Did Chesnee need a voter referendum before transferring its sewer system to a sanitary sewer district?

Plain-English summary

In 2006, the City of Chesnee and Spartanburg Sanitary Sewer District were negotiating transfer of the city’s sewer system. They disagreed over whether the city needed a referendum. The Attorney General concluded that Chesnee had to submit the proposed sale to its qualified voters before transferring the system.

The AG read the utility statute as giving municipalities power to sell sewer facilities but imposing a separate election requirement before a sale under that part of the law. The city’s general claim that council could set sale terms did not remove that requirement in his analysis.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Could Chesnee sell its sewer system at all?
A: The AG said state law allowed municipalities to sell sewerage facilities, subject to the election requirement he identified.

Q: Was council approval alone enough?
A: No. The AG concluded that the city had to submit the proposed sale to qualified municipal voters.

Q: Did the presence of loans change the AG’s answer?
A: The request mentioned two rural-development loans that the district might assume. The AG based his answer on the statutory referendum requirement for the system’s transfer.

Background and statutory framework

Section 5-31-610 addressed municipal power to build and dispose of sewer facilities. The AG read it alongside section 5-31-620, which required a city or town council to call an election before a covered construction, purchase, sale, or disposal. He applied that language to the proposed transfer to the district.

Citations and references

Statutes: Section 5-31-610; section 5-31-620.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/november-8-2006/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/06nov8-Flynn.pdf

Original opinion text

HENRY MCMASTER
A1TORNEY GENERAL

November 8, 2006

Lawrence E. Flynn, Jr. , Esquire
Lister, Flynn, Kelly & Talley, PA
Post Office Box 2929
Spartanburg, South Carolina 29304-2929
Dear Mr. Flynn:
By your letter, you informed us that you are the attorney for the City of Chesnee (the "City"). You also informed us that through your role as city attorney, you are active in negotiations between the City and the Spartanburg Sanitary Sewer District (the "District") for the District to acquire the City's sanitary sewer system. You stated: The City constructed a wastewater coJlection system which consists of a treatment facility, approximately 180 manholes and 40,500 fee of pipe. This system is encumbered by two rural development loans which will probably be assumed by the District upon consummation of the transfer. The question which has arisen and which needs to be addressed relates to the authority of the City to transfer the system to the District. The City's position is that it has the authority "upon tenns and conditions as Council deems advisable" to sell real or personal property without the requirement that a referendum be held. The District asserts that a referendum is required for such a transfer. We would, therefore, request an opinion from your office as to whether or not a referendum will be required to allow the assumption of ownership of the City's sewer system by the District.

Law/Analysis
Section 5-31-610 of the South Carolina Code (2004) affords municipalities with various rights in regard to the construction and operation of municipal utilities. Among these is the right to "Contract for the erection of plants for waterworks, sewerage or lighting purposes. one or all, for the use of such cities and towns, and the inhabitants thereof ...." S.C. Code Ann.§ 5-31-610(4). Furthermore, a municipality has the authority to "Sell, convey and dispose of any and all ·such properties, any such sale, conveyance or disposal of an electric light plant or water system, however,

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R~eERI C. DENNIS B u1LDING

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Pos-r 0f'FICE Box 11549 •

COLUMBIA, SC 292 11 -1549

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TELEPHONE 803-734-3970

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FACSIMILE 803-253·6283

Mr. Flynn
Page 2
November 8, 2006

to be made under the provisions of Article 13 of this chapter and not under the succeeding provisions of this article." Id. § 5-31-610(5). Thus, these provisions allows municipalities not only to construct sewerage systems, but also gives such municipalities the authority to sell and dispose of such facilities. However, section 5-31-620 of the South Carolina Code (2004) requires:

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Before such construction, purchase, sale, conveyance or disposal of any such property, or any part thereof, shall be made under the provisions of this article, the city or town council of the municipality shall submit the question of such construction, purchase, sale, conveyance or disposal of the qualified registered electors of the city or town at an election to be ordered for that purpose by the city or town council and to be conducted in accordance with the laws governing municipal elections. (emphasis added). Thus, according to this provision, before a municipality may sell a sewerage facility, it must submit the issue to its electors. Therefore, to answer your question, according to section 5-31-620, the City must hold a referendum prior to the sale of its sewerage facilities to the District. Very truly yours,

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Cydney M. Milling
Assistant Attorney General
REVIEWED AND APPROVED BY:

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Robert D. Cook
Assistant Deputy Attorney General