Water compromise may emerge at Council meeting

A bill that would allow Asheville to spend 5 percent of water revenue on non-water infrastructure is currently in the general assembly, according to a legislative update to be presented at tonight’s meeting.

That bill would represent a break from the current Sullivan laws which restrict the city’s use of water revenue, but is only one point in a compromise put forth by Council Member Brownie Newman in February.

As a result of that news, Newman plans to ask Council to reaffirm an amended proposal that would also allow for the use of water in voluntary annexation negotiations for certain properties, another action restricted by the Sullivan Acts.

Newman announced that intention tody in an e-mail, stating:

“I believe that Asheville’s inability to grow through Voluntary Annexation is one of the single greatest threats to the economic health and viability of Asheville.”

Council member Carl Mumpower, who in February called the proposal a “surrender document,” responded with an e-mail of his own, asking for a discussion of other options.

Mumpower has suggested that the city stick to its intention to assume full control of its ability to charge differential rates and use the water asset as an annexation tool, but to find a way to ease them in over a matter of years. Failing that, he says, he wants to explore a plan whereby Asheville separates the water reservoirs owned by the city from the water lines, which would be run by an independent authority, giving Asheville control over the supply itself.

Today’s e-mails from Newman and Mumpower are below. The legislative bills amending the Sullivan Acts are HB 702 and SB 552 (click on link to read the full text).

Brian Postelle, staff writer



If we are going to discuss the surrender of our water system this evening, please consider this a formal request for time to discuss other options.

That said, giving up full control of a 1 billion dollar city asset should not be hidden in a broader discussion of legislative agendas.

This issue deserves definition as a separate agenda item that is properly announced to the public in advance of Council discussion.

Carl Mumpower
Asheville City Council

In a message dated 4/14/2009 10:11:09 A.M. Eastern Daylight Time, Newmanasheville writes:
Mayor and Council,

Please find below a copy of the memo that was shared at City Council earlier this year regarding a proposal for revisions to the Sulivan Acts that would allow Asheville to use water resource funds to improve public infrastructure directly related to water line construction projects and allow Asheville to grow through the process of Voluntary Annexation.

We will be reviewing our legislative agenda at the meeting tonight. I would like to request that Council affirm this proposal. As indicated in the legislative information prepared by Bob Oast, there has been a bill introduced by our legislators that addresses the infrastructure funding but not the Voluntary Annexation policy.

I believe that Asheville’s inability to grow through Voluntary Annexation is one of the single greatest threats to the economic health and viability of Asheville, in the near term and especially over the long term. The lessons of history are clear on this point. Cities that cannot grow die. And if the only way that Asheville can grow is through the poisonous and litigious process of Involuntary Annexation, we will never be able to grow in a manner that is healthy for our community or the region.

After Council’s previous discussion and approval of the proposal printed below, Councilman Davis, Mayor Bellamy and I met with Senator Nesbitt and Representatives Goforth and Whilden. There was agreement on most of the items included in the proposal. The major substantive difference of opinion was on the issue of whether there should be a strict prohibition on Voluntarily Annexation of new developments that are non-contiguous with the city limits.

The proposal below is identical to the one approved by Council earlier this year, except for the two underlined sections. One change clarifies the size criteria for new developments that will require a Voluntary Annexation Agreement—16 residential units or 10,000 sq. feet of commercial facilities. The other change addresses the issue of non-contiguous properties.

Thank you for your consideration of this proposal. I look forward to discussing it with you this evening.

Brownie Newman,
Asheville City Councilman


Proposal to settle the Sullivan Act dispute


• City of Asheville agrees there will be no differential rates charged for water customers inside and outside the city limits.
• The Sullivan Acts will be modified to allow Asheville to operate under the Voluntary Annexation policies that apply to all other cities in North Carolina. Asheville is open to policies to assure Voluntary annexation will not be abused. Potential policies could include:
• No more than 5% of the city properties could be non-contiguous with the primary city limits unless specifically authorized by state legislation (such as the airport property). Existing state law allows cities to have up to 10% non-contiguous.
• No properties could be Voluntarily Annexed into the city unless they are within one-half mile of the city limits. However, Asheville could still require other developments that more than a half mile from the city limits to sign an Voluntary Annexation agreement with the city if they wish to connect to city water lines, so that the city can bring them in to the city once the city has grown outwards to the point that the development is within one-half mile of the city.
• Developments of less than 16 residential units or 10,000 square feet of commercial space would not be required to enter into a Voluntary Annexation Agreement with Asheville in order to access municipal water services.
• No existing customers of the water system could be required to sign an annexation agreement as a condition of continuing to receive water service. The policy would apply only to new developments.
• New developments that are located closer to another incorporated town or city than Asheville could not be required to sign a Voluntary Annexation Agreement with Asheville unless there is a “sphere of influence” agreement between Asheville and the other town or city.
• Members of the legislative delegation have indicated they may be unwilling to allow Asheville to Voluntarily Annex any properties that are not physically contiguous with the city limits. There are significant new developments being constructed very close to the city limits that should be incorporated into the city but which, due to topography or the presence of other unbuil dable lands, are not contiguous with the city limits. While the City Council is open to policies that strictly limit annexations that are non-contiguous, an outright prohibition is poor public policy and Council does not support it. However, it would be even more disappointing to not include any Voluntary Annexation policy in the revisions to the Sullivan Act because there is a difference of opinion about this specific point.
• Asheville will not be allowed to divert Water Funds to the General Fund. However, up to 5% of Water Funds may be used for infrastructure improvement projects directly related to water line replacement (such as improving streets or sidewalks torn up during the line replacement process).
• City and County continue discussions about opportunities to work together to be partners on infrastructure and facilities that serve the larger region. The previous water agreement included the following City/ County Partnerships:
• County reimbursed Asheville about $1.7 million annually for law enforcement services provided outside the city limits that are not provided in the city.
• The County was financially responsible for the Nature Center, McCormick Field and the golf course.

