During May 15th’s City Council session Raleigh’s FY19 proposed budget will be presented by Ruffin Hall (Raleigh’s City Manager). While the budget won’t be voted on until the June public hearing, there’s already an item in the proposal causing controversy. The FY19 budget will include a proposed water rate increase of 3.2% per year. Water rates have been a hot topic at City Council ever since this past February when Raleigh Public Utilities discovered nearly 650 water customers were being billed the incorrect rate for 12 years. Two Councilmembers (CM) have already published their feelings on the rate increase. CM David Cox posted to his Facebook page April 28th he would oppose the increase and would like to see the rate of pipe replacement slow SEE UPDATE. In opposition is CM Nicole Stewart who voiced support for the rate increase on a post April 17th. For Raleighites, the #WakeWaterWars issue is a separate concern from the rate increase so this post won’t focus on it. For those interested in why residents using Raleigh water who don’t pay city taxes to any municipal government believe they’re not being treated fairly check out the N&O story here. It’s only fair that citizens be concerned their Raleigh water bill will increase, but it’s also important to know not paying that small increase would likely lead to even larger expenses down the road.
Update 5/16/17:
After publishing this post long-time David Cox supporters Tim Niles, and George Farthing took issue with the post’s claim David Cox wants to slow pipe replacement as readers could misunderstand Councilor Cox’s position of wanting to maintain pipe replacement at the current FY18 rate, which is slower than the recommended rate for FY19. To be clear, Councilor David Cox pushed against the rate increase and against increasing pipe replacement rates. The compromise results in rates being kept at FY18 (current) pipe replacement rates being raised for one year to a higher rate but makes no funding or commitments available to replace pipe at the rate recommended by Public Utility experts beyond FY19. It’s unclear as of this update if the compromise allows for pipe replacement to occur at a rate recommended by public utilities for FY19, or if the rate would only be increased a smaller amount to match the reduced rate increase.
It’s also worth pointing out that on the very evening City Council voted on the compromise to keep pipe replacement rates at FY18 levels, there was a water main failure in David Cox’s own district at the intersection of Wake Forest and Litchford road. It was a 42″ transmission pipe. It’s hard to say how many pipe failures have occurred in Raleigh this year, but according to a tweet from WNCN news we had at least 40 pipe failures in Raleigh by the first week of 2018. You may draw your own opinion on if we’re doing enough to maintain our water and sewer infrastructure.
https://www.facebook.com/groups/RaleighDistrictB/permalink/2108133919215386/
What Does My Water Bill Cover?
Recently, Raleigh’s Public utility workers have been visiting CACs in the city and giving detailed presentations on why the rate increase is necessary. Below is the brief presentation they gave at the Five Points CAC in May and is about 14 minutes long.
So, what does your water bill cover? Essentially everything directly related to the treatment and delivery of water to your home. Raleigh’s Public Utility service is an “Enterprise Utility” meaning the entire utility is funded off of its own revenues and not from city taxes.
This funding method has its benefits and its drawbacks. Regardless, the amount charged to users is decided on by Raleigh City Council. The rate increase is primarily being proposed to replace aging pipe in the city. Since most of this pipe is from Raleigh’s early days, the majority of the pipe is located in Raleigh’s ITB “Inside the Beltline” area. That’s not to say all the pipe giving trouble is in the downtown area. According to a presentation given by Robert Massengill (Public Utilities Director) at the April Central CAC meeting:
“Some of these green pipes [referring to newer installed pipes on the map in the presentation] that are not that old and put in in the 80s, especially our large diameter concrete pipes, they’re not holding up…Some of our 1980s vintage pipes are already failing”
This is particularly concerning. With pipe replacement not only being needed for the older pipes like that found in downtown Raleigh, but also newer pipe that is not operating as expected the City is unable to replace the pipe at the rate needed.
Pipe Replacement
The City of Raleigh operates an asset management rating system to determine pipe replacement needs. This is based on the condition of the pipe meaning how likely it is to fail, and the pipe’s criticality or how high the consequences of the pipe failing. You can see a screenshot from one of the CoR Public Utility presentations below with how the rating system works.
