Signal Mountain residents today are getting their first look at a 25-page report completed by members of a six-member committee tasked with evaluating multiple offers to either buy or manage the town’s aging water system.
Both Tennessee American Water Company and Walden’s Ridge Utility District submitted multiple responses to the town’s request for proposals from firms interested in either managing or acquiring the water system, according to the report.
WRUD’s $3.6 million proposal to acquire both the water system and the real estate on which it sits came in $200,000 higher that TAWC’s $3.4 million bid, according to information in the report.
Further, TAWC’s proposal stipulated that this and its two other acquisition proposals all are “subject to .
. . a reduction in purchase price based on the town’s estimated RFP cost and expense of $200,000.”
Should TAWC’s acquisition proposal be accepted, the report noted, “The strategy is to completely integrate the Signal Mountain water system with the Chattanooga system so that the systems operate under one Public Water System identification (PWSID) number, and all compliance requirements will be based upon one total system rather than two independent systems.”
Both potential purchasers reportedly noted that if officials do opt to sell the municipal system, their action would enable town council members to spend Signal Mountain Water District’s financial assets – estimated to total $3 million to $3.8 million in cash and restricted funds – on whatever they wished.
All told, the town received five acquisition proposals, three from TAWC and two from WRUD.
TAWC’s two additional acquisition proposals were:
· Purchase the water assets of the town, including the pump station, James Blvd. single tank and James Blvd.
double tank, for a cash payment of $3 million.
· Purchase the water assets of the town, excluding associated town real estate, for $2.8 million.
WRUD submitted a second acquisition proposal under which it would acquire the water district and its assets, but no land, was for $3 million.
Further, WRUD proffered a management proposal, offering – if the town rejects all acquisition proposals and decides to retain ownership of the water system – “to manage, operate and maintain” the municipal system for a price of $20 per customer, per month.
“This equated to nearly $900,000 per year,” the committee report said. “A transfer date of June 30, 2018 is proposed.”
TAWC did not offer any management proposals, according to the report.
The evaluation committee’s report made no recommendations as to which of the six offers received, if any, should be accepted.
“It is important to note that it was not the charge of this committee to make a recommendation for any particular proposal,” it explained, “but merely to evaluate all the proposals and present the facts.”