Pulaski Citizen

Utility Districts Vote for Consolidation

Connie Roe / Pulaski Citizen

The boards of directors of the South Giles Utility District and Tarpley Shop Utility District voted to consolidate at a joint meeting last week.

Present for the Feb. 7 meeting were South Giles Utility District board members Forrest Bates, Chris Edgmon and Carol Cary; Tarpley Shop Utility District board members Chairman Daryl Williamson, Vice Chairman Sean Collins and Clint King; Giles County Executive Graham Stowe; County Commissioner Joyce Woodard-Morgan; and members of the public.

According to Williamson, in November 2022, Tarpley Shop Utility District received an order from the Tennessee Comptroller’s office regarding the district’s finances, which have shown a negative net income for two years.

Williamson explained what caused Tarpley to go into the red.

“It started during the COVID era, that the board elected to change out meters, and spent a good portion of revenues that they had built up changing those meters out,” Williamson said. “Increases in utility bills, an increase in labor costs and wholesale water cost went up, and between those few items, they did not adjust the rates, and when they didn’t adjust the rates, it caused them to go negative. By not adjusting the rate, even a little bit along the way, it just cascaded the events, and it’s in a tail spin.”

A negative net income for fiscal year 2022 is what drew the comptroller’s attention to Tarpley, which started the audit process. An audit has not been done yet for 2022-23 but, according to Williamson, it is expected to report net negative income.

In its order to Tarpley Shop, the comptroller set forth several requirements, one being a rate study. However, because rates can’t be changed until the rate study is complete, another negative net income report will also be expected for the third year in a row. The state comptroller considers Tarpley Shop to be in distress, and, according to Williamson, they will have to consolidate with another water department. 

Williamson said that TSUD’s board is like-minded, in that consolidation talks need to keep moving through the process. 

The first step in the consolidation process will be helping Tarpley with the billing system, getting all the billing data converted over into South Giles’ system. This would give South Giles an opportunity to see the financial condition of TSUD and what kind of revenues to expect. 

The next major step would be a formal merger resolution. If the two boards were to adopt that resolution, it would go to the Giles County Commission to consider a public resolution.

 “This is not a decision that happens overnight,” Williamson said. “There are many steps that happen behind the scenes, and the whole process is still likely 6-8 months out from getting it done.”

Both boards agreed to come together monthly throughout the consolidation process, with the meetings being scheduled for the fourth Tuesday each month at 5 p.m. The first meeting is scheduled for March 26.