Rocky Top keeps tax rate at $2
The Rocky Top City Council on Monday morning gave final approval to a $3.16 million budget for the new fiscal year beginning July 1, but held off for further study an increase in consumer water rates.
City workers will get raises, but the property tax rate will remain at $2 per $100 valuation for the new year, the council decided as it passed the budget 4-0 on second and final reading. Councilwoman Stacy Phillips was not present for the special meeting, held at 9 a.m. Monday (June 26).
City officials still want to meet with a representative of the UT Municipal Technical Advisory Service to work out how much of a water rate increase might be necessary to keep the city’s water system operating in the black, City Recorder Peggy Watson told the council.
Mayor Kerry Templin has already said that there most likely will be an increase above the usual annual 1% that water customers have been seeing since the city was forced by the state to raise rates significantly in 2016. The rates increased 15% that year, and then were to continue rising 1% a year indefinitely.
But Templin said at Monday’s meeting that a 1% annual increase does not allow the city to keep up with inflation on water system expenses. Under state law, all money spent on municipal water and sewer systems, other than grants, must come from the rates customers pay. Property tax revenues are not allowed to be used to fund water and sewer operations.
Councilmembers also learned Monday morning that the mayor and City Manager Mike Ellis last week dismissed sewage treatment plant Superintendent Gary Harsey from his $55,000-a-year job, and eliminated his position.
Ellis said another worker will be hired to help at the sewage treatment plant, but at a much-lower salary. The move comes in the middle of a multi-million-dollar upgrade of the Rocky Top sanitary sewer system designed to update old pipelines and help eliminate infiltration of groundwater into the system.
Council members earlier this month approved the budget on first reading, with no provision for water rate increases.
At that time, Templin said, “Water rates are going to go up every year.” The new budget projects total revenues of $2,774,965, and total expenditures of $3,160,764. Revenue includes $1,476,400 in local taxes, along with $1,133,955 in state taxes, plus other sources.