By Tabitha Evans Moore
Editor & Publisher

The Metro Moore County Utility Department has been losing nearly half of its treated water for approximately seven years — and the state has been watching. At Tuesday’s MUD Board meeting, staff presented a new way of calculating that loss that brings the number down significantly on paper. But state law doesn’t care about the new math.

By the state’s measure, MUD’s water loss rate stands at 42.6 percent for the month of April. It was 45.3 percent in March. That means for every 10 gallons of water the utility treats and pumps, more than four gallons never reach a paying customer. Under Tennessee law, that number triggers mandatory state oversight — and it has consequences that reach far beyond the utility’s balance sheet.

At Tuesday’s meeting, MUD staff broke down the numbers differently. After accounting for 3.38 million gallons of water lost to known leaks, many since repaired, fire department use, routine flushing, and in-house plant use, staff argued the utility’s true unaccounted loss is closer to 29.8 percent — roughly 7.9 million gallons, or about $58,000 a month in lost revenue at the residential rate of $7.39 per 1,000 gallons. The state sees it differently. By TDEC’s measure, MUD’s loss rate is 42.6 percent — more than 11 million gallons and roughly $83,000 a month walking out the door untreated, unpumped, and unbilled.

Staff member Katie Goodwin was direct with the MUD Board about what the new calculation means to regulators.

“In the eyes of the state, our water loss is 42.6 percent,” she told the board.

Later, Goodwin also told the board that she’d spoke to Lincoln County officials concerning their method of water loss documentation and felt hopeful that keeping accurate logs of in house, leaks, flushing, and fire department usage would help satisfy state officials should they come looking.

“That will suffice the state because we’re being responsible in knowing where our finished water has gone. And it’s not just ‘we don’t know,'” she said.

“But still, you want to fix those leaks as fast as possible because that’s uncollected money,” MUD Chair Barry Posluszny added.

{Editor’s Note: This story is based on the transcript of the May 12, 2026 MUD Board meeting and Tennessee state statutes T.C.A. § 7-34-115 and related provisions governing municipal utility financial oversight.}

What state law requires

Under Tennessee Code Annotated § 7-34-115, municipal utility systems are required by law to operate as self-sufficient entities on sound business principles. Rates must reflect the actual cost of providing service. Water that is treated, pumped, and lost before it reaches a customer is money spent with nothing to show for it — a cost that falls on ratepayers.

The financial stakes go further. Under state law, the Water and Wastewater Financing Board — which operates under the state comptroller’s office — has authority to investigate utility systems with excessive water losses and require them to reduce those losses to acceptable levels. Once an audit showing excessive losses is filed, the comptroller has 60 days to refer it to the board. If the utility fails to act, the board can petition chancery court to force action.

That is why the comptroller’s office requires the raw, unadjusted loss figure — not an internal calculation that accounts for known leaks and municipal use. The state’s interest is financial sustainability, not a technicality. A utility bleeding water is a utility bleeding revenue, and that instability falls on ratepayers and the broader community that depends on it.

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A problem years in the making

The water loss problem at MUD is not new. But when exactly it started seems up for debate. On Tuesday, board member Glen Thomas stated it began in 2020 around the time the Zenner meter when it. However, MUD Office Manager Katie Goodwin can be heard on the transcript stating that is began at the end of 2019. Based on our past reporting, the Zenner meters were approved in June of 2020 and meter replacement began in October of the same year.

MUD has made recent progress finding and fixing leaks using acoustic detection technology from the new Kamstrup meters. Staff reported that since the last board meeting, crews located and repaired leaks accounting for 3.3 million gallons — bringing the internally calculated loss rate from 42.6 percent down to 29.8 percent. Several leaks remain unresolved, including one in Booneville that’s been hard to locate and one on Merrell Lane that has been active since October, according to MUD Manager Ronnie Cunningham. They also discuss aging infrastructure in Chapman Acres as a problematic area.

The meter system itself also continues to have problems. Staff acknowledged that a number of meters have bent antenna probes that prevent them from reporting readings remotely, requiring crews to drive routes manually to collect data. A representative from Kamstrup is scheduled to meet with MUD staff to review the system’s setup and performance.

Why it matters beyond the water bill

Water availability in Moore County is not just a utility issue. The county’s largest employer — Jack Daniel Distillery — depends heavily on a reliable water supply to supply the globe with Tennessee Whiskey. A utility operating at 42.6 percent water loss raises legitimate questions about whether the system can support the county’s existing demand, and future growth.

Those questions are already being asked at the planning level. The Metro Moore County Planning & Zoning Commission has been cautious about approving new development in part because of concerns about water system capacity. Selling new taps — connecting new homes and businesses to the system — adds demand to a system that is already struggling to account for nearly half of what it produces.

MUD’s also looking in other places for the discrepancy. An outside CPA is scheduled to visit in early June to review the utility’s billing software export process and ensure water sales figures are being captured accurately. Staff noted that for a period, the system had been dropping decimal values in readings — a technical error that could affect the accuracy of loss calculations.

What happens next

MUD’s water loss audit, once filed, will reflect the state’s 42.6 percent water loss figure. Under state law, that could trigger the comptroller’s mandatory 60-day referral to the Water and Wastewater Financing Board. Whether the board takes further action depends on whether MUD can demonstrate it is making meaningful progress toward reducing losses to acceptable levels.

In general, if the State Comptroller’s office feels utilities are making progress towards resolution, they are generally patient — until they’re not.

The MUD Board meets every second Tuesday of the month at 6 p.m. at the Metro Utility Department offices at 705 Fayetteville Highway in Lynchburg. There is a public comment period at the beginning of each meeting. To be added to the agenda, contact MUD at 931-759-4297 or metrowatermc@gmail.com. •

ABOUT THE LYNCHBURG TIMES Public meeting coverage is crucial to the citizens of any small town. It matters who’s in the room, what decisions are being made on your behalf, and how those decisions trickle down into everyday life. Our editor, Tabitha Evans Moore, has covered Metro Moore County public meetings for more than 20 years — bringing the institutional knowledge to report them with the nuance that makes local government accessible to every citizen. If you’d like to support our work, you can do so at this link.