Water system divides towns it once joined

This was evident Thursday night at a special called water board hearing in Wartrace where both Wartrace Mayor Don Gallagher and Bell Buckle Mayor Dennis Webb explained their recent actions and reactions.

Gallagher called the meeting for Thursday night to address the issues raised by Bell Buckle's recent decision to choose Bedford County Utility District for its primary water supplier.

"Wartrace and Bell Buckle have had a good working relationship since the 1930s, so we regret Bell Buckle's decision to sever this long-standing relationship," read Gallagher from a three-page statement he had prepared.

"I am disappointed in the Bell Buckle Board. I do not feel the best interest of the people in Bell Buckle nor Wartrace have been served," he added later.

Soon after he said that, the water board approved a resolution for a contract to be submitted to Bell Buckle to serve as the town's secondary water source. Gallagher recommended a charge of $5 per thousand gallons, with a minimum of $1,600 ($800 per line) purchased each month. When BCUD offered the secondary status, it was at $4 per thousand and $800 minimum ($400 per line.) The terms of the contract being offered won't be official until they are approved by the Wartrace Board of Mayor and Aldermen on July 26.

"I think that rate is punitive," said Webb. "That's almost $20,000 a year just to draw from the well."

Friday morning, Webb said he and BCUD were researching other secondary sources. He said he was disappointed by the lack of data available that would justify the amount Wartrace was asking.

While towns are not required by law to have a contract for a secondary water source, the Municipal Technical Advisory Service, MTAS, strongly recommends it, said Dana Deem, MTAS management consultant for Bedford County.

"I've worked in towns that had no backup supply, but they were on the Tennessee River," said Deem, who added that both Tullahoma Utilities Board (Wartrace's supplier) and BCUD draw from a more finite source. He said MTAS will be conducting a study in Wartrace to determine rates soon, at the town's request.

Contract conflict

The Bell Buckle Board of Mayor and Aldermen decided at the June 8 meeting to request contract proposals from both BCUD and Wartrace. A story including that information appeared in the June 10 Times-Gazette.

From his letter, Gallagher stated, "On or about June 17th, Mayor Webb informed me that Bell Buckle was having a called meeting Thursday June 24 to select either BCUD or Wartrace as its primary."

Gallagher said the town needed more time to assess the situation before committing to a fixed rate.

"I certainly did not want to commit to a rate for the next three years that would result in Wartrace paying more for its water than it was selling to Bell Buckle for," he said.

According to Deem, a town's water system can only operate in the red for two years; otherwise, the state will come in and reevaluate, implementing rate increases to cover the losses.

"Since I was committed that week to our church for Vacation Bible School, each night from June 20th through June 24th, it would not be possible for me to draw up a contract, have it approved by our water board, and reviewed by our city attorney by the 24th," said Gallagher, a minister.

Friday, Webb said he notified Gallagher to request a contract on the morning of June 11, after a June 10 meeting with BCUD.

According to Wartrace's city code, the mayor is authorized to issue contracts with the approval of the board. When Gallagher did submit a contract before the June 24 special called meeting of the Bell Buckle Board of Mayor and Aldermen, it "was with the understanding that it would have to be approved by our water board," said Gallagher.

The contract never made it that far.

Reciprocation urged

After considerable debate, the Bell Buckle board voted to sign a primary contract with BCUD. Alderwomen Jenny Hunt and Annie Rooney voiced concerns about a part of the contract that would allow Wartrace to change the rates after three months, instead of locking down one rate for three years.

"This was not an easy decision to make," Webb told the Wartrace officials Thursday night. "We deliberated for hours."

In a later interview, he said he hoped the Wartrace board understood that this was not a sudden, off-the-cuff decision, but had been deliberated for months with his own board, and he had been in contact with Gallagher about the matter several times.

To explain Bell Buckle's need for a fixed rate, he cited his town's own financial woes, including tap fees going from $30,000 to $2,500 in one year, severely affecting the town budget, as well as the work that will need to be done on the Webb basin in the next few years, estimated at between $3-5 million.

Prior to the discussion about the secondary source contract and its costs, Webb also stressed the need to maintain a good relationship between the two towns and offered a reciprocal agreement as far as labor and equipment.

"We've had a great relationship with you, we want a great relationship with you," said Webb. "We need a great relationship with you. Our people work together well. I hope that you take that into account with the secondary contract."

"We want to be fair as possible," said Gallagher.

Second chance?

Before Wartrace changed its water source from Cascade Springs to TUB, a move essentially mandated by the state because of water quality issues, the town was selling its water to Bell Buckle for $1.55 per thousand gallons. After the changeover in March, the rate went to $2.50 per thousand, but with no contract. BCUD offered Bell Buckle a contract of $2.55 per thousand and Wartrace's tentative contract offered a rate of $2.60. Gallagher referred to the millions of dollars Wartrace has spent on its waterlines in the past 10-12 years, especially in the last two years, preparing for the changeover, and how the construction, labor -- especially overtime -- have hurt the town.

After Bell Buckle voted to accept the BCUD offer, Gallagher made a second offer to Bell Buckle, this one for $2.55 per thousand gallons, but then withdrew it.

"When I started crunching numbers, I could see even $2.55 wasn't going to work," Gallagher said.

Webb said Bell Buckle would not have been able to accept the second offer because the town had already made a commitment to BCUD.

According to Gallagher's projections, if the town operated at its current rate, losing approximately 47 percent of its water due to leaks and line issues related to the changeover to TUB, Wartrace could have lost more than $500 a month by selling to Bell Buckle at $2.55. With the water loss reduced to the more acceptable 20 percent, income generated by Bell Buckle for the Wartrace water department would have been $2,340 a month.

"Losing money in the short term is one thing," he said, "But over three years?"

Rock, hard place

Many of those leaks and losses were due to the increased water pressure needed to ensure Bell Buckle got all that it needed, said Gallagher, who added that by not having Bell Buckle as a primary customer anymore could actually help the town.

"Currently we are reducing the water pressure from TUB, which will relieve the stress on our lines and help with water loss," said Gallagher. "We are continuing to be very proactive in searching for leaks."

Gallagher said that within two or three months, the system would have been more stabilized and he would have had a better idea of a rate to lock into for Bell Buckle. The biggest factor, he said, is that Wartrace is no longer a water wholesaler, but a distributor, and that limits pricing options.

"I understand Dennis' position," said Gallagher. "I think he understands ours. "

Just before announcing his proposed rates as a secondary source, Gallagher said, "It's important for our communities to work together, but sometimes you can and sometimes you can't. We were both between a rock and a hard place."