Originally created 12/17/05

Attorney raises questions on legality of board's vote



AIKEN - The Valley Public Service Authority board voted during a meeting this week to spend $5.9 million on a developer-installed water system for a large subdivision planned near Graniteville.

But because the action was taken during a meeting that might have been held in violation of South Carolina open meetings laws, the vote could be invalidated.

The deal could mean a big revenue boost to the small water utility, which serves the Midland Valley region of Aiken County, and the sale would make the developer more than $2 million.

The problem is that the meeting might have been illegal, said Kirby Shealey, an attorney with the South Carolina Press Association. The meeting must be advertised 24 hours in advance so the public can attend.

Whether this one was advertised is in question.

The developer that stands to make the $2 million from the sale, Sage Mill Residential Ltd., is better known as FineDeering Development Group, a collection of partners from Houston and South Carolina, including local businessman Weldon Wyatt, who initially pushed the county to back a $36.3 million bond deal that would have paid for much of the same water and sewer system the service authority has now committed to fund.

FineDeering ultimately withdrew its bond proposal with the county because of public outcry from residents who said the developers were making money off the deal.

According to copies of documents submitted to the service authority and obtained by the newspaper, FineDeering gave its proposal to install a water and sewer system under the name Sage Mill Residential, one of its subsidiaries. The water and sewer system would service its proposed Trolley Run Station neighborhood across 1,800 acres off the Aiken bypass.

According to terms of the agreement, which was put forward Nov. 7, the developer will install a water tower, three wells, treatment facilities, pipes, hydrants and more at a cost of $3.8 million.

The service authority will charge home builders $3,250 in impact and tap fees, most of which will be used to pay back developers for the infrastructure investment, documents show.

Over the course of eight years, the service authority will pay $5.9 million to developers, a 55 percent increase over the actual cost.

The $3,250 fee, which would not apply to commercial or nonresidential properties, is what the city of Aiken charges nonresidents for its water and sewer services. But it's five times as much as the service authority's routine impact and tap fee of $650.

That doesn't sit well with service authority member Keith Smith, who along with Wymann Diggs voted against the deal.

It passed 6-2.

Mr. Smith said he feels FineDeering is passing on too much of the cost to customers.

"The whole thing smells to me," he said. "Most of the (board) members are wanting to turn over the keys to the city to them because they're promising the world."

"I feel like there's something we're not seeing that they don't want us to see," Mr. Smith said.

A large part of construction FineDeering has proposed - wells, towers and treatment facilities - is typically done by water and sewer providers themselves, not developers, North Augusta City Administrator Charles Martin said.

It's not unreasonable for the developer to get paid for installing such infrastructure, Mr. Martin said, but the service authority could probably find a better rate.

"It would be cheaper for the utility to float the bond to do the job themselves," he said. "I would certainly check out a few other things before I take what they offered."

Repeated messages left with Richard Fine, a principal FineDeering partner, were not returned.

Otis Gibson, the chairman of the service authority board, also did not return repeated phone calls seeking comment.

A notice was supposed to have been posted outside the authority's office 24 hours before the meeting, Mr. Shealy said. It is supposed to include the date, time and place of the meeting, along with the agenda items.

But according to Mr. Smith, no notice was posted.

"There was not a note. The public didn't know anything about it," Mr. Smith said.

Not publicizing the meeting leaves the authority's 6-2 vote open to challenge under the state's Freedom of Information law, Mr. Shealy said.

"If someone wishes to challenge the action taken at that meeting for lack of notice, whatever happened there could essentially be undone," he said.

Reach J.C. Lexow at (803) 648-1395, ext. 106, or jc.lexow@augustachronicle.com.