Crossville Chronicle, Crossville, TN

November 27, 2012

Councilman says city proposal ill advised

By Heather Mullinix
Assistant editor

CROSSVILLE — A new member of the Crossville City Council has determined a proposed merger of the city water and sewer services with Tansi Sewer Utility District (TSUD) and South Cumberland Utility District (SCUD) would be ill advised.

Pete Souza, in a memo to Crossville Mayor J.H. Graham III and the rest of the council members, wrote, "The credulity that this merger will lead to lower cost for everyone strains the reality of fiscal demands that will be placed on Crossville."

Graham has proposed merging TSUD and SCUD with the city provided the city could gain ownership of a sewer line along Dunbar Rd. owned by the Cumberland County Board of Education, an appraisal of the assets of TSUD and other conditions that include a current and renewable National Pollution Discharge Elimination System Permit for the TSUD water treatment facility. Graham proposed a reduction in water rates of 7 to 10 percent for all SCUD water customers and allows residents of each street to determine if sewer will be available, requiring 51 percent of the property owners on a street agreeing to pay a tap fee. Once sewer service was available, however, those who did not want the service would still be charged a monthly fee, proposed at $30 per lot.

The rates proposed are lower than those charged by TSUD to its sewer customers, with a minimum $30 charge per month for treatment of up to 3,000 gallons of waste water for residential customers. Monthly service fee for TSUD residential customers is $50, but that is billed at a flat rate.

Souza said he conducted a non-scientific poll of 50 homes by going door to door in the community.

"Out of 50 homes, I found no one who wanted the merger," Souza wrote. "As a matter of fact, most people were hostile over the idea of a merger."

Souza noted there were some areas that would benefit greatly from the merger and increased sewer service in the area, particularly around the lake where lot owners have unbuildable lots that would certainly increase in value if sewer service were available.

Souza also noted the Lake Tansi Property Owners Association represented only a portion of the residents in the area and the POA request for help was not inclusive of all property owners. Souza also expressed concern for how those residents would be represented if the utility districts merged with the city.

"The City Council of Crossville would be the sole authority, thus disenfranchising the utility members (the utility members cannot vote in city elections)," Souza wrote. "What does that say? It says the City Council moves to control county growth as it applies to development. That authority should be retained at the county government level. We are not a metro government!"

The city of Crossville did merge with the Catoosa Water Utility District in 2004 and an advisory council was formed as a way of providing input from customers and residents that live outside the city limits.

Souza also expresses concern regarding pending lawsuits and questions of financial statements, including an unexplained $100,000 transfer from TSUD to Tansi Waste Management, Inc. (TWMI), the non-profit corporation that preceded the public utility district. The POA also has an active lawsuit against TSUD and TWMI regarding nonpayment of a $1.3 million loan to TWMI for construction of the sewer system in Lake Tansi. There are also legal issues regarding a public entity taking over a private loan, though Souza believes the city could overcome that obstacle, though at increased cost.

"No one knows what other litigation will result in a hostile takeover," Souza wrote. "I see the merger as one continued legal cost drain on Crossville."

The geography of the area is another concern, with rock in the ground adding to the cost of extending sewer service. Also, Souza is concerned about the effect on the city's sewer treatment facility, which is currently at about 60 percent capacity in keeping with the city's 10-year-plan.

"TSUD is not on the 10-year plan," Souza wrote. "Then we borrow money again to upgrade our sewer."

In the end, Souza believes a merger of the utility districts would benefit the POA and some residents in the area, as well as lawyers and contractors, but would harm those Tansi residents with good septic systems and Crossville taxpayers, and would infringe on the county government's role in controlling growth.