Approve the Water Authority
The Tellico Village Water Authority Initiative
Are You Ready To Take Action? Print the Authorization Form Now. Please drop off at the Welcome Center – 202 Chota Road or POA Admin Office – 112 Chota Center
Acting Today to Secure Tomorrow
FREQUENTLY ASKED QUESTIONS
Has the POA researched to see how many new Water Authorities have tried to form in the state in the last five or ten years? Do you know how many were created?
There are presently seven Water Authorities in the State of Tennessee. The most recent Water Authority is the Cumberland Plateau Water Authority, which was created in 2022. All Water Authorities were created by the Tennessee Legislature, most of which were established in the last 20 years.
Like many Villagers, I was surprised to learn that water and sewer projects need to be funded to the tune of $31 million in the next five years. For those of us who pay attention to this stuff, for the past two or three years, we have been told the Village will need $13 to $20 million over the next ten years to tackle improvements in the system. Further, recently the construction of a holding tank and the erection of a water tower were supposed to lower these $13 to 20 million expenses aided by a $2 million government grant. What happened to increase these costs to $31 million over five years?
Since 2017 a few water and sewer studies have been completed to deal with very specific issues. Those studies provided plans and costs to fix that specific issue. In 2020, PSAC requested a full system-wide water study for the Loudon County portion of the Village. That study took over a year to complete. The findings were presented in January of 2022. It offered two phases that totaled 13 million dollars without inflation. This includes several booster pump upgrades and line upgrades. At this time LUB built an additional storage tank off Maple Hill and PSAC wanted to see the impact it had on our system pressure. After further study, an elevated storage tank option was investigated. This was presented to the Board in March of 2023. This option will take the 13 million dollars down to around 7 million and will fix our pressure issues for current build-out.
Next, we ask for a full sewer system master plan also for the Loudon County portion of the Village. The results of that study indicated the need for 24 million dollars over the next five years. When both studies are combined the total with estimated inflation is 31 million dollars. Click here for the project timeline and what is included in each project.
Currently, we are in the process of a full Kahite Water and Sewer study, we expect it to be complete by March/April of 2024. The sewer holding tank that the Board approved earlier this year is in the design phase and is currently at 30%. The goal is to have that completed by the end of the year and construction in 2024.
In considering this option of creating a Water Authority, did members of the staff or Board of Directors visit or meet with representatives from newly formed or current Water Authorities to gain insight into the pros and cons of their operations?
POA representatives have met with multiple representatives from the Tennessee Department of Environment and Conservation, the Tennessee Association of Utility Districts, State Legislators, local utility districts, and local government officials regarding the creation of a Water Authority. POA representatives will also meet with representatives from existing Water Authorities as this process proceeds.
Does the POA have any concept of how LUB and TASS will react to the Village establishing its own Water Authority? Have there been conversations with these utilities about this Village initiative?
We have had conversations with both LUB and TASS. They are in support of us becoming a Water Authority. This will not have a negative impact on their operations as the existing service agreements with these utility providers will remain in place.
How is the POA going to sell this idea to the legislators in Nashville? I don’t think you can say Villagers do not want to pay for infrastructure improvements, so we want to create this Water Authority. What position is the POA going to take with these governmental bodies?
We have and will continue to talk to legislators about our needs. It is very uncommon for a community to own and maintain a water and sewer system. Since we are not a government entity, we do not have the ability on our own to seek grants or long-term (30+ yr.) financing. This is the reason we would like to become an Authority. It will allow our aging infrastructure to be upgraded sooner while stretching the cost over a much longer more affordable term.
Will a set of governing documents need to be created for the Water Authority? Who will create them? Who will need to approve these documents? And will Villagers have a chance to review these documents?
Yes, a set of governing documents will need to be created. The Private Act of the Legislature creating the Water Authority will broadly establish the rights and obligations of the Authority. Further, the Water Authority will be subject to all regulatory requirements of the Tennessee Department of Environment and Conservation in its operations. Finally, as a governmental entity, the Water Authority will be subject to the other applicable legislative and regulatory requirements mandated by the State of Tennessee.
Will the Water Authority have a physical location in the Village? Has any consideration been given to where that office might be situated to help address issues?
