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Fire hydrant fees too high: Johnson

Friday, September 7, 2012

Discussions are continuing between the city and the Shelbyville Water Board over unusually high monthly maintenance charges for fire hydrants.

According to the minutes of the July water board meeting, civil engineer John Freeman presented a detailed analysis of the system's hydrant costs.

System manager David Crowell and attorney Fred Hunt were authorized by the board to meet with city manager Jay Johnson about the utility's view that the $10.30 fire hydrant monthly charge billed to the City of Shelbyville is fair.

With 1,123 functioning hydrants billed each month, the city pays $138,803 annually to the water system.

Budget issue

"It's about the money, I'm going to say that up front," city manager Jay Johnson said.

He added that the issue is not "a dispute or disagreement" with the utility.

"But from my perspective, we're paying a fire hydrant maintenance fee that is substantially above any other city in middle Tennessee," the city manager said. "And I think we need to look at that."

Johnson told the T-G that the average cost for a city Shelbyville's size would be $50,000 to $60,000, with the highest he was aware of being Tullahoma at an estimated $105,000.

If the council looks at how much the utility is actually spending on fire hydrant maintenance, "by their own numbers, it's about $51,000 a year," Johnson said, which is "very comparable to other cities."

"We're paying a fee related to the infrastructure costs to produce the water that is unusual," he said. "I'm not going to say it's wrong ... but it's unusual."

Questions

Council members asked if the fire department could take part in the maintenance, such as hydrant reviews, and basic flow tests, and Johnson said that was one option, but that even if they accepted the premise that Shelbyville should pay a portion of the water production costs, "I think a case could be made that the percentage allocated to fire hydrants is too high."

If a hydrant is not functioning, the city doesn't pay for it. According to the utility's numbers, nine hydrants are not billed.

Johnson said that 40 percent of the city's Insurance Services Office (ISO) rating is based upon water supply, its transmission and hydrants. The ISO rating is used by insurance companies; a favorable ISO rating generally means lower premiums for homeowners' insurance.

Costs questioned

In a letter to the utility, Johnson said he had questions on the cost allocation percentages, noting that the insurance value of the hydrants is about $3 million more than the audit's water system asset figures of "plant, net of accumulated depreciation," saying clarification is needed.

The city manager also asked the council and fire chief Ricky McConnell if they realized they were paying a 20 percent charge for the water pump as part of the maintenance fee, pointing out it would take 24 hours to pump two million gallons of water through a fire engine to achieve that.

"The numbers don't relate," Johnson said.

Johnson also questioned a six percent chemical building calculation for fire protection, stating that "theoretically, raw water is just as effective for fire safety purposes." He also said he did not understand how electric costs were calculated at two percent to the fire protection needs, the letter said.