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Tennessee American Water Co. will host an informational meeting from 6-8 p.m. Dec. 15 at the Signal Mountain Country Club.

The biggest private water game in town, Tennessee American Water Co., is offering to buy and take over the Town of Signal Mountain's roughly 3,000-customer water system.

But Signal Mountain officials aren't ready just yet to commit to anything — either Tennessee American's offer or handing over management of the water system to Walden's Ridge Utility District, which has expressed interest.

Signal Mountain has not issued any requests for proposals, which are legally required to entertain formal propositions, and city officials say the town didn't go looking to sell its water system.

"Signal Mountain wasn't seeking out a suitor," Councilman Robert Spalding said last week.

Tennessee American has been Signal's water supplier for nearly 20 years. City Manager Boyd Veal said in a work session last week that during negotiations for regular water purchases, the company floated the option of buying the city's water system outright.

Tennessee-American Water spokeswoman Daphne Kirksey said that as part of the nation's biggest water provider, American Water, the Chattanooga water utility is able to use its national expertise and buying power to provide better water service. Tennessee American is looking to extend the wholesale water service now provided to Signal Mountain directly to the town's residents and businesses as a retail water provider.

"We're able to cost-effectively provide improvements in the system because of national buying power through our parent company, American Water," Kirksey said.

She said the company is open to buying or taking over Signal Mountain's water system. It would work to keep the town's current water staff and go about assessing the infrastructure and scoping out potential improvements.

"This is kind of what we do day in and day out," Kirksey said. "We're water professionals and we always take on the challenges and are always trying to operate as efficiently as possible and take care of what the needs are."

Spalding said the town probably is months away from issuing any official requests for proposals.

"All we've done is accept looking at their offers," he said. "We don't even have a definitive offer."

But Signal Mountain isn't dismissing the idea, either.

Tennessee American officials have made public presentations and hosted informational meetings for curious Signal Mountain residents. Another is scheduled from 6-8 p.m. Dec. 15 at the Signal Mountain Country Club.

"Residents can drop in whenever is most convenient for them," Kirksey said.

Veal said last week the town will extend its current, and expired, water purchasing contract with Tennessee American at the current rate — $21.90 for the first 4,000 gallons — until April 30, 2016, to give town officials time to mull the potential sale and other options — including keeping and managing the system themselves, or handing over management to another entity.

Walden's Ridge Utility District, the publicly owned water utility based in nearby Walden, has expressed potential interest in managing Signal Mountain's water system, but not buying it.

And some Walden's Ridge Utility District officials have no love for Tennessee American Water Co. Earlier this year, Walden's Ridge Utility District opted out of its 40-year water purchasing contract with Tennessee American after only nine years.

"Our relationship with Tennessee American was not a good one," said Frank Groves, president of the utility district board. "We just had our belly full of Tennessee American, first of all by the way they treated us and second of all by these rate increases."

Utility district officials accused Tennessee American of imposing rate hikes without first consulting them, or without giving Walden's Ridge Utility District any input or negotiating power as was guaranteed in their contract.

Tennessee American officials said they were merely passing on mandatory rate increases handed down to them by the Tennessee Regulatory Authority.

After dropping Tennessee American, Walden's Ridge Utility District earlier this year signed a contract with Hixson Utility District. Walden's Ridge agreed to pay $3.5 million to Tennessee American for the pump station and water lines Tennessee American built to serve Walden.

Now Walden's Ridge Utility District officials say they would have no problem tying into Signal Mountain's water system and serving the town, with Hixson Utility District water.

Because the Walden's Ridge storage tanks are physically uphill from Signal Mountain, the utility could supply the town through a gravity feed, officials said.

Hixson Utility District General Manager Greg Butler said his utility supplies roughly 25,000 customers while operating at about half its capacity of 15 million gallons a day.

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.

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