'It May Be Legal, But It’s Not Right': Lake View United Against Private Sewer Owner

LAKE VIEW, AL — Susie Cathey stood arrow-straight and quiet near the door after the work commute made her a few minutes late to a public question-and-answer meeting in the Lake View Municipal Complex Wednesday evening concerning the small west Alabama city's ongoing sewer controversy.

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But the room erupted with laughter and subsequent cheers when Cathey sliced the stillness of a short pause in debate to declare that she flushes the toilet every time she walks by it — just to get her money's worth from the ridiculously-high cost of her sewer bill.

Cathey, though, is only one of many with migraine-inducing stories about Tannehill Sewer.

The controversial shadow company, which has a dead website, a shell office in Leeds and non-existent customer support system, has been the sewage treatment provider of record for the City of Lake View, in some form or other, since just after the city's incorporation in 1998.

Lake View's geographical position alone, though, makes it one of the most atypical municipalities in the state. While having the benefit of ties to its two doting, cash-flush counties, Lake View's relative youth as an incorporated city makes it a conveniently-overlooked gray area in the eyes of the state and its cascading series of feckless regulatory bodies.

This also happens to come at a time when the city is celebrating rapid growth reflected in 2020 census data, along with the visible site work going on within eyesight of the town hall. But as the city continues to expand, the demand to keep pace with adequate infrastructure and utilities becomes all the more evident.

Cathey told Patch in an interview Wednesday night following the meeting that when she and her daughter first moved in to their current home in Lake View in 2013, the flat rate for the private sewer service was an odd, but reasonable, $36.50 a month. This was her only option, she explained, as the cost and hassle of installing a septic system was out of the question.

As is the story with numerous residents Patch has spoken to, Cathey said since her move, the rates and fees have steadily climbed, with the present flat rate for sewer service at $126. To reiterate the point, this does not include water service or any other utility service.

Just sewer.

"If you have 20 people in a house or two people in a house, you’re paying the same amount," Cathey explained. "And even with oversight, it can't hurt and, yes, I read the people [on social media] who are against it, saying you can't let get big government get on it or you can never go back. But, you have to help these people. How do you sell your house if you want to move? It’s a debacle all the way around and everybody was duped, if you want to know the truth. I would have thought after this lawsuit was lost, they might have a little change of heart, but nothing."

The lawsuit she is referring to saw Tannehill Sewer owner and operator J. Mike White forced by a federal judge in Tuscaloosa to pay $4.7 million in damages to three Lake View families who cumulatively saw their sewer bills climb to roughly half a million dollars.

As Patch reported on Tuesday, White is the longstanding boogeyman in the battle for fair sewer prices in the growing city of approximately 3,600 people. He has also operated other opaque firms, such as SERMA Holdings and Eco Preservation, both of which have managed the privately-owned sewer system in some form or another since its creation.

Most important to note, though, is that the firms owned by White have historically operated only with the oversight of the Alabama Department of Environmental Management (ADEM) and not under the regulations set by the Alabama Public Service Commission.

"The town of Lake View was formed [in 1998] for him to build a sewer," Tannehill Townhomes resident Sonya Whitaker told Patch on Wednesday. "[White] and [State Sen. Gerald Allen] have been close since day one."

Whitaker has been active in the fight against White's business practices for half a decade and gave a range of anecdotes gathered over that time. For instance, she has known people to move from their Lake View homes under the impression that their sewer service had been cut off, only for it to be continually running and building up fees, completely unbeknownst to the outgoing homeowner.

And Patch has confirmed through numerous sources, including city officials speaking on background, that when there is an infrastructure failure for an existing customer, the costs of the repairs are most certainly passed on to the homeowner.

By all accounts, if you're a sewer customer in Lake View and your pipes burst at 3 a.m. on a Saturday ... you're on your own. If you can't pony up the cash, tough luck.

But apart from the frustrating logistics, Whitaker explained the late fees have been the most pervasive problem to have a direct impact on those in the community, especially those living on fixed incomes or supporting families on razor-thin budgets.

"His fees, alone, are underhanded," Whitaker said. "When I moved in five years ago, [the flat fee] was like $81 and now we’re up to $126. I have a lot of his documents I took off his website the last time we tried to get [legislation passed to force oversight]. It showed what all of his rates were then, but we don’t even know what he’s charging now, because he took his website down after the lawsuit."

These stories shared by Cathey and Whitaker are compelling, but sadly make up just a fraction of the myriad accusations levied against White and Tannehill Sewer, even in the wake of a landmark court decision that many viewed as his demise in the business world.

