Chattanooga claims Ga. sewer utility owes $25M, seeks cutoff

Dispute over alleged unpaid bills and fines now in court.

A Sept. 16 letter from a Chattanooga city attorney says the authority owes $1.9 million in unpaid bills, as well as more than $23 million for breaching the contract.

FLINTSTONE, GA. — A Tennessee city claims that a north Georgia sewer authority owes more than $25 million in unpaid bills and fines, and wants to cut off sewer treatment for the county, but the authority says the amount owed is less than $300,000.

The chattanooga times free Press reports that the city of Chattanooga claims the Walker County Water and Sewerage Authority didn’t pay the full amount of 22 bills from October 2017 through July 2019.

The Walker County utility pipes some sewage that it collects to Chattanooga for treatment, paying for the service.

A Sept. 16 letter from a Chattanooga city attorney says the authority owes $1.9 million in unpaid bills, as well as more than $23 million for breaching the contract between the two entities.

“Walker County’s refusal to timely pay the full amounts owed is a material breach of the parties’ agreement,” wrote Phil Noblett, a deputy city attorney, demanding payment within 60 days. “That amount continues to accrue at the rate of $1,000 per violation per day,” he wrote, plus interest.

The 60 days ended Nov. 15 and the authority had not paid by then.

On Nov. 19, the sewer authority’s attorneys filed a legal response challenging a number of actions and charges by Chattanooga over the years and saying the sewer authority is, in fact, owed $279,500.

On Dec. 13, Chattanooga responded by filing a motion to dismiss the counterclaims.

Earlier this year, the Walker County Board of Commissioners voted to spend $5 million in federal COVID-19 relief funds for a water and sewer improvement plan with the goal of redirecting sewage from the north end of the county to the sewer treatment plant in Chickamauga, Georgia, rather than Chattanooga. When asked during the September deposition if this would allow the Walker County Water and Sewerage Authority to disconnect from Chattanooga’s system and treat all of its own wastewater, the representative for the authority said doing so would likely require another “redirection project” as well as facility treatment upgrades.

In court documents, attorneys for Chattanooga said the city was entitled to terminate service under the 2016 agreement.

“Nothing is stopping Walker County from raising its wastewater rates to construct a treatment facility with sufficient capacity to treat all of its own wastewater,” the city argued. “Walker County can also find someone else to contract with to treat its sewage. But what it cannot do is stubbornly refuse to pay its bills, tell Chattanooga how it must finance capital projects necessary to treat its wastewater, and then play the victim when Chattanooga sues to enforce its contractual rights.”

Chattanooga’s attorneys argue that Walker County withheld payments when Chattanooga needed the money to comply with federal agreements to clean up its wastewater treatment system.

Attorneys for Chattanooga asked the court to require the sewer agency to begin taking steps to disconnect, although they acknowledged that might take time.

Representatives of both sides declined to comment.