Atlanta still owns the pipes and sends the bills. Sandy Springs now requires certain housing projects to prove the system can support them.
A hotel room above the third floor, a certain hour of the day and a toilet that will not flush.
That is the example Mayor Rusty Paul used during Sandy Springs’ State of the City address on Sept. 15.
“We have hotels that can’t flush their toilets above the third floor at certain times of the day,” he said. “We have hospitals without enough water pressure at certain times of the day.”
Paul did not name a hotel or hospital, and ATL Vibes and Views has not independently confirmed either example. It is his description of the system as the mayor advocating for Sandy Springs to acquire it.
Two days later, Sandy Springs and Atlanta entered mediation over who should own and operate the water distribution system inside Sandy Springs.
The argument is 20 years old. What is new is where it has landed.
Sandy Springs has written its concern about Atlanta’s water system into the permitting process for new attached housing.
What changes on your bill this month
Nothing.
The Atlanta Department of Watershed Management still operates the system and sends customers their bills. Customers outside Atlanta also continue to pay a 21 percent surcharge.
Atlanta says the surcharge reflects the higher cost of serving customers outside the city. Sandy Springs disputes that calculation, arguing its water may cost less to deliver and residents cannot vote for the officials setting the rate.
A court-appointed special master recommended removing the surcharge in spring 2025. Atlanta challenged that recommendation, and in December, DeKalb County Superior Court Judge Nora Polk ruled that the charge was legal.
Sandy Springs is appealing.
The court found that Atlanta’s rate studies provided a rational basis for charging outside customers more. Those studies reportedly supported a surcharge of up to 90 percent, although City Council kept the existing 21 percent rate first established in 1998.
The water fight is already affecting development
On March 3, 2026, Sandy Springs City Council approved Ordinance 2026-03-003, requiring a Water Supply and Fire Flow Adequacy Study for multi-unit and single-unit attached projects.
Apartments, townhomes and similar proposals must now show that the available water supply can meet everyday demand and fire-protection requirements. If the study identifies inadequate capacity, necessary improvements must be addressed before development approvals are issued.
The city explained the purpose in its March council recap: confirm that domestic water and fire-flow needs can be met before approving a project.
For a developer, that means an additional engineering study, another expense and another point where a project can stall.
The rule does not prohibit apartments or townhomes. It requires proof that Atlanta’s system can serve them.
We recently covered a $139 million, 382-unit development replacing the former UPS office on Glenlake Parkway. It shows the scale of attached housing still moving forward in Sandy Springs.
The available records do not establish whether that project was subject to the March requirement. The rule matters most for proposals entering the approval process now.
The city’s own downtown plan faces the same question
Sandy Springs is preparing to restart the second phase of City Springs on city-owned land south of Mount Vernon Highway.
Current concepts include a hotel, rental and owner-occupied housing, restaurants, retail, limited office space, greenspace and shared parking. Paul said the city was close to selecting a development partner and construction could begin in 2027.
Those are concepts, not an approved plan.
If the project includes attached housing and reaches permitting under the current code, the city’s development will encounter the same water-supply review it created for private projects.
That makes City Springs Phase II a useful test.
In June 2023, the city selected Regent Partners and Morris and Fellows as its preferred development team. At the time, construction was expected to begin in late 2024 and finish in fall 2026.
It is now fall 2026. Construction did not begin, and the city is selecting a development partner again.
No public record establishes that water caused the delay. The immediate questions are whether a new team is named, whether a plan reaches the public and whether the site can support what the city wants to build.
How a 2005 agreement became a 2026 development issue
A Fulton County service-delivery agreement signed in October 2005 identified Atlanta as the water provider for the area that became Sandy Springs that December.
Sandy Springs has purchased water from Atlanta ever since. The governments have argued over rates, maintenance, reliability and control, but have never reached a permanent agreement transferring the system.
By June 2026, water distribution and wastewater were among the final unresolved parts of Fulton County’s updated Service Delivery Strategy. Sandy Springs requested a purchase framework and information about Atlanta’s planned investments in the system.
Paul has said he would prefer a negotiated purchase rather than eminent domain. No condemnation case has been filed, no purchase price has been announced and ownership has not changed.
“If we don’t go that particular route, what we call the service delivery strategy, then we will be in court to try to take that system over,” he said.
The dates to watch are the county’s service-delivery deadline and Dec. 31, when the state’s current deadline expires. Failure to secure state verification could jeopardize access to government funding and approvals.
The other date has not been announced: when Sandy Springs will name the City Springs development partner.
The strongest evidence in this story is not the hotel example or the mediation rhetoric. It is the ordinance. Sandy Springs has decided that Atlanta’s water system presents enough uncertainty to require additional proof before approving attached housing. That is already a development consequence, even though Atlanta still owns the pipes and sends the bills.
The city should publish what these studies find. Residents and developers need to know whether failures involve individual properties, undersized neighborhood mains or a wider capacity problem. The same transparency should apply to City Springs Phase II. If private developers must prove the system can support their projects, the city should show the public the same work for its own hotel and housing plan.
