Saturday, July 2, 2022

Legal spending on the H2GO case approaching $1 million, one year later

It's been exactly one year since outgoing H2GO commissioners transferred their $60 million utility away to the Town of Belville, a move the Town of Leland is still fighting in court.

A map of each group's political and service boundaries can explain why the H2GO case arose. In green, Belville's approximate corporate limits. In pink, Leland's approximate corporate limits. Shaded in grey, Brunswick Regional Water and Sewer H2GO's approximate service boundary. (Port City Daily graphic/ Johanna Ferebee, Courtesy Google Maps, Brunswick Regional Water and Sewer H2GO)
A map of each group’s political and service boundaries can explain why the H2GO case arose. In dark green, Belville’s approximate corporate limits. In pink, Leland’s approximate corporate limits. Shaded in grey, Brunswick Regional Water and Sewer H2GO’s approximate service boundary. (Port City Daily graphic/ Johanna Ferebee, Courtesy Google Maps, Brunswick Regional Water and Sewer H2GO)

BRUNSWICK COUNTY — Fighting your neighbors over the rights to a steady revenue stream is expensive.

One year after a majority of Brunswick Regional Water and Sewer H2GO’s Board of Commissioners voted to transfer the utility out of political existence, legal fees fighting for H2GO’s $60 million assets are approaching $1 million.

Confused? Catch up on what the case is all about: Leland and Belville’s 30-year rivalry is the key to understanding the complex H2GO case

After the transfer, Leland sued Belville, H2GO is now aligned with Leland as a co-plaintiff, and the case is still tangled up in Brunswick County’s Superior Court.

Of course, except for a small number of people involved in the Nov. 28, 2017 transfer, the three government bodies involved in the case — Leland, Belville and H2GO — did not know, and therefore did not budget, for a costly court battle.

In total, spending on the case will reach approximately $766,301.95 by the end of the year, according to legal fee estimates provided by each party.

Here’s a breakdown of what the case is costing:

Leland

Leland is the biggest spender in the case, according to a self-reported estimate and invoice summary provided by town manager, David Hollis.

The town has paid the Atlanta-based law firm Kilpatrick Townsend & Stockton LLP, $293,693.12 since the contested transfer. John Wessell, Leland’s town attorney, has also assisted in the case, billing the town a total of $3,307.50 for transfer-related matters.

In addition, Leland anticipates spending another $50,000 on the case before the new year, bringing the town’s total to an estimated $347,000.62

Brenda Bozeman, Leland’s mayor, said the town is confident the court will rule in favor on all of its claims. “Leland continues to support a regional, lawful solution for clean and affordable water,” she said.

Belville

Belville, with a tenth of Leland’s population and about 13 times less revenue, plans to spend $253,500 on the case. That’s nearly three times as much as what the town budgeted in total legal fees for fiscal year 2016-2017.

According to Belville’s town administrator, Athina Williams, the town has already spent $193,500 on litigation costs. These costs are shared, though it’s not clear by exactly how much, by two Wilmington-based firms: Eldridge Law Firm, P.C. and Brooks, Pierce, McLendon, Humphrey & Leonard, LLP. James Eldridge has served as the town’s attorney for 18 years, according to Belville’s mayor, Mike Allen.

In August, mayor Allen said though spending on the case is difficult, he feels it’s important for his town to secure a clean water solution in the reverse osmosis plant.  “I told them if we don’t get in this battle, we’re going to have to sit on the sidelines and take whatever is given to us,” he said.

H2GO

Days after the transfer, H2GO hired Brian Edes of Wilmington-based Crossley, McIntosh, Collier, Hanley & Edes, PLLC to assist with the case.

H2GO passed a budget amendment in January, two months after the transfer, to increase budgeted legal expenses by $150,000.

According to invoice amounts provided by H2GO’s spokesperson, Tyler Wittkofsky, the utility has paid out a total of $79,801.33 in case-related costs to date.  A total of three invoices make up this number, with Edes’ last invoice having been issued eight months ago. An additional, estimated $55,000 still needs to be processed, Wittofsky said, for legal services up until Oct. 2018.

H2GO’s counsel, Stephen Coble of Wilmington-based Coble Law Firm, PC, has also participated in discussions and closed session meetings with H2GO’s Board of Commissioners on case-related matters. Though Coble’s case-related services may not be specifically itemized, Wittofksy was able to provide a “very rough” estimate of $31,000 for Coble’s expenses.

That brings the utility’s estimated total to $165,801.33

RELATED: The lawyer answering all questions for H2GO won’t disclose how much it’s costing ratepayers

Last year’s audit for the fiscal year that ended in June, months before the transfer, showed H2GO spent a total of $104,785 on legal fees. The utility’s financial audit covering expenses between July 2017 and June 2018, which would include case-related spending, is not yet available.

When asked whether she was comfortable with the amount of legal spending last year, H2GO Commissioner Trudy Trombley referred to the previous board’s contested maneuver.

“If Belville and the former commissioners had not pulled their little action in November, then none of these attorneys fees would be necessary,”  Trombley said.


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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