Oconee County Commissioners Hear Report on Sewer Capacity Fee Investigation

“We Had A Mess”

The Oconee County Board of Commissioners on May 29 brought at least a temporary close to a two-year investigation of how the county handles sewer capacity fees when county Administrative Officer Alan Theriault read a nine-minute-long report on that investigation into the public record.

“Frankly, we had a mess,” said Commissioner Jim Luke at the end of the report, given as part of the regular Commission meeting. He said he was pleased with what the county had done to address the problem.

Theriault began his comments by reminding the commissioners that he had promised them he would make a report “to the commissioners and to the public” on the “research” he and others had done and the actions that had been taken.

Theriault said the “review was initiated primarily because of complaints and criticisms received by members of the Board from citizens, business and others about the methodologies employed to calculate and assess those fees, the cost of capacity fees themselves, and what appeared not to be a uniform, consistent and a fair manner in which the fees were collected.”

Sewer capacity fees are paid by developers and businesses to be allowed to reserve for their own use the capacity of the county’s two treatment facilities, one on a tributary to Calls Creek in Watkinsville and the other on Rocky Branch Road in the western part of the county.

Capacity Fees Used Since 1991

Capacity fees “in one form or another have been collected, assessed or granted” ever since the County assumed the operation of the Calls Creek plant from the city of Watkinsville in 1991, Theriault said.

“Since that time, the Utility Department has seen multiple directors, privately contracted operations, and the County has seen changes in administration and its organizational structure,” Theriault said.

“Obviously, trying to reconstruct how and why certain things were done over the course of 20 plus years was going to prove to be a monumental task,” Theriault said.

The task was made even more complicated because “BOC and Utility Department policies changed from time to time,” he added.

At times, sewer capacity “was used as incentives” to spur development, Theriault said, and “under one set of guidelines, the director (of the Utility Department) was given broad discretionary authority over the application and collection of capacity fees.”

Theriault said “there was a practice that allowed some franchised establishments to calculate capacity fees owed based on usage from their other locations, while the small, single, independently owned mom and pop operations were unable to draw usage comparisons from other locations, and were subsequently charged the full capacity fee rate” based on a formula developed by the state of Georgia.

Tried To Reconstruct History

Theriault said he had worked with current Utility Department Director Chris Thomas and his staff to “try to reconstruct a history for many of the approximately 1,500 customers tied on to the County sewer system. Obviously there are some customers for which no records were found.”

Most of those missing records were for customers added to the system or who purchased capacity fees in the early days of the system, Theriault said.

Theriault said that Thomas worked with county Finance Director Jeff Benko “to verify that capacity fees collected were actually submitted and deposited correctly.”

Theriault said Benko “could find no discrepancies in his records regarding collections and deposits.”

The County’s independent auditors confirmed this finding, Theriault said.

Policy Changes Proposed

As a result of the investigation of the problem with capacity fees, Theriault said, the county staff formulated a policy for the Board to consider.

He said that goal of the policy was to “be fair to all using the sewer system” and to be “equitable in its administration.”

Theriault also said the goal of the new policy was to “remove discretion on the application of the policy from the director and return all authority to the BOC for any deviation from the policy.”

Finally, Theriault said, the staff wanted a policy that “would be business friendly.”

Theriault said the Board had taken action on three occasions while the investigation was taking place to implement the new policy.

On April 6 of 2010, the Board adopted a policy reducing capacity fees by 50 percent.

The Board at that April 6, 2010, meeting also made the owner of buildings responsible for payment of the capacity fee, and on Oct. 12, 2010, the Board amended that policy allowing owners to transfer the capacity reserved to tenants.

At that time, the Board also allowed for a refund of capacity fees paid after April 6, 2010, if actual use deviated by more than 25 percent from the purchased capacity.

On Jan. 4, 2011, the BOC again amended the policy to provide a mechanism for the refund of residential sewer capacity fees where appropriate.

Things Left Unsaid

What Theriault did not say in his report, but what the minutes of the April 6, 2010, meeting indicate, is that the BOC at that meeting also voted to refund $8,805 to Rachel’s Southern Style Restaurant on Hog Mountain Road at Jamestown Boulevard west of Butler’s Crossing and $1,575 to Scoops ice cream shop, also off Hog Mountain Road at Capital Avenue west of Butler’s Crossing.

Both had paid sewer capacity fees.

Theriault also did not say that charges that former Utility Department Director Gary Dodd had made a special agreement on sewer capacity fees surfaced late last year in a controversy between the county and the owner of Pinewood Estates South mobile home park.

At that time, the county produced written records that showed that the owner of the mobile home park was expected to pay for water services, contrary to the claim.

Praise For Director Thomas

Theriault went out of his way to praise Thomas, as did Commissioner Luke and Commissioner Chuck Horton.

Thomas had been assistant utility director when Dodd stepped down in the July of 2007 and served as utility director for two months before leaving the department. Thomas was replaced by John Hatcher, but Thomas returned as utility director in June of 2008.

Theriault also said that commissioners Luke and Horton were “primarily the driving forces behind” the investigation and changes in capacity fee policy.

Horton said he thought a big change that had been made was to involve Finance Director Benko in the process. In the past, he said, Benko had no idea what fees has been assessed and no way to know if payments were consistent with the fees.

Horton also praised “A particular citizen with a mom and pop restaurant (for) at least having trust in us” to try to solve the sewer capacity fee problem.

That person, Horton said later, was Rachel Hammond, who opened her Rachel’s restaurant in 2007.

More Work To Be Done

Theriault told the Board near the end of his report that “This is, however, not the end of this research, nor the end of monitoring or tweaking what we have in place.”

Utility Director Thomas is continuing to review data gathered by new meters installed in the county “in an attempt to make further improvements in the capacity fee system,” Theriault said.

“We fully anticipate that our relatively new policies will require additional amendments in the future to serve the ever-changing needs of our customers,” Theriault said in concluding his report.

The video clip above consists of Theriault’s report and the responses of the commissioners. Luke chaired the meeting in the absence of BOC Chairman Melvin Davis, who was absent for family reasons.