It's official: 30-percent water rate hike final for Rockwood

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Unlikely utility’s troubles are over

By Cindy Simpson

Rockwood water and sewer customers will soon see an increase in their rates.
The Rockwood City Council approved a 30 percent water rate increase Monday.
The measure will automatically raise sewer rates, which are figured as 150 percent of the water bill.

Vice Mayor Peggy Evans was the only vote of opposition during the final round of approval.
“I can’t see adding more expenses to each of those citizens out there paying these rates unless we cut the budget to the maximum,” Evans said.
Glen McCuiston, a former Rockwood Water, Sewer and Natural Gas Board member, disagreed that the 30 percent increase was the only solution.
“As with any business whenever the revenue is not there or business declines the first thing you do is look inward, you look at what you are doing as a business owner,” McCuiston said.
He also said his research showed that the utility’s troubles were fairly recent.
“Prior to 2007, the utility was in fairly good shape financially,” he said.

McCuiston said the gas utility had $1 million in reserves and the water and sewer had between $750,000 to $800,000 in the checking accounts.
McCuiston also sat on an advisory committee that recommended either a 22 percent increase last year or cuts in expenditures.
McCuiston said salaries and benefits eat up most of the revenue generated by the water and sewer department.
Councilman Bill Thompson said the past is responsible for the problems of today and wanted it well known.
“I just think we didn’t have good fiscal management somewhere between 2007 and up to the present time,” Thompson said.

Councilman Mike Freeman agreed with Thompson, saying he was disappointed in previous officials’ failure to see the utility’s financial struggle and failure to consider the advisory committee’s proposal of 22-percent increase in the winter.
“The rate we have now, there is no way the water department can meet the objectives they are required to meet,” Freeman said.
He added he didn’t believe there has been a rate increase in water or sewer in almost 10 years, prior to the 15 percent increase earlier this year.
Manager Kim Ramsey and board members, however, have said they’ve cut all they can, including no raises for employees.
They’ve told the council their proposed budget includes no major capital projects and hope for a small fund balance of more than $100,000 in the water and sewer department.

The utility has also gone to shifts of four 10-hour workdays as one of its efforts to cut overtime. Ramsey said overtime is often due to callouts in the late afternoons when everyone has gone home for the day.
She also talked about dealing with the utility’s debt.
 Ramsey said Scott Gibson of Morgan Keegan, who assisted them in refunding, or essentially delaying a loan payment of $170,000 until the new fiscal year, came to a joint board and council workshop.
“He was stressing how important it is we have to make an adjustment right now or we’re going to continue to get further and further behind. There is over $1 million in debt service we have to pay in 2012 alone,” Ramsey said. “We’ve got to get control of our current debt. Right now the banks are not favorable on lending us any more money.”

While the utility is already substantially in debt, the future doesn’t look promising for avoiding additional debt.
No major projects are scheduled in the upcoming budget, but repairs and work is needed — many that officials say may save the utility money in the long run.
Those include working on water loss and more work to minimize infiltration and inflow into the wastewater system.
Freeman said the water loss is the equivalent of the city essentially throwing one of every three gallons of water made out the back door.
“I’ve been informed by the water gas and sewer board they are going to be looking at finding out why we have so much water loss,” Freeman said.

Ramsey is also concerned that the wastewater plant will need upgrades after the utility’s permit runs out.
Regulations are getting more stringent and changes may need to be made to be made to either improve the release into Black Creek or move the release point elsewhere.
The utility is also looking at ongoing projects due to a directors order from the Tennessee Department of Environment and Conservation.