Jasper leaders approve counterproposal to Tennessee American Water purchase offer

Alderman Josh Jennings discusses the situation with the Jasper fire department's finances at the Jasper Board of Mayor and Aldermen June meeting.

JASPER, Tenn. - A thorough evaluation of Jasper's water and sewer systems is needed before Tennessee American Water can determine their value.

In May, the Jasper Board of Mayor and Aldermen voted to reopen discussions with the Chattanooga company about the potential sale of the town's utilities.

At the board's August meeting, City Attorney Mark Raines said Tennessee American Water sent city leaders a confidentiality agreement that required approval before that evaluation process could begin.

"This agreement safeguards any data that we give to Tennessee American that they're going to use in their due diligence to see if it's worthwhile for them to make a bid on purchasing the water and sewer works," he said.

The agreement primarily protects Jasper's data, but Raines said it also gives the company a two-year period in which the town can't offer to sell to someone else to the extent that's allowed by state law.

"They'll keep our data safe and secure and confidential, and [be assured] that we won't go to another vendor and try to undercut their bid based on what they provide us," he said.

Alderman Josh Jennings asked why Jasper would offer that kind of protection to Tennessee American Water.

"If I'm going to sell something, why would I tell that entity I'm not going to bid it out to anybody else for two years?" he asked the board. "That gives them a better price."

Raines said that two-year period "may not be permissible" by state law, but the board would have to approve the agreement for the process to continue.

Examining the potential sale would be a "lengthy process" on the part of Tennessee American Water, he said.

"If I was going to sell my business, I wouldn't sign an agreement with somebody that says you've got two years to decide what you're going to pay me," Jennings said. "I wouldn't do that. I mean that. That's just me. That's a bad business deal."

Alderman Paul "Mac" Bumpus proposed a nine-month period in the agreement instead of two years.

"Deals are done back and forth," he said. "If they want two years, we'll tell them nine months. Push and shove."

The board voted 4-1 to approve that offer for the company to consider.

Mayor Paul Evans, who cast the lone dissenting vote, said he didn't think it was a good idea to consider selling the water and sewer systems at all.

"Once it's gone, it's gone," he said. "You're not getting it back."

Evans said Tennessee American Water has hired people in recent years to "aggressively seek smaller utilities."

"We provide a good service for our residents at a real good rate," he said.

Vice Mayor Paul West said Tennessee American Water wants to have "one continuous loop" from Chattanooga, across Suck Creek Mountain, through the Sequatchie Valley and back.

"That's what their ultimate goal is," he said. "That's why they came a knockin'."

Jennings agreed and said he's been told by state officials that Jasper would have to build a new water system in about 15 years.

He said that would drive city leaders to one of two options.

"Do you build a new water system and pass that [cost] on to people if [the state] says that you've got to do that?" he asked. "Or, do you say we sell that, and we let Tennessee American, who gets some tax incentives that we don't get, borrow the money? You have option A or option B."

Jennings said he didn't have the answer, but the board needed to figure out which would be the cheapest for Jasper.

Ryan Lewis is based in Marion County. Contact him at ryanlewis34@gmail.com.