By Robbie Ward
TUPELO – High-stakes negotiations begin in earnest this week to determine if recently annexed Tupelo residents can gain access to the city’s lower cost water utilities and switch from the North Lee County Water Association, a rural water association with a history of providing rust and brown colored water.
Negotiators for the two water providers will likely discuss dollar figures, future growth and other details related to a possible agreement that can avoid expensive legal fees paid using tax dollars and water bill charges.
Both Tupelo Water & Light and North Lee County Water Association have time-sensitive reasons to resolve negotiations as quickly as possible. The city will soon begin installing water and sewer infrastructure to the areas where North Lee currently provides water. At the same time, North Lee intends to push ahead with a nearly $9 million project to improve service to areas including the annexed parts, an effort Tupelo formally protested in October to the state department that will decide whether to approve the plan.
At the heart of negotiations are 442 mostly residential customer accounts. They’re Tupelo residents who didn’t ask to join the city but now pay municipal taxes for services.
“Annexed residents want to get services we’re paying for,” said Buddy Palmer, a Tupelo City Council member since July whose Deerpark residence was included in the annexation. “I’ve still got the same dark water and am paying more for it.”
Palmer and other North Lee customers complain about the water provider’s costs and quality compared Tupelo Water & Light. Customers of the rural water association pay 6 percent more for minimum charges each month but price differences skyrocket as customer’s water use increases during each monthly billing period. North Lee customer bills can more than double for many residents using sprinklers during the summer.
Tupelo’s annexation approval by the Mississippi Supreme Court in mid-2012 requires the city to provide the same services existing residents receive to 3,000 new residents in a reasonable amount of time. The city wants to have an agreement to provide water to annexed customers before infrastructure work begins.
Tupelo Water & Light intends to begin water and sewer infrastructure installation in annexed areas within four months. The city has scheduled infrastructure installation in the most populous annexed areas first, the southeast portion that includes the Auburn community and Deerpark subdivision, and then expand improvements to the northwest, including Big Oaks, Indian Hills Beach Springs Road and Mount Vernon Road areas.
Tupelo Fire Department engines require larger water lines than the four-inch lines in North Lee areas to connect to hydrants and receive necessary water pressure for fire hoses. Since Tupelo will have water lines for fire protection in these areas, city leaders also would like to provide water service to the residents there.
Many annexed residents welcome Tupelo’s water. David Summers, 66, has had a quarter-century relationship with North Lee County Water Association’s service at his home near the Deerpark subdivision and isn’t impressed.
A few years ago, Summers sat down in his bathtub to relax after a hard day’s work and watched globs of oil ooze from his faucet.
“It was just a clump of oily junk into my bathtub,” he said. “If I can’t get Tupelo water, I’m going to be upset with the city.”
His and other stories abound of clothes ruined with red and brown stains after washed using North Lee’s water.
The rural water association’s periodic water discoloration results from sediment within the system containing iron and manganese. However, fewer customers have complained as much in recent years due to operational improvements. Surface water used by the city of Tupelo since 1990 does not have color or order issues. North Lee has said converting to a surface water system would be cost-prohibitive to customers.
Tupelo’s recently annexed areas includes about 10 percent of North Lee Water Association’s customers. However, higher water use among the group has it contributing about 20 percent of the association’s revenue.
This area’s revenue and projected future income for the water association factor significantly into plans to repay a $8.9 million low-interest U.S. Department of Agriculture loan to add six new water tanks and six more wells.
The project will help the water association “provide better service to its customers by installing badly needed state-of-the-art meters to rectify what had previously been an antiquated, unreliable metering system,” according to North Lee documents provided to the Mississippi Department of Environmental Quality on Nov. 12.
MDEQ likely will decide in the coming months whether to grant required permits to allow the expensive project to proceed. Adding wells and services show North Lee’s continued effort to improve after the association’s trouble in recent years.
A Daily Journal investigation in 2011 exposed wrongdoing by water association officials, including the association’s then-supervisor Dan Durham falsifying monthly water samples, charges he admitted in federal court in December 2012. Also in 2011, all eight of North Lee’s Board of Directors resigned amid the controversy.
Current board president Terry Anderson, elected in October 2012, said projections to pay for the loan include annexed areas.
“Taking away that area has a significant impact on the amount of money you can generate for revenue for the overall North Lee customer base,” he said.
He said the water association’s leadership spent about a year planning additions of new tanks and wells.
USDA approved the loan for the water association improvements but the money hasn’t been accessed yet.
Representatives with the city and North Lee met in December to discuss how many members from each side negotiate related to the annexed residents. Likely Thursday, detailed discussions will begin between the city’s four-person committee – TW&L director Johnny Timmons, city attorney Ben Logan, Mayor Jason Shelton and city clerk Kim Hanna – and Anderson and three other North Lee board members. Discussions will likely continue once a month until agreement is reached or a stalemate occurs.
Timmons said the city wants to provide fair compensation to the North Lee water association for customers and areas Tupelo wants to serve. He didn’t give a specific amount the city will offer and declined to give any other specifics related to negotiations.
“We want to make them whole,” he said.
Even if the two sides reach an agreement, the state Public Service Commission must determine it meets the best interests of customers in the annexed areas. If no agreement is reached, the city of Tupelo can try to convince the PSC that the water association does not provide “reasonably adequate service.” This requires the city of Tupelo prove this degree of service isn’t currently provided. Shawn Shurden, attorney for the PSC, said each decision the commission makes in these types of situations is made a “case-by-case basis.”
Another option for residents of the annexed areas who want to get on the city water system is for nearly each of the water association’s customers living in Tupelo to sign a petition for the PSC to hold a hearing on the adequacy of service provided.
Negotiators for the city seem optimistic an agreement will be reached.
“I think we have some good people on these committees,” Logan said. “As long as we realize we have all options on the table, from the good to the bad, we can do what we always do and work something out.”
As for North Lee, Anderson said he and other board members need to learn details like how much money Tupelo plans to offer but currently thinks the rural water association should keep all of their customers. He also pointed out North Lee can proceed with building water tanks related to the $9 million project since Tupelo only objected to the wells.
“We’re sitting on a bid,” he said. “It’s good for 60 days.”