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Water and sewer customers are $3.5M behind on their bills to Winston-Salem, Forsyth County but COVID-19 relief remains.

Water and sewer customers are $3.5M behind on their bills to Winston-Salem, Forsyth County but COVID-19 relief remains.

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Past-due billings in the city-county water and sewer system are running 80% higher now than a year ago, thanks to COVID-19 relief efforts that included a temporary ban on cutting off service and collecting late fees and penalties.

Despite rising to $3.5 million at the end of July, the past-due billings do not have utility officials overly concerned, given the need to help people facing a coronavirus crunch and the economic health of the water and sewer system.

Courtney Driver, the director of the City-County Utilities Division, said her office is working on a plan to eventually start collecting the past-due bills.

"We were very conservative with our budget this year," Driver said. "We are trying to be sensitive to the community and the challenges that people are still facing, but we are working on putting a plan together about when to phase (past-due collections) back in and what that looks like."

Think in terms of paying off past-due bills over a period of time, officials said. They know that many people can't manage paying off a big water and sewer bill in one fell swoop.

"As long as accounts are active, we feel that over the course of the next six to nine months we can work with them to pay that off," said Mike Koivisto, the deputy utilities director. "If you have lost your job and were not able to pay utilities over the past five or six months, you would reach out to us and we would put you on a payment plan to pay the balance you have accumulated over that time."

Know this: The city-county water system is robust financially. It has a fund balance that's projected to hit $133.7 million by the end of the fiscal year next June. While it's true that the system has big debts for plant improvements and and big capital projects ahead, officials say they're confident the system is sound.

Still, Robert Clark, a Winston-Salem city council member who chairs the council's Finance Committee, cited the piling utility debts recently as an argument against a budget adjustment on Monday that shifted $1.5 million from a coronavirus relief fund to pay for antipoverty measures, an increase in the city's minimum wage and a 1% pay hike for police officers and firefighters.

Noting the increase in past-due utility accounts, Clark said the utility system could hit a $12 million revenue shortfall for the year.

Because of when the coronavirus pandemic hit, utility officials say they were well-positioned to plan for a revenue downturn before the end of the 2019-20 fiscal year.

The utility commission's 2020-21 budget, prepared with a response to COVID-19 in mind, projected revenues at $111 million, down from almost $122 million in 2019-20.

The past-due billings are not the only financial hit utilities has taken. There's another $1.3 million in waived fees and penalties.

At the end of July, utility officials said, there were 14,000 past-due accounts among some 120,000 utility customers. The delinquency rate was 23% compared to 11% the year before.

Koivisto said he doesn't think Clark's worst-case scenario will come to pass as long as the people with delinquent accounts don't all simply leave the county. Unpaid bills by people who have moved away are the hardest to collect.

The lost utility payments reported at the end of July also are more than one month's worth of debts, utility officials said, noting that the tally started in April and was mostly accounted for in the 2019-20 fiscal year.

In the spring, Gov. Roy Cooper issued executive orders that put a stop to utility disconnections and penalties. While those orders expired at the end of July, utility officials said they still have not reinstated late fees and penalties.

"We did not budget any penalties or late fee collections for 2020-21," Koivisto said.

As well, the City-County Utility Commission, which oversees the water and sewer system as well as the landfills, decided this year that no rate increase could be contemplated because of the economic effects of coronavirus.

And next year? That depends, Koivisto said.

"When we get closer to January we will have a clearer picture of what the impacts are going to be," he said.

Water and sewer plants and equipment are expensive: The system carries some $475 million in debt for past construction, and big projects loom on the horizon, too: An advanced metering replacement that will cost $50 million, paid off over 20 years, and the modernization of the Neilson Water Treatment Plant in Clemmons.

Still, those projects are all figured into the budget, and the water-sewer system projects adding some $18 million to its reserve fund even with the reduced amount of revenue coming in because of coronavirus.

Some people might question the need for such a large pile of reserves, but Courtney said that the idea is to reduce the need for taking on debt.

"We are trying to get to the point where we can pay more for capital projects with cash," Driver said.

336-727-7369 

@wyoungWSJ

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