Emails reveal state reps trying to settle Asheville water lawsuit, may change city elections

Emails obtained by Xpress reveal that some state legislators have asked city of Asheville representatives to drop their lawsuit contesting a state-mandated transfer of the water system to the Metropolitan Sewerage District. The emails also show legislators discussing the fate of legislation that consolidates Asheville and Buncombe County parks-and-recreation services — a move that could save the city $5 million a year. Further, the candid discussions shine a light on a long-rumored proposal that the state may force Asheville to switch to district-based elections.

Vice Mayor Esther Manheimer says the city is being “told to settle the lawsuit or else” face more unwanted legislation.

On June 3, Rep. Tim Moffitt emailed Asheville Mayor Terry Bellamy, asking if the city would reach a settlement by the end of that day. “As we are approaching the end of the long session, is it the intent of the City to continue with the legal action against the State and MSD?” Moffitt writes. “Representative [Nathan] Ramsey has been attempting to seek resolution and it seems to no avail. I would like to know by COB tomorrow if a resolution is possible and if not, I need to know that as well.”

In the next paragraph, he brings up changing the city’s election system and delaying this year’s elections so that district elections could take place (such a move could keep Bellamy and three Council members in office for another year):

“In regards to district elections and moving City elections to general election cycles — it would require all seats subject to this years’ election to be extended for an additional year. What are your thoughts, since it would apply to you?”

A draft bill to switch Asheville to district elections already exists, though it has not been officially filed. The draft, prepared in March and recently obtained by Xpress, proposes plans for district elections, with seats for north, south, west, east, and central Asheville, as well as a mayor and one at-large seat. City officials would draw up the boundaries, but the state would approve them.

City officials have not requested such a change. In 2011, North Carolina legislators mandated that Buncombe County’s Board of Commissioners be elected in by district; the move is credited with ensuring that the board, long dominated by Democrats, get more Republican representation.

Ramsey claims city officials have been aware of the possibility of district elections since at least January, and “district elections have worked in my view pretty well in the county.”

On June 4, Council member Gordon Smith wrote Ramsey to ask his “sense of the CRA’s [the recreation merger bill’s] progress in the Senate. It’s been weeks with nary a word. If passage of this bill is explicitly tied to other policy decisions, that would be helpful to know for sure. If it’s just a hold up because of Senate logjams, that’d be helpful information, too. We’re trying to build a budget, and it’s awfully hard when we don’t know what our revenues and expenditures are going to be.”

Smith claims he did not receive a reply.

Ramsey tells Xpress that he doesn’t know what the bill’s fate in the Senate will be, but “if somebody wants a bill passed in the Senate, they need to contact their Senator. I’m in the House.”

On June 5, Rep. Ramsey wrote to city leaders and senior staff that he “spoke with Asheville representative Mr. [Jack Cozart, the city’s lobbyist] this morning, looking forward to hear if the city has any desire to settle the case filed against the state.”

Later the same day, City Manager Gary Jackson replied, “Repeal the law taking city property, state pays fair market value, and structure authority with fair elected representation?”

State Rep. Chuck McGrady also weighed in, writing, “Usually, you’re pretty diplomatic, Gary, but clearly there was no diplomacy in this response.” He continues: 

“Of course, my perspective from dealing with Asheville over a lot longer time than you’ve been manager is that ‘fair elected representation’ is just another way of saying that Asheville is in charge. If you’re stating the basis for any settlement, please consider your conditions rejected.”

McGrady also praises the city for its work on getting a regional airport authority going.

Ramsey replies to Jackson, “I have discussed with city representatives a financial benefit to the city of $7.5 million via the CRA and $1.1 million via the MSD, is that not acceptable? I have discussed with city representatives giving the city ½ the votes on matters concerning water, is that not acceptable?”

Jackson asks if he’s speaking for himself or his whole delegation, and requests more information about the process before proceeding. Ramsey then writes, “If the city is willing to meet with the delegation, I’d suggest you come to Raleigh since we are in the midst of the budget, and I will work to set up that meeting.”

The emails do not explicitly say that the state delegation will hold up the parks authority or force district elections if the water lawsuit doesn’t go away, but Manheimer says, “Who knows what the hell is really going on, but what appears to be happening is that we’re being told to settle the water lawsuit or else. … Those appear to be the options on the table.”

