No tax increase
Rocky Top holds rates for 2024-25; $5.4 million sewer upgrades begin
There will be no property tax increase in the new Rocky Top budget for fiscal year 2024-25, which takes effect July 1, according to the budget ordinance passed recently on final reading and amended last week by the City Council.
Also, work has begun on a $5.45 million sewer system upgrade, which will cause residents some inconveniences until the work is completed, including traffic-flow problems as streets are shut down or restricted while sewer lines are laid.
In the first of the planned weekly progress meetings with city officials last Friday, the sewer project administrators outlined the plans and provided a projeced completion date of April 26, 2025, for the expected 330-day duration of the work.
For the new fiscal year, the Rocky Top property tax rate will remain $2 per $100 of assessed property value, the same rate in place for fiscal year 2023-24, which ends June 30.
In the new budget, the city plans $2.324 million in general-fund expenditures for the year, against expected revenue collections of $2.207 million.
The city will spend $5.799 million for sewer and water operations in the new fiscal year against expected operating revenues of $1.472 million plus grant funding.
The bulk of the water and sewer budget will go toward the city’s ongoing $5.45 million contract for major sewer system upgrades, which will be paid for out of grants and other assistance and financing.
In April, the council passed a resolution to provide additional financing of $1.3 million for the sewer upgrade to cover budget overrun the city incurred with the lowest bid for the entire project.
In January, the council voted to award the contract for the sewer upgrades to Morgan Contracting of Knoxville, the latest step in a multi-year project to eliminate environmental concerns with the system.
Cannon & Cannon Inc. engineers of Knoxville is managing the project for the city.
Morgan’s winning bid was over the city’s budget for the project, so Rocky Top plans to get an additional $1.1 million loan amount from the state of Tennessee through the State Revolving Fund program to cover the extra cost, Mayor Kerry Templin has said.
The city is using a combination of grants and SRF loans to pay for the sewer repairs.
City Manager Michael Ellis said the SRF loans come with a 40 percent “forgiveness,” rate, which means the city would have to repay only 60 percent of what is being borrowed.
That means that the additional loan amount would cost the city $660,000 in repayments. Ellis said.
But the city also has asked Anderson County about getting some help from federal grant money the county has received through the American Rescue Plan Act.
Rocky Top in April 2023 received notice of an additional $1.38 million in assistance to pay for the work with an American Rescue Plan grant through the Tennessee Department of Environment and Conservation.
That money was in addition to other funds transferred from Anderson County, and was meant “to develop a comprehensive asset management plan and address the critical needs of water loss and excessive infiltration and inflow into its sewer system,” the state department said.
Rocky Top plans to use the grants and loans to rehabilitate 33,000 linear feet of sewer lines, along with installation of new manholes, Ellis said.
The city is among 43 Tennessee communities to share in the latest round of grants totaling $203.2 million from the state’s ARPA fund.
Tennessee received $3.7 billion from the ARP, and the state’s Financial Stimulus Accountability Group dedicated $1.35 billion of those funds to TDEC to support water projects in communities throughout Tennessee.