On May 17, 2012, a bill modestly titled “MSD Amendments” was introduced in the final regular session of the N.C. General Assembly. Sponsored by Western North Carolina Reps. Tim Moffitt of Buncombe County and Chuck McGrady of Henderson County (both Republicans), the bill passed the House (74 to 39) on June 18, and received Senate approval (31 to 14) on June 27, moving to the governor’s desk on June 28.
The true meaning of that bill — HB 1009 — is a matter of some history, some speculation, some objection and a fair amount of outright praise.
According to both sponsors, the bill was principally designed protect Asheville and Buncombe County’s representation on the Metropolitan Sewerage District of Buncombe County in the event that MSD’s territory should expand into Henderson County — something that would have to happen by request. The MSD board currently has 12 seats; Asheville and the county each get three, and other member entities get one (the towns of Biltmore Forest, Black Mountain, Montreat, Weaverville, Woodfin, plus the Woodfin Sanitary Water & Sewer District).
But in keeping with the recommendations of the Legislative Research Commission’s Metropolitan Sewerage/Water System Committee, which Moffitt chaired, HB 1009 also opened the legal door for MSD — itself a creation of the Legislature some 50 years ago — to exercise the same powers as a metropolitan water district. Enter, the unsettled waters of Asheville, Buncombe County and Henderson County politics.
“The provision was included in the bill to make sure that MSD was included in any discussions that might occur this year regarding [the] consolidation of water and sewer services,” said McGrady in an email explaining the bill’s design. “The committee chaired by Rep. Moffitt recommended a consolidated water and sewer authority, and local officials said if that was going to happen they wanted time to talk among themselves. Well, the bill insures MSD will be part of those discussions by giving MSD the authority to operate a water system.”
Moffitt, in a subsequent telephone conversation, agreed with McGrady’s description, but added that the original MSD statutes were written with change anticipated. His opinion was “this is a good and fair start” with regard to representation. The issue was tricky, he admitted, “but we’re not going to give up any of the seats for Asheville and Buncombe County” in order to potentially bring in new MSD members and territory.
Buncombe County’s Democratic Rep. Susan Fisher, however, doesn’t see things exactly the same way. “This is a thinly disguised effort to take over the water system either for possession by Buncombe, Henderson and who knows what other entities or eventual privatization,” Fisher declared in an email. She called the action one of many examples statewide of legislation that is “unfriendly to cities,” adding, “this could be looked at by the governor as a statewide health and safety issue when it comes to the integrity of water systems management in North Carolina.”
HB 1009 must gain the Gov. Bev Perdue‘s signature — or at least avoid her veto — by July 28 in order to become law. There is the chance, in the interim, that the governor could exercise her veto power over the bill, although the margins of passage indicate a veto override could be easily mustered. (The governor’s office was contacted regarding any contact or consideration regarding a veto, but had not responded at the time of this writing.)
Meanwhile, MSD Board Chair Steve Aceto takes a more historical view towards the legislative changes and their impact. “In a nutshell, MSD has existed since 1962 with no changes,” he explained by phone. Under the existing legislation, the board has grown to 12 through the old mechanism of representation.
“The one piece we sort of saw as a flaw,” Aceto said, was that, potentially, the combined representatives from all the municipalities and unincorporated areas could reduce Asheville’s representation to two members, which he felt wasn’t fair. “We had tried to get the Legislature to fix this,” he admitted. And the latest round of water/sewer discussions became the opportunity to say, “Here, we have a few other issues.”
Those issues included the potential for Henderson County to consider joining MSD, which would have given them three board representatives and knocked Asheville — as a municipality — down to one.
So with HB 1009’s new representation system, Henderson County would now get two representatives, should it join the district; Asheville would stay at three; and any other municipality that operates its own system could join with one representative (in theory, that means Hendersonville). “So the way I see it, we’re really fixed up for 20, 30, 40 years in terms of how the district can expand,” said Aceto.
“Nobody is apt to thank Tim Moffitt,” Aceto added, “but he did the city a favor. Henderson County wanted more representation, but they didn’t get it. The Legislature handled it well.”
As for the portion of the legislation the empowers MSD to operate as a water authority, Aceto stressed that the bill only gives MSD the power to operate a water system. “If they wanted to, they could,” he explained. “They don’t have to.”
But the water issue has led to MSD’s recent request for proposals to do an independent financial study of the possibility of just that — adding the Asheville water system to its functions.
“The idea behind the RFP is dirt simple,” Aceto said. “MSD has a fiduciary responsibility to operate for the benefit of the ratepayers. … We felt we needed a third-party, outside opinion. It amounted to going to city of Asheville and getting financial data to derive costs.” He expects selection of that outside party at this month’s board meeting (July 18), with a product in hand by October.
Meanwhile, MSD and the city of Asheville have made contact by letter acknowledging the potential need for negotiations, although things are currently in a wait-and-see pattern. And Moffitt acknowledged that although the study committee recommended that consolidation take place, “[the] committee decided it was better left in hands of local officials to work out how.”
The city’s point person with the LRC committee was Vice Mayor Esther Manheimer, who also sits on the board of MSD. Manheimer, in a phone interview on July 11, acknowledged the same governance correction that McGrady, Moffitt and Aceto pointed to in HB 1009. “What it really means,” she said, regarding the existing potential for Henderson County to ask to join MSD, “is that Buncombe County keeps three [representatives] and Ashesville keeps three.” Otherwise, Asheville would drop to one.
“I wondered if the Legislature would force Henderson County to come in,” she admitted. That didn’t happen, although as she acknowledged, “There’s a whole host of issues going on with that.”
“The other part [of HB 1009] authorizes MSD to operate a water system — should it happen to come into one,” Manheimer said with a slight pause and audible chuckle.
Enter, Doug Bean — former Asheville city manager, who has since spent 16 years as director of the Charlotte-Mecklenberg Utilities and is now director of government services for Raftelis Financial Consultants, the company the city has now hired to handle communications regarding water system finances as the MSD financial study progresses.
Meanwhile, just down the road, Henderson County Manager Steve Wyatt described HB 1009 from a different perspective. “The board [of commissioners] has not taken a position on a merger with MSD,” Wyatt said up front — although there has been informal discussion over the years. “I have communicated to the chairman that the board will need to have a discussion about the issue soon,” he added in a telephone interview.
The most obvious opportunity for any Henderson County membership in MSD, according to Wyatt, would be for the Cane Creek Sewer District to propose a merger, since MSD now services its lines for treatment. But Wyatt thinks that the changes written into HB 1009 do not address his county’s need for “meaningful representation” in such an event.
“I don’t have a number, but it ain’t two,” Wyatt said, “and you can quote me. I told the board that two members falls short of meaningful participation. We’re not interested in taking slots away from anybody; however, if the board could be expanded,” said Wyatt, it could potentially give the county and its subdivisions a more substantial voice at the table.
Moffitt, in answer to that criticism, said he felt the bill was “a good and fair start.” The statutes were written to evolve, he said. ” Nothing is going to be perfect, but this is a start.”
by Nelda Holder, contributing editor
Editor’s note: Additional coverage of the issues surrounding HB 1009 and MSD’s community role will be available in an upcoming print edition of the Xpress.