published Wednesday, October 6th, 2010

City opposes 28% water rate hike

by Chris Carroll

Months after raising property taxes 19 percent and stormwater fees 220 percent, the Chattanooga City Council didn’t need much prodding to oppose a request from Tennessee American Water to increase water rates by 28 percent.

“We’ve got to have skin in the game,” Councilwoman Sally Robinson said during a committee hearing. “We don’t control our water, and that troubles me.”

But opposing the measure may cost the city up to $300,000 since the process could take until March 2011 and no one in the city attorney’s office has the expertise to negotiate Tennessee American’s lengthy rate proposal, according to City Attorney Mike McMahan.

“We don’t understand everything in those 2,500 pages,” he said. “We’re not going to be prepared until we pay somebody to delve into those pages.”

Tennessee American has asked the Tennessee Regulatory Authority for the increase to offset higher operating costs, fund employee pensions and boost the allowable rate of return earned by the company.

Before joining the other eight members in opposing the rate hike request, Councilman Andraé McGary compared the water company’s request to the recent property tax hike and said residents may need to “suck it up and take it.”

“I can’t help but wonder if [the water company is] in the same boat as us,” he said.

City and county elected officials last opposed a similar request in 2008, when Tennessee American officials asked for a 20 percent increase. The company ended up with a 4.37 percent increase.

“It’s the same old story,” Councilman Jack Benson said.

The Chattanooga Manufacturers Association and the consumer advocate for the Tennessee attorney general also oppose the proposal, but Tennessee American officials said the water company will lose money next year without a rate increase.

The state’s largest private water company, Tennessee American services more than 350,000 residents in Southeast Tennessee and Northwest Georgia.

“We’re talking an additional $4.68 a month for the average customer,” company spokeswoman Kim Dalton said. “It’s the lowest utility bill of the month customers pay.”

Click here to vote in our daily poll: Should the city challenge the water rate increase request?

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whatever said...

I wish you wouldn't blindly cite percents as if they had any relationship to each other.

Include real dollar values please!

October 6, 2010 at 12:31 a.m.
altavista said...

"But opposing the measure may cost the city up to $300,000..."

“We’re talking an additional $4.68 a month for the average customer,” company spokeswoman Kim Dalton said.

Those look like real dollar values to me...

October 6, 2010 at 1:02 a.m.
whatever said...

Check all the percents in the story.

October 6, 2010 at 1:17 a.m.
slr3 said...

Interesting how the council members have a problem with a private company (Tennessee American) trying to raise the rate to a level they can make a profit, yet have no problem raping taxpayers with stormwater fees & property taxes. At election time , remember the five council members who voted for the 19% property tax increase and vote them out. They are LADD,ROBINSON,BERZ,RICO and BENSON. Maybe after they are sent packing , they can go to work at Tennessee American.

October 6, 2010 at 4:15 a.m.
Allison12 said...

So, the City of the Chattanooga proposes to spend $300,000 in legal fees to fight a private company's fee increase. I wish the taxpayers had these resources to fend off and protect business and homeowners from the City of Chattanoogs imposing the highest stormwater fees in the state of Tennesee, and Memphis level property taxes.

October 6, 2010 at 7:55 a.m.
ordinaryguy said...

Councilman Andraé McGary compared the water company’s request to the recent property tax hike and said residents may need to “suck it up and take it.”

The arrogance and incompetence of McGary is on display. This coming from a man who spent the last two years hoping from job to job much like that nationally elected politician in DC.

He claims he owes the Crutchfield's nothing, couple that and all the donations on his financial disclosure with no names reveal he is indeed hiding something.

His arrogance and "I am better than you, because I am on the radio" act is getting old.

Maybe those donations will pay his increased water fees.

October 6, 2010 at 9:30 a.m.
rolando said...

This 28% increase is unwarranted, especially since they just had one. What increased costs are the company paying? This is NOT a "local water company"; it is nationwide...they just name themselves to appear "local". They just raised Kentucky's water by 38%. They are having us pay for California et al wastage.

Water is a constant resource -- at least here in Tennessee. There are no related increases in cost, just the company's [obscene] profits at our expense for a necessity of life. Note the company's phrase, "...boost the allowable rate of return earned by the company" in their proposal. They want more profit than allowed.

Or is it new construction and demands that TA Water wants all consumers to pay for? So bill the developers for the cost of improvements to existing or new water supplies, not the rest of us.

Let the new buyers foot the bill up front -- higher prices for new homes raises everyone's home value; just ask the tax appraisers...

October 6, 2010 at 9:34 a.m.
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