GERMANTOWN, Tenn. — Monday, Germantown's Board of Mayor and Aldermen approved a recommendation from the Financial Advisory Commission to adjust the water and sewer rates for Germantown utility customers. The changes will appear on bills beginning in January.
To help address resident questions, the City of Germantown put together some facts and a list of FAQ. If your question isn’t answered below, feel free to send an email to Communications@Germantown-TN.gov.
Fast Facts
- Germantown has about 14,000 water customers.
- Since 2008, the average Germantown customer’s monthly water usage has decreased from approximately 9,000 gallons of water a month to less than 5,000 gallons a month.
- The last time Germantown increased its water rates was July 2014.
- The City’s utility fund supports $144 million in assets, including two water treatment plants, 212 miles of water mains, 3,500 fire hydrants, wells, pumps and a water tower.
- On average, Germantown spends $8.3 million annually to maintain and operate its utility system.
- Utility fund revenues have fallen from $5.3 million in fiscal year 2016 to $5 million in fiscal year 2020 due to decreased usage.
- The average Germantown water customer will see an approximately $5.70 increase in fees related to water usage.
- Most of Germantown’s sewer expenses are passed down from City of Memphis’ sewer treatment costs.
- Over the last three years, sewer treatment costs in the City of Germantown increased by 39%.
- As a result, the average Germantown resident should see a monthly sewer rate increase of approximately $5.50.
- While individual rates may vary, most customers can expect a total increase of approximately $11 on their monthly utility bill. This includes both water and sewer rate adjustments.
Here are some frequently asked questions about Germantown's water rates:
1. Why are my water rates going up?
Germantown residents’ water usage has significantly dropped. That in itself is excellent news – as an educated and engaged community, we care about the environment and conserving our natural resources.
However, the drop in water consumption has resulted in a decrease in utility fund revenues. Meanwhile, the City still must maintain its water system, including the wells, tanks, pumps, water lines, chemicals and employee salaries. Due to inflation, these expenses are increasing.
2. How much will my water rates increase and when?
The average Germantown water customer will see a $5.70 increase in fees related to water usage.
3. Why can’t the City cover these costs?
The utility fund operates as a stand-alone business that covers annual expenses through its own revenue. It can’t be supplemented by dollars from other sources like property or sales tax revenues.
In fact, the State of Tennessee has established systems to ensure that municipal utility funds operate on a sound financial basis. While the Germantown utility fund isn’t in violation of any state guidelines, a recent State review of the budget recommended a rate increase.
4. How did you determine the new rates?
In the spring of 2021, the City began a utility rate study that allowed us to identify future capital projects and explore long-term plans for funding utilities. This study balanced forecasted revenues against competing demands for services, including equipment replacement, maintenance and reconstruction of utility assets. We used these results as a guide for keeping our utility rate increases predictable and manageable, along with making decisions about operational and capital spending.
After we reviewed the study results, we established a subcommittee of the citizen-led Financial Advisory Commission. The group reviewed several proposed rate adjustments and fee structures, finally settling on a recommendation that has been approved by the Board of Mayor and Aldermen. This will result in an average $11 increase in overall water and sewer rates for most Germantown utility customers.
5. How much will my sewer rates increase?
Adjustments to the sewer rate which will result in a $5.50 per month increase for the average user.
6. Why are my sewer rates going up?
The fee increase was passed along to the City of Germantown from Memphis, where your sewage is treated. Germantown’s sewer agreement with Memphis dates back to 2003 and is an important element of the City’s utility system.
Over the last three years, sewer treatment cost has increased by 39%. Currently, Memphis is under a consent decree to improve the sewer system and a percentage of that cost is passed along to the City or Germantown. Every two years, the City of Germantown renews its sewage treatment agreement with the City of Memphis. The latest update occurred in January 2021.
7. How do our rates compare to other areas?
Water Monthly Charges on 5,000 Gallons:
- Germantown current (2021) $ 8.78
- Germantown new (2022) $14.48
- Collierville $14.15
- Bartlett $13.20
- Oakland $17.60
- MLGW $29.17
Sewer Monthly Charges on 5,000 Gallons:
- Germantown current (2021) $ 9.95
- Germantown new (2022) $15.48
- Collierville $28.50
- Bartlett $14.86
- Oakland $17.60
- Memphis $24.90
8. What will be the overall impact on my bill?
Most customers can expect a total increase of approximately $11 on their monthly utility bill. This includes both water and sewer rate adjustments.
9. When will I see these changes?
The rate increase will appear on bills issued after January 1.
10. How will the utility fund be monitored?
City budgets are subject to constant monitoring. Going forward, the City plans to review utility rates and the related rate structure annually to allow for smaller incremental adjustments on a yearly or biennial basis, compared to the current five-year plan.
