Final impact report on Asheville water merger presented to MSD

The hefty final version of an impact study assessing the potential merger of Asheville’s water system with the Metropolitan Sewerage District of Buncombe County was presented to the MSD board on Wednesday. The short version: potential net savings to water customers of $1.1 to $2.2 million per year over the next nine years.

The long version is complicated by the multiple scenarios examined by the consultants, Arcadis G&M of North Carolina. A second phase of the study includes potential merger with three other municipal systems in the county. At the present time, the legislatively driven consolidation prospect only targets Asheville, but other municipalities in the county could find themselves merger targets in the same fashion.

The merger study was a result of a legislative study committee’s report, released last April, pointing towards a forced union of the city’s water system with MSD, an independent authority. It cites purposes of “economies of scale” and provision of a “single location for water and wastewater availability and planning” as objectives. (See “Reluctant Partners: Asheville, MSD Take Tentative Steps Toward Merger,” August 1, 2012.) In the wake of the report, which indicated that due consideration would be given to any merger plan devised locally, both the city and MSD have undertaken studies to assess the respective financial and administrative impacts of such a merger.

Biltmore Forest, Montreat and Weaverville opted to be included in the study. If merged with the larger system, estimates per town over a nine-year period was $200,000 for Biltmore Forest, and $209,000 to $675,000 for Weaverville, depending on the type of merger implemented there. The study found that impact for Montreat would be “negligible.” The towns of Black Mountain and Woodfin did not choose to participate in the study.

Following Wednesday’s presentation, Chris Pelly, city council member and representative to the MSD board, asked for clarification regarding the incorporation of the city’s current water department employees into any merged management structure. The study assumes all those employees would be brought into MSD and would gain equitable compensation levels. Healthcare cost benefits would increase by some $2,695 per employee. Salary and other fringe benefits would increase 3 percent annually, plus an additional 6.4 percent for the first four years to mirror recent MSD adjustments.

Cathy Ball, Asheville’s director of public works, called attention to recently introduced state legislation (HB 252). If passed, the bill would repeal the 2009 law that currently allows the city to use up to 5 percent of utility revenues for “street and sidewalk improvements associated with waterline improvements.” The amount of money involved, Ball indicated, could basically negate the savings projected in the Asheville portion of the impact study.

HB 252 is currently in the House Committee on Finance. Introduced earlier this month, the local bill was sponsored by Buncombe County’s Reps. Tim Moffitt and Nathan Ramsey, in conjunction with Henderson County’s Rep. Chuck McGrady. Moffitt was the sponsor last year of the original legislation that led to the study of consolidating the water system with MSD.

In concluding discussion of the impact study, MSD Chairman Steve Aceto praised the document and its authors for a “comprehensive response to what the Legislature asked.” It will be “helpful to the board in its fiduciary responsibilities to the ratepayers,” he declared. The document, as well as the slide presentation used at the board meeting, can be accessed through the MSD website under Water Studies.

Other MSD business of the day included the seating of two new members—Ellen Frost and Joe Belcher, both in their first terms on the Buncombe County Board of Commissioners. They are replacing former county appointees Max Haner and Jon Creighton.

by Nelda Holder, contributing editor

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3 thoughts on “Final impact report on Asheville water merger presented to MSD

  1. RavenRavinoff

    And don’t forget that Asheville will have to be compensated for its assets, such as the 22k acre North Fork watershed. So not only will water customers not save money once HB 252 is considered, but there will actually be a huge net loss once Asheville is duly compensated for its assets.

    Not only is this a HUGE over-reach by Tim Moffitt & McGrady, but it’s also plainly a terrible idea from a financial point of view as well.

  2. “Asheville will have to be compensated for its assets”

    Can Asheville use these so-called “assets” as collateral for a bond? The suspense is killing me.

  3. sharpleycladd

    It’s a savings for ratepayers if 22,000 acres of watershed the City bought and paid for are stolen. This article is surprising from Xpress.

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