Dade Water Board Seems Set To Gift Developer With Canyon Ridge Sewer Plant

July 9, 2019


The governing board of the Dade Water Authority, which officially formed only last Tuesday in its newly legislated configuration, with a new chairman, a new board member, and a new general manager at the water company, held a special called meeting on Tuesday for the purpose of giving away the Canyon Ridge wastewater plant Dade was astonished to find itself owning eight years ago, the last time the water board was reshuffled.


"'Giving it away' is not the right way to put it," said Jeff Pendergrass, the aforementioned new water company manager, interviewed by telephone after the meeting. "'Transferring ownership' is a lot better word."


But "giving away" is a shorter way of saying "transferring ownership without getting paid," which is what Pendergrass and Sherri Walker, the authority's assistant manager, were making a case for at the July 8 meeting. The thing simply costs too much to operate, they explained. “There’s been a loss every year, and it seems to be getting worse and worse,” said Ms. Walker.


She had brought to the meeting calculations showing that--including power, repairs, labor, lab fees and engineering--the Canyon Ridge Wastewater Plant had cost Dade Water $112,218.41 in fiscal year 2019 and brought in only $62,340.03 in income, a loss of $49,878.38 for this year alone.


Furthermore, said Pendergrass, Dade Water was not in the sewer business and didn't know the first thing about running a wastewater plant. "We don’t have the certification," he said. "We don’t have the experience." If things needed work, he said, the work would have to be farmed out to a contractor.


"We're a little bit trapped," he said, responsible for a sewage plant without really much say in how it was run. "If it was our water system I’d want control," he said. "We don’t have it."


Eddie Cantrell, chairman of the water, had Ms. Walker, who was working for the water company at the time, explain how it was that Dade came to own a wastewater treatment for a property that is mostly in Walker County, when Dade itself is a rural county whose residents are mostly served by septic tanks. 


The then-developer of the Canyon Ridge (once called Tauqueta Falls) golf course and luxury housing subdivision on Lookout had built the sewer in 2003 and had solicited the Dade water board to partner with it for the EPD (Environmental Protection Division) permit, said Ms.Walker. The developer needed a governmental entity for the permit and Walker County had no water or sewer infrastructure in that area of the mountain. "The only tie we had was helping with the permit," she said. 


Then, when the housing market crashed in 2008 or so, the then-developer had gone belly-up and Dade had inherited the wastewater plant in 2011. "We've been operating it ever since," said Ms. Walker.


The developer back then was Randy Baker, who was developing Tauqueta Falls/Canyon Ridge as a luxury housing and golf community. Another developer, Duane Horton, was around that period of 2008-10 trying to line up backing for a luxury hotel and conference center in the same area. At one point Walker County under then Sole Commissioner Bebe Heiskell had plans to underwrite Horton's hotel plans with taxpayer money. (Dade County Executive Chairman Ted Rumley refused that notion on Dade's behalf.)


Developers Baker and Horton were at first working together on the same grand vision for the Canyon Ridge area, but after the crash Horton accused Baker of starting a rival project that detracted from his original plans. There was a long and bitter civil suit from which Horton eventually emerged victorious, and two years ago Horton revealed ambitious plans for another world-class luxury hotel and conference center, the McLemore, this time with the enthusiastic support of the current Walker County governmen as led by a new sole commissioner, Shannon Whitfield.


(Photo: A Walker County resident gazes at an artist's-concept-of illustration of the planned Canyon Ridge hotel during a June 2017 meeting hosted by the Walker County government.)


During Ted Rumley's tenure as chairman of the water board--a position from which he was ousted by the reshuffle--he stressed that the developer did not have the water and sewer infrastructure needed for such an ambitious project and would sooner or later have to approach Dade Water about planning for same. That never happened, and in fact construction has still not begun on Horton's long-dreamed-of hotel. But the McLemore golf course has been expanded and improved with some fanfare, and when the new water board called a special meeting with the only agenda item "Discussion and possible action on Sale of Property," it seemed likely that Horton and his Scenic Land LLC had made an offer on the sewage plant.


