Rogersville BMA approves 23 percent water rate hike, abolishes Water Commission

Jeff Bobo • Jun 6, 2018 at 9:30 PM

ROGERSVILLE — Rogersville water customers will be hit with a 23 percent rate increase to help pay for about $2 million in system repairs and renovations and offset the water department's current $67,000 deficit.

On Tuesday the Rogersville Board of Mayor and Aldermen made three significant decisions related to the Water Department.

The BMA approved the first of three required readings on Water Commission's requested 23 percent water rate increase; the BMA approved a cash transfer of up to $100,000 to ensure the water department can pay its bills; and the BMA approved the second of three required readings on an ordinance abolishing the Water Commission and transferring the commission's powers to the BMA.

The water rate increase

The Rogersville city government, Rogersville City School, and Water Department each operate on a separate budget.

The proposed 2018-19 RCS budget and city general fund budget were balanced without a property tax increase, but the Water Department is currently operating at a deficit.

The proposal, approved on first reading Tuesday, increases the minimum water rate for a city resident by $3.85 from $18.19 to $22.04 for the first 1,000 gallons.

The current average bill for city residents who use 4,000 gallons of water per month would increase by $10.78, from $46 to $56.78.

Not including anticipated loan funds, that rate increase is projected to give the Water Department a $60,287 surplus as of the end of the 2018-19 fiscal year.

Although a reported $338,929 allegedly stolen by former water superintendent Shawn Hatchett over a two year period  obviously contributed to the current deficit, acting water superintendent Bill Pearson said the need for a water rate increase was inevitable.

Pearson noted that the sewer system isn't financially self sufficient, and the water department has basically become a repair shop. That's why the Water Department is issuing a $2 million bond in 2018-19, to address a long list of needed renovations and repairs in both the water and sewer systems.

Pearson told the BMA the Water Department's proposed 2018-19 budget was compiled by the Water Commission and his staff over the course of three workshops.

"I asked for, what does it take to do the work," Pearson told the BMA Tuesday. "We spent a lot of time on it with the supervisors — the people involved who actually do the work. This is their product, and it requires a 23 percent rate increase. It is an honest budget put together by the entire water department and the board."

Although Rogersville had a 5 percent sewer increase in 2015, Pearson said that wasn't sufficient. The last time Rogersville raised its water rates was 2011.

A transfer of up to $100,000

It's not a gift. The Water Department will have to pay those funds back to the city when it builds up a sufficient fund balance.

So far $50,000 has already been transferred from the city general fund to the water department to pay the bills.

"The city was gracious in making sure we had the resources to make our bills," Pearson told the Water Commission, which met prior to Tuesday's BMA meeting. "Cash flow in June hopefully will be enough to compensate for that."

Abolishing the Water Commission

Mayor Jim Sells broke a 3-3 tie in favor of the second of three required readings on an ordinance abolishing the Rogersville Water Commission, and essentially making the BMA the Water Commission.

Sells had previously explained he felt that in light of Hatchett’s alleged thefts that were uncovered last year, and with the Water Commission gearing up to borrow $2 million for system upgrades, the BMA should be making the decisions.

The BMA's three Water Commission representatives cast no votes including Mark DeWitte, Eloise Edwards and Craig Kirkpatrick.

Although the Water Commission was created by a private act of the Tennessee General Assembly, City Attorney Bill Phillips asserts that state law gives the BMA the authority to operate its Water Department.

Kirkpatrick read opinions to the contrary which he'd solicited from attorneys who he didn't identify publicly.

"I do not see anything in those (Tennessee Private Acts) documents which grants the authority to the Board of Mayor and Aldermen to do much anything about the Water Commission above appointing and removing individual commissioners," Kirkpatrick read.

He added, "I’ve had contact with three different attorneys, and they all say we cannot do what we're trying to do. I'm not opposed to getting rid of the Water Commission. But if we're going to do it, we need to do it right."

Phillips said, "The private act created the Water Commission, however the Water Commission operates under the general authority of Title 7, Chapter 35-406 which authorizes the Board of Mayor and Aldermen to assume duties of the Water Commission. If you want to have an attorney say something, Mr. Kirkpatrick, have him come in here and say it. The way to challenge that is in court. If you think it's unlawful, fine. I'm giving you advice that it's lawful."


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