Comptroller questions Kimball sewer fund surcharge

Comptroller questions Kimball sewer fund surcharge

September 12th, 2013 by Ryan Lewis in Local Regional News

Kimball, Tenn., Mayor David Jackson is seen in this file photo.

Photo by Contributed Photo/Times Free Press.

KIMBALL, Tenn. - Whether Kimball's creative plan to remedy its sewer fund deficit is legal or not remains to be determined, but Mayor David Jackson said it is likely the state will make it illegal in the future.

Last year, the Kimball Board of Mayor and Alderman approved a plan that created an $800-per-month sewer surcharge for each of the city's six buildings to help keep the sewer fund from losing money.

"We'd been in the red for the past two years, and we knew we were going to get a nice, little letter from the state," Jackson said. "We did, so we passed this ordinance [as an answer to the problem]."

Jackson estimated in August that the sewer fund will be "on the right side" by $57,000 this year.

The plan caught the attention of the Tennessee Comptroller of the Treasury's Water & Wastewater Financing Board, which is wrestling with the legality of the move.

"They're not really sure whether it's legal or illegal," Jackson said. "They really don't know."

The state board recently told city leaders to change the terminology of the ordinance from "fee" to "transfer," but it reversed that directive recently.

"They've called back and asked us not to do anything right now," Jackson said.

He said he has been told legislation will be proposed soon at the state level to "fix this where this will not occur again."

Kimball would be "grandfathered in" if any new legislation is enacted, Jackson said.

City Attorney Billy Gouger said the town has found itself in a unique legal situation.

"What the town has done is not illegal, but apparently the state wants it to be illegal," he said. "There's no law that says it is."

The statute under which the city adopted the ordinance last year says a town that has its own utility can charge itself any rate that it considers to be reasonable, Gouger said.

"The reasonableness is really to be determined by the town," he said. "Since there are no third-party customers, there's nobody who can complain, except the town [officials]."

City officials could be called before the state board at its next meeting in November, but Jackson doesn't anticipate that happening.

"If there are any cities that want to do this, they better get it done now," he said. "I'm not making any suggestions to anybody, but time is limited, probably."

Ryan Lewis is based in Marion County. Contact him at ryanlewis34@gmail.com.