TVA gives houseboats a 30-year sunset

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TVA gives houseboats a 30-year sunset

fr TVA Opposition from local, state and federal politicians, a petition with 3,500 signatures and more than three hours’ worth of poignant testimony from the public wasn’t enough to sway the Tennessee Valley Authority board of directors from imposing a 30-year sunset on all houseboats moored on TVA lakes.

In the end, the TVA board voted 7-2 in favor of removing all houseboats from its 49 reservoirs in the next 30 years. In the meantime, the TVA’s new policy prohibits any new houseboats from occupying the waters, requires all existing houseboats to have a TDA permit and meet TVA standards and will allow the TVA to collect a fee from exiting houseboat owners in order to implement the new regulations.

With more than 350 houseboats sitting on Fontana Lake in Swain and Graham counties, people drove more than six hours to attend the TVA meeting held in Buchanan, Tennessee, last week. Out of the 40-plus people who spoke during the public listening session, all but two were against the TVA’s proposal to put any sunset on houseboats.

It was an emotional scene with grandmothers crying, businesses pleading and houseboat owners debating their right to keep their investments.

“What can I say in three minutes to the people who want to destroy my home?” asked Barry Burgess, a houseboat owner from Nashville.

The TVA has been looking into the houseboat issue since 2014 and released a 400-page environmental impact study claiming the floating houses could cause environmental issues, safety concerns and navigation problems on the lakes. Many speakers at the meeting pointed out the study did not point to any concrete data or examples of those concerns.

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While the houseboat owners and businesses were able to debunk most of the TVA’s assertions, in the end board members and staff said it came down to the TVA’s mission to be good stewards of its natural resources.

“It’s been a very tough issue for the board and staff,” said TVA President Bill Johnson following public comment. “It’s had the most political interest. It’s been negative in intent, but this board and organization have a duty of stewardship of public assets.”

Feeling misled

Speaker after speaker took their allotted three minutes to explain to the TVA how they made the decision to purchase or build a houseboat on a TVA lake. They described how they did their research and talked to Realtors, lawyers, TVA staff, county officials and marina owners about the security of such an investment. By all accounts, people were assured they were making a sound and safe purchase.

Others said they were specifically told by TVA staff through the entire process that what they were doing was within the TVA’s guidelines. Norris Lake houseboat owner Randy Johnson said calling the TVA was the first thing he did when he wanted to invest more than $200,000 in purchasing a houseboat. He said TVA land use specialist Woody Farrell told him the TVA staff would not be recommending the sunset clause option.

“That made me feel secure because there would be no sunset clause and more regulations,” Johnson said. “Getting rid of these homes isn’t going to help anyone — it’s going to hurt us all.”

Mark Godsey, a law professor at the University of Cincinnati, said he was not someone who tried to sneak around the regulations when he bought his Norris Lake houseboat. When he noticed other houseboats had numbers displayed on the front of them, he called the TVA to make sure he didn’t need one of those as well.

Those numbers indicate homes that were permitted by the TVA prior to 1978 when the TVA changed its policy to prohibit any new homes from being built on the lake. Godsey said TVA staff told him not having a number wasn’t a problem but that his houseboat may be subject to taxing from the local county. When Godsey heard the recent talk about the possible sunset clause he called TVA again to get clarification. The person assured him TVA staff would be recommending the B1 option — more regulation but no sunset clause.

“I got a chuckle from the person on the phone that said, ‘if they ever recommend a sunset, I sure as hell don’t want to be at that meeting,’” Godsey recalled. “I don’t think they we’re lying to me. I think something went awry at some point.”

Gary Henson said he also did his research before purchasing a floating home in 2009. It was a pre-1978 houseboat that had a grandfathered-in TVA permit. TVA staff told him that it was deemed an existing houseboat and that he wouldn’t have a problem as long as he stayed in compliance. Throughout the process, Henson said, the TVA said it was leaning toward option B1 until homeowners got a notification in the mail two months ago.

“Had I known there would be a 30-year sunset, I would have never invested in the house,” Henson said. “We’ve been misled at these public meetings — we were told they were leaning strongly toward B1.”

Debbie Samples, a marina owner and owner of two houseboats on Norris Lake, said the TVA’s environmental impact study was fundamentally flawed since TVA employees had been telling people for years to do what they want.

“Your own people told me and my partners when we built floating homes in the harbor it was OK with TVA — I’ve built six,” she said.

Not enforcing their rules

TVA has valid concerns about the number of unpermitted houseboats popping up on the lakes. Even though the TVA said in 1978 that no more houseboats could be added to the lakes, there are more than 900 unpermitted homes on the lakes today.

Rebecca Tolene, vice president of natural resources, said the TVA was even receiving marketing materials from developers basically wanting to build small subdivisions of houses on the water.

But houseboat owners couldn’t understand how the TVA could punish everyone for the ones who didn’t follow TVA regulations, especially when TVA hasn’t been enforcing those regulations for more than 30 years.

Jody Musick of Kingport said many people spent even more money to buy a houseboat that was TVA-permitted before 1978 because they wanted to make sure their home wouldn’t be breaking any laws.

“Mine is permitted and anchored to land I own. The wastewater is contained and I’m replacing the floats. My house poses no threat to anyone,” Musick said. “Please manage the problem where it lies.”

Musick said a reasonable alternative to the sunset would be to create an annual fee of $100 a year to pay someone to better manage the lakes and enforce the regulations.

