Asheville, not Beirut

“There ain’t no way I’m going to vote for [$6.2 million].”

— Board of Commissioners Chairman Nathan Ramsey

Rancor, raw and ugly, returned to local water negotiations when the Asheville City Council met with two Buncombe County commissioners at A-B Tech’s Enka campus on July 17.

A mere month before, Mayor Terry Bellamy and City Manager Gary Jackson were promoting a tactful new negotiating style. Now, however, Bellamy described Commissioner David Gantt‘s contention that the city hadn’t properly consulted with the county about the meeting as “a blatant lie.”

Gantt, meanwhile, took the city to task for its hypocrisy in talking about the need for open negotiations after holding a closed session of Council immediately before the July 17 meeting. Not to be outdone, Board of Commissioners Chairman Nathan Ramsey bemoaned the difficulty of getting his argument that the county, in fact, owns a large part of the water infrastructure “through the city’s thick head.”

So when Vice Mayor Holly Jones exclaimed, “We’re Asheville — we’re not Beirut!” she sounded only half-convinced herself.

Slouching toward compromise

Despite all the high drama, the two sides’ negotiating positions actually wound up closer than ever before. Assuming that Ramsey’s and Gantt’s responses reflected those of the other commissioners, by the meeting’s end, only one obstacle — money, albeit a lot of it — appeared to stand between the two governments and a new agreement.

Specifically, there was a $5.1 million gap between the $1.1 million a year the county said it was willing to pay the city as compensation for maintaining recreational facilities used by people from throughout the county and the $6.2 million a year that City Council members said they deserve for agreeing not to charge more for water delivered outside the city.

At first it seemed that the powwow might not take place at all. On July 14, the Friday before the Monday meeting, Ramsey sent the city a letter complaining about how the meeting was announced and noting that most commissioners wouldn’t be able to attend. “We were not given the courtesy of a phone call confirming availability before this meeting was set and announced to the media,” he wrote. “We need a written proposal with support of a majority of Council as a starting point for our next meeting.”

When the meeting did convene, Ramsey and Gantt first offered Asheville a choice: either provide a new, written proposal endorsed by a Council majority or accept in its entirety the offer the county had made a few weeks earlier. Calling it a “package deal,” the two men repeatedly rebuffed Bellamy’s attempts to respond to the county’s offer line by line. But finally, after multiple pleas from the mayor and other Council members, they agreed to hear her out.

Bellamy readily accepted the first item in the county’s proposal — that “water will be a municipal system” — since it was in fact a concession to the city. (The county would prefer a true regional authority, similar to the Metropolitan Sewerage District, that would take title to the water infrastructure the city now owns.)

The mayor also consented to the condition that “water will not be used as a tool for annexation,” so long as a qualification from the county’s June 2005 offer was included here as well: “New developments within a half-mile [of the city limits] can be annexed using the same criteria other North Carolina cities use.” Forsaking the right to use water hookup as an annexation tool is a major concession for Asheville, since gaining that leverage was one of the principal reasons the city gave notice of its intention to pull the plug on the 1981 Water Agreement — and, by extension, the Regional Water Authority — in June 2004.

That action prompted the N.C. General Assembly to pass Sullivan Acts II and III last June at the county’s behest. These laws prohibit the city — uniquely among North Carolina municipalities — from charging rate differentials, using water-system access as an annexation tool, or diverting water revenue for other purposes.

Together, the Sullivans negated much of what the city had hoped to gain by pulling out of the Water Agreement while doing nothing to cushion the blow of what it would lose — several million dollars’ worth of annual payments from the county to fund recreational facilities within the city limits and to reimburse Asheville for Sheriff’s Department services that city residents pay for in their county taxes but don’t use.

The laws’ passage, in turn, prompted the city to file a lawsuit last August challenging their constitutionality. And the resulting state of legal limbo, which still persists, at least delays the eventual loss of incentive to negotiate at all: Once the state courts issue a ruling, the winning party will have less reason to cut a deal.

