Signal Should Not Sell Its Water System

Sunday, July 8, 2018

At its meeting at 6:30 p.m. on Monday, July 9, 2018, the Signal Mountain Town Council will take the first official steps toward selling the Town’s water system.  Selling the Town’s water system will inevitably lead to Town residents having to pay more for their water than they would if the Town kept its water system.

For proof of that fact, one need look no further than what happened after the Town sold its sewer system several years ago.  Quality of service has gone down and the cost has gone up year after year since the sale occurred.  Before the sewer system was sold, the sewer portion of our water bills was much smaller than the water portion of our water bills.  Today, the opposite is true.  Like the sale of the Town’s sewer system, selling our water system would be a very costly, foolhardy mistake that the Town’s residents will have to pay for forever.  There was no compelling reason to sell the sewer system, nor is there any compelling reason to sell the water system.

In addition, a Town Council member recently informed me that the Town has not had the value of its water system appraised, which would involve an appraisal of the land and the fixtures, including water works and buildings located on that land, as well as a valuation of the Town’s book of water business with the Town’s residents and businesses located in the Town.  It is the height of fiscal irresponsibility for a majority of the members of the Town Council to embark on a process of selling our water system, which is a multi-million dollar asset, without first engaging qualified professionals to provide a professional valuation of what that asset is worth.

The “request for proposal” process that the Town used did not provide such a valuation.  It was not anything close to an auction process or a sealed bid process, which is why the two proposals the Town received are so close together ($4,250,000 and $4,300,000).

The fact that these proposals included only short term water rate locks (2 years under one proposal and 5 years under the other, plus capital riders that  would also increase costs for Town residents) is further proof of the fact that selling our water system will cost Town residents more than they would have to pay if the Town kept its water system.

Town residents, please inform the Town Council by e-mail (their e-mail addresses are on the Town’s website) and in person at upcoming Town Council and Planning Commission meetings that you are opposed to selling our water system.

Thank you.

Brendan Olin
Former member, Signal Mountain Town Council and Planning Commission


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