Water rate decision due

Wednesday, August 18, 2010

With concerns about residents suffering from continued economic hardship and unemployment rates that attracted federal assistance, Lewisburg's City Council meets this afternoon to resume deliberations on how to increase the price of water and sewer service.

Councilman Robin Minor has proposed a utility rate schedule different from what was presented by the Water and Wastewater Board that's led by Councilman Hershel Davis. Minor's plan is "to put more of the load on outside customers," City Manager Eddie Fuller said, reporting Minor's plan.

The rate increase is to raise money to pay for an expansion of the sewage treatment plant as ordered by the Tennessee Department of Environment and Conservation. TDEC enforces federal mandates from the Environmental Protection Agency. EPA administers standards set by the Clean Water Act first adopted by Congress in 1972.

As first presented, the city water board's rate increase would raise an average household's cost by $7-8, according to Kenneth Carr, superintendent of the utility. That average applies to out-of-city customers with sewer service.

Most households receiving city water beyond the municipal line don't use the city's sewer service, a fact emphasized by the existence of the Marshall County Board of Public Utilities. The MCBPU met Tuesday morning.

As drafted for the Council's consideration during its special meeting in City Hall at 4:30 this Wednesday afternoon, the MCBPU's cost for water would go up from $2.15 per 1,000 gallons to $2.40.

MCBPU's contract to buy city water expires in September. An increase would be passed along to the county's customers.

"I don't think we should have any rate increase," said MCBPU Chairman Rocky Bowden, who was recently re-elected as a county commissioner.

MCBPU Superintendent Tommy Whaley said the county-owned utility buys 26 percent of the water produced by Lewisburg and spent $520,000 on it from July 1, 2009, through the end of last month.

Mayor Barbara Woods distributed a proposed water and sewer rate schedule at the Aug. 10 council meeting, immediately acknowledging that the councilmen had not seen it before. Woods, utility and other city leaders worked on the rate schedule for several hours on Aug. 9 and for about 90 minutes on Aug. 10 during a special meeting of the city utility board.

The two-page document has four columns listing: services; current rates in and out of the city; proposed rates; and the amount of the increase. Those 45 numbers on one page indicate that a city resident's cost for the first 2,000 gallons of service would go up from $8.90 to $9.90 and those buying city water beyond the municipal line would pay $1.20 more as the rate might go from $12.08 per 2,000 gallons to $13.28.

Given the assumption that an average customer would use 4,000 gallons, a city resident's bill could go up by about $4.30 per month. The customer beyond the city line would pay about $5.35 more. Those increases are for both water and sewer service.

The increase for water only beyond the city line would be $2.40 for 4,000 gallons of water per month.

Cornersville residents would pay $2.40 more per month, assuming 4,000 gallons of water used.

Issues raised about charging more for water have focused on the reason, which is expansion of the sewer treatment plant, generally estimated at $13 million. A sale of income tax-free city utility bonds is anticipated as the financial vehicle to fund the expansion project. It includes changes to the plant as well as the construction of a big, contained holding tank to serve as a reservoir for a volume of wastewater that's too great for the plant to process at one time. It's needed largely because sewer pipes leak and ground water flows into the system during major rainstorms and the increased flows are too great for the plant's treatment capacity.

Funding the $13 million, however, became an issue.

The utility board's proposed rate schedule was apparently developed "before they got a report from the state to say how much money was needed and the state came back and said you need $160,000 more per year to pay off the bonds" to build the tank and expand the plant's treatment capacity, Fuller said.

"And there's a question about bonds that will be paid off in the spring," the city manager said. "Have they put that extra money in the budget? Will they have that extra money?"

He's also noted people are asking: Why should people outside the city pay for Lewisburg's sewage treatment plant when they just buy water?

"There's not a good answer for that, but it's a decision for the city council and the water board," he said, also noting that those residents "live outside the city and are not paying city property taxes."

Such issues are to be discussed in City Hall late this afternoon.