1. Cities and Towns--taking by town in county--no consent from county--regional
water system
Condemnation of property by defendant Town of Yanceyville in Caswell County for a
regional water system without the consent of Caswell County was not invalidated by N.C.G.S. §
153A-15, which applies when a local government unit attempts to acquire land in another
county. Yanceyville is within Caswell County, and summary judgement was correctly granted
for defendants. Any claim that Yanceyville is merely undertaking the condemnation on behalf of
other counties or towns outside Caswell County is obviated by the real and substantial benefits
accruing to Yanceyville.
2. Cities and Towns--regional water system--property condemned by town within
county--no leaseholder interest by town in different county
The Town of Roxboro did not acquire a leasehold in real property located in Caswell
County in violation of N.C.G.S. § 153A-15 through the condemnation of land for a regional
water system by Yanceyville, a town within Caswell County. The parties have mutually and
cooperatively utilized the subject property, and Yanceyville has not surrendered to Roxboro the
occupation and profits of the land.
3. Public Works--interlocal water agreement--formalities for water system not skirted
The defendants did not use an interlocal water agreement and the pertaining statutory
provisions to skirt the formalities required for the creation of a water authority under N.C.G.S.
Chapter 162A. The provisions on which plaintiff relies are permissive, and nothing in Chapter
162A indicates that it was designed to restrict the broad grant of authority to local government
units for interlocal cooperation.
Caswell County Attorney Robert V. Shaver, Jr., for plaintiff-
appellant.
Brough Law Firm, by G. Nicholas Herman, Ramsey, Ramsey & Long,
by James A. Long, and R. Lee Farmer, for defendant-appellees.
CALABRIA, Judge.
Caswell County appeals the trial court's entry of summary
judgment in favor of the Town of Yanceyville (“Yanceyville”), the
City of Roxboro (“Roxboro”), and Person County (collectively,
“defendants”) on issues involving defendants' proposed water supply
and distribution facility to draw water from a portion of the Dan
River that runs from Virginia through Caswell County. We affirm.
Caswell and Person Counties are adjoining counties.
Yanceyville, a municipal corporation located in Caswell County,
owns and operates a public enterprise water supply distribution
system currently capable of treating approximately 1.0 million
gallons per day (“MGD”). Yanceyville currently supplies water to
its citizens from Farmer Lake, which is located within Caswell
County, pursuant to an agreement with Caswell County.
Yanceyville's current water need is 0.4 MGD, and its projected
water need in twenty years is 1.0 MGD. Farmer Lake has the
capacity to supply approximately 6.3 MGD of water.
Roxboro, a municipal corporation located in Person County,
also owns and operates a public enterprise water supply
distribution system. Person County does not operate a public
enterprise water supply distribution system but has an agreement
with Roxboro for future extension of Roxboro's system to provide
water to residents located within Person County but outside of
Roxboro's boundaries. Roxboro currently supplies water to its
citizens from Lake Isaac Walton and Lake Roxboro, having respective
capacities for water supply of 3.2 MGD and 7.8 MGD. Current peak
demand of usage for Roxboro is 3.7 MGD of water, and the latestwater study by Roxboro and Person County indicated the current
supply would be sufficient for projected needs for twenty years.
In September of 2001, Dominion Energy (“Dominion”), a
Virginia-based power company, expressed an interest in constructing
a natural gas fired electrical generation plant in Person County.
To service the proposed plant, Dominion required peak raw water
supplies in the amount 8.0 MGD. As a result of this need, Roxboro
and Person County began investigating alternative sources of water
to ensure supply for future growth. Ultimately, Roxboro and Person
County identified the Dan River, which flows out of Virginia and
through Caswell County, as the most viable alternative source of
water. On 1 March 2002, Roxboro submitted an application to
request reclassification of the Dan River to allow it to be used as
a drinking water supply source as well as an application for a
permit to withdraw water from the Dan River at a proposed intake
facility to be located along the Dan River in Caswell County.
Although Dominion withdrew its plans regarding the construction of
an electrical plant in Person County in February of 2003, Roxboro
and Person County elected to proceed with the applications based on
the expenditure of approximately $500,000.00 on the project at that
time.
At all times relevant to the issues on appeal, Caswell County
opposed the applications regarding the Dan River; nonetheless, on
25 March 2003, defendants executed an interlocal agreement (the
“agreement”) to establish a public enterprise water supply
distribution system. The stated purpose of the agreement was “toestablish a . . . regional and inter-governmental approach for
supplying raw water services to Yanceyville, Roxboro, Person
County, and other areas of Caswell County” by utilizing the water
supply capacity of the Dan River. The planned interconnected and
regional water supply and distribution system (the “supply system”)
was intended to
(1) serve the current and long-term water
supply needs of Yanceyville, other areas of
Caswell County, and Roxboro and Person County;
(2) accommodate industrial, commercial, and
residential development within the
jurisdiction of those units of local
government; (3) provide Yanceyville with the
revenue to operate, maintain, and repair a
water supply system for the benefit of users
in Caswell County; and (4) be financed by
Yanceyville, Roxboro, and Person County.
