Asheville City Council sent city staffers back to the drawing board March 28 after voting unanimously to delay approval of recommendations for increased water fees. Council asked that the city’s budget be reworked to keep those fees flat while meeting revenue goals for water system operating expenses and capital needs.
A full slate of proposed increases to city fees and charges had been presented by budget staffers Taylor Floyd and Tony McDowell, including recommendations to increase stormwater and solid waste fees. For a typical household, those increases came out to an estimated $10.50 and $12 per year, respectively; the water fee increases would have cost a typical household roughly $43 per year. Council voted unanimously to approve all of the increases except those for water customers.
“How do we tweak this so that we create greater affordability for residential users and not put the water budget off kilter, because I mean, we have a lot of capital projects we’re doing in the water budget,” said Mayor Esther Manheimer during the meeting. “But it’s very clear that we need to make a transition to relieving the fees charged for residential customers.”
Residential customers pay higher rates for water than do commercial or industrial water consumers — $4.77 and $4.20 per cubic foot for single-family and multifamily housing, respectively, compared with as little as $2.29 per cubic foot for large manufacturers. Several members of Council said that the discrepancy was troubling.
However, Council also noted that freezing residential fees could negatively impact the city budget. User fees account for over 89% of the water system’s $40.3 million budget in the current fiscal year. Floyd explained that those fees support maintenance, staffing at water treatment plants, communications and customer engagement. User fees also support capital improvements to the system, such as a more than $28 million project that will replace all 63,000 city water meters with updated technology.
Water consumption fees have taken on extra importance in recent years after two lawsuits filed in 2018 led the city to stop charging water users a monthly capital fee starting in fiscal year 2020-21. Those discontinued capital fees, which were substantially higher for commercial users than for residents, accounted for over $7 million in revenue in fiscal 2019-20.
City staffers appeared to be caught off guard by Council’s request. They said it would be difficult to make up the needed revenue if residential water fees didn’t increase.
“We know that our commercial and industrial customers are getting a great deal. That’s got to come up,” said David Melton, Asheville’s director of water services. “I just don’t know that we would have time to really do a good job at [revising the rate structure], even before July.”
Floyd also noted that, while a cost-of-service study was underway to offer insights and direct future fee recommendations, those results were not expected until later in the year. “I think we may be challenged to get that prepared for the April 11 [budget] work session, honestly,” he said.
Closed-door water committee meetings draw criticism
Council heard a 30-day update from Capital Projects Director Jade Dundas on the Independent Review Committee. The nine-member committee was established in January to analyze the events and issues that caused a prolonged water outage in December, as well as the city’s communications and emergency response. No findings were shared during the update, but Dundas said the committee was on track to deliver a final report by the end of May and present it to Council in early June.
The committee’s meetings, which so far have not been open to the public or required to keep public records, were criticized by Council member Kim Roney. She argued that the lack of transparency adds to the frustration that she and some community members felt after the city initially delayed releasing information about the water crisis in December.
“Matching lack of public information with lack of public information, I think, has given folks some heartburn, including me,” Roney said.
City Attorney Brad Branham responded by stating that the committee’s work required complete access to the city water system and that state law prevents the city from sharing information about the utility.
“The security of the city’s water facilities and associated infrastructure is imperative to the provision of safe and sustained water to our customers,” Branham wrote in an email to Xpress after the meeting. “As a result, laws of this nature have been adopted in almost every state in order to keep these records out of the public domain.”
Asheville’s interpretation of public information regarding its utilities, however, hasn’t always been consistent. During the outage itself, city staff had referenced federal privacy laws as a reason for not providing a map of affected areas. The city later published such a map after sustained public criticism.