SUD Board Approves Delayed Payment of Tap Fees

by Leslie Lytle, Messenger Staff Writer
“We would have to insist the note survives even in the event the Cooley’s Rift developers declared bankruptcy,” SUD manager Ben Beavers advised, commenting on a request to delay payment of tap fees presented for a vote at the July 26 meeting of the Board of Commissioners of the Sewanee Utility District of Franklin and Marion Counties. The developer RLF Cooley’s Rift, LLC applied for water service to 23 lots in the Cooley’s Rift development, but subsequently requested two changes to the standard developer’s contract.
Typically the developer is required to pay the $4,150 per lot tap fee at the time the contract is executed. The developer is also required to pay a $5 per month dry tap fee until half the lots are sold to cover administrative expenses and line flushing costs.
Cooley’s Rift requested a three-year, no-interest note on the tap fee cost, total $95,000, with the tap fee to be paid at the time a customer requested water service. By the provisions of the note, the developer would pay any unpaid tap fees at the end of the three-year term. Cooley’s Rift also requested SUD waive the monthly dry tap fee.
“We need to be very cautious given the history of the project,” Beavers said. New Life, the former Cooley’s Rift developer, was forced to liquidate by creditors and a court order.
Brian Youngblood, representing the present Cooley’s Rift developers, expressed confidence in their marketing plan. “We’ve already sold six of the existing lots,” Youngblood said. Interest in lakefront lots is particularly strong, according to Youngblood. Fifteen of the 23 lots identified in the SUD contract are lakefront.
Raising another concern, Beavers said accepting the note as payment might violate SUD policy, which requires payment at the time the contract is signed. “We’d need to check with the attorney to see if a note constitutes payment,” Beavers insisted.
After long deliberation, the board agreed to the three-year note contingent on SUD attorney Don Scholes satisfying both of SUD’s concerns, survivability of the note and compatibility with current policy.
The board voted against waiving the dry tap fee.
“Flushing lines would be the only cost SUD incurs during the three-year period of the note,” Beavers said. The dry tap fee covers that expense.
 In reviewing operations Beavers stressed the need for sewer line remediation in three areas prone to overflows, Depot Branch, Alto Road and Running Knob Hollow Road.
“Depot Branch is the worst,” Beavers said. “We’ll address it first. There’s enough money in the budget to start the project.” The problem stems from roots growing into the old clay pipe. At present, SUD cleans the line every other week to avoid backups. According to Beavers, 2,000 feet of line needs replaced. He estimated the total cost at approximately $80,000.
Beavers projected it would cost $200,000 to do all the sewer line remedial work needed. Beavers will consult with the state comptroller about the legality of drawing on SUD’s cash reserves to finance the sewer repairs. SUD drew on the cash reserves to finance the automatic meter reading project. As a public utility, SUD law prohibits SUD from drawing the cash reserve below the minimum required balance in successive years.
 Flagging another operations issue, Beavers said he will consult with the Tennessee Department of Environment and Conservation about how to control the invasive duckweed at two of the wastewater treatment plant ponds. “The duckweed shades out the algae needed to put oxygen back in the water,” Beavers said. The duckweed appeared following the introduction of plants to the constructed wetlands, the site of a pilot wastewater treatment study by University of the South and University of Georgia. The SUD Board meets next on Aug. 23.