We have heard a significant number of questions and of incorrect information being spread in the community regarding Walhalla’s proposed water ordinance amendment, commonly called the annexation ordinance, that would require new water customers to sign an annexation covenant. It’s the city government’s responsibility to make sure that the citizens of Walhalla have the correct information, so we have put together the below FAQ based on the concerns we have heard in the hopes that it will clear up this confusion.
View a copy of proposed Ordinance 2025-03 here.
The second reading of Ordinance 2025-03 is scheduled for June 17, 2025 at 5:30 PM.
Q: Does the proposed “annexation ordinance” force anyone currently living outside of the city with water service to annex into the city?
A: No. It only requires future new water customers to sign an agreement granting approval to annex into the city if their property ever borders the city in the future. No current Walhalla water customer will be asked to retroactively sign an agreement or be forced to annex into the city.
Q: Would this ordinance mean that any new water customers who sign the annexation agreement have to immediately annex into Walhalla no matter where they live?
A: No. State law requires that properties border a city before they can be considered for annexation. So, a new water customer living miles from the city limits would not be a candidate to be annexed into Walhalla.
Q: Will water service be withheld until after the property is annexed?
A: No. If the water contract and covenant are signed, water service will be provided regardless of whether the property is inside or outside City limits.
Q: Do other cities have similar ordinances?
A; The majority of cities with water systems in South Carolina have similar ordinances, and it is common practice. (For example, in our area, Seneca, Westminster, Clemson, and Pendleton all have annexation covenants as a condition of water service.)
Q: I am being told that this is a “land grab” and a “cash grab.” Is this true?
A: This is not true. Not one existing Walhalla water customer will be required to sign an annexation covenant agreement to maintain their water or sewer service, be forced to annex into Walhalla, or have to pay Walhalla city taxes as a result of this ordinance. This is a growth management strategy.
Q: How long will it take a new water customer to be subject to annexation into Walhalla?
A: Depending on the property’s distance from Walhalla, it could take years, if ever, for new water customers on these properties to be subject to annexation. Many people live in their homes for years before selling them. For example, in 2024 only one residential property that applied for NEW water service would have been eligible to be annexed into the city.
Q: What if I inherit my property from my spouse or parents, would I have to sign the annexation agreement?
A: No. Walhalla’s proposed ordinance amendment exempts properties inherited from spouses and parents. Council is actively considering expanding this exemption to include all inherited property. These inheritance clauses are unique to Walhalla’ and not common in similar ones across the state.
Q: I have rental property outside of the city. Will my tenants be forced to sign this agreement to receive water service?
A: No. The ordinance will not require tenants to sign an agreement.
Q: I have a farm. If, one day, someone buys it and requests new water service and it gets annexed into the city, could it still be a farm?
A: Yes. Existing city code (330-1.39) allows for the continuation of non-conforming land uses of the property – more commonly known as grandfathering.
Q: So, under this ordinance, if a property with new water service eventually borders the city, will it be automatically annexed in?
A: No. It is a long process. City staff will review annexation covenants at least once a year and make a recommendation on eligible properties to the city’s Planning Commission. The city’s Planning Commission must determine if annexing a property is in the city’s best interest and fits with the city’s long-term growth plan. Then, the Planning Commission will make a recommendation to the City Council. Annexation can only occur after the Planning Commission provides a recommendation and after two readings by the City Council. This process also requires notifying the current property owner in advance, of the public meetings and public hearings. There are examples where nearby cities declined to annex properties because doing so would have cost taxpayers too much money to provide services to those properties or they do not fit into the city’s long term growth strategy.
Q: You said that this type of ordinance is common throughout the state. Have the courts reviewed these types or ordinances?
A: Yes. The South Carolina Supreme Court has reviewed similar ordinances and found them to be legal. The provision of City services to outside users is a contractual matter and the city may impose conditions on the use of its services.
Q: Did council try to sneak this ordinance by with no one noticing?
A: Not at all. These meetings have been conducted in public. In a January public meeting, Walhalla’s General Government Committee recommended sending this ordinance to council for first reading. All committee and council meetings were announced in advance and the agendas available in advance also. In another public meeting, City Council approved the ordinance on first reading on February 18. Media has covered the meetings and reported on the annexation proposal previously.
Q: I’ve heard that the city is bankrupt and that this is why the city is trying to pass this ordinance. Is this true?
A: This is far from the truth. In the current fiscal year, the city expects to collect over $10.5 million in revenue, has around $2.2 million in reserves for emergencies, and just received a clean audit from our auditing/CPA firm (Bailey Love firm) for its Fiscal Year 2023-2024 budget. So no, the city is not bankrupt.
Q: Is the city trying to annex in property so that it can “grab cash” from those living outside of the city and receive an immediate influx of cash?
A: As noted above, annexation is a very slow process. In 2024 only one residential property with new water service would have been subject to be annexed into the city with a tax bill of approximately $118.
Q: Is the city spending money on “wants” instead of “needs”?
A: The current council committed to a “back to basics” approach to funding city operations. As a result, all expenditures have prioritized basic city needs such as water and sewer, police and fire services, sanitation and streets/facilities services and recreation for our children. The CPA audit mentioned above found that Walhalla’s expenditures on personnel and services are in line with those of cities of similar size in the upstate. (Monies for events and beautification efforts are now funded by HTAX proceeds and donations/sponsorships.)
Q: What about the money for the new community center and police station? How can Walhalla afford to build them?
A: These projects are 100% funded by state grants with no match required. State money for the new police station replaces a badly deteriorated building with high maintenance needs and it gives our city its first emergency operations center. State money for the new community center allows us to get out of a building the school district will demolish and out of an almost 100-year old gym. Our children will be able to have events in one place instead of two. These are all pluses for our community.
Q: If Walhalla is in such good financial shape, then why are city officials saying that the budget is so tight?
A: Cancellation of the $550,000 fire contract, increasing electric and internet costs and an increase in the cost of supplies (i.e. pipes, asphalt, roll carts, etc) have been big factors that contributed to the tight city budget. The same inflation that has impacted our citizens also impacts their city government. We are working to cut expenses while maintaining the same level of service and making sure that any budget we produce does not negatively impact the city’s financial status.
Q: If Walhalla stopped transferring funds from its utilities fund, would the city then need to have a water annexation ordinance?
A: The city’s transfer from the utilities fund to help with general operations is not related in any way to the water annexation ordinance. Like most cities with utilities operations, Walhalla transfers these revenues to support shared services. Removing this transfer would negatively impact critical city services.
Walhalla’s elected officials are responsible for taking action that is in the best interests of our citizens. As explained above, this ordinance will not provide the city with a quick increase in funds or territory and is not “forced annexation”. However, it is critical to the future of Walhalla
- If Walhalla does not have the chance to grow in a strategic manner, however slowly, then the laws of supply and demand will continue to apply, driving up the costs of homes in the city and also taxes to a point where the people who currently live here cannot afford to do so (gentrification). This has happened in other cities and has priced out the middle and working-class residents. In Walhalla, house and land prices have already begun to increase.
- As our county continues to grow, new developments are springing up outside of Walhalla, putting strains on our existing services that Walhalla’s taxpayers will have to cover. This will increase the burden on our current citizens unless we are able to begin spreading the cost.
- Westminster and Seneca are already growing towards Walhalla, helped by their water service annexation covenant requirements. This brings a future threat of boxing us in and making the threats to Walhalla noted above happen more quickly.
