Judge rules against H2GO agreement with Town of Belville

The H2GO utility company wants to build its own water treatment plan and stop buying water from...
The H2GO utility company wants to build its own water treatment plan and stop buying water from the county.
Updated: Apr. 22, 2019 at 2:04 PM EDT
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BRUNSWICK COUNTY, NC (WECT) - A judge has ruled that the previous H2GO Board of Commissioners’ decision to dissolve the authority and convey its assets to the Town of Belville was unlawful.

According to a news release from the Town of Leland, Superior Court Judge Charles Henry ruled in Brunswick County Superior Court on Monday that the agreement is “unlawful, void and of no effect.” The judge also declared H2GO as the “lawful owner” of all the assets and debts involved in the agreement.

The H2GO controversy centers around a reverse osmosis plant costing about $30 million to build and first proposed in 2015.

The argument came to a head in November 2017 when the outgoing board voted to dissolve H2GO and sell its assets to the Town of Belville in a last-ditch effort to save the controversial plant.

H2GO aligned with the Town of Leland in its legal efforts to force Belville to return assets to H2GO.

“This is a strong decision in Leland’s favor and a good decision for all North Carolina citizens,” said Joe Dowdy of Kilpatrick Townsend & Stockton, LLP, Leland’s lead attorney in this matter. “It prevents the illegal H2GO-Belville transfer from becoming a blueprint for other local governments to give themselves away to avoid the results of an election and the laws addressing how those local governments must conduct business.”

“The Sanitary District and Belville commissioners did not follow the processes and procedures laid out in N.C. General Statutes when making their decision and, in doing so, effectively subverted the will of thousands of Leland citizens and disenfranchised hundreds of voters,” Leland Mayor Brenda Bozeman said. “This decision upholds our democracy. We may disagree on the issues or how to solve a problem, but we have to go through the lawful process of resolving those disagreements and finding the solutions. Our opponents didn’t do that here, as the court recognized.”

The Town of Belville released the following statement in response to the court order:

"While we are disappointed with the Order, we will continue to advocate for the protection of the health and welfare of our citizens. We are reviewing the ruling for a possible appeal because several aspects of the plaintiffs’ case were dismissed.

It must be noted that the decision does not provide an opinion on the construction of the groundwater reverse osmosis plant. In fact, the court found that ‘there is a legitimate public debate and concern in the communities of northeastern Brunswick County over the quality of the water distributed to the citizens through the H2GO system. Both the conveyance agreement and the Belville resolution recited, and the defendant contends, that GenX, and other unregulated contaminants, potentially harmful to humans, have been detected in water drawn from the River. … These findings, conclusions of law, and orders by the court are not meant to resolve those important issues.’"

Brian Edes, litigation counsel for H2GO released the following statement on the decision:

"On Monday, April 22nd, 2019, North Carolina Superior Court Judge Charles Henry issued his decision in the case involving the attempted transfer of the Brunswick Regional Water and Sewer H2GO assets and debts to the Town of Belville in November of 2017. The ruling held that the attempted transaction was unlawful and that H2GO is entitled to the return of its assets.

We have always known that North Carolina law would not abide a transaction such as this. You simply cannot give away a unit of government because you don’t like the results of an election. We are very pleased that the Court reached the same conclusion and found the contested transaction to be null and void.

We are also pleased that the Court determined that H2GO is the rightful and lawful owner of the 56+ million dollars of assets at issue in this litigation. It is our hope that Belville will return these assets as soon as possible without the need for further Court action.

As H2GO Executive Director Bob Walker testified and is noted in the Court’s Order, H2GO has always provided its customers with water that meets or exceeds all applicable state and federal water quality standards.

The H2GO Board of Commissioners thanks the Court for its ruling and looks forward to putting this matter behind them and governing H2GO without being further distracted by this litigation."

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