The Smithville Board of Aldermen voted Thursday night to begin charging DeKalb Utility District (DUD) $5.00 per 1,000 gallons for the water beginning Jan. 1.
A special meeting was held at city hall to set a new rate for the DUD before the existing agreement to purchase water from the city runs out on Dec. 31. The present contract, expiring after ten years, dictated that DUD bought water from the city at a rate which increased by five cents per 1,000 gallons each year. The rate topped out at $2.05.
The new $5.00 per 1,000 gallon rate is the same that customers inside the city limits of Smithville pay for water. While both sides have put forth proposals for a water-purchase plan, no agreement was reached.
DUD attorney Dewey Branstetter, in a letter to city attorney Vester Parsley, Jr., opined that charging $7.50 per 1,000 gallons, the rate water customers outside the city limits now pay, might be in violation of state law.
Parsley said Thursday that state law does not dictate what the city can charge. “TCA (Tennessee Code Annotated) does say that the city and any distributor should make the rates reasonable, but there is nothing in the code that says we have to set a certain amount for them,” Parsley told the board.
The city presented more than one proposal that DUD officials found unacceptable, including plans that called for them to abandon plans to build a new water treatment plant, to agree to minimum purchase amounts, and sell certain metering points to the city.
DUD countered with an offer to begin a new ten-year agreement to pay $2.67 per 1,000 gallons for the first five years and $2.80 per 1,000 gallons for the remainder of the contract.
The aldermen were less than enthusiastic about DUD's proposition.
“I personally don't think it's reasonable at all. I don't think we would be loyal to our customers to consider something like this,” Alderman Josh Miller opined.
Alderman Jason Murphy told the assembly that he felt that DUD should pay rates comparable to other city customers.
“This is how I feel. I'm a water customer. I don't have to agree to buy a minimum. I pay $5.00. I think that should be our bottom dollar. We don't charge anybody more than $7.50, so I don't think we should charge DUD more than $7.50. I think we should be somewhere in that range so that we know we are covering our costs,” Murphy said.
Alderman Shawn Jacobs said that he felt DUD should pay a rate more in line with city customers as well.
“I have had comments from lots customers inside the city saying they think it's unfair that we sell to DUD at a price less than we provide to our own city customers. I understand the wholesale concept. In a wholesale situation you do sell cheaper, but a lot of our customers don't understand it or don't agree with it,” Jacobs shared.
Alderman Danny Washer moved that the board vote to charge DUD $7.50 per 1,000 gallons, the same rate customers outside the city pay now.
“They are not willing to work with us. Next year it’s going to cost more to produce water, so we need to be prepared for it,” said Washer.
Some members balked at that idea.
“I think if we set this too high, we're not punishing DUD, we're punishing DUD's customers,” Murphy replied.
“I would hate for this board to be accused of trying to gouge anybody out of vindictiveness,” Jacobs countered.
“I don't disagree with $7.50 but I had rather drop it on down because I think what we'll do if we get it at $7.50, it's going to make it hard on a lot of people, especially older people in the county.” Mayor Jimmy Poss added.
“I don't want to put a burden on them but we've got to look at the big picture,” Washer said. “If everything wasn't going to go up and everything was going to stay the same, I'd be willing to come down.”
Alderman Tim Stribling agreed that $7.50 might be excessive.
“The citizens of Smithville have the financial responsibility of the water plant, and we as a board represent those citizens, but my personal opinion is that charging $7.50 is too high for the volume that they're using. My opinion is that it shouldn't be more than what our inside customers pay, which is $5.00, because of the volume DUD purchases,” Stribling said.
Alderman Washer withdrew his motion, and the board unanimously approved a new motion to charge DUD $5.00 per 1,000 gallons of water.