When the pipe is replaced it basically falls into two scenarios. Planned replacement, and unplanned replacement. As you can guess, unplanned replacement occurs when a pipe has failed, or when a pipe is discovered to be leaking during a routine inspection. There’s one big thing to keep in mind:
Planned pipe replacement is much cheaper than unplanned replacement due to pipe failure
Why is it cheaper? There are several factors. First, and the most important, is environmental damage. A failed pipe will dump tons of untreated wastewater into our streams. A News and Observer article cited an estimated 741,821 gallons of untreated sewage was sent into Raleigh creeks and streams in 2016. That number hasn’t been going down. In just one incident near Walnut Creek in 2017 an estimated 22,650 gallons of untreated sewage was dumped into the stream. Not only does this untreated sewage damage our environment, but the city also faces fines from the EPA for these accidents. The City must also pay for clean up and mitigation of the resulting environmental damage.
There are other factors that drive up the cost of unplanned pipe replacement. Workers typically need to be paid over-time in an unplanned replacement. Roads are usually shut down for much longer periods of time in an unplanned replacement as well. The work to repair damage from a pipe failure also complicates the replacement and drives up costs.
If you think water and sewer pipe failure is rare in our city, you’d unfortunately, be wrong. The rate of pipe replacement has been too slow to replace aging pipe in time. While developmental pressure has put additional strain on the system, those pointing to developers as the ones to handle a larger share of the cost are trying to find a scapegoat instead of addressing the issue. Raleigh’s water rates remain relatively inexpensive when compared to rates paid by other cities.
What’s City Council doing?
The rate increase proposed by the FY19 budget would allow pipe replacement to stay on pace and help prevent pipe failures damaging our environment. Of concern, however, is Council Member (CM) David Cox’s idea of reducing pipe replacement rates, and curtailing programs that reimburse developers for replacing critical water/sewer infrastructure.
If we reduce Raleigh’s pipe replacement rate, the number of pipe failures can be expected to increase. This will only make pipe replacement more expensive and risk even more untreated sewage being dumped into our streams. With the added costs of fines for this untreated sewage, service interruptions, road closures, and overtime pay we could see our water system not only lose it’s current A/A- rating but also lose the ability to sustain itself on charges to customers alone. CM Cox has suggested using a bond to pay for the pipe replacements, however that puts the burden on Raleigh taxpayers instead of it being shared by all users of our water system based on their usage.
As to the program reimbursing developers for infrastructure improvements. It would be unfair to end that program. If the system can handle the current amount of usage, but then one development pushes the system past its capacity should that developer have to pay to improve the sewage system for all users? The current development rules for infrastructure reimbursements outline a developer is only reimbursed for the costs that go above and beyond the maximum improvement responsibilities required by the classification and size of the development. Further, each case of reimbursement must be voted on by Raleigh City Council giving CMs like David Cox the ability to review a reimbursement on a case by case basis and make decisions on if the developer gets paid. Ending this program would only further contribute to issues like pipe failures in Raleigh.
What’s your opinion as a user of Raleigh’s water system? Are you concerned about the impact untreated sewage has on our city? Do you want the cost of pipe replacement to be borne by the users of Raleigh’s water system, or only by Raleigh taxpayers? Comment below, or on our Facebook page to join the conversation. Reach out to your City Council members and let them know your thoughts on this issue. Email them at [email protected].
Edited to include the correct email address to contact City Council: [email protected]. Thank you for reaching out CoR staff!
In December 2017, there were at least 735 customers with billing discrepancies, plus many more were discovered later per Waldroup. Errors existed in each of the six connected regions.
We should be encouraging them to do a better job.
For context, this commenter is the leading advocate for the members being charged a double rate for water. At a recent panel discussion hosted by the Wake County Young Republican’s group, Russ Stephenson gave an excellent response to the question of why these residents are being charged a double rate. You may watch a video of his answer here.