For the first time in four years, the City of Reidsville will be increasing rates due to rising costs of maintaining its utility systems.
The City’s Fiscal Year 2024-2025 budget, approved Tuesday night by the Reidsville City Council, includes a 35% rate increase. The average residential utility user will see their bill go up a little less than $20 per month. The bills for commercial and industrial users will increase proportionately based on their meter size and use. City staff requested the change be delayed until October 1st to allow residents and businesses time to budget for the increase.
“While no one wants to pay more for these services on top of higher prices on most every other thing we have to buy, we hope that our citizens can understand the needs behind this increase,” Mayor Donald Gorham explained.
Like its residents and businesses, the City of Reidsville has seen costs rise with historically high inflation, supply chain issues and the rising expenses related to employees. Chemicals related to operating the Water and Wastewater plants are a specific area of increase with some items more than doubling in price. Operating costs alone represent a12.6% increase.
The City must continuously reinvest in the utility system infrastructure. Fortunately, grants and low-interest loans from Federal and State resources are available to assist. The City has three current improvement projects under way that are funded with 20-year low-interest loans (some at 0%). As the projects are completed, the loan payments will come due. The new debt service equates to a 6% rate increase.
As part of analyzing the current status of the enterprise systems, an outside firm, McGill Engineering, was contracted by the City to complete a Comprehensive Improvements Plan (CIP), which takes an in-depth look at current and future needs of those utility systems. Current year capital needs identified in the plan along with departmental requests totaled $1,600,000, which requires a 16.4% rate increase.
The CIP also looked at what the City’s utility rates need to be in order to operate. The increase was supported by the report. Because the two funds are operated independently, the 35% increase is actually broken down as 65% to water rates and 25% to sewer rates. While most customers have both water and sewer service, some with only one or the other will see the different percentage applied to their bills.
Prior to this increase, Reidsville had the lowest utility bills in Rockingham County for the average user. This increase will bring the rates in line with the average rates for the services provided by all of the systems within the County. The City will continue to promote the upcoming October date for the increase in efforts to inform customers. As always, customers are encouraged to contact the City with questions and concerns.