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City to consider first water rate increase in 7 years

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On Dec. 13, the Germantown Board of Mayor and Aldermen will consider a recommendation from the Financial Advisory Commission to adjust water and sewer rates for Germantown utility customers.
In advance of the meeting, city leaders put together some “fast facts” to address some commonly asked questions.
The meeting of the Board begins at 6 p.m. in Council Chambers at Germantown City Hall, 1930 S. Germantown Road. If your question isn’t answered below, feel free to email us at [email protected].
n By the Numbers:
• Germantown has about 14,000 water customers.
• Since 2008, the average Germantown customer’s monthly water usage has decreased from approximately 9,000 gallons of water a month to less than 5,000 gallons a month.
• The last time Germantown increased its water rates was July 2014.
• The City’s utility fund supports $144 million in assets, including two water treatment plants, 212 miles of water mains, 3,500 fire hydrants, wells, pumps and a water tower.
• On average, Germantown spends $8.3 million annually to maintain and operate its utility system.
• Utility fund revenues have fallen from $5.3 million in fiscal year 2016 to $5 million in fiscal year 2020 due to decreased usage.
• If the water rate increase is approved, the average Germantown water customer will see an approximately $5.70 increase in fees related to water usage.
• Most of Germantown’s sewer expenses are passed down from City of Memphis’ sewer treatment costs.
• Over the last three years, sewer treatment costs in the City of Germantown increased by 39 percent.
• As a result, the average Germantown resident should see a monthly sewer rate increase of approximately $5.50.
• While individual rates may vary, most customers can expect a total increase of approximately $11 on their monthly utility bill. This includes both water and sewer rate adjustments.
n Why are my water rates going up?expenses in the utility fund will exceed revenues in 2022?
Germantown residents’ water usage has significantly dropped. That in itself is excellent news – as an educated and engaged community, we care about the environment and conserving our natural resources.
However, the drop in water consumption has resulted in a decrease in utility fund revenues.
Meanwhile, the City still must maintain its water system, including the wells, tanks, pumps, water lines, chemicals and employee salaries. Due to inflation, these expenses are increasing.
n How much will my water rates increase and when?
If the FAC’s recommended rate adjustments are approved by the Board of Mayor and Aldermen, the average Germantown water customer will see a $5.70 increase in fees related to water usage.
n Why can’t the city cover these costs?
The utility fund operates as a stand-alone business that covers annual expenses through its own revenue. It can’t be supplemented by dollars from other sources like property or sales tax revenues.
In fact, Tennessee has established systems to ensure that municipal utility funds operate on a sound financial basis. While the Germantown utility fund isn’t in violation of any state guidelines, a recent State review of the budget recommended a rate increase.
n How did you determine the new rates?
In the spring of 2021, the city began a utility rate study that allowed us to identify future capital projects and explore long-term plans for funding utilities.
This study balanced forecasted revenues against competing demands for services, including equipment replacement, maintenance and reconstruction of utility assets.
The city used these results as a guide for keeping our utility rate increases predictable and manageable, along with making decisions about operational and capital spending.
After the city reviewed the study results, the city established a subcommittee of the citizen-led Financial Advisory Commission.
The group reviewed several proposed rate adjustments and fee structures, finally settling on a recommendation that, if approved by the Board of Mayor and Aldermen, will result in an average $11 increase in overall water and sewer rates for most Germantown utility customers.
The rate adjustments will be considered by the Board of Mayor and Aldermen during the Dec. 13 meeting.
n How much will my sewer rates increase?sewer treatment costs continue to rise?
The FAC has recommended adjustments to the sewer rate which will result in a $5.50 per month increase for the average user.
Why are my sewer rates going up?
The fee increase was passed along to the City of Germantown from Memphis, where your sewage is treated. Germantown’s sewer agreement with Memphis dates back to 2003 and is an important element of the City’s utility system.
Over the last three years, sewer treatment cost has increased by 39 percent.
Currently, Memphis is under a consent decree to improve the sewer system and a percentage of that cost is passed along to the City or Germantown.
Every two years, the City of Germantown renews its sewage treatment agreement with the City of Memphis. The latest update occurred in January 2021.
n How do our rates compare to other areas?
Water Monthly Charges on 5,000 Gallons
Germantown current – $8.78
Germantown proposed – $14.48
Collierville – $14.15
Bartlett – $13.20
Oakland – $17.60
MLGW – $29.17
• Sewer Monthly Charges on 5,000 Gallons
Germantown current – $9.95
Germantown proposed – $15.48
Collierville – $28.50
Bartlett – $14.86
Oakland – $17.60
Memphis – $24.90
n What will be the overall impact on my bill?
Pending approval of the recommended rates, most customers can expect a total increase of approximately $11 on their monthly utility bill. This includes both water and sewer rate adjustments.
n When will I see these changes?
If approved, the rate increase will be effective on Jan. 1.
n How will the utility fund be monitored?
City budgets are subject to constant monitoring. Going forward, the city plans to review utility rates and the related rate structure annually to allow for smaller incremental adjustments on a yearly or biennial basis, compared to the current five-year plan.

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