Crossville to consider nonbinding talks with Cumberland Plateau Water Authority to explore system transfer

The Crossville City Council heard a presentation from Jeff Dyer, general manager of the Cumberland Plateau Water Authority (CPWA), on a proposed Resolution No. 1 that would allow the city to begin formal, nonbinding negotiations about a possible sale, transfer or merger of water system assets.

Dyer said CPWA exists "to ensure long term water supply security for our region" and described the authority as a regional option that can reduce duplication, lower long-term operating costs and improve buying power. He gave a snapshot of CPWA’s current finances and scale, saying the authority serves about 17,171 customers, shows roughly $9.2 million in annual income and about $7.1 million in annual expenses, and lists about $46 million in assets with no debt, according to the figures he presented.

Dyer said Resolution No. 1 would not approve a sale or transfer; rather, it would allow Crossville to "begin formal nonbinding negotiations" so both parties can exchange information and vet options. "What the resolution does not do," he said, "it does not approve the sale of the water system. It does not permit the city to transfer anything. It does not authorize signing or binding agreement. It only allows discussions to continue." He emphasized safeguards: full disclosure of assets and liabilities, debt review and a requirement that any final deal return to council for approval.

City attorney Randy York told the council the legal difference between a partnership and a merger matters for referendum law. York referenced the city charter’s election and referendum provisions and said a mandatory referendum could be triggered if the arrangement conveyed long-term possessory interests in city property or water rights, or if the authority received exclusive or long-term operational control of facilities. "If the water authority receives no long term or exclusive rights to city property, no referendum," York said. He added that any agreement granting more than a two-year possessory interest or conveying Meadow Park Lake or adjacent lands could require voter approval.

York warned of tight timing for a ballot measure: to reach the November ballot the city would need to finalize language and submit it to the election commission 90 days before the election (he cited August 5 as the calendar deadline). He said a special referendum is possible but would be at city expense (he noted a prior estimate around $35,000). York recommended retaining bond counsel and completing appraisals and full disclosure before advancing beyond nonbinding talks.

Council members asked whether a voter approval would legally bind the council to proceed. York said voter approval would authorize moving forward but would not compel the council to perform immutably without further required steps; conversely, a voter rejection would preclude a merger that legally required referendum approval. Members also questioned whether CPWA would assume existing bonds; York said CPWA likely would take on obligations if it assumed the system, but this would be a negotiable term and should be reviewed by bond counsel.

Dyer acknowledged Meadow Park has been discussed as the quickest near-term option for additional supply but cautioned it may not offer the best return on investment and said TDEC funding for dam raising is limited. He said CPWA is pursuing regional and federal funding opportunities in some projects.

No formal vote was recorded on Resolution No. 1 during the work session; the measure was described by staff and CPWA as a first step so both parties can exchange information and return to council with specific proposals, financial analyses and recommended next steps.