County Comments regarding pending Leland / H2GO deal

March 19, 2021 — 8:21 a.m.

Brunswick County Chairman Randy Thompson issued the following statement on Thursday, Mar. 18, 2021: “At tonight’s public hearing in Leland regarding their pending utilities deal with H2GO, Town of Leland officials implied that the County was not interested in working with the Town. At the Town’s request, Commissioner Frank Williams and myself participated in multiple meetings regarding the County assuming the Town’s water system over the past few months. During our negotiations the County agreed to every single request made by the Town that we could legally accommodate. Unfortunately, based on the way this transpired, I can only conclude that the Town of Leland is more focused on empire-building than serving the citizens.”

Commissioner Frank Williams issued the following statement on Thursday, Mar. 18, 2021: “As Chairman Thompson stated, we met with Leland numerous times and negotiated in good faith. I believe Brunswick County residents would be well served by the economies of scale and increased efficiencies offered by a single countywide utility operated by the only entity whose elections are open to every county voter: Brunswick County Public Utilities.”

According to WECT: Leland Town Manager David Hollis told council members town officials had reached out to Brunswick County on several occasions about “a  joint undertaking with all the entities in Northern Brunswick County, and the county was not interested in that.” (article linked here)

Response from Commissioner Frank Williams: Upon hearing this assertion I reached out to Ann Hardy, who was our County Manager at the time and was our point person for all communications on these matters. Ann reassured me that she would never say the county does not want to work with anyone. She indicated she did relay that the board was not in agreement with the Town’s requests related to annexation and for the county to build the district’s aquifer reverse osmosis system given that we were proceeding with plans for countywide reverse osmosis. On the first point, we believe any deal which includes an annexation requirement to obtain utilities service is an egregious assault on property rights and an attempted end-around of our State’s prohibition on forced annexation. Such an annexation requirement was never discussed during the most recent negotiations with Leland. On the second point, we did not feel it was wise for the County to be engaged in simultaneous construction of two reverse osmosis treatment facilities when we were already working on one that can supply the entire County. That is a moot issue at this point given that construction has already begun on H2GO’s plant. While I cannot speak for other Commissioners, I would be open to the County acquiring that plant in a future consolidation to better serve all of the County’s citizens.

Letter from BASE (Business Alliance for a Sound Economy) to Leland sent 3/18/2021. While BASE is a business organization not affiliated with the County, their stated concerns are noteworthy:

Mayor Bozeman and Town Council,

We wanted to provide some comments before your public hearing this evening. 

Earlier this week, it was announced that the Town of Leland and H2GO have scheduled a special joint meeting tomorrow morning to consider an Interlocal Agreement which will consolidate your respective water and wastewater systems. Presumably, tonight’s public hearing is a formality. Unlike the months-long process that led to the creation of CFPUA in New Hanover County, this new joint venture was announced to the public within the last two weeks, with the draft ILA going online last week and public hearings this week. That’s not good government. 

We have significant concerns and unanswered questions. Unfortunately, to this point, the entire process has been very short on facts. However, two things appear to be true: 

1) to get future water/sewer service from H2GO, a landowner will have to annex into Leland (which seems to be forced annexation) 

2) for some current Leland ratepayers in places like Brunswick Forest, a homeowner will now get a water/sewer bill from H2GO–but no ability to vote in the elections of H2GO Commissioners (which seems like taxation without representation). 

With the complex nature of the utility systems in northeastern Brunswick County and significant questions unresolved, we strongly believe additional, substantive public dialogue is needed before the parties move this issue to a vote.  

Unfortunately, neither the Town nor H2Go have provided financial specifics in the public information distributed on this issue. It is challenging to quantify the impacts on existing ratepayers, landowners and taxpayers in both jurisdictions. There are no numbers provided in the notice about the public hearing (link). How many customers will be impacted? What is the value of the assets individually and combined? Does the transaction require approval by the Local Government Commission? Will the new entity operate under the sanitary district statutes? 

We believe that an efficient and effective infrastructure investment is the key to the future of our region. Consolidation may be the best path forward in northeastern Brunswick, but we believe Brunswick County be part of that discussion. With major projects in process and financial obligations set, haphazardly moving the pieces around will impact multiple parties, permits, allocations, landowners, businesses and citizens.  

For example, what happens in a masterplanned subdivision currently in Brunswick County with existing H2GO utilities? For the next phase of the development, is the developer required to annex into Leland to get water and sewer? Is that legal? What fees do they pay? When? Will Leland accept that development’s existing private roads? Will the Town trash vehicles use the existing private roads? What are the neighborhood dynamics of two virtually identical houses across the street from one another—one in Leland and one in Brunswick County? Why would a buyer pay additional taxes for the Leland house?

Additional questions have to be clearly answered: Will areas adjacent be forced to annex into Leland to get water/sewer? Do current H2GO areas get annexed into Leland? Can you have a joint venture and exclude some areas in an interconnected system? How is Compass Pointe going to be handled separately? Can the same class of rate payers be treated differently by the utility provider? Has a rate study been completed to look at the current rates, future rates and rates of adjoining utility providers? 

If the effort moves forward, how will Leland and H2GO rates and system development fees change if this consolidation occurs? How will Brunswick County rates and system development fees change if this consolidation occurs? How does the Northeastern Waste Water Treatment Plant allocation change with this agreement? Is Leland’s allocation something that can be transferred to H2GO without agreement from the actual permittee: Brunswick County (page 33 of the ILA)? How will H2GO respond if Leland development code changes deter future investment in the Town and frustrates adding ratepayers to the system? What is the reason to rush this vote through with less than a week of public notice? If true regional consolidation is the goal, why is there not a public discussion about merging all utilities with Brunswick County? 

Again, we believe that efficient and effective infrastructure investment is key to the future of our region. This is especially true in northeastern Brunswick County. Unfortunately, there are too many questions without answers. We encourage further deliberation and public discussion with Brunswick County before taking this significant action.  

Tyler Newman
President & CEO
Business Alliance for a Sound Economy