City vs Water System 'Debacle'

[westsider28]

There's a disconcerting situation brewing between the City and Commission of Public Works (aka Spartanburg Water).  The CPW is apparently wanting to cut or eliminate the $1.4 million dividend it pays to the City (which was established in lieu of forcing annexation for water customers).  If that happens, the City would be in a big hole money-wise and would be forced to raise taxes and/or cut services.  This whole thing is quite confusing to me, and I don't know if there is any precedent for this situation.  I don't know why the CPW wouldn't just raise rates.  Utilities do that all the time (see Duke Energy).  Anyway, here's some more info.  See if you can make sense of it.

 

Herald-Journal article

City of Spartanburg information

[Spartan]

The best way to fix it is to abolish the Spartanburg Sanitary Sewer District, move the water and sewer services under either the City or County umbrella as part a Public Works Department, and allow the city to require annexation as part of getting water or sewer service if it wants. Whoever made the decision to disallow annexation in lieu of a payment was a bonehead. What a short-sighted decision.

 

Having a quasi-governmental agency like the Spartanburg Water System makes them unaccountable to voters. Moving them into a normal part of the bureaucracy simplifies government, and would prevent asinine disagreements like this from occurring in the first place.

[westsider28]

I believe Spartanburg Water leaders are elected by the public, but the their relationship with the City and voters is a bit odd.

 

There was another article today that details Greenville's set-up with their water system.  They require any commercial or industrial development, or any other development larger than a single-family residential unit, locating within one mile of the contiguous city limits to sign an annexation agreement.  That seems like it would be a good compromise in our situation.  We've got to be able to annex existing water customers, though, in addition to new ones.  I'm not sure how that would work, and annexation is a touchy issue politically in this area.

 

There's going to be a public forum about this Thursday at 6:30 pm at the H-J office.

[Spartan]

Right, but can you actually tell me who is your Sewer District representative without looking it up?

 

I will agree that Greenville's system is an improvement. I think is Spartanburg were able to annex enough non-residential properties to compensate for the $1.5m annually then it wouldn't be an issue.

[Spartan]

I moved this discussion into its own thread. As I have stated in the past, I think this is a prime example of why Special Purpose Districts are bad for cities, and why our local government's in this state cannot function as well as they could.

 

To that end, Mayor White is now calling on citizens to vote in new commissioners, which is a pretty bold thing for him to do from a political standpoint. My opinion is that because the vast majority of Spartans do not know who their water commissioners are, or what makes and effective water commissioner, how can they truly know who they are voting for? If the Water System were a City department, Mayor White and City Council would be directly responsible and it would be far easier to make changes in leadership... and more importantly, this very issue would not exist.

 

http://www.goupstate.com/article/20130501/ARTICLES/304301028/1083/ARTICLES?p=1&tc=pg&tc=ar

[westsider28]

Spartan, do you know what the process would be to make the Water System a city department?  Is there any precedent for doing that?  I would think that would be very difficult to do.  For instance, wouldn't that require annexation of every Water System customer into the City (if the State would even allow that)?

 

I did a quick search, and it appears that Charleston and Greenville have a separate water system, like us.  Columbia and Rock Hill appear to have water as a city department.

[Spartan]

That's a great question. Let me preface the following by stating that local governments fascinate me for some reason. Special purpose districts are created by an act of the General Assembly, so it would require both parties agreeing to merge and, I assume, getting our local delegation to pass a bill to abolish the special purpose district. It's been done before in Spartanburg. But in order to explain that you have to understand the extremely complicated relationship between the various districts within the county. It is my opinion that the extreme complexity associated with this arrangement reduces government transparency and accountability because most people will never take the time to learn how this mess actually works.

