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City, county hurtling toward war over water system

Hendersonville's water system, with 26,000 customers, is the 11th largest in the state. Hendersonville's water system, with 26,000 customers, is the 11th largest in the state.

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Hendersonville City Council members are bracing for what they believe is an effort by a Henderson County commissioner to force the city to cede control of its water system to an independent authority and they vow to fight any such effort.
The Board of Commissioners on Wednesday is scheduled to take up a request by Commissioner Bill Lapsley to discuss public water systems in Henderson County. In interviews, Lapsley and board Chairman Michael Edney declined to provide specifics of what Lapsley has in mind. The city of Hendersonville is ready to fight any effort to abandon the water system to an independent authority or to give up control to the state Public Utilities Commission.
“We all are in agreement,” said Councilman Ron Stephens. “They are just off on another twig. We have a very strong system. I compliment (city manager) John Connet and the water department for doing a good job of planning and providing a solid financial setting for our water and sewer system not only currently but in the future.
“Several of the things Lapsley has said to mayors are just plain wrong and I don’t why he would do that because he used to work for the water department,” he said. “It looks like the county is sitting around trying to find out ways to take on the cities and towns and so forth. It’s several things. They have gotten so involved in Hendersonville High School, they’re not providing animal control. Even though we all pay the same taxes, they’re not going to approach the dog issue inside the towns, and now this water system. I just don’t know how they think we would support this.”
The matter was considered urgent enough to trigger a news release, which the city issued on Tuesday morning, the day before the commissioners’ regular mid-month meeting.
“It has come to the attention of the City of Hendersonville that at the Henderson County Board of Commissioners regular meeting on Wednesday, March 15, 2017, they will consider a resolution requesting the City to turn over its utility to a regional authority or become a regulated utility under the oversight of the North Carolina Public Utilities Commission,” the city said. “Furthermore, it is the City’s understanding that this initiative directly stems from Commissioner Bill Lapsley’s belief that the public interest is not protected under the City's ownership of the utility system.”
Commissioner Lapsley has recently met with Henderson County municipalities and other political leaders to discuss his proposal. During those meetings, the city said, he raised concerns about the city’s long-range planning, its inside and outside rate differentials, water and sewer expansion policies, a 2000 Mud Creek Settlement Agreement, financial management and customer disenfranchisement.
“The City of Hendersonville contends that Commissioner Lapsley’s facts are misconstrued, taken out of context or simply wrong,” the city said in the news release, issued by the city manager. “The following are examples of proactive initiatives or improvements made by Hendersonville Water and Sewer over the last four years:
• Development of water system master plan and hydraulic model that will guide system growth and improvements until 2040.
• Water and sewer rates that are lower than Henderson County's Cane Creek Sewer District and most water and sewer utilities in the region.
• Proactive water and sewer extensions at no cost to customers that have resolved public health issues in the Dana community and promoted economic development in Mills River.
• City staff have made presentations to the Henderson County Board of Commissioners and municipal governing boards regarding the water and sewer system and meets regularly with Henderson County staff and other stakeholders to discuss utility issues and concerns.
• The Hendersonville City Council has adopted strong financial policies the require reinvestment of cash reserves into the system.
• There has been no public outcry from customers requesting a change in the governance of the utility system. The City of Hendersonville has a strong customer service focus and all customers are treated fairly regardless of whether they live inside or outside the City of Hendersonville.

“In conclusion, the City of Hendersonville believes any action to force the City into a Water and Sewer Authority or under the oversight of the Public Utilities Commission is overreaching and unjustified. Henderson County has never made any significant efforts to build a countywide water system and has indicated that they would like to get out of the sewer business. The City of Hendersonville believes this action is politically motivated and not in the best interest of the Hendersonville Water and Sewer customers."

