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Wlaf1450By Charlotte Underwood
LAFOLLETTE, TN (WLAF) – The LaFollette Utility Board met Monday evening for its workshop and monthly meeting. During the workshop, board members listened to a presentation on a cost of service study regarding water and sewer rates.
Board members heard from Sarah Chandler with Jackson Thornton who presented the 2022 water cost of service study for the 12 month period, ending June 2022. LUB has been working with the company since 2010, but according to General Manager Kenny Baird, it had been three or four years since a cost of service study had been done.
According to Chandler, “typical objectives of a rate study are “revenue stability and sufficiency, fairness and equity, ability to pay, simplicity, and defensible.”
Chandler reported first on water operations and maintenance, saying the total revenue requirements is a little over $5.6 million. “So rates need to bring in right at $5,321,631,” Chandler said. “For every dollar you need coming in, you have 97 cents coming in; so you have a small shortfall,” Chandler said. As a rate adjustment, she suggested the utility incrementally, over a three year period, “eliminate usage in the minimum bill for all rate classes.” She said the utility was giving away 1,500 gallons a month of water with how they bill for minimum usage. Over three years, this would drop from 1,500 gallons, to zero. In the first year, it would go from 1,500 to 1,000, then in year two it would drop from 1,000 to 500, then from 500 to zero in year three. “Your average user uses about 3,000 gallons a month, and you’re giving away half of it,” Chandler said. This could bring in $609,000, according to Chandler. On the sewer side, the shortfall is $629,000. The recommendation is the same to eliminate the minimum usage credit. On the sewer side, doing this would bring in approximately $430,000. “This won’t get you there completely but will get you closer,” Chandler said. This would allow the utility to recover some of its lost expenses.
If implemented, these changes would increase the average bill of a citizen in the city by $9.75 over a three year period on the sewer side plus $7.33 on the water side. So over three years, bills would go up by $17 approximately. “The rates aren’t going up, rates aren’t changing, you just won’t be including minimum usage anymore,” Chandler said. Board members will take these suggestions into consideration come budget season.
LaFollette Utility Board General Manager Kenny Baird started the meeting by giving financial reports on the electric and waste water departments. He also updated what would be coming up next month. “We will have hourly tree trimming bids brought to board next month. Next month will also be the performance appraisal for the general manager,” Baird said.
Baird asked if next month’s meeting could be moved to May 30 due to the Memorial Day holiday and board members approved. (WLAF NEWS PUBLISHED – 04/25/2023-6AM)