Jun. 13—It’s been a while since Crossville water customers have seen a rate hike on their bills.

The last time: 2017.

“It’s amazing to me that we’ve gone seven years or whatever without an increase,” said Crossville City Council member Scot Shanks.

That’s likely to change soon. The council on Tuesday recommended a 7% increase for all water and sewer customers inside and outside the city limits, as well as for South Cumberland and Grandview Utility Districts, both of which buy water for their customers from the city.

“That’s not something we want to do, but the way it’s going with inflation, if we don’t the state can come in and tell us what we’re going to do,” said City Finance Director Nathan Clouse. “We don’t have any control at that point.”

The University of Tennessee’s Municipal Technical Advisory Service works with cities and towns throughout Tennessee. In a presentation last month, an MTAS adviser recommended a 2%-3.5% rate increase to ward off a predicted negative fund balance within the next few years.

“The issue we are looking at is per the state guidelines,” Clouse said. “This is not something that we can regulate. The state says we cannot have our fund balance go in the negative any years. We can’t have any negative impact in our fund balance. If you do it the first year, they’re going to call you and they’re going to ask you what you’re going to do to fix that that year. If you do it two years, they’re going to come in and do it for you.”

Presently, water rates per 1,000 gallons are $5.34 for customers who live inside the city, $8.02 for customers outside the city, and $3.88 for South Cumberland and Grandview utility districts.

Current sewer rates per 1,000 gallons are $7.54 for city customers and $11.31 for those living outside the city.

Clouse told the council during last week’s monthly work session the water department is looking at estimated revenues of $19,145 next year without an increase. That’s on a budget that includes no capital projects.

“I think maybe 3 1/2 [percent] is too low,” council member Rob Harrison said at the time.

State law stipulates that water and sewer operations must be self-sustaining. It also prohibits using other city funds, taxes or revenues to shore up finances.

The city is under contract with the South Cumberland and Grandview districts until Dec. 31, 2027. According to the contract, their rates cannot be increased over what is recommended for city customers.

“What makes me sick to my stomach is the fact that we are selling water to other utilities, and we are not even breaking even,” said Mayor RJ Crawford. “As a property — as a taxpayer — that makes me ill.”

That loss is $1.08 per 1,000 gallons. So far for the year, that’s the equivalent of a $290,000 loss, Clouse said.

Shanks said he finds the difference between inside-city and outside-city rates troubling. He said he wants an equitable rate for all parties.

“Just because someone is not in the city, they have to pay more?” he said. “I’m hoping somebody can tell me — give me a reason as to why they should be different. Because that’s what I’ve been looking for.”

Council member Mike Turner noted that inside-city customers are the ones who largely pay sewer rates, which are 1.5 times water rates per 1,000 gallons.

“I just don’t see the fairness in that,” he said, referring to Shanks’ equitable rate idea. “I don’t think we should raise the city an exorbitant amount to catch up with the county.”

Shanks’ motion to raise in-city and utility district water and sewer rates by 7% died for lack of a second. Crawford then made a motion to raise the rates by 7% across the board.

“What I’ve heard from people in town is if you’re going to do this, instead of doing it every single year, just maybe like every couple of years,” he said.

The motion, seconded by Harrison, passed 4-1, with Turner voting against.

Council will again discuss water and sewer rates during a special-called meeting at 12:15 p.m. today in Crossville City Hall at 392 N. Main St.

During this meeting, the council will also look at its nonprofit resolution for the next fiscal year and have its third and final readings of ordinances for 2023-24 end-of-year budget adjustments, the 2024-25 city budget and the 2024-25 city property tax rate, which is unchanged at 60.59 cents.

Contact Cheryl Duncan at cduncan@crossville-chronicle.com or 931-484-5145.