The Petersburg water system will soon be transferred to A Fayetteville Public Utilities with water customers being billed by FPU by May l, 2026.

The Petersburg Board of Mayor and Aldermen unanimously approved authorizing Mayor Shantel Gatlin to sign die agreement to transfer its water system to FPU during last week’s BOMA meeting.

Alderman Charles Gatlin made the motion to approve die mayor to sign the agreement. Vice Mayor Kevin Coffield seconded the motion with Gatlin, Coffield, Alderman Logan Jolly and Aldermen Randy McDonald voting yes, “I am pleased to announce that the Board of Mayor and Aldermen voted unanimously to authorize me to sign the agreement that transfers ownership of the water system to Fayetteville Public Utilities,” said Mayor Gatlin. “I would like to extend my gratitude to everyone who has supported us in this matter. This has been a bittersweet journey and one that the State mandated to be done. The administration of the Town of Petersburg stands ready and able to assist as we finalize the transfer of assets.” Petersburg purchases all its water from FPU.

The agreement must also be signed by FPU’s Board Chairman Amy Harwell and Fayetteville’s Mayor Donna Hartman. The Fayetteville BOMA approved FPU taking over Petersburg’s water system.

Britt Dye, FPU CEO/ general manager, confirmed FPU will be reading meters in Petersburg beginning May 1.

“We will make sure we do our due diligence for the Petersburg customers,” Dye said.

Local Government Corporation has been estimating water bills for Petersburg customers since new meters were installed. Mayor Gatlin said the water department didn’t have the equipment to read the new meters; therefore, they turned to Local Government Corporation until FPU took over the water system.

“Some Petersburg residents may have high bills the first month or so when FPU does the billing,” Mayor Gatlin said.

Dye said it could take two billing cycles to get everything worked out.

“We will do the best we can,” he said, adding, FPU may still have to ask for more information from Petersburg in coming weeks.

Mayor Gatlin said she received an email from Ross Colona, assistant director in the Tennessee comptroller’s division of local government water, wastewater and natural gas who serves as the designated manager to the Tennessee Board of Utility Regulations (TBOUR), stating he liked the language of the agreement prepared by John T. Bobo, attorney for FPU.

An order dated Aug. 7, 2024, from the Tennessee Board of Utility Regulations (TBOUR) “determined a merger is necessary to restore the financial stability of the water system and ensure the continued operation and wellbeing of the water system as its mandated public service.”

The order stated, “FPU, with the approval of the City, has agreed to enter into an agreement with Petersburg for their water system to commence billing of water customers by FPU on May 1, 2026. Petersburg has agreed, at that time, to convey all the assets, properties and liabilities of its water system to FPU in accordance with the terms and conditions of this agreement, and, in addition, all parties have agreed to fully cooperate and execute any documents necessary to accomplish this after May 1, 2026.”

Mayor Gatlin said Petersburg has gathered information in boxes to give to FPU.

Dye said FPU staff went to Petersburg Town Hall to gather information. “We will have to go through all that,” he said.

According to the agreement, “Petersburg will transfer and convey to FPU all capital assets of the enterprise fund; all information regarding assets, liabilities, location of water lines and meters, location of all facilities, all easements, deeds, leases or other real-estate interest.”

Neither Petersburg’s wastewater nor septic facilities are part of this agreement, as stated in the agreement.

FPU agrees to “assume all the liabilities of Petersburg relating to the operation of it water system, conditioned upon those lists of liabilities being provided to FPU prior to May 1, 2026. (There) shall be no further payments or considerations for this transaction. The agreement does not address any current employees of Petersburg. Any employment retention agreement will be negotiated between FPU and the individual employees post closing.”

The Petersburg water system has been under financial distress as far back as 2018. In October 2023, The Times reported another water rate increase wouldn’t solve the water department’s financial problems. Audits showed losses for almost five years, with the water system losing almost $100,000 in fiscal year ending June 30, 2023, due to water leaks. The losses placed the utility under the TBOUR’s supervision for financial distress. Water leaks continued to plague the water department until recent efforts have made to locate the leaks and install new water meters.

In June 2023, Petersburg was one of the recipients announced by the Tennessee Department of Environment and Conservation water infrastructure investments and collaborative grants from the state’s American Rescue Plan (ARP) fund. According to state officials at the time of the announcement, the Town of Petersburg would use APR funds to develop an Asset Management Plan and modernize, improve and strengthen water infrastructure. Projects include the replacement of isolation valves, the installation of 375 automated meter-reading transducers on existing meters and the rehabilitation of an existing concerted water reservoir with an elastomeric membrane system to address water loss. They will also modernize aged storm water infrastructure through system wide culvert replacement in the downtown area. Petersburg received $629,657.65 with no required matching funds.

Mayor Gatlin said last week, contractors are completing the value insertments and culvert replacement.

Mayor Gatlin said efforts had been made during the past 18 months to locate and fix the water leaks. “It’s too far down the hill to go back now,” she said, adding, “It’s bittersweet.”