What: Council vote on new water, sewer rules

When: Monday, Oct. 15, 7 p.m.

Where: Durham City Council Chambers, 101 City Hall Plaza

What’s at stake: Developers would have to comply with new requirements if they want city water and sewer service for projects outside the city limits

After the last dustup over water and sewer service to the controversial 751 South development, the City of Durham is revamping how it provides utilities to projects outside the city limits.

If city council approves rule changes proposed by the city Department of Planning next week, developers will have to fulfill new requirements if they want city-provided sewer and water: They must apply for and accept annexation into the city. And they must submit to a zoning review.

The new guidelines will streamline what is currently a disjointed process, says City Planning Director Steve Medlin. Under the current rules, requests to the city for the extension of utility service and annexation are handled by several departments and presented to the council separately.

By considering the requests at different points in the process, council members could conceivably approve the extension of utilities service to a development project, and then later decline to annex it. That would force the city to maintain the service with no additional tax revenue to pay for it.

The new rules ensure that the annexation, utility extension and rezoning applications are all presented to the city council at one time. In other words, sewer and water service is incumbent on annexation.

“These new rules bring the process together, so that the council has all the pieces in front of them and can make the best upfront decision,” Medlin says.

Revisions to the process come three months after Southern Durham Development, which is building 751 South, tried to circumvent city policy by going to the Legislature. In June, state lawmakers considered, but ultimately rejected, legislation that would have forced Durham to extend utilities to the 167-acre project in the environmentally sensitive Jordan Lake watershed.

This maneuver was in response to city council’s earlier rejection of the company’s application to have city water and sewer lines extended to the proposed 1,300-home subdivision that will include 600,000 square feet of commercial space.

Asked if the controversy motivated the city to revisit its process for approving such applications, Medlin says, “Certainly that was a contributing factor,” adding that recent moves by the General Assembly require the city to have stricter rules for annexing properties.

With the pending revisions, the city is revisiting several applications for annexation and utilities, Medlin says. One of the applications in the hopper was submitted by 751 LLC. The Florida-based company wants to build Southpoint Trails, a 169-townhome subdivision set on 27 acres. Like the 751 South project, it hugs N.C. 751 Highway and Stagecoach Road about three miles from Jordan Lake.

According to a 2011 article in the Triangle Business Journal, owner and former Chicago developer Jeff Gelman, through 751 LLC, bought five parcels for about $3.1 million in 2006.

Local attorney Ken Spaulding, who’s been retained by the developers as counsel, says he doesn’t expect any fallout from the controversy over 751 South. “I expect the city council to make a decision based on the merits of the application, which was submitted in a way totally consistent with the newly proposed policy,” Spaulding says.

Medlin declines to speculate on the planning department’s recommendation about Southpoint Trails to city council.

A final decision by council on the 751 LLC application won’t be scheduled until after the city council takes up the proposed rule changes. A council vote on the revised rules is set for Monday, Oct. 15.

This article appeared in print with the headline “Utility players.”