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Residents file class action lawsuit in sewer fight

1:47 AM, Jan 23, 2011   |    comments
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Dozens of Lake Tansi area residents met Saturday afternoon at the Music Barn in Lake Tansi to review a letter to Governor Haslam asking for a review of all state laws regarding small district utility companies, and to talk about a class action lawsuit filed on their behalf.

The lawsuit, filed in January 11, 2011, alleges a conflict of interest in how more than $100,000 was transferred from the Lake Tansi Area Property Owners Association (POA) to the Tansi Sewer Utility District (TSUD).

"It's against the POA for the way they financed TSUD, but we're all out to shut down TSUD," said Dana "Davey" Crockett. 

Crockett lives in Knox County, but owns a 24 unit apartment complex in the Lake Tansi area of Cumberland County. He is not a member of the POA. 

The group that met Saturday is also sending a letter to Governor Haslam, asking him for help in their fight against TSUD.

"We need him to look a laws and regulations that operate these little utility districts because there's no control over these utility districts," said Crockett.

Herb Pallatt is President of the TSUD Board.  He is also a POA member.  He said he is not worried about the lawsuit because TSUD is not named as a defendant even though the group filed the lawsuit as a first step toward eventually getting rid of TSUD.

"There has never been and there was never intended to be any corruption involved. This was a community betterment program," said Pallatt.

All of this comes less than a year after TSUD was formally established, and nearly a decade after talks of setting up a local sewer system started.

Residents, like Crockett, are upset because they are being required to pay set up fees for the sewer system, even if they don't sign up for service.

"My availability fee for just the pipe being within 500 feet of me is $36,000. We don't have $36,000," said Crockett.

Availability fees are $1,500 for residential properties, and $3,000 for commercial properties.  Crockett's rentals are classified as residential.

Jane Cunningham owns the Music Barn, a commercial property.  When her property comes up for service in a few years, she's looking at a $3,000 fee.

"I'm a widow on a fixed income. I'm afraid I won't be able to afford it," said Cunningham.

Pallatt said the sewer system is being built in phases.  The first two phases are already built, with a third phase in the works.  The last phase is scheduled to be built in 2017.

Pallatt also said the TSUD board is reviewing their current rates.  He said initial costs have come in at less than what they estimated.  He said the board could decide to lower rates for new customers, and offer credits to existing customers to refund the difference.

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