She explains that in conversations, Ramsey has denied that the recreation authority bill is tied to a water settlement, but “then he’ll proceed to give me a 30-minute lecture about while we should settle the water lawsuit.”

Ramsey says that the emails show the city officials have been saying one thing in public — that no settlement is in the cards — and another thing when they discuss terms in private.

“For well over two months, we have been discussing specific proposals to reach a settlement,” Ramsey says. “I’m trying to do the best I can and deal with facts. Until they [the city] can deal with facts it’s hard to engage in discussions with people that say one thing publicly and another privately.”

In a May 2 email to other legislators and local leaders, McGrady questions proceeding forward with the recreation authority bill while the legislature’s facing a lawsuit from Asheville:

“I’m not going to oppose the legislation, but it puts us in an interesting position. … We’re being asked to change the law and the result will be that Asheville’s expected fiscal crisis goes away. Having passed this legislation, we then will be sued over the water system. So we could end up giving a windfall to the City and then still have the prospect of controlling water, is that what could happen, Nathan [Ramsey]?”

Ramsey wrote back, “I have always believed a consolidated parks/rec system would be positive for our community and for over a decade have believed that water/sewer consolidation would benefit the City of Asheville, our smaller towns, and Buncombe County.”

Manheimer believes that Ramsey is sincere, “and not as punitive as Moffitt — frankly it’d be hard to be that punitive. [But] unfortunately he can’t act alone, and folks in the legislature are tying together the water system with parks and rec or any bill that might benefit the city.”

“There’s clearly not an agreement on their side about what should happen,” she adds.


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20 thoughts on “Emails reveal state reps trying to settle Asheville water lawsuit, may change city elections

  1. bsummers

    Wow. “Give in on the water or we’re suspending elections for a year and not giving you the parks & rec bill we promised”? Sounds a little thuggish.

  2. Thurston Moore

    Either this lawsuit is badass…seriously badass…or we must ask Why Moffitt and crew seem so so intent on forcing a settlement? Seriously…just whose land deal hinges on this water? THAT is the question no reporter has dated ask. This did NOT come from this trio of legislators without a significant reason why. No one has asked why? This behavior…desperation to settle …scres it?

    • Margaret Williams

      Xpress reporters have asked, and sniffed around, but the results are inconclusive.

  3. bsummers

    And I would quibble on the title of this article – state reps cannot “settle” a lawsuit. That’s between the parties (City of Asheville, State of NC Attorney General, MSD) and Judge Manning.

    What the state reps are doing is bullying, threatening, coercing the City in an attempt to force them to abandon their legal challenge to a controversial and possibly unconstitutional piece of legislation.

    If I were them, I would worry about how the Judge in the case will take all this, now that it’s been made public how they are secretly trying to pressure the City into surrendering their legal rights.

  4. Roger Hartley

    Bsummers is right…A little reminder of what might happen if you don’t settle (your best alternative to a negotiated agreement…called BATNA) is one thing. A threat to use power if you don’t…AND by another branch of govt is something completely different. A threat is dangerously close to meddling in a case and the judiciaries right to hear it.

    As a side. The city should not settle this. It is quite clear they have the upper hand…especially now that this has come out. A) delay is your friend. Water profits keep coming…and more time to plan the budget hole of they lose. B) delay forces a better bargaining position later. They want a settlement…and have turned to threats…because they or someone needs this water authority now…perhaps a land deal or development? Perhaps logrolling. why would a group of legislators thst care less about this unless they traded votes. C). If this takes years, the parties that proposed it and the support of it by colleagues will wane. Some may not even be back.

    The city clearly has a dominant position after suing. And the defendants have made a cardinal error. Don’t anger the judge.

  5. Roger Hartley

    This is a great story David. I eagerly await more facts…comments from all parties and more.

    Well done.

  6. John Miall

    This is unconcionable. Never in the history of government in this state has anything like this ever occurred. Asheville, and the western region are the victims of the most visious and sinister assault ever seen out of Raleigh. It is my hope that the City of Asheville not only NOT cave to this pressure, but should ask the Judge to sanction the State for the actions of its “agents”. Furhter, I do not know what the requirements are for censure at the Legislative level, but at the very least a full investigation by the State of this needs to be conducted.

