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Business & Technology

Elizabethton suing neighboring utility for charges, late fees

May 27th, 2009 12:00 am by JOHN THOMPSON

    ELIZABETHTON — For the second time in the past few years, the city of Elizabethton and the Watauga River Regional Water Authority are on opposite sides of a lawsuit.

    This time, the city has brought suit over delinquent water payments owed by North Elizabethton Water Co-op, a small utility managed and operated by the WRRWA. The suit was filed in Carter County Chancery Court.

    Elizabethton is owed $71,167.06 in water fees and late charges for water provided by the city’s water department to North Elizabethton as of May 8. The city is the sole provider of water to the utility.

    The utility started having difficulty paying its water bill after the Elizabethton City Council decided to start a series of water rate hikes to generate additional funds to replace its aging waterlines and make other infrastructure improvements.

    The city’s water rates were increased by 10 percent on July 1. At that time, the WRRWA Board of Commissioners did not respond to the increase in the rates by raising the water rates on North Elizabethton customers, who were already paying the highest rates in the county, many near $50 per month.

    WRRWA Chairman Johnny Mills said at the time the utility’s rates were especially high because the utility was paying on the out-of-city rate scale. Mills was attempting to negotiate with city officials to obtain a lower rate for the utility before he was sidelined by a heart attack.

    While the WRRWA attempted to obtain the lower rate, the board failed to raise the water rates for North Elizabethton customers. The result was a gap between how much money was collected from North Elizabethton customers and how much was owed to Elizabethton.

    In the city’s complaint, filed on May 15, City Attorney Roger Day said the North Elizabethton for the period June 8-July 8 was paid in full on July 23. With the rate increase, the payments to the city have been late, resulting in late payment fees in addition to the higher base rates. Day said the payments have also been sporadic.

    As a result, the amount owed to Elizabethton continued to grow. By Jan. 9, the debt had grown to $45,000. By March it had grown to $62,000.

    Several months ago City Manager Fred Edens began publicly calling for the utility to pay its deficit. That pressure led the WRRWA commissioners to vote for a rate increase that enabled the utility to meet the monthly payments but did not address the deficit and late fees.

    The final payment made before the lawsuit was on April 30 for $25,000. Since then, a new bill for $21,000 was distributed, bringing the total to the amount the city is asking in its lawsuit to in excess of $71,000 plus court costs.
 


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