Bell: No city interference with 751 South

Dec. 23, 2012 @ 02:17 PM

Mayor Bill Bell has told City Council members and city administrators he doesn’t want them doing anything to try to block construction of the controversial 751 South project under the county’s jurisdiction.
Bell last week said members of the N.C. General Assembly are watching the city’s actions for signs it’s “doing everything it can to prevent this development from achieving its goals.”
The mayor made it clear he wants no part of that.
“My concern is that I don’t think it’s appropriate, personally, for the city to try to block anything that a developer is doing outside its jurisdiction,” Bell said during Thursday’s council work session. “To get in and try to be proactive in blocking those issues I think is the wrong step.”
The mayor’s comments came as Durham officials ponder the latest moves by 751 South’s would-be developers to obtain water service for their 1,300-home project.
The developers have extended feelers to a private-sector firm, Aqua America, that’s already supplying Chatham County developments like Governor’s Club and Carolina Meadows.
Aqua’s North Carolina branch is in talks with Chatham County officials about buying 850,000 gallons of day from their government that it in turn would be free to sell to other customers.
Aqua North Carolina President Tom Roberts on Friday said his firm is seeking the allocation initially to serve Colvard Farms – a partially completed project on the extreme northern edge of Chatham County mounted by 751 South’s developers.
But the 751 South/Colvard Farms team has signaled that they “certainly would be interested in serving their proposed [Durham] development in the future,” Roberts said.
Durham officials took note because it’s likely some or all of the water Chatham might sell to Aqua North Carolina would actually come from Durham’s water-treatment plants.
The city and Chatham County in 2008 signed a deal that currently gives Chatham the right to buy up to 2 million gallons of water from Durham each day.
The upper limit on Chatham’s purchases will increase to 3 million gallons a day in March 2013 and 4 million gallons a day in March 2014. The contract between the two governments bars Durham from cutting off transfers for any reason save an emergency.
The deal bars Chatham County from installing “facilities” of its own in Durham to serve customers in Durham. But its terms don’t appear to bar Chatham from selling to a third party that in turn sells to Durham customers. And while the no-facilities language clearly applies to city controlled land, the 751 South site remains under Durham County jurisdiction.
Once they got wind of Chatham’s dealings with Aqua North Carolina, city administrators sent a letter to Chatham County officials asking them to consider an amendment that would bar any out-of-county sales by Chatham, either directly or through a third party.
But city officials wouldn’t appear to have much leverage when it comes to getting Chatham County to the bargaining table.
Absent an outright breach of contract, the 2008 deal can be canceled or amended only with the consent of both governments. It doesn’t expire until the early summer of 2028.
Bell said his only 751-related concern would be if Chatham sells water to Aqua North Carolina “at a cheaper price than we’d normally sell to someone outside the city.”
“If that’s the case, we need to talk about what we’re charging Chatham County,” Bell added.
As things stand, there is a major arbitrage window for both Chatham County and Aqua North Carolina in serving 751 South.
Bell’s government charges Chatham a so-called “Tier 1” rate of $1.74 for every 100 cubic feet. Were it to sell water directly to a 751 South project that remains under Durham County jurisdiction, commercial customers there and many homes would likely pay double, $3.48 per 100 cubic feet.
But Chatham’s claim to a Tier 1 rate is embedded in its 2008 contract with Durham, and like other terms of the deal, is changeable only with the consent of both parties.
The mayor’s comments notwithstanding, some council members aren’t pleased by the Aqua North Carolina feeler.
“I’d be very concerned if I thought that Chatham was buying water from us for what is purported to be their emergency uses, then selling it to a company for profit that would be supplying it to a development in Durham we didn’t agree to supply,” said Councilman Steve Schewel, a 751 South critic. “I don’t think that’s right.”
But the 2008 contract makes clear that the transfers are for both emergencies and the “normal course” of operations.
Bell’s no-interference-by-the-city message also isn’t being universally embraced.
The Durham Open Space and Trails Commission – chaired by 751 South opponent Will Wilson – wrote the U.S. Army Corps of Engineers late on Thursday to ask it to conduct an environmental assessment of a planned Durham County sewer line to 751 South.
Wilson told Corps officials the line will cross wetlands and a creek.
Schewel, the council’s liaison to the trials commission, said the panel was supporting a request from the Haw River Assembly. He called it “a good thing to do,” and said he thought Bell was only addressing the water issue.
“I don’t think he was addressing the sewer question,” Schewel said. “In fact, I’m sure he was not.”
But Bell in fact did address both utilities.
“I wouldn’t want the county to come in [and] tell us what we could or couldn’t do with our water and sewer,” he said during Thursday’s work session. “Likewise, I don’t think it’s appropriate for us to tell the county what they can or cannot do.”
Bell is wrapping up a term as chairman of the N.C. Metropolitan Mayors Coalition.
That group and the N.C. League of Municipalities is worried the Republican-led N.C. General Assembly will try to pare the authority of cities and towns.
They’re at the moment most worried about a potential move to force the city of Asheville to surrender its water system to a regional authority, a move League officials say could establish a statewide precedent.
The General Assembly last year considered and only narrowly defeated a bill that would have forced the City of Durham to provide water to 751 South. Republicans have since expanded their majorities in both the House and Senate.
The developers of 751 in June hired a top lobbyist, Reginald Holley, to promote their interests in the Legislature. Holley is a Republican. Schewel, Bell and other city elected officials are Democrats.