CFPUA Seeks Consultant for Rate Study

The Cape Fear Public Utility Authority issued a request for proposal November 1st looking for help with their rate structure. According to the proposal, ‘The overarching goal of the study is to adequately fund water and sewer operations, capital improvements costs and bond debt while at the same time keeping rates low.”

When the CFPUA was created just over two years ago rates were changed from a uniform water rate to a tiered rate structure. Since then families have complained about the punitive nature of the tiered rate structure with some board members agreeing. For this very reason County Commissioner and CFPUA board member Bobby Greer has attempted to change the rate structure since its inception. However, Commissioner Greer’s proposals and customer complaints have fallen on deaf ears of the current CFPUA leadership. It’s not likely another rate study would result in any meaningful change.

Former CFPUA board member Kathryn Johnston wanted to see the board move away from spending money on consultants for rate structure input. She saw it as a waste and believed staff was capable of handling rate issues. A review of CFPUA minutes would seem to agree with Ms. Johnston’s conclusions. Just one year ago in November of 2009, then CFO Brent McAbee gave an in depth rate presentation. CEO Matt Jordan did the same in July of 2010.

Skyrocketing rates are a growing concern as well. The study documents call for the consultant’s rate proposals to meet all the CFPUA spending demands while “keeping rates low.” How can consultants recommend ways to keep rates low when the CFPUA has already informed customers that rates will nearly double over the next decade?

With the decision to nearly double rates already in place, it seems as if the study will serve as either a high priced propaganda piece to support the status quo, or a scapegoat on which to blame the impending rate increases.

Much of the information requested in the proposal is freely available online through organizations like The North Carolina League of Municipalities and the American Water Works Association.

Municipal Services Financial Group performed the Authority’s initial rate studies and proposed the rate structure in place now. They’d likely be a front-runner to secure the study this time around as well.