When you provide goods or services and the cost of doing so exceeds the amount you get in return, you won’t stay in business for very long unless you make up the difference by charging more for something else.

But that’s what Ellerbe had been doing with utility customers.

Town officials say the rate disparity was an honest mistake. Some blamed their auditor for not raising red flags or raising them high enough.

In the big picture, utility rates may not seem like a big thing, but in Ellerbe’s case, the town needs to secure grants and loans so it can connect to the Rockingham sewer system. That would enable the town to close an outdated treatment plant. The expansion will cost more than $4 million, and that’s money Ellerbe doesn’t have.

Hopefully the Golden LEAF Foundation will provide $1 million of the cost, but in order for Ellerbe to be eligible for other funds it needed to make a good faith effort to bring the rates into line with the actual cost of doing business.

We can understand why the state and federal government may not be keen on the idea of handing out money to cities and towns that are already losing money on water and wastewater services. Why help somebody out if they are giving the service away for free?

“If you take a loss a couple of years, the state starts to look at you,” said board member Jerry Meacham.

“This (operations data) should be reviewed every year instead of every three years. Compared to everybody else, our rates are extremely low because we’re losing money on sewer and water. Just raising sewer rates alone right now may be OK, but at some point in time we’re going to have to raise water rates to make it equal to everyone else.”

Ellerbe isn’t alone. A lot of smaller towns subsidize the cost of services. According to the Lumber River Council of Governments, Dobbins Heights and Hamlet are in the same boat. Even though Dobbins Heights is charging $55 a month to a typical water-sewer customer it’s still not making enough to cover the cost of the service, according to the Council of Governments. Hamlet’s average bill for the same 5,000 gallon customer isn’t much lower, at $46. Ellerbe’s was $27.

A public hearing to discuss the new budget, which includes the sewer rate increase, is set for June 29. The council will vote on the budget at that time. If approved, the increase will go into affect July 1.

Ellerbe customers may not like paying more, but the long-term benefits of having the new sewer line will be worth it to both Ellerbe and Richmond County.