Glynn County Schools and Brunswick-Glynn County Joint Water and Sewer Commission recently made their initial filings in the case over nearly $400,000 in overdue utility bills.
According to the JWSC’s filing, the school system paid the debt service fee portion of its utility bill until 2014, when the utility audited its debt service charges and adjusted them based on the findings.
The audit resulted in a net increase in the school system’s monthly bill, which is when the system stopped paying the debt service portion, the filing states. The school system claims it is prohibited from paying the debt service fee by state law.
The JWSC filed a lawsuit against the school district to force it to pay the debt service fee and establish that it isn’t prohibited from paying it. The school system filed a counterclaim to make the utility return debt service fees it had paid from 2008 to 2014.
Glynn County Superior Court Judge Stephen Kelley ruled in favor of the JWSC in February, telling the system to pay the utility what it owed in debt service fees.
The school district appealed the decision, taking it to the Georgia Court of Appeals.
A debt service fee is essentially an impact fee, the school system argues.
“(Debt service) charges are not for the actual water or sewer services used in the schools and buildings operated by the (school) district ... These funds are used to make payments on debt for capital improvements already built by the (utility) commission and/or to build a reserve to be used for similar capital improvements in the future,” the school system’s filing states.
State law requires the school system to spend money for educational purposes only, including what’s necessary to run public schools. It exempt schools from paying impact fees, the filing states.
For the JWSC’s part, its filing states the debt service fee is not an impact fee. An impact fee is a “one-time, project-specific” charge, while the debt service fee is part of the utility’s monthly rate structure.
“(The debt service fee) is charged and collected so that the JWSC can make payments on debt, not to build a reserve to be used for capital improvements in the future as contended by the district,” according to the filing.
The school system filing also says that state law prevents it from carrying over debt from year to year.
“If the school district cannot incur debt for school buildings under Georgia law, it certainly cannot use school tax funds to pay off the commission’s long-term debt incurred for capital improvements,” the filing claims.
However, Kelley sided with the JWSC in his final decision.
“The court finds that the JWSC charges the district has incurred, including the (debt service) charges, constitute ‘necessary and incidental’ public education expenses authorized under the Georgia Constitution and (state law),” Kelley wrote in his order.
The school system’s filing claims Judge Kelley’s decision “contravenes the constitutional and statutory limits, as set forth in well-established decisions of the Georgia Supreme Court, on the use of school tax funds received from the state and collected from local property taxpayers.”
The JWSC alleged the school system owed close to $140,000 when the case was originally filed in 2015. Utility officials said Tuesday that the amount has risen to nearly $400,000 and continues to rise every month it goes unpaid.