By Miles Layton

PLYMOUTH — Plymouth residents may soon face significant changes in their monthly utility bills as town leaders consider a major restructuring of the municipal water and sewer rate system — a plan that could include double-digit rate increases in the coming years.

Why it matters to residents is straightforward: for households already concerned about rising costs, the decisions made by the Plymouth Town Council in the coming months could directly affect how much families pay for water and sewer service. At the same time, newly revealed audit findings have raised questions about how fairly and consistently those bills have been handled in the past.

The proposed rate adjustments come from a financial study conducted by The Wooten Company, but the discussion has taken on additional urgency following the discovery of billing irregularities that have prompted concerns about transparency and accountability inside the town’s utility system.

Council members say the town must address both issues at the same time — stabilizing Plymouth’s financially strained utility system while restoring confidence that billing practices are accurate and fairly applied.

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Audit Raises Concerns About Billing Practices

During recent council discussions, Councilman John Shelton highlighted two issues uncovered in a billing audit that examined how water accounts have been managed.

The first involved a configuration error affecting customers who live outside Plymouth’s town limits but receive water service from the town. Under Plymouth’s rate structure, outside customers are supposed to pay a higher rate than residents within the town.

That policy reflects the added cost of extending infrastructure and service beyond municipal boundaries.

However, the audit found the town’s billing system had not properly implemented the second tier of that rate structure.

As a result, when outside customers exceeded the 2,000-gallon monthly threshold, the system charged them the same lower rate as in-town customers rather than the higher rate intended for out-of-town service.

Because of how the billing formula worked, the mistake sometimes produced an even more unusual outcome: customers using more water could actually pay less than they would have if they used less.

Town Manager Joanne Floyd said the problem has now been corrected.

The second finding raised deeper concerns for Shelton.

The audit showed that adjustments reducing customers’ water bills had been made without following a formal approval chain.

In other words, someone within the utility system had the ability to reduce individual bills without authorization from management.

“That concerns me,” Shelton said.

Shelton noted the contrast between that discovery and the complaints he has heard from residents who say it has been difficult to obtain adjustments when they believe their bills were incorrect.

“I have heard many residents complain about the water bills and how difficult it has been for them to get an adjustment,” Shelton said.

Shelton urged the town to implement a clear, written process governing how billing adjustments are approved so that decisions are applied consistently rather than informally.

Town officials told the council that changes have already been made. Under the new policy, all bill adjustments must receive manager approval, and customers requesting adjustments must provide documentation to support their request.

Still, the revelations have added a layer of skepticism to a conversation already sensitive for many residents.

Rate Study Paints Challenging Financial Picture

These water woes come as Plymouth faces another pressing issue: the long-term financial health of its water and sewer systems.

Last July, Wooten Company conducted the rate study as part of the closeout requirements for a Wastewater Asset Inventory and Assessment grant awarded in 2021. State grant programs often require municipalities to analyze the sustainability of their utility systems as a condition of funding.

The results presented to the council in December show a system under increasing financial pressure.

Consultants identified more than $5 million in infrastructure needs over the next five years. Those projects include upgrades to water and wastewater treatment facilities, repairs to aging pipes and pumps, and improvements required to maintain regulatory compliance.

Debt service on those projects alone is expected to exceed $300,000 annually once construction begins.

When those costs are combined with routine operational expenses — including electricity, treatment chemicals, maintenance, and staffing — the study estimates Plymouth will need about $2.81 million per year to operate the system by the fifth year of the financial plan.

Current revenues are projected to reach only about $2.52 million annually under the town’s existing rate structure.

That leaves a gap of roughly $290,000.

Without changes, consultants warned, the town’s water and sewer enterprise fund will struggle to remain financially sustainable.

“Distressed Unit” Designation Adds Pressure

The financial challenges are compounded by Plymouth’s designation as a “distressed unit” by state oversight agencies, including the State Water Infrastructure Authority and the Local Government Commission.

That classification signals that a municipality’s utility system is financially vulnerable.

The designation can also limit the town’s ability to secure state grants or low-interest loans for future infrastructure projects unless corrective action is taken.

For a small community like Plymouth, access to those programs is often essential.

Many towns simply cannot afford large-scale infrastructure upgrades without state assistance.

