A couple of Tracy City, Tenn., residents say a $5.5 million project to enlarge the reservoir used by the town for drinking water is too expensive to undertake without an OK from taxpayers.
Tracy City's charter requires approval of two-thirds of the town's registered voters if a debt exceeds 5 percent of the taxable property assessment, according to resident Barbara J. Camm.
She said the $3.3 million loan needed for the project is four times more debt than the charter allows without a taxpayer vote. She calculates that amount at $759,756.75, using current data from the county property assessor's office.
But Jeff Oldham, Nashville-based bond attorney for the Tracy City Water Works, said state law supersedes the City Charter, providing instead for a 20-day public protest period that he said drew no opponents before the utility got the loan.
"The General Assembly intended that the Local Government Public Obligations Act, rather than any local government charter, serve as Tracy City's bonding authority," Oldham states in an email. "If 10 percent of voters petition the issuance of a bond, then the bond may not be issued until the bond issue is approved by voter referendum.
"In this case, the 20-day period expired without any voter protest."
Camm and fellow resident Steve Sabados, the county's Emergency Management Agency director and a city alderman when officials first discussed the idea in 2008, also contend the project isn't needed.
Sabados said the reservoir was more than half full, able to meet local demand and still help out nearby Monteagle even at the height of the 2007 drought. He said Tracy City residents shouldn't foot the bill for a "regional" project.
Both residents note U.S. Census Bureau numbers show Grundy County's population is shrinking.
Tracy City public utility Manager Tommy McFarland said a $30,000 state and federal study launched in 2009 concluded the project was the best answer to long-term water needs for the town and the surrounding region.
Raising the reservoir dam seven feet would boost storage capacity by 176 million gallons, allowing the utility to produce an additional 600,000 gallons per day, he said.
Despite population figures in the last few years that show no growth, he said growth will come in the future. The utility's customers, not taxpayers, will pay for the project, he said, though he acknowledged that many people are both.
There are about 650 households, or customers, in Tracy City, a town of around 1,400 people, according to 2010 U.S. census data.
"You can add about 1,100 customers outside the city limits," McFarland said.
U.S. Department of Agriculture Rural Development Community Specialist Clay Copeland said the city's bond attorney has the authority to issue an opinion on the bond and that judgment has been accepted by USDA.
The USDA has no concerns about the project, he said.