A long, hard look

“What would be the ultimate cost of not having a regional approach?”

— Nelda Holder, president,Asheville-Buncombe League of Women Voters

Just get everything out on the table, and maybe everyone involved will feel obligated to address the stated problems.

So says Gary Semlak, a former board member of the Regional Water Authority of Asheville, Buncombe and Henderson.

He was reflecting on an April 10 meeting in Hendersonville — the latest round of negotiations concerning the 1995/1996 Water Agreement. It was the fifth meeting of a nine-member team charged with considering two key issues: how to get new water lines built in Henderson County and whether (and how) to make the RWA a fully independent body. The early meetings, held last year, were contentious and argumentative.

“In the beginning, no one wanted to concede anything,” recalls Regional Water Authority Chairman Jack Tate.

When the team began its work, Henderson County was suing Asheville and Buncombe County over 139 acres of Bent Creek property promised to Henderson in the ’95 agreement. Another potential lawsuit was averted at the last moment when the city agreed to lay Henderson’s first regional water line for American Freightways, a business moving to Henderson County). Still, the early meetings were so contentious that almost no mention was made of the issue of creating an independent authority — a move some Authority members, observers and elected officials feel is needed in order to avoid having to pay nearly $7 million to the state Department of Transportation over the next five years to relocate water lines affected by road projects such as the widening of Sweeten Creek Road.

“But now we’re in a position where everyone wants to cooperate,” says Tate.

For starters, the renegotiation team — made up of representatives of the three member governments plus the RWA — has several definite proposals to consider before its next meeting in June. One is a staff proposal that the Bent Creek property be sold and the proceeds used to pay for laying new water lines in Henderson County. There’s also a joint proposal by Henderson County Board of Commissioners Chairman Bill Moyer and Asheville Mayor Charles Worley that calls for creating an independent authority and transferring ownership of all the treatment plants and major distribution lines (a major sticking point in earlier discussions of this idea) from the city to the new authority.

Local activist Mickey Mahaffey, who’s been observing the whole process, made this remark after the meeting: “Finally the Bent Creek property issue is on the table and out in the open, the possibility of creating a true [independent] authority was openly discussed, and buying Henderson County … out [of the Water Agreement] has finally been said. … It was the first meeting that showed some measurable progress.”

Underneath these proposals, however, lies a question that Moyer urged all members of the negotiation team to “give serious thought” to between now and June: Should the three governments continue to pursue regionalism or simply terminate the 1995 Water Agreement?

At the crossroads

Either way, the idea of selling the Bent Creek property appears to be the catalyst. Two proposals came up in meetings held last month between the Asheville city manager and the managers for Buncombe and Henderson counties. In one, the agreement that created the regional body effectively unravels, warned Moyer at the April 10 meeting. Chart a different course with the Bent Creek sale, and a regional approach to water treatment and distribution survives, he noted.

“We’re at a crossroads,” Moyer concluded.

One idea is that the RWA would pay Henderson County a flat amount “as complete compensation for regional water lines.” Then, Henderson would deed the Bent Creek property back to Asheville, which would sell it on behalf of the Authority to fund the buyout. With the payoff, Henderson would be free to build its own lines and, possibly, enter into an “arms-length agreement” with the RWA or the city of Hendersonville to operate and maintain those lines. But proponents of this approach appear to have overlooked a couple of key points. First of all, the RWA is broke; it has no money to give to Henderson County. And there has been no explicit mention of the city (which owns all water sytem assets) giving the proceeds of the Bent Creek sale to the Authority to reimburse it for paying off Henderson. In any case, by cutting Henderson County loose, this scenario would effectively cancel the 1995 agreement.

Another plan would allow Henderson County to sell the Bent Creek property — after the city removed the deed restrictions that prompted Henderson to sue. The proceeds from the sale would pay for building water lines (in keeping with a Water Authority master plan now being developed for the county). Henderson would then deed the new lines over to the RWA, which would maintain and operate them as well as sell the water and get the revenue from the new customers. The Water Agreement would stand.

Despite the risk of seeing the 1995 agreement unravel, the proposals do at least “put money on the table,” said Moyer. He estimated that Henderson would need $250,000 a year for 20 years as compensation for the Bent Creek property and to fulfill the commitment to build regional water lines.

After a round of discussion, the team members agreed to have the RWA get the property appraised (it was estimated to be worth about $1 million when Asheville attached restrictions to the deed in 1999).

There was also consensus that the Bent Creek proposals have merit and that it makes sense to drop consideration of an earlier proposal that the cash-strapped RWA somehow lend Henderson a flat amount of money each year.

For all that, however, it wasn’t a smooth ride down the river.

Unanswered questions

The proposals seemed to raise almost as many questions as they answered, but at least team members were talking about them, some observers noted.

Renegotiation-team member Marilyn Gordon, who is vice chair of the Henderson County Board of Commissioners, raised one key point: “How does the city of Hendersonville fit into this? … Without our other key player, Hendersonville, we are not being regional.” She also noted that it wouldn’t be fair to force customers in north Henderson to buy water from the RWA when they could perhaps get it cheaper from Hendersonville, which has an extensive system in the county.

The RWA’s rates might possibly be lowered if the Authority were indeed made an independent body (and thus exempted from those DOT costs), several team members mused. But J. Lewis Daniels, an Asheville appointee to the Water Authority board, emphasized this fiscal reality: The RWA “needs the revenue to sustain the current system. … We have a … system out there that’s in need of maintenance and repair and improvement.”

