Tellico Village Property Owners
Re: Water and Sewer Infrastructure Asset Fee (WSIAF)
At the July 17, 2024, Tellico Village Property Owner’s
Association (TVPOA) Board of Directors (BOD) meeting, the BOD
approved the implementation of a $80 per month WSIAF for utility
customers effective October 1, 2024. This fee will apply to any
property receiving water and sewer utility service from TVPOA
and was approved for a period of 60 months. However, the WSIAF
amount will be reviewed at least annually and may be adjusted
based on updated information for infrastructure project costs or
the realization of other funding opportunities.
The purpose of the WSIAF is to finance five TVPOA-identified
water and sewer projects that are needed to address significant
risks associated with TVPOA’s 35-year-old utility
infrastructure. These projects are currently estimated to total
approximately $36 million, but actual costs are subject to final
design and bid processes. The fee is to be used solely for water
and sewer infrastructure expenditures and will be accounted for
separately. Information about the five projects is available on
the TVPOA website and has been explained via YouTube videos on
the Tellico Village Network. Each of the projects remains
subject to final review and approval by both POA management and
the TVPOA BOD prior to implementation. These water and sewer
projects are consistent with approaches taken by other utility
districts and municipalities to address similar infrastructure
issues.
The TVPOA BOD approved the WSIAF in accordance with Article
VI of the Declaration of Covenants and Restrictions that each
property owner is bound to when purchasing property in Tellico
Village. Our legal counsel reviewed and confirmed the Board’s
interpretation of Article VI of the Declaration to authorize the
implementation of the WSIAF. Legal counsel has rendered a
written legal opinion, and that document is available for review
on the TVPOA website.
The volunteer TVPOA BOD members approved the WSIAF after an
extensive multi-year study and review of the current risks
associated with existing TVPOA water and sewer infrastructure.
Each of the five water and sewer projects has been unanimously
approved by the Public Services Advisory Committee (PSAC)
members. The WSIAF had the unanimous support of the Finance
Advisory Committee (FAC) as the optimal means to improve TVPOA’s
utility infrastructure based on current information and
projections to finance these projects. Contractors will not bid
on these multi-year projects unless the POA can demonstrate
existing financial capacity to pay for project expenditures.
The PSAC and FAC members are committed fellow property owners
with extensive past professional careers and relevant
experience. The advisory committee members spent countless hours
understanding optional approaches and challenging assumptions
before making recommendations.
In order to have sufficient funds available to the POA to
complete and finance the five water and sewer projects,
collection of the WSIAF must start now. As a reminder, the POA
has extremely limited options to obtain traditional bank
financing for these projects, given restrictions in its
governing documents. The POA cannot practically pledge either
assets or a revenue stream as collateral for a loan. In
addition, current loan rates are not favorable for significant
POA borrowing.
It is recognized that some Tellico property owners disagree
with TVPOA’s current approach. BOD members and POA management
have heard and carefully considered the concerns raised by
Tellico property owners.
Recently, the TVPOA BOD members and POA management have been
made aware that one or more Tellico property owners have
initiated a fundraising effort to finance legal counsel and
potentially initiate litigation against the TVPOA concerning the
WSIAF. The TVPOA BOD certainly respects the rights of all
property owners to organize and express concerns regarding any
utility matters. However, the BOD urges all property owners to
carefully consider the merits and viability of such litigation,
along with the financial risk to the POA and all residents that
may result from delaying these projects, before engaging in such
fundraising effort or potential litigation.
In addition, some property owners have expressed the
potential intent of not paying the $80 monthly WSIAF by
short-paying their monthly water and sewer bills. Payment of the
WSIAF is not optional, and any property owner not paying the fee
will be subject to the discontinuation of water service
under the POA policy, along with associated fees for late
payment and reconnection of utility service.
The TVPOA BOD voted to implement the WSAIF and intends to
initiate the water and sewer infrastructure projects as the
optimal approach to maintain long-term property values for all
Tellico property owners. As demonstrated in an August BOD
presentation of a study conducted by the Long-Range Planning
Advisory Committee, Tellico Village provides significant value
to owners and residents compared to other property owners
associations. Your elected BOD and POA management intend to
maintain and operate TVPOA in a financially sound manner while
addressing known infrastructure risks.
Thank you for supporting Tellico Village and for carefully
considering the information in this letter.
Sincerely,
Board of Directors, Tellico Village Property Owners
Association