Crossville Chronicle, Crossville, TN

Area News

April 30, 2013

TRA orders sale of Laurel Hills water system

CROSSVILLE — The Tennessee Regulatory Authority (TRA) has denied Laurel Hills Condominium Property Owners Association's petition for a Certificate of Convenience and Necessity (license) which is required by state law to operate the Laurel Hills water system. The system supplies water to the residents of Renegade Mountain in eastern Cumberland County.

The TRA also ordered that Laurel Hills Condominium Property Owners Association "shall divest itself (sell) the water utility within 60 days, or no later than June 7, 2013."

The ruling was made earlier this month after a hearing was conducted by the TRA board.

"This is great news for the residents of Renegade Mountain," said John Moore, President of the Renegade Mountain Community Club.

The legal battle has been ongoing for more than a year after the Laurel Hills Condominium Property Owners Association, the operator of the water system on Renegade Mountain, had turned off water service to more than 80 residences on Renegade Mountain over a water fee dispute when Laurel Hills attempted to raise the water rate from $25 per month to more than $86 per month per residence.

Michael McClung and Phillip Guettler, directors and officers of Moy Toy, LLC, own Renegade Mountain and are also the directors for the Laurel Hills Condominiums Property Owners Association's water system.

The Renegade Mountain Community Club filed a complaint in Chancery Court and Chancery Court Judge Ronald Thurman ordered and injunction and the water service be restored and eventually ordered Laurel Hills Condominium Property Owners Association to come under the authority of the Tennessee Regulatory Authority.

"The TRA will request the Comptroller of the Treasury, Office of State Assessed Properties, to appraise and value the property of the water utility system pursuant to Tenn. Code Ann. § 65-4-117(2)," the ruling states.

One obvious candidate for the purchase of the Laurel Hills water system would be Crab Orchard Utility District, which is the water supplier for the system.

Everett Bolin, Jr., general manager of Crab Orchard Utility District said he didn't think the utility district would pursue purchasing the water system.

"It's more of a liability than an asset and I couldn't in good faith spend our customer's money paying for that system," Bolin said.

He said the utility district would of course continue to supply water to Renegade Mountain, but they would not pursue a purchase.

According to the TRA order, Laurel Hills shall submit evidence of the sale of the water system to the TRA for its approval.

"If Laurel Hills is unable to divest (sell) its water utility by no later than June 7, 2013, Laurel Hills shall file a notice with the (TRA) of its inability to divest itself of the water utility and shall appear before the (TRA) at the time and date which may be ordered by the Authority to explain its efforts to divest itself of the water utility," the ruling reads.

It further states, "Pending divestiture of its water utility, Laurel Hills remains a public utility and shall follow all applicable statutes, rules and procedures. Specifically, Laurel Hills shall furnish safe, adequate and proper service and keep and maintain its property and equipment in such condition as to enable it to do so pursuant to Tenn. Code Ann. § 65-4-114."

A monthly interim rate until the sale of the water system is completed was also ordered at  a monthly rate of $33.10, per residence pending either divestiture of the water utility to a non-public utility, or further action of the TRA.

"Thank goodness we live in Cumberland County and the great State of Tennessee where the justice system works just as it was designed. Thank goodness for Representative (Cameron) Sexton, state Senator (Charlotte) Burks, Cumberland County Mayor (Kenneth) Carey and exemplary state agencies like the Tennessee Regulatory Authority and the Consumer Advocate’s Office, all of which played a crucial role in assuring this ruling. But, in the end, it was the residents and property owners of Renegade Mountain that literally saved the day.  Collectively, they paid all the legal bills, packed the court and hearing rooms to standing room only, wrote letters and expressed their concerns to state lawmakers. From the four residents that met in my living room two years ago, we now have over 250 residents and property owners that have banded together to change our community’s destiny. During the past two years we have endured the abandonment of the water system once, a shutdown of the system for five days, two legal complaints, two TRA petitions to issue a CCN (water license), two court injunctions to keep the water turned on and an enormous amount of legal expenses. The bottom line is that through these efforts and this decision, the Renegade Mountain community will have a reasonably priced, continuous and safe water supply for decades to come.  With the water situation rectified, we can now move forward with building and development ...," Moore said.

"The Show Cause proceeding opened as Docket No. 12-00077 will be held in abeyance until after the June 7, 2013 deadline for divestiture has passed. If Laurel Hills has not divested itself of the water utility by the deadline, the Hearing Officer and Investigative Staff shall resume proceedings against Laurel Hills for the violations set forth in the Show Cause Order issued by the Hearing Officer in this Docket and in Docket No. 12-00077 on July 17, 2012, and shall give notice to Laurel Hills of any additional violations before any additional counts are added to the Show Cause proceedings," the order states.

The TRA investigative staff shall take whatever actions may be necessary against Laurel Hills in any court to protect the customers ofthe water utility and to enforce the order.

Either party in the case may file a Petition for Reconsideration with the TRA within fifteen days from the date of the order.

"Either party aggrieved by the TRA's decision also has the right to judicial review by filing a Petition for Review in the Tennessee Court of Appeals, Middle Section, within sixty days from the date of the order," the order states.

TRA Chairman James M. Allison, Director Kenneth C. Hill and Director David F. Jones of the TRA concurred on the decision.

Moore said the Renegade Mountain Community Club (RMCC) is the master Property Owners Association/Homeowners Association (POA/HOA) for Renegade Mountain and currently serves approximately 531 property owners who own 1,351 residences or building lots on the 3,000 acres that comprise the Renegade community. There currently are 84 condominiums, eight executive condominiums, 45 single family homes and eight timeshare units on the mountain with 37 families residing there fulltime.

Laurel Hills Condominiums Property Owners Association currently operates the water system by distributing already treated water from Crab Orchard Utility District to 135 customers.  For more information on Renegade Mountain visit the website at www.renegademountaincc.com.

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