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Freeport council approves $651,641.41 repayment plan to Surfside Beach for water overbilling
Summary
Council approved an interlocal agreement formalizing repayment of $651,641.41 to the Village of Surfside Beach, including an initial payment, annual installments of $100,000 and interest at 3.6806%.
The Freeport City Council unanimously approved a resolution on May 11 authorizing an agreement to repay the Village of Surfside Beach $651,641.41 in water overcharges.
Doctor Kelly (speaker 3) explained the amount had been independently verified and mutually agreed as the full and final sum under an existing interlocal water supply agreement. The approved repayment schedule includes an initial payment of $325,820.71 within 10 business days of execution, annual payments of $100,000 beginning Sept. 30, 2027, and a final payment of remaining principal plus accrued interest at a rate of 3.6806 percent. The agreement allows prepayment without penalty and includes a mutual release of claims related to the overbilling.
Doctor Kelly said internal controls have been tightened and that utility changes now require director-level approval. City staff described the issue as the result of a historical interlocal-agreement provision that the current billing practice did not reflect; staff traced the error to previous management and a former utility clerk. Mr. Pennington and staff have been working to resolve the matter since late 2025, the city said.
Council approved the resolution by unanimous vote.
What happens next: the initial payment and the scheduled annual payments will be handled according to the agreement, and the city said it will continue to review controls to reduce the risk of similar errors.