The supply system consists of five segments. Segment 1
consists of a raw water intake, a raw water pump station, a
pretreatment facility, and a meter vault with water line connection
points (the “Point of Connection”). Segment 2 consists of a raw
water line in Caswell County extending from the Point of Connection
to the Caswell County-Person County line and traversing existing
easements. Segment 3 consists of a raw water line in Person County
extending from Segment 2 at the Caswell County-Person County line
to Roxboro's water facility at Lake Isaac Walton and traversing
existing easements. Segment 4 consists of a raw water line in
Caswell County from the Point of Connection to Yanceyville's water
treatment plant. Segment 5 consists of a water treatment unit and
high service pump station at the raw water intake site and a finishwater line from the water treatment unit to the water distribution
system located in the Town of Milton.
The agreement details the parties' responsibilities with
respect to each segment. Regarding construction, maintenance,
associated costs, and other costs for regulatory approvals, Roxboro
is responsible for segments 1, 2, and 3, and Yanceyville is
responsible for segments 4 and 5. With respect to holding title to
the physical improvements to the real property, Roxboro and Person
County hold title to segments 1, 2, and 3, and Yanceyville holds
title to segments 4 and 5. As to the real property on which the
physical improvements are located for segments 1, 2, 4, and 5,
title is held by Yanceyville alone; however, the agreements
provides that
[i]f, at any time during the [forty-year,
renewable] term of this Agreement, it becomes
lawful under G.S. 153-15A or other law for
Roxboro to hold title to the Raw Water Intake
Site and the real property or interests in
real property by way of easements or right-of-
ways necessary for the Segment 1 and Segment 2
facilities, title to the Raw Water Intake Site
will be held in the joint names of Yanceyville
and Roxboro, and title to the real property or
interests in real property necessary for the
Segment 2 facilities will be held in the sole
name of Roxboro . . . [without] any monetary
or other consideration for such transfers of
title.
Title to the real property upon which segment 3 is located is held
jointly by Roxboro and Person County.
Other pertinent provisions in the agreement include (1) how
the water drawn from the Dan River is allocated between Roxboro
and Yanceyville, (2) that Roxboro pay three cents to Yanceyvillefor each 1,000 gallons of raw water Roxboro draws from the Dan
River through the Point of Connection, (3) provisions for
liquidated damages in favor of Roxboro and Person County in the
event of breach by Yanceyville, (4) the parties' respective
responsibilities for acquiring the necessary real property for the
five segments, and (5) Yanceyville's right to draw water, at
operating cost, from Lake Isaac Walton via segments 2 and 3 during
times of need when the Dan River cannot supply the necessary water,
provided that Roxboro has sufficient water capacity to supply such
volume.
Pursuant to the agreement, Yanceyville instituted a
condemnation action against a Caswell County property owner to take
land on which the proposed water intake facility would be located.
Plaintiff subsequently filed a declaratory judgment action
requesting the trial court determine the applicability of N.C. Gen.
Stat. § 153A-15 to the condemnation action. Both plaintiff and
defendants moved for summary judgment, and on 11 December 2003, the
trial court entered summary judgment in favor of defendants after
hearing arguments and concluding “that the provisions of N.C. Gen.
Stat. § 153A-15 do not invalidate the condemnation action initiated
by Yanceyville or otherwise prevent the proposed use of the land
pursuant to the 'Interlocal Agreement' presented . . . .”
Plaintiff appeals, asserting the trial court “erred by granting
summary judgment to defendants and denying summary judgment to
plaintiff when defendants failed to obtain the consent of theCaswell County Board of Commissioners pursuant to N.C. Gen. Stat.
§ 153A-15 before acquiring real property in Caswell County.”
“[S]ummary judgment is an appropriate procedure in an action
. . . for a declaratory judgment.” Tucker v. City of Kannapolis,
159 N.C. App. 174, 178, 582 S.E.2d 697, 699 (2003). Our appellate
review examines the whole record to determine “(1) whether the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, show that there is no
genuine issue as to any material fact; and (2) whether the moving
party was entitled to judgment as a matter of law.” Id. In the
instant case, the facts are undisputed; therefore, the only
question is whether the trial court properly entered summary
judgment in favor of defendants.
[1] North Carolina General Statues § 160A-240.1 (2003)
authorizes a city to acquire an interest in real property for use
by the city through the exercise of eminent domain procedures as
provided in Chapter 40A of the General Statutes. Under N.C. Gen.
Stat. § 40A-3(b)(2) (2003), the governing body of a city is granted
the power of eminent domain, for the public use or benefit, to
acquire property, “either inside or outside its boundaries,” for
the purpose of “[e]stablishing, extending, enlarging, or improving”
public enterprises listed in N.C. Gen. Stat. § 160A-311. North
Carolina General Statutes § 160A-311 (2003) expressly includes
water supply and distributions systems within the term “public
enterprise.” Authority is expressly granted to a city to operate
a public enterprise “outside its corporate limits, withinreasonable limitations . . . .” N.C. Gen. Stat. § 160A-312(a)
(2003). In addition, this Court has noted that the “broad language
. . . in G.S. § 160A-312 . . . evidence[s] [the Legislature's]
intent to give cities . . . comprehensive authority to own and
operate public enterprises outside their boundaries . . . [and]
grant[s] a city the absolute authority, without limitation or
restriction, to establish and conduct a public enterprise for
itself and its citizens.” Davidson County v. City of High Point,
85 N.C. App. 26, 41, 354 S.E.2d 280, 288 (1987). Nonetheless,
Caswell County contends Yanceyville's condemnation action cannot be
sustained due to operation of N.C. Gen. Stat. § 153A-15 (2003). We
disagree.
