Troubled waters

Water can carry a boat and can also sink it.

— Chinese proverb

Frustration over Asheville’s water policies is at flood stage and rising.

Two weeks ago, the news broke that David Hanks, interim director of the city’s Water Resources Department, had decided to gut an award-winning, water-efficiency-education program without informing the Regional Water Authority of Asheville, Buncombe and Henderson.

Since then, Xpress has learned that Hanks also failed to inform the Authority about a mishap at the North Fork water-treatment plant on July 25, when a plant operator accidentally poured fluoride into a tank of sodium hypochlorite. The resulting chemical reaction necessitated a visit by a hazardous-materials team and disposal by the Neo Corporation of Waynesville.

Many past and current Water Authority board members, as well as advocates of regionalism and water-quality activists, say Hanks’ decisions to keep the Authority in the dark were only the latest incidents in a long history of city staff treating the Water Authority as if it were irrelevant. “It just raises the same old question about what’s the point of having an Authority,” remarks Tom Sobol, the former chairman of the Buncombe County Board of Commissioners and a longtime Water Authority board member.

Some critics go so far as to flatly accuse Asheville of having broken both the letter and the spirit of the 1995 agreement with Henderson County, which enabled the Asheville-Buncombe Water Authority to build a water intake and treatment plant at the confluence of the Mills and French Broad rivers in northern Henderson County. The agreement pulled Henderson County into the Authority and mandated that the three parties negotiate “in good faith” toward something new: a truly independent regional water authority, to which would be transferred, at some undetermined future time, “all assets and improvements accumulated pursuant to this Agreement … upon such terms and conditions as are mutually acceptable.” (At the time of the agreement, Asheville, rather than the Authority itself, owned the water-system infrastructure; and because those “mutually acceptable” terms have yet to be negotiated, this is still the case today.)

A key piece of those acceptable terms, of course, would be how Asheville would be compensated for transferring its assets (which the city has estimated to be worth at least $100 million). The existing Regional Water Authority has no assets of its own, and both the city and the two participating counties are feeling the effects of the state budget crisis.

For years, Henderson County complained that the city has been stalling or refusing outright to meet its obligations under the pact. Matters came to a head in the spring of 2001, when Henderson County filed a lawsuit against Asheville, the Water Authority and Buncombe County over restrictions the city had placed on the deed to a 139-acre parcel of land in Bent Creek that was to be transferred to Henderson County under the 1995 agreement.

Asheville Mayor Charles Worley and City Council member Jim Ellis are now conducting closed-door negotiations with Henderson County over the suit. And officials are also (in open sessions of the joint Regional Water Agreement Renegotiation Team) discussing more general issues related to the water agreement. These include whether Henderson County will remain in the Authority at all, and how the regional body might be restructured to address these long-festering concerns. Many believe that an amicable resolution of these matters is essential for the future of regional cooperation.

“If this deal breaks down or ends up in litigation because the city has walked away and failed to meet their obligations,” says Henderson County Board of Commissioners Chairman Bill Moyer (who also serves on the Water Authority board), “I don’t think there are going to be many parties that are going to want to enter into a regional agreement with [Asheville].”

“We’ve got major transportation issues we need to deal with,” he continues. “You’ve got to have confidence and trust in the people you’re going to work with. Mental health, solid waste and economic development are some other areas. I mean, we have taken a big step back from 1995, when there was a move towards regionalism. The conduct of the city with respect to this agreement has had a major detrimental effect on regional cooperation. And if these talks collapse, it is going to get even worse.”

Early this summer, it appeared that the city simply wasn’t interested in pursuing a regional approach. At the Renegotiation Team’s June 3 meeting, representatives of Buncombe and Henderson counties and the Water Authority all stated their preference for a “true” regional water authority, which would fulfill the vision of the 1995 agreement. Asked about Asheville’s position, however, Worley said the city had lowered its projections of how much such an entity would save by not having to pay the state Department of Transportation “nonbetterment charges” for water-line relocations connected to highway projects (see “A long and bitter history” below). “So, our answer is ‘no’ for now,” said the mayor, according to the meeting minutes.

More recently, however, City Hall has been sending out mixed signals.

Take, for instance, a Sept. 17 e-mail from Worley to Council member Carl Mumpower (and forwarded to several others) responding to a question about whether he was planning to attend the League of Women Voters’ Oct. 3 “Citizen Summit on the Regional Water Authority” (see box).

“I am concerned about going, but I am perhaps even more concerned about not going,” Worley wrote. “I am inclined to attend but to temper any remarks, depending on where we are in the negotiations. Jim Ellis and I are meeting next week with Bill Moyer and [Henderson County Board of Commissioners Vice Chair] Marilyn Gordon and hope that we can make substantial progress in settling the Henderson County problems.”

