Crossville Mayor J.H. Graham III has revised his proposal for a merger of the Tansi Sewer Utility District and South Cumberland Utility District with the city of Crossville, removing the payment of a minimum bill by those not using sewer service and increasing the monthly minimum bill to $50.
The proposal states that 51 percent of the property owners on a street must pay or agree to pay a tap fee before sewer will be extended. The property owners not wishing to utilize the sewer would not be required to pay a tap fee or a minimum monthly bill until the service is requested.
The proposal also addresses the issue of property owners owning multiple lots, stating it would be considered one lot where the current property owner has two lots, but not more than three, continuous or contiguous to a residence.
Those property owners who wish to have sewer service would pay a tap fee of $1,250. There would also be a charge of $2,908.38 for a grinder pump and a $32 charge for an electrical permit. Duplex units would bear the same cost, plus an additional $50 add-on fee for the additional unit.
Tap fee for commercial connections would be $2,000. A triplex or larger residential commercial unit would be charged a $2,000 tap fee and $50 per additional unit.
Once service is established, the monthly rate would be $50 per month for up to 5,000 gallons of use and $10 per additional 1,000 gallons.
The proposal also calls for a reduction in water rates for customers of SCUD of 7 to 10 percent. However, TSUD Commissioner Trey Kerley noted his objection to that as other water districts saw significantly higher savings when merged with the city.
"If there is a merger, I'd like to see the water rate changed," he said. "There are a lot more people that SCUD represents other than Tansi. The people of Vandever and Lantana don't need to bear the cost of the sewer."
The proposed reduction in rates would be wiped out by a planned increase in water rates scheduled for 2013, noted Commissioner Virgil Ferguson.
Kerley, Ferguson and Chairman James Heath all noted the statement by Joyce Welborn of the Tennessee Comptroller's Office that public utilities were prevented by state law from assuming private debt.
"The water rate reduction took the POA debt and the ridiculous bill from ECE [engineer on the sewer system construction project]," Kerley said. "According to Ms. Welborn, we're not really responsible for those."
The group also decided to seek a legal opinion from their lawyer regarding the ability of the utility to assume a $1.3 million loan made by the Lake Tansi Property Owners Association to Tansi Waste Management, Inc. A lawsuit is currently pending seeking to void the transfer of assets, namely the wastewater treatment plant, from TWMI to TSUD as fraudulent.
Also at issue is an outstanding bill of $430,000 to ECE for work done on the sewer project.
Ferguson said, "I don't think we could pay the POA if we had the money and wanted to."
Heath added, "I don't think we can do a settlement with ECE, either."
Kerley noted that a court could always determine otherwise; however, those statements were in agreement with his understanding of the statement. Ferguson said his records indicate TSUD had paid ECE for all work the utility asked to be done, and that much of the unpaid work was for work done for TWMI.
The TSUD board also briefly discussed a bill from its attorney, Don Scholes with Bransetter, Stranch and Jennings law firm in Nashville. While the district has a large outstanding bill from the firm for legal work, the bill only asked that current charges of $1,757.50 be paid.
Commissioners questioned the bill, however, which included charges for Scholes to attend a meeting between TWMI, SCUD, Lake Tansi POA and the city of Crossville. Kerley wanted to know if the other entities Scholes represents, TWMI and SCUD, were also being charged the same amount for attendance at the meeting.
Another question was raised regarding a $50 charge for a 20 minute phone call to former TSUD General Manager and TWMI CEO Duke Coyne with a notation the call was in reference to a settlement.
Ferguson said, "Why was he calling Duke Coyne? He's been out of here over two years. Was he talking about TWMI? They should pay it if that's the case."
The phone call occurred Oct. 8. Heath recommended tabling the discussion to gather more information from Scholes regarding the charges so the commission could determine if those charges should be paid. Kerley moved to table the bill, supported by Heath and the motion passed unanimously.
TSUD also approved a preliminary appraisal, which the city would require in order to move forward with a possible merger. GRW Engineers, Inc., of Nashville, prepared the appraisal, which placed the 2012 value of the TSUD collect system, treatment plant construction and treatment plant equipment at $1.3 million. That report has been sent to both the city and the county.