Jellico Utility discusses Rarity

-A A +A
By Natasha LaFayette


The office of surface mining, which recently fined Rarity Mountain for a coal mining violation, has determined the fine will go to the Jellico water system for needed improvements.

“The state has said they want us to spend it on a sewer project,” said Jellico Utility General Manager Mike Bethurem.

The board discussed using the $200,000 fine for sewer repair in the downtown area. Rarity will most likely do the work instead of paying the money, said Bethurem.

Engineers are identifying four possible projects in the older section of town for water main replacements. Once those areas are targeted, the board will choose the highest priority area.

A contract will be prepared once the designated area for work is chosen.

“That will allow us to move ahead on some of the main replacement a lot quicker then we normally would be able to do,” said Bethurem.

During the manager’s comments portion of the Jellico Electric and Water System board meeting, Bethurem addressed news with the Rarity Mountain development.

Among the items discussed was the payment schedule between Rarity and Jellico Utility.

Payments on the outstanding balance of $108,000 have been paid with $10,000 a month.

While a payment plan is being implemented, a change in the contract between Rarity and Jellico Utility could make future payments much less in the future.

“What the addendum to the agreement is going to say, it outlines that we are agreeable to let Rarity contract to put the infrastructure in, have a contract to do that under our supervision and in accordance with our specifications,” said Bethurem. “By letting them do that they do not have to put up a performance bond except based upon the construction project they are actually doing and that would be bonded with the contractor that’s bonding it.”

The contract would specify the bond would be payable solely to Jellico Electric and Water System.

Though the board is not enforcing the right to do the work on the infrastructure, only establishing bonds in case the work is discontinued or faulty, it is asking for a letter of credit for the remainder of the engineering services. The price for engineering services could fluctuate based on work done in the future.

Bethurem told the board the contract and letter of credit is required before work can continue.

In other business, Bethurem also updated the board about Rarity’s intentions to blacktop the roads by March.

“That is the big key in getting through the county finance committee and getting to finance lots,” said Bethurem. “Their plans still are to try to get the golf course open this summer, so they can have it to try to draw people in.”

The golf course is going to be a main attraction to potential buyers coming off the interstate, according to Bethurem.

Board member Eddie Barton asked how the water system is going to provide for the entire development. Bethurem responded by saying a contract with LaFollette Utilities will allow Jellico to serve all of phase one and the first 200 lots around the golf course.

Bethurem said he recently approached the general manager of LaFollette Utilities, Kenny Baird, about the rate Jellico is paying for water.

“It needs to be more competitive,” said Bethurem about the current charge for water. “I have been threatening to go towards the other end…to buy it from the Caryville side.”

Diesel generators are currently being used to warer the golf course, which is the main drive in getting the electrical conduit into phase two, said Bethurem.

“As soon as they get their mind made up it won’t be a problem for us to move on that, will it,” said Barton.

Other than design work, the rest of the project is in the hands of the Rarity developers, Bethurem confirmed.

“It’s their labor and everything else,” said Bethurem. “If there is a hold up it will be on their side, not ours.”

The addendum to the original contract will be reviewed by the entire board for final approval.