As a result, restoring financial stability to the utility system is not only a budgeting issue but also a strategic necessity if Plymouth hopes to continue improving its infrastructure.

Significant Rate Increases Proposed

To close the financial gap, consultants outlined a series of proposed rate increases.

The recommended plan includes:

• A 30 percent increase in water rates in the first year
• A 12 percent increase the following year
• Annual increases of 6 percent after that

The increases would continue until the town’s water reserve fund returns to a positive balance, which the study projects could occur by 2030.

While those numbers may initially alarm residents, consultants also proposed restructuring how water bills are calculated — a change that could offset some of the impact for many households.

New Billing Structure Could Lower Some Residential Bills

Under Plymouth’s current rate structure, residential customers pay a flat monthly base charge regardless of how much water they use within the base threshold.

The current system charges:

• $30 per month for water for up to 2,000 gallons
• $32 per month for sewer service

The proposed structure would dramatically lower those base charges while introducing a usage-based pricing model.

Under the proposal:

• The residential water base charge would drop to $13.45
• The sewer base charge would drop to $15.16
• Additional water would be billed at $4.50 per 1,000 gallons

Consultants estimate that a typical household using around 5,000 gallons per month could actually see its monthly bill decrease despite the overall rate increases.

Under current rates, that household might pay about $57.

Under the proposed structure, the monthly bill could drop to roughly $36 once the system is fully implemented.

The goal is to shift the billing structure toward a more usage-based model, rewarding conservation while stabilizing revenue for the utility system.

Commercial and Out-of-Town Customers Would Pay More

Not all customers would benefit from lower bills.

The restructuring would shift a larger share of the cost burden toward heavy water users, including commercial and industrial customers.

Commercial accounts would face higher base charges and usage rates reflecting their typically higher water demand.

Customers outside Plymouth’s municipal boundaries would also pay significantly more.

Under the proposal, outside customers would pay double the base charges of in-town users.

For example, an out-of-town commercial customer would face a minimum monthly water charge of $32.28.

The rationale is that serving customers beyond town limits requires additional infrastructure and maintenance.

The billing error uncovered in the audit — which resulted in outside customers being charged the lower in-town rate — therefore has broader financial implications for the town.

If those customers were undercharged for an extended period, Plymouth may have collected less revenue than it should have at a time when its utility finances were already strained.

Alternative Rate Models Considered

Before recommending the current proposal, consultants examined several alternative pricing models.

Seasonal rates — which increase water prices during peak demand months — were considered but ultimately rejected because Plymouth’s water demand does not fluctuate dramatically during different seasons.

Consultants also reviewed decreasing block rates, which lower the price per gallon as usage increases.

That model is sometimes used to attract industrial users, but it can produce unpredictable revenue patterns.

Consultants concluded that a uniform volumetric rate combined with lower base charges offered the most stable and transparent approach for Plymouth’s needs.

What Happens Next

Plymouth’s water system currently serves approximately 1,279 customers, while the sewer system covers about 1,284 accounts.

Every one of those customers will be affected by whatever rate structure the Town Council ultimately adopts.

The proposed changes are expected to be discussed in detail during upcoming budget workshops for the next fiscal year.

Council members will have the opportunity to review the recommendations, hear public input, and decide whether to adopt the new rate structure.

If increases are approved, state law requires public hearings before the new rates can take effect.

Accountability Remains a Key Issue

While the financial challenges facing Plymouth’s utility system are substantial, the audit findings have underscored another issue that many residents view as equally important: trust.

For customers who have spent months disputing high water bills or requesting adjustments, the discovery that some bills were altered without formal approval has raised questions about fairness.

Shelton said that restoring public confidence requires clear rules and consistent enforcement.

“A procedure needs to be in place with proper approval,” Shelton said, “and that procedure must be followed consistently.”

Town officials say the necessary corrections have already been made, both to the billing software and to the approval process for adjustments.

Whether those reforms will satisfy residents — and whether the proposed rate restructuring ultimately proves workable — will become clearer as Plymouth enters its next round of budget discussions.

For now, the town faces a difficult balancing act: repairing aging infrastructure, maintaining access to state funding, and ensuring that the bills residents receive are accurate, transparent, and fair.