Continuing through the county’s proposal, Bellamy said the city could accept the conditions prohibiting rate differentials and “diversion of water revenues” so long as it received sufficient “tax equity” (i.e. money) in return.

Core water issues

Another item in the county proposal read: “The City will transfer both title and responsibility for McCormick Field, Nature Center, Golf Course, Recreation Park and the Civic Center [to the county]. (This relieves the City of a net operating loss that is currently $1.1 million annually and which will grow substantially in the future. Additionally, the county could address the much-needed and long-deferred issue of improving or replacing the Civic Center.)” On this point, Bellamy said the city prefers to work out the “core water issues” first.

There was no doubt, however, that Asheville sees money from the county as one of those core issues. The $6.2 million in annual reimbursement that the city wants is based on the extra amount that it figures Asheville residents are paying in their water bills because the city can’t charge people outside the city limits an additional 85 percent (the average water-rate differential in the state). And even with this reimbursement, Asheville would still be at a disadvantage, argued Council member Brownie Newman, since city water users are also Buncombe County residents whose taxes would help pay for the transfers.

Newman and several other Council members stressed that the city would much prefer to be treated like any other North Carolina municipality and have the right to impose differentials. Giving up that right was, as Jones put it, a “gargantuan concession.”

But Ramsey argued that the local water system has a unique history that justifies a prohibition on differentials. The county, he noted, took over responsibility for water lines funded by water districts that defaulted on their bonds in the early 1930s. That history was cited by the state Supreme Court on multiple occasions to support the constitutionality of the original, 1933 Sullivan Act, which prohibited rate differentials for customers outside the city who were connected to lines built by those old water districts.

The city holds that Sullivan I applies to no more than 1 or 2 percent of the system’s lines — the ones that were installed by those water districts and have never been replaced. Ramsey, however, maintains that the figure is much higher, and that when one factors in the money the county has put into the system and the number of lines that have been donated by developers outside Asheville, the county might own 40 percent or more of the entire system. That, Ramsey argued, justifies treating Asheville differently.

Both Gantt and Ramsey said they opposed transferring money to the city based on its inability to charge differentials. But Ramsey did express a willingness to transfer money to the city under another rationale: as reimbursement for city services that were enjoyed by all county residents, such as the $1.1 million a year the recreational facilities are costing the city. He emphasized, however, that these costs would have to be for services provided uniquely by Asheville — not those borne by all municipalities in the county, such as duplicated police services. Ramsey also made it clear that the amount the city was requesting was wildly out of line with what he might support, proclaiming, “There ain’t no way I’m going to vote for [$6.2 million].”

Uniquely yours

But Council member Robin Cape, who has served on the Woodfin Water Board, remarked that many of the arguments about Asheville’s uniqueness simply don’t hold water. Throughout North Carolina and the nation, she said, developers routinely pay for line extensions and then donate the infrastructure, title and all, to the municipal system.

On a similar note, Jones said, “We are not unique in being unique.” She also said she’d like to see the documentation supporting the county’s claim that it owns a large share of the infrastructure.

Ramsey responded that these matters are at the “heart of the legal issues” and that both sides would have a chance to see what the other had during the discovery process.

It seems clear, however, that the city would prefer not to let things get that far. On July 11, Asheville filed a motion for summary judgment, under which the court could issue a quick ruling if it determined that it needed only to resolve matters of law, not matters of fact. The county, meanwhile, has filed a motion to intervene with the aim of becoming a party to the lawsuit. Although that motion was filed a few weeks later, County Attorney Joe Connolly said he expects the court to rule on it first.

The city is also pushing for more frequent open meetings with the county to hammer out an agreement. As the probable date of the next meeting, the commissioners and Council members picked July 31, a date the commissioners believed would also work for the local legislative delegation to Raleigh. Both Newman and Jones had planned family vacations on that date but said they would attend via conference call, if not in person.

[Jonathan Barnard, a freelance translator and writer, lives in West Asheville.]