Economic board says losing water line not harmful

Brad Hicks • Feb 14, 2014 at 9:36 PM

ERWIN — The Joint Economic Development Board of Unicoi County has answered a complaint filed last month by the Unicoi Water Utility District Board and is seeking its dismissal as a defendant in the case.

In a complaint filed in Chancery Court on Jan. 14, the water board said it was tasked with replacing a 4-inch water line with a 10-inch water line from Unicoi Elementary School to a tract of property located off Exit 32 owned by Exit 32 LLC, a company promoting a development at the site that was to include a hotel, convenience center, restaurant and other businesses.

The complaint said the project’s final cost was $82,219.13, and Exit 32 LLC had agreed to reimburse the utility district one-third of the cost if the development was not “generating significant water usage in three years.”

In September 2008, the town of Unicoi also agreed to contribute one-third of the project’s cost, and the economic development board later agreed to do the same, the complaint said. These two local entities, along with Exit 32 LLC, are named as defendants in the complaint.

The complaint said Exit 32 LLC has not paid its $27,739 contribution toward the project as promised. The water board is not seeking damages or money judgments from the town of Unicoi or the economic board, but is seeking a declaratory judgement from the court that says that even though these two entities have interest in the project, they would have no right or legal ability to prevent the utility district from taking the water line out of service until it is more “fiscally feasible.”

The water board said in its complaint that the water line continues to require maintenance and upkeep, even though the proposed development has not come to fruition.

The economic board met Feb. 3 to discuss the pending litigation and voted to hire attorney Doug Shults and approved Shults’ recommendation to seek dismissal from the complaint.

In the answer and accompanying motion to dismiss filed Wednesday afternoon in Chancery Court, Shults said:

- The complaint filed by the water board does not allege the economic board has any legal or regulatory authority over the utility district.

- The economic board acquired no propriety or security interest in the water lines by virtue of its monetary contribution of $27,739 for the water line upgrade project.

- The complaint does not allege that any controversy or dispute exists between the utility district and the economic board.

“All parties agree that the installation of these water lines was to promote economic development for the county and town of Unicoi,” the answer document said. “The mere fact that this defendant assisted other entities in economic development does not create grounds for a lawsuit from a party that received the benefit of the contribution.”

The answer also said the proposal to take the 10-inch water line out of service, while not in the best interest of economic development, would not harm the economic board.

“This defendant would note that said proposal may harm the co-defendant, the town of Unicoi, which is the owner of real property, served by the new water lines in the Unicoi Village Development,” the answer said.

Economic Development Board Executive Director Tish Oldham said the board has no additional comment on the matter at this time, as it is still in the court process. Neither the town of Unicoi nor Exit 32 LLC had responded to the complaint as of Friday afternoon. No court date has been scheduled in the matter.

In a news release issued Friday, Chairman John Mosley said the utility district “had no other choice” but to take legal action, as it must find a solution to the ongoing expenses associated with the water line project since the proposed development project has not been successful.

“The town of Unicoi and the Unicoi County Development District were our partners in this project, and are necessary parties to this legal matter because we believe they deserve a right to have a say in the outcome,” Mosley said in the release.

“Even though we regret that we had to take legal action, we felt we had to try to recoup the expenses that have not been repaid from the project by Exit 32, LLC and to stop the ongoing monthly expense.

“We intend to and want to partner in the future with the town of Unicoi and the Unicoi County Development District for the betterment of the county and of all our citizens. We hope this present difficult situation can be used as a way to bring all of these involved groups together to resolve our problem and make our community stronger and more prosperous.”

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