The state has filed a complaint against companies linked with Chattanooga developer John "Thunder" Thornton's Jasper Highlands project, alleging violations of Tennessee law over its water system.
The filing by the Consumer Advocate unit of the state Attorney General's office said the company Thunder Air and another entity failed to obtain a certificate of public convenience and necessity concerning the system at the mountaintop housing development near Kimball.
The filing said the companies failed to pay annual inspection fees and charged rates not approved by the Tennessee Public Utility Commission.
It also alleged the companies violated state law when the water system withheld or refused to provide service to customers.
The filing said that Robert Schlenkert, a Jasper Highlands resident, filed a complaint with the state Department of Consumer Affairs last November stating that the developer refused to provide water service after the resident paid a $2,150 hook-up fee. It said that Schlenkert has been forced to purchase water and transport it to his home for daily use.
The Consumer Advocate unit is seeking a hearing before the Tennessee Public Utility Commission and is asking the state regulatory agency to issue a cease and desist order and impose civil penalties and sanctions against Thunder Air for the alleged violations.
Dane Bradshaw, president of Thunder Enterprises, said the Jasper Highlands Property Owners Association, which manages the water system, fully abides by a not-for-profit exemption allowed by the commission.
"Five years ago we had no other options available other than to form our own water system, a mission we successfully accomplished," he said in a statement.
Bradshaw said the system has consistently received exemplary rankings in an annual survey conducted by the Tennessee Department of Environment and Conservation's Chattanooga field office. The most recent survey by TDEC resulted in a score of 99%, he said.
"For these reasons, we are certain we remain in full compliance as a not-for-profit exemption," Bradshaw said.
The state filing said that Thunder Air seeks to evade commission jurisdiction by claiming the system is exempt from state code. That measure deals with nonprofit homeowner associations or organizations where membership is limited to owners of residential subdivisions.
The filing said that to support that position, Thunder Air provided a copy of lease and management agreements between the company and the Jasper Highlands Property Owners Association. Under the terms, the association can claim the exemption from commission jurisdiction despite not owning or operating the system.
According to the filing, while a property owners association exists, Thunder Air may unilaterally amend the subdivision's covenants and has full control over appointments to the association's board of directors.
Some residents of the mountaintop community have said they're upset with Thornton, saying his company has used heavy-handed tactics in business disputes.
Residents James and Shirley Long said two years ago after they filed a lawsuit that a Thornton company cut off their internet service and sought to ban them from the common areas of Jasper Highlands under threat of arrest. Also, the company tried court action to keep them from speaking badly about the project, they said.
But Thornton has said the couple owed his company $27,700 after building their house and have refused to pay. His company, JHH LLC, later sued the Longs in Marion County Chancery Court.
Over the past decade, the developer of Jasper Highlands has sold more than $100 million of property and is preparing a fifth phase in the 8,893-acre development to add 150 additional lots for sale, Thornton said.
Developed by Thunder Enterprises, Jasper Highlands in one of the largest mountaintop developments in Tennessee and will ultimately include about 1,500 lots. The properties typically range from one to five acres and sell anywhere from $59,000 for interior lots up to more than $1 million for some of the prime bluff-view lots near waterfalls.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.