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Utility Management Review Board Water and Wastewater Financing Board Water Loss Accountability

Utility Management Review Board Water and Wastewater Financing Board Water Loss Accountability. General Introduction. Utility Management Review Board Water and Wastewater Financing Board. Utility Management Review Board.

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Utility Management Review Board Water and Wastewater Financing Board Water Loss Accountability

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  1. Utility Management Review BoardWater and Wastewater Financing BoardWater Loss Accountability

  2. General Introduction • Utility Management Review Board • Water and Wastewater Financing Board

  3. Utility Management Review Board • Established in 1989 to advise utility district boards of commissioners in the area of utility management.

  4. Utility Management Review Board Nine member board, consisting of: • Commissioner of Environment and Conservation or the commissioner’s designee • Comptroller of the Treasury or the comptroller’s designee • Four experienced utility district managers • Three experienced utility district commissioners • Last seven to be appointed by the Governor

  5. Utility Management Review Board Duties • Oversight of financially distressed utility districts • Providing advisory technical assistance upon request • Review any decision of a district upon simple written request (Are policies being followed?) • Establish an alternate mechanism for consideration and resolution of customer complaints • Conduct hearings to determine if commissioners should be removed from office or the method of commissioner appointment

  6. Utility Management Review Board Duties • Adopt rules for commissioner training • Adopt rules to define excessive unaccounted for water losses • Review and approve ethical standards for utility districts and water, wastewater and gas authorities • Subpoena power • Enforce decisions through Chancery court

  7. Utility Management Review Board Duties • Review and comment on petitions for incorporation, modification, merger or consolidation of utility districts • Determine the financial, technical and managerial capacity of the public water system to comply with federal and state laws and require systems to take appropriate action

  8. Utility Management Review Board 2008Legislation • PC 852 • A single customer of a UD may file a request with the UMRB to obtain utility service from an adjoining district if: • The primary district has refused to or is not able to provide service within a reasonable period of time at a reasonable cost as determined by the UMRB, AND, • The adjoining district is willing to provide the service

  9. Utility Management Review Board 2008 Legislation • PC 700 • Changes the criteria for reporting utility districts to the Board • Allows interest income and grant funds

  10. Utility Management Review Board 2008 Legislation • PC 1179 • Requires the development of a program for board members of authorities and utility districts to educate them about open meetings laws and how to remain in compliance with the laws

  11. Utility Management Review Board 2008 Legislation • PC 720 • Allows the creation of a public building authority for utility districts

  12. Utility Management Review Board • Appearances before the Board since 1989: 215 different entities – cases related to financial distress, relocation loans, complaints, petitions, mergers, etc. • Annual average water loss for utility districts as reported in 2007 audits: 25.14% (53 districts)

  13. Water and Wastewater Financing Board • ALL public water systems and wastewater facilities (municipal, authority and utility district) are under the jurisdiction of the WWFB (TCA 68-221-1015(d) allows the WWFB to defer to the UMRB cases under the jurisdiction of the UMRB) • Established in 1987 and empowered to effect reasonable user rates to correct financial losses

  14. Water and Wastewater Financing Board Nine member board consisting of: • Commissioner of Environment and Conservation or the commissioner’s designee • Comptroller of the Treasury or the comptroller’s designee • Municipal representative (TML) • Utility district representative (TAUD) • Environmental representative (Environmental Council) • Manufacturing representative (Assoc of Business) • Minority representative with governmental finance experience • Active member of a municipal water utility • Active member of a water utility district • Last seven appointed by the Governor

  15. Water and Wastewater Financing Board Duties • Subpoena power • Enforce decisions through Chancery court

  16. Water and Wastewater Financing Board Duties • Investigate and determine the financial condition of water systems and wastewater facilities under its jurisdiction • Determine the financial, technical and managerial capacity of the water systems to comply with requirements of federal and state laws and require system to take action • Adopt rules to define excessive unaccounted for water losses

  17. Water and Wastewater Financing Board 2008 Legislation • PC 779 • Requires a study of all water and sewer rates and tap fees set by a municipality for customers inside and outside the municipal jurisdictional boundaries • Board is to evaluate differences in rates if outside rates are greater than 100% of the inside rates and determine if the rates are reasonable and justified • Report to Governor and speakers by 1/1/09

