No rate hikes expected for water services

Monday, May 24, 2010 at 11:10pm

Metro Finance Director Richard Riebeling told The City Paper that imposing a water rate hike to help pay for the water department’s $200 million in flood-related damages is unlikely.

“I don’t think we have any need to do a water increase,” Riebeling said. “That’s not been discussed by anybody.”

Metro officials are still tabulating the overall cost of repairs to public property following Nashville’s historic flood earlier this month. Already, officials have projected damages at the city’s Dry Creek wastewater treatment plant to be $100 million, with repairs at the K.R Harrington Water Treatment Plant costing another $40 million. The total cost of the water department’s repairs is believed to be around $200 million.

Under the formula used to pay for repairs to Metro’s public infrastructure, the Federal Emergency Management Agency would take care of 75 percent of costs, leaving 12.5 percent of funds coming from both the Tennessee Emergency Management Agency and Metro government. For its share, Metro plans to rely partly on its self-insurance fund.

“At the end of the day, we think the Metro portion of that [$200 million] would be $25 million at most,” Riebeling said. “It’s a little early to tell, but I think it’s going to be a pretty manageable number.”

Metro is currently in its second year of implementing a staggered, three-year increase to the city’s water and sewer rate. Some Nashvillians are already due to see a rate hike beginning July 1, with a third and final hike coming July 2011.

“If people see a rate increase in July, that’s not because of the flood,” Riebeling said. “It’s because of a previously approved plan we did two years ago.”

According to Riebeling, the city’s three-year water rate hike has left Metro Water Services with $500 million worth of bonding capacity. “They have ample ability to generate some money to pay for projects,” he said.

Metro’s three-year water rate shouldn’t be confused the city’s new stormwater fee, which was first enforced last summer. Determined by the amount of impervious square footage on one’s property, the stormwater fee averages out to $3 per month for each property owner. The new fee was imposed to raise funds to update the city’s aging stormwater infrastructure. 

3 Comments on this post:

By: localboy on 5/25/10 at 12:32

well, that's good news...especially after hearing about the govenor's and Mayor Dean's press conference on tv, speaking on water conservation after the flood, with the sprinklers going off on the lawn behind them...

By: silverhaired on 5/26/10 at 1:16

A lot of us (myself included) complain about people who have the ability to be self sufficient, but have decided to tap into and become increasingly dependent on various governmental programs.

So how about this situation? Metro Water Services suffers about $200 million in repair costs from the flood. Although most Nashville water customers (myself included) already feel we pay high water rates, I suspect the Nashville water customers, given some time, could find a way to pay the $200 million in additional costs. It would be painful, but possible.

Instead, most of us (myself included) will happily accept the FEMA and TEMA funds to pay the vast majority of the costs. In fact, isn't that why we created FEMA and TEMA anyway? Also, if we don't take the money, some other community will take it.

Maybe I'm wrong, but "I think I have seen the enemy, and the enemy is us!"

By: localboy on 5/27/10 at 2:38

amen