Sullivan’s Island Town Administrator Andy Benke recently sent a check for more than $200,000 to the Charleston Water System (CWS) in an effort to solve a dispute between the two entities, but, unless the town comes up with another $850,000 or so before July 20, CWS has threatened to cut off the town’s water supply.
At an April 1 meeting, the Sullivan’s Island Town Council voted to approve a payment of $227,381.92 to the water system, a figure determined by water utility rate consultant Raftelis, based on a 1994 contract between CWS and the town. Benke said the check was mailed, but, as of April 11, there was no word from CVS and no indication the check had been cashed.
CWS CEO Mark Cline insists that the town of Sullivan’s Island owes the water system $1.078 million, a difference of $850,618.08. Since they are still trying to solve this issue through mediation, neither side is saying much, though both the water system and the town released statements regarding the disputed terms of the 1994 contract.
“Charleston Water System does not agree with the town of Sullivan’s Island’s viewpoint or its recollection of the historical facts,” Cline said in a statement released by the water system. “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.”
“Charleston Water System wants the town to ignore the terms of the signed agreement we entered into almost 30 years ago, after Hurricane Hugo devastated our independent deep water well system,” Sullivan’s Island Mayor Pat O’Neil said in his own statement, which was released on April 3. “We entered into that agreement at a significant cost to ensure that our residents would have certainty as to the source of our water for decades to come. It’s hard now to accept the baseless claim that CWS is ‘subsidizing’ Sullivan’s Island 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 gifted them an easement through our public park and playground so there would be additional capacity to sell water to our neighbors in Mount Pleasant.”
According to CWS spokesperson Michael Saia, the $1.078 million it is demanding is “the cumulative portion of their bill they haven’t been paying since 2017. They paid this portion in full and without question for the first 22 years of the contract and then suddenly stopped on their own accord that year.”
The 1994 agreement between Sullivan’s Island and CWS states that “The life of this contract shall extend for a term of 30 years from the date of execution and shall be automatically renewed for additional 15-year periods unless Sullivan’s Island gives 180-day written notice. … of its intent not to renew this contract.”
Prior to presenting his April 1 motion to pay the Charleston Water System $227,381.92, Sullivan’s Island Town Council member Justin Novak pointed out that “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 long-standing, signed agreement.”
He added that the town has placed the disputed amounts in escrow, “pending a resolution of the dispute.”
When the contract was signed in 1994, the town agreed to pay CWS $1,986,216 to help with the cost of connecting its lines to Sullivan’s Island. O’Neil pointed out in a recent interview that the contract said Sullivan’s Island would not have to pay any additional capital charges except for work done for the benefit of the island’s water supply.
