Just more than a year after hitting city water and sewer customers with a large rate increase, McMinnville officials will be considering a smaller one Tuesday.
“I am going to propose that we raise rates 1 percent,” said Water and Sewer Committee chairman Jimmy Bonner.
Going into effect in January 2014, customers inside the city limits were given a 19 percent 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 for future upgrades.
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 informed the city revenue was not adequate.
Bonner says he would like to prevent another large increase in the future.
“If we raise rates 1 percent annually, we can prevent the 30 percent increase like we had to do,” said Bonner. “They waited five years before they went up on the rates. That’s why we had to in-crease the rate so high at one time. If we do this, it will prevent a large increase four, five or six years down the line. We don’t need the revenue now, but we don’t need to wait until we are in the hole by $1 million and have to give customers a 30-percent increase.”
Unlike 2014, when the rate increase was higher on non-city residents, Bonner’s proposal will be an equal increase for all customers.
“It’s going to be across the board,” said Bonner. “It’s going to be 1 percent inside the city, as well as those outside the city. It’s fair to everybody.”
At this time, the cost to customers is unknown. However, Bonner expects that information during Tuesday night’s Water and Sewer Committee meeting scheduled to begin at 6:45 p.m. on the third floor of City Hall.