Crossville's water and wastewater system "in financial distress" says agency. Rate increase ahead?

The City of Crossville has not raised water or sewer rates since the last in a series of 4 annual rate increases of 5 percent each required by the state due to financing improvement work on the system. The last increase went into effect July 1, 2013.  At the time, council members hoped they wouldn't need another increase for a while, but that time has now come.

Former city manager David Rutherford had previously told the council that this year's budget for the water and sewer system was not generating adequate revenue based on a standard form that the city submits each year to the Tennessee Water and Wastewater Financing Board (WWFB).  The form looks only at revenue and expenses in the operation and the city was upside down on the form submitted earlier this fiscal year.  Several weeks ago the agency visited city hall and were told the city would look at rate increases for the next two years to eliminate the "financial distress."

The agency then sent a notice to the city titled as an "order" that "directs the city to comply with the following corrective action plan:

1) the city will increase its water rates by 2% and sewer rates by 5% by July 1, 2016
2) the city will increase its water rates by 2% and sewer rates by 5% by July 1,2017
3) the city shall update the WWFB's staff on its progress quarterly until formally released from WWFB oversight.

The water and wastewater system does have cash reserves in the bank, but those funds are for future maintenance and do not offset the problems that the WWFB looks at.

The city council has not taken any action on the matter yet.