 

There are seven entities involved with the operations related to servicing water and sewer in Spartanburg (just the area around city itself, I'm excluding the rest of the county for this discussion because I don't fully understand it):

• The City of Spartanburg (please note that City with a capital "C" refers to the local government itself, not the residents)
• The Commission of Public Works (CPW)
• The Spartanburg Water System (SWS)
• The Spartanburg Sanitary Sewer District Commission (SSSD Commission)
• The Spartanburg Sanitary Sewer District (SSSD)
• Spartanburg Water
• State of South Carolina

 

Now, here's the fun part:

 

Spartanburg Water System & Commission of Public Works

The residents of Spartanburg voted via referendum to establish the Commission of Public Works in the early 1900s to oversee the "Spartanburg Water Works" - now called the "Spartanburg Water System." The CPW, and thus the SWS, are a public agency, not a Special Purpose District. This agency is charged with providing water to the city's residents and businesses. It has a political relationship with the City because it is a public agency and the residents vote on members to the CPW; and thus it does not directly answer to City Council. This relationship is complicated by the fact that the SWS territory extends well beyond the corporate limits of the City, but is still owned by taxpayers within the city limits (eg: Boiling Springs). City residents vote on commission members, people who live outside of the city limits of Spartanburg do not get a vote. Because SWS owns the primary water supplies (Lake Bowen, Lake Blalock, and Reservoir #1) other water providers (Like SJWD) in the county contract with SWS to "buy" water, and resell it at a higher rate. Over time SWS has acquired the water systems in Cowpens, Pacolet, Una, Landrum, Glendale, etc.

 

I'll add here that I am not clear about how this arrangement prevents the City from annexing. This is a common practice, especially in the Lowcoutnry, where the groundwater tables are less conducive to wells in denser developments like subdivisions.

 

The Spartanburg Sanitary Sewer District & Commission

The SSSD was established as the Spartanburg Metropolitan District in the 1920s as a Special Purpose District -managed by the CPW- to provide sewer services in the urbanized and urbanizing area around Spartanburg. It had three sub-districts, A, B, and C. The SSSD Commission was established as its governing body in 1973, replacing the CPW. I have no idea why they made this change, but logically it could makes sense because the SSSD Commission has independent taxing authority while the CPW does not. The SSSD Commission has 7 members, including the Mayor of Spartanburg.

• District A included Spartanburg, District B was located northwest of the city, generally north of old 85 and between the Southern Railroad Shops/Railyard and Hwy 9, and District C encompassed Una. District A was changed to SSSD.
• District B (known as Metro B) still exists as an SPD. It provides water, purchased from SWS, sewer (also 'purchasing' the rights to use SSSD 's treatment facilities), and fire to the small area within its jurisdiction.
• District C was changed to the Una Water System, and it was eventually merged with SSSD and SWS operations. The Una Fire District, however, is as a stand-alone SPD, and I assume a remnant of the old Metro C, though I could be mistaken on that detail.

Over time, various mill towns handed over their Sewer SPD's to the SSSD (similar to Una), including Pacolet, Landrum, and Fingerville. When this happens, the SSSD Special Purpose District boundary is expanded to include these areas (ie: the area that can see taxes levied for sewer services).

 

City of Spartanburg

The City kept its sewer system separate until 2008, when it was handed over to the SSSD for management.

 

Apparently the City CAN annex based on its sewer system, as demonstrated by the Hilbrook annexation a couple of years ago. I am not clear as to the new arrangement with SSSD still allows the City to annex.

 

Spartanburg Water

Over time, there was an obvious need to combine the operations of these various entities due to the overlapping work and economies of scale. The "SWS-SSSD" is the water and sewer management agency of the CPW, SSSD, and indirectly, the City. This entity is now known simply as "Spartanburg Water."  There are two management entities for this organization: the CPW and the SSSD Commission. Keep in mind that the City appoints members to both of these commissions, so it has only an indirect influence on how things are operated.
 

