Legal stand

Aug. 2—CLYDE — A lawsuit between the Junaluska Sanitary District and the town of Clyde has come to an end.

The lawsuit centered around extra charges tacked on to Clyde's sewer bill by the Junaluska Sanitary District.

Clyde's sewage flows through Junaluska Sanitary District's line en route to the Waynesville sewer plant. A contract spells out the cost and terms for Clyde's sewage to travel through the lines of Junaluska Sanitary, which has no connection to Lake Junaluska.

At issue in the lawsuit was whether Clyde sewer customers should be financially responsible to help pay for an expansion of Junaluska Sanitary service along N.C. 209 — well outside of Clyde's town limits. Details were sorted out after both parties agreed to settle.

Per the settlement, the sanitary district dropped more than $170,000 in the extra fees, while Clyde agreed to pay the sanitary district $72,500 for past operation and maintenance of the Richland Creek Pump Station.

The settlement also stated that the town will keep the sewer rate at 52 cents per 1,000 gallons until at least July 2024. The true cost of the wastewater is 78 cents per 1,000 gallons, however, according to minutes of a closed session Clyde town board meeting where the settlement was accepted.

Following the out-of-court resolution, the two bodies agreed to voluntarily dismiss the case with prejudice, meaning the case can not be refiled at a later point.

Lawsuit origin

The lawsuit was filed by Junaluska Sanitary District after Clyde refused to pay charges relating to the Richland Creek Pump Station, which was upgraded to serve an expansion of sewer lines along N.C. 209 in Crabtree.

In 2019, Junaluska Sanitary District upgraded the pump station at a cost of $225,000, according to the filed complaint. The complaint states that the town's share of that cost was $173,400.

The lawsuit was filed in January of 2021 after the town declined to pay the charge. The sanitary district claimed the town had been billed $37,046.56 up to that point and had only paid $2,899.75, leaving the $34,146.81 that the sanitary district was suing for.

The sanitary district was also asking for $173,400 for breach of contract, interest from the date of the breach of contract and for the legal fees to be imposed on the town.

The town's initial motion to dismiss included a copy of the contract signed by both parties in 1999 that states "Clyde shall share in the cost of future upgrades to the Sanitary District system which would be necessitated by the addition of Clyde's wastewater flow."

In that same motion, they point to this exact clause saying that the town would only be expected to pay the costs if the upgrades were to help Clyde's wastewater flow.

"The upgrades complained of by the Plaintiff were necessitated solely by the addition of wastewater flow from Riverbend School, Pilot Travel Center and Sams Mart," the motion reads.

One of the other defenses stated that when the sanitary district applied for funds for the expansion, it told the Local Government Commission that the amount of debt incurred by the expansion would not require an increase in sewer rates. That was before asking for an increase in sewer rates from Clyde.

"The unclean hands of Plaintiff act as a complete bar to any of its claims that it makes in equity," the town's attorney argued.

The town's motion to dismiss also included counterclaims stating that the sanitary district had submitted reports and documents to the town showing itemized expenses that the town was responsible for but did not provide the same documentation for the increase in sewer rates, failing to show how the new rates imposed on the town were calculated.

The town also attached the invoice they had received from the sanitary district, showing that the town was being charged with 68% of the cost of the upgrades, but there was no breakdown of how that number was calculated.