To start we will lease the Water Authority space at our Public Works Facility. Long term they may choose to move to a new location.
The Water Authority is going to have a governing Board, correct? How will this Board be chosen? Who is on this Board? How long do they serve? Can they be removed? Will they be term-limited?
The Board will be set by the POA Board of Directors. It will include one POA Board Member and four property owners. They will serve three-year terms on a two/three schedule. The Water Authority Commissioners will not be term-limited but may be removed for cause. This is common practice for other utilities and water authorities in the State.
Will the Water Authority Board meetings will be open to the public, streamed, and have Q & A sessions?
Yes, the Water Authority meetings will be open to the public and, hopefully, streamed. Like any public meeting, there will be a Q&A session. Further, as a State governmental entity, the Water Authority will be subject to all Tennessee Open Records and Open Meetings requirements.
Who will oversee the day-to-day operations of the Water Authority?
We intend to select the most qualified individual we can for this important position of supervising the day-to-day activities.
Presently, the Village purchases water at a wholesale rate from the Loudon Utility Board (LUB) and Tellico Area Services Systems (TASS). Will this arrangement continue with the new Water Authority? Are there any other options?
Initially, these arrangements with LUB and TASS will continue, and existing service agreements will be assigned to the Water Authority. The WA Board will have the latitude to explore other options in the future.
In the Town Hall, a comment was made that the Village will need to present a budget to the state. Part of the budget will need to include money from our reserve fund. Has the amount of this contribution from the Village’s reserve fund been determined?
We will take the R&M (repairs and maintenance) reserve balance from the 2022 budget and take off any water and sewer costs spent in the 2023 budget, and what has been added in 2023. We estimate it will be around $3.5 million dollars.
Villagers will need to know what amount of the reserves are being invested. This will be our sunk costs. Do you have any idea when and how much this amount will be determined?
The Water / Sewer Reserve balance 12/31/2022 = $2,490,462
This should already include the $1,046,966 contribution in 2022. Hence, the bottom line would = $3,935,986 (2,490,462+1,735,000-289,476)
There is a range of water and sewer-related equipment and materials owned by the TVPOA Public Works Department. Villagers have paid for these items. Is the plan to transfer these assets to the new Water Authority? Any idea about the value of these assets? All of this information will need to be included in the submission to the state.
The Private Act Legislation creating the Water Authority will not contain an itemization of assets to be conveyed to the Water Authority from the POA. However, the POA will be required to provide its operating budget, including an itemization of assets, and anticipated operating expenses, to the State Comptroller for approval.
In addition to all equipment and materials, there is a highly qualified workforce with extensive familiarity with the current Village water and sewer system. This has value too. Will this point be made to the state when the plan for the new utility is forwarded to the state?
Yes, we recognize the value of our employees, and this will be a point of emphasis in the state submission.
The new Tellico Village Water Authority will be able to seek grants from government and non-government entities. Do we have any idea how many grants have been awarded to Loudon County, the city of Loudon, and the city of Lenior City in the past five years? Some counties and cities are good at getting grants; some are not so good because of their ratings. Knowing the success level of these government entities will help the Water Authority understand the grant climate in which they will operate.
As a water authority, we will not be required to rely on the county for government grants. It will be eligible as a government entity.
At the Town Hall, a reference was made that a portion of the funding for the Water Authority would come from issuing bonds. Does anyone in the finance department have experience with this process? Or is there someone with experience in issuing bonds on the Finance Advisory Committee? If this is going to be a major revenue stream, how is this going to be handled?
The POA may consult with the Tennessee Department of Environment and Conservation, the Tennessee Association of Utility Districts, financial institutions, bond underwriters, other water authorities and utility districts, and other state agencies as it evaluates the issuance of bonds in the future.
There has been talk about grants, bonds, assets, and such. The financial health of this Water Authority will be the monthly bills paid by the 5,600 residences and all the commercial water demands. Am I right? And what is the monthly revenue stream from these bills? Annually amount?
Just like any utility, the users will fund the operation along with any governmental grants that can be secured.
Will the POA create a detailed business plan and budget to submit to the state which is going to have all this information. Will a high-level budget summary covering all this information be shared with Villagers before being presented to the state?
