NEW HANOVER COUNTY — The Cape Fear Public Utility Authority (CFPUA) is looking to raise its ‘system development fees.’ These fees, which new customers pay when they ‘connect’ to the water and sewer system, help fund overall improvements and expansions. The fees have also been cited as a factor in driving up the cost of housing.
New rates have been proposed to come into effect on July 1, 2020, and would increase both the water and sewer system development charges.
“The system development charge (or SDC) is the fee that new customers pay to ‘buy-in’ to the water and sewer system. The proposal includes an increase in the water SDC from $1,880 to $1,920 and an increase in the sewer SDC from $1,930 to $2,070,” according to a memo from CFPUA.
Related: Water, a basic need that comes with a cost: CFPUA’s role in the affordable housing crisis
The rate changes are not yet approved or finalized and CFPUA has opened an online form to receive public comments on the issue.
According to the utility provider, “The objective of CFPUA’s system development charge is to assess new customers their proportionate share of the cost of infrastructure improvements benefitting the new customer that were paid for by past or existing customers.”
The logic and reasoning behind the proposed rate change is that new customers drive the need for new infrastructure and using existing customers’ payments to pay for this is not the most equitable way to fund it.
“CFPUA’s SDC calculation seeks to allocate the equity in existing infrastructure assets to new water and sewer customers. “Equity in existing infrastructure” is defined as the assets funded with rate revenues that will benefit new customers less [with] outstanding debt used to acquire or construct those assets,” according to the memo.
While the rate increases could potentially hinder future affordable housing construction in the area, CFPUA does have a responsibility to its ratepayers as well to make sure everyone is paying their equal share and hopefully keeping rates low.
Public comments can be made until April 30 and will be received by the board at its May 13, 2020, meeting to adopt the new budget.
