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City prepares to fight for its water system – again

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Case will go to  NC Supreme Court

In June, 2014, a state superior court declared that the North Carolina General Assembly’s move to legislate possession of the water system, away from the city and into the hands of the Metropolitan Sewerage District was unconstitutional. The lawmakers challenged that verdict. On October 6 the state Court of Appeals reversed the lower court’s decision and ruled in favor of the general assembly. Last week, at its first meeting following the verdict, city council voted unanimously to appeal.

The city’s move, which was anticipated, has sparked a surge of public interest in the legal questions underlying the dispute: who actually owns the water system, including its three component reservoirs at Bee Tree, North Fork and Mills River? Does the general assembly’s legislative power trump ownership rights? And what difference does it all make for rate payers, many of whom do not live in Asheville proper but still get their water from the system?

The City of Asheville has deeds to the property on which the reservoirs and pumping stations are located. “Deeds are important,” said former city risk management supervisor John Miall, “If I have a deed for a piece of land I cannot be dispossessed of it without due process and some sort of compensation. Arguably ‘the people’ still own it, but so do people who never paid a penny in fees or taxes.

“The City has been arrogant and has exercised bad decision-making [in administering the water system] at every turn,” Miall said. “ But the taking of the land runs contrary to everything I ever thought I knew about property ownership. Can the State come to you or me and say, ‘We’ve been watching you and this land for many years. We don’t think you’re using it to the benefit of everyone who needs it, so we are going to take it from you.’ ?”

And in fact, by enacting the 2013 measure that stripped Asheville of its right to operate the water complex, that was exactly what the General Assembly did say: that, in effect, the city was not exercising due diligence, so the state, as owners-in-fact of the water itself, would take the running of the water works away from the city and place it in the hands of an entity that would be duly diligent – in this case, it said, the MSD.

“Asheville is simply a legal steward for the rate-paying owners of the water system,” said local conservative activist Robert Malt. “Unfortunately, Asheville has abused this authority, and now the stewardship must be transferred to a more responsible entity for the sake of good government.”

Ironically, this was the same legal argument the city used to leverage its 2014 takeover of the Pack Place Arts and Cultural center.

So the question to be determined in law appears to be: can the state, which owns the water, wrest the entire system away from the city, which owns the acreage and the physical plants, which in turn are useless without water to process?

The answer to that question, legal experts say, could be precedent-setting; certainly the outcome of the case will have ramifications statewide. Going into the hearing that ended in the overturning of the pro-Asheville ruling by Superior Court, the North Carolina League of Municipalities, which represents some 540 cities statewide, filed a “friend of the court” brief with the appellate court supporting Asheville’s position that the general assembly’s actions were unconstitutional. The town of Wilson did likewise, saying that a ruling in favor of the general assembly would have a chilling effect on cities’ investing in upkeep of their infrastructure.

But the appeals court clearly saw the case in a light favorable to the legislature. Summarizing the judges’ 3-0 decision, Judge Charles Dillon wrote that the cases cited by Asheville in presenting its appeal were not germane to the issue itself. Dillon said 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.”

The fact that Dillon, speaking for the appeals court, took note of the state supreme court’s actions in similar cases did not appear to bode well for Asheville, which is headed for the Supreme Court next.

Directly or indirectly, city taxpayers stand to lose, according to local politicos who have criticized the city for allegedly using its water revenues as an all-purpose slush fund to finance pet projects. “The city has been using FTEs to get all their feel good projects completed. Council will either have to cut projects or raise taxes. They will raise taxes and blame the NCGA the whole time,” one said.

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