(This is NOT a faith column.)
In conversations and on social media, Town of Farmville utility customers have been questioning the increases in our recent water bills. Some of you have commented that the water and sewer portions of your bill added up to more than the electric portion. The Farmville residential water rate was increased by 6% on July 1, 2020. This brings to mind several questions about the Town of Farmville and fiscal responsibility.
- Why is my Farmville water bill so high?
- How could my property tax to the Town of Farmville go up when the rate stayed the same?
- Why did the town manager write on a private social media page then share at the September Town Board meeting that “The town is in excellent financial condition with growing reserves and resources to adequately fund necessary services?”
- Why doesn’t the Town of Farmville make it a rule to get two or three bids for construction projects over the anticipated total cost of $50K or $100K in order to get the best deal? The State of NC requires multiple bids for projects over $500K but municipalities certainly are free to look for the best cost for less expensive projects.
- Why did the Board of Commissioners start the Bonnie’s Alley project at a cost to the town of $200K but vote unanimously for work order changes to bring the cost to the Town up an extra $322K to become $522K for the creation of 13 public parking spaces and an improved alley?
- Why did the Board of Commissioners vote unanimously to proceed with a $5M project for a new library when there were less expensive options available? How will we pay for this?
- Why did the Board of Commissioners vote to take out a $5M loan for the new library when The Farmville Enterprise repeatedly reported that the Town had allocated $2.25M for the project? (Another $2.25M was expected to come from grants, fundraisers and donations.)
- Who will buy the small business incubator which was gifted to the Friends of the Farmville Public Library in March 2020 by the Farmville Economic Development Council, Inc.? (The OPIS current market value is $251K and the sale of this property will go towards the building of the new library.)
- Why did the Board of Commissioners vote unanimously to spend $340K to pave the privately owned parking area and lot at the former train depot in exchange for rent from January 29, 2020 to March 31, 2021 or the equivalent of $24,200/month rent for the building? Does any building in Farmville rent for close to that amount?
- How will the Town of Farmville pay for the needed new fire station which was removed from the 2020-21 budget due to tight finances described in the budget’s cover letter?
- Why did the Board of Commissioners vote to withhold the recommended Cost of Living Adjustment for town employees for the fiscal year 2020/21 yet to give the town manager a 2% merit raise, bringing his annual salary to $110K?
- Why has the Town made such dramatic increases in transfers from Enterprise Funds (Water, Sewer and Electric) to the General Fund in the past six years?
WHY IS MY FARMVILLE WATER BILL SO HIGH?
In 2015 the Town of Farmville entered into an agreement to become a wholesale customer and to buy water from the Greenville Utilities Commission. The cost per 1,000 gallons would go up by 10 cents for four consecutive years. The starting rate was $1.61 per 1,000 gallons, then it went to $1.71, $1.81, $1.91 and $2.01 in the succeeding years. The agreement was that in 2020 there would be a rate analysis, which was done recently. On July 1, 2020 the wholesale cost paid to GUC from the Town of Farmville rose to $2.15 per 1,000 gallons. (The town’s fiscal year runs from July 1 to June 31.) The cost of the actual water we get is only part of our residential water bill. The Town has to maintain infrastructure, run operations and pay personnel in the water department and in billing.
The wholesale cost per 1,000 gallons of water went up by 14 cents on July 1 but certain other costs associated with our water bill did not increase. For example, town employees in the water department or in billing did not get a Cost of Living Adjustment. Why did the Town increase our total water rates by 6% when that was far more than the increase they had to pay to the GUC? The town had to pay an additional 5% of only the cost of actual water, or 5% of 22% of our water bill. It was a percentage of a percentage. If we used 4,000 gallons of water in our household the cost to the Town of Farmville for that actual water only went up 56 cents in July 2020. An increase of less than 1% of our total water bill would have covered the 14 cents per 1,000 gallons increase.
The Greenville Utilities Commission had scheduled a 6.8% increase in water rates to their retail residential water customers starting on July 1, but due to COVID decided to have no increase. (On a related note, the Town of Winterville gave its utility customers a 10% break for two months in a gracious move to relieve some financial strain caused by COVID-19. The Town of Ayden gave its residential customers a 10% discount for two months on the electric portion of their April and May bills as well as a 1% electric rate reduction for all customers starting May 13. Residential and business customers in the City of Washington, NC saw a 30% reduction of their electric rates for the month of April to help with the economic effects of the pandemic. The Town of Farmville did none of these things.)
