Rate Projections & Budgetary Forecast

increase with the new replacements, the operational cost will decrease for general maintenance and for emergency spill response.

Sewer Rate Increase

Staff recommends a 3.0% increase in domestic and industrial sewer rates and meter fees for FY2023.

We believe this rate increase is prudent under the current economic situation and is necessary to provide for the following District responsibilities and objectives:  Meet current and future regulations at the Water Reclamation Facility and for the Collection System  Replace and rehabilitate approximately 41,000 linear feet of sewer mains a year  Debt coverage ratio attractive to investors and rating agencies  Support of the pay-as-you-go element of the CIP in addition to bonds  Continue with goal of periodic smaller rate increases in lieu of large increases in future years  Adequate current funding and maintenance of prudent reserves for Self-Insured Medical/Dental Plan

 Continue with necessary Treatment Plant upgrades

In the past, the MSD Board has endeavored to keep rate increases to a minimum. The District’s Bond Order requires sewer rates be set to ensure that the excess of revenues over current expenditures is at least 120% of debt service.

Additionally, the Board balances the bond order requirements while maintaining all regulatory and fiduciary responsibilities.

Domestic sewer rates for the past five years as well as a projection for FY2023 are shown below:

FY18 FY19 FY20 FY21 FY22 FY23 Rate Increase % 2.5% 2.5% 2.5% 0% 2.75% 3.00% Meter, Maintenance & Billing Fees $9.30 $9.51 $9.74 $9.74 $9.99 $10.38 Flow Rate (per ccf) $4.50 $4.61 $4.73 $4.73 $4.86 $ 5.01 Avg. Monthly Bill (5ccf) $30.62 $31.36 $32.17 $32.17 $33.04 $34.10

Distinguished Budget Award

The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the Metropolitan Sewerage District of Buncombe County, North Carolina for its annual budget for the fiscal year beginning July 1, 2021. This is the twenty-fifth (25) consecutive year that the MSD has received this award. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device.

This award is valid for a period of one year only. We believe our FY2023 budget continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award.

In Closing

The Budget represents the combined efforts and guidance of the Board, its Committees, and staff. A special thanks to Jody Germaine/Budget Analyst for assembling the budget documents, Pam Thomas/HR Director, Hunter Carson/CIP Director, and Cheryl Rice/Accounting Manager for assembling the CIP Section of the Budget. We look forward to working with you, staff, and our ratepayers as we implement this financial plan and policy document.

Respectfully submitted,

Thomas E. Hartye, PE General Manager W. Scott Powell, CLGFO Director of Finance