Update: This article has been updated to clarify H2GO’s Chairman Jeff Gerken’s position on a proposal to “permanently abandon” the wells for the reverse osmosis plant.
BRUNSWICK COUNTY — The recent court ruling ordering Belville to return H2GO’s assets has done little to end the acrimonious debate over what should be done with the utility’s already-partially-constructed reverse osmosis plant, although Leland has now come around to supporting the completion of the project – as long as Leland owns and operates it.
It’s been a busy month. To recap:
- On April 22, Superior Court Judge Charles Henry found that Belville and H2GO’s outgoing board had acted illegally and unethically in coordinating the takeover of H2GO’s assets and ordered the town to restore them to the utility’s new board (which has essentially presided over a non-entity since they were sworn in a year and a half ago).
- A week later, on April 27, Belville’s Board of Commissioners decided 3-2 to appeal that ruling (although the town has refused to identify who cast for and against votes, stating only that Mayor Mike Allen broke the tie in favor of the appeal — legally, the town is within its rights to restrict this information.)
- Then, on May 16, Leland took the region by surprise by offering what it called a “regional compromise plan.” The plan would give Leland, which had long objected publicly and in court to the project, ownership and operating rights to the RO plant – making H2GO a wholesale customer of water from the plant it had started to build. It would also significantly reduce the burden of legal fees – which Judge Henry ordered Belville to repay – a move the town claimed would provide “accountability, but not bankruptcy” for Belville (Leland’s proposal would retain the right to sue H2GO for legal fees). The plan also included a provision to prevent H2GO from competing with Leland for new utility customers.
- Over the next several days, reactions varied: Brunswick County Chairman Frank Williams was “blindsided,” H2GO Chairman Jeff Gerken – a vocal opponent of the RO plant – remained skeptical of the region’s need for the project but offered to work with Leland, and Belville – not mincing words – called Leland’s offer the “height of hypocrisy.”
Press releases, open letters, and numerous other statements followed. Leland’s proposal won over H2GO, effectively resolving the debate that had bitterly divided the board leading into and following the 2017 election. Pro-RO plant candidates would get their plant built; anti-RO plant candidates would avoid the cost of the plant, which had been the major objection. It is worth noting, however, that Leland’s plan would not provide one of the originally touted benefits of the plant – independence from other wholesale water sources, although that concern seemed to fade in the wake of concerns of GenX and other water contaminants.
Belville, on the hand, was thoroughly opposed, issuing a press release offering a “history lesson” on Leland’s past attempts to derail the RO plant. Then, Belville followed up with a proposal of its own.
Belville’s counterproposal
On Friday afternoon, Belville announced the “true regional compromise plan” – the name suggesting that Leland’s proposal lacked real interest in the town’s regional neighbors; Belville made this explicit in its proposal, stating “[t]heir plan is not a regional plan. It is a Leland plan.”
Belville reiterated points made in its “history lesson” press release, calling Leland’s proposal “simply a money and power grab.” Belville also criticized Leland’s ability to carry out the plan, alleging that the town lacked water experts on staff but did have a “long track record of failing to construct and operate major infrastructure programs,” and accusing Leland of not having its finances in order.
Belville stated that its counteroffer was developed from “a compromise proposal made by H2GO Commissioner Rodney McCoy and the citizens of Compass Pointe last December, which was blocked from public discussion by H2GO Chairman Jeff Gerken.” The plan, according to Belville, will deliver “cleaner drinking water to H2GO customers faster and cheaper than Leland’s proposal.”
The proposal contains a number of points, first being the return of all assets from Belville to H2GO; although this is already the court-ordered requirement of Judge Henry’s decision, Belville has kept the utility assets in its name pending the appeal.
The proposal also ends current and freezes future legal action, requiring Leland, Belville, and H2GO to all withdraw from the current lawsuit and enjoining them from any new legal action for three years.
There are also conditions on H2GO which the utility board would have to agree to, including that the utility “contractually agree to restart and execute on the completion of the RO project as quickly as possible.” It also requires H2GO to retain all its assets and not transfer them to another entity.
H2GO’s decision?
The 2017 H2GO election ushered in a 3-2 majority of board members opposed to the RO plant – resulting in Belville’s illegal actions, which the town has defended as necessary to “save” the plant. Belville’s proposal would require that same 3-2 majority to commit contractually to building the plant, the very thing they campaigned against doing in 2017. Belville’s proposal would also prevent H2GO from transferring its assets to any other entity. The stipulation is designed to prevent a takeover by Leland but it is, ironically, also the exact same thing Belville helped coordinate in 2017.
It’s worth asking: since Belville was just rebuked by a Superior Court judge for attempting to subvert the mandate of H2GO’s 2017 election, why would the town again try to determine what H2GO’s board can or cannot do in the future?
Belville spokesperson Mike McGill gave two defenses of the move.
First, McGill argued that Leland’s about-face on the RO project it has tried to kill since 2014 has ended the debate over the construction of the plant.
“Leland completely reversed itself, ending the debate over the construction of the plant. However, their “regional” plan is only a Leland Plan. It makes them the water boss in the fastest growing part of the county and gives them the infrastructure for annexation. Their move is a money and power grab. Our proposal puts everything back with H2GO. Yes, it’s with conditions, but those conditions aren’t about lining pockets but getting the plant built and run by proven water leaders,” McGill said.