On May 4, 2020 in his budget cover letter David Hodgkins wrote, “Retail water rates are proposed to increase by 6% to maintain a sustainable rate structure with the loss of the water rights payments from the Town of LaGrange in FY 2019-20 and to offset a planned bulk water rate increase from the Greenville Utilities Commission effective July 1.” The bulk water rate increase from GUC is relevant but the other part of this explanation is not accurate. The Town of LaGrange completed its ten-year contract of buying water credits from the Town of Farmville in August 2018, near the beginning of fiscal year 2018-19. That was two years ago. Actually, the Town supposedly made up for the losses from LaGrange in fiscal year 2016-17 with an 8% increase in our retail water rates. In May 2016 Hodgkins wrote about this increase, “These revised rates will fully fund all critical and operational and capital needs in the Water Fund without appropriating any funds from the Water Fund reserves.” The Farmville water rates also were increased in 2017-18 and 2018-19. (In the fiscal year 2017-18 the Town of Farmville transferred $663,702 from the Water Fund to the General Fund.) We residential water customers enjoyed a one-year reprieve from increases in our retail water rates in 2019-20. On May 6, 2019 Hodgkins wrote, “No changes in the retail water rate structure are recommended at this time. Rate increases in recent years as well as continued success in securing grant funds from major capital projects have enabled the Town to build an adequate reserve sufficient to maintain a sustainable rate structure in the near term.” If the loss of revenue from the Town of LaGrange was not recouped by June 2017 it certainly was by June 2019. LaGrange should not be mentioned as a partial cause of the 6% increase we began to see in our retail water bill in July 2020.
For some perspective you might look at the UNC NC Water and Wastewater Rates Dashboard. The website shows what residential water rates were as of 1/1/20 for 4,000 gallons. These rates were before the 6% increase by the Town of Farmville. The NC median was $30.50. Farmville was above the median at $36.25 with Kinston ($36.49) and Ayden ($34.) in that ballpark. The Dashboard shows Tarboro much lower at $17.13, Greenville Utilities Commission at $27.08, Snow Hill at $28 and LaGrange at $28.80.
According to this UNC Dashboard, before Farmville’s recent 6% increase, if your household used 4,000 gallons of water in May 2020 your water bill from the Town of Farmville was $36.25. Of that 100% of your bill ($36.25), $8.04 was paid to the GUC for actual water. The remaining $28.21 was for other costs, many associated with what it took to get the water and your bill to you. Thus, only 22% of your water bill was for actual water. It is interesting that the GUC charged their customers $9/month less for 4,000 gallons than the Town of Farmville did last fiscal year and Snow Hill charged $8.25 less. Since the GUC did not increase their water rates to residential customers for fiscal year 2020-21 but the Town of Farmville went up by 6%, the water bills to GUC residential customers will be $27.08 per month for 4,000 gallons as opposed to $38.45 per month for those gallons in Farmville households. Farmville residents who use an average of 4,000 gallons per month will pay over $132 more for water in 2020-21 than GUC residential customers.
HOW COULD MY PROPERTY TAX TO THE TOWN OF FARMVILLE GO UP WHEN THE RATE STAYED THE SAME?
The rate of a municipality’s property tax does not have to increase in order for that municipality to collect more in property taxes. Every four years in Pitt County revaluations are done. Most of us had our property values go up in 2020. Our property taxes due Pitt County and the Town of Farmville would both go up with the increases in property value without any change in the rate. In an effort to be gracious to property owners, Pitt County leaders decided to lower the Pitt County property tax rate, at least for one year, to offset the increase residents would have to pay due to the revaluation. This was to help property owners in the midst of the financial impact of COVID-19. The Town of Farmville did not decrease or increase our property tax rate, so most of us will pay the Town more in property taxes this year.
WHY DID THE TOWN MANAGER WRITE ON A PRIVATE SOCIAL MEDIA PAGE THEN SHARE AT THE SEPTEMBER 2020 TOWN BOARD MEETING THAT “THE TOWN IS IN EXCELLENT FINANCIAL CONDITION WITH GROWING RESERVES AND RESOURCES TO ADEQUATELY FUND NECESSARY SERVICES?”
Apparently it must mean that the financial impact from COVID-19 to the Town has been minimal. For the sake of the town employees I hope it means that their Cost of Living Adjustments that were removed from the 2020-21 budget (with a note that they could be added back during the budget year) will in fact be reinstituted. Hopefully, it means that the Town recently has received large donations for the library so we taxpayers will not have to pay back over $3.5M plus over $1M in interest. It would be terrific if these factors would combine to mean that the construction of the much-needed new fire station will be back on the table and that the Town will be in a good position to pay for that.
SOME INFORMATION RELATED TO THE REMAINING QUESTIONS CAN BE FOUND AT
celiastone.blog under the title “Overspending by the Town of Farmville, new fire station on hold.” See the link in red below. Please look also at the Town of Farmville website. To find the link to the annual budget click on “Departments” and then on “Finance Department.” Attend Town Board meetings or listen to the audio. Email questions or documentation requests to the Finance Department or the Town Manager. The more eyes on this information, the better.