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The increase, which includes water, sewer and stormwater services, is part of the city’s push to upgrade old infrastructure and address rising environmental regulations.

During Thursday’s Board of Mayor and Aldermen work session, Deputy City Manager Ryan McReynolds outlined the proposed changes as part of the upcoming utilities budget.

The largest driver, he said, is the need to reinvest in aging pipes and equipment while maintaining compliance with growing regulatory expectations.

“Seventeen percent of our spending goes to personnel, but more than half of what we take in is reinvested directly back into capital,� McReynolds said. “We’re are trying to maintain the system and strengthen it.�

Breakdown of proposed rate changes

Water: A $2.51 increase per month for all residential customers, driven by a structural rate change. The city is removing the 500 gallons previously included in the base rate, requiring customers to now pay for that volume separately. The base rate itself will increase, but the volumetric rate will stay flat.

Wastewater: A 5.2% rate hike, which is slightly lower than last year’s projected 6.5%. For an average household using 3,000 gallons, this equals about $4 more per month, McReynolds said. The base rate will decrease, while the volumetric rate will increase slightly, from $10.77 to $11.02 per 1,000 gallons.

Stormwater: A $0.50 increase per month is also proposed — the first since 2011. That change would bring the average residential stormwater fee from $3.50 to $4.

Old infrastructure

McReynolds said Kingsport is under pressure to replace deteriorating infrastructure, especially galvanized water lines and aging cast iron pipes that date back decades.

“Every year our pipes continue to age, and that’s one area, especially on the water side, where we haven’t kept up with the level of investment needed,� he told the board. “We’ve done better on the sewer side, but our water system is showing its age.�

According to McReynolds, the city is on track to replace about 0.2% of its waterlines annually, with a goal of moving toward a 1% or 2% replacement rate.

Recent data shows an uptick in main line breaks, particularly in areas that have older galvanized pipes.

“We’re going to put an emphasis on replacing galvanized water lines over the next few years,� McReynolds said. “There’s no trend suggesting it will get better unless we take action.�

The city relies on a 2011 water system master plan, which is currently being updated, McReynolds said.

Completed or ongoing projects from that plan include the raw water tunnel, the new pumping station and high-service pumps expected to be completed within a year. Next on the list is upgrading the city’s water disinfection system.

Similar master plans for the wastewater and stormwater systems also guide capital investment priorities. The city is working on completing a stormwater master plan and expects to present it to the board this fall.

Environmental pressures

One of the biggest costs, McReynolds said, comes from the state placing the city on its 303(d) list of nutrient-impaired waterways, due to a section of the South Fork of the Holston River. That could eventually require major upgrades to the wastewater plant, costing between $45 and $60 million.

To prepare, Kingsport is investing $1.5 million in a three-year scientific study to verify the state’s findings and better understand whether such upgrades are necessary. The city is currently in year one of that sampling effort, with initial results expected by the end of 2025.

“This all started with very limited data, potentially one grab sample,� McReynolds said. “We’re not opposed to making the investment if it’s needed, but we need to be sure we’re targeting the right outcome.�

He added that the city’s upstream location in the watershed gives it a better water source than many downstream municipalities, reducing the likelihood of contamination from “forever chemicals� such as PFAS, though those remain a long-term regulatory concern.