Second, McGill argued that H2GO’s anti-RO plant majority are likely to irreparably set the project back if H2GO’s assets are returned unconditionally.
“Our entire effort has been to protect the health and welfare of our citizens. Given their years of coordinated opposition to the plant, even using legal and legislative processes to try and stop the plant, we cannot trust that Leland, Gerken, Trombley, and Beer will simply do the right thing and let H2GO staff build, own, and run the plant,” McGill said.
Although Leland was quick to respond to the Friday afternoon announcement from Belville, H2G0 has not yet commented. The utility has already voiced a willingness to work with Leland and so it is unclear for the time being if H2GO will see Belville’s proposal as the better deal and agree to the town’s conditions.
And, while Leland officials now join Belville in supporting the idea of a reverse osmosis plant, it is unclear if H2GO voters feel the same way. The electorate was nearly split in November 2017 – which was several months after revelations about GenX hit the news. With filing for the 2019 election just over a month away, it remains to be seen if H2GO board members who ran against the RO plant think their constituents have changed their minds or not.
One thing is clear, Leland has not changed its mind about Belville’s role in the regional water system.
Leland’s (latest) response
Leland’s synopsis of the proposal? It would “reward Belville for misconduct,” and the town would “face no consequences after a finding that it is a court-adjudicated wrongdoer.”
“Belville’s proposal is not in the spirit of compromise,” Leland Mayor Brenda Bozeman said. “Our plan offers to collaborate and do things for the community as a whole, whereas the Belville plan is for Belville to leverage the assets it wrongfully took in order to force its will on the entire region. I wish Belville’s leadership would get serious about working together rather than using its unlawful takeover of H2GO to create a standoff with a hostage-taker.”
Bozeman called the proposal a “media stunt.”
“We’ve proposed working with Belville to get the RO Plant built regionally and to reduce the fees Belville owes us, but Belville officials don’t seem to be able to take ‘yes’ for an answer,” Bozeman said. “They are insisting on getting everything they want, or they won’t come to the table. I hope they will eventually show an interest in a real compromise resolution instead of media stunts.”
Leland’s response also pointed to statements allegedly made by Belville Mayor Mike Allen to the crowd waiting while H2GO’s board met in closed session of May 21. According to Leland, Allen promised that Belville’s appeal could keep H2GO’s assets in the town’s hand until after the November H2GO election.
Leland Attorney Joe Dowdy also weighed in on Belville’s proposal.
“No attorney with an IQ of room temperature would ever recommend the ‘Belville-wins-even-though-it-lost’ deal to his client, given all that has happened, which I suspect Belville knows…[Belville’s propsoal] would reward Belville’s historically bad conduct in subverting the democratic process and its aggression towards Leland and would not adequately protect Leland from the kind of inter-regional hostility that Belville’s committed,” Dowdy said.
Lastly, Leland’s response roundly rejected Belville’s criticism of Leland’s ability to build and manage the RO plant.
“Belville’s press release also misrepresents the facts. Leland officials hold more advanced water treatment certifications than anyone on staff at H2GO. And both staffs have distribution certifications equal to the respective water distribution systems they operate. Additionally, Leland is not raising taxes this year. Leland has a beautiful town hall that it appropriately held the contractor accountable for completing correctly years ago. Leland’s finances are in excellent shape as reported annually in its audits. It is unclear why Belville would feel the need to make misrepresentations in its proposal if it really believes that it is a good proposal,” the town stated.
What’s next?
The court has yet to rule on Belville’s appeal; a decision could force the return of H2GO asset’s, negating Belville’s ability to negotiate any regional agreement. At that point, H2GO’s board would have actual infrastructure and assets to make decisions about for the first time since 2017. The board could vote to continue to RO plant, hand over the project to Leland, or cap the wells.
According to Chairman Gerken, “After Judge Lock’s order enjoined further construction on the reverse osmosis (RO) plant, the North Carolina Department of Environmental Quality (NCDEQ) sent a letter to H2GO’s engineer regarding the State’s concerns about the wells, from both safety and environmental considerations, and demanding that the wells be either completed or ‘permanently abandoned.'”
Pro-RO plant members Rodney McCoy and Ron Jenkins have indicated that Gerken was in favor of filling the wells in during a closed session, something Gerken denies.
“The option that was recommended by the Executive Director [Bob Walker] and the engineer was to finish and cap some of the wells, and to grout in the partially completed pilot hole wells, as determined by the percentage of completion in each case,” Gerken wrote. “I have never considered or promoted any other option with respect to the wells.”
Of course, Leland could still build its own reverse osmosis plant and possibly negotiate a wholesale agreement with H2GO. (And then there are Brunswick County’s own plans for reverse osmosis, part of over $200 million in planned infrastructure improvement — but that’s another story.)
In the meantime, Leland and Belville haven’t come any closer to an agreement. If there is to be a regional compromise plan it will require just that — compromise. Based on the last few weeks, that doesn’t appear to be on the horizon in the immediate future.
Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001
