An independent analysis of fire hydrant fees is to be performed in the hopes of settling an impasse between the city and its water system.
Shelbyville officials and members of the water board held a "very good" open discussion on the subject of fire hydrant fees this week, and it will be a topic for the city council next Tuesday.
City manager Jay Johnson, fire chief Ricky McConnell and city treasurer Jamey Owen met with Shelbyville Power, Water and Sewage System's board of directors Monday to address concerns over high fees charged by the utility, which Johnson claims is higher than any city in middle Tennessee.
Earlier this year, the water board voted to charge a monthly fee of $10.30 for each fire hydrant in Shelbyville. With 1,123 functioning hydrants billed each month, it would mean that the city would pay $138,803 annually to the water system.
In a memo to council members, Johnson had suggested an independent study, or a "cost of service" accounting be performed, with the city paying half of the costs.
"I recommend we do so," Johnson wrote. "It may be the best manner to resolve the question."
The water board voted to honor Johnson's request, and utility general manager David Crowell is currently in the process of doing research into firms that can perform the task.
Crowell said that Johnson told him he does agree a rate should be charged, but the disagreement is over how much it should be.
Another issue that came out of the meeting is the fact that the city's water system has some hydrants outside Shelbyville municipal limits, yet charges have never been levied against the county fire department.
"That's the same service that the city taxpayers are paying and the county is not," Johnson said. "I really have a huge issue with that .... if there is a fee, they should be paying it. That's something that the city council really needs to address."
Johnson addressed this concern in a letter to Crowell in late October, but the city has received no response to it since that time.
However, Crowell explained to the T-G that while their water lines do extend outside the city limits, "they are purely for consumption purposes," and the hydrants are there for flushing of the system, and not for fire protection.
According to Johnson's letter, county fire chief Mark Thomas told Johnson their budget does not include a fire hydrant maintenance fee billing by the water system. Also, county finance director Robert Daniel told Johnson he was not aware of any billing for fire hydrants in the county's budget.
Crowell stated that in his conversation with county fire officials, "they do not use those (hydrants) to fight fires," further explaining that the board has never charged a fee for them.
But Johnson told the T-G Thursday that he found Crowell's explanation about the hydrants outside the town's limits "hard to believe."
Johnson made four proposals to the water board: that the "cost of service" review be made, suspend the fee charged to the city pending the detailed study, complete a revised hydrant fee to be levied "fairly and equally" on all fire service providers within the Shelbyville water system area and that the city and utility renew their efforts to closely together on projects and services.
The conversation was characterized as "blunt" by Johnson, who said there were differences of opinion on the issue.
Johnson told the T-G that one of the issue he's "having difficulty with" is that the utility calculates the fire hydrant fee based on replacement cost of values, yet the utility pays the city their in-lieu-of taxes based upon depreciated values.
The city manager said that the city was paying with one calculation, and being charged by another, and that the big difference of opinion is what should be included in these calculations.
Crowell agreed that there was a "disagreement" over that issue, saying that the cost analysis done by their in-house engineer was on a historical cost basis. He hopes that the independent fee review would clarify the issue.
But the utility manager said if the analysis showed the cost to the utility to be more, "then there will probably be an increase in the fee, if it's less, sure, then we'll honor that."
Johnson also wrote that the utility understood that the city is looking at the matter "as a cost issue, not any dispute with the service." He told the T-G that everyone in the meeting felt the issue needed to be resolved so that they can move on.
Crowell said Thursday that this is not a "divisive issue" and that the board was comfortable with the rate they were charging.
During a study session at the first of the month, Johnson told the council that he was "not happy" with the vote made in September by the water board, which had stated that the $10.30 fee was "reasonable."
In September, Crowell explained to the T-G that the utility's charter came about from a private act from the state legislature which establishes that they operate separately from the city. The city appoints the power board, and then that group sets the rates.
Shelbyville's city council will meet for their December study session at 6 p.m. next Tuesday in the courtroom of the Shelbyville police department following a special called meeting to address pending legal matters.