SUD Sets 2014 Budget with No Rate Increase in 2014

 by Leslie Lytle, Messenger Staff Writer

At the Dec. 17 meeting of the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties, the board approved the 2014 budget. The utility plans to complete the automated meter reading (AMR) installation without taking out a loan and with no rate increase until 2015.

At the November meeting, SUD Manager Ben Beavers said SUD had sufficient cash reserves to implement AMR without taking out a loan, although SUD’s cash reserves would drop to approximately $850,000 by the end of 2015. The board asked Beavers if any regulations bound SUD to maintain a set amount in cash reserves. At the December meeting, Beavers reported that the only cash reserve requirement binding SUD was a USDA grant for sewer rehabilitation. The required reserve amount is determined by a formula taking into account SUD’s operating budget and debt payments. By the formula, SUD’s required cash reserve above and beyond the amount already set aside for debt payment is $391,000. SUD’s projected 2015 cash reserve of $842,000 is well within the limit.

The 2014 budget projects $1.375 million in revenue and $1.722 million in expenses. The $347,000 deficit will come from cash reserves. A 3 percent rate increase would have made it unnecessary to draw on the cash reserves. SUD’s long-range plan calls for a 4 percent annual rate increase in keeping with the recommendation of SUD’s consulting firm, Raftelis Financial, Inc. A 3 percent rate increase is projected for 2015.

The board also approved the Modified Safety Plan presented by Beavers. Beavers explained that the plan differed from the current plan only in language and was modified in keeping with the Tennessee Occupational Safety and Health Administration (TOSHA) decision to adopt international definitions and symbols as the standard for state regulations. SUD has never been cited by TOSHA for any substantial violation.

Updating the board on the Midway pumping station project, which will increase water pressure for Midway customers, Beavers said difficulty getting an easement for property tied up in an estate settlement was preventing the project from moving forward. Beavers will investigate getting an easement on University land so the project can proceed.

Reporting on the pilot Constructed Wetlands project, a joint initiative proposed by University of the South and University of Georgia students who collaborated on a feasibility study, SUD Commissioner Ken Smith said the University of the South is looking into possible corporate funding sources.

Voting in the SUD commissioners election begins Jan. 2 and will continue through Jan. 28 at the SUD office during regular business hours, 8 a.m.–4 p.m. 

Commissioners Randall Henley and Karen Singer are running for re-election uncontested.

Votes will be counted at the next business meeting of the board, scheduled for 5 p.m., Tuesday, Jan. 28.