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Court upholds taking of Asheville's water system

The city of Asheville has lost its battle with the state Legislature over the transfer of its water system to a regional utilities authority — an outcome that increases Henderson County's power in the management of water resources.

The state Court of Appeals on Tuesday threw out a trial court victory for the city of Asheville, which had argued successfully at that level that the Legislature’s decision was an unconstitutional overreach. The legislation merged the city water system and Henderson County’s Cane Creek Water and Sewer District with a newly formed Metropolitan Water Sewerage District that would serve the city of Asheville and Buncombe and Henderson counties.
“It will mean that our efforts to create a regional sewer and water authority has been upheld and that hopefully the city of Asheville will not be in a position to use its power over water as a weapon against neighbors,” state Rep. Chuck McGrady said of the appeals court ruling. “I’ve been about trying to put in place a regional water and sewer authority for some period of time. That was the focus of a lot of positive feelings in the ‘90s but then by the end of the 2010, ‘12, ‘14 period the city was very much opposed to the transfer of what it views as its water asset.”

In a joint statement,  state Sen. Tom Apodaca and McGrady praised the decision.

"We are gratified by the unanimous decision of the North Carolina Court of Appeals upholding the constitutionality of the law creating a metropolitan water and sewerage district for Buncombe County, Henderson County and the City of Asheville," the two Hendersonville Republicans said. "Essentially, the court recognized the legislature's power to organize and regulate its municipalities and other local governments.

The legislature created the regional water and sewer authority following decades of well-documented disputes involving water and sewer systems. The legislature decided that a regional solution for public water and sewer for large public systems was the best way to provide the highest quality water and sewer services.

"We are particularly pleased that the court noted the long contentious history with customers residing outside of Asheville's city limits and that the transfer of the Asheville Water System might provide better governance for the system," the joint statement said. "One of our primary interests in this legislation was to establish a water and sewer district governed by a local entity whose representatives are selected from all areas served by the system, as opposed to being governed by Asheville's city council."

“Former North Carolina House Representatives Tim Moffitt (R-Buncombe) and Nathan Ramsey (R-Buncombe) played an important role in the passage of this legislation, and we know they are gratified by the Court of Appeals decision,” the statement added, referring to the two legislators who lost their re-election bids in November 2014.

The appeals court brushed aside five cases the city of Asheville cited in arguing that the Legislature’s action violated “the law of the land.” The state had no “rational basis” to transfer the water system to another political subdivision and could not legally take the asset without paying for it, the city argued.

The state Supreme Court “has recognized the authority of our General Assembly to divest a city of its authority to operate a public water system and transfer the authority and assets to a different political subdivision,” Appeals Court Judge Chris Dillon wrote for the 3-0 ruling. Similarly, the U.S. Supreme Court has ruled that the Constitution does not bar such an action. The cases cited by the city weren’t on point, the appellate court said.
“It’s pretty significant,” McGrady said. “In terms of Asheville and Henderson County, it relates back to the old water authority we were a part of and Asheville abolished.”
The Legislature’s action merged the old Cane Creek utilities district, combining it with the Asheville water system and MSD. The MSD is governed by an appointed board made up of members from Henderson and Buncombe counties and the city of Asheville.