Crossville Chronicle, Crossville, TN

Area News

April 2, 2013

City council to study alternate depreciation method for assets

CROSSVILLE — The city of Crossville is beginning its budget development with two work sessions scheduled this week.

The council will meet today at 3 p.m. and Thursday at 2 p.m. at Crossville City Hall, 392 N. Main St.

Department heads for the city have prepared a "bare bones" budget, explained City Manager Bruce Wyatt. The council will need to make decisions regarding capital projects and purchases, salary increases and support of outside agencies, such as the Cumberland County Playhouse.

The council will also have to make a decision regarding a move to a modified approach for reporting infrastructure assets.

Fred Houston, finance director, explained depreciation was a significant expense, especially in the water and sewer budgets. Depreciation coupled with no projects involving grant funds in those projects could lead to the budget reflecting a loss, even with an increase in water and sewer rates.

"This year, our grants may be zero," Houston explained. "We're going to be looking at a loss on this if we continue to operate like we are. After three years of these losses, the state of Tennessee has created a utility management review board who just handles water rates and, whenever they see we've had a loss for three years, they get excited. They pulled Catoosa in one time and told them they had to increase their water rates 25 percent to get them out of a deficit situation. We don't want that situation."

Houston said depreciation costs for this year would be about $3 million.

"We've got a situation here where we can alleviate some of that depreciation and bring that bottom line back down to where we can afford to pay for it and not be in a situation where we're going to show a big loss," Houston said.

Houston estimates a modified approach to depreciation could save the city $1.4 million in depreciation costs using 25 to 30 pieces of equipment and assets that are within 10 years old. Those assets include items such as the dams at Meadow Park Lake and Holiday Hills, main water lines, water tanks and roads.

"The dam, you would depreciate that over 60 years, but it may last another 160 years. That's the type of asset I've chosen," he said.

In addition to approval by the council to make the accounting change, the city would be required to provide an inventory of all eligible infrastructure assets that includes historical cost, location, acquisition date and description and must document those assets are being preserved at or above a condition level established and disclosed by the government. A condition assessment would be needed to measure the condition of the assets and must be done by trained individuals every three years.

The city must also provide an estimate for the annual amount necessary to maintain the infrastructure assets at the condition level established by the city. Failure to maintain assets at the condition level established would invalidate the modified approach.

Additions and improvements to the assets would be capitalized as they increase the capacity or efficiency of the asset, rather than preserving the useful life of the asset.

Councilman Danny Wyatt said, "It sounds like a no-brainer."

Mayor J.H. Graham III said, "I've got a problem depreciating a dam that we built in 1938 and here it is 2013 and we've spent $4 or $5 million and it's liable to last another 100 years. These long-term projects that we've had all are in our long-term planning projects. We've planned for them for many, many years and now that we've brought them to fruition over the last 10 or 15 years, we've got a tremendous amount of depreciation and I'm not real sure that Fred can look me in the eye and tell me what the useful life of these things are, or any other accountant in this country."

1
Text Only
Area News
  • quackers at the library.jpg Spring jamboree

    April 17, 2014 1 Photo

  • Suspect charged in Sportsman Club break-in

    A Crossville man has been arrested and charged in connection with the burglary of a shooting club's building in the county that occurred last week, according to arrest reports.

    April 17, 2014

  • Panel discusses auditing hotel/motel tax collections

    Commissioners on the budget committee discussed the possibility of auditing hotels and motels in the county regarding the collection of hotel/motel tax collection figures being down.

    April 17, 2014

  • Repent burglar must serve time

    Some defendants cry, because they get caught, and others are tearful with remorse. No one in the courtroom doubted Robert Killeen's sincerity when he apologized to his victim, his loved ones and supporters for committing crimes against an elderly widow, stealing the money her late husband left her.

    April 17, 2014

  • Panel OKs budget amendments

    The Cumberland County Budget Committee approved a $134,506 budget amendment for the Cumberland County Solid Waste Department in order to accept a grant from the Tennessee Department of Environment and Conservation for enhanced waste oil collection.

    April 16, 2014

  • Council votes to seek RFQs for wastewater operation

    The city of Crossville has had a 20-year relationship with Veolia Water, the contractor that currently operates the wastewater treatment plant for the city, and while council members say they don't have a problem with the company's service, they have voted to send out requests for qualifications (RFQ) to determine if they have the best company operating the facility.

    April 16, 2014

  • Police: Couple sets up house in Tansi pool

    A Lake Tansi couple who suddenly found themselves without shelter set up a temporary home in an indoor pool area at the resort/retirement community, according to police arrest reports.

    April 16, 2014

  • certifying machines.jpg Certifying early voting machines

    April 15, 2014 1 Photo

  • Mobile Vet Center in town Wednesday

    The Department of Veterans Affairs will have a Mobile Vet Center (MVC) in Crossville at the Cumberland County Community Complex 1398 Livingston Rd. on Wednesday, April 16. MVC 844 will be at the Community Complex from 10 a.m. to 2:30 p.m.

    April 15, 2014

  • The Palm Tree Revisited

    Palm Sunday is right around the corner. Since we don't have palm trees in our neck of the woods, there probably aren't many people who think about their unique characteristics. Several years ago I read a devotional by Dr. Cecil A. Fayard Jr., “The Palm Tree Revisited,” and want to share some highlights.

    April 15, 2014

Marketplace Marquee
Parade
Must Read
Section Teases
Seasonal Content
AP Video
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Weather Radar
2014 Readers' Choice