Lake Wylie residents listened eagerly to hear George Sheppard’s thoughts on buying a water utility. After all, he was the one there who had done it.
Two years ago Tega Cay purchased Tega Cay Water Service, a subsidiary of Utilities, Inc. as Carolina Water Service in Lake Wylie still is. Sheppard, the city’s mayor, sees a similar situation forming here. He doesn’t see an identical one.
Residents in Tega Cay then and Lake Wylie now argued a variety of cost and service reasons for wanting public ownership of their systems. But Tega Cay also had environmental issues. Significant sewage spills at the time, and public documentation of them, put Tega Cay Water Service under a consent order with the state health department.
The state demanded fixes on the utility’s dime. Raising rates for those fixes wouldn’t be an option, officials said. That order was a major factor in the deal.
Sign Up and Save
Get six months of free digital access to The Herald
“They came to realize they were going to be spending millions of dollars to fix the system,” Sheppard said at an Aug. 30 public forum.
“There was no way you were going to get a return on investment.”
Still, the sale wasn’t easy. The sewage spills and constant news coverage of them made the utility more willing to sell, Sheppard said, but also worried banks. Initially, the state of system disrepair worried the city, too. Leaders knew they would need money not just for the purchase, but for ongoing improvements.
The city began moving forward in earnest when leaders stopped focusing on the infrastructure they were getting, but on the residents served. Residents who would become customers, which could help with costs.
“We got to thinking, ‘we aren’t buying the system,’” Sheppard said. “We were buying the customers.”
Tega Cay already had a city utility, as York County has water and sewer operations separate from Carolina Water. To bring in the roughly 2,700 more Tega Cay Water Service customers, city staff and partners had to find a bank in California willing to help. The city had to use its own service as collateral.
All those issues, and the city still had to meet with the utility on an asking price. At one point in his time as mayor, the utility put the price at $12 million. Sheppard, elected officials and city staff met to crunch numbers. They had to bring the number to a point, as would York County now with Carolina Water, where the purchase and needed improvements wouldn’t skyrocket existing utility rates.
Sheppard eventually set a somewhat arbitrary figure of $5.8 million. Staff told the utility the city wouldn’t go higher, but the utility countered with $5.85 million and the deal was done. Sewer rates increased $3 in Tega Cay to make it happen.
Like Tega Cay then, Lake Wylie residents are asking elected officials and regulators for help. About 100 people turned up at the meeting last Tuesday that was led by state Rep. Ralph Norman. Residents wanted to know why the county can’t open up water service to bid, or why the company should claim assets of infrastructure installed by developers and donated to the utility.
Sheppard told residents to take meticulous notes. To take pictures and date phone calls, anything regulators could look at as proof of warranted discontent with the utility. He and other leaders Tuesday called for inspection of water and nearby infrastructure. Sheppard offered names of helpful professionals the city used.
In many ways, some of the biggest struggles in Tega Cay also were the most helpful. The sewage spills were hurting property values and making Lake Wylie, a main attraction for Tega Cay, unusable at times. Yet declining property values and increased repair costs from the consent order, also due to the spills, brought the city and utility to the same table.
In Lake Wylie, the community is growing and Carolina Water has a monopoly on water and sewer service. Property values aren’t dipping, and a growing community means more customers on the way. So the $5.85 million for 2,700 customers two years ago may be nowhere near the cost structure now for 4,000 homes and businesses in Lake Wylie.
Sheppard can look back for lessons now, but at the time evaluating, negotiating and purchasing a utility was a daunting task. One he equates to the apprehension of buying a first home. One his city is still working through as needed system repairs will take many more months still.
“We’ve had our problems,” Sheppard said. “We’ve had many sleepless nights. Every time it rains, I don’t sleep at night.”
But, the spills are fewer. They are less severe. Which is part of why Lake Wylie residents listened so carefully Tuesday, to a man on the other side of an issue still facing them squarely, without regrets for having gotten there.