  18. Water and Wastewater Financing Board • Since 1987, 177 different entities have appeared before the board • Annual average water loss reported for municipal systems: 26.51% (118 systems)

  19. Comparison of Boards • Both deal with financial distress, capacity development, water loss and have Chancery Court enforcement power • WWFB – evaluates inside/outside rates that vary by 100% • UMRB – Customer complaints, ethics policies, commissioner training, commissioner replacement, management, creation, addition of service types (sewer, gas)

  20. Public Acts 2007Public Chapter No. 243HB743-SB738Effective July 1, 2007 Affects both Utility Management Review Board And Water and Wastewater Financing Board Water Loss Legislation

  21. Tennessee Code Annotated • Public water systems shall include in their …audit the…annual average unaccounted for water loss percentage in the manner prescribed by the Comptroller of the Treasury. • UMRB and WWFB are to investigate public water systems whose unaccounted for water loss as reported in the audit is excessive as established by rules…of the board

  22. Tennessee Code Annotated • In the event a water system fails to take the appropriate actions required by the board to reduce such water loss to an acceptable level, the board may petition the chancery court in a jurisdiction in which the system is operating to require the system to take such actions. • Boards are required to promulgate rules to determine excessive water loss.

  23. Tennessee Code Annotated • The UMRB is required to provide a report to the chairs of the House Conservation and Environment committee and Senate Environment, Conservation and Tourism committee by February 1 of each year. • The WWFB has no such requirement, but Municipal Audit has agreed to prepare a similar report

  24. Proposed Rule • The Board will review … no less than annually to determine the acceptable unaccounted for water loss percentage …. Any amount greater than the acceptable unaccounted for water loss percentage established by the Board shall be considered excessive. • Once the percentage is determined, the Board shall notify the Division of Municipal Audit within the Office of the Comptroller of the Treasury in an appropriate manner of its determination of acceptable unaccounted for water loss percentage. The Division of Municipal Audit will make referrals to the Board based on that percentage. • The acceptable unaccounted for water loss percentage shall be posted on the website of the Board within 30 days of its decision.

  25. Audit requirements • Believing the proposed legislation would pass, the Division of Municipal Audit was proactive and required municipalities and utility districts to include the information in their financial statements for fiscal year 2007. The 2007 reported percentage was to be “pumped vs. sold.” • The 2008 calculation is now online at the Comptroller’s website

  26. 2008 Calculation Formula Town/Utility District of Anywhere Schedule of Unaccounted For Water June 30, 2008 • (All amounts in gallons) • A Water Treated and Purchased: • BWater Pumped (potable) 2,000,000 • CWater Purchased 500,000 • D Total Water Treated and Purchased • (Sum Lines B and C)2,500,000

  27. 2008 Calculation Formula • E Accounted for Water: • FWater Sold 1,800,000 • GMetered for Consumption 200,000 • HFire Department(s) Usage 50,000 • IFlushing 10,000 • JTank Cleaning/Filling 7,200 • KStreet Cleaning 0 • LBulk Sales 0 • MWater Bill Adjustments 2,000 • NOther (explain) 150,000 • O Total Accounted for Water 2,219,200 • (Sum Lines F thru N)

  28. 2008 Calculation Formula • P Unaccounted for Water • (Line D minus Line O)280,800 • Q Percent Unaccounted for Water • (Line P divided by Line D times 100) 11.232% • R Cost per 1,000 gallons of water $2.12 • S Cost of Unaccounted for Water • (Line P divided by 1000, times Line R)$595.30 • Explain Other:

  29. Water Loss • The WWFB voted on the rules on July 10, 2008. • The UMRB is scheduled to vote on the rules August 8, 2008. • Both rules must be filed with the Attorney General and the Secretary of State for review. • When the review is complete, the Boards can then establish an acceptable water loss percentage.

  30. Contact Joyce Welborn 615-401-7864 615-532-5232 fax Joyce.Welborn@state.tn.us 505 Deaderick Street, Ste 1700 Nashville, TN 37243-0274

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