Nope. Water company manager Jeff Pendergrass explained after the meeting that the golf course operation hadn't called him, he'd called the golf course operation. He'd been feeling under the gun about the Canyon Ridge plant because a letter from the EPD had informed him it had only so many weeks to find a better place to release its discharge. He had been hoping the McLemore operation would lease or sell the water company an acre of land for that purpose. The man he'd talked so, said Pendergrass, had said, "No, you can't have any land but we could offer to take it off your hands."


There had never, during the conversation or subsequently, been a mention of anybody paying Dade Water any money for the wastewater plant, said Pendergrass. Asked what its value was, he said he had no idea but that it was a dilapidated and elderly facility not fit for the function it is serving. "It may not even have a value," he said. And he pointed out that Dade had not paid for the plant in the first place but had inherited it when the first developer bankrupted.


The function the facility is serving, he explained when asked further, is to service the 81 customers in the Canyon Ridge neighborhood who pay sewer bills, and who if the plant stopped functioning would have to arrange for septic tanks. Is Dade obliged by its covenant with EPD to keep the plant functioning so the 81 customers in the opulent Canyon Ridge houses don't have to install septic tanks the way Dade residents do? Pendergrass didn't know that, either, but said he would reexamine the EPD's letter he'd gotten, and possibly even provide The Planet a copy.


(If the Dade Water Authority is not obliged to keep the plant operational to serve the 81 customers, that begs the question of why it has done so since 2011 at a consistent loss.) 


Under the proposal Pendergrass and Ms. Walker outlined at the meeting, the developer would take over operation and management of the wastewater facility, and Walker County would assume Dade's current role with the EPD for permit purposes.


In any case, at no point at the Monday meeting was the sewage plant's value to the developer discussed, the concept that if the developer did not have an existing sewer plant to serve his development he would have to build a new one. Asked subsequently, Pendergrass said that building a new one might or might not turn out to be the better route for the developer. "The only way to know that is to ask an engineer," he said.


Which had, apparently, not been done. A lot was not known just yet, said Pendergrass, and the best route right now was not to ask so many difficult questions but: "Give us time," he said.


The Monday meeting ended in the formation of a task force--Pendergrass and water board members H.A. McKaig and Travis McDaniel--to investigate the options before the board's next regular meeting. Three choices were named: giving the plant--er, transferring its ownership--to the developer; finding a third party to buy it; and keeping the plant but raising the rates of the 81 customers enough to break even on the operation.


But at the meeting itself, not only did Pendergrass and Ms. Walker speak unequivocally in favor of unloading the wastewater plant without further ado--“To me, it’s a no-brainer," said Pendergrass--but the board members had seemed to accept their decision without demur, and in fact without asking many questions beyond variously-phrased versions of "Whar do Ah put mah X?" 


"The main thing, in my humble opinion, is to stop the bleeding," said board member H.A. McKaig.


He hated losing money, said newest board member Darrell Pardue: "If I could get rid of it, I’d get rid of it," he said.


Board member Dr. Billy Pullen said that Dade customers on Lookout had benefitted by the better water pressure they got from the main that had been run up the mountain for the Canyon Ridge development. "So we did get something out of this," he said. 


And the board's legal advisor, County Attorney Robin Rogers, had nothing to say at all. He did explain that while government entities cannot give away property but must exchange them for a consideration, in this case the consideration was "elimination of a negative value." But even this was in response to the blank incredulity of concerned citizen Susie Talbott, who asked him if the plant was being "gifted" to the developer and Walker County, and reminded him of the we-no-givee, you-pay-money rule he'd explained on the occasion of Dade County transferring ownership of the selfsame wastewater plant to the water company a few months ago.


Ted Rumley, contacted for comment, said there had never during his years as chairman of the water board been mention of giving the sewage plant away. "It was discussed about selling it," he said.


But that was then and this is now, said Rumley. "You've got new people with new ideas on there," he said. 


The next regular meeting of the water board is at 6:30 p.m. on Tuesday, July 23, in the Dade Administrative Building.




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