Asheville City Council: All about water

In Asheville, fifth Tuesdays of the month are traditionally reserved for neighborhood gripe sessions. Instead, City Council earmarked Jan. 31 for a special water session. And though it was far from the first time city leaders have waded into this stormy issue, the contrast with the past could not have been starker.

Like the May 24, 2004, Council meeting (see “Then and Now”, below), this one could aptly be described as having marked a new chapter in the turbid history of local water politics. But this time, Council members and city staff alike were taking pains to show that the process would be altogether different — in tone, pace and transparency.

In her opening remarks, Mayor Terry Bellamy described the search for new water policies as an “interactive decision-making process that is starting, not ending, tonight.” And she reaffirmed that Asheville is “open to working with the county.”

City Manager Gary Jackson then delivered a lengthy staff report. With the stated aim of providing “reliable, safe and affordable drinking water to all customers throughout the region,” it examined five policy areas: “capital investment, rate structure, growth and development, financial policy and governance models.”

The portion dealing with capital investment covered well-trod ground. An asset-management study prepared by consultants Brown and Caldwell several years ago for the old Regional Water Authority cited the need for $57 million worth of system repairs and refurbishment by 2012. Reviving a familiar bugaboo, Jackson showed how a capital-improvements fee on meters could at least provide a start on generating the needed funding. Twice endorsed by the Water Authority and approved by City Council only to be vetoed by Buncombe County each time, this approach was most recently voted down by the new City Council in December amid concerns about public perception and the need for outreach. And though the proposed meter fee would affect all system customers, the bills of large commercial and industrial users would increase by a higher percentage than those of smaller residential users.

And Jackson’s financial-policy recommendations — such as adopting specific priorities for operating-reserve levels and using “financing for major improvement projects and pay-as-you-go funding for smaller repairs” — were similarly in line with former Water Authority preferences.

New directions

But other recommendations — notably those concerning rate structure as well as growth and development — represent major departures from prior water policy.

Under the current “declining block-rate structure,” rates go down the more water one uses. Jackson, however, noted a growing national trend toward uniform rates. With this approach, typical Asheville residential users would see the water portion of their bimonthly bills drop substantially — from $39.84 to $31.80, he said. Commercial and multifamily users would experience smaller drops, whereas a large industrial user now paying $4,258 bimonthly for water would see that figure rise to $5,830.

In the past, Asheville appointed only three of the Water Authority board’s nine members. And the typically pro-business leanings of the other six (three appointed by Buncombe County, two by Henderson County and one at-large member) meant that any such proposal would have faced dim prospects. But on Jan. 31, Council member Carl Mumpower, the current Asheville City Council’s lone Republican, was clearly in the minority when he raised objections, saying the idea that the current rate structure is aimed at helping “fat cats to drive Mercedeses” is a misconception. The real purpose, said Mumpower, is to attract jobs.

Asheville Water Resources Director David Hanks explained that staff had in fact proposed considering an exception for the system’s largest industrial customer, Anvil Knitwear in Swannanoa. But in general, he argued, the area is no longer attracting the kinds of factories — such as textile and food-processing — that are particularly heavy water users.

Several of the dozen or so residents who spoke during the public-hearing portion of the evening, which was sandwiched between Jackson’s report and the Council discussion, also voiced support for changing the rate structure. Montford resident Kevin Hogan, for example, argued that although hospitals would take a hit if the city adopted a uniform rate structure, it should be remembered that they don’t pay property taxes.

And Gracia O’Neill of the nonprofit Clean Water For North Carolina went a step further, calling on Asheville to join the small but growing ranks of water systems that encourage conservation via an “inverted-block rate structure” in which rates actually rise with higher levels of consumption.

Partly in response to a plea from Bob Smith, director of the Asheville-Buncombe Community Relations Council, to provide relief for “the disabled, elderly and people on fixed incomes,” several Council members, including Robin Cape and Vice Mayor Holly Jones, expressed an interest in supporting people’s “basic right to water” by means of a hybrid structure combining uniform rates with a very low rate for the first 5,000-6,000 gallons consumed

Carrots and sticks

Speaking about the impact of water use on growth and development, Jackson asked, “How can we structure policies to promote sustainable development independent of annexation?”

Buncombe County, he noted, is projected to gain 70,000 new residents by 2025: “It’s like Asheville doubling,” said Jackson. Urging a coordinated rather than an ad hoc response, the city manager explained that staff have suggested developing a list of potential carrots and sticks the city could use to promote its land-use goals. As an example, Jackson cited line-extension policies or water-related incentives to protect ridge tops or to encourage development in the River District, downtown and in urban villages. The list would be submitted to Council’s Planning Review Committee in March.

Several members of the public — and most of City Council — seemed to greet Jackson’s message with enthusiasm. The city, noted Bellamy, could develop “creative, out-of-the box measures” to guide growth. And former Mayor Leni Sitnick, deploring the proliferation of big-box stores in Asheville, suggested leveraging the newly regained control over water to say, “Here is how we want to define our city.”

But Mumpower, once again in the minority, urged caution when using “water assets to control property that we don’t own.” Using “the language of control,” he argued, could make the city “dead before we get out of the gate” in future negotiations with Buncombe County.

