Whitwell water system sold

Whitwell water system sold

October 9th, 2012 by Dave Flessner in Business Around the Region

Deron Allen

Deron Allen

Photo by Tim Barber /Times Free Press.

Nearly a decade after taking over the Suck Creek Utility District, Tennessee American Water is preparing to buy another Marion County utility to help upgrade water service in and around Whitwell, Tenn.

The Whitwell City Council voted 3-2 last week to sell the city's water system to Tennessee American, the biggest privately owned water utility in Tennessee, for $1.5 million. Under the ownership of the Chattanooga water utility, bigger water lines will be installed, water tanks will be upgraded and more lines laid to serve outlying residents, officials said.

"We've had several people outside of Whitwell whom we haven't been able to get water to and they have had to dig wells and that's just not right," Whitwell City Manager Charles Tucker said. "If you have a water system, you ought to be able to give everyone water."

Whitwell's water system was originally built in 1957, and many of its water lines are too small to serve the city and its neighboring residents, Tucker said. He said a study of the water system estimated it needs $6.5 million of pipe upgrades, tank maintenance and additional water capacity.

"I think this change will help Whitwell grow tremendously," Tucker said.

But Whitwell City Councilman Harry Holland said he thinks the city can upgrade its water system on its own and keep lower rates than it will get by turning over the utility to a private company.

"This is one of the poorest parts of Marion County, and we can't afford to get our water bills raised every year like they have been in Chattanooga," he said.

Holland said new commissioners elected next month could have a different view on selling the water system, although he admits it may be too late to reverse the sale after the city council voted three times to sell the water system to Tennessee American.

Whitwell officials said they expect most of the 10 full- and part-time employees with the city water system will get jobs either with Tennessee American or by filling other city of Whitwell public works jobs.

Tennessee American, which currently serves about 74,500 customers, will pick up about 3,000 customers in Whitwell through the pending utility purchase. Deron Allen, president of Tennessee American, said he will soon petition the Tennessee Regulatory Authority for permission to acquire the Whitwell utility.

The TRA is scheduled to vote next Monday on a proposal to raise the water rates for most Tennessee American customers by more than 12 percent, effective next month. That rate increase follows a 14.8 percent increase in water rates by Tennesee American last year.

Allen said the utility plans to keep the current Whitwell water rates initially, although rates may change in the future with the approval of state regulators.

"Whitwell is doing what they can with their water system, but they just don't have the resources we do," Allen said. "We have a lot more capabilities and ability to access materials when new water mains must be replaced or new equipment added or replaced."

Through its parent company, American Water Co., Tennessee American can offer a 24-hour-a-day telephone answering service and its own water quality testing and analysis. Initially, Tennessee American will continue to get Whitwell's water strictly from the Sequatchie River. But over time, the water service could be connected with other Tennessee American water supplies, Allen said.

Tennessee American Water began operating the former Suck Creek Utility District water system in 2003 after Marion County officials appealed to Tennessee American to help maintain water service west of Chattanooga. The Chattanooga utility purchased the water system from the county in 2006.

Contact Dave Flessner at dflessner@timesfreepress.com or 757-6340.