So, with a bill being considered in the legislature that could finally bring some degree of oversight to the situation, Lake View elected officials were prompted to host a question-and-answer meeting Wednesday night to further engage the public for feedback, in addition to letting their own positions be known.

I was in attendance asking questions of officials and citizens alike, with the narrative becoming more complex and maddening with each individual story I heard.

'It may be legal, but it’s not right'

The Lake View Municipal Complex, which also serves as the city's police and fire headquarters and event center, sits downhill from Tannehill Valley Baptist Church — a beautiful brick building with a sharp, white steeple that is far and away the largest single structure and highest point within the city limits.

The small, incorporated city is a short drive from Exit 100 in McCalla and looks much like many of its peers across the south. Newer middle-class homes are spaced comfortably apart in most cases, backdropped by picturesque rolling hills and barbed-wire hayfields. It even has its own Alexander Shunnarah billboard as you go over the railroad tracks that run through the city, before running into another sign for the highly-visible law firm less than a mile up the road once you reach the end of Tannehill Parkway, directly across from the historical state park.

But the most curious sight in Lake View — at least above the ground — can be seen in the dirt work and build out of the Tannehill Preserve subdivision that is seemingly encircling the municipal complex. It's a monstrous, multifaceted development and a source of pride for most residents, as the homes will become available starting in the range of $300,000.

It's important to note, as this reporter has witnessed, that there are very few people who are "from" Lake View. The residents of the city, for the most part, are as historic to the area as their homes, with many having similar stories as to why they first decided to buy a new home or build in Lake View over the last three decades.

For example, retired veteran and first-term Lake View Mayor Adrain Dudley is one such resident. He openly admits to still having a bit of a learning curve when it comes to the nuances of the sewer situation and didn't shy away from telling residents and Patch on Wednesday that he simply didn't have answers to all of their questions.

"There was a lawsuit pending when we took over," Dudley said of the city's current elected leaders. "We wanted [the lawsuit] to be over before we started looking at things."

Dudley told Patch Wednesday morning before the meeting that he had been in close contact with State Rep. Rich Wingo — a Tuscaloosa Republican and sponsor of HB148.

As Patch has previously reported, this measure, if signed into law, would place private sewer system owners within the Lake View city limits under the regulatory oversight of the Alabama Public Service Commission.

Without naming White or any of his corporate aliases, the bill does take specific aim at the way a localized monopoly, like Tannehill Sewer, is currently allowed to operate without any regulations on its rate-setting practices.

Dudley also explained that if the constitutional amendment receives unanimous support in the House of Representatives and is passed by the Senate, then it would be brought to a countywide referendum vote to decide on the measure for the City of Lake View.

However, if there is any dissent in the House and it still manages to pass and be signed in to law, the amendment would then appear on the statewide ballot during the next general election.

In between fielding concerns, Dudley and the rest of the Council regularly circled back to their unity in the push to hold White accountable through policy. The desire isn't to force a hostile takeover of the system by the city, but to provide the necessary oversight so residents are treated fairly.

"I know I keep saying it," Dudley said. "It may be legal, but it's not right."

The Devil In The Details

For those wondering just how Lake View ended up at its present state, the best place to start is with the franchise agreement issued by the city to SERMA Holdings in June of 1999 — less than a year after the city was incorporated.

Patch obtained a copy of the agreement, which is dense with nebulous and confusing legalese. However, it does provide a clear black and white picture into just what the city's founding fathers signed away when they agreed to do business with J. Mike White.

Stamped off by the city's first mayor, Fred Pugh, the city not only agreed to grant exclusive sewer rights to White and SERMA, but also drastically limited the city's own ability to make capital expenditures to expand the sewer system. As it stands, Lake View and its Governmental Utility Services Corporation (GUSC) are barred from performing any work on the system that exceeds $1,000.

What's more, the city also signed over to SERMA the sole authority to set rates and agreed to give it exclusive rights, effectively cutting itself out of the process and trusting in good faith that the private company would charge fair rates comparable with other utilities in the region.

It's also important to mention that the franchise agreement, in a way, foreshadows the future bind the city would find itself in more than two decades later. This can be found when SERMA's legal counsel makes the claim that it would likely be "impossible" for Lake View to raise the necessary funds to construct its own costly city sewer system, before underscoring the relaxed convenience of Alabama law, which permits private sewer system operators to do business in places like Lake View.

"The problem isn’t the length, but the buyout clause in it," Dudley said. "It kind of hamstrings the city."

Indeed, White appears to have the city over a barrel on this one. For instance, when the franchise agreement gets to term, the city has the statutory right to inquire as to the purchase of it. But the catch comes with White assessing the fair market value of the system.

