McMinnville officials have settled on a 20.5 percent increase in water and sewer rates to satisfy the state and cover pending upgrades within the department.
Water and Sewer Committee members Jimmy Bonner, chairman, and Mike Neal voted for the increase Tuesday night. Alderman Billy Wood voted against it.
Wood says he is OK with a 20 percent increase for non-city residents who are connected to the city’s water supply, a lower increase for city residents, and allowing the department to keep the money it pays to the city in lieu of taxes annually.
“I think we could do it at 15 percent,” said Wood. “We could probably do it at 12 if you brought outside the city to 20. We do represent residents of the city.”
The 20.5 increase is larger than the 20 percent officials considered two weeks ago to satisfy a Tennessee Comptroller’s requirement that the department’s revenue increase by $854,388 to cover expenses. At 20 percent, revenue would increase by $989,194.
Interim Water Department director Bill Brock says he sat down with city engineer Anthony Pelham and the two decided a 20.5 percent increase would satisfy the state and give the department what it needs for upgrades. At 20.5 percent, revenue would increase by more than $1 million.
“The $1 million will get us above the $800,000 the state says we need in additional revenue and help us with rehabbing of the sewer plant, so we won’t have to raise rates now to take care of expenses and raise rates later to cover construction,” said Brock. “I would rather do it one time and be done with it.”
The increase would add 8 cents on 100 gallons of water, says Brock.
“I know the number sounds scary percentage wise, but we are going up only 8 cents on 100 gallons of water. That’s pretty cheap water. If you can buy anything for 8 cents at 100 gallons, I would like to know what it is,” said Brock.
Vice Mayor Ben Newman suggested the city consider ways to prevent large increases.
Brock replied, “A lot of utility districts tie increases to consumer price index. Once you go up and get your rate stable, you tie it to that. You stay out of these high jumps, but I don’t know if that’s a good thing or a bad thing.”
Connecting water and sewer rates with the consumer price index would require the board to pass a resolution or an ordinance.
No decision was made regarding rates and CPI. The measure to increase rates by 20.5 will be sent to the full board for its approval.