After years of planning and months of legal battles with opponents including the City of Smithville who tried to stop the project, the DeKalb Utility District has begun construction on its own water treatment plant.
The DUD Board of Commissioners held a groundbreaking ceremony Thursday at the site of the water plant on Yulanda Hills Road off Holmes Creek Road near Center Hill Lake. The event was covered exclusively by WJLE.
"The purpose of this project is to provide a long term solution to providing the DUD customers with a safe, economical source of drinking water. A second purpose is to provide the region with a backup source of drinking water," said Roger Turney, Chairman of the DUD Board of Commissioners in remarks during the brief groundbreaking ceremony.
Turney expressed his appreciation to fellow board members for their vision and to others who have helped to bring this project about including agencies providing funding. "This project would not have happened without the commitment and vision by the District’s Board. We understood the importance and impact to the District’s customers in the future. We also had the willingness to see this project through in spite of some obstacles," said Turney
"This project received low interest loans and grants from three federal and state agencies. Their participation made the project economically feasible. We would like to recognize the representatives from these agencies, USDA Rural Utilities Service, State of Tennessee, State Revolving Fund Loan, and the Appalachian Regional Council," Turney added.
The $16 million project provides for the construction of a new raw water intake structure and raw water pump station on the Holmes Creek Embayment of Center Hill Reservoir (Caney Fork River); an 18-inch diameter raw water transmission line from the raw water pump station to the new 2.0 million gallon per day water treatment plant; an 18-inch diameter finished water transmission line along Holmes Creek Road, Allen’s Ferry Road, and U.S. Highway 70; and new 8-inch diameter water distribution lines along Big Rock Road, Dry Creek Road, Game Ridge Road, Turner Road, and Walker Lane. A finished water pumping station will also be constructed to deliver water from the Snow’s Hill Water Tank to the Short Mountain Water Tank. The new water treatment plant will include clarification, mixed media filtration and backwash systems, and a 250,000 gallon clear well.
To fund this project, the DUD is receiving $5 million in loans at 2.75% interest over 38 years and $1.25 million in grants from USDA Rural Development. The utility has also been approved for $500,000 in grant funding from the Appalachian Regional Commission; three loans through the State Revolving Fund Loan programs in amounts of $2 million, $2.75 million, and $4 million at .6% interest over 20 years; and a $500,000 forgiveness (grant) from the State Revolving Fund Program.
"Every scenario we looked at it was going to be beneficial to DUD customers for us to build our own treatment plant. In the long run, we will save our customers money. Interest rates are also at an all time low and grants have been available to us. So we felt the time was right for us to proceed on with a treatment plant," Jon Foutch, DUD Manager told WJLE.
In October, 2014 the DUD awarded bids on the project. W&O Construction Company, Inc. of Livingston got the bid to build the water plant at $6.9 million. Judy Construction Company of Cynthiana, Kentucky is to perform construction on the raw water intake at $4.1 million and Hawkins and Price, LLC of Wartrace, Tennessee was awarded the bid for construction of the 18 inch Raw and Finished Water Transmission Lines at $1.8 million.
The original project cost was estimated to be $12,000,000 but it is now expected to be $16,000,000 due to a bid overrun. To cover the additional costs, the DUD requested and was approved for a $4,000,000 loan increase to the Drinking Water Fund loan. (part of the funding package as referred to above)
When the DUD asked for the loan increase, the State Revolving Fund Loan Program performed a financial review and decided a rate increase was necessary in order for the request to be approved. The DUD satisfied the requirement by making an adjustment in the minimum usage rate in February, 2015.
In January, 2015, the DUD completed a facilities plan amendment which included a new cost-effective analysis to prove that the chosen alternative of the original facilities plan (to build a water plant) was still the most cost-effective. The analysis concluded that the DUD could produce drinking water for its customers at a cost of $2.32 per 1,000 or less and is still cost-effective.
The new water plant is expected to be completed by late fall or early winter next year.
Since its beginning, the DUD has been a wholesale water customer of the City of Smithville but in 2012 the Board of Commissioners decided to pursue plans for building a water treatment plant. By producing its own supply, the DUD would not have to rely on the city for water. But plans for the project came to an abrupt halt in July of 2012 when a petition brought by the "Ratepayers of the DUD" and City of Smithville was filed before the Tennessee Utility Management Review Board (UMRB) to stop the construction of the facility. The UMRB later held a hearing in Smithville and denied the petitioners' request for relief, meaning the City lost. The petitioners then filed a petition for Judicial Review in the Chancery Court of Davidson County but lost again as the Chancellor later ruled against them, essentially clearing the way for DUD to proceed with plans for building the water plant. But the legal battle didn't end there.
In December, 2013 the Smithville Board of Aldermen and Mayor held a special board meeting to decide on a new water rate for the DUD beginning January 1, 2014 upon the expiration of the DUD's 10 year water purchase agreement with the city. At that meeting, the rate was increased from $2.05 to $5.00 per thousand gallons forcing the DUD to temporarily increase rates to its customers. The DUD then filed a Chancery Court lawsuit to contest the city's new rate and following a February 2014 hearing in Cookeville, Chancellor Ronald Thurman ordered Smithville to reduce the rate it assesses the DUD from $5.00 to $2.67 per thousand gallons, which a water study at the time found to be the city's actual cost to produce water. The $2.67 rate still remains in place today. But in April, 2014 attorneys for the city filed a counter claim in Chancery Court alleging that the DUD underpaid for water purchases from July 1, 2008 to December 31, 2013 and owes the city more than one million dollars. The case remains pending in court.
The DeKalb Utility District serves a portion of DeKalb, Cannon, Smith, and Wilson Counties.
(TOP PHOTO: DUD Manager Jon Foutch, DUD Board members Joe Foutch, Jimmy Womack, Chairman Roger Turney, Danny Bass, Hugh Washer, and Buddy Kooce Jr. of Goodwyn, Mills, Cawood, the DUD's utility engineer)
(SECOND PHOTO FROM TOP:Chris Hampton, USDA Rural Development Program Specialist; Paula Lovett, Director of Community Development-Grants and Loans for the Tennessee Department of Economic and Community Development; Joe Foutch, Jimmy Womack, Roger Turney, Danny Bass, Hugh Washer, Rick Hogshead of the State Revolving Fund Loan Program, and Booxie Carlton, Appalachian Regional Commission State Program Manager)