Mobile County utility providers battle over expanding service territory

Just months after two rival utility providers in Mobile County reached an agreement over providing water and sewer service to the $350 million South Alabama Logistics Park (SALP), it appears they are digging their heels into disputed territory elsewhere.

The smaller Mobile County Water, Sewer & Fire Protection Authority (MCWS) was initially cut out of the deal to supply water or sewer to the SALP site when it was announced by economic development officials last May, in favor of the much larger Mobile Area Water & Sewer Service (MAWSS).

But MCWS quickly filed a federal lawsuit over service territory, claiming its ability to repay a U.S. Department of Agriculture (USDA) loan was threatened by MAWSS’s intrusion.

Allegedly, MAWSS’s closest water line was more than a mile away from the SALP site on Interstate 10 at Theodore Dawes Road, while MCWS maintained a water line on adjacent property. In August, an agreement was reached with the developer to allow MCWS to provide water to the site and MAWSS to provide sewer service.

But in September, MCWS doubled down, filing a new federal complaint claiming “MAWSS is right back at it.”

Both actions are based on violations of the Consolidated Farm and Rural Development Act of 1961, which prohibits “municipal corporations or other public bodies from curtailing or limiting water service provided or made available by any rural water association indebted to the [U.S. Department of Agriculture] during the term of indebtedness.”

“Unlike in the previous lawsuit, where MAWSS could arguably claim ignorance of the USDA loan, it no longer has that excuse,” the complaint states. “Instead, it simply disrespects the law, and Mobile County Water, by continuing to place new lines in areas where development is forthcoming and extending its previously installed (and often unreported) water lines within [MCWS] service area.”

MCWS claims in one instance, MAWSS put one of its water lines “directly on top” of an MCWS water line, and in other alleged instances, MAWSS purchased an easement in MCWS territory and “forced at least two customers” to switch providers.

In December, MAWSS responded, arguing MCWS was mischaracterizing the statute and explaining the easement it purchased was to repair an existing sewer line. Still, by Dec. 20, MAWSS agreed — at least during the pendency of the lawsuit — to cease the installation or extension of water lines in certain MCWS service areas, including Fowl River Road, Scottish Highlands, Saybrook, Cypress Business Park and elsewhere.

Then, last week, MAWSS fired back. In a counterclaim, MAWSS seeks the court’s determination that it “has the right under both state and federal law to provide service in the disputed areas set out in this lawsuit on a case-by-case basis depending on applicable facts.”

“MCWS has repeatedly sought both an expansion of its claimed exclusive territory from the Mobile County Commission as well as an expansion for a type of service which it has never provided and has no capability or foreseeable plan to provide,” MAWSS argues. “MCWS has repeatedly sought only the ‘low-hanging fruit’ of water service in service areas not exclusive to it and also within the service area of MAWSS.”

MAWSS further complains that MCWS is using the Consolidated Farm and Rural Development Act “as a sword instead of a shield to restrict lawful activities of MAWSS and to impair a constitutionally protected property interest of MAWSS arising from both statute and contract.”

Representatives for MCWS declined to comment for this article. But Monica Allen, a spokesperson for MAWSS, said, “Our position is clearly spelled out in our vision statement: We will lead our industry and provide services to accommodate regional economic development and growth. We are concerned about the growth of Mobile County. Without MAWSS assistance this project may not happen. This is not about MAWSS, it is what is good for the community.”

MAWSS is represented by Larry Wettermark at Galloway, Wettermark & Rutens LLP, while Patrick Dungan and Jay Ross of Adams and Reese LLP represent MCWS.