Public‑utility staff presented the FY26 Central Nash and Northern Nash water and sewer budgets and recommended a set of rate adjustments to cover a projected operating deficit and to help build internal reserves.

Mike Phillips said Central Nash faces a larger shortfall driven primarily by sewer costs and an increase in wholesale purchase rates from Rocky Mount and Nashville; his recommended package (staff option 2) would raise water base and usage rates and increase sewer base/usage rates so that a typical 5,000‑gallon household's water bill would rise about $4.20 and the sewer charge would rise about $14.50 under the proposal. Phillips said the Northern Nash water fund was in surplus but Northern Nash sewer showed a deficit; staff proposes a rate package that addresses both districts’ cash needs without cutting service.

Phillips also presented a proposed internal fund‑balance target for both utility districts modeled on peer practices: a target equal to six months of operating expenses plus one year of debt service. Using that model the target would be roughly $1.92 million for Central Nash and $635,000 for Northern Nash; current FY24 audit cash stands at about $1.28 million combined (about $240,000 of which is in Northern Nash). Staff recommended setting the target and working to reach it over a 3–5 year period while monitoring affordability and new capital obligations.

Commissioners asked about alternatives (holding base rates steady and raising usage rates) and effects on small water users and seniors; staff said they can run alternative scenarios and will return with detailed comparative models. No final rate ordinance was adopted at the work session; staff will return with final proposed rates for adoption during the formal May budget process.