Our Mission....To communicate critical village news in a fair, clear, truthful and concise manner of key issues that impact YOU.

Publisher: Mark Werner

Hello neighbors! Sorry, this Newsletter is a bit late. I wanted to ensure I had the latest and greatest regarding the Sewer and Water projects. Easter made access to others difficult. But regardless here it is May's Newsletter.
 

There have been many questions as to how we got where we are relative to the Sewer and Water Plan (TAP). So, this might be a good time to review. The method often used is called Root cause analysis (RCA). In its detailed process it identifies the underlying reasons for problems in order to address them and prevent them from happening again. With any plan it’s a good practice to analyze plan process and results to determine what went right or wrong for the purpose improving results. This includes looking at how decisions were made and implemented. Regarding THE TAP (water/sewer proposed projects dubbed Tellico Action Plan) it’s very apparent the plan was quite flawed from the start. How did that happen?
 

How did WE get here?
 

1. Sometime in 2016 the POA contracted with Jacob’s Engineering a FORTUINE 500 GLOBAL company, with over 55,000 employees, revenue of over $14 billion and approximately 400 locations. The purpose was to consult with us on our Sewer and Water issues.
 

2. Why would a huge company like Jacob’s Engineering be interested in the problems of “little old” Tellico Village? They normally work on mega projects. As it turns out, the head of our PSAC advisory Committee at the time was very familiar with Jacob’s Engineering having worked with them throughout his water and sewer career. So, Jacob’s was chosen. But that’s not the Root Cause of the error. The error was with the POA board in its instructions and guidance or lack thereof to the PSAC.
 

3. Why didn’t the POA board direct PSAC to look for local contractors? Doesn’t that make better sense? We could have used the TASS engineering group Barge or the LUB engineering group C2RL. Both have the resources to provide excellent results. But that didn’t happen. The board simply “rubber stamped” the PSAC plan. That needs fixed.
 

4. Being such a small job for such a huge company like Jacob’s Engineering, we now know they did not provide their best people to assess our problems. Remember they are set up to consult on large, sophisticated projects. So, it’s likely they assigned their “C” team, thinking it would be a nice project for inexperienced engineers to cut their teeth on. Corporate likely provided them with some support. But this led to major mistakes, as we will see below. Mistakes we were expected to pay for.

The Mistakes

1. For example, they failed to identify and include in their plan a 1M GALLON WATER STORAGE TANK, located at 1588 Watt Cemetery Road, including a booster station that serves Tellico Village. A BIGGIE!
 

2. Another miss is a 3.5M gal TASS water tank off Bat Creek Road that was available to Tellico Village for the asking.
 

3. They also failed to include a larger diameter waterline installed for the Wellness Center in their calculations.
 

4. Even after they were told about their errors, they did not amend the plan to include these items.

5. Did the POA demand they amend their plan? IF not, why not? After all they are supposed to be looking out for us…. the owners.
 

6. Perhaps the biggest “WHOOPS” was engineering a massive $10M, 750,000gal waste water back up tank on RT444 on the shores of Lake Tellico. Any engineering consultant with experience would have known this would never have been passed by Tennessee regulators. NOR would it simply be accepted by our residents and it wasn’t.
 

7. They recommended a $9M elevated water tank to improve water pressure without input from our water suppliers to see if they could increase water flow. If they could then all we needed to do was upgrade our current pumps. Guess what, both LUB and TASS can. In any event, both of these projects will not needed!
 

8. These “misses” led to key information being left out of their analysis and as a result impacted their recommendations and inflated project costs to the tune of $36M.
 

9. Thus far, WE HAVE SPENT OVER $2M WITH JACOBS WITH LITTLE TO SHOW FOR IT!
 

Inaction and reaction

1. In Oct. 2021 Jacob’s Engineering reported that our Sewer capacity problems are from rain water getting into our residential sewer tanks, when it rains hard. We have had some major hard rains this winter and have had no significant spills due to rain.
 

2. This action of rain water entering our tanks is called I&I (inflow and infiltration). With the root cause identified in OCT. 2021, the contract with Jacob’s Engineering should have ended. Instead, the POA continued to pay them ~$1.1M over the next 3 years!
 

3. AND our POA did virtually nothing to address this rain water problem from 2022 through 2024!
 

4. Then in July of 2024 the POA voted without resident input, going as far as getting a second legal opinion saying they didn’t need resident input, and charged the residents a FEE of $80 a month for 5 years to pay for this inaccurate, error filled Tellico Action Plan from Jacob’s Engineering.
 

5. In November of 2024 the residents showed their displeasure with the Legacy POA’s decisions and performance and elected Joel Reed and Mike Lackey by huge margins, hoping they would bring common sense solutions to our problems. They put together a resident team of experts (at no cost to us) and they developed an alternative plan to TAP.

