SCCA Position on SUD Rates for 2008

South Cumberland Community Association position on SUD rates for 2008:

1. The SCCA strongly supports SUD's previously stated important strategic position that "growth pay for growth."The organization encourages SUD to incorporate this goal into a formal strategic plan. . Thus, the SCCA supports the implementation of a Water System Development Charge. This charge would be for all new 5/8" water connections to SUD and using the AWWA meter equivalent factor to calculate charges or larger connections. Additionally, the SCCA supports the implementation of a Water Resources Charge for all new 5/8" connections to SUD that do not meet LEED (or comparable) water conservation standards and using the AWWA meter equivalent factor to calculate charges for larger connections for such connections.
However, SCCA encourages SUD to consider waiving this Water Resources Charge for new connections made to University property, given the University's past and present role in protecting the watersheds for the Sewanee community's three reservoirs: O'Donnell, Jackson and Dimmick. SCCA understands that these charges are above and beyond the present SUD tap or connection fee it charges.


2. The SCCA supports changing the water rate fee structure to parallels SUD’s present wastewater rate structure that uses a Base Rate, rather that a Minimum Use Rate. The current rate system is less equitable to very low usage customers. The Raftelis Rate study suggests four rate classes: residential, irrigation, institutional and institutional. This seems reasonable and should be implemented. Additionally the study recommends water conservation rates for residential uses above 8,00GPM and for noninstitutional irrigation customers. Again, this seems reasonable and extremely supportable. If it is the opinion of the SUD board that the water rate increases recommended by Raftelis are necessary for SUD to meet debt service requirements and achieve adequate revenue to perform necessary repair and replacement of water system infrastructure to run a least-cost utility operation, then the SCCA is supportive of these proposed water rate increases.


3. Although the proposed 9% increase in wastewater rate seems reasonable, the SCCA is withholding its endorsement of the increase at this time. It is understood that a significant part of this increase is due to TDEC citations (2005) of SUD’s wastewater plant and subsequent TDEC moratorium (January 2006) on new hook ups.
Several current SUD board members were on the board during the aforementioned situation. SCCA would like a full public explanation and accounting for this situation by SUD. SCCA will then reconsider its endorsement of this rate increase.

4. The SCCA commends this board for hiring a financial consultant of the experience and stature of Raftelis Financial. Having this work done by such credible, independent company allows the community to have confidence in the rate study recommendations. Additionally, the community is assured that the study is believable and fair. This is money well spent, especially if there are any legal challenges of the charges and fees by developers. SUD has done the analytical work to justify the charges and rates that are established. The SCCA strongly encourages SUD to continue to use the services of such a financial consultant on a continuing basis at necessary for adjustment of both future rates and developers' impact fees.