Ordinance 2019-11 clarifies the conditions associated with previously prepaid water and sewer tap credits and imposes a fee for opting out of the City's automatic meter reading program.
The City, at various times between 1980 and 2002, allowed builders to purchase water and sewer tap credits. These were typically sold just prior to the City increasing tap fees to be used by owners towards tap fee obligations when obtaining building permits. These credits were pre-sold to provide added funds for water and sewer infrastructure construction, with each credit being equal to one residential unit tap fee.
Over the years, builders have used most of the credits. However on occasion, a holder of a credit will contact us to inquire about what their options are with regard to returning a credit or transferring the credit. Based on the best records available, it is believed that approximately 39 of these credits remain. Over the years, the conditions applied to the use of these credits--particularly, the valuation of a credits and what can be done with them if unused--has been inconsistent. Staff has researched past action taken by the Board in regard to how credits are to be valued relative to tap fees increases and had very little luck in finding conditions or instructions that can provide direction and consistency.
Therefore, in hopes of clarifying rules or conditions for staff and those owners of remaining tap fee credits going forward, staff is recommending the attached ordinance which places the following conditions on remaining credits:
- An owner of any unused water or sewer tap credit may use the credit, regardless of purchased value, towards the full value of a water or sewer tap fee obligation at the time the owner applies for a building permit;
- An owner may transfer or sell the credit to another builder or owner after receiving approval from the Director of Water Services and the City Manager as specified in Section 70-8 of the Municipal Code;
- Credits may not be returned to the City and redeemed for a cash value.
In addition to clarifying rules for prepaid tap fee credits, staff desires to establish a policy for customers requesting to opt out of the Flexnet or automated meter reading system.
The Water Services Department’s CIP for FY 2020 includes completing the final phase of the ongoing Flexnet meter reading system upgrades project. In FY 2019, the department began work to install new meters and/or meter reading communication devices (radio units) to transmit readings to the previously installed tower system infrastructure. To date, around 5,500 customer sites are now being read from the Flexnet, tower reading system. It is anticipated that all customers, with a few exceptions, will be Flexnet based reading by the spring 2020. The upgrades are providing improved accuracy of our meter system as well as enhanced service for our customers. The new meters provide near real-time information that allow leaks to be identified more quickly and allow City resources to be redirected more efficiently.
With the new technology, Water Department staff has had a few residents inquire about opting out of having a radio read meter installed. At this time, staff is requesting the Board approve an “opt-out” option of the City’s automated meter reading technology. As you know, one of the purposes of the AMR program is to reduce costs associated with labor to read the meters and provide real-time data to identify leaks or other system problems. If a customer requests not to participate in the AMR program, the department then continues to incur the labor cost of having a technician read the meter monthly and loses the other leak detection and other benefits.
Taking into account direct costs associated with the labor and equipment needed to continue manual reading of these meters plus the greater financial exposure for leak adjustments on these accounts, staff is recommending a monthly fee of $25 be added to the water bill for those customers who wish to opt out of the AMR system. A customer may choose to participate in the AMR program at any future date and avoid this charge thereafter.
For the Board’s information, staff has reached out to other utilities in the middle Tennessee area which are upgrading to an AMR system for information related to their “opt-out” options being offered. This information is attached for your consideration.
At its November 25, 2019 meeting, the Board of Commissioners discussed the possibility of adding some type of annual escalator to the monthly fee. Should the Board wish to amend the draft ordinance on second and final reading to add such an increase, staff proposes the following text to be added at the end of the new subsection 70-159(g) (Section 3 of the ordinance):
"This fee will be reviewed on November 1 of each calendar year after its implementation and be adjusted based on the change in the consumer price index for the most recent twelve month period as published by the Bureau of Labor Statistics. Any increase will be rounded to the nearest $0.50, and be adopted by resolution by the board of commissioners no later than December 1 of each applicable year to be effective January 1 of the following year."
Should you have any questions, please contact Chris Milton, Director of Water Services. |