Moving Service Lines Will Cost SUD $288,000

by Leslie Lytle, Messenger Staff Writer

Moving service lines to accommodate the narrowing of Hwy. 41A will cost the Sewanee Utility District approximately $288,000, manager Ben Beavers informed the board of commissioners at the July 21 meeting. How to pay for this unbudgeted expense in the midst of suffering heavy revenue losses due to the COVID-19 pandemic focused much of the board’s discussion. The board also addressed financial planning and approved a revised Sewer Adjustment Policy that will benefit pool owners.

Narrowing Hwy. 41A is a priority initiative of the University’s Sewanee Village Project. A Sewanee resident who attended the meeting said, “I think it’s terrible…measuring up to somebody else’s vision, that’s what I object to. And the money.”

“It wipes out our cash on hand,” said Commissioner Paul Evans.

Beavers said the cost could be reduced slightly from the $288,000 figure by eliminating two service lines that loop back to other lines. However, the modification would negatively impact fire flows, and SUD’s cost would still be $220,000.

To pay for moving the lines SUD will need to “reduce expenses or raise rates,” said Board Chair Charlie Smith.

In the past month SUD has experienced significant unexpected expense on two fronts: $7,000 for an air compressor at the water plant and repairing water lines busted in the Ben Lomand fiber-optic installation process.

“The contractors were not liable except in one instance,” Beavers said.

Meanwhile, due to the pandemic, SUD’s revenue is almost $60,000 below the year-to-date budgeted projection. Beavers said June water sales were 25 percent below 2019, and sewer sales were down 33 percent. The May decrease in revenue was even greater. “It’s a slightly better picture than it was in May, but there’s no way we can recover,” Beavers insisted.

“Even if we borrow money [to pay for the road project], we’ll still have to raise rates,” said Commissioner Doug Cameron.

“It’s not fair the customers have to pay for what nobody else wants,” said Commissioner Randal Henley.

The board agreed with Beavers’ recommendation to appeal to the University for financial relief. Beavers will speak with Frank Gladu, who heads up the Sewanee Village Project. If that fails to yield results, a commissioner delegation will seek a meeting with the vice chancellor.

Following up on investigation into Long Term Financial Planning by Evans and Smith, Smith proposed SUD accept the offer of the nonprofit Communities Unlimited to perform a three-part study for SUD. The board approved moving forward with the project. The study will include an asset management plan (i.e., determination of the longevity of tangible assets and replacement cost); a rate study; and a vulnerability assessment.

There will be no cost to SUD. Beavers already tracks tangible assets’ longevity, but concurred the supplemental information provided by the study would be useful. He pointed out a rate study normally costs $10,000-$12,000.

The revised Sewer Adjustment Policy provides for a sewer adjustment for customers with pools. Normally, customers pay sewer charges based on their water usage. If the pool water does not drain into the sewer, the water used to fill the pool will be deducted from the customer’s sewer bill. One pool adjustment per year will be allowed, pools must be filled all at one time, and customers must notify SUD when they plan to fill their pool. SUD will base the adjustment on the pool’s estimated size.