Crossville Chronicle, Crossville, TN

September 24, 2010

Petition circulating against Tansi sewer

By Heather Mullinix
Assistant editor

— Two petitions regarding the Tansi Sewer Utility District have been circulating, gathering signatures of those who are against Phase III of the TSUD sewer project and that TSUD General Manager Claude "Duke" Coyne be removed from his position.

The petitions have gathered 414 signatures each.

The first states, "The Lake Tansi property owners listed below are against the upcoming sewer project. We are not willing to pay the exorbitant rates that will be charged, we will not sign sign a contract with Tansi Sewer Utility District, nor will we pay the monthly statement."

The second states those signing the petition do not feel Coyne has "been governing in our best interests as taxpayers."

About 50 people opposed to the sewer project attended the Sept. 16 regular meeting of the TSUD board where they made statements against the amount of the fees, questioned the salary paid to Coyne and stated liens placed against homes were "unAmerican."

One man said, "I'm opposed to the rule you set up last time charging an availability fee and a sewer fee. When they first talked about this it was going to be around $35. What you've done now, it's difficult. Then, the statement that if you don't sign onto this, then you'll take a lien against my house. I think it's very unAmerican what you are doing. More people are opposed to what you are proposing."

Lots with structures will have a $1,500 sewer availability fee once the sewer line is constructed if it is within 500 feet of the property. The cost to tap into the sewer will be $5,950, which includes the availability fee. Monthly fees will also be charged to customers as well as those who have sewer available but are not customers. The fee structure is based on water usage and is a minimum of $50 for the first 2,500 gallons of water used.

TSUD will allow those connecting to the system to spread the cost of their hook-up fee over two years, or homeowners could secure other financing if they wanted. Coyne plans to meet with homeowners as sections of the sewer system come online and said he would like to have representatives of banks available for those homeowners wishing to secure longer-term financing.

According to a report by the state Utility Management Review Board dated Oct. 1, 2009, the residential tap fee was projected at $2,500, not including the cost of purchasing and installing a grinder pump, and a residential user fee of $20 per thousand gallons, with a 2,000 gallon minimum usage assessed.

Coyne said liens on property were only for collection purposes, and the district had no intention of foreclosing on people's homes.

"That's to protect the utility district so that if you sell your home or transfer your property, the bill will have to be paid," Coyne said. "That's common practice. No one has ever said from this office or this district that we intended to take anyone's property. What would we want with real estate? We're not in the real estate business."

Other residents say they were not informed of the potential costs of the sewer system before it was approved.

Another man present at the meeting said, "You have implemented all kinds of rules, regulations, guidelines and dollar values on things without ever significantly notifying the people who live in this community, who have homes."

Another said, "I live in this community. Nobody contacted me. And your comments as a group that this was put in the newspaper, a little one line, that said there was going to be a meeting to vote on this, how many people in this room take the newspaper? I've been here four and a half years and I've never bought a newspaper. I didn't know."

TSUD was formed in March, following a public meeting in which about 180 people were present to hear information and ask questions. The public meeting, a requirement of state law, followed a petition to form a public utility filed in October 2009. State law requires only 25 people sign a petition to form a utility district. Coyne said the TSUD petition included at least 35 signatures. The report also included engineering reports, revenue projections and information on the need for sewer service.

"How can you pass something no one wants but a half a dozen people," a lady asked.

Another speaker asked why a vote of Tansi property owners wasn't taken prior to forming the district.

The Tansi Sewer Utility District includes all of the Lake Tansi Village area, but is a public utility and its boundaries extend beyond the Lake Tansi Village area, including Oak Hill subdivision and O'Henry subdivision.

Accusations that board members and General Manager Duke Coyne were making money on the sewer system were also made. The board supplied the audience with Coyne's yearly salary, $27,000, which was met with laughter from the audience.

The board members are entitled to $300 per meeting, however, the TSUD board, at its second meeting, voted not to receive any compensation. And, the board of directors for TWMI received no compensation during their three-year service to start the sewer system. Coyne said he received no salary from TWMI, and it was only the last 15 months that he received any reimbursement for his out-of-pocket expenses while with TWMI.

The cost of the system remains the biggest concern of those opposed to the sewer system. Coyne had previously announced the district would be seeking grants and low-interest loans through government agencies, including USDA Rural Development and the state revolving loan fund.

"We didn't qualify for $6 million from the state revolving loan fund," Coyne said. "One of the state revolving loan fund requirements are that you be able to post, in cash, the equivalent of one year's principal and interest. In this case, that would have been a quarter of a million dollars. The second problem is that they would not allow us to utilize any of those funds to pay for previously constructed lines or plant, which is what the POA paid for. We could not use any of that money to repay the POA for the original infrastructure."

There was also $950,000 in funding from the EPA the county received for a Tansi sewer project, but it requires offering residential service and is for planning and engineering for a project, not construction. Coyne has stated previously he is working to have those funds transferred to TSUD from the county to assist with engineering costs.

"We are more interested in getting service to the residents than anyone before, but we have to go by the rules," Coyne said. "We can't make our own rules and get the money. We are aware the rates are higher than anticipated. Those were based on things we were told that didn't come to pass.

"I'm not thrilled about having to spend $6,000 to connect to the sewer myself, but when the line goes by my house, I've got to pay the same thing as everybody else, and so do the commissioners."

The board voted to approve a bond resolution for funding not to exceed $8.5 million. Those funds will go toward construction of sewer lines to serve about 700 residences, to expand the wastewater treatment facility to treat up to 300,000 gallons of wastewater a day and to repay the Lake Tansi Property Owners Association $1.2 million, plus interest, for a loan it secured to form Tansi Waste Management, Inc. TSUD voted last month to absorb the assets and liabilities of TWMI. The debt to the POA is the only liability of TWMI. The interest rate is 6.25 percent, which amounted to $53,000 at the end of June.

Herb Pallatt, board chairman, moved to adopt the resolution, supported by Jim Heath. The motion was unanimously approved, with Mike Dalton voting in favor.

The interest rate for the $8.5 million bond will not be set until the bonds are sold, but according to the resolution is not to exceed 6 percent. The bonds will be subject to redemption, at the option of the District, July 1, 2020 or thereafter.

Coyne said the bonds may not be issued until November.

Pallatt told those present the board would work to schedule a forum where questions regarding the sewer project could be addressed. He asked those with questions to submit them in writing to the TSUD office, on Utility Drive. A date or location for that meeting has not been set.

In response to numerous complaints, Cumberland County Mayor Kenneth Carey told the Cumberland County Commission Monday he would be forming a task force to address questions and concerns. The members of the task force have not yet been named.