State of South Carolina

The need for Special Purpose Districts in the first place was a function of the South Carolina Legislature. The South Carolina government has always been anti-establishent. Dating back to colonial times, the Commons House (later called the State House) was always designed to collect and maintain power - notably over the executive (including appointed leaders by the Crown), but also over local government. Prior to 1975, each County had one senator, and various numbers of house members. Because of the nature of a strong legislature, the Senators were very powerful figures at the local level - some viewed them as the 'boss' of the county. They worked with the House to establish "supply bills" to each county, which literally funded everything that happened in the county, and they controlled everything even down to a municipality's finances. Because of this arrangement you didn't "need" cities for anything other than for courts. So effectively, cities and counties were an arm of the state legislature, and served no real purpose- they couldn't even annex!
 

In 1964 with the U.S. Supreme Court decision in Reynolds v. Sims, established that House and Senate districts that must contain equal population. This decisions moved us to the current system of having equal population in all districts. Over time, this change reduced the power of the Senator, and in 1975, the State House enacted the Home Rule Act. "The Act greatly expanded the authority of county government, allowing it to provide municipal-type services. It prevented the formation of any more special purpose districts. Instead, it included a provision for the county to establish special tax districts."

 

So, think about that. Prior to 1975, the only way to provide municipal services outside of an incorporated city was for a County Senator to sponsor legislation to create a district with the ability to tax in order to pay for its services. In other states, these districts are known as "cities," which are able to "annex" the new growth into their boundaries and thusly provide urban services to them (water, sewer, fire, police, transportation).

 

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My point in all of this is that SPD's are vestiges of a broken system, which is in turn a function of State government. These districts create general confusion in the population and cause an inherent lack of transparency and accountability due to the complex nature of these various entities. For example, there are about 52ish different Special Purpose Districts in Spartanburg county. Can anyone name them all? They overlap to create 283 different "levy districts" within the county. Don't believe me? Check out the 2012 Levy Sheet from the County. Explain to me how normal person is supposed to figure out all of this? Not to mention the complication of having 67 different elected bodies (including the 14 municipalities and the county) in one county.

 

By targeting certain agencies, like SWS and SSSD, and consolidating them within a municipality, you are enabling the municipality to perform a function for which municipalities are supposed to exist. Thus removing two layers of government that are not needed, and preventing situations like the current one from occurring in the first place.

 

I will freely admit that I am biased by the simplicity of Charlotte's government structure. Our water and sewer services are provided by the Charlotte-Mecklenburg Utilities Department, which is a function of the City of Charlotte and Mecklenburg County government's semi-consolidated government arrangement. They operate in a quasi-independent fashion because they are funded entirely by user fees (just like SWS-SSSD), but still answer to City Council. That's it.

 

Additionally, I want to point out that I am by no means a "pro-government" guy. I am, however, 100% for government being as simple as possible (which I realize is all relative). If local governments can operate efficiently you have healthy cities. Healthy cities are, in turn, more efficient and more conducive to economic development. For examples, see most cities in North Carolina.

 

Here are some links that are relevant to this discussion

SWS-SSSD History

City of Spartanburg's info page

Home Rule Act

Metropolitan B

[westsider28]

Holy crap...

 

I'll have to read over some of that stuff in more detail, but I see what you're saying.  I knew South Carolina was messed up when it came to the state screwing with local governments (especially compared to other states), but I didn't realize it was that bad/confusing!

[westsider28]

Apparently, the City and Water System are getting closer to an agreement.  The current plan presented by the City would be a 15-year agreement that includes a $1.2 million payment next year, $1.1 million in 2015, $1 million in 2016 and $1 million plus the federal consumer price index rate from fiscal years 2017 to 2027.  That's lower than the current payment, but there is also a new annexation provision that would include new or expanded water connections within one mile of the city’s corporate limits, provided the areas are contiguous to the city limits.

 

H-J article

 

Glad to see the annexation component.  That's really important (especially with the smaller payment).  Hope this gets resolved soon.

[Spartan]

I guess its a step in the right direction. At least the annexation agreement is an improvement for the City.

[westsider28]

The City and CPW have finally reached an agreement.  It still needs to be voted on, but it will more than likely pass.  It's a 15-year deal; basically exactly the deal I described above.  Good to finally have this settled and finally have a way for the City to expand its boundaries.

 

City Announcement