This hasn't stopped present Lake View officials and other businesses from reaching out to get a price. However, the numerous efforts over the years have failed to yield a single monetary figure or even a thoughtful response from White.

Lake View resident Jerry Tingle represents the city, in addition to seven other municipalities, on the Tuscaloosa County Commission and has been involved in discussions since before the city's inception.

Tingle, in an interview with Patch on Wednesday, echoed the mayor's concerns over the radio silence in trying to contact the company.

"There's never been an actual cost put on the sewer system," he said. "SERMA wants to sell the sewer system or so they have said all these years, but they will never get to a point to say 'This is how much it's going to cost.' All they say is they want 75% of the sales taxes and then never come up with a valuation to sell. So, it’s difficult to deal with with something like that, it’s not like buying a car."

What is arguably most concerning when considering the unchecked authority wielded by Tannehill Sewer, though, is how the lack of access and oversight of the system has visibly stunted the city's understanding of the complex infrastructure under their feet.

There are no readily-available maps of sewer lines and it is not even known exactly how many Tannehill Sewer customers there actually are. The only physical trace of the company this reporter could confirm in the area is what one elected official on background referred to as the company's "treatment facility."

"My understanding is, he’s got two old rusty railcars that all this sewage goes in and he pumps it out and it’s taken to Jefferson County," speculated Sonya Whitaker.

Indeed, a simple Google satellite search shows two parallel structures that resemble refurbished rail cars, which are tucked away in a heavily-wooded area that is connected by a dirt road to the southwest end of The Woodlands subdivision at Woodland Park Circle.

Patch has confirmed this site is indeed operated by Tannehill Sewer, but the area is gated off and marked as private property. Little else is known about its operations, apart from anecdotes of large waste trucks regularly passing through the small neighborhood of roughly two-dozen homes.

But when trying to understand the full scope of White's shadowy operations, this is where the Governmental Utility Services Corporation of Lake View comes in — or at least is supposed to. The three-person utility oversight board, which many have argued has only served as a puppet board for White since its creation, is also an aspect of the sewer controversy that the current Council hopes to address.

The GUSC board is currently vacant, as Patch reported on Wednesday, with city leaders openly acknowledging the board's lack of actual authority when dealing with the private sewer system.

It does, however, present one of several possible avenues where reform could make some kind of difference in the community's fight against J. Mike White.

Available options

Randy Price was one of the few locals signed up to take to the podium Wednesday evening and was not sheepish in expressing his concerns.

Price mentioned that, from 2012-2014, construction and commercial development was halted in Lake View due to worries that the private sewer system would not be able to handle anymore homes. Somehow, he said, this issue was quietly resolved and building was able to resume, as evidenced by the large-scale project that could be seen outside from a window in the council chambers.

"What improvements happened to the sewer ... to allow more building?" he asked the Council. "Did it increase in capacity?"

As was the case with many questions, the mayor and council offered nothing in the way of insight.

"I truly don’t know why it happened then," Dudley said.

Rather, instead of trying to make sense of the past, this Council and mayor appear focused on what can be done at present to provide relief and oversight to the situation at hand. This is where city officials hope reform and legislation will make the difference.

Chief among the city's options is HB148, which appears to be gaining momentum in the legislature during the ongoing session, despite failing in its past incarnations. As Patch previously reported, the bill is currently in "the basket" of legislation that has cleared committee and is ready for consideration on the floor of the Alabama House of Representatives.

The real fight for the bill's supporters won't be in the House, but in the Alabama Senate. Knowing this fact all too well, numerous residents had pointed words Wednesday night for State Sen. Gerald Allen — the Tuscaloosa Republican who many argue is complicit in allowing Tannehill Sewer to operate the way it does.

"Every time I see those [campaign] signs on the highway, I want to rip them up," Cathey told me. "I don’t do it. But it's just not right."

For instance, fears continue to persist in certain parts of Lake View after a bill sponsored by Allen during the current session proposed a unilateral annexation of several properties that would have likely resulted in big business for Tannehill Sewer and would not have been put to a referendum vote. The bill, SB88, stalled in committee and was postponed indefinitely, effectively killing the measure for this session.

Despite this victory for the City of Lake View, Allen and his influence in the Senate will also represent the most challenging hurdle for those wanting to see HB148 signed into law.

Dudley informed those in attendance and later reiterated to Patch that he plans to actively lobby those in the Senate to throw their support behind the expressed desires of the city and its residents.

