Water vs. Roads, Round 3

Friday, May 19, 2017

Maybe the third time will be the charm.

The Marshall County Commission will again consider the adequate facilities tax at their Monday monthly meeting.

The measure has been discussed at the last two commission meetings, with commissioners unable to agree on the details of any increase.

As currently written, the tax is set at 70 cents per square foot for residential construction and 30 cents for commercial construction.

The tax only applies to new construction and is designed to offset the cost of extending infrastructure for new builds, such as water lines.

The first $300,000 raised by the tax is earmarked for the county Board of Public Utilities, the water authority for the county.

They apply the funds toward the debt incurred several years ago when the utility ran roughly 75 miles of water lines throughout the county.

This year the tax is expected to bring in $337,000, the first year that it will have met the $300,000 threshold.

Any funds over the $300,000 amount go into the county’s general fund.

As it stands, the issue for commissioners seems to be how to spend any increased funds generated by increasing the rate, not the increase itself.

The commission will have two different resolutions on their agenda to chose from and a third version could be presented Monday night for consideration.

The county planning commission recommended an increase in the rate back in March to the maximum allowed by the state, 30 additional cents per foot on both residential and commercial to one dollar per square foot for residential and 60 cents for commercial construction.

Commission Joseph Warner introduced a resolution at the March meeting that proposed an increase in the residential rate to $1 per foot, with no increase for commercial. His resolution also called for splitting the revenue equally between the Board of Public Utilities and the County Highway Department.

The resolution was tabled in March in order to await the outcome of Governor Bill Haslam’s proposed gas tax increase in the General Assembly. The final version that was adopted phases in, over three years, a six cent per gallon increase that should add $600,000 annually to the county paving budget.

The issue was again introduced at the April meeting for discussion by Commissioner Mike Waggoner.

After long discussion, commissioners cobbled together another resolution that would increase both rates by 30 cents and would divide the proceeds between the two departments with 70 percent going to Public Utilities and 30 percent going to roads.

An effort to vote on that resolution failed at the April meeting. Since the resolution was not on the agenda, a vote to suspend the rules in order to vote on it was required.

Votes to suspend the rules must be unanimous and some commissioners wanted more time to consider the issue. Both resolutions will appear on Monday’s agenda.

Commissioners Tony Beyer and Mickey King, who serve as commission representative on the Board of Public Utilities, have been adamant that the county’s water authority will be negatively impacted by any loss of revenue.

Beyer said Wednesday at a meeting of the budget committee that either resolution as written would take funds away from the water system.

“The Board of Public Utilities is experiencing some real growth issues,” said Beyer.

Growth in the northern part of the county is straining the utility’s current capacity for delivering water.

The size of the pipes running to that part of the county must be increased in size to handle the additional water flow that is needed.

Such a project was initially estimated to cost roughly $3.2 million but this week the estimate, to replace pipe with larger sizes and build an additional storage tank in the north part of the county, increased to $3.6 million.

The adequate facilities tax funds are the only tax money that the commission can designate to the utility, unlike the Highway Department, to which the commission can appropriate other funds if needed, said King.

If the amount of funds from the adequate facilities tax was decreased the cost would have to fall on the utility’s roughly 2,800 customers.

If Public Utilities is unable to fund expansions, then the county might not be able to provide water to new developments, especially in the north end, due to insufficient flow.

King said at Wednesday’s meeting of the budget committee that he would like the $300,000 cap for Public Utilities preserved with a 50/50 split between water and roads over that figure.

It seems likely that he will offer another resolution to that effect on Monday.

Supporters of retaining the funds with the water department point to additional money coming from the state for road work in the county.

An estimate from the Governor’s office projected up to an additional $600,000 per year from the gas tax increase dedicated to paving and maintaining county roads.

Additionally, legislators diverted $55 million that Haslam wanted to move from the state’s surplus to the Tennessee Department of Transportation directly to the state’s 95 counties.

Marshall County’s estimated share of that windfall is $480,000.

“The thing they (the commission) has to understand is that this may have an impact on the ability of the Public Utility Board to extend additional water lines,” said Beyer. “You have to understand the potential consequences of whatever action is taken.”