  7. TJ

    Wow! Is there such a thing as the Constitution, anymore?

    I would like to think that other folks in Raleigh would oppose these happenings.

    Than, again, they’re seeing it up close and personal.

    Are citizens REALLY not outraged that, whichever “side” one takes, that there is a serious lack of response to this thuggery?

    Or, do you have to wait until its “your” turn to be bullied?

  8. Grethawk

    Sounds to me like someone needs to be taken out back of the woodshed. Maybe somebody’s a little too big for their britches.

  9. The city has filed a rather weak lawsuit against the state and MSD. Buncombe and Henderson counties are, oddly, not named in the suit.

    You can read their complaint on my Scribd account.

    The key features of the complaint are that the legislation is unconstitutional, that the bond transfer injures the city, and that the corporation of Asheville is a person.

    The city contends that HB488 was a local bill and it is unconstitutional to pass legislation in a local bill that affects sanitation. First, the law does not affect sanitation. It changes operational structure only. Second, the legislation is a public bill and would apply to any municipality that meets the conditions set forth. Therefore, it is constitutional.

    The city contends that forcing a transfer of bonds to MSD would jeopardize the city’s credit standing. The bonds that Asheville “floated” were Revenue Bonds backed, not by taxpayers, but by current and future water system ratepayers. It doesn’t matter who holds those bonds, Asheville or MSD, the ratepayers will always be the obligors. Nothing changes with a transfer of ownership. In fact, handing local government bond transfers is what the state treasurer does on a regular basis. They should be done by now.

    The city contends that Asheville is a person and must be compensated for a taking. First, a corporation is not a person. Second, the city does not own the water system. Third, a transfer of assets from one government entity to another does not obligate either to any financial reconciliation.

    See: WCQS Interview with Attorney Frayda Bluestein, School of Government, on Asheville water lawsuit.

    Ownership is difficult to untangle. But the one thing that is clear is that it’s not owned by Asheville. See this report for a breakdown of ownership: Municipal Sewerage FINAL REPORT.pdf

    The water merger is law but is now subject to a temporary restraining order brought by the city. The defendant, the State of North Carolina, asked for the TRO to be extended another 60 days, which was granted by the judge. That is so that the bond transfer matter can be resolved before the case is heard in court. That will blow a big hole right through this lawsuit. The last nail is to ******REDACTED*******. That will completely dispose of the lawsuit to the city’s disfavor.

    Asheville Water Merger Lawsuit

    • Jason

      The key features of the complaint are that the legislation is unconstitutional, that the bond transfer injures the city, and that the corporation of Asheville is a person.

      A corporation may be recognized as an individual in the eyes of the law. It’s called “Corporate Personhood.” In Trustees of Dartmouth College v. Woodward

  10. sharpleycladd

    Two things.

    Chuck McGrady is living proof that an adult can get colicky and ruin things for everybody else in the room.

    Second, if we had any real journalists who could connect the dots between Moffitt’s clients, North Henderson developers and McGrady, and tie the whole blatantly corrupt mess up for the voters, that would help.

    I am so disappointed in Xpress’s lack of real reporting on this story.

    • Margaret Williams

      Xpress reporters have asked, sniffed around and looked into those details, Sharpleycladd. The results are inconclusive.

  11. Jonathan Wainscott

    North Carolina and Asheville are starting to look like dingalings. Not a good way to do business.

  12. Chuck McGrady

    Sharplylcadd, I don’t what makes you think I’ve gotten colicky. As for “connecting the dots between Moffit’s clients, North Henderson developers, and McGrady,” I’m unaware of any connections. I don’t know who Moffitt’s clients might be, and because of my extensive work on land use planning I’ve never garnered support from developers. Former national presidents of the Sierra Club, which I am, aren’t normally supported by the development community.

  13. Jason

    There are 17 legislators on the Board of Directors for ALEC, the American Legislative Exchange Council (a “bill mill” – see North Carolina has two. They are: our beloved Tim Moffitt, and Thom Tillis, the only Speaker on the Board. Interesting.

    This legislation smells like it came from ALEC. I wonder how things are faring in other communities with similar bills that have already been enacted.



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