No resolution yet in water service dispute

While it’s preparing to start a major project on its water system, the town of Nashville is still working to resolve a dispute with its water supplier.

Brown County Water Utility filed a federal lawsuit against Nashville in June, accusing the town from encroaching on its service territory and asking the Southern District Court for an injunction.

In May, the town signed an agreement with the owners of the Big Woods companies to supply their new development, Hard Truth Hills, with water. The town started proceedings to annex the land in April at the owners’ request.

The new brewery, distillery and restaurant at Old State Road 46 and Snyder Road is expected to consume about 1 million gallons per month once it’s fully running, according to court paperwork.

Brown County Water Utility, a private, member-owned utility, and Nashville Utilities, a town government-owned utility, both want that business. Both utilities have claimed, through their attorneys, that not getting it will cause “irreparable harm” to them.

Big Woods is the largest water customer of Nashville Utilities, considering the use at its four existing buildings in Nashville. If Big Woods were no longer a customer, water rates would have to rise to offset that loss, court paperwork says.

Nashville, in turn, is the largest water customer of Brown County Water Utility. Since there is no guarantee that the town and Big Woods will always consume Brown County water, Brown County Water Utility fears that it could one day lose that revenue, according to court paperwork. It also claims that it can serve the development directly at a cheaper monthly rate than Nashville Utilities can.

Since suing the town in June, Brown County Water Utility has taken big steps to try to serve Hard Truth Hills on its own. In mid-July, the company spent about $95,000 to build a new water line to the western edge of the Hard Truth Hills property along Weddle Lane and through neighbors’ yards. However, the development’s owners would have to spend about $100,000 to extend that line through the woods to the Hard Truth Hills buildings, which they don’t want to do, according to court paperwork.

In early July, after the lawsuit was filed, Nashville Utilities went ahead and hooked up the new Hard Truth Hills development where a town main already existed at the front edge of the property.

In the months since, their lawyers have been trading legal briefs back and forth regarding the federal case, as well as a case before the Indiana Utility Regulatory Commission in which the town attempted to draw up a service area for itself. The town filed that one in May in response to threatened litigation from Brown County Water, according to Town Attorney James T. Roberts.

An Oct. 23 brief in the state case said that “there have been discussions between the parties which would, if agreed upon, result in a 180-day stay of the federal proceeding and any further proceedings in this cause, including issuance of an order.”

On Dec. 14, the most recent filing in the state case, the town’s attorneys wrote that the parties were continuing “to negotiate a potential resolution of the dispute.”

That’s about all that Town Manager Scott Rudd and Brown County Water Utility Board President Ben Phillips could say about the legal situation last week. The parties are to report back to federal court by Jan. 25.

“We’ve been having positive conversations with Brown County Water, and hopefully we can resolve the situation soon,” Rudd said.

“We’ve been having positive conversations with the town council and their attorneys and we hope to resolve this suit in the near future,” Phillips said.

There is a chance that the town’s dispute with Brown County Water could affect the upcoming water system project, because the agencies funding the project want 40-year agreements with the town’s water suppliers.

The town council signed a new, 41-year agreement with East Monroe Water Corporation on Jan. 4. Rudd said he wasn’t sure how many more years were left on Brown County Water Utility’s contract.

“In order to close the loan with Rural Development, they would prefer that we have a 40-year agreement with all of our suppliers. In certain circumstances, they may be able to work with us on that,” he said.

In the meantime, the unexpected legal fees from the state and federal cases are having an effect on the town’s water utility budget, Rudd said.

At the end of 2017, the council approved a claim for $18,722.04 to Bose McKinney & Evans, which has been handling the state and federal cases. The 2018 water department budget includes 55,000 for legal expenses; in 2016, only $3,000 in the water budget was set aside for attorney fees.

Despite the legal matters between them, Brown County Water Utility continues to supply 100 percent of the water the town sells to Nashville Utilities customers. The East Monroe source is used in case of emergencies, said Nashville Utility Coordinator Sean Cassiday.

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Sara Clifford has been raising a family in Brown County since 2005 and leading the Brown County Democrat since late 2009. In addition to editor, she is the beat reporter for town government and writes columns, features and general news stories.