CHARLOTTE, N.C. — As Charlotte's city manager prepares to announce how much higher water and sewer customers' bills should increase, a WCNC Charlotte investigation found Charlotte Water has overspent in recent years. In the midst of an unusually difficult financial year in 2024, records show the utility has delayed and even stopped several major projects.
Charlotte Water has suggested a rate increase range of 5.75% to 5.99%, which is substantially higher than the prior two years. If eventually approved by the council, the average customer's bill would increase by $4.37 to $4.55 a month.
The city manager recommended his rate proposal at Monday night's council meeting.
"One of our biggest struggles internally is making sure that we can cover all of our operations and keep rates affordable," Shawn Coffman, the Charlotte Water deputy director, explained. "We really work hard to ensure that we have a reasonable rate and that it's part of what folks can afford. It's a challenge. Everybody has struggled with the inflationary pressures."
Coffman said inflation has taken its toll on the utility, resulting in higher expenses for construction, chemicals and power. That, along with more government regulation, the city's growing infrastructure needs and increased borrowing costs, have led to an unusually difficult set of circumstances that he said is out of the utility's control.
"We are making tough decisions," Coffman said. "I think the environment for all utilities has been challenging the last few years."
A Charlotte Water meeting video obtained by WCNC Charlotte revealed the department cut more than $100 million in the middle of this fiscal year, is preparing for even more cuts and could go over budget by $60 million by the end of this fiscal year. Since 2021, Charlotte Water has overspent on long-term projects by a combined $168 million, according to internal records.
"We have spent more than our original budgets with the introduction of a number of new projects," Coffman said. "There certainly have been cost increases, especially over the last four years for all of our projects. It has forced us to put a sharper pencil on some of our other capital programs."
As a result, Coffman said the utility has delayed "a few" projects in order to stay within its budget this year. Public records show Charlotte Water has delayed or stopped nine projects in all.
"We're not impacting current users and the goal is not to impact future users of the system," Coffman said of the paused projects. "There are hard decisions that are made on a daily basis"
Four of the projects on hold are designed to upsize existing sewer lines "to increase capacity." A previous WCNC Charlotte investigation uncovered a growing number of sewer system failures that have resulted in blockages and blowbacks that have forced raw sewage into people's homes.
"Have you all told council the situation you all are currently in, having cut $100 million during the year?" WCNC Charlotte asked Coffman.
"So, actually yes. We've discussed prioritization of projects," he replied. "There have been a number of council members that have been interested in the process and we walked them through our model and provide any information that they may request or need."
"Have you explained the magnitude of the cuts?" WCNC Charlotte asked.
"We've had discussions related to the entire capital program," Coffman replied. "They are aware that there are needs that we are having to prioritize and we're trying to move forward with the best possible scenario to meet those needs."
Following WCNC Charlotte's initial questions of Charlotte Water, newest councilmember Tiawana Brown said the utility did not share specific information when she recently toured Charlotte Water with leadership.
"I didn't get that information. None of this information that you're giving me today, I didn't get this on my visit," Brown told WCNC Charlotte just hours after her tour. "There was no numbers ever stated."
"They did not tell you they paused nine projects?" WCNC Charlotte asked.
"No, I don't know anything about them nine projects," she replied. "This is my first time hearing about pausing nine projects."
The councilwoman said it's critical the utility is transparent with the public, especially in light of the rate increase proposal.
"We need to make sure that we're transparent, that that information is out," Brown said. "I don't like for my constituents to be blindsided. So I want to go and get all of the information that I can. I would want to know all of the information, not some of the information. I want to know all of the information."
Coffman said the utility believes it has been "very transparent" related to Charlotte Water's budget and "how we move forward." Despite the recent challenges, Coffman pointed out Charlotte Water has maintained the highest credit rating, which generally, suggests financial stability.
"We're being the best stewards that we possibly can of the community's resources," Coffman said.
WCNC Charlotte is always asking "where's the money?" If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.
He questioned the numbers shared in the leaked meeting video, including the projection that Charlotte Water will go over budget by $60 million this year.
"This year doesn't stop until July 1. I don't know that I have an estimate for you for the entirety of our fiscal year that's not closed and I don't believe that's the case," he said. "I will be more than happy to go back and find out information about that particular meeting and we can talk further if you like."
Coffman declined WCNC Charlotte's offer for a follow-up interview.
Contact Nate Morabito at nmorabito@wcnc.com and follow him on Facebook, X and Instagram.
WCNC Charlotte's Where's The Money series is all about leveling the playing field in the Carolinas by helping others and breaking down barriers. WCNC Charlotte doesn't want our viewers to be taken advantage of, so we’re here to help. Watch previous stories where we ask the question “Where’s the Money” in the YouTube playlist below and subscribe to get updated when new videos are uploaded.