Officials say rural utilities face steep challenges

ELIZABETHTON — Siam Road resident Ashley King was already worried about how her neighbor, a single mother, managed to pay $50 or more monthly just for water service — but news that the Siam Utility District's former manager is accused of skimming nearly $100,000 from the utility has added a layer of frustration to her concern. "I would like to see increased oversight," King, a graduate student who shares bills with her sister, said outside the mobile home they share in a picturesque rural part of Carter County. "Maybe we don't let one person alone run the district because then we have two sets of eyes and somebody else holding them accountable." Ashley King, a Siam Utility District water customer in front of her home on Siam Road in Carter County, Tenn. JEFF KEELING/SIX RIVERS MEDIA State and local officials the Press interviewed don't disagree. "The rate payers deserve to know that the board members who are in these positions are paying sufficient attention to the everyday operation of the utility," Tennessee Comptroller of the Treasury Jason Mumpower said. "It's not just honorary, it comes with real responsibilities and they need to be in that utility office regularly with their eyes on the financials, their eyes on the bank statements, taking their job seriously." But Mumpower and Carter County Mayor Patty Woodby also said the challenges rural water utilities face — Tennessee has well over 100 of them, including a handful in Carter County — run much deeper than the occasional incidence of malfeasance. "When people ask 'what keeps you up at night,' my answer every time is ... 'worrying about the financial health of Tennessee's utilities, especially the small rural utility districts,'" Mumpower, who grew up in neighboring Sullivan County, said. "This is a life and death question, access to clean safe water," he added. "It's a financial issue. It's a public health issue. It's a sanctity for the ratepayer issue." Woodby, who doesn't nominate utility board members but has the option to confirm or turn down those nominations, said all the county's small utilities face headwinds. "It's becoming harder and harder for them to find the maintenance employees they need," she said. "More infrastructure, updated infrastructure is needed. It's getting harder for… these small utilities to get the grants and the money to do these things." New management: Staff focused on strengthening accountability, improving operations Michele Henegar has been Siam's manager since shortly after Royce Gentry's abrupt resignation at the end of March 2025. She said no current employees worked at Siam during Gentry's tenure. "The current staff is focused on strengthening accountability and improving the utility's operations," she wrote in an emailed response to questions. Gentry faces felony charges and is due in court Nov. 23 after being indicted Sept. 10. That news came to light when Mumpower's office released a 10-page investigative report detailing the allegations. The report pulls no punches about the kind of accountability King said customers deserve. Investigators found multiple ill-advised practices by the utility's board during the period investigated (January 2023 through April 2025). The Siam Utility District offices on Siam Road in rural Carter County, Tenn. JEFF KEELING/SIX RIVERS MEDIA Even though utility boards' responsibilities include "establishing and maintaining an adequate system of internal controls," the report found shortfalls in everything from disbursements, cash management and reconciliations to segregation of duties and timekeeping. Gentry is alleged to have paid himself more than $73,000 in overtime payments and about $24,000 of sick leave after getting board members to sign blank checks, and board members told investigators they would routinely sign blank checks for Gentry. Henegar said the board now requires two signatures on checks and numerous other practices recommended in the investigative report, and is continuing to formalize other internal control policies. Those cover everything from payroll, purchasing and customer deposits to billing adjustments. "We recognize that allegations involving former leadership can undermine confidence," Henegar wrote. "Although the current employees were not here during that period, we accept responsibility for managing the District carefully today and addressing the challenges we inherited." On the operations side, Henegar said Siam is continuing a relationship with Communities Unlimited (CU), a community development financial institution that came on the scene around the time Gentry left. CU is advising on the financial and transparency side, but also helped the utility seek and receive some grant funding that allowed it to replace aging water lines along three roads it services. Henegar said crews are trying to improve leak tracking, maintaining a flushing program and developing better maintenance and asset records. A Siam Utility District worker checks a meter near Siam Road Wednesday, Oct. 14, 2026 in Carter County, Tenn. JEFF KEELING/SIX RIVERS MEDIA That's all with help as available from CU, whose Annie Chiodo said Henegar "has been through the works with this whole mess but has done an awesome job of getting everything straightened out." Strapped customers, no easy path forward Up Siam Road, Ashley King looked around at the nearby houses and offered an assessment about bills that equal or exceed what she paid in Elizabethton for not just water but also sewer and trash pickup. "Not a whole lot of ability and resources in this area," King said. "You have your outliers, but most of us are middle to low income. Just kind of a making ends meet kind of area. "My neighbor pays bills on her own, her lot rent, electric, water. I'm sure it's not very doable some months for her." Woodby put it even more starkly. "When your utilities raise their water rates, it becomes a choice between paying your water bill or getting your prescription, paying your water bill or going to the grocery store," she said. Siam customers aren't the only ones dealing with high cost just for water, as opposed to the water/sewer/trash bills in most cities. After a rate increase implemented earlier this year, Siam customers pay $51.77 monthly for up to 1,500 gallons, with the rate going up by $4.67 each additional 500 gallons. A price comparison provided by Henegar showed North Elizabethton Utility with slightly higher rates and South Utility with a minimum rate higher than Siam's. Woodby said the utilities that are running good financial ships still don't have much choice: "These utilities have got to replace water lines and other infrastructure." A Siam Utility District worker checks a meter near Siam Road Oct. 14, 2026 in Carter County, Tenn. JEFF KEELING/SIX RIVERS MEDIA She said one solution could be larger utilities, including municipal ones like Elizabethton or Johnson City, absorbing some of the small, struggling ones. "They don't want to take on the financial burden and the unknowns," Woodby said. Mumpower is an advocate for consolidation, including working with the Tennessee Department of Environment and Conservation to encourage small districts to get absorbed into municipal districts or at least merge with other small ones. "The construction inflation we have seen over the past few years, the scarcity of parts and pipe and supplies, these small utilities just do not have the purchasing power to maintain their infrastructure the way they need to," he said. Siam's Henegar said her team and board are committed to the double duty of improving both operations and trust. "Rebuilding and maintaining trust requires consistent action," she said. "Accurate records, meaningful financial oversight, clear communication and visible improvements such as the grant-funded waterline replacements. We intend to earn that trust through responsible decisions, attention to customer concerns and continued progress."