The Sullivan Acts II and III.
In 2004, the City Council decided to dissolve the Water Agreement that had governed management of the system since the early 1980s. In response, members of the legislative delegation passed Sullivan Acts II and III.

Sullivan Act II prohibits the city from charging differential water rates.
Sullivan Act III prohibits the city from using Water Funds for any purposes unrelated to management of the water system and prohibits Asheville from using Voluntary Annexation of new developments that wish to access City water services.

Benefits of the proposed settlement:
The proposed settlement represents a compromise. Neither party gets everything they wish. However, it does address the core concerns identified by the City, County and legislators over the past several years.

Benefits of the settlement to Asheville:
·      The water system will be managed by the City, which has demonstrated good stewardship of the system over the past several years, investing tens of millions in long overdue water infrastructure repairs.
·      Voluntary Annexation will allow the city’s tax base to grow as the area urbanizes.
·      The city will have additional funds to upgrade streets and sidewalks as part of the process for replacing old water lines.

Benefits of the settlement to non-city residents:
·      Assurance that water rates will be no higher for non-c ity customers than for those who live in Asheville.
·      Assurance that for all existing customers, water cannot be used as a condition for annexation into the city.
·      Assurance that payments made for water services cannot be diverted to the City’s General Fund.

Benefits to the water system:
·      Assurance that the infrastructure will be fixed as funds cannot be diverted to non-water system programs.



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6 thoughts on “Water compromise may emerge at Council meeting

  1. John

    30% of Asheville’s water leaks out into the ground because the underground pipes are toast. Now they want to spend water revenue on things other than water infrastructure.

    This same strategy is why our roads and bridges are in the dismal shape they are … diverted funds. In a few years, they’ll tell us that they need more money because of an infrastructure emergency. Business as usual in our broken political machine.

  2. James

    John…the 5% non water related infrastructure use they are talking about is still tied to water if you read the compromise article:


    It would be used to repair side walks and roads from water line replacement which currently has to be funded out of the city budget.

    I personally don’t think there should be any compromise. The city should file an appeal with the US Supreme court who I believe would ultimately rule in the cities favor. It’s either that or the state and county should have a bond referendum and buy the system from the city at fair market value and assume all assets, debt, and liabilities.

    After the purchase the county and state could then turn it into an independently operating system like MSD.

  3. John

    Sidewalks are not water infrastructure. I understood that part. The city budget is supposed to allot for that. I stand on my ‘diverted funds’ position. You have to watch the fine print.

    However, I agree that a MSD type model is the ideal solution.

  4. John

    James … I agree that a MSD type entity is the best long term solution. Unfortunately, there is big push back to that.

    My point on the 5% is that the money for sidewalk repair etc has always been in the city budget. They are supposed to allot budget dollars to that line item. Now they are looking to get that money from somewhere else by diverting funds that are supposed to go towards fixing the pipes. It may just be 5% of the pipe budget, but now the pipes will get 5% less attention. Its a bad idea.

  5. I see your point as well but I also think when you tear up a road up (Biltmore Ave near Mission Hospital is a good example) to replace water lines then it would make sense that the costs of repairing the road or sidewalk correctly should be included in the cost of replacing the water lines. That way the funds that they currently are using for that could go to fix pot holes….lol… and the city might not have such a bad budget shortfall.

    Atleast since the city took over the water system long overdue repairs are now being made. Instead of having a 50% water loss they are now in the thirties and most experts say the best they can hope for due to the amount of pressure required in the system to pump water up all those steep slope developments out in the county…j/k.. is around a 20 to 25 percent loss of water.

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