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County poised to take over sewer plant
Deal could end years of litigation
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Forsyth County News

 

Forsyth County has approved a settlement agreement to acquire the privately-owned James Creek sewer facility, as was intended several years ago, from Waterscape Services.

County Attorney Ken Jarrard said the design-build agreement called for the south Forsyth facility to be donated to the county after the company had made its money back and then some by collecting tap fees from area developers.

"It was a great idea in principle," he said. "However, in 2006 at the time when the conveyance was to occur, Forsyth County and Waterscape got into a fairly significant disagreement with respect to a change order."

Waterscape terminated the contract and litigation began, in which the county filed suit and the private entity countersued in 2006, Jarrard said. Both suits are still active.

For $2 million, the county will buy the James Creek facility and all its infrastructure, contracts and rights. The funding for the purchase will come from the county's water and sewer fund.

The county commission voted 3-1 on Tuesday to approve the agreement, with Commissioner Jim Harrell opposed and Commissioner Patrick Bell absent.

Assuming the county does not back out of the agreement, the sale will close no later than Dec. 17.

Contingent upon the closing of the deal, the settlement also calls for both sides to file a mutual petition for dismissal of the legal battle.

Prior to that date, the county will hold a public hearing on the matter, which Jarrard said would likely take place at the first regular meeting in December.

According to the contract, the county may get out of the agreement without penalties if Waterscape does not remedy any material deficiencies that might be discovered in the plant.

Also, for any other reason, the county may decide not to execute the contract at a cost of $20,000.

The plant is permitted to treat 250,000 gallons of wastewater per day, but has the capacity to handle about 1 million gallons per day through additional equipment.

According to a June presentation by Tim Perkins, the county's water and sewer director, the facility has reserved nearly 900,000 gallons to various developments.

If the contract goes through, the county plans to expand the gallons per day allotted.

Perkins said the issue of sewer availability in that area has been "contentious" for some residents and developers.

Mike Dye, a developer in the area, said he was concerned about moving forward with the Overlook at James Creek subdivision without the promise that sewer would be available.

In the next couple of months, Dye plans to begin removing a landfill on the property, which has unsafe methane levels. The area where the landfill once sat will then become green space.

In July, Dye worked out a deal with the county to relax the soil and erosion fines in return for reclamation of the property. But he couldn't secure confirmation that sewer would be available to the 157-lot subdivision.

Though the plant has had the capacity, the county did not increase the permitted amount due to the pending litigation.

"For all of the landowners in the basin, it had approached a melting point," Dye said. "We're sitting here trying to survive the biggest housing decline in decades and now we were faced with having properties that could not be sewered."

Dye and other property owners in the same situation, which he said represented about $50 million in assets, met with the commissioners and asked them to seek a settlement.

"The resolution was a breath of fresh air," he said, adding that the James Creek submarket is one of the best selling and will contribute to growing the county's economic development.

"We're glad it's coming to a close ... I think it's a big win for everybody, including the citizens of Forsyth County."

An estimated 740 sewer taps are available for the county to sell, with 543 of those not under any contracts.

Altogether, the county stands to profit between $2.3 million and $2.5 million from acquiring the facility, minus attorney fees for four years of litigation, which Jarrard estimated at about $1 million.

An outside firm, Kilpatrick Stockton, has been handling the county's legal battle with Waterscape, which would continue if the agreement is terminated before closing.