The Monteagle City Council Meeting on Monday, September 28 started with questions of adding infrastructure for additional waterlines to residential properties, continued with communications by Mayor Greg Maloof for water infrastructure projects in the works, and concluded with great feats of arithmetic for re-structuring the cost of water that would satisfy the income requirements for receiving State Revolving Funds without penalizing and raising the utility bill for minimum water consumers.

During Citizens Comments, Steven Martin came forward saying he was trying to purchase a lot on Monteagle Falls Road and declared, “There’s seven pieces of property on that road and none of them can get water.” Alderman Dean Lay cited property deeds which state that the landowner falls responsible to pay for the expansion of waterlines to the property. Alderman Nate Wilson pointed to an ordinance which allows incremental infrastructure fees for the expansion. The first step would require an engineer’s blueprint and cost estimate. Mayor Maloof’s communications served as an introduction to Monteagle’s plans for facilities maintenance. “The water plant is over fifty years old, the sewer plant over fifteen years old, some of the equipment original, very old, or beyond repair,” he began, with mention that they could come close to having a mandate for repair by the Tennessee Department of Environment and Conservation (TDEC) if they waited too long to address the issues. Mayor Maloof stated that upgrading the pump station behind the Waffle House, an estimated cost of $750,000, would increase capacity to accommodate the Hampton Inn and other developments and that increased capacity in sewage comes down to making improvements to infiltration and inflow (I&I), a cost of $125,000. He noted that not only must the projects be funded but the funding must also account for the facilities’ depreciation over time. Gesturing to the State Revolving Funding (SRF) the team has applied for, the Mayor warns, “If we turn the money down, we’re going to have to do it later, and it will be more expensive.”

Alderman Nate Wilson stepped up to the plate to explain that the SRF functions as a loan and hinges on the predicted ability to perform on the assets of investment. The SRF programs provide technical assistance and low-interest loans to cities, counties, utility districts, and water authorities across the state for planning, design, and construction of drinking water and wastewater infrastructure projects. The SRF interest rate is 1.8% (compared with a 4% interest rate from other loan providers) and municipalities can qualify for up to two million dollars in interest on the principal loan. The rub is that the state says the current water and sewer rates do not support the grants applied for to upgrade the water and sewer and would need to see a 13% increase over a certain period, and the team does not believe they should raise the rates for the average household, which has seen a 50% increase in their utility bill over the past 5-6 years. “The time has come that we’re going to have to shift the burden away from the minimum users,” declared Alderman Dean Lay.

Wilson began to explain the working changes in the rate structure beginning with consumption analysis data for 2025, which shows that consumers are paying a flat fee up to 96,001 gallons; however, the average residential home uses between 9-12,000 gallons per month. This means that the rates for water use could increase for use over 12,000 gallons so as to not penalize the average residential consumers. They also noticed that throughout the year sixty people are absent second-home-owners using no water. Wilson noted that the deficit of paying to service their water while not receiving income from selling them water could be mitigated with a dormant service fee. Finally, Wilson went on to explain how they could change the rates of upper bands of consumption by use of ERU, Equivalent Residential Unit, the standard unit of measurement used to compare the water usage of different types of properties to that of a typical single-family home. For example, one hotel may reach the consumption of seventy houses, or 70 ERU. For a ERU rate of $500, the hotel would pay $35,000 in addition to a tap fee. They pointed out that developments do need to cover the infrastructure cost, but that ERUs which are too expensive will deter development and suggested that new developments could start at the rate of $500 per ERU, and gradually increase to a higher rate. To compare, Rutherford county operates at $7,000 ERU; and Franklin, TN: $24,000. Wilson concluded that a moderate to low ERU rate for developments would completely change the billing structure, reduce rates for average consumers, potentially do away with the $5 service fee which disparately impacts low income households, and still be 10% over the state requirement for the SRF funding. Alderman Lay reminded the citizens of Monteagle and those residing out of town for whom the changes would affect, “You have a right to voice your opinion on what we’re gonna to do your utility bill.” The math went unchallenged.