Others agreed they were more than willing to follow the regulations as long as TVA was consistent about what is expected of houseboat owners.

“In our wildest dreams we didn’t think we’d be looking at this,” said Mary Lefker.

“We want to be good stewards of the reservoirs. We are more than willing to abide by the rules — we just need to know what these rules are.”

Other speakers questioned how the TVA would manage the removal of more than 1,800 houseboats if it has not been able to enforce its current regulations. Donna Driskell, who has owned a floating home for 38 years, said she anticipates litigation if the TVA plans to make houseboat owners remove their property without compensation.

“TVA has done nothing for 30 years — they’ve been negligent,” she said.

Economy killer

Several marina owners, who hold 30-year leases with the TVA to operate, told board members a sunset clause would shut most of them down because houseboats make up 90 percent of their business.

Debbie Prince, owner of Prince Boat Dock on Fontana, and Tony Sherrill, owner of Alarka Boat Dock on Fontana, both made the long drive to address the TVA board. Prince and Sherrill both said they had worked hard alongside the counties to get better regulations in place to keep Fontana clean. While they said they would continue to work with TVA to enforce stricter guidelines, they agreed a sunset clause would shut them both down.

“After 40 years, I was hoping to leave the business to my kids or grandkids, but if you go with option B2, it won’t happen,” Sherrill said.

Debbie Samples, owner of Indian River Marina on Norris Lake, said she manages 23 houseboats and losing those would mean losing $55,000 in annual revenue. Most of her boat slips come from people who own houseboats as well. If the homes go, most of the boats will go too, which is another $16,000 in revenue.

“My marina is now devalued because the sale price is based on the net operating income,” she said.

E. L. Morton, mayor of Campbell County, Tennessee, said 11 marinas operated in his county and those marinas and houseboat owners bring a good bit of outside revenue into his county. Without that revenue, he said, the tax burden would be transferred to his residents.

“These assets across Tennessee alone are powerful economic drivers,” Morton said. “I can’t turn my back on an $8 million dollar tax base that keeps other people at a reasonable cost of living. Don’t sunset on these houses. We’re for clean water, safety and all those things, but I have nothing to work with if you sunset these homes.”

That’s also the point Laura Sneed of Cherokee tried to drive home for the TVA board. Counties like Swain and Graham are already economically depressed because more than 85 percent of the land is federally owned and can’t be locally taxed. These counties rely heavily on tourism dollars from outdoor recreation, and they also collect personal property taxes on the Fontana houseboats. Without that revenue stream, residents could find themselves paying higher taxes.

While some of the more modern houseboats on Fontana are owned by tourists who visit on weekends, Sneed said others were old fishing shacks that have been passed down through generations of local families.

“These people work paycheck to paycheck, and to take this asset from them is tragic,” she said.

Board member response

TVA staff and board members listened and waited patiently throughout the three hours of public comment before addressing the houseboat issue during their meeting.

TVA President Bill Johnson admitted that the TVA had been “lax” in enforcing its policies throughout the years. Not all mistakes have been made during his tenure, and he apologized to the public for any miscommunications from TVA staff.

“What’s being asked for is permanent use of public property. The idea that these floating homes have a right to stay on public property doesn’t seem to be a good stewardship resolution,” Johnson said. “It’s clear enforcement has been lax and we need to do something about that. I apologize for that, but it doesn’t create a perpetual right.”

TVA board member Michael McWherter, who leads the external relations committee, said a majority of the committee was in favor of accepting the sunset clause policy recommendation. However, he said he didn’t think a sunset clause was warranted at this time. He suggested delaying the houseboat decision until the TVA’s next meeting in August so the board could have more time to digest all the public input.

TVA board member Marilyn Brown made a motion to postpone the decision and McWherter seconded the motion, but the vote failed 5-to-4.

TVA board member Eric Satz recalled one speaker asking the board to do what is right and what is fair. Unfortunately, Satz said, those two things don’t always line up exactly. While the TVA needs to do what is right by protecting public waters, taking away someone’s property is not fair. He said the 30-year sunset was a compromise to give people time to enjoy their investment.

“What is right in my view is that we enforce the land policy. What’s also correct is we have blundered over time and folks face a real potential investment loss. I think by providing for a 30-year sunset period we buy ourselves time,” he said. “I believe the burden is on the TVA to help mitigate any economic loss that may be suffered as a result of inactions in the past and any actions we may take today.”

Board member Richard Howorth admitted that the TVA’s lax enforcement in the past had created this problem, and the sunset clause is a way to help ease that burden to houseboat owners. The 30 years will also give TVA time to move forward in a way that everyone can be comfortable with.

A motion to approve the recommended policy for a 30-year sunset clause on houseboats was passed with a 7-to-2 vote. The TVA staff will spend the next six months developing a set of standards houseboats must meet during the next 30 years as well as come up with a fee schedule for houseboat owners so TVA can afford to implement and enforce the new standards.

“The fee structure will pay for the inspections and permitting process,” Johnson said during a follow-up interview. “I don’t know exactly who will do the work, but it shouldn’t be a cost the entire region should bear.”

Johnson said the TVA would continue conversations with stakeholders in an effort to mitigate any economic impact to property owners, businesses and communities.

“Thirty years is a long time, and human beings are creative and innovative beings,” he said. “We’re going to do six months of work and revisit this. People will find a way over three decades to play the cards they have.”

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