Oneida City Council Assumes Operations Of Water Department

Oneida, TN (2013-03-21) Two months following a meeting with state officials regarding the financial condition of the city-owned water and wastewater department, the Oneida Mayor and Board of Aldermen have taken control of the fledgling utility.

By a 4-0 vote Thursday night with Vice Mayor David Lowe absent and casting a non-recordable vote by proxy in support of the measure, the Oneida City Council approved a resolution that dissolved the existing Oneida Water and Wastewater Advisory Board and established a new five-member board that will be comprised of the duly-elected members of the Oneida City Council. The action also established that the day-to-day operations of the utility district would be the direct responsibility of the Mayor, and the City Recorder would serve in the capacity of comptroller over the utility district’s funds.  Furthermore, the resolution authorized the payment of a supplemental salary to the Mayor and City Recorder for the additional workload.

“We’re not in compliance (with state regulations regarding the solvency of utility districts),” commented Mayor Lay.  Following the January retirement of then Manager Johnny Acres, the administration began taking measures to assume full responsibility for the department, which led to Thursday’s night action.  “Something had to be done,” Lay added.

During the often contentious meeting Thursday night, the council appeared unified in its decision to assume operational control of the utility district, which, although ran separately for years, has always been the responsibility of the city government.  However, Alderman Cecil Anderson, who had long championed the reorganization of the water department, disagreed with the amount of the proposed salary supplements.  “I never said they shouldn’t get paid, but we live in a county with 19% unemployment,” commented Anderson.  During an impromptu meeting of Vice-Mayor David Lowe and Alderpersons Sharon Miller and Linda Lay, Miller stated Thursday night she had suggested supplementing the mayor’s pay by $25,000 annually, while supplementing the city recorder’s pay by $12,500 a year.  At those rates, city officials contend they will still be savings nearly 50% on administrative costs.  The former manager reportedly received an annual salary of $78,000, plus benefits.  The department’s advisory board members also received a $100 a month stipend.

Although the city brought the water and wastewater department under the umbrella of city government, officials stressed the salary supplements would be paid from utility district’s funds and would not be paid out of tax revenues. The salary supplements have not been officially approved, as the newly-formed water board will have to take up that matter in a separate meeting.

Thursday night’s action didn’t preclude the city administration from naming an independent manager of the department in the future.

In mid-January, the members of the Oneida City Council appeared before the state’s Water and Wastewater Financing Board, defending an audit of the department’s financial records.  According to an audit of the city’s books ending June 2012, the Oneida Water and Wastewater Department lost $200,000 in its last fiscal year.  The department’s day-to-day operations netted about $513,000 in profits; however, annual depreciation of the department’s assets and interest on its outstanding $3.2 million long-term debt led to the loss.

According to Mayor Lay, city officials will have to appear before the Financing Board again on July 11, 2013 to show proof of the department’s action to rectify the situation.  If the city fails to meet the state’s expectations, the state could assume control of the district and set the district’s water and sewer rates.  In an earlier meeting, the state urged the local utility to raise its rates by as much as 38%.  Currently, residents inside the municipality pay $12.11 for the first 2,000 gallons of treated water.  Those rates will automatically increase by 2% in June 2013.