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Leland Proposes To Settle RO Plant Dispute, Build Plant

By Jenny Callison, posted May 16, 2019
The town of Leland is attempting to broker a compromise aimed at settling the contentious battle over control of a northern Brunswick County water and sewer utility.

Leland officials on Thursday announced a proposed regional compromise plan that would empower the town itself to build a reverse osmosis plant and define the role and authority of the Brunswick Regional Water and Sewer Sanitary District, familiarly known as H2GO.

There were sharp divisions among area officials and residents within the utility’s district about whether building a reverse osmosis plant was justified. The elections in November 2016 shifted the balance of H2GO board members from pro-plant to anti-plant, but before the new board member opposed to construction of the plant could be seated, the existing board voted to transfer H2GO to the town of Belville, which had agreed to proceed with the project.

On April 22 of this year came a Brunswick County Superior Court ruling that H2GO’s former board’s transfer of the utility – including millions in cash and assets – to the town of Belville in 2017 was illegal.

Belville has since announced it will appeal the decision. But Leland has moved to develop a solution to the dispute.

“In light of that recent ruling, Leland officials believe the court has spoken and it is now time to move forward with the Regional Compromise Plan, which addresses differing opinions in the community,” the officials stated in a news release Thursday. 

The plan, which would need approval by governing boards and alignment with legally required processes, outlines steps that would result in a new reverse osmosis plant and a new understanding with H2GO. 

After release of the plan Thursday morning, H2GO spokesman Tyler Wittkofsky sent out a response from the utility.

"H2GO is aware of Leland’s proposed 'Regional Compromise Plan,'” the response stated. "The proposal has been sent to the members of H2GO’s Board of Commissioners for their review. The proposal will be added to the agenda of H2GO’s regularly scheduled meeting on May 21st."

The draft plan includes several stipulations.

First of all, work on the reverse osmosis plant would begin immediately as a cooperative effort between the sanitary district (H2GO) and Leland. Leland would build and own the plant and would obligate itself to provide aquifer-based reverse osmosis water to H2GO, “thereby addressing both the concerns of those who want the plant and the concerns of those who do not want the district to build it,” the proposed plan states. 

H2GO and Leland would enter into an interlocal agreement that would ensure the utility’s water needs are met and requiring that the utility would get its water from Leland until the reverse osmosis plant is paid off.

H2GO would be contractually entitled to reasonable, wholesale rates that cover the cost of the plant’s construction, operation and maintenance. These expenses, according to the release, are ones H2GO customers would have to pay anyway. A court-appointed referee would resolve rate disputes, and there would be contract termination rights if a court finds a bad faith breach of rate provisions.

The utility would resume its operations as they were before H2GO’s transfer to Belville.

“The voters’ right to meaningfully choose the District’s leadership will be restored. The District will keep its existing customers,” the proposed plan states. 

The utility could not impair the expansion by towns within its district into areas in which they want to provide additional services; in other words, H2GO would be prohibited from offering its services in direct competition to those already offered by municipalities.

As of 2017, H2GO's district included about 25,500 residents, according to Leland officials. It encompasses the entire town of Belville, a majority of the town of Leland, part of the town of Navassa and unincorporated areas outside of those towns.

The plan requires that Belville “dismiss its appeal, stop stalling, and return the District’s property.” It further stipulates that instead of paying $1 million or more in the attorneys’ fees the municipality would owe after exhausting – and probably losing – its appeals, “Belville will pay $350,000 in 10 annual installments of $35,000. That will provide accountability, but not bankruptcy.” The plan would also require Belville to de-annex the reverse osmosis site and renew its annexation agreement with Leland.  

According to the plan's provisions, Leland has a right to seek attorneys’ fees from H2GO for what the previous board did and will negotiate those fees.

“While we need to review a finalized plan as a Council, I am appreciative of the spirit of cooperation behind this plan, and from the Town Council in optimistically supporting it, to move on from an unnecessarily lengthy and costly dispute,” Leland Mayor Brenda Bozeman said in the release.

Belville officials said Thursday afternoon that the municipality would issue a response through its public information officer Mike McGill. That statement was not available as of press time.


 
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