Crossville staff seek contract with Crab Orchard Utility District to unlock $8 million ARPA water project

City of Crossville staff on Wednesday discussed a proposed contract to sell treated water to Crab Orchard Utility District and said the agreement must be finalized for the city to move forward with related infrastructure funded by an $8 million ARPA grant.

City attorney Joe Wyatt, a local attorney, told the council the contract was drafted so TDEC would approve the pump station and water-line plans tied to the grant. “We received a $8,000,000 ARPA grant. We can't move forward with the grant till this contract is in place. TDEC will not approve the water plans for the pump station or the line till this contract is completed,” Wyatt said.

Why it matters: City staff said TDEC approval and grant disbursement are contingent on a binding purchase agreement. Council members were told the contract contains a minimum supply commitment, an annual rate formula to avoid selling at a loss, and a cap tied to a prior 2018 council authorization.

Key contract details and context - Minimum and maximum volumes: The contract includes a minimum monthly volume of 300,000 gallons and a maximum entitlement of 1,000,000 gallons, the latter based on a council vote from February 2018 allowing up to one million gallons. Council members were told typical demand is expected to be around 700,000 gallons (approximate). - Rate structure: Staff said the contract uses a formula allowing annual review so the city can adjust rates to avoid selling water at a loss. - ARPA grant dependency: City attorneys and staff said the $8 million ARPA grant cannot proceed until the contract and TDEC approvals are complete. - Merger language: The draft retains the named counterparty “Crab Orchard Utility District” but includes a place for signature by the Cumberland Plateau Water Authority; staff said the parties anticipate a merger and that the contract can remain with Crab Orchard’s name while allowing a DBA for the Plateau authority. - Timing: The Crab Orchard merger public hearing is scheduled for the 13th of the month; attorneys described the merger as imminent and said Crab Orchard only saw the city’s draft that day, so small tweaks are possible before next week’s formal agenda.

What council asked and what’s next Council members asked whether the city would be joining any authority (it will not; the city is selling water) and whether daily needs were known; staff repeated the estimated daily demand of roughly 700,000 gallons but cited the 1,000,000-gallon cap previously authorized. Wyatt said he expects potential minor edits from Crab Orchard before the contract returns to the consent agenda and that any substantive changes would be highlighted for council review.

Ending Staff recommended placing the finalized agreement on the next regular agenda so the project can proceed toward TDEC review and grant implementation. Council members did not take a final vote at the work session.