Gastonia locks in 7.5% water and sewer rate hike to fund $6M capital plan and secure AAA rating

Gastonia locks in 7.5% water and sewer rate hike to fund $6M capital plan and secure AAA ratingFacing aging infrastructure and a growing population, the Gastonia City Council has approved a 7.5% water and sewer rate increase for FY2027 to back major capital projects, including pump station upgrades and an Advanced Metering Infrastructure (AMI) rollout.

The 7.5% rate increase is expected to generate an additional $6 million for the city's 10-year capital improvement plan.

The overall water and sewer budget increased by 17%, with operations alone costing over $65 million.

Capital priorities include rolling out Advanced Metering Infrastructure (AMI), upgrading 40 pump stations, and replacing century-old infrastructure.

City Manager Michael Peoples announced the utility recently achieved a AAA bond rating from Fitch, attributed to the newly adopted rate plan.

Stage 2 water restrictions remain in place as the city continues to navigate drought conditions.

During its June 2, 2026 meeting, the Gastonia City Council approved its FY2027 fee schedule and annual budget, which includes a 7.5% increase in water and sewer rates. The hike is designed to generate an additional $6 million to fund a 10-year capital improvement plan targeting deferred maintenance across the city's aging utility network. City Manager Michael Peoples noted that the rate adjustment is a critical step in addressing infrastructure that is, in some cases, over 100 years old. The city's water and sewer system currently supports more than 100,000 daily users, maintaining 30,000 water meters, 40 pump stations, three wastewater treatment plants, and one water treatment plant. "People don't get into the water and sewer business to make money," Peoples told the council, emphasizing that the $65 million operations budget is essential for maintaining service as the city's population surpasses 85,000 residents. He added that the 7.5% increase is "probably less than what we would absolutely need to continue to address at a higher level," pointing to a separate list of unfunded projects. The overall water and sewer budget saw a 17% increase for FY2027. Major capital projects slated for funding include the ongoing deployment of Advanced Metering Infrastructure (AMI) for water and sewer, comprehensive pump station improvements, and water line upgrades. The commitment to a structured rate plan has already yielded financial dividends for the utility. During his closing report, Peoples announced that Fitch recently upgraded the water and sewer division's credit rating to AAA—the first time the city's utility has achieved this status. Peoples attributed the upgrade directly to the strategic rate plan presented to the rating agency. Meanwhile, Gastonia's water supply remains under pressure from ongoing dry conditions. Peoples reminded the council that Stage 2 water restrictions remain actively in place, urging residents to conserve water as the summer begins.