Sunday, July 14, 2024

After years competing, Leland and H2GO agree to merge utility systems

Leland Mayor Brenda Bozeman and H2GO Chairman Ron Jenkins shake hands after the town and utility provider agreed to merge ownership of its water distribution and wastewater collection systems. (Port City Daily/Mark Darrough)

LELAND — A long, contentious battle over utility distribution rights in the fast-growing northern Brunswick County region has come to an end. Two utility providers, previously at diabolical odds with one another, reached a landmark agreement to merge ownership.

Earlier attempts to merge the systems were unsuccessful as part of failed settlement negotiations related to the lawsuit embroiling Leland, H2GO, and Belville. Friday morning, in a rare joint special meeting, Leland council members and Brunswick Regional Water and Sewer H2GO commissioners all voted unanimously to approve the “Interlocal Agreement of the Operation and Joint Ownership of Water Distribution and Wastewater Collection Systems.”

The agreement means H2GO will take over Leland’s existing utility systems and hire its water and sewer employees.

READ MORE: Leland and H2GO propose consolidation of services, assets after long legal battle

The region has seen a patchwork of utility providers and local governments embroiled in a decades-long struggle for water rights. In the ’70s, the county’s own water distribution network did not reach the rural Leland area, which was then beginning to develop. In 1976, the North Carolina Commission for Health Services established the Leland Sanitary District, now known as H2GO, as a public organization to meet the growing water demands in the region.

The Town of Leland was incorporated more than a decade later. In recent years, as it has grown at an astronomical rate — it was the state’s fastest-growing town between 2010 — Leland developed its own utility system. 

With overlapping potential and actual service areas, Leland and H2GO competed for new customers. In some areas, the two utility providers have redundant infrastructure — meaning, there’s two lines in the ground doing the same thing, funded by ratepayers. 

Meanwhile, the county’s utility system has crept up further into the northern region. The three providers have attempted to meet demand in an often inharmonious manner, both from an infrastructure and intergovernmental affairs standpoint.

H2GO Commissioner Barry Laub talks at the special meeting Friday morning after the vote. (Port City Daily/Mark Darrough)

After the vote, H2GO commissioner Barry Laub said the drawn-out battle — which cost the public bodies millions — was altruistic in nature.

“This has been a long time coming,” he said. “It isn’t that long ago that there were some very, very contentious moments. And, truly, those contentious moments were because individuals wanted what was the very best for the citizens in this region — nothing more than that. Seeing a different position but all wanting the same objective.”

Comments made by the town’s manager, David Hollis, during a Leland Council meeting on Thursday night resulted in immediate backlash from county leaders. Hollis told council members the town had reached out to Brunswick County on multiple occasions about “a joint undertaking with all entities in northern Brunswick County, and the county was not interested in that.”

Brunswick County Chairman Randy Thompson responded later that night: “I can only conclude that the Town of Leland is more focused on empire-building than serving the citizens.”

Thompson said he and fellow commissioner Frank Williams attended multiple meetings “regarding the county assuming the town’s water system over the past few months.”

Leland Town Manager David Hollis apologies to Leland councilmembers and H2GO commissioners for his remarks about the county the previous night. “To the point that I said — or it was implied — that the county was not willing to work with the town, that obviously is not true,” he said.

On Friday morning, Hillis stood before both boards and issued an apology. 

“I apologize to the county officials and staff who were and are upset,” Hillis said. “I also want to apologize to both boards who are here with us today. It was not my intent to distract from this meeting and this historical event.”

He said his statements the previous night needed to be clarified with additional context: 

“This agreement that the town and the sanitary district are considering today is an extension of utility regionalization talks that have been ongoing for nearly three years. During that process, the town and district met with local officials, including the county, to discuss how everyone could work together in the region. As those talks progressed, the county chose not to continue their participation. Those talks continued without the county, but ultimately stalled for a period of time. 

“Last summer I reinitiated the conversation with county staff regarding water and sewer services in the region, to determine if we could develop an exchange agreement that would meet mutual goals. An outline of an agreement began to take shape over several months. Subsequent to those talks with the county, the talks with the sanitary district began again. The two separate talks were happening parallel to one another but not together.

“The town met with officials and staff from both organizations over several months. As the need for a decision from the town approached, the town weighed many aspects of the two potential agreements, including what was best for the region and its customers, the partnerships that could be enhanced, and the return on value the town was receiving for what it was exchanging. The council decided the potential agreement with the sanitary district outweighed the potential agreement with the county, especially as the county consented to allow the sanitary district to expand its wastewater treatment plant. 

“To the point that I said — or it was implied — that the county was not willing to work with the town, that obviously is not true, for the separate potential agreement that the county was discussing with the town. In the context of my statement last night, the breakdown of the talks in 2017 ultimately led to the agreement that is before the boards for consideration today.

“Again, I apologize and take responsibility for my words and lack of clarity that I provided last night.

After Friday’s meeting, Leland Mayor Brenda Bozeman said the town expects to see the same level of rapid growth in coming years, and both council and H2GO board see clearly that cooperation is needed to improve utility services.

“The agreement specifies areas of the region where both parties would be able to expand their services jointly, and other areas where H2GO could expand separately of Leland,” according to a statement issued by the town late Friday morning. “By doing so, both entities would be able to grow in a coordinated and unified manner that eliminates uncertainty regarding the provision of utility service. In addition, a consolidated customer base could take advantage of economies of scale as they relate to rates and pricing.”

Leland and H2GO will spend the next few months to facilitate the transition “with a goal of closing by June 30, 2021,” according to the statement.

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