10/29/2024
Re: City's Water and Sewer assets being discussed recently, I thought you all might find this of interest:
Recent radio ads talk about ‘giving the water and sewer assets of the city away’. To put this idea into the form of a question, “Can the City Council just transfer it’s water and sewer assets without the voters’ approval?”
The answer is “No!” per the legal opinion set forth below:
The Municipal Technical Advisory Service (MTAS), which advises Tennessee cities on legal matters, gave an opinion on July 10, 2023, that dealt with the provision in the City Charter as to whether the City has to have a referendum before it can transfer, sell or assign any of its water rights. The opinion is that the provision in the charter is valid and a referendum must occur before the City can sell or transfer any of its water rights to the Water Authority.
Per the MTAS letter … you have asked, in light of the powers granted to the Cumberland Plateau Water Authority by Private Act Chapter 58 of 2022 , must the City of Crossville receive approval via referendum, as required in its charter, prior to transferring or selling any of its water rights to the Cumberland Plateau Water Authority? Article III, section 1, subsection 9 of the Municipal Charter of the City of Crossville provides (emphasis added):
Be it further enacted, that said municipal corporation, in addition to the powers, rights and authority vested in it by the preceding articles and sections shall have the power by ordinance where expressly so provided, otherwise by resolution . .
(9) Acquisition and disposition of property. To acquire or receive and hold, maintain, improve, sell, lease, mortgage, pledge, or otherwise dispose of property, real or personal, and any estate or interest therein, within or without the city or state.
However, any proposed sale, exchange, or lease for a term of more than two (2) years, of city owned real property, water rights or franchise rights must receive prior approval of a majority of the qualified voters of the city voting in an election on the question of whether to approve such sale, exchange or lease, or not to approve if a petition signed by not less than ten percent (10%) of the qualified voters of the City of Crossville requesting such an election is filed with the City Council within thirty (30) days after publication of the relevant details of the proposed sale, exchange or lease. The sale of city owned real property for cemetery purposes and the sale of timber from city owned land shall not be subject to this requirement, but the sale of such timber must be advertised and the sale made on bids.
However, any proposed sale, exchange, or lease for a term of more than two (2) years, of the property of the City of Crossville known as "Meadow Park Lake", together with all adjacent land owned by said city, must receive prior approval of a majority of the qualified voters of the city voting in an election on the question of whether to approve such sale, exchange or lease, or not to approve.
Article III, section 1, subsection 9 of the Municipal Charter of the City of Crossville grants the municipal corporation with the power to “sell, lease, . . . or otherwise dispose of” municipal property, but the subsequent language places the condition of a referendum prior to the municipal corporation selling, leasing, or disposing of municipal water rights.
In 2022, the Tennessee General Assembly passed Private Act Chapter 58 of 2022, which created the Cumberland Plateau Water Authority. Section 6(c) of this private act provides the following power granted to the Cumberland Plateau Water Authority:
The Authority shall have the powers necessary to accomplish the purpose of this act (excluding the power to levy and collect taxes) including, but not limited to, the following: . . .
(c) To enter into agreements with the County, the City, the Districts, or any other municipality for the orderly transfer of all or any part of its water system or wastewater system provided that the governing body of the entity has irrevocably voted:
(1) To consolidate the system into the Authority or to transfer the system to the Authority; and
(2) To the extent permitted by law and contract, to assume, reimburse, or otherwise agree to pay outstanding obligations or liabilities of the County, the City, the Districts, or other municipalities incurred to acquire, extend, or equip the system.
While this private act requires that the Cumberland Plateau Water Authority obtain an irrevocable vote of the municipal governing body approving the transfer or consolidation prior to the Authority’s acceptance of a transfer or consolidation, Private Act Chapter 58 of 2022 does not modify the powers (or the conditions on those powers) granted to the City of Crossville in its charter.
Further, Private Act Chapter 58 of 2022 does not otherwise preempt or repeal the referendum requirement imposed by article III, section 1, subsection 9 of the Municipal Charter of the City of Crossville on the City of Crossville.
Therefore, the City of Crossville must “receive prior approval of a majority of the qualified voters of the city voting in an election” in order to sale, exchange, or lease water rights of the city”
Stephanie Allen O’Hara,
MTAS Legal Consultant
7/10/2023
