Asheville City Council

“We owe it to the people to fix our pipes and fix our plants and not be paralyzed by a process that is out of our hands.”

Vice Mayor Holly Jones

The capital-improvements fee — an extra charge on city water bills to fund infrastructure repairs — has surfaced repeatedly in recent weeks. In July, a $3.50 monthly fee took effect for single-family residential structures. And earlier this month, staff was instructed to find some relief for residential customers with larger meters and owners of multifamily developments, who were saddled with monthly fees of $48-$140 (See “A Hard Cell,” Oct. 4 Xpress).

Since then, the city’s Water Resources Department has been helping condo associations swap out their meters to reduce their fees (which are based on meter size) and negotiating fee reductions with other complexes, Director David Hanks told Council at its Oct. 17 work session. But inconsistencies in how water is distributed within complexes make some imbalances inevitable, said Hanks.

“Finding equity is not easy here. I don’t think we’re able to do that,” he said. “There is a big disparity here, when these folks built these out, how they wanted to distribute water to the units.”

That was disappointing news to Council member Brownie Newman, who observed that under the new structure, some residents of multifamily complexes would pay fees even lower than the initial $3.50. “They are getting water at a tiny fraction of the cost for single-family homes,” he said.

But Mayor Terry Bellamy and Council member Bryan Freeborn pointed out that high-density development is one of the city’s goals, saying that perhaps those residents should be rewarded with lower water bills.

Meanwhile, all water customers could see an even bigger cut if Council moves forward with a restructuring of capital-improvements funding. A proposed $35 million revenue bond issue would enable the city to jump-start much-needed repairs, reported Chief Financial Officer Ben Durant, while allowing for a 20 percent across-the-board cut in CIP fees. The cut would also benefit business owners, who are now paying up to $1,400 per month.

In the wake of the recent residential discounts, businesses have a greater need for relief, argued Council member Jan Davis, calling their CIP fees “staggering.”

The revenue bonds would provide enough supplement to make $66 million in needed repairs over six years, Durant said, while providing a sufficient cushion to offset plant closings or other unforeseen developments that might reduce projected revenues.

The system repairs were initially recommended by consultants Brown and Caldwell, hired by the now-defunct Regional Water Authority. Before the city pulled out of the Water Agreement and assumed full control of the system in 2005, the Buncombe County commissioners had twice rejected the proposed CIP fees. That same year, the N.C. General Assembly passed legislation forbidding Asheville to charge customers outside the city limits more for water; Asheville responded with a lawsuit that has yet to be resolved. Likewise, sporadic attempts to resume negotiations with the county have proved fruitless.

With so much up in the air, Council member Carl Mumpower said he would prefer to hold off on the revenue bonds.

“To make substantial changes in how we finance our water issues before our legal issues are resolved is premature,” said Mumpower, adding that residents should not be subjected to a roller coaster of rising and falling fees. “I find that very uncomfortable.”

Durant countered that, with Sullivan Acts II and III still in place, the situation is already about as bad as it could get. Even if the court ruled in the city’s favor and lifted the restrictions, Durant said he would still recommend the bond issue. “The decision you need to make is whether to do it now or to do it later,” he said.

Hanks, noting that he’s outlined the most critical projects, said, “We are ready to go out and get bids.”

Vice Mayor Holly Jones said the city has taken every reasonable step at this point and needs to move forward. “We don’t know when this lawsuit will be over, and we gave [the county] a year’s notice for negotiation,” she said. “We owe it to the people to fix our pipes and fix our plants and not be paralyzed by a process that is out of our hands.”

Unlike general obligation bonds (which must be approved by voters), these would be backed only by the water system’s revenues, not by taxpayers or the city’s general fund, Durant explained. But Durant wanted to take a closer look at the legal ramifications if the water system were wrested from city control. He and Hanks said they would report back to Council within the next few weeks.

Leftovers

Thanks to extra property-tax revenue and a projected increase in the fund balance, the city is preparing to take on $2.5 million worth of projects that hadn’t been budgeted for the 2006-07 fiscal year. Durant presented a list of preferred projects as part of his quarterly financial update to Council. The list includes new sidewalks for Patton Avenue and Haw Creek, the balance needed for a new roof for the Civic Center arena, a new fire station on Sand Hill Road, radio and emergency-vehicle enhancements, and a parking lot for Richmond Hill Park.

There was some haggling over priorities, with Jones favoring downtown public restrooms over sidewalks and Council member Robin Cape lambasting the way the planning for Richmond Hill had been handled. City Manager Gary Jackson said that other money has been set aside for restrooms, and Mumpower pointed out that the list had resulted from Council’s earlier budget discussions.

“This is where we landed,” said Mumpower. “I personally would be supportive of these.”

Durant emphasized the need for prompt action, noting that matching funds or available land for some projects might not be available later.

Bellamy agreed, saying, “This is short-term; let’s go ahead and do these while the money is there.”

But as long as Council had the budget out, Newman wanted to talk transit. The free-ride campaign, which ends Nov. 11, has generated a more than 60 percent increase in ridership, he said, and he wants to find ways to keep those numbers high. To that end, Newman proposed cutting the price of both monthly and annual passes. The daily fare is already scheduled to increase from 75 cents to $1 when the free-ride promotion ends.

“This is one of the most significant areas of progress in this city,” Newman declared.

Mumpower, however, was not impressed. He objected to the way the unscheduled item was brought to the table — especially without Transit Director Bruce Black in the room — and he dismissed the increased bus use as “joy riding” that would not continue once fares were restored.

Both Jones and Newman said they’d heard from plenty of riders who use the system for practical transportation, and Newman said he’d like to see a seamless transition to lowered-fare packages — a move that would require Council action at the Oct. 24 formal session.

But Davis objected to the rush, saying, “I think this needs to be more thought out. It is a real concern to me to see, during the [free-fare promotion], us orchestrating a new stage.”

At the heart of the matter lies a fundamental philosophical split: Mumpower has consistently voiced his opposition to increased public funding of the transit system, whereas Newman maintains that the city spends more money on parking for cars than it does on buses.

Bellamy, meanwhile, turned Council’s attention back to the existing list of projects, seeking consensus to place them on the agenda for Oct. 24. Jackson said the transit director would have enough time to pull together transit numbers for Council’s consideration at that meeting.

No perfect options

Since 1984, Asheville has given all retired employees the option of remaining on its health-insurance plan, but the city subsidizes only those who aren’t covered by a spouse’s policy.

The result: Someone who has access to other coverage through a spouse’s policy pays $370 a month to remain on the city plan, while a retiree who worked for the city the same number of years but has no other coverage pays only $40 a month.

Consultant John Ferguson of the Greenville, S.C.-based Ferguson Employee Benefits Agency presented a menu of options for striking a balance in retiree health benefits. “I always try to look for who will be unhappy,” he said. “As I told you when we started this process, there are no perfect options.”

Staff will explore the idea of a sliding-scale subsidy, depending on how long an employee worked for the city, and report back to Council within a month.

In the meantime, Bellamy urged current city employees not to turn in their keys before Jan. 1, when the new plan might take effect.