TOP PHOTO: LUB held it workshop and meeting on Monday evening approving a bucket truck purchase, a rate schedule change, as well as discussing the fiscal year 2024.
By Charlotte Underwood
LAFOLLETTE, TN (WLAF) – The LaFollette Utility Board held its workshop and meeting on Monday evening, approving a bucket truck purchase, a rate schedule change, as well as discussing the upcoming budget for fiscal year 2024.
LUB General Manager Kenny Baird noted that the utility has been in need of a new bucket truck for a while. After advertising for bucket truck bids, the utility received one bid from Altec for $214,690 for a new 2023 International truck, that can pick up transformers and other types of materials, according to Baird. This is around $100,000 less than what was budgeted for the purchase. The board unanimously approved the purchase. “The truck will be paid for with remaining bond funds,” said Baird.
The water and sewer rate schedule change was also discussed and approved. The board voted to implement phase 1 of the rate schedule change. This takes 500 gallons off the base rate, so, for the minimum rate of $19.90 customers will get 1,000 gallons, instead of 1,500 gallons. The utility didn’t raise the rate itself, but changed the amount of water that is allowed at the base rate purchase amount. Several years ago, the utility dropped from 2,000 gallons to 1,500 and is now taking it that next step.
“This is something the comptrollers office is strongly encouraging utility districts to do,” Baird said.
The rate schedule change begins July 1.
Baird also gave a budget and financial forecast for the upcoming fiscal 2024.
He projected the budget with a total revenue of $56 million dollars. The purchase of power is around $36 million, which is what the utility buys from TVA and sells to the customer.
Payroll costs and cost of living adjustments were briefly discussed.
“We talked about cost of living adjustment being five percent. Looking at the core inflation, it’s at 5.3 percent. When I put the budget together, I used 5.5 percent cost of living adjustment,” Baird said. This 5.5 percent adjustment was approved by the board.
Some other budget increases discussed regarded tree trimming. Maintenance expenses and tree trimming is budgeted at nearly $2 million dollars.
“Tree trimming continues to be expensive, but it is important for the health of the system,” Baird said.
Also in the budget will be the purchase of two new pickup trucks and the bucket truck, as well as a new roof for the utility building.
Baird projected the utility will end the year with cash, right at $3.3 million dollars on the electric side.
He reminded the board, this was a financial forecast only.
“A lot can change quickly,” Baird said.
Also approved was a resolution for the utility to establish a short term revenue anticipation note, which will be used for line projects, and could be used for equipment as well.
“It’s a draw down note, and we will only pay interest on what we draw down,” Baird said.
Requests for bids were sent to 28 banks, including all local banks.
According to Baird, the best proposal came from Hearthside Bank at a 5.51 percent fixed interest rate. This resolution allows the utility to draw down up to $5 million for capital expenditures.
Also approved was the contract agreement with Cannon & Cannon Engineering for the City State Revolving fund downtown water main improvement project.
The cost for the engineering is $161,005. It is being funded through a low interest loan from the state revolving fund, half of which will be forgiven, according to Baird.
“I don’t know when this project will come into being. The wheels turn slow on these government projects,” Baird said.
Also approved was the legal services agreement between LUB and local attorney Kathy Parrott, who has been retained as the utility’s attorney for the past five years.
Parrott asked the board for equal pay to what the men who served in the position before her received. She told board members LUB was her “number one priority,” and that she felt she deserved equal pay. Currently, Parrott received $400 a month retainer fee and $200 hourly for LUB legal work. The attorney prior to her received an $800 a month retainer fee and $213 an hour for legal services.
After a brief discussion during the workshop, the board then approved $800 a month retainer fee and $250 hourly.
Parrott thanked the board for its vote of confidence.
“She’s been a big help to me, especially on contracts. She has a lot of knowledge and she works hard for us,” Baird said.
The next LUB meeting is Mon., July 31; workshop at 6 pm and meeting at 7 pm. (WLAF NEWS PUBLISHED – 06/27/2023-6AM)