New water/sewer plan source of major conflict
Unbeknownst to most, a small civil war has been raging for several months in one of the quieter and more affluent corners of Macon County. Just west of Franklin, Mill Creek Estates has long been a favorite community for retirees and those seeking summer respite.
Tucked in a green valley cradled by the Nantahala National Forest, Mill Creek, with its shady bungalows, manicured lawns and 18- hole golf course, has always seemed more like a peaceful playground than a war zone. But last fall a battle broke out, waged mostly by email, that has threatened to spoil neighborhood relations and to strain the tranquility of lazy afternoons.
“We have a house divided,” said one resident, who wished to remain unnamed due to fear of retaliation. The infighting, she said, has caused threats, neighbors not speaking and lies. “The whole community is suffering.”
Another resident posted this comment on a community blog: “I have seen the workings of the devil, and he exists within our board!!!”
What’s it all about? For some time some members of the Mill Creek Property Owners Association (POA) have had problems with the way the association’s board of directors has been conducting its business. Accusations have ranged from incompetence to negligence to outright embezzlement. Depending on who you speak to, verbal contracts and a lack of receipts have been either an efficient way of conducting business or completely irresponsible and shady.
Then last year, the community was notified by the Town of Franklin and the State Utilities Commission that to continue to receive water and sewer service from the town, Mill Creek would be required to do one of two things: upgrade to minimum town standards or become a so-called purchase water system with either the POA or an outside corporate utility becoming the licensed system operator.
The POA has for years owned and operated its water and sewer system through an agreement with the town by which the town does metering and billing to individual residences within the community. When a master meter was installed at Mill Creek, it became apparent that there was a large water deficit of hundreds of thousands of gallons a month. Some of this was due to leakages in the system; most of it to the fact that outdated home water meters were failing. The town demanded that at the very least, these issues needed to be addressed.
A letter from town manager Sam Greenwood told the POA in November that “the town remains willing to continue to assist the Mill Creek POA as it evaluates its options including if the POA wishes to continue its ownership of the utility.” The letter notes also that the town could extend assistance on a contractual basis for services including meter system replacement, meter reading and billing, technical support, emergency service back-up and service installation. Not deadline was given for withdrawal of town support, but the letter asked have a structure in place by Jan. 1, 2011.
During this period, opinions became divided on the best course of action, and other long-submerged grievances began to surface. A faction of the nine-member board called for the resignation of then-president George Ellison, who stepped down last January, though he remains on the board. Ellison was replaced by Clay Lambeth, a former mayor of a town in Florida.
Then, the “dissidents” who had forced Ellison's resignation found themselves suddenly ejected from the board in what they say was an illegally conducted election. In the consequent power struggle, the association had its expense account frozen at a local bank unsure of exactly who rightfully controlled the account.
The individuals who were forced to leave the board subsequently formed a separate group of “concerned owners” and contracted an attorney specializing in homeowner associations to represent their interests. They have since filed a petition claiming, among other things, that the board had since held illegal votes with misleading “sham” ballots on the issue of whether the development should sell its water and sewer system and contract with a Delaware-based utility company, Tidewater Inc., to be its operator. The petition also calls for a special meeting for a vote on the removal of five members of the board, including Ellison and other officers.
The Town of Franklin also decided to wait on making any agreements with the community until its internal issues were resolved. A letter from town attorney John Henning, Jr., dated May 2, stated that the town would take seriously the legal challenges presented in the petition.
“It is my opinion that this challenge would not be frivolous, and would almost certainly result in injunctive relief that would halt any transfer and leave matters unsettled for an indefinite period of time,” wrote Henning. To enter into any agreement with Tidewater at this time, he said, “would mean taking on an unknown number of risks related to litigation and/or financial losses due to injunctive relieve.”
Annual meeting not a scene of carnage
All this was the situation leading up to the June 20 annual meeting of the POA, held for the first time at the Macon County Courthouse under the supervision of two sheriff's deputies. Those who predicted a riot in the courthouse would have been disappointed. In fact, it was one of the more civil public meetings conducted in Courtroom A in recent memory.
Though some still complained that Robert's Rules of Order were not strictly adhered to, particularly that no comments from owners were allowed until after the meeting was adjourned (thereby keeping their comments from appearing in the minutes of the meeting), there was in fact dialogue and civil discourse heard at the meeting and even some glimpses of agreement and potential compromise between the feuding factions.
Before the meeting was called to order, the owners voted to fill four seats on the board, ultimately electing four new directors, all from the opposition group calling itself “Friends of Mill Creek.” Neal Hearn, David Kellam, Joanne Snider and June Hernandez all won by large majorities.
During the meeting, the owners heard the annual financial report from the treasurer. The biggest clue to the welltamed friction in the association came when President Lambeth told the room that his brief three-month tenure as president on the board had been “the most difficult time” of his political life. He alluded to all the email correspondence that had been written and sent, enough “to reach from the courthouse to Mill Creek.” Lambeth also reported that while the board has continued its negotiations with Tidewater, no contracts had been signed or deals concluded.
Hearn, a past board member who was reelected on Monday, says that while he hopes the success of the “Friends” will signal a return to civility for the POA, his group still plans to proceed with it petition and the removal of the remaining members of the old board. “We have to have a board that can come to consensus,” he said. “The board needs to remember that it serves at the pleasure of the owners.”
Ellison, who has been on the receiving end of much of the “Friends” frustration, says he is not so sure that things will be resolved so quickly. He reports that in the closed board meeting following the election, the public tone of respect and courtesy was quickly abandoned.
“This is all about one thing, some big personality conflicts,” said Ellison, who served as the board's president for four years. Ellison laments the politicization of a board, but he also seems resigned to go with the tide. “They've got new members on the board and things seem to be going the way they want them to go, so we'll just see how it works out,” he said. “I just hope it works out for the best for the homeowner's of Mill Creek, that's all I care about.”
Snake in the grass
In the meantime, the water and sewer system still lies like a snake in the grass, and the more one investigates the issue, the less clear it seems to be. According to Ellison and another property owner named Chuck Seigel, who for years has been the resident operator of the Mill Creek system, the community has no choice but to either sell the system to a corporate operator like Tidewater or have the POA form its own public utility. The reason for this, says Seigel, citing North Carolina General Statute, is that non-residential, commercial customers are also served by the system.
Hearn, however, says this is simply not the case. He is confident that the Town of Franklin is still willing to work with the development much as it has in the past, and he questions the vigor with which others are promoting the Tidewater deal.
Ken Rudder, Water Division Public Staff Director for the North Carolina Utilities Commission confirmed that statute does hold such a provision for public utilities regarding the existence of non-residential customers, but when asked what leeway the POA might have in this case, he said he wasn’t sure.
Back in Franklin, town manager Greenwood repeated that Mill Creek does in fact have more options than those that are on currently on the table. He noted that the town has been flexible with the developments it serves outside its and has unique relationships with almost each one.
Greenwood’s advice? “I think the best thing they could do is find an unbiased, outside third party to come in and help them look at their options.”
Indeed, though all sides refuse to admit the other might be right, they also agree that a third-party mediator could be the best solution to the impasse and the best hope for seeing peace return to the valley once more.