​SUD Grapples with Uncertainties

by Leslie Lytle, Messenger Staff Writer

At the June 16 meeting, the Sewanee Utility District Board of Commissioners grappled with two large-scale financial uncertainties confronting the utility: revenue loss due to the COVID-19 pandemic and the cost to SUD of plans to narrow Highway 41A. SUD’s auditor Don Mills attended the meeting to provide an overview of SUD’s 2019 audit. Mills weighed in on the discussion from the perspective of the district’s financial health.

“We still have three more months of foreseeable decline in sales,” SUD manager Ben Beavers said. Compared to May of 2019, water sales decreased by 29 percent and sewer revenue by 48 percent. “Our residential revenue hasn’t dropped, but commercial and institutional is what’s killing us.”

Looking to the future, Commissioner Doug Cameron said the University planned to bring the students back early, eliminate fall break, send students home for the semester at Thanksgiving and to have them take final exams remotely.

Beavers hopes SUD will recover 80-90 percent of its revenue with the return of the students. He told SUD employees there would likely be no raises this year. “We’ll do what we have to do to reduce costs so employees can keep their jobs,” Beavers said.

Mills said SUD could expect to show a negative net change in position for 2020, but noted the negative finding would need to occur two years consecutively before the state comptroller intervened. “The district is financially healthy,” Mills said. “So long as you don’t have to pay TDOT half a million dollars you’re in pretty good shape.”

Updating the board on the cost to SUD of narrowing Highway 41A, Beavers said, “We’re still seeking adjustments to the plan.” The initial proposed cost, almost $500,000, had decreased to $327,000. At SUD’s request, the SUD engineer reduced manhole depth and eliminated a redundant service line to further reduce costs.

“Our pipes could stay where they are if TDOT would move their storm drains,” Beavers said. SUD’s cost would decrease to approximately $100,000.

Beavers has been calling daily to inquire about the status of the plan. “I sent them a response saying we wouldn’t sign the contract until we got a definitive answer about what the changes we requested.”

The highway is being narrowed in conjunction with the University’s Sewanee Village project.

Beavers said, according to the project manager, the University’s position is paying for relocating the lines is SUD’s responsibility. TDOT regulations stipulate utilities must bear the cost of relocating service lines for road projects.

In other business, the board discussed modifying the Adjustment Policy to allow for a sewer bill adjustment for customers who filled swimming pools, since the pool water did not enter the sewer system. Beavers said the Fowler Center pool water did enter the sewer system, but proposed SUD could inspect residential pools to confirm the water did not drain to the sewer and estimate the pool size to determine an adjustment amount.

SUD is currently prohibited from taking new customers in the Mikel Lane area due to excessive wastewater overflows. The manhole being lower than the pumping station is the cause, Beavers said. SUD will raise the manhole, cost $500, to remedy the problem.

The board meets next on July 21.