CMUD Blasted For Sky-High Rates
The findings of a citizens’ Water Solutions Task Force released this week reveal that a lot of folk in Cornelius apparently enjoy long showers and really green lawns; that Charlotte’s utilities department has problems with defective meter readers; that the city has for years been raiding the utilities treasure chest to pay for capital projects that have little to do with water delivery; that city bureaucrats conned the city council with mumbo-jumbo explanations about the impact the utilities department’s tiered-rate system would have on customers; and that councilmembers were either too lazy or inept to root out the deception.
None of those findings should come as particularly shocking, but rather discouraging and infuriating; doubly so for hundreds of residents who have complained about what they claimed were excessively high, wrongly calculated water bills, and were essentially told by Charlotte-Mecklenburg Utilities Department (CMUD) to hush up or have their water cut off. The task force was convened earlier this year by Cornelius Mayor Jeff Tarte, after numerous residents from that town were hit with high water bills.
The root of the problem, according to the task force, can be traced to what it tags as CMUD’s “questionable business model” and “flawed” rate structure. Those problems, according to the task force, have been exacerbated by a “high error rate” in meter-reading equipment and the utilities department’s response to the drought of 2008.
When the city implemented mandatory water restrictions, CMUD saw sharp declines in water usage and corresponding revenues that spawned a $20-million budget shortfall. To bolster the department’s bottom line, the city council approved rate hikes for all users. And while the hikes were across the board, they weren’t exactly equal. Customers who used less water received relatively small rate increases compared to those who used more.
The goal was to encourage continued conservation efforts, with higher rates acting as a deterrent to higher water usage. In doing so, CMUD created an additional fourth tier to its rate structure, essentially reclassifying “average” users to “heavy” users based on how many hundred cubic feet (CCF) of water they used per month. One CCF typically equals about 748 gallons of water. An average CMUD customer uses between 4 and 6 CCFs per month.
The resulting increases for each tier of users produced significant disparity, according to the task force’s findings. They showed rate increases of 26 percent from pre-drought rate levels in 2007 to post-drought levels in 2010, for Tier 1 customers who used 9 CCFs. By comparison, Tier 4 customers who used 30 CCFs saw their rates skyrocket 112 percent, or more than a $50 bump.
The task force blistered CMUD officials for essentially hiding from city councilmembers the full impact that rate increases would produce.
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