On Thursday, Dudley sent letters to state senators written by Lake View residents who expressed many of the same concerns voiced during the public meeting Wednesday night.

At the urging of several in attendance, it appears the next step from a policy standpoint will be the Council adopting a formal resolution expressing the city's desire to have Tannehill Sewer placed under the regulatory jurisdiction of the Alabama Public Service Commission. As one attendee pointed out, such a measure would stand in stark contrast to the actions of the previous mayor and city council, who passed a resolution opposing oversight of Tannehill Sewer.

But the energy and optimism among elected officials and the crowd gave way to uncertainty when asked by Patch during the meeting if there were any alternate courses of action the city or residents could take in the event that HB148 fails.

At present, there appears to be none, with Dudley insisting that the city is hedging its bets on the passage of the bill. However, Councilwoman Cheryl Ivey did mention in passing that the push to shore up support will include a banner that will be taken from neighborhood to neighborhood and signed by residents as a kind of petition.

While not telegraphing much else in the way of options, Dudley and the Council did discuss future reforms to the Governmental Utility Services Corporation Board.

Officials have been a vocal about improving the involvement of the other communities served by Tannehill Sewer, arguing that a concerted effort on the part of the different communities impacted could result in better oversight of the system by the GUSC.

However, as pointed out by Ivey, saber-rattling by the city has proven an ineffective tactic in getting White's attention.

"[White] told me that he does not recognize the authority of the GUSC," she said, underscoring the inherent lack of authority held by the regulatory board.

District 2 Commissioner Jerry Tingle, who represents Lake View on the Tuscaloosa County Commission, was asked by Patch what options he thought the residents of the town had at their disposal and said it would all come down to the will of the people.

"Lake View has got some decisions to make up there about which way they are gonna move," Tingle said. "I know [HB148] has been floated for years and never has had any teeth to it. I'm not too sure what step they are gonna take next and frankly ... this issue it is so complicated that it's not going to be easy to get this settled."

Tingle is not a customer of Tannehill Sewer and is a resident of what he and others refer to as "Old Lake View," which is viewed in many respects as a separate town from the Tannehill Preserve, where the Lake View Municipal Complex is located.

"I don’t think [the Council and mayor] have any power to do anything separate from what the town will authorize," Tingle said. "It takes the action of the council there and this is what’s been rolled over year over year."

But as debate persists, shady business practices continue on as usual, which were accessible through the numerous stories voiced to city officials Wednesday night. Among these were rumors circulating that White planned to install cutoff valves for each sewer customer.

As one attendee explained, these devices would allow Tannehill Sewer to cut off service for a customer due to failure to pay, resulting in sewage backup that could ultimately get the home condemned by the state health department.

This draconian approach to customer billing is also evidenced in scores of liens filed by Tannehill Sewer in Tuscaloosa County Probate Court against Lake View residents. Tannehill Sewer is a litigious company that has shown an affinity in the past for using the courts to intimidate customers out of their money.

Whitaker told Patch she has never gotten behind on her sewer bill to find out what the repercussions would be for her specific situation. She did, however, break down the nuances of the company's billing practices, saying that customers are charged a fee of $25 a month for late payment, with those going over the threshold of $300 forced to pay the bill in full or risk having their service cut off.

"Any time you try to make a partial payment, they send your check back, so then you get another $25 added to it and [White] adds 18% interest. There is nothing to stop him from doing these kind of things."

And if you find yourself in this position, Whitaker said, there is no point holding out hope that the company's customer service will be any help.

"The only way to pay is by check or by money order or something," she said. "You can't just go to the website or go to a brick-and-mortar building and pay it. You have to pay it by check, so I send mine two weeks early. Especially with the way the mail is now, if I mail it five days ahead of time, there is no way to prove when they got it, so they won’t deposit it until the 26th and that’s when they will say they got it ... then there’s that $25 fee."

The decades-long grift by J. Mike White and Tannehill Sewer is a large and complex one, made possible in-part by the laws — or lack thereof — on the books. But, at one point during the meeting Wednesday night, Councilman Kelly Rolen issued an emboldened call for increased involvement by those in attendance and watching over Facebook Live.

In echoing Tingle, Rolen then said this issue could only be resolved by the residents of Lake View.

"I want people to familiarize themselves with this entire situation and be prepared to fight," he said. "Honestly, in the past 23 years, inactivity and the inability to act ... that's landed us here."

Have a news tip or suggestion on how I can improve Tuscaloosa Patch? Maybe you're interested in having your business become one of the latest sponsors for Tuscaloosa Patch? Email all inquiries to me at ryan.phillips@patch.com.