OWASA approves 4% rate hike and $488m 10-year CIP for PFAS and infrastructure upgrades

OWASA approves 4% rate hike and $488m 10-year CIP for PFAS and infrastructure upgradesThe Orange Water and Sewer Authority has adopted its FY 2027 budget, advancing major capital projects including a $105 million clearwell replacement and programming $58.8 million for a future PFAS treatment system.

The board approved a 4% water and wastewater rate increase effective October 1, 2026, raising the typical residential monthly bill by $4.03.

The FY 2027 budget includes $36.9 million for operating expenses and $41.7 million for capital improvements.

The $488 million 10-year CIP features $105 million for a new clearwell and finished water pump station.

The capital plan includes $58.8 million for a new PFAS drinking water treatment system scheduled to begin in FY 2032.

Executive Director Todd Taylor warned that exceptional drought conditions could trigger Stage 1 restrictions and drought rate surcharges by July.

The Orange Water and Sewer Authority (OWASA) Board of Directors unanimously approved a 4% water and wastewater rate increase and a $488 million 10-year Capital Improvements Program (CIP) during its June 25, 2026, meeting in Carrboro, North Carolina. The rate adjustment, effective October 1, 2026, will increase the typical residential monthly bill for 3,000 gallons of usage by $4.03. The revenues will support a fiscal year 2027 budget that includes $36.9 million in operating expenses, $12.5 million in debt service, and $41.7 million for capital improvements. A major driver of the $488 million 10-year CIP (FY 2027-2036) is the need to replace aging infrastructure and comply with looming water quality regulations. The largest single capital investment is $105 million for a new clearwell, finished water pump station, and electrical distribution system at the water treatment plant. The critical structure has reached the end of its useful life, and $2.5 million is allocated to advance the project in FY 2027. The utility is also preparing for long-term regulatory compliance regarding per- and polyfluoroalkyl substances (PFAS). While the FY 2027 operating budget includes roughly $930,000 for powdered activated carbon to meet impending EPA limits, the 10-year CIP programs $58.8 million for the design and construction of a dedicated PFAS drinking water treatment system beginning in FY 2032. Other near-term capital priorities for FY 2027 include $5.1 million for the Briarcliff and Ridgefield water line replacements, $4.9 million for the Morgan Creek Interceptor phase two, and $1.4 million for service line replacements to comply with the Lead and Copper Rule Revisions (LCRR). In addition to financial approvals, the board received a briefing from Executive Director Todd Taylor on the region's exceptional drought conditions. With reservoir storage levels currently at 77%, Taylor indicated that OWASA expects to declare a Water Shortage Advisory in the coming weeks, potentially escalating to Stage 1 mandatory restrictions by July. A Stage 1 declaration would trigger targeted drought rate surcharges for residential usage exceeding 5,000 gallons per month to incentivize conservation.