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Lula, Hall sewer dispute reignites

City is concerned it will lose money it fronted as part of 2006 agreement

POSTED: November 22, 2013 11:45 p.m.

Despite Hall County’s September agreement with Gainesville to service the Gateway Industrial Centre in North Hall, Lula’s role in treating wastewater for that portion of the county remains a point of contention.

Hall County officials are in a contract dispute with Lula over a 2006 intergovernmental agreement that has already been subject of a lawsuit. The agreement may head to court again as attorneys argue a different interpretation on who will provide sewer to the Ga. 365 area.

Gainesville has stayed on the sidelines so far, but could become a player if tensions continue.

The parties agreed in 2006 that Hall County would fund construction of a Lula-built sewer plant that would service the city and a portion of Hall County, including in the Ga. 365 corridor. Hall was to buy 100,000 gallons of wastewater capacity in the plant with an option to purchase 50,000 more.

Lula Attorney Brent Hatcher Jr. has said in letters to County Attorney Bill Blalock that the city is concerned the deal with Gainesville ignores Lula’s rights to the service area defined about seven years ago.

Blalock has responded that Lula can’t service that area unless there’s another contract, and said the county will reopen negotiations with Lula “when appropriate.”

Hatcher said Lula owes more than $2 million in debt for the wastewater plant, completed in early 2011.

Hall County had three choices as it closed with the Georgia Poultry Network on 10 acres in the Gateway in October 2012. The county agreed it would provide 500,000 gallons per day of sewer service to the park within 36 months of the closing. The industrial park currently under development is 518 acres on Ga. 365, which is expected to house significant future economic development. Hall could decide to partner with Lula, Gainesville, or build its own system.

The Hall County Board of Commissioners approved a contract with Gainesville after spending several months negotiating a deal with Lula. The county wanted to replace the 2006 agreement, but walked away from talks in July and in September.

Hatcher said in an October letter to Blalock that Lula is happy to see Gainesville provide sewer to anywhere other than that area. Lula officials want to meet with their counterparts from Gainesville and Hall “to try to work together to make sure sewer is delivered in accordance with that 2006 agreement.”

Gainesville City Manager Kip Padgett had no comment on the city’s behalf.

Hatcher proposed some dates in his last letter to Blalock, dated Nov. 13. He hasn’t heard from Gainesville or Hall officials.

“This is an issue between the county and Lula,” Padgett wrote in an email Friday.

Blalock’s letter said the county doesn’t intend to let the 100,000 gallons it purchased in capacity go to waste. He claims Lula tried to use the limited time frame Hall had to decide on a sewer option to get what it wanted in the failed talks.

Blalock declined to comment beyond his letter.

“It’s obvious in my reply letter to Bill that the city does not agree with the county’s overall interpretation of the portions of the 2006 agreement,” Hatcher said. “What the city simply wants is to use the facility that was built for the purpose of providing sewer that would, obviously in turn, allow the city of Lula to pay down its debt that is owed to the taxpayers through (the Georgia Environmental Finance Authority).”

Lula sued Hall County for payment on the 100,000 gallons, which was settled in December 2012. Hall paid $1.4 million for that capacity, which included a $750,000 settlement.


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