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Water war ends in rate increase

Town water and sewer dilemma settled in front of State Board.

By Tamas Mondovics

Following an order to appear — in person — before the State Water and Wastewater Financing Board (WWFB), all five members of the Town of Mountain City Council including Mayor Kevin Parsons and Aldermen presented its compliance to raise water and sewer rates effective this summer.
The council’s appearance before the board was a result of a subpoena and was a final step to end the drama about local water and sewer rate changes recommended by State Water and Wastewater Financing Board following an audit late last year that found the utility to be operating at a deficit.
Directed by the State, the Municipal Technical Advisory Service (MTAS) did the rate study and gave its recommendation of a water and sewer rate increase inside city limits, a decrease of water and an increase of sewer rate outside city limits.
After expressing his opposition to as well as changes to the MTAS recommendation, Mayor and the Aldermen received a letter
stating WWFB’s rejection of the town’s proposed
changes. The State ordered an immediate action of compliance by the Mayor and
Aldermen, which also included the city hire a state-approved expert to conduct another service study at the cost of $15,000 paid by the town.
Unable to meet the required steps, the five-member City Council found itself in front of the State Water and Wastewater Financing Board during its March 14, 2019, meeting, which gave Mountain City officials the opportunity to explain the rate adjustments they have made and provide evidence the new rates (initially recommended by MTAS four months earlier) is sufficient to sustain the water and sewer system going forward financially.
After four months of back and forth, a decision to approve MTAS’ first recommendation and an unnecessary trip to appear before the State, the drama is now officially over. Mountain City residents will now see a water and sewer rate increase, which according to City Recorder Sheila Shaw also includes an annual one percent increase which will begin in July 2019.
“Based on the proposed rate increase it will take at least three years to get out of the red,” Shaw said.
Shaw added that the Town of Mountain City is also required to give an update every six months to assess the town’s water and sewer rate status.
“Our case was one out of seventeen other systems that were on the Water and Wastewater Financing Board’s March agenda,” Parsons said. “Our appearance was due to not complying with
their order that the town
hires a qualified expert to complete a comprehensive cost of service study of the Town’s water and sewer system.”
Parsons emphasized that he explained to the Board the difference between inside and outside city rates, if “we have a repair in the town limits we might be looking at five miles round trip to correct the problem whereas if a repair needs to take place outside the city limits we might be looking at up to nearly a one hundred miles round trip to make the repair.”
The Board ordered the Town to send financial updates to Board staff by March 1 and September 1, of
each year, beginning September 1, 2019, until the Board releases the Town from its oversight.