“The League is pushing for a true regional authority,” continued Worley. “That is something that will not occur in the context of the negotiations that have been so ‘structured.’ I think it can be discussed, but Buncombe County and our ‘nonwater’ aspects of the Water Agreement are so critical there, and those discussions are best held in a nonstructured environment.”

It’s not entirely clear what to make of Worley’s comments. (At press time, the mayor had not returned a reporter’s phone calls.) When he says that a true regional authority “will not occur” in “negotiations that have been so ‘structured,'” is Worley suggesting that the city’s strategy is to cut Henderson County out of the picture? Does a “nonstructured environment” translate into backroom dealings with Buncombe County? (On several previous occasions, Worley, citing the “very nature of negotiations,” has expressed a preference for keeping negotiating goals and strategy out of the public spotlight — much to the consternation of open-government advocates like local activist (and former mayoral candidate) Mickey Mahaffey.)

But “nonstructured” could also suggest talks unfettered by narrow, previously agreed-upon parameters for discussion — meaning that all three parties could discuss establishing a true regional authority in open (or at least publicly acknowledged) meetings.

In any case, the e-mail does make a few things clear: first, that the negotiations with Henderson County, though apparently limited in scope to smaller issues such as resolving the Bent Creek lawsuit, have not broken down; and second that, from the city’s point of view, any discussions about establishing a true regional authority — with or without Henderson County — would also have to deal with the “nonwater” portions of the earlier Asheville/Buncombe water agreements.

A long and bitter history

“The thing to remember is that while regionalism is great, it’s only great if it serves everybody equally — if you pay your fair share and get what you pay for.”

— former Asheville Mayor Leni Sitnick

To understand what these “nonwater aspects” involve and how they fit into the bigger picture, we need to direct our gaze backward.

In 1995, the mood was much sunnier. Henderson County was happy about joining the Regional Water Authority (which would give them a new water supply and help with distribution in the northern part of the county), and Asheville and Buncombe County were rejoicing over having staved off a threatened water shortage. At times, the levels in the Bee Tree and North Fork reservoirs had fallen alarmingly low, and the Asheville-Buncombe Water Authority was desperate to find a new water source. But an activist citizenry had roundly defeated a 1989 referendum on the Authority’s plan to tap the French Broad River, which was widely considered too polluted to use for drinking water, and subsequent efforts to identify another source had come up empty-handed. In a surprise move, however, Worley (then, as now, a Water Authority board member) had cut a deal with Henderson County to acquire a site for a water-treatment plant on the Mills River.

“We were all thrilled,” recalls UNCA environmental-sciences professor Rick Maas, who served on the Authority with Worley at the time. “It was a great, saving solution.”

Those who were involved back then — activists and public officials alike — were justifiably proud of the parts they played in securing a less-compromised water source than the French Broad. But skeptics sometimes regarded their glowing pronouncements about regionalism as so much praise for a conveniently abstract sacred cow.

“Quite frankly,” remarks former Asheville Mayor Leni Sitnick, “the thing to remember is that while regionalism is great, it’s only great if it serves everybody equally — if you pay your fair share and get what you pay for.”

When Sitnick became mayor late in 1997, she made re-examining the city’s water agreements one of her top priorities. “I think it’s healthy for any community to review its agreements from time to time,” she says now. “Demographics change, economics change, city boundaries change, populations change, needs change. And so by not reviewing an agreement every once in a while, you would be doing a disservice to your constituents, because you don’t know whether that agreement is truly serving its original purpose — or any purpose.”

The current water agreement, Sitnick said recently, consists of “so many convoluted agreements and amendments to agreements that to truly understand, one would have to go back — and, in some cases, wake the dead — in order to interview folks as to why this was done and why that was done.”

But as William Faulkner once noted: “The past is never dead. It’s not even past.”

Think of Asheville’s water agreements as being something like a set of nested boxes. Each box contains both its own legal bric-a-brac as well as the next smaller box (which, in turn, contains its immediate predecessor — or some revised version of it).

Delving into these boxes within boxes carries one back in time — from the Asheville-Buncombe-Henderson agreement of 1995 through the Asheville-Buncombe agreements of 1987 and 1981, and finally to the last and oddest box of all: the Sullivan Act of 1933.

The Sullivan Act prohibits Asheville from charging higher water rates to customers outside the city limits. No other city in North Carolina is similarly shackled, and many say the state law has kept the city at a disadvantage ever since.

By charging customers more the farther they live from the city, other water systems are able to recoup the higher infrastructure costs as lines extend outward into less-populated areas. Such rate differentials, moreover, give developers an incentive to build in or near a city (discouraging sprawl), and the prospect of eliminating these charges can be dangled in front of a reluctant community as bait when a city wants to annex neighboring areas (to expand its tax base) or request extraterritorial zoning (to prevent unregulated development just beyond the city limits). In short, such differentials give a city more revenue and more control over development.

