Sullivan’s Island agrees to pay $227k amid contract dispute with Charleston Water System

SULLIVAN’S ISLAND, S.C. (WCBD) – The Town of Sullivan’s Island has agreed to pay just over $227,000 to Charleston Water System amid a contract dispute.

Sullivan’s Island Town Council spent almost an hour in an executive session on Monday night while they received legal advice on contractual negotiations with Charleston Water System.

“That signed contract constitutes a valuable asset of the town and provides certainty regarding the rates that our residents pay for water. Years ago, Charleston Water System decided to raise our rates as if our signed contract did not exist,” said Town Councilman and Mayor Pro Tem Justin Novak, as he read aloud a lengthy motion upon council’s return to open session.

As News 2 reported last month, Charleston Water System claimed in an October 2023 letter to the town that Sullivan’s Island has been paying less than the correct rate since 2017. A spokesperson for CWS said the town owed $1,078,000 as of the beginning of March.

The letter also said the 30-year contract between CWS, and the town will expire on July 19, 2024 and if there is not a new contract by then, water service will be disconnected for the town’s 2,000 on July 20^th.

“The town disputed that rate increase and continued to pay the undisputed amount owed in accordance with our longstanding signed agreement and placed the disputed amount in escrow pending the resolution of that dispute,” Councilman Novak read.

He continued with the motion and said CWS is ignoring the other terms and stated the town would not accept any of the water system’s proposals in the contractual dispute.

“The town must stand firm that signed contracts are signed contracts,” the councilman said as part of the motion.

The town used who leaders said is a nationally recognized rate consultant to calculate what they owe.

“Accordingly, I move that town council authorize the payment of $227,361 to satisfy in full the disputed portion of arrearage now calculated to be owed under the terms of our written agreement with Charleston Water System,” Councilman Novak finished.

The motion passed unanimously. News 2 reached out to Charleston Water System after the meeting. A spokesperson said they are evaluating the action taken.