Another team member raised a key underlying issue: Who controls the system and the rates? Under some scenarios, even an independent water authority would still be buying its water from Asheville, and “We’re at [their] mercy,” said RWA board member Tom Sobol, former chairman of the Buncombe County Board of Commissioners.

Asheville Mayor Charles Worley emphasized the need to resolve all these issues, because water lines “are needed for economic development … to attract industry.” Yet another part of the economic puzzle is sewer lines, he mentioned.

Fellow team member Nathan Ramsey, the current chairman of the Buncombe County Board of Commissioners, summed up his take on the proposals: “We want something that doesn’t increase water rates; we want a true authority [and] long-term, we need the city of Hendersonville [and] the sewer provider to sit at this table.”

Ramsey was supported by Buncombe Vice Chair Bill Stanley, who added: “We shouldn’t do anything to get away from regionalism. We need to do things cooperatively.”

The Metropolitan Sewerage District is working with Henderson County on a plan to extend sewer lines, interjected Moyer. The county, he continued, has a plan, federal funding and new land-use controls already in place. “The only piece not worked out is the water.”

At least they’re talking now

“I’m trying to step back from the agreement [and] from political considerations … and see what [we] all want to accomplish,” said Mayor Worley as the meeting wound down.

Daniels fleshed out Worley’s notion, giving city and county staff several parameters to consider in hashing out the Bent Creek proposals: a continued regional approach, boosting economic development, relief from the DOT payments, the financial ability to sustain and maintain the current system, an autonomous water authority, getting other players (such as Hendersonville and MSD) to the table, and the possibility that the 1995 agreement might unravel.

After the meeting, Daniels offered these thoughts: “I’d like to see these options worked out and what the various interests of the parties are and where the differences lie.” When asked if he thought there has been an effort on Asheville’s part to get Henderson out of the Water Agreement (or vice versa), Daniels replied: “I haven’t seen that. … But the agreement is so difficult, it might happen.”

Asked the same question, Tate remarked: “I had the sense, early in the meetings, that Asheville wanted everything its way, but [Worley’s] being fair and reasonable and looking at both sides of the issue. That’s been a positive change.” But he voiced concern that neither Asheville nor Buncombe want to “let go” of the total 7.5 percent of RWA revenues they take — money that could fund substantial water-system improvements (Asheville gets about $1 million, Buncombe about $500,000 year). The city owns RWA’s assets, too, without which an independent authority can’t be created, Tate reiterates. To relieve the pressure to raise rates, press forward with a regional approach, and address system needs, the city is “going to have to give up something,” he asserts. But the latest rounds of talks have shown “a positive change” toward addressing these questions, Tate concluded.

Moyer agreed, dubbing the tone of earlier meetings “bitter. Now, however, “There’s an indication of a desire on everyone’s part to resolve things,” he observed. The Bent Creek and water-line-extension disputes, Moyer reflected, have made it harder to act regionally on transportation, air pollution and other issues because, “You’ve got to be able to trust the people you work with.” The latest talks and the new proposals, he implied, do indicate an increased level of trust.

Seeking to be clear about where Henderson officials stand, however, Moyer emphasized the dollars-and-sense side of regionalism, saying, “I’ll be looking for some kind of financial commitment to build water lines” in exchange for Henderson County’s contributions as detailed in the 1995 agreement.

Moyer also pointed out that a number of key details still need to be worked out. How would the various parties to the agreement buy water (and from whom)? Who would handle maintenance and operate the system? How will the remaining obligations from the 1995 agreement be met? “I’m interested in a regional approach if it’s good for Henderson County,” said Moyer.

Asheville has its own interests, too, Worley commented later: The city created the water system, still owns the assets, and because of that gets 5 percent of the RWA’s annual revenues. The loss of that revenue — about $1 million a year — could result in a 2-cent property-tax increase, he mentioned. It’s unlikely that the city could give up that revenue, he said, but relinquishing assets in the interest of regionalism “meshes with the notion of getting out of those DOT payments.” Avoiding those payments, said Worley, might result in lower rates and would at least “decrease the pressure to increase water rates.”

Worley also remarked, “It’s pretty clear you’ve got to come up with some kind of [organizational] structure that gives local jurisdictions the power to make their decisions on growth and development, [such as] where water lines go and who controls the rates.” His talks with Moyer have led to this tentative approach: an independent authority that could produce and sell water wholesale to the participating jurisdictions, which would set their own rates and determine where lines would go in their respective areas, Worley explained. “I don’t think regionalism is dead at all. The problem is finding the most effective way to address everyone’s concerns. … You can’t make any progress without putting everything on the table,” he concluded.

Asheville-Buncombe League of Women Voters President Nelda Holder, who has attended most of the renegotiation meetings, urged team members to consider this question: “What would be the ultimate cost of not having a regional approach? I’d like to see that discussed fully before a decision is made.” She also remarked that even if avoiding the DOT payments didn’t lead to lower rates, it could result in better service and an improved system if the RWA devoted that money to repairs and upgrades.

And Gary Semlak, who resigned from the Water Authority board in March, remarked: “A statesmanlike thing for the city [of Asheville] to do would be to turn over those assets [and help create an independent authority]. If they don’t grasp this opportunity, regionalism is gone.”