The state has a template that the POA will update and submit back to them.
After, looking at the recording of the Town Hall meeting, I am confused. Why do we need 51% of property owners to agree to this Water Authority and not two-thirds?
We are conveying as an asset – the Village’s water and sewer system to the new Water Authority – we are not attempting to change the Covenants and Restrictions which require a two-thirds vote by property owners. Article VIII, Section 4(I) of Declaration of Covenants and Restrictions for Tellico Village expressly authorizes the Association to transfer all or any part of the Common Properties, including the water and sewer infrastructure and associated water and sewer reserves, to any public agency, authority, or utility where an instrument is signed by POA members entitled to cast a majority of all votes (i.e., 50% plus one). The process of conveying these assets to the Water Authority does not require an amendment to the Declaration (which itself requires a two-thirds vote), but merely the signatures of a majority of all POA members.
Are there any clearances required from the Tennessee Valley Authority or the Tellico Reservoir Development Agency to create the Village’s own Water Authority? Have there been any discussions with officials from these agencies about the new Water Authority?
Talking about government groups, what about discussing this with Representative Russell and Senator McNally? Has this been done? The Village will be looking to these gentlemen to help push this through their respective bodies in Nashville. What is their reaction to this proposal?
POA representatives have met with both Representative Russell, Senator Swan and Senator McNally and they are actively supporting the process of enacting Private Act Legislation to create the Water Authority.
Does Loudon County and Monroe County Mayors support the authority?
Yes, both Loudon County Mayor, Buddy Bradshaw and Monroe County Mayor, Mitch Ingram support the pursuit of a Water Authority.
Will the POA create a business plan? Will it be shared with Villagers before it is sent to Nashville?
Yes, an operating plan will be created along with an initial budget that will be submitted to the state.
At the town hall, an approach was discussed of getting 54 Villagers to visit 100 homes each to obtain signatures to accomplish getting 51% of signatures. Will these people be educated on the nuances of this water authority plan? I suspect they’ll be knocking on the door of Villagers who will have no concept of what they are talking about and need an elevator speech to inform these people.
Yes, volunteers will be educated to help their neighbors understand the Water Authority concept and benefits. This approach will be used only if we do not receive the needed signatures.
Will the volunteers who help collect signatures need to be notaries? I have needed stuff notarized before and I had a difficult time trying to find one notary.
No, they do not have to be notaries. Article VIII, Section 4(I) of Declaration of Covenants and Restrictions for Tellico Village expressly authorizes the Association to transfer all or any part of the Common Properties, including the water and sewer infrastructure and associated water and sewer reserves, to any public agency, authority, or utility where an instrument is signed by POA members entitled to cast a majority of all votes (i.e., 50% plus one). This Section does not require notarized signatures.
How are you going to recruit these people to get these signatures from residents?
We have already had several Villager’s volunteer to assist in a door– to–door campaign. We will be reaching out to other organizations like neighborhood watch, COPS, and others to see if they are willing to assist in sharing the information as well.
I know the whole purpose of starting a Water Authority is to manage our infrastructure expenses differently. Will this potentially lower our monthly water rates in any way?
It is too early to tell if the monthly expenses will go down. Overall, the main benefit is the long-term maintenance and financing options available to a government entity like a Water Authority.
A lot of different ideas have been broached through this Q&A session. It was suggested at the town hall meeting that the POA hoped to have the new water authority in place by next July. Is this realistic?
We hope to get approval in the Spring of 2024 leaving a few months to get the water authority operational. Once the signatures are acquired, we can start gathering all the information needed for the state and be ready to submit if legislation is approved.
What happens if I don't want to sign the agreement?
No one is required to sign the agreement, but the POA Board of Directors and Tellico Village executives believe it is in the long-term best interest of Tellico Village.
Is there a chance the state legislature will deny our request to form our own Water Authority?
Anything is possible, but considering the due diligence already conducted, along with support from Tellico Village residents and local elected officials, we believe it is unlikely as long as we get signatures from 51% of property owners.
We know you may still have a few questions. Please use the contact form below to send those our way. We will get back to you as well as post them under the FAQs on this page.