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County water rules challenged in court

RALEIGH -- Another developer is expressing concern about the county's refusal to allocate water.

This complaint is being taken up in federal court, though.

PEM Entities LLC, which owns land and has developed phases within the Olde Liberty subdivision -- a Youngsville-area development that dates back to 2005 -- filed a lawsuit on July 24, alleging, among other things, that the development predates a 2019 county ordinance that restricts water allocation and the county's refusal to provide water to a planned 37-unit development has cost them millions.

"As a direct ... result of [the county's] failure and refusal to approve [our] request for water and sewer allocation," the lawsuit states, "[PEM Entities] has sustained actual, special, and consequential damages, including but not limited to ... $100,000 spent on engineering and surveys and drilling to prepare for development of Sutherland Station."

The complaint also speaks to losses in excess of $75,000 for the "substantial diminution in the fair market value of [PEM Entities'] land."

The complaint lists 10 claims for relief, ranging from breach of contract, to the unconstitutional taking of vested rights, to the violation of due process rights.

PEM Entities is asking the court for two claims of relief, both in excess of $75,000, that the courts enter a judgement that the water sewer allocation ordinance doesn't apply to the plaintiff's land, and, essentially, immediately and permanently stop the county from enforcing the water sewer allocation ordinance against PEM Entities.

The complaint was filed in the U.S. District Court of the Eastern District of North Carolina by Charlotte attorney Keith B. Nichols. Nichols declined comment for this story.

Immediate attempts to contact the county's attorney, Pete Tomlinson, were not successful.

According to the complaint, when the county approved the preliminary plan in the summer of 2005, it agreed to provide water and sewer to the development.

The county's legal duties to follow through, the complaint says, follows the land -- which PEM acquired in 2012.

When a water/sewer allocation study revealed that as much as 90 percent of the county's water supply was either being used or had already been allocated, the county adopted a water sewer allocation ordinance in the summer of 2017.

That ordinance's purpose was to allow the county to better manage the resource it still had available while making plans to bolster its supply in the future.

As it's written, the ordinance allows the county to allocate for residential use, 50,000 gallons per day and up to 250,000 gallons per day for non-residential uses, within a calendar year.

Under the ordinance, requests, are considered on a first-come, first-served basis.

Beyond that, priority is shown to:

• Developments within incorporated limits of a town served by the county;
• Developments adjacent to existing infrastructure;
• Development requests located outside of a Water Supply Watershed ... unless existing utilities are adjacent;
• Developments that are a continuation of a build out of a site-specific development plan;
• A development request that does not propose using a new pump and/or lift station.

PEM's lawsuit argues that their Olde Liberty subdivision development is not subject to the ordinance because it predates it and the preliminary plan approval is the binding document.

And, even if PEM's current 37-lot subdivision was controlled by the county's allocation ordinance, it does comply with the ordinance and warrants allocation.

"The [county] refuses to give final review and approval to the engineering plans for Sutherland Station, although all other relevant agencies have approved the plans," the lawsuit states.

In March, Youngsville Town Manager Phillip Cordeiro appeared before county commissioners, expressing to commissioners the exasperation that had been shared with him regarding a developer's inability to get a project approved by the county.

Also, during a spring Franklinton board meeting, developers took their disappointment in the county's slow moving water allocation process to town leaders -- urging them to speak up on their behalf.


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