At various times in the mid-1900s, Asheville mounted legal challenges to the Sullivan Act or tried to persuade the county to allow rate differentials in exchange for the city’s taking over the maintenance of county water lines. But the county wouldn’t budge, and state courts upheld the law’s constitutionality.

The city and the county remained at loggerheads over this issue right on up until they signed the 1981 agreement establishing the Asheville-Buncombe Water Authority. In exchange for the city’s agreeing not to challenge the Sullivan Act — meaning there would be no future rate differentials — the county agreed to a formula that would reimburse Asheville and other municipalities in the county for duplicated Sheriff’s Department services that city residents pay for in their county taxes but don’t use. This arrangement now costs the county about $2.5 million a year (about $2.25 million of which goes to Asheville).

The county also agreed to pay for maintaining certain public facilities that lie within the city limits but are meant for the enjoyment of all county residents, such as McCormick Field, the Aston Park tennis facility, and the municipal golf course.

Asheville owns all water-system assets, and the city’s Water Resources Department administers and maintains the system. To offset those costs, the agreement gives the city 5 percent of the Water Authority’s revenues (the county’s share is 2.5 percent).

The peculiar structure of the local Water Authority is just about as unusual as the prohibition on water-rate differentials. For starters, the 1981 agreement left the ownership of all water infrastructure in Asheville’s hands. And the staff who administer it are city employees, ultimately answerable to the city manager.

Many Water Authority board members argue in exasperation that by controlling the infrastructure and staff, Asheville has simply been able to stall whenever the Authority has requested something that the city has perceived as running counter to its interests.

For example, when Asheville refused to run a water line out to American Freightways in Henderson County because no accounting system was in place to track the associated income and costs — just one example of the kinds of crucial details that were conveniently omitted from the 1995 agreement — critics accused the city of outright stonewalling. “The procedures could have been drawn up on the back of a lunch bag,” cracks Sobol. “It just wasn’t that complicated.”

The Authority’s odd structure, many of its board members complain, has left them powerless — more like an advisory body.

But the unusual nature of the 1981 agreement (and its offspring) has had another unfortunate — and costly — result as well: Because the local body doesn’t own the water-system infrastructure, the state doesn’t recognize it as a true water authority — and so refuses to reimburse it for “nonbetterment” expenses — the cost of repairing or replacing water lines affected by DOT road construction. In June, the city estimated those costs at about $394,000 a year; earlier estimates had put the figure at about $1 million per year.

A glimmer of hope?

For these two reasons, then — to resolve the structural flaws in the current arrangement that give Asheville almost all the power, and to avoid having to pay nonbetterment costs — Henderson County, Buncombe County and the Water Authority itself have all been pushing hard to establish a truly independent regional body, as envisioned in the 1995 agreement.

The city, meanwhile, fears losing its assets and control over its infrastructure, as well as the revenue it gets from the current arrangement.

By invoking the noble cause of regionalism, however, the other parties may hope to shame the city to the table. And to be sure, there is one thing about the current arrangement that the city would definitely like to change: It would love to repeal the Sullivan Act. And therein may lie an opening for negotiations that could lead to a fully independent authority.

There is, in fact, at least some evidence that the Buncombe County commissioners and Asheville City Council members have been putting out feelers to each other about these very issues.

“If we’re all realists about this, we can look at what are the city’s concerns,” Buncombe County Board of Commissioners Chairman Nathan Ramsey told Xpress in August. “I’ve talked to City Council members who say that most cities can control their water systems; they can charge differential rates to non-city residents. … They exercise some control that makes it easier for annexations.

“My personal view?” continued Ramsey rhetorically. “We would be willing to say a differential rate would be OK … that water customers outside the city could be charged a 20-percent differential. You know, something that’s reasonable. There’s some that probably want the rate to be double. But as long as there’s a reasonable differential — if it’s part of a regional approach — then it would be my vote on the board to support something like that.”

Of course, any agreement mandating rate differentials would also have to revisit what Mayor Worley described in his e-mail as the “nonwater aspects”: the complex system of reimbursements that the county consented to in 1981 in exchange for the city’s not contesting the Sullivan Act. That, some observers say, could mean opening up another major can of worms.

And if this happens, two long-running questions will loom large: how will the negotiations be conducted — and how well will the public be kept informed about the workings of their government?

Citizens’ Summit on Water Authority

Thursday Oct.3, 7pm – A Flood of Excuses, A Drought of Facts: The public is encouraged to attend & participate in this forum on the stalled negotiations towards creating a Regional Water Authority. In the Community Room of St. Mark’s Lutheran Church, at the corner of Liberty & Chestnut Streets. Info: League of Women Voters of Asheville-Buncombe County, 258-8223.