Sewerage Systems

Generally, sewerage systems and wastewater treatment facilities operated by municipalities and counties, as well as facilities that have been granted a Certificate of Convenience and Necessity (CCN) by the Tennessee Regulatory Authority (TRA), are exempt from TDEC’s financial assurance requirements. However, to discuss whether a facility is required to provide financial assurance, please contact Wade Murphy in the permitting section of the Division of Water Resources at Wade.Murphy@tn.gov or 615-532-0666.

Facilities that do require financial assurance may also be required to maintain an operation and maintenance fund to ensure the availability of resources to provide proper operation and maintenance of the system; a reserve fund that is restricted to capital expenses related to the upkeep of the system; and, in many cases, additional financial assurance based on the size of the operation and maintenance and reserve funds.

The following financial assurance mechanisms are allowed. Please click on the links below for the language required. The financial institution/surety should use the language in the files to issue an original instrument on the institution's letterhead or in its standard instrument format.

• Letter of Credit
  • Guidance Document for Use of Letters of Credit
• Performance Bond
  • Guidance Document for Use of Performance Bonds
• Personal Bond Supported by Certificate of Deposit
  • Certificate of Deposit Guidelines

The use of cash/certified check is also allowed to satisfy the financial responsibility requirement for sewerage systems.

Note: The instrument language is provided here as a convenience. Please consult with your legal counsel and the TDEC Division of Financial Assurance & Business Process Improvement before submitting a financial instrument.