Despite previous attempts, private sewer provider has escaped local regulation

While Baldwin County’s only private sewer provider has operated with limited government regulation since its founding, records indicate it has, at times, been under scrutiny both by elected officials and the law.

Baldwin County Commission meeting minutes over the past two decades are ripe with approvals for extensions of Baldwin County Sewer Service’s (BCSS) service area, but occasionally they also reflect calls for regulation. And on Tuesday, that call was renewed.

According to archived news reports and minutes from public meetings, BCSS manager Clarence Burke first entered the public sphere in the early 1990s as a member of the Baldwin County Road Builders Association. In 1993 he was among the members who signed a letter to the commission supporting its authority “to hire and fire key staff and department heads for the good of the county.”

In late 1994, as a principal of Summit Construction, he lobbied the Robertsdale Planning Commission and later the City Council for zoning changes to allow smaller lot sizes on properties zoned R3.

Perhaps his first big coup as a developer was during the same period, as one of the investors of The Beach Club on Fort Morgan peninsula. At the time, when residents of Fort Morgan became the first in the county to organize and institute zoning regulations to preserve the area’s limited development, Burke was among a group who pushed a plan to build the 700-plus unit mixed residential property on 86 acres.

According to a news report, the County Commission delayed the zoning regulations for procedural reasons, which gave the developers just enough time to have The Beach Club approved by the state. When zoning regulations were adopted weeks later, The Beach Club was grandfathered in along with similar developments Kiva Dunes, The Peninsula and Martinique on the Gulf.

In 1997 Burke was appointed by the county to serve on a committee that would study and recommend changes to the county’s subdivision regulations. The committee’s recommendations included requirements that subdivisions could only be built along paved roads; that the Planning Commission had the authority to make developers pay to construct turn lanes into new subdivisions; that prohibited the filling of wetlands without mitigation; that exempted court-ordered subdivisions of property from some regulations; and that amended roadway design standards and filing deadlines and other application procedures, among other things.

According to Alabama Secretary of State records, Burke incorporated Baldwin County Sewer Service in January 1998. A forensic accounting entered as evidence in a lawsuit involving another of Burke’s companies suggest Burke has a 43.5 percent interest in the company through his Wolf Creek Industries Inc., while an equal interest was owned by the Delaney family under their company, Alliance Ltd.

At the time the evidence was submitted in 2017, it also indicated an 11 percent interest was owned by Supersonic LLC. Probate records indicate engineer John Avent and his wife, Olivia, were assigned a 2 percent interest in the company doing business as Southern Aventi LLC in 2013.

As soon as April 1998, Burke appeared before the Baldwin County Commission to propose a regional sewage facility to service customers along Highway 225 in Spanish Fort. There, a district created to study the feasibility of a public sewer system conceded it would be advantageous to defer to a private provider who could find private investment and build a treatment plant separate from the city of Daphne’s, which was already on pace to reach capacity within 20 years.

According to meeting minutes, there were reservations about a private system’s financial viability, cost to customers and regulatory oversight, but the commission was receptive. Years earlier, Burke had purchased a wastewater treatment plant in Lillian that had fallen into foreclosure as part of the Spanish Cove subdivision.

Separately, in 1999 Burke ran afoul of the law as a developer, according to archived news reports from the Press-Register. In Magnolia Springs, where he was planning to build condos on 30 acres of waterfront property he reportedly purchased from former Gov. Fob James, Baldwin County officials claim Burke “illegally filled in a section of the flood plain along the river bank and built a bulkhead out into its flowing channel.”

Residents said soil from the site spoiled the channel during heavy rains and the Baldwin County Building Department issued a stop-work order, claiming he was in violation of Federal Emergency Management Agency’s (FEMA) floodplain regulations. The violation even drew the scrutiny of the U.S. Attorney’s office and the FBI. Months later, at an expense he said was at least $80,000, Burke removed the bulkhead and brought the development into compliance. He was also levied a $25,000 fine.

Meanwhile, a debate was underway about private sewer regulations. Citizens were concerned about health department requirements that prevented property owners from installing septic tanks if sewer lines were available nearby. Along with Burke, Phillip Bass also owned a private sewer company, South Alabama Sewer Service, and suggestions were made that their rates and other business considerations be reviewed by the state’s Public Service Commission.

Then-District Attorney David Whetstone cautioned the county about the challenge of enforcing certain provisions awarded to private providers while also suggesting if either company went bankrupt, the county would have to be ready to step in and take over.

In the years afterward, BCSS would purchase existing treatment plants in Daphne’s Plantation Hills subdivision and Bass’ plant on Fort Morgan, along with Bass’ entire company. He also made promises to build a new treatment plant in the Magnolia Springs area going back as far as 1999. In a report from the Press-Register, former Baldwin County Planning Commission Chairman George Roberds was once quoted saying Burke “lied” about BCSS’ intention to build a new plant in Magnolia Springs, after the city approved subdivision applications based on the promise.

However, Burke later entered an agreement with Bass to pipe sewage from the new developments to Fort Morgan, in spite of his pledge. A fourth plant has never been constructed and as Lagniappe previously reported, the land where it was supposed to be located later became the subject of a four-year fraud lawsuit Bass filed, but eventually lost, against Burke and BCSS.

By early 2000, calls for regulation from residents and officials reached a fever pitch. Another report in the Press-Register indicated the County Commission circulated a questionnaire and “of 111 people who responded, 94 percent said private sewer companies should be regulated the same way other utilities are.”

