Cleveland Utility rate request includes higher materials and bookkeeping costs

CLEVELAND, Tenn. — The rising cost of materials plus a mandated accounting change is pushing Cleveland Utilities to seek an increase in water, sewer and electricity rates.

If the city utility’s proposed budget is accepted by its board and the Cleveland City Council, the average homeowner’s bill will go up about $8 a month, General Manager Tom Wheeler said after a Cleveland Utilities board meeting Thursday.

“There has been tremendous upward pressure on everybody,” Mr. Wheeler told the board.

He said one example is copper, with a 200 percent price increase. And copper is “basic to our operation.”

Then there’s the federally mandated accounting change, called GASB-45. It is a statement from the Government Accounting Standards Board dealing with how retirement funds are recorded.

According to a GASB information sheet handed to board members Thursday, retirement accounting changes from a “pay as you go” approach to budgeting future retiree benefits as current expenses during workers’ careers.

The bookkeeping change affects the water and sewer budgets.

“We have no choice about this. It’s about $1 million we have to put in the budget,” utility board Chairman Dale Hughes said.

Even with the increases, Mr. Wheeler said Cleveland Utilities’ electric bill will remain one of the area’s lowest. Its water and sewer rates keep Cleveland Utilities in the middle of the pack statewide, assuming no other utilities raise rates, he said.

All city department budgets are to be presented to the Cleveland City Council during a budget planning retreat next week. It will come before the utility board for approval on April 24.

PROPOSED BUDGET INCREASES

* Water: 8.5 percent

* Sewer: 8 percent

* Impact: Combined increase of $3.76 for 6,000 gallons

* Electricity: 2 percent

* Impact: $4 for average residential use of 2,000 kWh

Source: Cleveland Utilities