Crossville Chronicle, Crossville, TN

Tansi Smoke Signals

February 28, 2012

POA board holds community meeting

Kerr: Get re-involved and let's move forward

The Lake Tansi Village Property Owners Association brought together interested members of the community for an open meeting to discuss the future of the embattled community.

"This board is pro community," said Tommy Bean, board member. "We are starting tonight and want to make a difference in saving our community."


Larry Williams, treasurer, reported the POA has an income of $2.5 million in 2011, with the majority of that, 60.4 percent, coming from dues payments. The golf course and pro shop brought in 22.4 percent of the income and cabin rentals accounted for 10.7 percent.

Expenses are at $2.5 million, with a $24,618 profit before deprecation was figured.

There were questions regarding the POA settlement with the city of Crossville over use of water from Lake Tansi. The city paid the organization $550,000; however, the accounting firm used by the POA recommended that income be accounted for as unrelated business income. That would result in state taxes of $35,000 and federal taxes of $175,000.

The POA has gone ahead and paid the state taxes, but not the federal taxes. The board is seeking opinions from other CPAs and a tax attorney on if the income can be counted as regular business income as the POA is selling water to the city.

David Kerr, chairman of the board, said, "It may seem risky, but we felt we had no choice."

Richard Cahill said the board would begin meeting in March with every department head to review costs and eliminate any unnecessary costs.

"We feel we can make a sizable reduction," Richard Cahill, board member, said.

Sewer Lawsuit

The POA has filed suit against Tansi Waste Water Management, Inc. and the Tansi Sewer Utility District regarding the transfer of the wastewater treatment facility from TWMI to TSUD.

Earl Patton, board registered agent, reported a meeting was set between the POA lawyer and the TSUD lawyer for Feb. 29.

A member of the audience said, "You can't Pollyanna it away. There's a lot of hooey going on in here. The sewer, encumbrances, debts, etc., we had no notification when we purchased our property and we haven't had a say."

Cahill said, "This mess started eight or nine years ago. The board members now were not involved, but all members are responsible, the same as me. I didn't get involved. There was someone who hoodwinked the board at the time. We had a right to interject ourselves into the proceedings."

The POA currently pays about $5,000 a month in interest on the loan to TWMI, which has not been repaid, and $3,000 a month for sewer service. Members of the audience questioned why the POA paid the sewer charge when it was owed $1.3 million.

Kerr said POA lawyers advised to continue paying the sewer fee while the issue works through the legal process.

He noted that, prior to the transfer of assets, including the wastewater treatment facility and sewer lines, from TWMI to TSUD, POA members had been assured the transfer would include liability for the line of credit extended by the POA. That was not what happened, he said.

"They grabbed the plant we're paying for and we got the debt," Kerr said.

Payment of sewer fees ensured sewer service continued for the amenities currently hooked up.

"The lawyer felt not paying that would muddy the POA's legal position," Kerr said.

Kerr said the POA wanted to either get the assets back or have TSUD assume the note.

Cahill explained the POA established a line of credit for the sewer project in the beginning, with Duke Coyne signing the notes. Coyne was on the POA board at the time as well as on the board for TWMI.

"Our position is we want the plant back," Cahill said.

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