No, after reviewing the cost analysis and documents provided by the POA, Jacobs, Cooper (CCI), Tellico Area System Services (TASS) and Loudon Utilities Board (LUB) as well as the Reserve Management Plan it is not obvious to us that the fee is needed at this time. 

First of all, we commend the board for their forward looking efforts in preparing the Village for financial success. We do need to have a reserve fund adequate to cover some projected costs as outlined by the RS. However, the RS makes the assumption that we will have to replace our entire Water and Sewer system within the next 30 years. The RS has allocated $760,000,000 for these components. That’s over 3/4 of a Billion Dollars! That’s an annual reserve payment, when annualized, of over $25,000,000 per annum!

Well, the RS assumes that we will need to replace all of the POA buildings within 36 years at a cost of $83,000,000! While we understand that all of our facilities will need upgrades to remain current with the times, we do not see the need for $83,000,000 within the next 35 years.

The RS assumes a 4% annual inflation rate for the next 30 years! The average annual inflation rate for this century is less than 2.6%! In addition, the RS only assumes a 0.75% return on our investments! That means we would be losing 3.75% against inflation every year on our collected funds! 

First of all freeze spending at current levels and bring in  third party consultants that could come in and audit our processes to define opportunities for savings and cost reduction. We brought in Jacobs for the water system. Why not bring in a third party to take all of the emotion out of the budget process and implement their recommendations. 

We see that the Village is nearing complete build out much sooner than CCI had previously predicted. As such, we need to transition from the rapid expansion mode that we are currently in to a maintain and support mode. This will require a realignment and reduction of many resources to meet the changing needs.

All information included herein was provided in the reserve study plan prepared by Facilities Advisors International, LLC dated January 1, 2023 and paid for by TVPOA.