Water rates up while property taxes down

Friday, June 9, 2017

The Lewisburg City Council touched on a pair of important resolutions for the next fiscal year at Monday’s work session.

Councilmen agreed to bring a proposed rate increase by Lewisburg Water and Wastewater to a vote at their monthly meeting next Tuesday and voted to accept on first reading the proposed city budget for the 2017-18 budget year.

General Manager Trigg Cathey reviewed the basis for the requested rate increase with the council, using the conclusions from a study by the Municipal Technical Advisory Service of the University of Tennessee.

Based on the data, the utility must increase rates in order to continue required operations without having expenses surpass revenues.

State law requires that water utilities operate with positive cash flow. Utilities that do not operate in the black are subject, after two years, to intervention by the state which will set rates as it sees fit in order to increase revenue.

The proposal would increase water rates six percent each year for two years and sewer rates by 16 percent each year for two years.

A household using the minimum 2,000 gallons per month of water and sewer services would see their bill climb from $36.06 per month to $44.85 over the two-year period.

The proposed increase would raise revenue by approximately $1.1 million.

Cathey said that the two rate studies commissioned by the department concluded that the increase was necessary in order to meet increasing costs, future capital needs, and debt service.

The water department currently carries $17 million in long-term debt on roughly $6.2 million in annual revenue.

The department spends 27 percent of its income on debt service.

Cathey said that the department will have to borrow $1.1 million from the State Revolving Fund in order to construct a federally mandated system to reduce phosphorous and nitrogen in the water entering Big Rock Creek from the wastewater treatment plant.

The department would try to avoid adding more debt, Cathey said, by funding as much of the $900,000 refurbishment of the Snell Branch wastewater pumping plant with cash instead of debt.

Greg Davenport, from Wauford Engineering, the city’s water system engineering firm since 1974, said that the Snell Branch pumping station was the largest in the system, handling between 40 to 50 percent of all of the wastewater in the city, covering the western side of town.

The pumps at the 30-year-old station, while still working well, are 10 years past their expected service life.

The council agreed, without discussion, to add the rate increase, as proposed, to their Tuesday meeting agenda for a vote on first reading.

The rate increase would require three readings and if passed would go into effect on October 1.

After the work session, the council held a specially called meeting to approve the 2017-18 budget.

City Treasurer Donna Park informed the council that, based on increased property assessments after this year’s county-wide reappraisal, the city’s property tax rate should drop.

The final tax rate for the next budget year should be approximately $1.69 per $100 of assessed value, down from the current rate of $1.90 per $100.

Councilmen approved the $14,771,119 proposed budget unanimously on first reading,

The budget includes several hundred thousand dollars in state grants for paving and road improvement projects along Yell Road and 1st Avenue.

Tuesday’s meeting will provide the opportunity for the budget’s second reading, as well as the required public comment period.

Councilmen will vote on several other resolutions on Tuesday as well.

Two of the proposed resolutions aim to ease the way for development in Lewisburg.

One would call for the adoption of the International Existing Building Code as a standard for the city, in addition to the International Building Code currently in use.

While the change would not impact basic building standards, it does make the rehabilitation of older, existing buildings easier for developers.

Under the IEBC for example, older buildings would not have to be brought up to current earthquake standards, saving time and money for developers.

The main impact of the change would be felt on the development of the more historic buildings around the square in Lewisburg.

Councilmen will also consider decreasing the allowed distance between alcoholic beverage permit establishments and schools or churches from 500 feet to 250 feet.

The change would bring the city into line with state standards as well as most Middle Tennessee municipalities.

City Administrator Randall Dunn said that, in both cases, potential developments were on hold because of the building code requirements or the distance requirements.