Dear LCUB Employee

Recently, all LCUB employees found themselves recipients of a somewhat ominous sounding letter from Lenoir City Mayor Tony Aikens.
Dear LCUB Employee:
I want this letter to serve a two-fold purpose.  First and foremost, I want to convey to you that my Administration is committed to open and frank communication.  A lack of communication is, I firmly believe, frequently the origin of many a problem.  Toward that end, it is my intent to open and maintain a candid dialogue with our employees.
Secondly, I would draw your attention to a recently received letter to my office from the Comptroller of the Treasury of the State of Tennessee.  More specifically, I would ask that you be particularly mindful, beginning with Paragraph Seven (7) of the letter and the Comptroller's closing remarks.  You will find that the closing remarks.  You will find that the closing remarks address the department's deficiencies along with but not limited to the deficiencies of LCUB as a whole, and his offer to provide staff assistance to address the problem.
While I do not necessarily advocate drastic reductions in force and operational costs, I want you to be aware of the serious issues facing the department, and LCUB as a whole, as outlined in the Comptroller's correspondence.  These are very serious issues, and I wanted to bring them to your attention.

Thank You
Tony R. Aikens
Mayor/Chairman Of The Board

It's no secret to anyone that some areas of the LCUB operation is in serious financial trouble. Mainly, the water and sewer department unlike the electric department which is in very good financial condition.

You noticed in the letter above a reference to a letter from the State Comptroller's office. (Click Here For Comptroller's Letter). A few months ago, Mayor Aikens and a select number of councilmen/board members traveled to Nashville to meet with the comptroller and ask for permission to allow LCUB to use surplus funds from the electric department bail out the water department. To make a long story shorter, the comptroller no only told them no, but heck no they couldn't do that. It would be illegal. You can't force rate payers of one utility service to subsidies another utility service they don't even use according to the comptroller.

Back in 2009, LCUB borrowed millions from the state to do a state mandated expansion of the antiquated sewer plant. LCUB had to prove that they could pay back the millions of dollars they borrowed. They agreed to a series of hefty water and sewer rate increases to guarantee payback of the loan.

Apparently now according to the comptroller's letter, LCUB has reneged on their agreed rate increases to cover the debt. And again according to the comptroller's letter without the rate increases LCUB can not repay the loan without "reduction in operating expenses." This could mean employees. The comptroller even points out in his letter and underlined by the mayor, "I noted that the city provides a very attractive set of benefits, both salary and fringe, to it's employees, which appears to be above the level provided by most local governments in the state."

LCUB board members and managers find themselves in an almost impossible position. They borrowed the money and now they have to pay it back. Their water and sewer rates are already so high, many people can't afford to pay any more. You may remember at the last rate increase, LCUB's two largest water and sewer customers, Wampler's and Elm Hill, discussed moving their operations out of the LCUB service area due to the high costs.

If in fact the council/power board has decided not to raise rates, and the comptroller says they can't pay their debt without "reduction in operating expenses" then employees may have a right to be concerned.

Couldn't everybody kind of see this coming?