By Tabitha Evans Moore, EDITOR & PUBLISHER
LYNCHBURG — It’s a clash that began in April and four months later doesn’t seem to be any closer to resolution. During the August Metro Utility Board meeting, all five MUD Board members voted unanimously to leave the Retreat at Whiskey Creek contract on the table as is with none of the concessions developer Chip Hayes previously asked for during the April meeting. {To read our complete coverage of the April meeting, click here.}
During the April meeting, Hayes asked the Board to reconsider language in the contract relating to a utility easement, tap and sewer fees, a grinder pump versus gravity sewer system, as well as a debate over a performance bond and engineering fees. In June, the Board voted unanimously to leave the verbiage in the contract as is.
The Times acquired a copy of the contract, which demands $258,925 up front upon execution. That total includes $2,175 in engineering fees, $118,500 in water tap fees, $134,300 in sewer tap fees, and a $3,950 in service fees for each connection inside Whiskey Retreat.
In the August meeting, MUD Attorney Michael Wall attended via phone and offered guidance on the points in question. Chip Hayes attorney William Penny was also in attendance.
Does MUD still need a utility easement?
During the April meeting, Hayes bristles at the language of the contract in regards to an easement from MUD’s nearby Dickey Tank across the Retreat footprint between lots 20 and 21 and to the main line located along Main Street before heading to Jack Daniel’s Distillery’s South Bottling Plant.
In 2021, MUD’s then manager, Russell Sells, and Jack Daniel officials agreed to partner on a $2.2 million project that would both add needed capacity and solve water pressure issues on Old Fayetteville Highway. MUD agreed to fund $1.3 million to build two water pumping booster stations, and the Distillery chipped in another $1 million to upgrade water lines from six-inch lines to 12 inches lines from the Metro water tanks nearest Lynchburg toward the bottling plant. {To read our complete coverage of that project, click here.}
“You can go and for whatever dollar amount do it and I’m just an open checkbook,” Hayes stated in the April meeting.
Between the April meeting and possibly based on potential delays caused by the contract stalemate, MUD officials decided to reroute the 12-inch water line – essentially making this contract detail a moot point.
“It sounds like now the plans have changed because you’ve got a different plan for how to reconnect Jack Daniel’s to the water tank. So, it doesn’t appear that you need that easement anymore,” Attorney Wall stated.
Wall further recommended to MUD Board members that their engineers sign off on the project before removing that language from the contract.
Who pays tap fees?
According to MUD’s Policy J, before MUD can do any work on a developer project, the developer must have a signed contract on file and must pay all tap fees, connection fees, a security deposit, as well as any engineering plan review fees.
Hayes pushed back against paying the fees up front – claiming ignorance of the policy and contract requirement prior to selling lots to the public at the Lynchburg tiny home community.
“We didn’t build that into the cost of the lots,” Hayes explained in April. “Our assumption was that money would be collected later from the homeowner. We got a copy of your guidelines for the first-time last week.”
“If they want to get sewer and water, they’re going to have to pay for the tap, so that’s their problem,” Penny reiterated in the August meeting.
New member Greg Guinn pushed back against Hayes claiming ignorance of the policies back in April.
“I’m new to this board, but I’m not new to the industry. I don’t buy that you never knew those policies. I’m also in the building business. I do my homework. When you develop, you go into that county, and you find out what the rules and regulations are. I’m not calling you a liar. I just find it hard to believe. I find it ridiculous that we’re all here going over a contract on a project that started over a year ago.”
Gravity sewer system versus grinder pumps
During the April meeting, another point of contention for Hayes was MUD’s insistence that gravity flow pumps be used in the development. Hayes stated that he thought it made more sense to use grinder pumps – an idea Chair Shane Taylor disliked.
Penny pushed back, “I don’t know about you, but I’ll tell you what, I represent several cities in Portland, several water authorities in Portland, and it will cause overflows at manholes and lift stations.”
Attorney Wall explained to the MUD Board that according to the Tennessee Department of Environment and Conservation, once installed all sewer connection whether gravity or grinder pump style become MUD’s responsibility.
“If I read it correctly, you’re really supposed to have some sort of easement and ownership of the grinder pumps, because they basically want somebody, an institution like the utility, responsible for these things,” Wall explained. “So that’s a decision for you all to make. Just know that if you do that, then you’re going to have the responsibility for those things. And we’re going to have to work that out somehow with property lot owners.”
Performance versus maintenance bond
During the meeting. Attorney Wall mentioned the MUD originally did not require a performance bond because MUD was under the impression that the Metro Planning and Zoning Commission already held a bond on the project.
“At this point, I don’t know if that’s true or not, but if there isn’t one, you need to be thinking about what security you have to ensure that the project is finished,” Wall explained.
After the meeting, The Times reached out to Planning Commission Chair Dexter Golden who stated that because Whiskey Treat was approved as an R3 development and not a subdivision no bond was secured.
Retreat attorney Penny argued during the meeting that a performance bonds wasn’t necessary because Whiskey Retreat planned to build the lines and not a third party contractor .
“Now a maintenance bond, yes, we’ll agree to a maintenance bond, but for performance bonds, it doesn’t make any sense to put a bond in there in that case,” Penny stated.
Unpaid Engineering Fees
Hayes also pushed back on paying the $2,175 in engineering fees and the ways in which those fees were calculated.
“Now, this property was approved at the beginning of 2022, and your developer guidelines didn’t go online, it doesn’t look like, till September of 2022,” Hayes stated. “So none of this was in place before that time. So I’ve got a history of emails that outline our correspondence of the engineer that we’ve had working on this since 2021 to do this.”
Chair Taylor countered stating that the Retreat at Whiskey Creek still needed to operated under Metro’s subdivision rules, which have been in effect since 2010.
“Have you had the opportunity to look at Metro County’s policy on subdivisions that was passed about, I think, Mayor helped me, maybe 2010, 2011? I emailed it to all you guys. It plainly lays out, and I’m not sure what you’re suggesting as far as Metro Utility’s Policy J, but the Metro Council approved a policy 2010, 2012, somewhere around in there, on the layout of subdivisions, and who is responsible for what?” Chair Taylor stated.
“This contract was was written off a big portion of that,” Taylor continued. “I don’t feel comfortable changing anything on something that’s already been approved by this board.”
Hayes also objected to the way the engineering fees were calculated. The Board quickly redirected him to the engineering firm, LJA Engineering, for any changes to that invoice.
“This would be an argument to the engineering company, not us,” Chair Taylor stated.
In the end, Barry Posluszny made the motion to leave the contract in place as written and Greg Guinn seconded it. Those two as well as Charles “Boo” Johnston, Glenn Thomas, and Chair Taylor all votes yes as well. Mr. Hayes, his attorney Bill Penny, and an entourage of Oak Stone employees left quickly after the vote.
The next Metro Utility Board meeting will take place on Tuesday, September 10 at 6 p.m. at the Metro Utilities office located at 738 Fayetteville Highway in Lynchburg. Shane Taylor stepped off the board during the August meeting and his replacement will be named in the September meeting. The Board will also elect a new chair person in September. •
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