Kingston Springs sewer customers to see $27.22 increase starting April 1

Kingston Springs sewer customers will see their bills increase by $27.22 per month beginning April 1 after the Board of Commissioners approved financing for two major wastewater projects during its Feb. 19 meeting.

In a pair of 3-2 votes, the board adopted Resolution 26-003 and Resolution 26-004, selecting “Option A” to fund the town’s $1.642 million lagoon liner replacement and a separate manhole rehabilitation project through two 12-year capital outlay notes at a 4.75% fixed interest rate.

Immediately following the financing vote, commissioners passed on first reading Ordinance 26-002, which implements the $27.22 monthly rate increase to cover the annual principal and interest payments on the loans.

Why rates are increasing

Town Financial Director Kellie Reed explained the calculation behind the increase.

Under Option A, the projects are financed through two separate notes — one for the lagoon liner and one for the manholes. Reed averaged the total annual debt service for both notes over 12 years, divided that by 12 months and then divided again among the town’s roughly 750 sewer customers.

“That’s the total amount needed per month to cover both the principal and interest,” Reed told the board.

The increase is designed to fully cover the debt service and prevent the sewer fund from operating at a deficit.

Officials acknowledged the impact on residents but said the repairs cannot be delayed.

“These are not vanity projects,” City Manager John Lawless said. “These are projects that have to happen.”

The lagoon liner replacement is required to remain in compliance with state environmental regulations, and the manhole rehabilitation addresses inflow and infiltration issues that have caused operational concerns.

Construction on both projects is expected to begin in mid-to-late March, weather permitting.

Why Option A was chosen

The board reviewed four financing scenarios presented with assistance from the Tennessee Municipal Bond Fund. Some options stretched repayment over 25 years, lowering the short-term monthly impact but significantly increasing total interest costs.

Under a 25-year option, the town would pay more than $1 million in additional interest over the life of the loan.

“It’s hard to put an extra million dollars just interest alone on the town,” Mayor Todd Verhoven said during discussion.

Option A separates the lagoon and manhole projects into two notes. While the difference between combining them into one loan was minimal — roughly $5,000 in lifetime interest savings — several commissioners said separating them provides flexibility.

The manhole portion is expected to be reimbursed through a previously awarded $701,000 ARP grant, though reimbursement has been delayed. If that portion is paid off early with grant funds, commissioners said the town could potentially revisit sewer rates at that time.

“If the smaller chunk is paid off, could the rates then be lowered? … That’s a potential,” Lawless said, noting future operating costs would also factor into any decision.

The board also discussed how the financing structure could affect a potential sale of the wastewater system, which remains under consideration. Town officials have been in discussions with Central States Water Resources and are awaiting further clarification before bringing any recommendation to the full board and public.

Commissioners emphasized that regardless of a possible sale, the lagoon repairs must move forward to maintain regulatory compliance.

The sewer rate increase received approval on first reading and will return to the board in March for a required second reading. If approved, the new rates will take effect April 1.

The town expects to close on the capital outlay notes within 30 to 35 days.

While several commissioners expressed frustration with the size of the increase, they said failing to act could result in even steeper hikes later.

“The other option is we don’t raise the rates, and we fall in the red and the state takes it over and raises the rates double that,” Verhoven said.

For now, the town is moving forward with the repairs — and the rate increase — as it weighs the longer-term future of its sewer system.

The town’s engineer who has been working with officials on the sewer system repairs, Peter Chimera, is currently transitioning out of his job. The town announced that they are working to fill in their new engineer on all of the town’s needs.

KSPD Officer Palazzi recognized

Separately during the Feb. 19 meeting, the Board and the Kingston Springs Police Department honored Officer Nate Palazzi, who worked for the town of Kingston Springs for 15 years. 

“He was the perfect employee,” KSPD Chief Eugene “Bubba” Ivey said during the meeting. “I've been doing this 40 years, and I always learn from other officers, because they went through the academy a long time after I did, and I can see without a doubt, I probably learned more from Nate than anybody that has worked here for 40 years.” 

Ivey continued, “He went above and beyond in every case. He put himself out there and got trained in things like geotracking, fencing of the cell towers … worked with other agencies, and was just an amazing asset.”

Sgt. Jeremy Vaughan also recognized Palazzi for his 12 years as a canine officer and the two dogs he worked with during his time at KSPD. Palazzi recently moved to the Metro Nashville Police Department.