October 10, 2018
By Marlana Ward
The October meeting of the Mountain City Board of Mayor and Aldermen saw much discussion and some disagreement as the group addressed proposed raising and lowering of water and sewer rates as recommended in a report from a state agency. The State of Tennessee is requesting changes after recent audits found the utility to be operating at a deficit.
In an interview after the council meeting, City Recorder Sheila Shaw explained how the state came to be involved with the utility rate situation: “If during an audit it is found that we are operating in the red for two years in a row, the Water/Wastewater Finance Board meet and tell us what to do, she said. “That happened. We are under an order stating that we would have a rate study done and that we will look at tap fees and rate changes. MTAS did the rate study and gave us their new recommendations. They gave what they thought fees and rates should be to bring finances back to black.”
The rate changes proposed by the Municipal Technical Advisory Service (MTAS) included the following:
• Inside City Water Minimum Rate of $11.00 for up to 2,000 gallons. An increase of $0.93.
• Inside City Over 2,000 gallons rate of $5.00 per thousand. An increase of at least $0.35 per thousand gallons.
• Outside City Water Minimum Rate of $22.00 for up to 2,500 gallons. A decrease of $7.40
• Outside City Water Over 2,000 gallons rate of $7.00 per thousand. An increase of at least $1.70 per thousand gallons.
• City Sewer Rate of $8.00 for up to 2,000 gallons. An increase of $1.75.
• Outside Sewer Rate of $16.00. An increase of $2.00.
When asked about the seriousness of a state order of this type, Shaw stated, “We have been under an order in the past. They tell you what to do, and you do it, or they come in, and they do it for you. They have that authority.”
During the council meeting, City Mayor Kevin Parsons was the first and most vocal about opposing the increase of rates for city residents. “I think we could save money elsewhere,” he stated.
Alderman Jerry Jordan shared how he initially was against any rate changes but had seen some benefit to the commercial side of the proposal. “I was completely against this until the financial workshop and saw that big businesses are going to have to start paying,” Jordan said. “They have simplified the rates.”
Shaw echoed that by adding, “People that use more water will pay more.”
Jordan expressed that while he understood customers would not like the new rates, it was necessary as rates had not changed in several years.
“No one likes an increase, but we have to use common sense. We cannot pay employees more and have our equipment and not raise rates.”
Alderman Bob Morrison wanted to be very clear with the public as to why the board was considering these changes, “We are doing this because the state has told us we were operating in the red and we have to correct that.”
Mayor Parsons reiterated his resistance to raising city resident rates. “The only way I will support this is if no increase is given to people inside the town.”
“Those in the city should have a little edge,” agreed Alderman Jordan. “Those that pay property tax and city tax should get some benefit.”
Mayor Parsons requested the ordinance discussion be tabled for further discussion next month after expenses could be reviewed in other areas to avoid raising rates. Shaw reminded the group that she had already requested an extension of the state order to allow for the study to be completed and she had to provide the state with an answer following the October Council meeting.
Alderman Jerry Jordan made the motion to approve the first reading of the ordinance with the condition that the proposed minimum rate increase of $0.93 be placed on the outside of city customers rather than city customers. A vote was taken with Mayor Parsons voting no but Aldermen Crosswhite, Icenhour, Jordan, and Morrison voting yes. The motion carried, and the ordinance will be presented for the second reading and public hearing at the next City Council meeting on November 13.
Following the meeting, Mayor Kevin Parsons offered the following statement regarding his stance on the MTAS proposal: ““I strongly oppose the water and sewer rate adjustments the city council approved as it produces higher water bills for city residents. This recommendation to us came from a state agency because they did not like our current rate structure, which does take into consideration that if it costs less to provide a product for a customer based on where they live then they should pay less. Common sense reasons that maintaining water distribution lines that are closer to the water source, which include city customers, cost less than say Butler or Dry Run, customers. We have county water customers because this same state agency forced the town to take over these old water systems including Pleasant Valley Utility, Dry Run Utility, and others because they were unable to continue operating. Many feels, part of the intent of living in town was to have access to an affordable public water supply making up for paying more property taxes than those living in the county. It would be nice to see a mandate coming from this or any state agency that recommends cost-cutting options over rate increases. As usual, I see this as another state mandate that puts more burdens on customers of cities, counties and many businesses all across Tennessee and I am not for it.”
Mountain City Council will hold its next scheduled meeting on Tuesday, November 6, 2018.