THE Results

So, with the election of Joel and Mike and their efforts, here is what they have saved us in a little over 3 months of work:

·     $8m in eliminating the 750,000gal sewage tank on RT444

·     $3.6M revising the pump station at Kahite

·     $6.7M in elimination of an elevated water tank

·     $10K to $13K per rain event saved by identifying and solving I&I and not sending rain water to be treated.

That totals $18.3M cut out of a $36M TAP plan or one half…. IN 3 MONTHS!! As Mike said campaigning for a board seat, “we will need to spend about $8 to $10m, but not $36M.”

AND NOW THE MONEY - Reserve Study and Financial overview

1. Currently we have about $34M in the General Reserve and it grows by about $1.3M a month.
 

2. We have a Reserve Study that we know is wrong…. Why? For starters it includes about $312M to replace all our roads!
 

3. BUT…In our annual maintenance budget, we have set aside $3 to $4M to mill our roads, fill and repair them. We don’t need the $312m for roads in the reserve study. 
 

4. Additionally, the study includes $750m in sewer and water reserves to replace the entire sewer and water system. We will not be replacing our entire sewer and water system. Who does that!
 

5. Both of these items are driving our reserve target to $30M. Resident experts have looked at the Reserve Study they have estimated that about $8M is a more realistic target.
 

6. Finally, regarding Sewer and Water and Roads… the Tennessee House recently passed Bill, SB 863. It says HOA (POA) sewer and water and roads are long term assets and therefore should not be included in a Reserve Study. Well, that changes the game significantly.

COMMON SENSE ACTIONS

What’s all this mean…near term…

·     WE SHOULDN’T BE PAYING A WATER AND SEWER FEE OF $80 A MONTH. 

·     WE shouldn’t be paying a premium for our water that adds PROFIT to our General Reserve.

·     And we need to let Jacob’s Engineering go! Do not hire them for anymore input. Their results are bad, driven by bad input and they cost too much!

STOP ALL THIS NOW!

Lots to take in there. These activities, plans, budgets and fees should have never happened. Had proper counter measures and actions been in place and the POA followed our Covenants and Restrictions all this might have resulted in much different results….

For example, it’s my experience that a sole sourced, single supplier solution is just asking for trouble. It usually results any number of mistakes, high cost, slow response, input errors, over pricing, etc. I know of no company that doesn’t require at least 3 competitive solutions and bids. Even our federal government requires 3 bids on most contracts. The POA relied on a single source solution…WHY? Because they instructed the PSAC to come up with a solution. They never questioned it, never asked for a local solution for comparison. They asked for one solution AND THEY NEVER QUESTIONED IT just “RUBBER STAMPED” it. 

Here’s an example of how their decisions can affect out comes. In late 2024 the Legacy POA board was looking for PSAC members to serve in 2025. The PSAC committee is comprised of folks recommended by POA managers and approved by the POA board. Gary Zika is TV resident and a foremost expert in sewer and water systems as a civil engineer (and IS a key member of Joel and Mike’s team). Gary requested (volunteered) to be added to the PSAC team for 2025, because he knew the village could use his expertise …BUT he was denied! WHY? Because he had been openly critical of Jacob’s and pointed out their mistakes…SOME BOARD MEMBERS DIDN’T LIKE IT! So, he was denied a place on the PSAC committee.
 

Who keeps Michael Jordan on the bench in a very close game with only minutes left…apparently it is more important for the Legacy board to try and cover its tracks for all of these TAP mistakes rather than just admitting they screwed up!

How do we fix this. Start with the LOW HANGING FRUIT.
 

1. The “BEST ATHLETES” should be chosen for these advisory committees, PERIOD. This means removing POA managers from the vetting and selection process. The committees need to operate independently of the POA, to create a proper checks and balances.
 

2. All projects should require at least 3 BIDS To MAKE THINGS COMPETITIVE. Especially costly projects like a $36M Water and Sewer Plan.
 

3. Resident experts (not one), should be sought out for their input. JOEL AND MIKE’S team is made up of TV residents who HAD EXTENSIVE experience in the sewer/water. In the end their plan will not cost $36 mill and we won’t be paying for more overpriced and over engineered solutions.
 

4. The C&R’s have a process to take big issues like this one and the Tanasi rebuild to the residents. Afterall this is a POA and we all are owners. The legacy board (and CHET PILSBURY) went to great efforts to by-pass the residents. If the process to do this is too cumbersome than change the process…don’t eliminate the input. Resident input most likely would have RESULTED IN ALTERNATIVE SOLUTIONS AND more competitive quotes.
 

5. The Legacy board of Schneider, Inkrott, Grollemond, Orr and Braddock need to get out of the way and allow Reed and Lackey to implement their plans.