Alamance County Towns Sue Over Water Deal as $3 Billion Infrastructure Push Looms

Mebane filed suit against Graham in Alamance County Superior Court over a festering dispute about how much the city owes toward a major wastewater treatment plant upgrade, raising concerns about the durability of interlocal agreements as the region considers a $3 billion infrastructure collaboration.

The two municipalities entered into an agreement in April 2017 requiring Mebane to pay $2.7 million in annual installments over 20 years in order to have 750,000 gallons of wastewater per day treated at Graham's plant for a period of 99 years. At the time, that volume represented approximately 21.4 percent of the facility's capacity of 3.5 million gallons per day. Graham's wastewater treatment plant sits along East Gilbreath Street, and the 2017 agreement stipulates it may be terminated only by the joint agreement of both municipalities, with Graham's operating costs funded as a separate department within the city's annual budget.

The conflict crystallized around Graham's plans to expand the plant's capacity. Engineering firm Hazen and Sawyer, in a March 2020 presentation to Graham's city council, recommended expanding the facility's capacity from 3.5 million gallons per day to five million gallons per day. Graham's city manager asserted that Mebane's share of the cost for the upgrade would be $18.1 million, while Graham's share would be $66.5 million. Mebane has disputed that figure at every turn.

The two cities' staffs, including their managers, assistant managers, and other municipal representatives, ultimately met seven times between November 22, 2022 and September 4, 2025 without resolution. Mebane offered to pay $6.8 million toward the upgrade and expansion, to be paid during the 2026-27 fiscal year, and later indicated willingness to consider a $10.7 million figure that Graham city management had previously floated in June 2024. Graham did not respond to that proposal.

After Mebane officials emailed their counterparts in Graham on September 9, 2025, to request another meeting, then-Graham mayor Jennifer Talley responded with a letter to Mebane mayor Ed Hooks informing him of Graham's desire to terminate the 2017 wastewater agreement. In a subsequent letter, Talley appeared to backtrack on that termination notice.

The courtroom clash carries consequences well beyond the two city halls. Mebane claims that Graham officials withheld approval for several flow-to-existing-sewer-extension requests, delaying the start of construction on major commercial projects, most notably the Buc-ee's travel plaza and Koury shopping center planned along Trollingwood-Hawfields Road. The pump station at the center of that commerce park along Cherry Lane currently serves distribution facilities for UPS, Walmart, Lidl, and Amazon, among others, created in 2013 as part of a three-way agreement between Graham, Mebane, and Alamance County government.

After returning from closed session at their latest meeting, newly installed Graham mayor Chelsea Dickey made a motion authorizing Graham staff to "take appropriate action to resolve the ongoing dispute with the city of Mebane regarding wastewater capacity and related requirements and agreements," with the motion passing 4-0.

The timing amplifies the stakes. Graham and Burlington each recently received $3 million from the state's Drinking Water Reserve Loan Fund to update water treatment facilities in Alamance County. The Triad Business Journal framed the Graham-Mebane feud as a cautionary tale, with a Greensboro editor reflecting on how the lawsuit threatens thinking about regional cooperation on infrastructure projects. With a $3 billion infrastructure collaboration on the horizon for the broader region, the court's eventual ruling on what the 2017 capacity agreement actually requires of each party will carry weight far beyond Alamance County's borders.