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City decides against raising water rates
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City water and sewer rates will remain the same, for now.
During a city Water and Sewer Committee meeting, the decision was made to table discussion and not take action on a recommendation by Alderman Jimmy Bonner to raise rates by 1 percent annually.
“Our water rates haven’t gone up in the last five years all that much,” said Bonner, committee chairman. “I know 1 percent isn’t much but if we can do it across the board from year to year to year, we won’t get back into a situation where we have to raise the water rates like we did.”
Going into effect in January 2014, customers inside the city limits were given a 19 percent water rate increase and those outside the city limits saw a 30 percent increase. The increase generated close to $1 million in additional revenue to cover $854,388 the state said the department needed to cover expenses.
The city’s Water Department is an enterprise system, meaning user rates, fees and charges must be sufficient to meet the actual costs of providing water and sewer services.
After reviewing the city’s budget for fiscal year 2013-14, the Tennessee Comptroller of the Treasury indicated revenue was not adequate.
City administrator Bill Brock presented a printout to officials on what a 1-percent increase in rates would do to increase revenue in the department. Per the information, revenue would increase by approximately $51,000 the first year.
“Some utility districts, instead of doing 1 percent annually forever, they will do 1 percent over three or four years. Then, they will come back and review that to see if it needs to be stopped or if they need to come back in two to three years and do it again,” said Brock.
Water Department director Paul Williamson suggested the city consider a higher increase.
“I think it’s a good concept, but I think I would look into something a little more because the cost of living each year is, on average, 2.5 to 3 percent,” said Williamson. “I would look at something like that.”
Alderman Mike Neal says the increase is too soon after last year’s large increase.
“While I agree with the concept of trying to stay ahead, I think it’s personally, and in the eyes of the public, a little early to have another increase,” said Neal. “Also I think there are some other things we need to focus on. At a previous meeting, we discovered there were some meters that haven’t been read right and some rates that weren’t right. What has been done to collect on those? I would also like to know the difference between the gallons produced and the gallons billed and be working on finding problems there.”
In September 2014, Brock was the water department director and he informed the city there is a $300,000 annual difference between what the department was producing in water and what it was selling to customers.
As the current director, Williamson says the effort to find and correct any problems is ongoing.
“It’s a work in progress,” said Williamson. “We have been checking the meters one at a time. We have found a lot of problems, especially where sewer was being credited back to the bill but the credit was more than the sewer on the bill. We found out one meter was supposed to be used for domestic water was being subtracted from domestic water from another meter. We got that revenue back.”
Alderman Everett Brock says he has a problem with raising rates 1 percent across the board for customers inside the city limits and those living outside the city limits.
“I don’t have a problem with 1 percent,” said Alderman Brock. “I do have a problem with across the board. If we are going to provide water to people outside the city, they are going to pay for it more than we are. They are not paying any city taxes. That’s just my 2 cents worth.”
The meeting was allotted 15 minutes. After that time was exceeded, committee members decided to table discussion.