Crossville Chronicle, Crossville, TN

October 23, 2012

Proposal would merge TSUD, SCUD with city

By Heather Mullinix
Assistant editor

CROSSVILLE — Crossville Mayor J.H. Graham III has a proposal that could bring the embattled Tansi Sewer Utility District under the management of the city of Crossville, though the proposal has numerous hurdles to clear before that could happen.

"This proposal is a response to a request from the Lake Tansi Property Owners Association for help," Graham told the Chronicle. "It's just a proposal. We don't know all the numbers yet, but we've got to start somewhere."

Much of the numbers would depend on the type of financing the city could secure, including interest rate and length of the loan.

"Tansi has a tremendous amount of residents on fixed incomes, and we want to be very conscious of that," Graham said. "We want to spread the cost for as long as we can to make it affordable."

Cumberland County Mayor Kenneth Carey Jr. said, "This seems to put control in the property owners' hands, and rates will go down for water and for sewer."

"But this is a proposal. It's nowhere near a done deal," Carey continued. "It's not perfect, but it's a work in progress."

The proposal by Graham includes a number of conditions he believes would be necessary for the city to accept the proposal, and would require cooperation from the county government, SCUD, TSUD, Lake Tansi POA and the Cumberland County Board of Education. Those conditions include:

•SCUD and TSUD join into a merger with the city of Crossville and become a department of the city;

•The city grants the request of the BOE to adopt all sewer lines that presently serve South Cumberland and Brown elementary schools;

•The debt owed to the POA by TSUD and/or TWMI be ascertained by a certified appraisal of the value of the TSUD treatment plant and equipment, negotiated, and paid;

•The National Pollution Discharge Elimination System Permit for 300,000 gallons is current and renewable and the POA will cooperate with requirements of the state and the city and any other agency for "operational and stormwater control" as owners of Lake Hiawatha, where the treatment facility discharges treated wastewater;

•That all water customers of SCUD incur a 7 to 10 percent decrease in water rates by May 1, 2013;

•And all local, state, federal rules, regulations and policies be adhered to by all parties of the agreement.

The proposal also includes provisions for extension of sewer service in the Lake Tansi area that includes having 51 percent of the current property owners on any street pay or agree to pay a tap fee. Once sewer service is available, property owners would not have to tap onto the system, but would be charged the minimum bill, currently at $30 per month for up to 3,000 gallons. Graham said those property owners would benefit from increased property value if sewer is available.

Many property owners in Tansi have homes built on multiple lots, and questions have been raised on if the minimum fee would be charged to each lot or to each property owner. Graham said he would look to the POA for guidance, and consider if those owners pay dues for each lot.

Graham has proposed sewer connection fees of a $1,250 tap fee for single-family residential connections with a cost of $2,908.38 for a grinder pump and an electrical permit of $32, for a total cost of $4,190. Duplex family residential sewer connections would be the same, with an additional $50 for the second unit. Graham said property owners could spread the cost of the tap fee over a year, and construction would start once tap fees were paid.

Single unit commercial connections would have a tap fee of $2,000. Triplex residential commercial connections would have a tap fee of $2,000 and a unit add on fee of $100, or $50 for each unit. Residential properties with more than two units would be billed a tap fee of $2,000 and $50 per additional unit.

Also, if the South Cumberland Utility District were brought under city operation, all water customers would see a decrease in their water rates of 7 to 10 percent. That's a number Graham said he arrived at using current audit information for both TSUD and SCUD.

"Sewer is expensive and there are so many Tennessee Department of Environment and Conservation and Environmental Protection Agency requirements you have to meet," Graham said.

He figures TSUD loses about $100,000 a year; however, SCUD produces enough revenue to cover that loss.

"It's not fair for all the water customers to pay for that loss," Graham said, and he's calculated a rate decrease that would allow SCUD to cover its business expenses and allow for a small rainy day fund yet still provide savings to water customers.

Getting word out to the community is the next step in the plan, Graham said.

Graham said he felt there would need to be a 60-to 90-day time period to bring the city council up to speed on the proposal and get the information on the proposal out to all interested property owners.

"It's very important to me that every property owner has a good comfort level with the proposal," Graham said.

He said he was talking with property owners to see if this initial proposal was met with positive comments. Large public meetings could be organized by the POA, if they chose.

"Community feels it was not made aware of the previous decisions," Graham said. "However long it takes, we want to get everyone a copy of the final proposal. We want to be slow and careful, and even the people that own property but don't live here, we want to try our best to get them the information."

Mary Aggers, who has been part of the Stop Tansi Sewer effort, questioned why there was such urgency to complete a merger with the city.

"Once again, residents are looking at a situation where they're stuck paying for sewer whether they want it or not," Aggers said. "Sewer is great, but don't make people pay for something they can't afford, don't need and don't want."

She questioned why TSUD and others were not looking for funding from grants and other sources. She also questions the numbers in the proposals, remembering when the sewer system was first discussed and estimated costs were much lower than what was ultimately approved.

"We've been told the low numbers before," Aggers said. "For a lot of people, the tap fee might as well be $1 million. I wanted to look for grant money to help the residents. Why are we rushing into this?"

She also noted she is among a group of residents who have a suit pending against Tansi Waste Management, Inc., the nonprofit corporation that began the sewer system in Tansi, for fraud.

Aggers is also concerned how residents of the area will have a voice in the utility service if both water and sewer become departments of the city. Graham said if the proposal is accepted, he wants the current commissioners for SCUD and TSUD to remain as an advisory board for the new departments, providing residents a line of communication directly to the departments and the city of Crossville.

"The members of the South Cumberland board have been there for a number of years, and they know their people out there," Graham said.

The complete proposal can be found on the Crossville Chronicle website, www.crossville-chronicle.com.