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City can't decide water rate increase
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City officials are running out of time to decide how much to raise water rates in an attempt to satisfy a state-mandated increase.
The measure has been sent to the full McMinnville Board of Mayor and Aldermen for a second time after failing in committee.
Under consideration is a 19 percent increase for customers who live inside the city limits and a 30 percent increase for customers who live outside the city limits.
Water Department director Bill Brock says the increase would generate close to $1 million in revenue, which is what the department needs.
“I make a motion we approve the recommendation,” said Water and Sewer Committee chairman Jimmy Bonner.
Alderman Billy Wood said, “There’s not a chance I’m going to vote for this.”
The Water Department pays the city approximately $250,000 in lieu of taxes. Wood says he wants to allow the department to keep those funds and reduce the pending increase on city residents.
“Recompute it with the department not paying its $250,000,” Wood said, “That’s the only way I’m going to vote to do it. This board refused to cut property taxes and it’s setting on $3.5 million of their money. Now, we are going to raise water rates. No.”
On the Water and Sewer Committee with Bonner and Wood is Alderman Mike Neal, who was absent.
The back-and-forth battle has put the city in danger of state action. The state could step in and make the decision for the city, says city recorder Shirley Durham.
“I told them the city’s plans were to raise rates and they would be effective Nov. 1,” she said. “That hasn’t happened.”
After reviewing the city’s finances for 2013-14, the Tennessee Comptroller’s office informed the city it needs to increase water rates to generate an additional $854,388 to cover expenses. Because the department is an enterprise system, meaning its revenue must cover all expenses, the state felt current revenue would fall short.