SULLIVAN’S ISLAND, S.C. (WCBD) — The town of Sullivan’s Island could have its water supply cut off this summer, amid a dispute with the Charleston Water System.

According to a letter sent to the town from Charleston Water System (CWS) in October 2023, when Sullivan’s Island purchased 750,000 gallons per day of capacity from the Charleston Water System in 1994, it was a 30-year term which expires on July 19, 2024.

The water system tells Sullivan’s Island leaders that if there is not a new contract by then, service will be disconnected for the town’s 2,000 residents on July 20.

In addition, in the letter, the water system said the town has been paying $0.88 per thousand gallons of water since 2017, and calls that rate “arbitrary and unsupported by facts.”

Charleston Water System says the rate in 2017 was $0.96, and each year, there is a new projected rate for the town. For example, the rate last year was $1.53 per thousand gallons. At the end of the year, an adjusted rate was given which amounted to $1.11.

CWS also said in the letter to Sullivan’s Island that they are willing to provide water service to the town as long as it pays all outstanding amounts owed to the water system. As of February, that amount totaled $1.08 million.

In previous letters responding to Charleston Water System, Sullivan’s Island Mayor, Patrick O’Neil, said they have been paying the correct rate and that a memorandum of understanding on a rate formula was never approved.

“SI (Sullivan’s Island) has been paying the undisputed portion of the volumetric rate since 2017. SI does not owe capital charges unless SI purchases additional capacity which SI has not done.” a letter dated June 30 to CWS reads.

Sullivan’s Island leaders claim that the contract with the water system is clear that capital charges should not be charged on top of the initial capacity the town purchased in 1994. The town also adds that “because SI has not given written notice to CWS not to renew the contract, the contract will be automatically renewed for 15 years or until July 19, 2039, as set forth in the contract.”

In its October letter responding to the town, CWS CEO, Mark Cline, said CWS cannot agree to a rate formula that does not include capital charges or a perpetual term.

As of now, Sullivan’s Island and Charleston Water System are in legal remediation for the issue.

On Friday, Sullivan’s Island leaders released a statement to News 2:

“It’s disappointing that the leadership at Charleston Water System has apparently decided to ignore the confidentiality agreement put in place during the mediation of our long-standing dispute.

Years ago, CWS decided to raise our rates as if our signed contract with them did not exist.

As CWS knows, we’ve simply been continuing to pay the undisputed amount set in our long-standing, signed agreement.

We hope everyone will understand we’re standing firm on the principle that signed contracts are signed contracts. It’s the right thing to do for our citizens.

We will continue our good faith efforts to reach an appropriate agreement through mediation, or if need be, in the court.”

– Sullivan’s Island town leaders

SULLIVAN’S ISLAND, S.C. (WCSC) - A yearslong dispute between Sullivan’s Island and the Charleston Water System could leave thousands of residents without water starting in July if over $600,000 in debt is not paid.

As of Sept. 28, 2021, Charleston Water System claims Sullivan’s Island owes them $197,468 in billed, but unpaid, volumetric charges and $442,478 in billed but unpaid capital charges.

Charleston Water says the town changed how much they paid per 1,000 gallons in 2017, even after paying the same amount since the contract began in 1994.

They say that the paid charge went from $1.22 per 1,000 gallons to 88 cents per 1,000 gallons.

Charleston Water wrote in a January 2019 letter that “after more than 20 years, the town of Sullivan’s Island does not believe the contract requires them to pay any portion of Charleston Water’s capital expenses, a belief which has no support whatsoever of our board of commissioners or legal counsel.”

After getting a rate consultant, Charleston Water offered Sullivan’s to pay 89 cents per 1000 gallons. According to numerous letters, the island refused.

An opinion from the state Attorney General in 2019, states Sullivan’s Island does not have the authority to interpret contracts, but believes both of these parties must finish their initial term of 30 years and then they are able to terminate it if everyone is notified.

Sullivan’s Island says they disagree with this opinion and there are four unresolved topics between the two: capital charges, fire hydrants, the municipal wholesale rate as an excess demand charge and the rate formula.

