​SUD Discusses Tap Fees, Commercial Leak Insurance

by Leslie Lytle, Messenger Staff Writer

At the Feb. 27 meeting, the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties resumed a discussion about the high cost of tap fees.
“It would behoove us to address what we want to accomplish with our tap fee policy,” SUD manager Ben Beavers said.
Tap fees increased dramatically following the drought of 2016, Beavers explained. The reason for the increase was to cover the cost of the $10,000 per year contract entered into with the University to draw water from Lake Dimmick in a drought emergency. In addition to the annual fee, SUD would have also been assessed at a .35 per thousand gallon charge for the water withdrawn.
SUD never drew water from Lake Dimmick, and in September 2013 the board decided the $10,000 per year fee was excessive and cancelled the contract. The tap fee continued at the same rate, the greatest portion of which is the $2,615 Water Resources Fee dedicated to maintaining an adequate water supply. At present, SUD’s only option in a drought emergency is to purchase water from other utilities.
“There needs to be a discussion about Lake Dimmick,” Beavers said. If SUD had access to Lake Dimmick, the tap fee could be cut by as much as half.
Beavers also cited the expansion called for in the Sewanee Village Plan as a possible source of increased demand on SUD’s water supply.
The University has built four or five dorms since 2006 Beavers pointed out. “If the tap fee hadn’t increased, they would have saved $150,000.”
“How much would a pump station at Lake Dimmick cost?” asked Board President Charlie Smith.
For short-term emergency situations, Beavers recommended using the pump from Lake Jackson. He estimated the cost of pipe at $25,000.
The board encouraged Beavers to pursue the Lake Dimmick discussion.
The board also authorized Beavers to investigate the level of interest in commercial customer leak insurance. ServLine, the utility district’s residential customer leak insurance provider, also offers insurance to commercial customers, but SUD doesn’t subscribe to the commercial customer program at this time. Since SUD initiated the residential leak insurance program in August, several commercial customers had inquired about obtaining leak insurance, Beavers said. The cost to commercial customers would be $4 per month. The insurance would be available to commercial customers with 2 inch or less size meters.
Reporting on the advice of the Tennessee Comptroller regarding hiring a part-time office employee to ensure adequate financial oversight, Beavers suggested the board review the comptroller’s list of duties and select those they wanted the new employee to perform. In general, the comptroller recommended reviewing bank statements, cash receipts and cash disbursements.
“We don’t have cash disbursements,” Beavers pointed out. “We could have them review bank statements and spot check invoices.”
The comptroller’s guidelines called for five office employees. SUD has three, and consequently as with many small utilities, the annual audit cites SUD for “inadequate segregation of duties.” The comptroller advised SUD to respond they were “making an effort to comply.”
Three people have expressed interest in the part-time position. Smith said he preferred waiting to get advice on “how to streamline the process” from newly elected Commissioner Paul Evans who holds a degree in accounting. Evans could not attend Tuesday’s meeting.
Returning to a discussion about collection of expired or unneeded pharmaceuticals, Smith said Volunteers in Medicine of Southern Tennessee collected all medications except opioids, vetted them for efficacy, and redistributed still viable medications to needy patients. Beavers will bring the Volunteers in Medicine program to the attention of the SUD wetlands project researchers who hosted a pharmaceutical collection day last fall.
SUD meets next on March 27.