In response, the Baldwin County Legislative Delegation incorporated the Baldwin County Utility Task Force, which included Burke and Bass as a members, along with former State Rep. Albert Lipscomb, former County Commissioner Dean Hansen and representatives from various municipalities. But early on, fears were raised that any regulation could hurt economic development and real estate in the county.

According to statements made by former County Commissioner George Price at a meeting in 2004, the task force’s efforts eventually became the latest of many to die somewhere between Bay Minette and Montgomery.

“In 1994 there was an attempt to get sewer legislation, but the bill did not go anywhere,” he said. “In 1995 the bill was redone and it passed the House and died on a senator’s desk. There was another bill introduced by Sen. [Gerald] Dial in 1999, which was an attempt to put the sewer control under the Public Service Commission. This one did not go anywhere. In 2001 there was another attempt, and as a result, Sen. Lipscomb appointed a committee and this also went nowhere. We are here again in 2004 with the same issues.”

In 2004 Bass sold his company to Burke. By most accounts, the area also began to feel the effects of recession, and any moves seen as restricting economic development at the time were no longer under consideration.

Over the next decade, BCSS would be entangled in multiple lawsuits, including one with the city of Fairhope, with residents who were the victims of a mix-up that saw BCSS tie sewer lines into water lines, essentially delivering untreated wastewater to their water hoses, sinks and baths. Later there were lawsuits with Bass over the alleged fraud, while residents of Foley’s GlenLakes subdivision sued over sewer rates. Both of those legal actions are ongoing.

The only legislation ever passed — a 2006 constitutional amendment that was amended two years later — reinforced BCSS’ ability to add new accounts anywhere it already provided service and also allowed the county to collect a tax off of private sewer tap fees.

Former County Commissioner Jonathan Armstrong, who served on the commission at a time when there were seven commissioners instead of four, said the regulatory environment for BCSS is just as favorable now as it was 20 years ago.

“My thing about sewer then and now is obviously we have some water quality issues,” he said.

As a former resident of Daphne’s Plantation Hills, Armstrong said he became aware of BCSS when his neighbors started complaining about tanker trucks from Mobile delivering “blue water” to the neighborhood’s treatment plant.

“It was Mardi Gras and they were getting paid to let [Mobile] pump [port-a-potty waste] into their system,” Armstrong recalled. “Those trucks were pretty raggedy and they spilled some of it on the street. We complained, but they weren’t scared of anything. But when the press ran the story, it got good attention and they stopped that immediately.”

Armstrong said when he began to call for regulation as a member of the commission, attorneys from BCSS called him in for a legal deposition. He was never involved in a court case, he said, but saw it as an intimidation tactic.

“There was a moratorium put in place during my time,” he said. “It was for a short period we didn’t approve any more pipes along county right of ways. But at every meeting there was somebody from BCSS and it seemed like there was a big rush going on with new lines being installed, not for any specific development — they just wanted to put sewer everywhere.”

Armstrong also stood in opposition to health department mandates against septic tanks, claiming they unfairly benefited private enterprise.

“It’s a private sewer company, but in our planning and zoning rules, it requires hooking up to sewer if it’s available,” he said. “So we were forcing people to hook up to something we didn’t regulate. I couldn’t figure that out — they didn’t have to tell us their capacity at a time [when] they were adding restaurants, malls, more homes and larger subdivisions. That just seems like some number they make up.”

In response to a series of questions emailed in June, BCSS spokesperson Jenny Williams said BCSS currently serves around 19,000 customers, charging $54.50 per month for the standard residential rate and $109 for standard commercial buildings. It also charges a $3,500 tap fee for new, single-family homes and $4,200 for commercial business. Proposed developments must pay the tap fee in advance in order to have BCSS sign off on any plats, before the plats are approved by the Planning Commission or buildings are ever constructed.

According to Williams, the company works closely with “engineers, architects, developers and others during [development processes] to ensure compliance with our standard specifications during the approval process. On a monthly basis, BCSS tracks active customers and commitments (new and previous) and updates capacity planning.”

While an additional treatment plant was never built, Williams wrote, “we have also expanded some of our [plants] and we are in the process of building more capacity.”

As recently as Tuesday, the Baldwin County Commission heard additional concerns about BCSS. Responding to Lagniappe’s recent reporting, Fairhope resident and blog publisher Paul Ripp encouraged the new commission — three of the four commissioners were first elected last year — to consider regulations again. He also asked County Attorney David Conner to define his relationship between the utility and the county. Conner is a registered lobbyist for BCSS and law partner with Daniel Blackburn. Both have represented BCSS in various legal matters and Blackburn continues to do so today.

Conner assured the commission he has not provided any lobbying activities on behalf of BCSS “for several years” and whenever an application involving BCSS comes before the commission, he said he recuses himself while the commission contracts with outside counsel.

But for Armstrong, the relationship seems a little too close for comfort. Conner is also the attorney for the city of Spanish Fort and the Baldwin County Planning Commission.

“David is a very capable attorney, but he has way too many irons in different fires to be independent,” he said. “How can anybody represent the county, Spanish Fort, the Planning Commision and [BCSS]? If anyone wanted to they could claim [BCSS] pretty much got it locked up. Red flags go up. [Conner] could steer or guide any discussions.”

He has since moved out of Plantation Hills, but Armstrong said he “won’t live anywhere BCSS provides sewer because you can’t regulate price either.” He also expressed concerns about Burke’s liabilities with numerous other companies and what would happen if BCSS ever went out of business.

“It’s still my position to this day … If they were doing a great job and I felt like they were upgrading facilities that’s one thing, but I don’t trust them.”