Graham schedules special meeting on updated water and sewer fees
Graham is revisiting water and sewer development fees as a new April study shifts more growth costs onto builders and future buyers, not current ratepayers alone.
The next round of growth costs in Graham may fall first on new homebuyers and developers, not on the city’s existing water customers. A public notice posted May 29 said the Graham City Council reached consensus during its May 20 budget work session to keep discussing the city’s Fiscal Water and Sewer System Development Fee Analysis, a sign that officials are still weighing who should pay for the utility capacity needed as the city grows.
The updated analysis was finalized April 23 by Hazen and Sawyer, and it comes with a legal deadline attached. North Carolina General Statute 162A, Article 8 requires system development fee studies to be re-evaluated and updated at least every five years, and the fees must be published in the annual budget or rate plan ordinance. The report says system development fees are one-time charges for new water and sewer customers, meant to recover part of the cost of capacity tied to growth. In practical terms, that means the bill is aimed at the next wave of development, while current ratepayers can still be affected through separate utility rate changes.
That distinction matters in Graham, where the city is already juggling multiple utility expenses at once. The city manager’s proposed FY 2026-2027 budget was presented May 12, the council held its budget work session May 20, and the public hearing is scheduled for June 9. The proposed budget also projects a 6% increase in water and sewer rates for the coming fiscal year, after a 4% increase in FY 2025-2026, putting added pressure on households even before any new development fee is set.
The new analysis builds on an earlier one from 2022, when the city said its water and wastewater systems had enough capacity to serve new customers at the time. That earlier study put the net asset value of the water system at $22,131,976 and wastewater at $20,060,262, while estimating about $82,010,000 in needed system-wide capital improvements. Of that amount, roughly $11,750,000 could potentially be recovered through system development fees. The 2026 report uses a combined methodology, with a buy-in component for existing capacity and an incremental component for future capacity, and it points to value tied to projects already under construction.
The stakes are larger now because Graham’s utility system is being asked to support a substantial pipeline of work. Local reporting in March said the city had identified $61.7 million in water and sewer projects needed within five years, and about $75 million in total capital needs through 2031. Graham’s water and sewer system includes more than 104 miles of water mains and 93 miles of sanitary sewer, so any change in fee policy can ripple into project budgets, housing costs, and the pace of new building across Alamance County.
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