To bolster its response, the city issued a 2,100-word point-by-point rebuttal to each of Lapsley's concern.
City Councilman Jeff Miller said he and Mayor Barbara Volk and City Manager weare summoned to a meeting at the Historic Courthouse with Lapsley, Edney and County Manager Steve Wyatt. During the meeting, Lapsley presented what Miller regarded as an ultimatum to go along with the authority or lose the water system through an act of the Legislature.
“I don’t want to see another government agency (the utilities commission) of appointed officials in charge of the water and sewer system for the city of Hendersonville and Henderson County,” Miller said. “If you can show me a legitimate reason then I’ll talk to you but honestly I can’t even remotely find anything (to justify it) unless you go back 30 years, 20 years and look at some of the actions of groups back then that were hesitant to expand.
“We’ve been more than willing and have pro-actively involved bringing all the players in our whole county in working on long-range planning,” he added. “Even before I got on council John was working towards that cause. I certainly have been focused on it. There’s nothing more important we can do in our charge than taking care of our water and sewer system and to deliver it in a planned unified long-term plan for the whole community.”
The comments of Stephens and Miller seemed to portend a major collision of policy between the county and city that at its worst could undo the past several years of cooperation and political harmony. Miller and Lapsley were friends, political allies and partners on several civic projects, before either was elected to office.
“What really got me about this was how Bill Lapsley presented it,” he said. “He asked that the mayor and myself and John meet with he, Mike Edney and Steve Wyatt, and he starts immediately reading off a list of things that he thought we in the city of Hendersonville weren’t doing properly. He said, ‘If you won’t form a water authority with the county, we have already talked to Chuck Edwards and Chuck McGrady and we’ll request that the city be put under the oversight of the Public Utilities Commission. Basically, they were trying to use a very heavy handed method.”

In an email, McGrady confirmed that he has spoken with Lapsley and city officials and appeared to side with Lapsley, at least on the point that a large majority of the city water system's customers live outside the city.

"I have spoken with Commissioner Lapsley, and have spoke with City Manager Connet, Mayor Volk, and Councilman Miller," he said. "About 70 percent of the people receiving water from the City are not city residents. Therefore, they don't really have any representation if they have problems with the water system. I'm aware of the issue, and aware of both the city's and couny's viewpoints. This issue closely relates to the issue on which I am working: the Asheville water system. That system has about 40 percent of its customers outside the municipal boundaries.

"I'm talking with various local officials, and I expect to introduce legislation which will address issues which originally related to the water system operated by Asheville."

Stephens and Miller both said any time the Board of Commissioners or the county Partnership for Economic Development has asked for waterline extensions, the city has responded, sometimes at its own expense, Miller and Stephens said.
“I don’t know of a case where we’ve refused,” Stephens said. “We have certainly done that and we’ve worked closely with Andrew Tate with new industry that’s thinking about coming here. As far as the water and sewer is concerned to help bring in new industry, we work closely with them.”

Miller and Stephens said the council is unanimous in its determination to fight any water system takeover and that the city is prepared to answer Lapsley's concerns point by point.

"I took great offense to it," Miller said of Lapsley's presentation, which the city regarded as a demand backed by a threat. "I was furious. I let him know that as long as he had that hanging over my head I wouldn’t even sit at a table with them. We’d take our chances. He said we’re not doing anything wrong but somewhere down the road we might. This council was good but there might be a bad council sometime. He said, 'I’d rather address it now.'

"There’s a lot of disadvantages to being under the Public Utilities Commission authority," Miller added. "We would not be able to respond quickly to a request for water and sewer lines that has potential for the development of a good business. There’s real disadvantages of trying to jump throuth their hoops."

Miller and Stephens denounced the county's actions as counterproductive and said the water system demand was consistent with what they perceived as government by bullying — whether it's the Hendersonville High School dispute, animal control or law enforcement patrols inside cities.

"The style they are governing with is not good," Miller said. "This is not how efficient government runs. It seems to be that way at the federal level and the state level. It’s the bully pulpit or nothing."

Lapsley would say only that he did want to discuss the water systems and that everyone would learn his views on Wednesday morning.

"There’s an item on the agenda for tomorrow morning where I’m going to talk about public water systems operating in Henderson County," he said. "They can say whatever they want. You’ll hear my thoughts. I believe I have unanimous support from the county commissioners.” Asked whether that meant support for forcing the city to agree to an authority, Lapsley declined to be more specific. “Tomorrow you’ll get my take on public water systems operating in Henderson County.” Asked whether he was aware that he had lighted a bomb fuse leading, the commissioner said: “They do what they gotta do and I’m elected to do what I’ve gotta do. You’ll get the details tomorrow.”

Laurel Park Mayor Carey O'Cain said he wanted to see Lapsley's proposal in writing before commenting in depth.

“I think the city is handling it pretty well,” he said of the water system.

Mills River Mayor Larry Freeman said Lapsley had also met with him and Town Manager Jeff Wells.

“I don’t think Mills River really has a dog in that fight,” Freeman said. “We’ve got some of the best water in state of North Carolina and we’ve got treatment plants on either side of our town hall. What they do with the water once it’s out of the town of Mills River is really out of our hands.”

Freeman added that Hendersonville has been responsive to his town’s needs.

“I will say we have actually had a good relationship with the city of Hendersonville ever since we’ve been in town,” he said. “They put the waterline up Schoolhouse Road and made it possible for Tri-Hishtil to locate here at no cost to the town of Mills River. We’ve had no issues at all.”