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Meeting finalizes call for MSD to take over water system

Rep. Tim Moffitt, chair of the Metropolitan Sewerage/Water System Committee, talks with Asheville’s Water Resources Director Steve Shoaf on Monday, Jan. 23. The committee met for the last time Thursday and finalized its draft recommendations. Lissa Gotwals/Carolina Public Press.

RALEIGH — A state legislative committee finalized on Thursday its recommendation that control of Asheville’s water system be transferred from the city to the regional Metropolitan Sewerage District. But the report to the state legislature also encourages local officials to reach a solution on their own, and warns that legislative action will be taken if they fail.

The 10-minute meeting was the fourth and final gathering of the Metropolitan Sewerage/Water System Committee, concluding a process that began last May when Rep. Tim Moffitt, R-Buncombe, filed a bill to turn Asheville’s water system over to MSD immediately.

He later changed it to a “Study Bill” in the face of opposition, and the modified version passed the N.C. House and Senate in early June. The bill called for four exploratory meetings to determine the proper course of action for Asheville’s city-controlled water system. Presented options were that the system to remain in city hands, be transferred to the MSD or be governed by a new independent organization.

A draft report  (full document also available below) released last week again advocated that the city-controlled water system be transferred to MSD. But it also recommended that “the 2013 Session of the North Carolina General Assembly consolidate the Public Utility Water System with the Metropolitan Sewerage District of Buncombe County. Should the interested governments craft their own solution for consolidation…due consideration would be given to the local plan.”

“My hope is that it will be resolved locally,” Moffitt said after the meeting Thursday. “We moved it back down to the local level where it should be, and we’ve asked them to reignite a spirit of statesmanship and local cooperation and solve this 80-year-old problem. And if they don’t go forward in good faith, if they choose not to follow our recommendations, then we’re prepared- if needed, not preferred- to help them along that path.”

Two amendments were added to the draft resolution before the final vote on Thursday. The first amendment encouraged local leaders to address privatization concerns as they worked toward a solution. The second preserves Buncombe County’s MSD board representation in the case of expansion.

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The four committee members present — Chairman Moffitt, Rep. Chuck McGrady, R-Henderson; Rep. William Brawley, R-Mecklenburg; and Rep. Tom Murry, R-Wake — approved the report and recommendations unanimously. The fifth member and the lone Democrat, Rep. William Brisson, D-Bladen, was absent. Brisson also missed the first meeting in January.

‘Hard issues, fought over for decades’

Moffitt expressed optimism about the possibility of a local resolution before the NCGA convenes in January, and a report in the Asheville Citizen-Times on Wednesday noted that MSD board members met this week to discuss a possible transition.

But McGrady, speaking after the meeting, was less optimistic.

“These are hard issues, and they’ve been fought out over, literally, decades, and there’s not a lot of good faith,” he said. “I don’t know. I’m concerned with the tone of the conversation with my neighbors in the north, Asheville, and how politicized the whole discussion has gotten.”

The motivation for the original study bill, according to Moffitt, stemmed from research into the city of Asheville’s involuntary annexation of surrounding areas. He argued that the relationship between Asheville and Buncombe County has been frayed by these annexations, and it hearkens back to water policy.

Because of the Sullivan Act of 1933, Asheville is one of the few cities in the state that can’t charge higher rates for water to areas outside the city (Charlotte is the other). The Sullivan Act was upheld in the state Supreme Court, and new versions were passed when a regional water authority was dissolved in 2005. Asheville publicly declared its intent to continue legal challenges of the Sullivan Act’s constitutionality.

Moffitt admitted after the meeting that the recommendations, along with any future legislation, are a preventive measure against potential future abuses — including disproportionate water rates and “forced” annexation of areas outside Asheville — rather than a reaction to current practices.

“I think that the professional staff that works within the water resources department do an exceptional job,” he said. “I think the concern that I have is that the city will contest the rate structure again in an attempt to charge higher rates for those people outside the city than those inside the city. And I think based on that threat…we need to take action to address that and really move it to a regional authority where that conversation doesn’t need to take place.”

“Sometimes the stars align,” McGrady said. “There’s no one issue here that has given rise to why we’re about this now.”

Brawley struck a somewhat different tone, saying he thought there were already issues of unfair service to outlying areas.

“I was disappointed with the number of people–particularly in elected office–that seemed to view this whole thing as something they owned and that gave them power to control the lives of others,” he said. “There would have been unfair access. Basically, ‘do what we tell you, or you get nothing to drink… You have to do what we say or you won’t have water.’ That’s the wrong premise for a water system.”

Privatization, pricing concerns linger

But Stephen Shoaf, the manager of the Asheville city water system, prepared a memo that shows that since 2000, the water system’s rates have gone up just 16.4 percent, while MSD’s rates have increased by 41.1 percent.

“I don’t think anything in this hearing has suggested that the city of Asheville’s management of its water system today is a problem,” McGrady said. “But there’s a real fear between Buncombe County residents and city of Asheville residents as to pricing and future attempts to do away with the Sullivan Acts. We could revert to the history that has given rise to three Sullivan Acts, and the way to avoid that is to put in place a truly regional water authority.”

But many of Moffitt’s detractors believe that the ultimate goal is to privatize the water system. Since MSD’s board is appointed rather than elected (for a full breakdown of how the appointments work, go here), the possibility exists that if the makeup shifts, it could result in a board sympathetic to privatization.

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Carolina Public Press reported in March that private companies have already approached other small towns in western North Carolina about purchasing public water systems.

Moffitt vehemently denied this motivation.

“It’s actually easier for the city to privatize the water,” he said. “There’s nothing stopping them. My instinct is the whole privatization thing was strictly a negative tactic that they tired to use politically to discredit the work that we’re doing here. I feel bad for people that were conned.”

Moffitt also pointed out that one amendment adopted at the meeting encourages local officials to consider “what steps should be taken to prevent the privatization of this public resource.”

But Moffitt also chairs the House Select Committee on Public-Private Partnerships and co-sponsored a bill that attempted to transfer the Asheville airport to an independent a regional authority in 2011.

Additionally, while it’s true that nothing prevents the city from selling its water system, the fact that it’s run by elected officials presents an obstacle to privatization that would be eliminated with MSD’s appointed board.

For now, the water dispute is in the hands of Asheville and MSD. Whether the two can forge a resolution before January — and whether Moffitt has the votes to pass a bill in Raleigh if they cannot — remains to be seen.

Shane Ryan

Shane Ryan is a contributing reporter for Carolina Public Press. Contact him at shane.spr8@gmail.com.

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  1. If it costs more to distribute water onto the top of a mountain where the wealthier part of the population is inclined to live, and it costs less do deliver water to the central lowlying areas where the majority of the lower and middle income population lives, why wouldn’t it be appropriate for ANY utility to charge more for delivery to the higher/further areas? Without this differetial rate structure, customers with lower delivery cost are currently subsidizing those whom it costs significantly MORE for delivery. How is that fair?