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Crossville finance director warns water/sewer fund squeezed by ARPA depreciation; staff floats possible 10% rate increase
Summary
City finance staff presented the draft budget and said depreciation on ARPA-funded capital projects and falling interest income have reduced the water/sewer fund surplus to about $12,000; staff recommended considering a rate increase (staff discussed 10%) to avoid state intervention if deficits occur.
City finance staff told Crossville City Council the water and sewer enterprise fund faces narrow margins because of depreciation on recent capital projects funded with American Rescue Plan Act (ARPA) monies and lower interest income, and staff recommended the council consider a rate adjustment to avoid future deficits.
Finance Director Nathan (last name not specified) told council the water/sewer budget for the coming fiscal year currently shows a roughly $12,000 surplus but warned that depreciation and contract increases will shrink that cushion. “We are really close on what this water sewer surplus is,” Nathan said. He cited anticipated depreciation increases (about $200,000) and an expected near‑$90,000 contract increase for the Viola contract as principal drivers of higher expenses.
Nathan reviewed revenue assumptions. He reduced projected…
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