Contact: Mr. Tommy Furlow, Director, Public Utilities Department, City of Gainesville, P.O. Box 2496, Gainesville, GA 30503, 770/538-2400, 770/535-5634 (fax), tfurlow@gainesville.org

Mr. Rob Rivers, Manager, Utilities and Special Programs, Hall County, P.O. Drawer 1435, Gainesville, GA 30503, 770/535-8260, 770/531-3972 (fax), rrivers.admin@hallcounty.org

Description of Effort
The City of Gainesville and Hall County have been at odds over issues related to providing water and sewer services for many years. Negotiations that are required under the Service Delivery Strategy Act of 1997 (HB 489) and local civic pressure have triggered cooperative action to resolve these long-standing tensions. The collaboration process, begun in 1997, has resulted in three significant actions by early 1999.

As a result of the collaboration, the city and county have signed three memorandums of understanding (MOUs) detailing the merger of the city’s existing water system and the county’s developing water system. Further, a rate differential study has been jointly undertaken, the outcome of which the communities have agreed to accept. In addition, the success in reaching agreement over the provision of water has led to discussions of cooperative arrangements between the city and county to address sewer services.

Managerial Considerations
Both governments have strongly supported the negotiation and collaboration process. The city manager and the county administrator, supported by the staff of each local government, took the lead on the negotiations that have resulted in the development of the three water related MOUs. Additional players include the city’s director of public utilities and the county’s utilities and special programs manager.

The elected officials in both governments represent the key stakeholders in the collaboration process. Their involvement was necessary not only in the preparation of the documents but ultimately in approving and signing the MOUs. The staff will remain primarily responsible for implementation of the agreements. It is hoped that the results of the process will be clear enough that the general public accepts them and moves forward in the cooperative development of the city and the county.

The three MOUs state that each jurisdiction will maintain ownership of its system. The Hall County water system is approximately three years old and has about 200 customers. The city system is 100 years old, has 31,000 customers, and serves approximately 60 percent of the area and about 75 percent of the residents in the county. The City of Gainesville will operate the county system under contract providing water, system maintenance, billing, and all other services. The county will have no staff other than one coordinator who will review operations and make priority-type decisions.

The city and county are pursuing a combined water withdrawal permit, currently only the city is permitted. As both governments desire an increase in the raw water withdrawal permit for Lake Lanier, joint water demands were calculated for the entire county. The Georgia Environmental Protection Division (EPD) accepted the joint water demand projections, but was unwilling to determine how to divide the withdrawal amount between the city- and county-owned systems. Therefore, the city and county hired a consultant to look at the master plan including water use, population projections, and a determination of the service area of each government. The result was a long-range plan that extends joint water demand projections to the year 2050 for the entire county and provides an agreeable allocation formula to divide the withdrawals that was included in the MOUs.

Technical Considerations
Technical considerations of the service systems played a small role in the development of the MOUs. Discussions of alternatives and compromises that each elected body could live with drove the decision process. However, documents concerning population, per capita water use, and availability of resources and input from regulatory agencies on what options might be available comprised the primary sources of information and data used to support the collaboration process. A consulting firm provided the primary technical assistance in the development of the economics-based rate differential study.

Even with this low-tech approach, the outcome of the negotiation process will involve two major studies (rate differential and an allocation of cost) and several plans (long-range water, water distribution, and a watershed analysis) that will support the completion of a comprehensive water management plan. The comprehensive water management plan will detail the considerations and the strategies agreed upon to provide a seamless city/county utility.

Service area is a major issue that a sewer agreement could impact, if one is reached in the near future. The agreement will determine whether Gainesville and Hall County together will extend sewer lines into areas that are not currently served. The city has full sewer service but only limited sewer is available outside the city limits. This has resulted in a concentration of heavy industry and commercial development in Gainesville. Limits to commercial, multi-family, and industry in areas outside of the city have been of significant concern to the county. Extension of sewers into these areas will go a long way toward allowing the county to increase commercial and industrial development.

The water and particularly the potential sewer agreements will have a tremendous impact on the land-use portion of the jurisdictions’ comprehensive plans. Without central sewer, areas within the county will remain low density, primarily zoned as large lot single-family residential. The county is in the process of updating its comprehensive plan, which the city is supporting, that will incorporate the impact of services detailed in the MOUs.

Financial Considerations
Although the new water provision arrangements are not viewed as primarily a budget issue and no funding has been required to date, the capital improvement plans have been carefully reviewed as part of this negotiation process. The MOUs will ultimately impact the city and county capital improvement budgets when construction projects to serve the county are underway. Several of the projects will receive financial commitments by the county, while the city will provide planning, engineering and other technical assistance. A one-cent Special Purpose Local Option Sales Tax was recently approved that includes between $68 - $69 million for water and sewer projects such as the extension of distribution and collection lines and the placement of associated works.

Current rates are adequate to support operation of the joint system; however, a significant issue in the merger of the water systems was working through the rate differential as required under HB 489. To address this issue and reach agreement the city and county jointly funded a rate differential study. Although the draft report of the study has been received, local officials are awaiting the final recommendations from the consultant. It is expected that the city rates will be raised somewhat, while the county rates will either remain the same or be lowered.

A second consulting firm was hired to undertake a study relative to the allocation of costs within the general funds of the city and county. In some ways this study was parallel to the rate differential study but more general. It attempts to balance cost of services by providing credit for services, such as police, parks and roads that the residents of one jurisdiction pay for but do not receive. Through this process each side will eliminate service inequity.

Outcomes
The water related MOUs have had two significant beneficial consequences. The first is that the joint city/county water demand projections led to approval of increased withdrawals for the entire county. The second result is that the constant feuding between the city and county elected officials over water services has for the most part been neutralized. The communities are now able to work together on other projects such as acquisition of a reservoir and long-range water plans including final raw water commitments from EPD.

In the long run, the users of the systems will benefit because water, and hopefully sewer, services to city and county customers will be seamless. The same people will provide the service, the water will come from the same treatment plants, and the bill will come from the same source. However, the county will have control over providing utilities in its service area.

Adjusting the rate differential and acknowledging that the county is now a significant water provider to the community represent major increases to the managerial, technical and financial capability resulting from this effort. By determining future service provision and expanding a capacity agreement (currently under negotiation), the county’s role and capabilities will increase. Through the experience gained, it will become an expert partner in the community’s joint water service decisions.

If it were to be done again, the City of Gainesville and Hall County may chose to begin the resolution process 10 years sooner. As the water issue was left to fester, over time their relationship deteriorated and service integration became more expensive and complex. Tackling this issue earlier might have made it easier to solve.

The City of Gainesville and Hall County advise local officials to work together. Both governments exist to serve the community and the community needs cooperation foremost. Divisiveness is detrimental to the ultimate welfare of the communities involved. It is possible for local governments to put difficulties from the past behind them and to cooperate better for the future.