Mayor Taft Hendrixson and the Smithville city council have hired a public relations firm to try and help stop the DeKalb Utility District’s plan to build its own water treatment plant.
The DUD plan calls for a treatment plant of their own in the Yolanda Hills Drive area off Holmes Creek Road.
It is the city officials’ opinion that the move would be disastrous for both city and county water customers, and the city council voted Monday night to hire the Calvert Street Group of Nashville,  to fill the public in on all the details.
According to city officials, water rates for both Smithville and DUD customers would suffer huge rate increases if the proposed water treatment plant is built.
The DUD now buys its water from the City of Smithville.
 The city of Smithville may suffer a loss of more than $500,000 yearly revenue if the plan is enacted.
J.R. Wauford, who has been the city's utility engineer since 1962, addressed the council at Monday night's meeting and told the mayor and aldermen that the city's newly renovated water treatment plant has the capacity to produce more than enough water to supply the City of Smithville and the DeKalb Utility District for years to come, making the DUD plan redundant and potentially financially harmful to customers of both districts.
"You (the city) have a four-million-gallon-a-day water treatment plant,” Wauford told the council. “You're producing about 1.8 million gallons per day. About 700,000 to 800,000 gallons is going to the DeKalb Utility District. Your contract with DUD now gives them the right to buy two million gallons a day which is well within your capability of doing so. They're (DUD) proposing to build a three-million-gallon a day treatment plant at Holmes Creek,’ Wauford said.
“About 10 years ago, we were asked to assist in negotiating with the DeKalb Utility District a water contract, which we did,” Wauford continued. “Last October, Mr. Hendrixson advised me that the DUD was planning on building a water treatment plant and asked me to look into the matter and see what their proposal was and give him an assessment of what it would mean to Smithville.
“Their proposal was similar to the one they made 10 years ago,” Wauford continued. “The reason the one 10 years ago didn't fly was when they took bids on it, they ran some $2-3 million over their estimate and they weren't going to fund it. So they negotiated a contract with Smithville.
“This proposal (by the DUD) proposes to increase the water rates to their customers by 50 percent. If they disconnect from your system, my pre-liminary assessment is that your customers (in Smithville) will have to absorb a 10-20 percent increase.
“You are selling water to DUD at what is a reasonable rate, less than other utilities around you, namely Sparta, Lebanon, Cookeville, and Livingston. So it seems to me that it's a matter of whether or not you want to advise the people of DeKalb County of what is going on and how much their water rates are likely to increase,” Wauford said.
“Smithville has just modernized their water plant and put in standby generators at both the water plant and the raw water intake,” he said. “You have modernized the equipment in the plant. It needed to be done whether you continue to have DeKalb Utility District as a customer or not.
“What the Rural Development is proposing to do is to give them (DUD) a million dollars, loan them $5 million dollars, and then they propose to borrow through the Tennessee Utility District Association to fund the other $5 million. Our opinion is in estimating this project at $10.5 million, that they (DUD) have underestimated again which would be in keeping with the previous estimates of the same engineers 10 years ago. Our ex-perience in raw water intakes is quite extensive.
“We have done 16 raw water intakes, three on the Caney Fork River so we believe our estimates are pretty good, but they are arguable. But what is not arguable is the fact that they (DUD) are going to raise their water rates 50 percent based on a three-percent growth rate and that's going to adversely affect your (Smithville) revenue stream,” said Wauford.
“Mayor Hendrixson and I talked about it and he asked me to locate a professional to perhaps lead a program to inform the public,” Wauford told the assembly.
Mayor Taft Hendrixson expressed concerns that if the DUD carries out its plan it could also mean layoff of city water department employees and a marked loss of revenue.
“If they do this, we will have to lay off one or two at the water plant because we definitely will not make half the water we're making and we won't need all those folks,” the mayor said. “We've spent $3 million (renovating the plant), and that means depreciation is going up starting this year, so expenses will be more and there are fixed costs, depreciation, and insurance that you can't do anything about whether you sell two gallons or two million gallons a day," said Hendrixson.
The city and the DUD signed a 10-year contract in 2004 which placed the price of water to the DUD at $1.60 per thousand gallons with a five-cent escalator increase per thousand gallons each year of the 10-year contract.
The DUD’s rate is currently at $2 per thousand gallons.
 Smithville’s sales to DUD for the year ending June 30, 2010 were $539,455.
DUD officials say that another plant would increase water capacity in the area, and that could be a selling point for industrial expansion and recruitment.
The DUD has already reached a fee arrangement with the U.S. Army Corps of Engineers to draw up to two million gallons of water a day from Center Hill Lake.
DUD officials hope to have the new  plant completed and operating when the current contract with the city expires in  2014.
City officials are concerned enough about the proposal to pay the Calvert Street Group a $5,000 per month fee to inform the public of their position.
“You know I don’t like to spend money unnecessarily, but I feel this is necessary.” Hendrixson said in discussing the hiring of the firm.
Darden Copeland of Calvert Street Group told the council at Monday night’s meeting that his agency will launch a  campaign to raise public awareness and educate local citizens on the matter.
“We work in tandem with citizen groups in communities trying to educate them on whatever the policy issue may be,” Copeland explained.
“We come in and meet with community members, try and understand the issues, educate the community on what is at stake here, and then organize a coalition of folks to take action. If everybody is happy with DUD's proposal then we won't get any traction.
“But I think once you educate the public, I think they will see how this really will affect not only Smithville but DeKalb County and the other counties and I think those folks will then try to take action to affect the outcome. We gather information and enable people to make their voices heard," Copeland said.