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REIDSVILLE — Residents and business owners might as well brace for the sticker shock. They are likely to see their water and sewer rates rise sharply by this summer.

Officials have known for some time that the city’s relatively low water and sewer rates could not last. But City Council members learned this week that the average residential water user would need to start paying 41 percent more for utilities to keep Reidsville’s water and sewer budgets in the black.

Specifically, Finance Director Chris Phillips recommended that the city double its flat base charge for all residential and business customers and increase the per unit charge by 15 percent. That would increase the average water user’s monthly costs from $37.15 to $52.20.

However, the increases still would place Reidsville below state median utility rates.

The council took no action at its Tuesday workshop, but Phillips said he expects the council will approve an increase no later than July.

“I understand that we are in jeopardy because we put off raising the rates for so long,” said Councilman Clark Turner. “I really don’t know any other option that we have at this point. I think we’re going to have to bite the bullet.”

The city was able to hold off on raising its rates for 12 years because of a contract to sell treated water to the city of Greensboro. Reidsville was able to keep its rates flat when Greensboro initially agreed to buy at least 1 million gallons of water per day and to pay for upgrading Reidsville’s water plant.

Greensboro recently reduced its minimum purchases to 500,000 gallons per day. And Reidsville faces expensive improvements to its wastewater treatment plant.

A February letter from the state treasury department also warned the city about the condition of its water and sewer funds.

In the letter, state accountant Sharon Edmundson noted that “the water and sewer system may not be sustainable in their current form over the long term. ... The Sewer Fund’s cash flow from operations, while positive, is not sufficient to cover the cash outflows necessary to provide sewer services to your customers and the related debt service payments.”

“We weren’t shocked,” Phillips said about the letter. “We’ve talked about it before.”

Phillips said the council likely will talk about his proposal again next week at a budget workshop. Council members also discussed meeting with local business leaders to explain the changes.

The city’s eight largest business customers will experience monthly bill increases of 17 percent to 78 percent if the higher rates are approved.

“We don’t want our water rates to keep someone from coming here,” Phillips said of the rates’ potential impact. “That’s why the rate increase is straight across the board on business and residential. We didn’t want to shift the burden one way or another.”

Phillips’ other recommendations include adjusting utility rates for inflation on a regular basis, charging new business customers a $75 deposit, and waiving reconnection fees once a year for people who don’t pay their bills on time.

Contact Morgan Josey Glover at 627-4881, Ext. 119, or morgan.josey@news-record.com