Signal Mountain to begin collecting water department proposals

Signal Mountain to begin collecting water department proposals

May 17th, 2017 by Myron Madden in Community Signal Mountain

Signal Mountain Town Hall (Staff photo by Shane Foley)

Photo by Contributed Photo /Times Free Press.

After sidelining the issue early last year, the town of Signal Mountain will finally begin considering proposals for the takeover of its water department.

The town council approved a motion to draft a request for proposal during its regular meeting May 8. An RFP is legally required to solicit business propositions.

The matter was put on hold last year per the request of Town Manager Boyd Veal, who said he wanted to give the decision the attention it deserved.

"I don't want this to be something that's just in the mix," he explained during last week's meeting. "We need to make sure we have time and ability to pay close attention to it."

The issue was thrust into the spotlight after Tennessee American Water Company offered to buy the town's water system in late 2015 — right before circumstances forced the council to turn its attention to scenarios for the Mountain Arts Community Center, along with other pressing issues. Now, with initial repairs for the MACC approved and 2017-2018 fiscal budget discussions wrapping up soon, the council can dedicate more time to reviewing its options.

After the RFP is issued, outside agencies will be invited to submit proposals to operate or acquire the water system. If another utility service took over operations, the town would still have ownership and managerial oversight of the department. If another utility service acquired the system, the town would cease to oversee it and the new proprietor would have sole ownership and full control over matters like rates and asset use.

Contenders for the system could also submit other various types of proposals, such as a merger, so long as they meet the needs of the town, officials said.

So far, the town has heard preliminary, unofficial offers from two utility companies: Tennessee American and Walden's Ridge Utility District.

In 2015, representatives from Tennessee American said they would be open to buying or taking over the water system, turning the town's water supplier of 20 years into its provider. They said the company would work to keep the town's current water staff employed and use its expertise to make cost-effective infrastructure improvements.

Early this year, WRUD also expressed an interest in taking over operation of the water system. WRUD officials pointed to the company's new $1 million storage tank, whose in-house costs were reduced to $150,000 through federal aid, as an example of WRUD's progressive thinking and ability to work with the government to lower improvement costs.

The town also has the option to retain the water system and continue operating the utility itself, but Veal said that decision would come with significant changes, like an increase in rates.

Though operational costs for the water system have exceeded its generated revenue, Veal said town officials have held rates down because they were not investing in the system. If the town retained the utility and began investing in it again, officials would need to look at raising those rates to make up the deficiency, said Veal.

Either way, the council needs to begin looking to the future, said Vice Mayor Dick Gee. With the water system's manager approaching retirement and the possibility of expansion on the horizon, Gee said the council has an opportunity to examine the capabilities of the water department and what improvements could be made as changes occur.

"It seems like a reasonable time to look at options rather than just go merrily along down the same road," Gee said.

Public meetings are expected to be held before any decisions are made. Veal said it will take about two months to issue the RFP and officially begin considering proposals.