At the Buncombe County Board of Commissioners’ June 7 formal session, disputes over water-system financial data triggered some of the most heated exchanges to occur in the chamber in recent memory.
The elevated emotions sprang from differing interpretations of figures in the fiscal year 2005-06 Regional Water Authority budget. After David Hanks, the interim director of Asheville’s Water Resources Department, had presented the budget, Board of Commissioners Vice Chairman David Gantt peppered him with questions about funding and cash balances. The exchange soon had both men fuming while Chairman Nathan Ramsey attempted to return the meeting to its customary calm.
The friction was all the more unusual given that the budget is arguably hypothetical, since the Water Agreement under which the Authority operates will expire on June 30, barring a dramatic sea change in the ongoing city/county negotiations. In the meantime, as stipulated by the agreement, both the city and county must approve the Authority’s budget — which explained Hanks’ appearance before the board.
Flat line, leaking lines
The complexities of the $23 million budget were reduced to several pages of a workaday PowerPoint presentation. Hanks’ proposed budget assumes no increase in either revenues or water rates. It includes increases in salaries and fringe benefits for both current employees and two new positions created for watershed management, coupled with a routine decrease in bond payments. Heavy equipment is being replaced on a regular schedule, Hanks reported, and repairs and maintenance are ongoing.
After Hanks had spoken, however, Gantt engaged him in a discussion of the “nonbetterment” fees supposedly paid to the state Department of Transportation for water lines that have to be relaid in connection with road work. At a May 24 special session called by the Board of Commissioners to present their call for an independent regional water authority (see “Water Cannon,” June 1, 2005 Xpress), the county had asserted that such an entity could save the city and county millions in nonbetterment costs. Hanks then told Xpress that no nonbetterment fees have been paid in the past five years, and he repeated that information under Gantt’s persistent questioning on June 7.
A visibly agitated Hanks repeatedly stated that given Asheville’s continuing growth, pipe sizes are invariably increased when the DOT moves old water lines — making them “better” (and therefore incurring betterment costs that even independent regional authorities have to pay). The state, he explained, typically deducts the estimated cost of nonbetterment work from the total bill it presents to water authoritites for water-line improvements.
Gantt then moved on to the matter of lost water, asking, “How much of the water leaks now?”
“Normally, about 25 to 30 percent,” Hanks replied. “We can think of it as two separate systems. Everything south of the Swannanoa River is fed by the Mills River plant. The bulk of what we call ‘nonrevenue’ water is in the North Fork system, primarily because of long cross-country lines.”
“What’s the best you can hope for?” Gantt inquired.
“The best we can do — if we captured every water seepage — we would probably be looking at 20 percent leakage,” said Hanks, adding that the system operates at an extremely high pressure. Whereas water systems in flat country operate at 40 to 80 pounds per square inch, “Our highest pressure is 650 pounds with an average of 200, due to steep terrain.”
Turning up the pressure
Gantt turned his questions to the Water Authority’s cash on hand, including a fund balance that county Planning Director Jon Creighton had pegged at $17 million at the May 24 meeting. Hanks responded that the figure is actually slightly more than $11 million, but Gantt pointed out a total of $4.5 million in accounts receivable. That sum, Hanks explained, is mostly money owed by the Metropolitan Sewerage District that is committed for repairs.
“Why don’t you use some of the $11 million to repair the system?” demanded Gantt.
Hanks responded: “We could use that money. Sure. But then we wouldn’t have funds for emergency repairs. We were lucky during the flood last September, because the water undermined the pipe and it broke.” (Hanks was referring to a 24-inch line adjacent to the North Fork reservoir.) He continued: “If it hadn’t broken, it could have split due to pressure, just like a knife running down the whole length. It could have cost millions to repair.”
Both Gantt and Commissioner Bill Stanley asked Hanks, “Why don’t you fix the system?”
“We have tried,” Hanks replied. “But two years in a row you rejected our budget requests.”
Stanley defended the board’s “No” votes on those requests, saying that the commissioners hadn’t seen evidence that repairs would actually be done, and Gantt was muttering before Ramsey interceded.
“We aren’t trying to attack you,” Ramsey said. “We don’t want to kill the messenger.”
Hanks then returned the discussion to emergency funding. “Five years ago, the financial people came in here and said: ‘You folks are sucking wind. If you have a major problem, you don’t have the money to cover it.’ So we’ve been trying to build that up.”
Ramsey asked, “What’s your target?”
“Twenty million,” replied Hanks.
In the end, the board unanimously approved the budget.
After the meeting, Hanks told Xpress that his greatest concern regarding the Authority’s uncertain future is for the employees. “They don’t know if they’ll have jobs; they don’t know what they’re going to do. Even over at MSD, employees are asking questions about what could happen to their jobs if the two authorities are combined.”
The big budget
The board also held a poorly attended public hearing on the county’s proposed $210 million budget for fiscal year 2005-06. Only four speakers addressed the meeting.
County resident (and perennial gadfly) Jerry Rice told the commissioners, “I know your political beliefs don’t go as deep as your skin,” and then proceeded to take them to task for providing increased funding for schools. “Accountability on the part of the county school system is zero,” he declared. “The more money you give them, the worse the dropout rates get.”
Rice then suggested that a 10-cent cut in the county property-tax rate would give taxpayers a needed break.
Swannanoa resident Eric Gorny, meanwhile, pitched a 6-cent tax cut, asking, “How can we audit the different departments to see that they are more efficient?”
In closing, Gorny added, “I urge you to push the state to take over Medicaid funding.”
Jupiter resident Don Yelton accused the commissioners of using nonprofit funding to buy votes. “The budget has increased, in three years, by 23.8 percent,” he noted, adding: “You’re going to have some hard decisions to make in the future. Do we take care of the elderly needing medication, or do we build libraries?”
Sharon Willen, director of the Asheville Area Chamber of Commerce’s Existing Industries Program, made a pitch for funds for an additional staff member in her department. After detailing some successes in helping current businesses expand, she noted, “There are major labor shortages looming across the country in advanced manufacturing.” A stronger focus on manufacturing in middle and high schools, said Willen, could encourage students to enroll in college courses that would help prepare them for the high-tech jobs of the future.
The commissioners will vote on the proposed county budget at their June 21 formal session.
In other business, the board appointed Robert Reed Moody, Pam Nickless and Jay Winer to the Historic Resources Commission of Asheville and Buncombe County.