State concerned about Jonesville water rates

Officials: Rates are not covering expenditures

By Troy Brooks -

JONESVILLE — The Jonesville Town Council held its meeting Monday evening to discuss financial matters and future plans, including water systems and the future of former government buildings.

First on the agenda was a discussion of a letter sent by the State and Local Government Finance Division on July 5, which had analyzed the audited financial statements for the town of Jonesville for the fiscal year ending on June 30, 2015. The division has shown concerns about the water system operating in the negative for the past few years.

In the letter they showed that the percentage of fund balance available for appropriation relative to expenditures has declined from 18.02 percent as of June 30, 2014, to 14.32 percent as of June 30, 2015. The General Fund also was noted to have increased the loan to the water fund by $56,407 with the loan now equaling $499,963.

“The financial condition of the general fund will not improve if it continues to lend money to the Water Fund,” stated the letter send by the North Carolina Department of State Treasurer. “Since utility customers and property taxpayers are not necessarily the same groups of people, the water fund should not be subsidized with tax dollars; the full cost of the operations should be passed on to customers through user fees. The governing board should set rates and fees at a level which is adequate for the fund to support its operations.”

The water fund reported a net loss and that the amounts being charged to customers were not sufficient enough to cover costs of providing water services. The town board has been asked to review the rate covenant and make changes necessary to improve financial operations and sustainability.

The town has been given 45 days to respond to the concerns.

“The water fund lost money every single year going back, partly due to recent payments on the water plant,” said Town Manager Scott Buffkin. “The biggest increases was made for the last three years on the debt service to the new water plant, that $180,000 for the last two years and $94,000 the year before that. That goes on for 37 more years. Revenues have increased over the years through rate increases, but unfortunately, so have the maintenance costs.”

Some town officials brought up the idea of using the recently installed vehicle tax to help with water costs.

“We could take like $5 of the $30 which can be used for any lawful purpose,” said Buffkin. “We could apply some of that money to help make it sustainable, but that’s like taking it out of one pocket and putting it in the other.”

The water fund will have to be self-sustainable for the town to have a better chance of applying for future grants which could be used on repairing the water system, Buffkin explained. There were also discussions of putting in water meters for residential and complex areas to better track water usage.

“I didn’t come here to say that we need to raise water rates tonight, but I think that’s something that we really need to work at and the structure of our rates such as the per-minimum rates and the per-gallon rates,” said Buffkin. “I think it may also be important for us to look forward at better capturing those not paying their bills, but we should discuss how we go about it. It’s not fair for some to re-plumb their whole complex.”

Councilwoman Judy Wolfe brought the idea of using part of the $30 vehicle tax to compensate for the water fund, but, according to Buffkin, even the entire $30 fee would only just allow them break even at $60,000.

Water rates have been raised several times over the past few years. Last year the town raised the tax rate from 40 percent to 45 percent, and it had a positive impact, said town officials. The town would have to bring in 7.2 percent more than what they did this year to break even.

There was also a lot of questioning on whether to raise the minimal rate or the volumetric rate.

“All of this is stuff to think about,” said Buffkin. “I’ll do anything I can to help, but I would like you all to give me some direction on what is more favorable, but it’s obvious we’re going to have to do something about the water expenditures. I truly wish that water could be free. It’s something that we all have to have. Unfortunately, it costs the town close to $900,000 a year to generate and distribute water.”

Options will be discussed at the next regular town meeting on Aug. 8.

In other news, the water system status was discussed. Last week, folks from the state Department of Environment Quality conducted tests on the town’s water system from Tuesday until Friday to assess the state of the water system, specify areas in need of repairs and updates, and give the town a more eligible chance for receiving grants for making the repairs.

“There was about 10 to 12 of them here for the assessment,” said Buffkin. “They really showed up from all over the state with different expertise. They were checking pressures, different parts of the system. They will issues a final report.”

Buffkin and Tim Collins, water resources director for the town, have been meeting with engineering firms, consulting to help with the application process for grant funds available.

The possibility of using Dr. Groner’s old office building on Swain Street as a replacement for the Jonesville Public Library also was discussed and the building will be looked into more to see if it fits the town’s needs.

The future of several old government buildings also was discussed, including the old library building, the old town hall, and the old building across from the old library building used for Custom Heating and Air, and whether to dispose or sell them.

The majority view was that the old town hall building probably would be better off demolished and the property sold as a vacant lot. The old library building and the Custom Heating and Air building are salvageable, although they may need work, said officials. These buildings may be sold to private parties and interests.

The next town meeting will be held on Aug. 8 at 7 p.m.

Troy Brooks may be reached at 336-258-4058.

Officials: Rates are not covering expenditures

By Troy Brooks

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