SUD: Cost Increase Drives Rate Increase
by Leslie Lytle, Messenger Staff Writer
At the Nov. 16 meeting, the Sewanee Utility District Board of Commissioners approved a 2022 budget calling for a 2 percent rate increase. The board also approved two provisions affecting employees: a year-end bonus and vacation policy amendment. With two commissioner seats coming open in 2022, the board is actively seeking candidates to run for the office of commissioner in the January election.
“We are expecting substantial increases in the price of materials and supplies across the industry which will put significant pressure on our operating budget if rates remain unchanged,” SUD manager Ben Beavers said in his budget summary. The cost of chemicals, pipes, fittings and fuel have increased dramatically. Without the rate increase, projected expenses would exceed projected revenue by $15,000. “I’ve cut the budget to keep the rate increase as low as possible,” Beavers insisted. “I don’t think we can put it off any longer.”
On average, customers with water service only will see a bill increase of less than $1 per month. For customers with both water and sewer service, the average increase will be under $2. The budget includes a 4 percent increase in employee hourly wages, but Beavers stressed the increase was less than the current 5.8 percent inflation rate.
Beavers noted SUD had relatively high employee overtime costs, dictated in part by the need to have employees on-call. Justifying the overtime cost, Beavers explained the total cost equaled less than half the cost of hiring an additional employee. “The labor market is tough,” Commissioner Doug Cameron said in support of the strategy.
Pointing to another budget driver, Beavers said SUD’s interest earnings had decreased from $25,000-$30,000 annually, two years ago, to $4,000 annually at the present.
In the discussion about the annual employee holiday dinner, Commissioner Randall Henley suggested giving the employees a bonus instead, citing COVID risks. “It makes sense,” Beavers said. Henley noted employees did not receive a raise in 2021. The employee dinner cost $1,500 by Beavers’ estimate. The board voted to cancel the dinner this year and give employees at $250 year-end bonus.
Beavers directed the board’s attention to a difficult circumstance arising from the current vacation policy which stated once an employee accumulated 240 hours (30 days) of paid vacation time, they must reduce the total hours by taking vacation time or lose the hours over 240. This potentially could result in staffing shortages from employees taking long vacations or several employees taking vacations simultaneously. The policy amendment recommended by Beavers allows employees to reduce accumulated vacation days by taking a cash reimbursement for the days earned. “The money is already in the budget,” he said.
The seats of commissioners Randall Henley and Paul Evans will come open in February. Henley is term limited and cannot seek reelection. Evans has not declared whether he will run again. Any SUD customer can serve as a commissioner. Potential candidates should contact the SUD office (931) 598-5611 by Monday, Dec. 13. Commissioners receive a $50 stipend for each meeting.