Human Resources Department

Revenue (continued)

Industrial User Charges

Prior to FY 2001, industrial users were charged decreasing tiered rates based on total volume so that actual rates charged were considerably below those paid by residential consumers. In FY 2001, the Board approved a plan to achieve rate parity between industrial and residential customers over the upcoming twenty years. The annual increases from this parity plan are incorporated in adopted rates.

Fortunately, the number of new residential customers continues to increase which is anticipated to mitigate the impact from the decline of industrial revenue.

Investment Interest

This revenue source reflects interest earned on public funds held by the District and the Revenue Bond Trustee. Investment income is determined by interest rates and cash balances available for investment. Interest rates decreased rapidly during the current year due to adverse economic conditions. The projected yield for the current fiscal year will be 1.00%.

All MSD investments conform to its Bond Order and the North Carolina General Statutes governing investments, and due to the minimum acceptable level of risk, produce fairly conservative rates of return.

Sewer System Development Fee

This revenue source represents the buying of equity in completed wastewater facilities paid by consumers who are added to the sewer collection system. In June 2006, the actual cost was determined to be significantly greater than the fee charged. To moderate the impact on customers, the board determined to implement 20% of this increase over each of the subsequent five years.

On July 20, 2017 the North Carolina General Assembly passed into law North Carolina General Statute 162A Article 8 (“Article 8”). Article 8 provides for the uniform authority to implement system development fees for public water and sewer systems. Raftelis Financial Consultants, Inc. was engaged to perform a study which conforms to the conditions and limitations of Article 8.

Effective in FY2018, sewer facility fees ranged from $670 to $2,836 for residential users based on size of structure, and from $2,836 to $751,540 for nonresidential customers based on meter size.