Explanation of Water & Sewer Rates
Water and sewer utilities in Lake Lure must operate as a self-supporting enterprise, akin to a municipal business.
This means that enough revenues must be collected from customers sufficient to cover the costs of the enterprise. Losses in the water and sewer utilities should not be subsidized from other town revenues (like property taxes), nor should profits be used in other town functions.
In Lake Lure, the systems are aging. They cover a lot of area and service a relatively small number of customers that must share the burden of the costs.
The costs associated with the water and sewer utilities include four components:
- Operating expenses: labor, electricity, fuel, supplies and chemicals
- Debt payments on borrowing
- Capital projects for refurbishing or replacing some of the infrastructure
- A contribution to capital reserves for future infrastructure needs, (planned or emergency)
- To cover continued revenue shortfalls, the Town has drawn on the reserves that were there, thus leaving the current reserves quite low. Therefore, to increase the revenues required increased rates.
