Asheville Water Issues Forum
by Moe White
On February 13 the League of Women Voters held a public forum at Grace Covenant Presbyterian Church to address legislative plans to give Asheville’s water system to a public or private authority. The panel included NC Rep. Chuck McGrady (R-Henderson County), Asheville Vice-Mayor Esther Manheimer, Metropolitan Sewerage District (MSD) chairman Steve Aceto, former County Commission Chair Gene Rainey, and privatization consultant Ted Volskay.
Rep. Tim Moffitt (“R-Buncombe County), who originated the legislature’s study committee, did not attend. Instead, McGrady outlined the committee’s role, asserting that it is merely studying the possibility of an independent authority (or combining it with MSD), that no decisions have been made, and that he has “had no discussion, and heard no comments from anyone about privatization.”
Manheimer made clear City Council’s opposition to legislative action.
“The water system has huge assets — reservoirs, several thousand acres
of land, the purification plant, our delivery system — and we’ve run
that system very, very well,” she said. She added that City Council may
soon formally affirm that “Asheville is not interested in a new
structure for our water system.”
A regional agreement with
Buncombe and Henderson counties ended in 2005. The city then negotiated a
$40-million-dollar bond issue to upgrade and replacement pipes, many
more than 50 years old: a project that has now been underway for several
years, and that city taxpayers pay for.
Rainey said the legislative study of the region’s water should raise four questions:
• Should a new water authority be controlled by a new agency?
• Will the city be compensated?
• How will the board be chosen?
• Should a new authority be regional, encompassing all six municipalities in Buncombe County, as well as surrounding counties?
Rainey
pointed out that the region remains one of the poorest in the country
and that the French Broad River is the lifeblood of the region.
“Buncombe County is the seventh largest county in the state, and we have
one-third of the population of Western North Carolina. And eighteen
percent of the county’s population is hungry. This entire region will
benefit from a regional authority that would use resources equitably.”
Aceto
explained that the MSD board comprises appointees from all six towns
and Buncombe County itself, making it politically accountable, though
legally independent. Many decisions are determined by county choices on
growth, development, and zoning. As an “enterprise agency” it is
responsible for its revenues and expenses, long-term investments, and
managing its assets, but all revenues remain in the county.
During
the public speaking period, Asheville Mayor Terry Bellamy reiterated
that historically the leadership of the water system came from
Asheville, not the state. She also reminded the audience that the
original bill said Asheville’s water system would be handed over. Though
rewritten since then, she said, “It still looks like a ‘taking’ from
our perspective. There is no reason for control of our water system to
be taken away by the legislature. We have managed the system well, and
we continue to do so.”
Rebutting the argument that all water users
are “invested” in the system, former mayor Russ Martin noted,
“Ownership is with the City of Asheville and its residents, not its
customers. Paying bills doesn’t make for any ownership interests. If it
did, I’d own Progress Energy, because I pay my electric bill every
month.”
Community activist Barry Summers said that privatizing
does not depend on transferring ownership. Asheville could continue
ownership while contracting out management, allowing a private manager
to set prices, establish its own profit margins, and take management
fees. Such structures leave the public with paper ownership but no say
in management. Summers said, “Under North Carolina’s Constitution, the
legislature can force the city to sign such a contract.”
The committee has returned to Raleigh and is expected to announce its recommendation this spring.
History of Asheville’s Water System
Metropolitan Sewerage District (MSD) Chairman Steve Aceto offered a thorough history of the historic bankruptcy of Asheville in 1930, which ultimately led to both the Sullivan Acts, which keep the city from charging different rates to water users inside and outside the city limits. Bankruptcy also led to the establishment of the MSD.
The city, which in 1930 was the second largest in the state, faced a crisis when local banks failed, leaving the municipality completely broke. The mayor committed suicide, the entire City Council and County Commission were indicted, and 300 animals in the City’s Recreation Park Zoo starved to death due to lack of funds. The state legislature established the Sullivan Act to allow revenue from the water system to pay for defaulted bonds; as a result, for 30 years all revenues from the system went to pay back the bonds rather than being invested in infrastructure. Because no lender would accept Buncombe County bonds in the 1960s, the legislature established the new MSD to issue bonds that would enable it to build a water treatment plant.
“Long-time residents,” Aceto said, “will remember when the French Broad River was so polluted that historian and author Wilma Dykeman wrote a book about it. Sewage was collected, but there was no treatment plant, and a lot of it went right into the river.
“But in 1990 MSD took over the collection system as well, and in the 20 years since then has put in new lines all over the county. We’ve cleaned up the river to the point that it’s now certified for recreation. People who have lived here a long time are still surprised that, today, people are swimming in the French Broad.”
Aceto said, “The MSD has taken no position on the water system questions before the legislature; we spoke to the legislature only to provide data about our operations and information about our structure.” A few minutes later, he added, “Collaboration is essential to regional growth; as you see by our history, it’s also part of our tradition. It’s in our DNA.”
