The Signal Mountain Town Council is considering raising water rates for town residents prior to making a decision on whether the town will sell its water system to Tennessee American Water or Walden’s Ridge Utility District, or retain ownership and continue to manage the system itself.
An eventual rate increase is inevitable – both companies have said they would raise the base rate if they acquired the system: $18.52 if sold to WRUD and $1.62 for TAW, though TAW’s figure does not include any capital improvements. State law allows Tennessee American to pass along the costs of any approved capital improvements to ratepayers as a “capital recovery rider” on their monthly water bills.
The town postponed its decision on the water system sale until an independent study is complete, which Town Manager Boyd Veal said should be ready by the end of September. The purpose of the study is to look at the feasibility of the town keeping its water system as well as whether the town should keep it, and what the town needs to do if officials decide to keep the system.
Mayor Chris Howley said at the council’s Aug. 24 agenda work session that he is prepared to make a decision concerning the water system sale. If others are putting off the decision, he said, the council should move forward with a rate increase on the assumption that the town will decide to keep the system.
“We’re going to lose three or six more months of collecting – if we decide to keep it – the capital we’re going to need to staff up and do everything we’ve got to do, which will put us in a bigger hole,” he said.