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Supervisors discuss options for utilities district

Posted on Tuesday, April 22, 2014 at 10:31 am

The Caroline Pines subdivision will eventually need to upgrade its aging water line. The question remains—how will they pay for it?

The Board of Supervisors discussed options at its April 8 meeting and will explore the matter further in future work sessions.

Caroline Pines is already set up as a utility service district. This allows the board to increase the real estate tax rate on residences within the service district. The board can also establish a separate water user rate for the district’s customers. The goal in either case would be to recover the costs of repairing and replacing the utilities infrastructure.

Currently, the residents of Caroline Pines pay an extra $46.67 per month on their water bills, and this additional charge goes toward paying off the county’s availability fee—not toward any future repairs.

The board had approved a discounted availability fee of $2,800 per customer for the community, which Caroline Pines residents are paying over a five-year period. The more than 350 customers are roughly two years into that arrangement.

The county’s current availability fee is about $8,000 per customer.

Interim director of public utilities, Joseph Schiebel, recommended adding a fee to the customers’ water bill beginning in the 61st month—or in other words, once the monthly $46.67 charge is paid up.

“If you were to start a fee during that 61st month at $40 a month, they will see a reduction in their bill of $6.67, and you would generate $173,000 that first 12 months (for Caroline Pines),” Schiebel explained.

“I believe you’re actually doing the residents a favor by doing it this way. I would say that the service district is your insurance policy. By doing this, they’re paying a monthly fee instead of being hit by a large (real estate) increase twice a year,” Schiebel said.

“It is my opinion that we are not going to have any major event that is going to cost the citizens, the utility system, additional money to fix those lines, so in order to benefit the citizens in there, one of the things we had talked about is not charging this fee until the 61st month, because they’re already paying $46 more than the rest of our water customers,” he added.

County Administrator Charles Culley said that if a catastrophic failure did strike, there is a mechanism in place to address it. The county would have to borrow the money for the immediate repairs and then charge the service district a greater tax rate to start paying those funds back.

“We’ll just have to borrow the money and charge them an assessment, hold a public hearing, and say, ‘Here’s what we borrowed and here’s what you owe,’ and everybody (in the service district) gets a tax increase to fix their water line, but they’ll see the work going on,” Culley said.

Reedy Church Supervisor Reginald Underwood said, “If we had increased the availability fee, we wouldn’t be at this juncture, would we?”

Madison Supervisor Wayne Acors commented, “I think the board had empathy for the people who lived in Caroline Pines in saying most of them couldn’t afford the $8,000, and $2,800 was a number that was agreed to by their board down there as to what they felt like they could afford.”

“There’s no way we can replace everything in there if we at some point don’t employ some method to put those funds aside,” Bowling Green Supervisor Jeff Sili said, adding that in addition to the infrastructure, the production of water comes with its own costs. “We’ve got to do all we can to make utilities come as close to even as we can.”

Sili said, “We need to have this discussion so that it’s on the table, and I think it needs to be on the agenda next year for the budget session—what we’re going to do with Caroline Pines—because it’s something we’ve got to watch.”

Western Caroline Supervisor Jeff Black was concerned about precedence.

“Caroline Pines is probably starting the process with other subdivisions that may be popping up down the road. That’s something we’re going to have to look at to do something uniformly with all subdivisions in what we charge them and how we go about collecting Caroline Pines,” Black said.