The outcome of a lawsuit filed in 2015 by the Brunswick Glynn County Joint Water and Sewer Commission against the Glynn County Board of Education could determine if another rate increase is imposed on utility customers.
Utility commissioners were told last week the finance department was already considering what to do should the utility lose its lawsuit seeking to recover what officials say is a large amount of unpaid debt.
“We have one customer that has a large balance of the $2 million dollars (of unpaid water and sewer bills), which is the Board of Education of Glynn County,” JWSC Finance and Administration Director John Donaghy said at a commission meeting Thursday. “This is a result of the school board not paying the debt recovery fee.”
While the amount was a little less than $100,000 when the lawsuit was filed in November 2015, it has grown over the last year and a half and is now somewhere around $250,000, Donaghy said.
“If it is determined that they are not responsible for paying that, that would increase every customer’s bill by 25 cents a month for the next 28 years,” Donaghy said.
At the same meeting, utility legal counsel Charles Dorminy said the JWSC plans to appeal if Glynn County Superior Court Judge Stephen Kelley rules against them, meaning that decision likely wouldn’t affect them within the next fiscal year.
Debt service is one of four charges that make up a water and sewer utility bill and is used to pay off prior debts accrued by the JWSC. At least some of that debt was accrued by expanding and maintaining infrastructure.
As such the school board claims the debt service charge amounts to an impact fee, which it claims it can’t pay because the Georgia Constitution “confine(s) expenditure of school funds to educational purposes, that is the support and maintenance of public schools,” according to court filings from 2016.
Attorneys for the utility, Dorminy and Steven Bristol, argued in a 2016 court filing that the phrase “and activities necessary or incidental thereto,” in state constitution meant the school board could pay the debt service fee, as debt service is necessary for the JWSC to operate and that water and sewer are “clearly necessary” to support and maintain public schools.
Trouble didn’t arise until September 2014, when the JWSC did an audit of the number of Residential Equivalence Units that businesses in the area were being charged. An REU is a water and sewer usage measurement in which one unit is equivalent to the average usage of one single-family home.
Most establishments in the area saw their bills increase, including local schools. At that point, the school board determined debt service charges were impact fees, in essence, and could not pay them.
The utility alleges the school board had been paying the charges until September. The school board acknowledged that it stopped paying certain charges in September of 2014 in court findings, but claims it owes the JWSC nothing and cannot pay the charges.
Despite the refusal to pay, the JWSC alleged that it was continuing to incur expenses related to improving water and sewer infrastructure at Glynn County schools. The school board claims not to have enough knowledge to respond to the claim in court filings.
The utility hopes for a ruling which would require the school board to pay the outstanding debt service portions of its water and sewer bills from September 2014 onward. The amount is increasing with each billing cycle, according to the JWSC’s original complaint.
Judge Kelley has not ruled on the matter.