BRUNSWICK COUNTY—H2GO has been deprived of its power since December. With Leland now on its side, the two are strengthening their case against Belville.
The three municipalities return to Brunswick County Superior Court next week, with the new H2GO board seeking to recover lost assets a previous board sold to Belville. If Superior Court Judge Thomas Lock grants the relief Leland is asking for, Belville would be required to return assets to H2GO.
Leland and H2GO Brunswick Regional Water and Sewer’s current board have re-introduced allegations against Belville and H2GO’s outgoing board as violating North Carolina Open Meetings Law and undermining the results of a public election.
Related: A timeline of how reverse osmosis broke up a public utility
Catching up
In December, the contentious transfer of H2GO’s $10 million in assets to the Town of Belville was approved by Superior Court Judge Thomas Lock.
Recent court documents say Belville accepted the transfer in a “hurried fashion” by signing a contested operating agreement within 24 hours by reopening a previously suspended meeting of its Town Council.
Judge Lock ruled in favor of the outgoing board’s transfer. He validated the contested November actions and assets have since remained under Belville’s ownership.
This transfer was made on Nov. 28, 2017, following the Nov. 7 municipal election. That election swung the board’s split membership in opposition to a $30 million reverse osmosis plant. The newly-elected commissioners vowed during the campaign to stop the plant’s construction.
Court filings allege the outgoing board, with a majority in favor of the reverse osmosis plant, colluded with the town of Belville to ensure the plant’s construction would continue.
Leland claims in its filing that the outgoing board violated state statues by transferring the sanitary district “out of existence.”
These documents describe the transfer as illegal and that the sale left H2GO an “empty shell of an entity…with nothing to govern.”
At the time, Commissioners William Browning, Carl Antos and Ron Jenkins successfully voted to transfer H2GO’s assets to the town of Belville.
Now, that vote will once again be in front of Judge Lock.
From then to now
Since Judge Lock granted the preliminary injunction late December, Leland has filed several requests in court.
First, Leland filed to extend its answer to the injunction by 30 days, which Lock granted on Jan. 3, 2018. Weeks later on Jan. 25, Leland filed an amended complaint, revising its claims and asked for a combined preliminary pre-trial conference and an initial discovery conference.
On Feb. 13, 2018, Leland asked Judge Lock to refer its case against Belville to the chief justice of the North Carolina Supreme Court in hopes of designating the case as “exceptional.”
“This case appears to involve the first attempt by municipalities to engage in such overreaching conduct,” that filing states.
The allegations
Though Leland initially retracted allegations against commissioners Jenkins, Browning and Antos in court months ago, it shows no sign of backing off now.
In the amended complaint, co-signed by H2GO’s current board, Leland re-alleges that the outgoing board engaged in potentially illegal conduct. It also claims Belville was complicit in that conduct.
In particular, it alleges Belville and H2GO’s outgoing board were complicit in:
- violating North Carolina’s Open Meetings Law
- a wanton disregard of the public good
- a manifest abuse of discretion
- violating numerous state statutes, including N.C. Gen. Stat. 130A, Article II, Part 2 and N.C. Gen. Stat. 130A-55(20).
Leland reasserts its allegations of an illegal debt transfer that violated H2GO’s bond order.
The amended complaint also names H2GO’s executive director Bob Walker. Since December, Walker has been ordered to submit daily logs to the current board as a result of actions taken before the transfer. Walker – along with the rest of H2GO’s staff members – has been under a gag order preventing him from talking about the issue to the public.
In addition, Leland and H2GO’s current boards allege Walker took direction from H2GO’s outgoing board to prepare the transfer before election results were learned. The filing also claims Walker colluded with Belville’s attorney to negotiate and facilitate an illegal transfer.
Mike McGill, spokesperson for Belville, denies the allegations as put forth in the amended complaint.
“We strongly believe that Open Meetings Laws were properly followed as this came together,” McGill said. Of the three seats secured in the November election, the top two were reverse osmosis candidates.
“I would say that the will of the voters was represented properly by the actions that occurred,” McGill said.
The third seat was secured by newcomer Bill Beer, an anti-reverse osmosis candidate whose election swung the board’s voting power against the plant.
Joseph Dowdy, attorney for Leland, could not be immediately reached for comment.
All parties will meet in court Friday before Judge Lock.
First Amended Complaint by Johanna Ferebee on Scribd
Johanna Ferebee can be reached at johanna@localvoicemedia.com or @j__ferebee on Twitter
