Crossville Chronicle, Crossville, TN

Area News

December 29, 2011

TSUD considers service fee for customers with sewer availability

CROSSVILLE — As the Tansi Sewer Utility District continues to construct extensions to its sewer line system and seeks ownership of a sewer line serving Brown Elementary School, a member of the board wants to ensure the district will be able to reserve sufficient capacity and have funds available to expand treatment capacity.

Jim Heath, TSUD board member, has proposed a $25 service fee that would provide revenue to increase sewer treatment capacity when necessary.

"We're shrinking our capacity availability every time we construct an extension," he said. "If a homeowner with the line available has a problem with their septic system, they're not going to be able to get a permit to fix their septic system and will be forced to hook onto the sewer. If we don't have the capacity to serve them, it's going to be crunch time."

Right now, the district does not charge those who have the sewer available but have not hooked into the system an availability fee of $1,500 or a monthly service fee, though the rules and regulations permit those charges. Heath said he was not suggesting billing the $1,500 availability fee at this time.

Under the rules and regulations, only lots with a residence or commercial business would be subject to an availability fee. The district cannot assess fees on vacant property.

Chuck Burgess, with Environmental and Civil Engineering Services, explained that the sewer district had to reserve capacity in its treatment plant for the peak use as though every possible customer along the line were using the service.

The treatment plant has a capacity of 50,000 gallons a day, which is limited by the storage tanks. The current peak usage is estimated at 24,900 gallons a day.

Heath said, "We have a fiduciary responsibility to collect all the potential revenue and operate on a sustaining basis."

He recommended passing the monthly service fee at $25 a month, beginning Jan. 1.

Mike Dalton, TSUD board member, said, "We've chosen not to enforce this up to now. Would we need to change our rate structure?"

Right now, the rate for sewer service is $50 a month.

Heath said, "Why should someone without sewer pay the same as someone receiving the service? That's why I modified it to $25 a month charge. But, we must reserve capacity to handle them in the future and we need appropriate income."

Herb Pallatt, president of the TSUD board, said, "There's a value even if they're not hooked up because we're setting aside capacity. What part of the $50 is for treatment and operation of the plant and what part is for amortizing the cost of the plant? It's worth consideration."

He also said a new fee would need to be added to the rate schedule and suggested a capacity reservation fee. He also suggested $25 a month might be too high and suggested $20.

He also noted the district was not moving to charge the $1,500 availability fee.

There were also questions about the 500 feet distance for determining if a structure had sewer service available. The rules state structures within 500 feet of the line, via right of way, would be subject to availability service charges. Pallatt suggested a 200 foot limit to prevent issues of going between properties. There were also questions regarding utility easements, which are not consistent throughout the community, and the possibility of stream crossings.

Members of the audience questioned if Pallatt's property would fall under the 500 or 200 foot guidelines.

Pallatt said, "My property is pretty close to it, but I'm willing to do it."

Pallatt recommended tabling the issue until the Jan. 18 meeting so that possible changes to the rules and regulations and fee schedule could be investigated.

A proposal for pre-payment benefit was also tabled for further discussion.

Heath suggested a plan where residents could begin paying toward their $1,500 availability fee and sewer connection costs even though they were not ready to hook on to the system. He proposed allowing 24 months to pay with no interest and maintain the price of the system for those electing to prepay.

There were questions about what would happen to those funds if the person sold their property, with Pallatt stating the fees would need to go with the property, not the person.

A member of the audience asked what would happen if the time came for the people to hook on and the system did not have sufficient funds for the connection.

Ken Deadmon said, "It's admirable you want to work with people, but there are unseen factors and legalities. You would have to escrow that money."

Mike Dalton, TSUD board member, also questioned guaranteeing the entire cost of sewer connection, as there was no guarantee of what would happen to the cost of grinder pumps and other materials.

"I thought this was for the availability fee, only," Dalton said. "I don't think we can guarantee the entire cost. I'm not comfortable with that."

Also tabled was a discussion on definitions of residential property, commercial property and negotiated rate property.


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