I called the number on the pamphlet to talk to a representative of SERVLINE, the company offering what is essentially insurance. Here's what I learned

The "Leak Loss Protection" covers high water bill costs from leaks from faucets, toilets or broken waterlines between the water meter and your home. To be covered, the water bill increase must be twice as high as the average water bill for the last two months prior to the leak. If you have a high water bill due to one of the mentioned causes, you would file a claim with the with the SERVLINE, company. They would then reimburse you for the difference in costs above your average bill. I think she said up to $1,000.00 once per year.

Martel Utility customers, which are now LCUB customers,  have been on the program since 2016.

The company also offers other services at additional costs if you want them. 

This is essentially an insurance policy in case you have an unknown leak causing high water usage. For $23.40 per year, it's probably well worth the cost. I had a friend just a couple months ago who had a broken water line for about three weeks before he found it. His bill was over four hundred dollars.

If you don't want the service, you can opt out by calling 1-865-271-1187.

What concerned so many folks about this deal, was LCUB just added to the utility bills rather that telling folks what it was and allowing them to sign up for if they wanted it. It's a little bit of a statement of the trust, or lack there of, in local government officials.