Charleston Water says Sullivan’s Island has two choices: to pay all outstanding balances and they can continue to purchase water at the then-published municipal whole rate or find an alternate water source starting July 20 of this year.

In a 2021 resolution from Charleston Water, they say they discovered through this lack of payment that 18 fire hydrants were not being paid for on the island. If they’re not paid, all will be removed except for those used for water main flushing.

Starting this month, they will send out delinquent notices to DHEC, the State Fire Marshal, Sullivan’s Island residents and other state agencies on a monthly basis that the water will be shut off starting July 20 – when the 30-year contract is up – if this procedures are not followed.

In response to these letters, Andy Benke, the town administrator for Sullivan’s Island, provided this statement:

It’s disappointing that the leadership at Charleston Water System has apparently decided to ignore the confidentiality agreement put in place during the mediation of our long-standing dispute.

Years ago, CWS decided to raise our rates as if our signed contract with them did not exist.

As CWS knows, we’ve simply been continuing to pay the undisputed amount set in our long-standing, signed agreement.

We hope everyone will understand we’re standing firm on the principle that signed contracts are signed contracts. It’s the right thing to do for our citizens.

We will continue our good faith efforts to reach an appropriate agreement through mediation, or if need be, in the court.

Charleston Water claims Sullivan’s Island revised its interpretation of the 1994 agreement in 2016 and part of the dispute is whether the island should have to pay any portion of CWS’s capital expenses.

Charleston Water System says they can’t make any further comment because it’s still in legal mediation.

You can read more about the dispute below, or click here.

Attachment to 06-21-23 Contract Dispute by Live 5 News on Scribd

Copyright 2024 WCSC. All rights reserved.

SULLIVAN’S ISLAND, S.C. (WCBD) – The future of water service on Sullivan’s Island remains uncertain amid a contractual dispute between the town and Charleston Water System.

“The island has the ability to generate taxes and they need to figure it out because what they did in 2017 was, they just quit paying,” said Sullivan’s Island resident, Dave Spurgin.

A 30-year water supply contract between CWS and the Town of Sullivan’s Island went into effect on July 19, 1994.

Based on letters provided by CWS, there has been a disagreement over the rates since 2017. The water system claims the town owes them $1,078,000 as of last month.

“Years ago, Charleston Water System decided to raise our rates as if our signed contract did not exist. The town disputed that rate increase and has continued to pay the undisputed amount owed in accordance with our longstanding signed agreement,” said Sullivan’s Island Town Councilman Justin Novak on Monday night during a special council meeting.

The statement was part of a longer motion read aloud before council voted to pay $227,361 to satisfy the disputed portion of the amount owed. Island leaders said the amount was calculated by a nationally recognized rate consultant.

CWS CEO Mark Cline released the following statement to News 2 on Tuesday.

“Charleston Water System does not agree with the Town of Sullivan’s Island’s viewpoint or its recollection of the historical facts. We fully intend to discontinue the Town’s water service July 20 unless their past due amount is fully paid and they have entered into a new contract that appropriately covers the costs of providing water service to their community. It’s not fair that our other customers have been subsidizing the Town’s service for years now, and that would continue under their terms.”

Spurgin, who has lived on Sullivan’s Island for nearly 30 years, said he is not concerned about the potential water shut-off.

“No, because we’re going to need our water. They’re not going to shut the water off. The town’s going to have to figure out, the town council is going to have to figure out how to come up with the money,” Spurgin told News 2.

Sullivan’s Island Mayor Pat O’Neil released the following statement.

“Apparently CWS is having very-late-onset buyer’s remorse about a legally binding contract they willingly entered into almost 30 years ago. When we entered into this agreement in the aftermath of Hurricane Hugo, the Island was at one of its most vulnerable points in its centuries-long history. Nonetheless we have abided by the language of this contract. It’s hard to accept that CWS (or anyone else) is “subsidizing” SI when we paid almost $2 million (in 1994 dollars) to support the infrastructure that allowed them to sell water to us and to our neighbors on the Isle of Palms, and when in 2020 we gave them an easement through our public park and playground so there would be additional capacity to sell water to our neighbors in Mount Pleasant.”

