Sewer Treatment Strategies: Answers to Frequently Asked Questions

The Economics of Wastewater

Lake Lure’s public utilities—water and sewer—are required to operate as a self-supporting enterprise, essentially a stand-alone business of the Town.  This means that the revenues from customer fees must be sufficient to cover the costs of operating the systems.

Any profits from these operations should not be used to fund other needs in the town, nor should losses in these systems be subsidized from other town revenues such as property taxes.  Additionally, the water & sewer system needs to maintain its own capital reserves for emergencies and future capital improvements.  Towns should aim to maintain a healthy level of reserves.

Our sewer rates of $38.50 per month per household are below the average across the state and are insufficient to cover the full costs of the sewer system.

Smaller systems usually have higher costs per customer, and the most costly being those in the mountains or the beach with difficult geographic or topographic challenges.  In North Carolina, several mountain or beach towns have monthly sewer rates from $50 to $70.  
The costs associated with the water and sewer utilities include four components:

1.    Operating expenses:  labor, electricity, fuel, supplies and chemicals
2.    Debt payments on borrowing for major improvements and extensions
3.    Capital projects for refurbishing or replacing some of the infrastructure
4.    A contribution to capital reserves for future infrastructure needs (planned or emergency)

For some time, we’ve been holding rates low by only covering #1, #2 and a little bit of #3 in our annual sewer system budget.  Our budget needs to fund all four and the additional debt needed for the Greenline project.  To cover needed capital projects, we’ve drawn down our reserves less than $150,000 (to cover both water and sewer systems).

What can we expect from the Greenline project?

Engineers are coordinating the planning, surveying, permitting and loan/grant applications for the 20-mile pipeline and intermediate pump stations that will move wastewater to Spindale’s treatment plant. It is expected to take 2-3 years to complete.  At that point, Lake Lure will:

  • Decommission our treatment plant
  • Own and operate the pipeline and pump stations
  • Pay Spindale (by the gallon) to treat wastewater
  • Begin paying the debt for the project
  • Continue maintaining the sewer collection system around and under the lake
  • Set aside capital reserves

All of the above will be funded from customer revenues from the new sewer rates.  The new rates will enable the Town to build reserves and down payments for the construction loans, beginning at the completion of the project.

Once the project is complete and the pipeline is operational, Lake Lure will seek partners to share in the ownership and operation of the system…larger entities like Rutherford County or the Broad River Water Authority or perhaps a newly-created regional sewer authority.  
The new system is expected to provide economic benefits to the Highway 64 corridor through Green Hill, spurring development and jobs and new sewer connections that can help to defray the costs.

What are the new sewer rates?


Why was it necessary to increase rates to qualify for loan assistance?

To qualify for zero-interest or low-interest loans that could save over $2 million dollars over the life of the project, the Town must be able to demonstrate that it is responsibly setting rates to cover costs of operating the plant and that the rates have reached a level of hardship for citizens—as measured as a percentage of the median household income.  This is a rough measure of the community’s ability to pay their sewer bills.  Compared to other towns, Lake Lure has a high household income. Thus the new rate is the minimum sewer rate that will qualify the Town for the loans. 

How did our rates compare with other North Carolina towns?


What would have happened if you had not increased the rates or taken any action at all?

The Town has explored many scenarios, including taking no action. However, by continuing to delay a rate increase, the Town risked being ineligible for loan assistance, meaning that it would have to finance the

Greenline project at market rates. This would increase the cost of the project even more. The longer it takes to begin the project the more likely the costs will go up with inflation in materials and construction costs.  And, with any delays, the risk grows that the state will demand payment of fines and may even take over the plant from the Town and set the rates for us.  In these situations, towns must demonstrate responsible fiscal actions to maintain autonomy over their utility systems. 

What if I cannot afford this increase?

Along with electricity and water, sewer treatment is one of the basic must-have utilities. In fact, a home without a sewer connection or an approved septic system will be condemned as uninhabitable. We recognize that many residents in Lake Lure are on a fixed income and have little discretionary slack in their budget.  Social services organizations like Hickory Nut Gorge Outreach have offered to help residents struggling to meet basic needs. 

 Who is the Utility Advisory Board?

Lake Lure’s local government makes very effective use of citizen advisory boards. For decades, these boards, including Zoning & Planning, the Lake Advisory Board, Parks & Recreation and the ABC Board, have worked alongside town staff in analyzing issues and providing guidance to Town Councils.  Recently, the Town established a Utility Advisory Board and appointed seven members that represent various water and sewer stakeholders in town (residents, businesses and vacation rentals).  Several of the members are engineers or professionals in the water and sewer industry.  Additionally, the board is assisted by two consulting engineering firms, Brown Consultants of Asheville and WK Dickson of Charlotte.  

 The Utility Advisory Board meets the first Tuesday of each month at 2 pm at Lake Lure Town Hall. Like all Town meetings, this meeting is open to the public.

 Utility Advisory Board Members are:

 Steve Miller

Wayne Hyatt

Richard Glassen

Paul Westbrook

Roger Peterson

John Chapman

Debbie Franberg

 *Town Staff Liaison: Linda Ward, 828-625-9983, Ext. 129
*Contact the Lake Lure Town Council at Click on “Your Town Council’ under the “Your Government” tab.