Rocky Mount's water and sewer system could pass into private hands, under a proposal offered to the city council this week.
American Water, based in Pennsylvania, will offer the city $174.6 million and retain all water and sewer employees. "From there, we would take ownership and responsibility for investing in those assets," said Brooks Crislip, Vice President of Business Development at American Water.
He said the company has identified about $200 million in needed upgrades to water treatment, pipes, and wastewater management.
"A lot of this infrastructure was put in around the same time. It has aged at the same rate, and it's getting to the point where a lot of it needs replaced," Crislip added.
Crislip emphasized that American Water would have no say on customer rates if it takes over the system.
"Our rates are not set by the company; they are set by the North Carolina Utilities Commission," he told the city council. "So, any future changes to rates would be set by the Utilities Commission through a regulated process."
Mayor Sandy Roberson and the city council had many questions for Crislip after his presentation. Roberson wanted to know how American Water came up with the $174.6 million price tag.
"We look at every bit of pipe and say, 'Hey, this pipe was put in in 1960. It is this type of material. It is depreciated at this rate. Here's the current value'," Crislip explained. "And then you're able to take a multiplier to that value per North Carolina law, and say, 'If we were to replace this today, it would cost X,' and that's how you come up with that that price."
Council member Reuben Blackwell said he's concerned about placing a public asset in private hands.
"Whether you like this group of people or not, it's still a group of people elected by the people who live here and who are paying for it, and that's a hiccup that's hard for me to reach," he said.
American Water has promised to establish a "local advisory board" if it takes over the system.
"An advisory board is not the board of directors. An advisory board is not the executive suite. An advisory board does not make decisions," Blackwell said. Crislip responded by urging Blackwell to contact other communities where American Water does business. He also emphasized the Utilities Commission will have to oversee any major decisions.
The city council took no votes on the matter this week. Members asked the company for more information about how it arrived at the purchase price and its estimates to upgrade the water and sewer system.
American Water's offer comes at a precarious time for Rocky Mount's finances. The council voted in March to raise water and sewer rates by nearly 15% in response to an ongoing budget crisis. An investigation by State Auditor Dave Boliek found millions of dollars in overspending by a former city manager. Earlier this month, the state's Local Government Commission placed Rocky Mount on its "Unit Assistance List" due to financial challenges. City leaders say finances and oversight have improved, and they look forward to working with the commission.
American Water is in the process of merging with the parent company of Aqua, which manages water systems in dozens of North Carolina communities. The $63 billion deal is expected to close in the first quarter of 2027.
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