SULLIVAN’S ISLAND, S.C. (WCBD) – The Town of Sullivan’s Island has agreed to pay just over $227,000 to Charleston Water System amid a contract dispute.

Sullivan’s Island Town Council spent almost an hour in an executive session on Monday night while they received legal advice on contractual negotiations with Charleston Water System.

“That signed contract constitutes a valuable asset of the town and provides certainty regarding the rates that our residents pay for water. Years ago, Charleston Water System decided to raise our rates as if our signed contract did not exist,” said Town Councilman and Mayor Pro Tem Justin Novak, as he read aloud a lengthy motion upon council’s return to open session.

As News 2 reported last month, Charleston Water System claimed in an October 2023 letter to the town that Sullivan’s Island has been paying less than the correct rate since 2017. A spokesperson for CWS said the town owed $1,078,000 as of the beginning of March.

The letter also said the 30-year contract between CWS, and the town will expire on July 19, 2024 and if there is not a new contract by then, water service will be disconnected for the town’s 2,000 on July 20^th.

“The town disputed that rate increase and continued to pay the undisputed amount owed in accordance with our longstanding signed agreement and placed the disputed amount in escrow pending the resolution of that dispute,” Councilman Novak read.

Sullivans-Island-Town-Council-Motion-4.1.24Download

He continued with the motion and said CWS is ignoring the other terms and stated the town would not accept any of the water system’s proposals in the contractual dispute.

“The town must stand firm that signed contracts are signed contracts,” the councilman said as part of the motion.

The town used who leaders said is a nationally recognized rate consultant to calculate what they owe.

“Accordingly, I move that town council authorize the payment of $227,361 to satisfy in full the disputed portion of arrearage now calculated to be owed under the terms of our written agreement with Charleston Water System,” Councilman Novak finished.

The motion passed unanimously. News 2 reached out to Charleston Water System after the meeting. A spokesperson said they are evaluating the action taken.

CHARLESTON, S.C. (WCSC) - From West Ashley to Sullivan’s Island, businesses spent the day recuperating after heavy rains and strong winds caused them to temporarily lock their doors.

Many of the exterior windows at Hay Tire Pros, off Savannah Highway, shattered, and a large part of their ceiling collapsed on the inside.

Vice President Bill Sekula said that they have always expected severe storms to come through with being in Charleston, but that they have never had this much damage before.

“I guess it was like a microburst or something to that effect, but apparently it was raining harder than usual and then the windows started to buckle and snapped over. These windows on the side just kind of came apart and came out of the building,” Sekula said.

Sekula said glass from the windows was even in the back part of their building which is almost 30 yards away. They had to close the business for the day and return all of their customers’ vehicles. He said the incident happened during hours of operation as employees notified him at around 8 a.m.

The next-door business, Etto Leisure Cars, a golf cart dealer, also saw significant damage. Will Harton, chief executive officer, said that part of their awning was ripped off and hit their power box causing them to lose power.

“I said ‘Oh my goodness.’ You know, you live in Charleston long enough, you know a storm is going to happen. Usually, it’s a hurricane. It’s not a microburst like this, but we will be fine and we will move on from here,” Harton said.

He added that he’s glad that all of his employees are safe and that the building and golf carts can be fixed.

First Alert Chief Meteorologist Bill Walsh said the damage could have been from a potential microburst or straight-line wind, but the National Weather Service has not yet confirmed that.

The Co-Op Frosé and Eatery on Sullivan’s Island had around two feet of water inside their restaurant. Their staff members spent the day using buckets to help get rid of the water. They said they have had flooding in the past, but never anything over a foot, so this is the worst they’ve seen.

“This morning, we lifted everything off the floor because we were expecting rain and heavy floods, but we didn’t know it was going to get this bad. So, as we were lifting things off the floor, it started coming in through the back door. Next thing you know there is water all over the place and we started getting buckets and mops and throwing water out. We’ve been throwing water out for the past three and a half hours,” employee Havannah Malan said.

She said that they have had to get their floors redone three times, and she expects the business will have to get them redone a fourth time after Saturday’s flood.

The businesses said they hope to repair the damages quickly, so they can return to normal operation as soon as possible.

Copyright 2024 WCSC. All rights reserved.