Tennessee § 9-21-308 - Rates, fees or charges — Collection, revision and disposition.

§ 9-21-308. Rates, fees or charges — Collection, revision and disposition.

The governing body of a local government issuing revenue bonds pursuant to this part and part 1 of this chapter shall prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities of the public works project or projects, and shall revise such rates, fees, or charges from time to time whenever necessary so that the public works project or projects shall be and always remain self-supporting. The rates, fees or charges prescribed shall be at least sufficient to produce revenue to: Provide for all expenses of operation and maintenance of the public works project or projects, including reasonable reserves therefor; and Pay when due all bonds and notes and interest thereon, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reasonable reserves therefor. If the governing body of the local government shall by resolution so request, the revenues produced from the rates, fees or charges prescribed may, after providing for payments referred to in subsection (a), be applied to payments to the local government in lieu of ad valorem taxes on the property of the public works project or projects not to exceed the amount of taxes payable on privately owned property of a similar nature. Rates, fees and charges shall be made for any service, facility, and commodity of any public works project to a local government or to any department or works thereof at the rate applicable to other customers taking service under similar conditions. Revenues derived from such service shall be treated as all other revenues. Any surplus thereafter remaining, after establishment of proper reserves, if any, may be applied to the acquisition, extension, and/or improvement of the public works project or projects or may be applied to the reduction of rates in the case of a public works project that provides water, sewer, gas, or electric services. Notwithstanding any other law to the contrary, as a matter of public policy, public works projects financed under this chapter shall be operated on sound business principles as self-sufficient entities. User charges, rates and fees shall reflect the actual cost of providing the services rendered. Public works shall not operate for gain or profit or as a source of revenue to a government entity, but shall operate for the use and benefit of the customers served by such public works and for the improvement of the health and safety of the inhabitants of the area served. Nothing herein shall preclude a municipal utility system from operating water and sewer systems as individual or combined entities. Nothing herein shall preclude a municipal utility system from operating a public works system as a special revenue fund when the governing body of the municipality determines that it is in the best interest of the customers of the public works system and the citizens of the municipality. All water systems and wastewater facilities must utilize an enterprise fund for accounting and reporting its operations. Any water system or wastewater facility currently not operating as an enterprise fund must be doing so by July 1, 2016. To the extent of any conflict between this section and the Wastewater Facilities Act of 1987, compiled in title 68, chapter 221, part 10, the latter statute shall control. To the extent of any conflict between this section and § 7-39-404, § 7-34-115, or title 7, chapter 52, part 3, the latter statutes shall control. If a municipality violates this section, it must repay any funds illegally transferred. If the municipality does not have sufficient funds to repay any funds illegally transferred, the municipality is required to submit a plan covering a period not to exceed five (5) years in which to repay the funds. The plan shall be submitted to and approved by the comptroller of the treasury or the comptroller's designee. Upon discovery of such violation through an audit, any city official in violation of this section is subject to ouster under title 8, chapter 47. Acts 1986, ch. 770, § 3-8; 1987, ch. 77, § 5; 1988, ch. 750, § 45; 1993, ch. 509, §§ 2-4; 2010, ch. 868, § 47; 2014, ch. 628, §§ 11, 12. Attorney General Opinions. Municipal authority to charge residents never connected to water system, OAG 98-152, 1998 Tenn. AG LEXIS 152 (8/12/98).