Clarksville Gas & Water to charge industries ‘reservation fee’ for large volumes of water

CLARKSVILLE, TN (CLARKSVILLE NOW) – In a special called meeting of the City Council last week, members voted to grant the Clarksville Gas & Water Department authority to negotiate water and sewer reservation fees and terms with large-usage customers.

The council also voted Thursday to amend the 2023 fiscal year budget to include additional funds for capital projects, totaling over $16 million in new debt. Both matters appeared before the council at their regular meeting on March 2.

Gas & Water

In the body of the ordinance, a “large water and sewer user” is described as a user exceeding 25,000 total gallons per day at one production, consumption or collection location.

“It will be mostly large commercial and industrial (users),” Mark Riggins, general manager of the Clarksville Gas & Water Department, told Clarksville Now. “This is an industry standard in a lot of cities, especially for those who have as many customers as we do.”

The ordinance noted that the department has performed an internal financial study on current and future capital improvement projects. The study revealed the costs associated with system capacity demands by consumers of large volumes of water and sewer, such as new industries. It added that reservation fees would allow the department to better align the financial impact of system infrastructure projects.

“Let’s say we have a large company that comes in that wants 2 million gallons of water a day, and just for ease, let’s say we have a water plant that costs $100 million for 10 million gallons of water. Somebody comes in, and they want 2 of that. We know that’s 20% of that plant, so they need to play $20 million,” Riggins said.

He explained that the first phase of building the new water treatment plant will cost between $200 million and $210 million, extending capacity by another 12 million gallons. By the time phases two and three are complete, Riggins said, the department will have the ability to produce around 36 million gallons of water a day.

“If someone is going to come in and take a certain percentage, a large portion of our resources, then they need to pay for that capacity. And what that also does is guarantee that consumer that capacity, so I don’t sell it to someone else.”

Proposed amendment

On Thursday, Councilperson Karen Reynolds introduced an amendment to the measure.

“At the last meeting, I spoke about my concern regarding that these are only going to be voted on at the committee level, and I feel very strongly that deals that are up to $15 million at the initial phase should be voted on by the entire council,” Reynolds said, noting she didn’t think the committee meetings were as public as council meetings.

No other council member spoke in favor of the amendment.

“I would ask that we vote against this amendment. I think if Mr. (Mark) Riggins was here to speak tonight I think he could speak to the fact that we should be able to trust in him and his department to be able to negotiate contracts that are for the benefit and protection of our customers, which are also our citizens and this community,” said Councilperson Stacey Streetman, noting the committee meeting agendas are as public as council meeting agendas.

The amendment failed 8-1, with only Reynolds voting yes. The ordinance as presented passed 9-0 on its second reading. Dajuan Little, Ambar Marquis, Wanda Allen and Trisha Butler were absent.

Capital projects fund

In other action, the council voted to add money to the Capital Projects Fund. The measure attributed inflation and supply chain issues to costs coming in higher than budgeted.

Streetman motioned to amend the amount to include $90,000 for the Fire and Administration Training Facility, which was not included on the original list of projects requiring more money.

“As with everything else, due to inflation, the cost has exceeded the anticipated budget,” Streetman told the council.

Councilperson Deanna McLaughlin asked if the additional amount would require a tax increase in the upcoming budget, to which Clarksville’s Chief Financial Officer Laurie Matta replied that the amendment alone would not. Matta added that the city has the capacity to accommodate it.

The amendment passed unanimously, along with the measure itself on its second reading. The projects and their full amounts are:

The impact on the capital projects fund is an increase of $16,198,190 in debt issuance.