Rate hike looms for Lewisburg Water

Wednesday, April 19, 2017
The average family using 4,000 gallons per month of water and wastewater service will see a 72 cent increase each month on their water bill during the first year of higher rates, and a $3.25 increase on their sewer rate.
Photo by Jay Langston

Lewisburg residents will soon see an increase in their water bills after a request approved by the city’s Water Board at their monthly meeting Monday.

Lewisburg Water and Waste Water General Manager Trigg Cathey presented the request to the board for approval.

The department is requesting a three percent increase in water rates and a 10 percent increase in sewer rates beginning at the start of the next financial year, July 1.

Additionally, the request would authorize additional three percent increases on the water rate for the next three fiscal years, until 2020.

Sewer rates would increase another 10 percent in 2018 and five percent in each of the next two years.

An average family using 4,000 gallons per month of water and wastewater service would see a 72 cent increase each month on their water bill the first year and a $3.25 increase on their sewer rate.

One reason for the difference in the rate increases stems from a higher number of customers having water service who do not use sewer service, due to septic tanks. The cost for sewer service is not passed on to those who do not use it.

The proposed rate structure also does away with “volume discounts.” The rate per thousand gallons of water would be set at $3.80, regardless of how much water is used.

Currently, the cost per thousand gallons decreases after 10,000 gallons used. Federal guidelines suggest doing away with the cheaper volume rates, since water is a limited resource and higher usage should be discourage where possible.

The department cites rising costs, aging equipment, and government regulation as reasons for the request.

Cathey noted that the department’s electric bill in 2012 was $385,000, but in 2016 that figure had risen 22 percent to $470,000.

The cost of chemicals used in water treatment is also increasing.

The water department also needs to carry a larger than usual contingency fund for emergencies or equipment replacement, Cathey said.

A lot of the water lines still in use by the department were originally laid down during the 1940s.

Lewisburg Water is also carrying $17 million in debt from past projects that Cathey would like to begin paying down, both to protect the department’s ability to borrow funds in the future if needed and to avoid passing on that debt to future users.

The department commissioned two different rate studies, one by the Municipal Technical Advisory Service—a University of Tennessee advisory agency for municipal governments, and another by a private firm.

Both concluded that Lewisburg Water needed to increase rates in order to continue operations at mandated levels.

The MTAS study suggested setting a higher commercial rate, but the department rejected that suggestion in order to keep Lewisburg positioned as a more business-friendly city.

The State Revolving Fund came to the same conclusion. The SRF is a state loan fund, providing financing for water infrastructure projects.

The department has presented two projects to the SRF for funding.

One is the refurbishment of the Snell Branch wastewater pumping station. Half of the system’s wastewater flows through the station, which needs new pumps if it is to keep up with the volume demands.

That project would cost $1.1 million, of which $100,000 of the principal would be forgiven by the SRF.

The other $930,000 project is required in order to reduce the amount of nitrogen and phosphorous discharged for the wastewater plant. The federal Environmental Protection Agency has mandated lower levels nationwide, but placed the burden of paying for the necessary equipment on the individual water departments.

The SRF told the city in December that rates would have to increase in order to service the additional $2 million in debt or they would not make the funding available for the two projects.

They required a four percent increase from the department just to service the loan.

The department raised rates by 19 percent in 2010 and increased the monthly minimum water and sewer payments in 2013 by six and four dollars respectively.

The request will be placed on the agenda for next month’s Lewisburg City Council meeting for approval. While the utility operates autonomously from city government, the council must vote on proposed rate increases.