Board authorizes MTAS to review Oakland’s water/wastewater rates

oaklandsealBy Bill Short
The Oakland Board of Mayor and Aldermen has unanimously authorized The University of Tennessee’s Municipal Technical Advisory Service to review the town’s water and wastewater rate schedule.
Board members took the action during their March 20 regular monthly meeting on a motion offered by Alderman Billy Ray Morris and seconded by Alderman John Troncone.
Mayor Chris Goodman recalled that, at its Feb. 20 meeting, the board briefly discussed the idea of “bringing in an outside entity” to conduct the review.
While acknowledging that one was done “a number of years back,” the mayor noted that Oakland’s water and wastewater rates have not been changed in “probably 15 years.”
Goodman said that, in maintaining a utility, the town is obligated to ensure that those rates are at a level that will “sustain the process” being done.
Under the agreement, signed by the mayor and Town Recorder Tammie Hightower, Oakland will pay MTAS $50 for each consulting hour. But “in no event” will the total cost of the review exceed $3,000.
Before the review is begun, the town will provide MTAS with requested financial and operational information.
The review will consist of the following documents and services:
(1) a narrative and summary of the review, with recommendations for setting “fair and equitable” rates for customers of Oakland’s municipal water system;
(2) a spreadsheet showing the past two to three municipal audits, current year-to-date revenues and expenditures, and a three-to-four-year projection of all water utility revenues, assuming no adjustment of the town’s water/wastewater rate schedule;
(3) a spreadsheet with rate adjustments that would potentially produce a “positive change” in the net assets of the utility within two to three years;
(4) a cash-flow sheet reflecting the results of both spreadsheets;
(5) a customer comparison analysis, including summarized customer data provided by the town, that contrasts each class by number of customers, volumes used and revenue generated;
(6) structural changes to the existing rate schedules;
(7) a schedule of recommended rates; and
(8) a graphical and PowerPoint presentation of findings at a meeting of the board.
After it completes the review, MTAS will provide a follow-up.
Eighteen months after the town has adopted the review’s recommendations, MTAS will provide a “brief follow-up on the status review” to assure that its recommendations are achieving the “desired revenue results.”