And indeed, it was relations with the county that dominated the discussion of governance policy. Staff, said Jackson, believes a “municipal system with a regional advisory board” or a “new regional water and/or sewer authority with a major role for Asheville” are structures more likely to support City Council’s priorities than a municipal system without regional input or a regional authority with only a minor role for Asheville.

The public, meanwhile, seemed split on the issue. Longtime Asheville water activist Hazel Fobes sang the praises of former Water Authority, and attorney Steven Aceto, who is chairman of the Metropolitan Sewerage District board, argued that MSD, a true regional authority that owns its infrastructure, has been very successful in managing its resources and thus provides an effective model for the water system.

Sitnick and Asheville resident Leslee Kulba, on the other hand, strongly urged the city to maintain both ownership and control. “Asheville should own the system so that you can be held accountable by the people who put you in office,” Sitnick declared.

Most on Council agreed. Passions flared, however, when Council member Brownie Newman expressed some doubt and said he’d like to see an objective study of the potential benefits to the city of either merging the water system with MSD or turning over the water assets to some other regional authority.

Four Council members — Bellamy, Cape, Jan Davis and Bryan Freeborn — appeared adamant that Asheville should hold onto its water assets and stay the course. (Mumpower, who was ill, had left at the break.) Once you lose an asset, Davis emphasized, you lose it forever. “MSD — it’s gone, it’s out,” he said.

Jones, however, sided with Newman. During last fall’s re-election campaign, she observed, voters had told her time and again that they wanted the city and county to work something out without resorting to the courts. “If you’re not going to be open-minded, you’re not going to get to the table,” noted Jones.

And Newman, calling such a strategy “an abdication of responsibility,” declared, “If we don’t even try to work it out, I’d be appalled.”

Bellamy, however, said that giving up Asheville’s water assets isn’t the only way to bring Buncombe County to the table. And Freeborn, striking a similar note, suggested that the county would always be willing to talk to the city about important issues because of Asheville’s crucial role in the county’s future.

“People are moving to Buncombe County because of Asheville,” said Freeborn. “We’re the shining beacon on a hill drawing people to the region. … Asheville is the asset.”

Davis, meanwhile, predicted that the county won’t negotiate seriously with the city about the water system now that Sullivan II and III are in place. “We’ve got to stay the course,” he argued. “If we enter into negotiations, they’re going to make fools of us, just as they have done in the past.”

And Cape maintained that Asheville has made all the concessions up till now, whereas Buncombe County hasn’t shown any real willingness to give up anything. Asked by Newman if she would be satisfied to have the water dispute settled by the courts, Cape said she would.

In summing up, Jackson described the meeting as “a productive exercise” that had given the community “a better read” on the complex situation while demonstrating that “there are no cloaks and daggers here.”

Then and now

When the Asheville City Council announced, in late May of 2004, its intention to terminate the Asheville-Buncombe Regional Water Agreement a year hence, the news appeared to catch both the county and the public by surprise.

Although Council members had discussed water issues at their annual retreat earlier that year, the public wasn’t invited. And despite the decision’s far-reaching ramifications, no public comment was subsequently taken until the day of the vote, when only three city residents (including one former Council member) stepped up to the mike.

At the time, Mayor Charles Worley and other Council members stressed the hope that talks with Buncombe County would lead to an amicable separation. But it wasn’t clear exactly what the city was willing to put on the table to achieve that end, or to what extent Council members’ apparent solidarity would be reflected in the city’s negotiating priorities.

By Jan. 31 of this year — when a new mayor, City Council and city manager sat down to discuss water matters — circumstances had changed dramatically. Negotiations with Buncombe County during the winter and spring of 2005 had come to naught. Meanwhile, the North Carolina General Assembly had, at Buncombe County’s behest, passed Sullivan Acts II and III.

By barring Asheville — alone among Tar Heel cities — from charging rate differentials or using water hookups as an annexation tool, these twin pieces of legislation had effectively negated much of what the city had hoped to gain by pulling the plug on the Water Agreement. And whereas the city had expected to lose several million dollars’ worth of tax-equity payments from the county that had been factored into the agreement, Sullivan II and III suddenly pushed Asheville into an even deeper financial hole by prohibiting the long-running practice of diverting 5 percent of total water revenue into the general fund.

Last August, the city filed a lawsuit in Wake County Superior Court challenging the constitutionality of all three Sullivan Acts (including the original 1933 edition, which bars rate differentials for a disputed number of lines that once belonged to several now-defunct water districts). The state then filed a motion to dismiss — arguing, in part, that Buncombe County and the old water districts were “necessary parties” that should have been named in the suit. If the judge had agreed with the state, Asheville might have been forced to file parallel lawsuits in Wake and Buncombe counties. But on Jan. 26, Judge Orlando Hudson ruled against the motion for dismissal, putting the ball back in the state’s court to prepare its defense of the Sullivan Acts. At press time, it was unclear what the time line for the next round might be.

Whatever the eventual outcome of the legal maneuvering, the Water Agreement breathed its last on June 30, 2005. And with its passing, responsibility for setting water-system policies has shifted from the disbanded Regional Water Authority of Asheville, Buncombe and Henderson to the Asheville City Council.

[Jonathan Barnard covers water issues for Xpress.]

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