Council OKs Oak Ridge budget, more pay raises, averts potential tax hike

Oak Ridge City Council members on Monday night approved a budget for the upcoming year that includes pay raises of at least 7% for all city employees and an 8.4% increase in water and sewer rates over the next two years. They also approved what council member Ellen Smith called a "good, creative solution" to an unusual problem that could have led to a future property tax rate increase.

The Fiscal Year 2024 budget, which goes into effect July 1, includes no property tax rate increase.

NNSA eliminating Fire Station No. 4 funding

City Finance Director Janice McGinnis has explained that the National Nuclear Security Administration (NNSA) is ending its payment of $1.5 million a year to the city for fire protection at the former K-25 site, now the East Tennessee Technology Park. But Fire Station 4 on the west end needs to continue operating because of increased housing growth on the west end, Interim City Manager Jack Suggs said at an earlier meeting. NNSA funding for the fire station gradually declines each year until Fiscal Year 2027.

McGinnis said if the city were to absorb the added cost of operating Fire Station 4 at $1.5 million a year the impact would be equivalent to a 15-cent increase on the property tax rate.

The resolution approved by council assigns $3 million of the city's general fund balance to be used to "transition the impact of the full cost of operating Fire Station 4," with the assignment ending at the end of Fiscal Year 2030 and all unused funds returning to the fund balance.

The funding plan is described as a way to make available $1.2 million in Fiscal Year 2027, $900,000 in 2028, $600,000 in 2029 and $300,000 in 2030 for the fire station operations.

7% pay raises - and more

The budget also includes pay raises of at least 7% for all city employees, but some employees will be getting more. The council approved a resolution updating its employee compensation plan by increasing the salaries of some positions within city government to more adequately reflect those of similar personnel in the area. City officials at past meetings have discussed employees leaving for higher-paying jobs.

The budget also includes adjustments for some city employees to get additional raises on performance. The city employs 412 full-time workers.

Water rate increase this October; sewer rate in 2024

The budget includes 8.4% increases in residents' and business owners' water bills on Oct. 1, and on their sewer rates on October 2024.

Suggs has said most residents will see an increase in their water bill of $1.49 to $4.59 per month based on use; likewise the monthly bill for sewer customers in October 2024 would go up $2.21 to $6.81.

He said most residential customers can estimate their future water and sewer bills by looking at their current bills and increasing them 8.4%.

For commercial customers with a 1-inch meter whose usage is 100,000 gallons per month, their bills would increase $53.66 for water and $94.34 for sewer.

On Oct. 19, city officials broke ground for construction of a new $78.3 million water treatment plant. The old water treatment plant - which is still being used - was built by the government in 1943.

Suggs previously explained that the city has asked Tennessee's State Revolving Fund Drinking Water Loan Program to finance a portion of the costs for the water treatment plant construction. The city also has asked for a loan from the State Revolving Fund for a sewer project.

In turn, the state has notified the city that to qualify financially for the $25 million loan, the water and sewer rates would need to generate another $1.52 million by the time the loan reached the repayment cycle. That's the reason for the increase in the water and sewer bills.

Suggs and Mayor Warren Gooch have pointed out that the city water rate hasn't increased since January 2018, and the sewer rate since January 2019.

At Monday night's meeting, council member Charlie Hensley asked about the U.S. Department of Energy and the increases. Suggs said when the new plant begins working the city will negotiate a new contract with DOE.

Donna Smith is The Oak Ridger’s news editor and covers Oak Ridge area news. Email dsmith@oakridger.com. Twitter: @ridgernewsed.

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This article originally appeared on Oakridger: Council OKs budget, more pay raises; averts potential tax hike