A thirst for change

“Don’t let the city and county get away with it!”

— Hazel Fobes, Citizens for Safe Drinking Water and Air

A funny thing happened to the Regional Water Authority of Asheville, Buncombe and Henderson on the way to finalizing its annual budget. With the June 1 deadline looming large, Authority members suddenly began talking about pushing for major reforms — specifically, the kind of fundamental structural changes water activists have advocated for years. And instead of voting on their Budget Committee’s recommendations on May 18 (as they usually do on the third Tuesday in May), they decided to have Chairman Bill Lapsley approach Asheville and Buncombe County about revising the Water Agreement (the comprehensive document that created the Regional Water Authority a decade ago) and then to reconvene on May 27.

At issue was the $1.7 million a year now paid out to Asheville and Buncombe County as a percentage of the Authority’s gross revenues. The city, which owns the water infrastructure, gets 5 percent (which it can spend as it sees fit); the county gets 2.5 percent (which must be spent on economic development).

Authority member Brian Peterson (an Asheville appointee) and others have long derided these off-the-top payments. Besides diverting funds from an already cash-strapped Authority, the arrangement, these critics maintain, also functions as a regressive tax, extracting extra money equally from water users rich and poor (who must pay more in order to support these payments) in order to keep property taxes (which are progressive, in that the wealthy pay more) lower.

And in recent months, Authority member Shannon Baldwin (who’s also a Henderson County commissioner) has argued that the arrangement is particularly unfair to the system’s Henderson County water customers, who help pay for these transfers while getting no break on their property taxes.

These various frustrations came to a boil during a May 13 public hearing on the Water Authority’s budget, when Authority member Joe Dunn (who also serves on the Asheville City Council) led his colleagues in complaining about the transfers in particular and the Water Agreement in general. That hearing was continued to the beginning of the Authority’s regular monthly meeting on May 18.

To be, or not to be…

The whole turn of events came as a pleasant surprise to longtime water watchers such as Hazel Fobes (chair of Citizens for Safe Drinking Water and Air) and Nelda Holder (outgoing president of the Asheville-Buncombe League of Women Voters). The two women — both frequent speakers during the public-comment portion of Water Authority meetings — have pushed for ample funding to repair the decrepit infrastructure and for pursuing negotiations to create an autonomous Authority that would own the water system (as called for by a nonbinding clause in the 1995-96 Water Agreement).

During the public-hearing portion of the May 18 meeting, Fobes praised Authority members for their willingness to tackle the larger issues and to push for a repeal of the transfers. “Don’t let the city and county get away with it!” she implored. And Fobes seemed to speak for many in the room when she described the Water Agreement as “a horrible thing that needs to be renegotiated or thrown in a ditch.”

Mere minutes later, however, some Authority members began backpedaling, suggesting that it would be difficult, if not infeasible, to eliminate the transfers at this point in the budget cycle.

“The timing would be somewhat irresponsible,” argued Authority member (and Buncombe County Commissioner) Patsy Keever, since the city and county, which are close to finalizing their own budgets, “would have to raise taxes somewhere else.”

And Dunn, whom Fobes had singled out for special praise for his May 13 comments against the transfers, now distanced himself from those remarks, explaining that though he wears two hats as both a Water Authority and a City Council member, his first responsibility is to his constituents in Asheville. “You can’t hold the City Council hostage,” Dunn declared, noting that the city is responsible for issuing the Authority’s bonds. After the meeting, he told Xpress that it would be hard for other Council members to get up to speed on the notoriously convoluted Water Agreement on such short notice.

In the same vein, Asheville Finance Director Bill Schaefer warned about problems with bondholders if political battles resulted in inadequate funding for infrastructure repairs. “In the revenue bonds we’ve issued, one of the covenants is that the city will maintain the system,” he explained.

The Authority, the Asheville City Council, and the boards of commissioners of both Buncombe and Henderson counties must all agree on the Water Authority’s budget — or, by default, the previous year’s budget is simply re-adopted. That’s exactly what happened last year after the Buncombe County Board of Commissioners vetoed a proposed new capital-improvements fee designed to raise money for infrastructure repairs. In part, the commissioners had argued that the Authority and city staff hadn’t given them enough hard data about the state of the system and projected future maintenance costs.

Since last summer, however, the city’s Water Resources Department has been working with consultants Brown and Caldwell to provide that information. The consultants performed an asset-management evaluation, a drought-management study, and a detailed examination of water usage and billing. Based on the results, the Authority drafted and passed a plan for funding maintenance that was aimed at “optimizing the life-cycle costs of asset management.” And the Budget Committee then produced a budget that included meter-based charges quite similar to the capital-improvements fee rejected by Buncombe County last year.

Schaefer went on to note that the bondholders are aware of the consultants’ findings and now, more than ever, will be watching to see if system maintenance is getting properly funded. As Authority member Darryl Hart (an Asheville appointee) put it, “The cat’s out of the bag.”

Brian Peterson, meanwhile, suggested that rather than expecting Asheville and Buncombe County to give up the transfers all at once, the Authority could ask them to begin by relinquishing their shares of the money that would be raised by the proposed new meter fees (about $264,000 for the city and $132,000 for the county).

At press time, the agenda for the May 25 Asheville City Council meeting included a resolution to “amend or terminate” the Water Agreement, which would open the door to a wholesale re-examination of water rates (including charging non-city residents more).

[Freelance translator/writer Jonathan Barnard lives in West Asheville.]