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State Supreme Court will decide fate of Asheville’s water system

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North Carolina Supreme Court Chamber. Ownership of Asheville’s water system could be decided here once and for all.

Pair of repealed verdicts leads to legal showdown

The case is a “discretionary” one, meaning that the high court had the option of declining to hear it (as opposed to a “mandatory” case, such as ruling on a death sentence, which is guaranteed automatic review), and proponents of the lawsuit were quick to hail the court’s announcement as a victory in itself. Asheville Mayor Esther Manheimer, a lawyer herself, said she was “thrilled” by the decision.

“This is an important decision for all of the citizens of Asheville and all of the citizens of other cities across the state, who have invested millions of dollars into their own utility systems,” Manheimer said.

The city’s taxpayer-funded litigation has already cost about $700,000 and the Supreme Court hearing is expected to push that figure well past a million dollars. Some observers say that taking the water case to the high court level could be a costly exercise in futility. Others think Asheville has no choice but to give a Supreme Court appeal its best shot, if only for the sake of being able to say it has exhausted all its possibilities.

By consenting to hear the case, the Supreme Court will write the final chapter in the latest volume of the decades-long history of disputes as to who should control the city’s water supply and operating systems.

This latest round began in 2013, when the General Assembly passed a law stating that a public water system that meets certain criteria, and that also operates in the same county as a public sewer system, must be transferred to the sewer system for administration. If the state should prevail in the upcoming hearing, Asheville’s Metropolitan Sewerage District (MSD) would take over the water system’s operations and its business generally. Legislators have been quick to point out, however, that customers would notice no change in rates or services.

As soon as the 2013 law was passed, the city swung into action with a lawsuit challenging the new statute’s constitutionality. A lower court sided with the city, agreeing that the state had tried to fashion what amounted to a local law, which constitutionally it may not do. Round one to the city.

Then it was the state’s turn to appeal, which it promptly did.

Arguments before the North Carolina Court of Appeals last June centered around whether or not Asheville actually owned its water system to begin with. Deputy Attorney General I. Faison Hicks flatly asserted at the time that “Municipal water systems belong to the state,” basing his argument on the premise that both cities and their water systems are chartered by the state, and that, having created both entities, the state retains ownership of them. Hicks also repeated that the city was not actually “losing” its water system because it would continue to function and serve the city; it would just do so under direction of a different entity.

Hicks’ argument prevailed over that of Asheville’s counsel, Charlotte mayor Dan Clodfelter, who called the state’s argument a “peculiar contention” and said it was self evident that Asheville would in fact lose a valuable asset if it lost control of its water.

From a political standpoint, observers have said, the state’s ability to extract a favorable ruling from the Court of Appeals was interesting because it occurred after a major power shift in the state legislature. The 2013 bill’s two sponsors, former Buncombe County Reps. Tim Moffitt and Nathan Ramsey, are both Republicans and were both defeated in their bids for re-election later that year. Moffitt’s and Ramsey’s opponents, Democrats Brian Turner and John Ager, made the water battle a major campaign issue, charging the legislature had “run roughshod” over the city.

The pending legislative transfer of the water system to MSD was referred to as a “seizure” of city assets and Moffitt’s bill was painted as a piece of pure political spite. Not so, said the legislature; the city had done an irresponsible and slipshod job of managing the system, and it was up to the general assembly to fix things.

City councilman Cecil Bothwell refuted that claim last week in a comment on the Asheville Citizen Times’ announcement of the Supreme Court’s decision to hear the case.

“I’d note that when we had a water authority largely controlled by Buncombe County, maintenance was years behind,” Bothwell said. “We couldn’t account for half of the water (between leaks and un-metered water being delivered to friends of a former, unscrupulous City Manager – dating back to 1960 or so).”

Bothwell’s “unscrupulous city manager” remark appeared to refer to legendary city manager and political kingpin Weldon Weir, who served in that capacity from 1950 to 1968.

“Starting with some of the cleanest water in the world, it was so polluted by the time it reached the airport that planes were forbidden to tank up here. When Asheville took over the system we put $40 million into repairs. We have the highest level of certification available, and the high quality of our water is why we have such a successful craft brew industry here. Meanwhile we have corrected a rate structure that was implemented decades ago to deliver nearly free water to industry, paid for by residents, so that industry is beginning to pay its fair share,” Bothwell added.

The city gained full control of the water system in 2005, after the Regional Water Authority was disbanded. That same year the city went to court seeking relief from the restrictions of the 1933 “Sullivan Acts,” which set strict limits on water rates and prohibit municipalities from using extension of water services for annexation purposes. In 2007 Wake County Superior Court returned a verdict in favor of the state in county.

Speculation as to the success of the city’s appeal is already running high. As to the odds, an analysis of North Carolina Supreme Court decisions compiled by the Boston University School of Law shows that the state’s high court’s record of reversing lower courts’ decisions in discretionary cases is 55.6% — slightly better than even.

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