North Carolina General Statutes § 153A-15(b) provides, in
pertinent part, as follows:
Notwithstanding the provisions of [N.C. Gen.
Stat. § 160A-240.1], or any other general law
or local act conferring the power to acquire
real property, before any . . . city . . .
which is located wholly or primarily outside
another county acquires any real property
located in the other county by exchange,
purchase or lease, it must have the approval
of the county board of commissioners of the
county where the land is located.
This statute operates when a unit of local government located in
one county attempts to acquire land located in another county.
See, e.g., County of Johnston v. City of Wilson, 136 N.C. App. 775,
525 S.E.2d 826 (2000). In such cases, the unit of local government
undertaking to acquire the realty is required to first obtain
approval from the board of commissioners of that county where the
land is located. N.C. Gen. Stat. § 153A-15(b). However, in theinstant case, both Yanceyville and the land being condemned are
located within Caswell County. Accordingly, Yanceyville's
condemnation action does not implicate this statutory provision.
Caswell County alternatively contends Yanceyville is
condemning the property on behalf of Roxboro and Person County and
is merely a token title-holder allowing Roxboro and Person County
to obtain an interest in real property located in Caswell County
without the necessary consent. Given the numerous and material
benefits afforded Yanceyville under the terms of the agreement, we
must disagree. First, Yanceyville's sole source of water currently
is Farmer Lake. Thus, the addition of another independent source
of water is beneficial should conditions cause Farmer Lake to
become unusable. Second, Yanceyville is acquiring an additional
water treatment unit and pump station to utilize the new water
source in addition to their current facilities. Third, the Dan
River is less susceptible to local drought conditions than Farmer
Lake. Fourth, the additional source of water allows for greater
future growth and expansion even in the absence of an immediate
need. Finally, the interconnected system allows Yanceyville to
obtain water from Lake Isaac Walton should the need arise in the
future paying only the cost of operating Roxboro's intake facility
provided Roxboro has sufficient capacity. These real and
substantial benefits accrue to Yanceyville and obviate any claim
that this is an unwanted taking by another government or that
Yanceyville is merely undertaking the condemnation action solely onbehalf of and in favor of granting Roxboro or Person County an
interest in Caswell County property.
[2] Caswell County separately argues Roxboro, through the
agreement, has acquired a leasehold interest in real property
located in Caswell County in violation of N.C. Gen. Stat. § 153A-
15. “A lease for a term of years is a contract, by which one
agrees, for a valuable consideration, to let another have the
occupation and profits of land for a definite time.” Helicopter
Corp. v. Realty Co., 263 N.C. 139, 143, 139 S.E.2d 362, 366 (1964).
In the instant case, however, the parties have mutually and
cooperatively utilized the subject property. Yanceyville has not
surrendered to Roxboro “the occupation and profits of the land”
under the agreement. To the contrary, Yanceyville has paid for and
owns the land, and Roxboro has paid for and owns the facilities for
the purpose of harvesting water for the benefit of both from the
Dan River. Moreover, Caswell County's reliance on the provision
within the agreement requiring Roxboro to pay three cents for every
1,000 gallons of water it draws from the Dan River is misplaced.
This payment does not constitute rent; rather, the payment to
Yanceyville is, by the agreement's express terms, to purchase water
for Roxboro which will “provide Yanceyville with revenue to
operate, maintain, and repair” their portion of the interconnected
water supply system. We are not persuaded that the instant
agreement represents a lease.
[3] Next, Caswell County asserts defendants used the
interlocal agreement and the pertaining statutory provisions in aneffort to “skirt the formalities required for creation of a water
authority under G.S. § 162A while making their endeavor sound
similar in scope.” We disagree. First, the provisions on which
Caswell County relies are permissive in nature. See, e.g., N.C.
Gen. Stat. §§ 162A-3 to 162A-4; 162A-5.1 (2003). Second, nothing
in Chapter 162A indicates it was designed to restrict the broad
grant of authority to local governmental units for interlocal
cooperation. See N.C. Gen. Stat. § 160A-461 (2003) (permitting
“[a]ny unit of local government in this State and any one or more
other units of local government in this State or any other state
(to the extent permitted by the laws of the other state) [to] enter
into contracts or agreements with each other in order to execute
any undertaking”) (emphasis added).
In summary, neither N.C. Gen. Stat. § 153A-15 nor Chapter 162A
of the North Carolina General Statutes prohibits the interlocal
agreement between defendants under the facts of the instant case.
We have carefully considered plaintiff's remaining arguments and
find them to be without merit.
Affirmed.
Judges HUNTER and LEVINSON concur.
*** Converted from WordPerfect ***