On May 14, the Signal Mountain Town Council is expected to vote on whether to sell the town's water system, and to whom. Tennessee American Water and Walden's Ridge Utility District have both submitted proposals.
In preparation for the vote, the town held three public Q-and-A sessions, giving town residents and councilors the opportunity to question representatives from both utilities.
Water tower repair work nears completion atop the Tennessee American Water Company structure Friday in the 200 block of South Crest Road on Missionary Ridge in Chattanooga.At the third and final session, Councilman Dick Gee asked representatives from both utilities what they could do that the town could not do itself.
Walden's Ridge Utility District representatives responded that they couldn't necessarily do anything the town couldn't, but they could supply the manpower to do it. WRUD General Manager Ron West said the utility researches new technology and has been aggressive in replacing water mains on the mountain, where it serves Sequatchie County, the town of Walden and a portion of the town of Signal Mountain, a total of about 3,500 customers.
Tennessee American Water President Val Armstrong responded that TAW's advantage is the access to resources and pricing it has because of the economy of scale it brings to the table. Tennessee American serves about 390,000 people in Tennessee, including 3,800 on Signal Mountain.
Town Councilman Dan Landrum asked both groups of utility representatives if they could name a subdivision on the mountain that needs a lot of work done on its water system.
Tennessee American representatives said they'd look to employees they've put on a community advisory board to answer that type of question.
West named Hidden Brook as a subdivision that needs work, explaining that its system is problematic because it is composed of small water mains. He added that pressure is always an issue when dealing with mountaintop water systems, with which his utility has experience.
TAW said in its proposal that it would bring $1 million in revenue into the town in the form of property, gross receipts and payroll taxes, but Landrum pointed out that only about $250,000 of that amount would directly benefit Signal Mountain, with about half of the $1 million going to the county and a quarter going to state and federal entities, which TAW representatives confirmed.
As a public utility, Walden's Ridge Utility District is exempt from property taxes.
Chuck Pruett, owner of Pruett's Signal Mountain Market and a mountain resident, praised the service he's received from WRUD but questioned why the town is selling its water system.
"I think it's an asset worth keeping," he said. "Once it's sold it's hard to get it back."
When Gee asked both utilities whether they'd consider selling the system back to the town in the future at a fair rate, both responded that they would be willing to negotiate.
Another resident asked how the town planned to put the revenue from the sale of the water system back into taxpayers' pockets. That question went unanswered.
A Hidden Brook resident claimed WRUD has a high debt-to-asset ratio and would pay off its debt by raising rates.
Signal Mountain resident Claire Gresinger holds up samples of water she collected from Tennessee American Water company's source, the Tennessee River, and water she collected from Walden's Ridge Utility District's source, an underground aquifer. Since WRUD's water, right, is clearer, she says, it requires less filtration before it is safe to drink. (Contributed photo)"Walden's Ridge is vastly underestimating the work required to connect to the town system," the resident said.
Both utilities' proposals say they would not raise rates for five years.
Gee said what bothers him most about WRUD's proposal is the makeup of its board, which West admitted does not have much turnover, therefore making town representation unlikely. One member has been on the board for 16 years, West said.
As part of its proposal, the utility agreed to give one seat on its five-member board to a resident of Signal Mountain, but Gee questioned whether it was legal for the utility to designate that seat based on the board's application process, which WRUD representatives said is mandated by state law.
Landrum pointed out that the town won't have a voting member on the Tennessee American board. The members of the Tennessee Public Utility Commission, to which Tennessee American presents its capital plans for potential rate increases, are appointed by the lieutenant governor of Tennessee and serve six-year terms, said Armstrong.