Asheville Water System Lawsuit Press Conference

Asheville City Council Press Conference on Water System Lawsuit
Council Chamber, City Hall
May 10, 2013, 11:30am

TERRY BELLAMY: Good morning, everyone. Thank you all so very much for coming out. Good morning. Good morning. Good morning. Thank you all so very much for coming out. Instead of having people sit down, I'm going to ask literally if my council, former mayors, former council members would come, and state legislators would come and stand with me as we start this out. [SPEAKERS ASSEMBLE BEHIND PODIUM] [APPLAUSE] Good morning, everyone. It's a pleasure to bring you all to city council this morning under unfortunate circumstances. It's great to see so many leaders here who have influenced the direction of our community. It's because of the leadership that you have behind me that the City of Asheville has seen unprecedented growth and that we've been able to weather the recession and the many storms our city has faced. I'm really proud that over the years that our representatives here behind me, we can say that the City of Asheville is a beautiful place not only to live and work but also to visit. It's because of the collective policies that were approved by the individual who are standing behind me, we have seen Asheville become one of the best places to live. And farmers have said that we are one of the best places to do business. But more importantly, we have one of the lowest unemployment rates in the state. We've added more jobs from January 2012 to January 2013 percentage-wise than any other city in North Carolina. [APPLAUSE] Yeah, you can clap about that. Because of this group behind us we have unprecedented partnerships we have created as a community. When we think about the vibrancy of Asheville and what makes us a unique community, it's because of the people behind me during the time that they've served, they've worked and they've built bridges, whether it's through the Land of Sky Regional Council, whether it's working with Pack Place, whether it's working with Buncombe County Commissioners, our leaders have committed to working with individuals to make this community better. And they've not only thought about the City of Asheville and the citizens of Asheville, they've thought about the citizens of Buncombe County and the millions of citizens from across this country and the globe who come to Asheville to visit our community. So, today it's troubling when we think about House Bill 488. It forces the loss of the city's water system. Forcing the transfer of Asheville's assets is harmful to our statewide efforts to encourage economic development and business growth. Stability and predictability in terms of municipal assets and agreements are extremely important in terms of how Asheville and North Carolina are viewed as a place to do business. Based upon the opinion of the state treasurer, those factors could impact the bond ratings in North Carolina which may increase the taxpayers cost to borrow funds for critical capital infrastructures. The uncertainties created by this move could also undermine the ability of other cities and towns to issue bonds because they would have to be disclosed to potential lenders in the future, impacting desirability in the bond market. Over the last few months, you've heard this council and myself talk about the issues impacting House Bill 488 impacting our city. I'm not going spend time talking to you about how bad this bill is. Today, I'm going to tell you that we are proud that we put the legal team together of Moore and Van Allen and Long, Park, Warren, Anderson and Payne and our city attorney Bob Oast to help us defend our water system. [APPLAUSE] I'm proud to let you know that we will file a complaint in Wake County Superior Court early next week to help us keep our water system. I'm really proud of the fact that Senator Martin Nesbitt is here standing with us and he's going to speak right now.

MARTIN NESBITT: Thank you and welcome all. I'm truly appreciative of the city taking this step. I take a little bit different approach to this. And I've said it over and over. This isn't my system, their system or Tim Moffitt's system to take or give away. This system belongs to the people of this county and it belongs to my grandchildren, their grandchildren and their grandchildren. We're number one in the state because we did the fundamentals right. We have good water and good sewer, clean air. And we all worked to produce all those. And at this point it's unfortunate, you're going to be saddled with the burden of representing all of the people of this county because this water system is vitally critical to the future of our people. And to move it from the possession of elected officials to an appointed board where Buncombe County and the City of Asheville, if they voted together, could not control. It's a taking of our assets and giving them to somebody else. We must fight and we must win and we must keep this water system under the control of elected officials so when we don't like what they do we can get redress of our grievances, which we have done periodically through the years. So, I commend you on this, I thank you for doing it, you're doing us all a service in this county and hopefully some of the other local governments in the area, and perhaps even the county, will join you in this effort. Thank you. [APPLAUSE]

TERRY BELLAMY: Next, we'll hear from Representative Fisher.

SUSAN FISHER: Thank you, Mayor Bellamy and thank you council members and former mayors and all of the people who are gathered here together today to, in one sort of united voice, tell the state that you don't agree with what's going on, with House Bill 488. Earlier in the week, once we knew that the bill had passed the House, that we had concurred with the changes that came over from the Senate, and by the way, when I say "we," I will qualify that, because I have every single member of my caucus with me in voting against concurrence and against 488. [APPLAUSE] But when we found out that it was going to go to the governor, I, and thanks to, and I have to say this over and over again, thanks to the volunteers here in Asheville and Buncombe County, I had a box full of petitions, 5,000 signatures, that I delivered with a cover letter to the governor, to Governor McCrory, asking him to veto this bill. And, as you know, he will let it go into law without his signature. And I believe that the reason he did that is because he knows how important it is to keep an accountability going with water systems, to keep cities intact. We have seen nothing but taking of power from cities over and over and over again in our committees in the legislature and this is just part of that scenario. So, I applaud the citizens of Buncombe and Asheville for sticking with this. [APPLAUSE] For fighting this. For valuing the city and for recognizing the real economic hub that we are in Western North Carolina. Because you're not alone. There are other cities across this state who could face the same issue and it was never more obvious to me than when Representative Stam from Wake County put in his amendment to protect the citizens in Wake County from being harmed by this bill. So, that tells you that this is not just about Asheville, it's about cities and town all over this state. So I thank you, I thank the citizens of Asheville and Buncombe for sticking with this fight and we will see it through to the end. Thank you very much. [APPLAUSE]

TERRY BELLAMY: Now we will hear from former mayors. I stand on their shoulders. It's been a pleasure talking to our former mayors about this issue. I'm going to start with Mayor Worley and then I'm going to go to Mayor Sitnick and Mayor Martin.

CHARLES WORLEY: Thank you mayor. I'd like to say it's a pleasure to be here. It's not really not that much of a pleasure under the circumstances but I am delighted to join in with all the other folks standing up here. It's really hard for me to figure out where to start. So much has already been said. So much has been published in the newspaper and on the television and on the blogs about how this will harm the City of Asheville and how it is not the right thing to do. I have to tell you that I'm actually in a state of shock. I would never in my wildest dreams have thought that the legislature would take an action to strip Asheville, or any city for that matter, of such a significant asset created well over a hundred years ago with the acquisition of property in North Fork that is probably worth billions of dollars today. It's unprecedented to me. It sets a very bad precedent for the rest of the state. I think every city and town in North Carolina has to be fearful of similar action if they, for whatever reason, create a controversy that displeases one or more legislators. And, indeed, we've already seen that starting to happen in a couple of other situations. Asheville has been a good steward of the water system. I have been heavily involved with the water system. During my tenure on city council and as mayor, I served as chairman of the water authority for a period of time and I can tell you we've been good stewards and we have done our very best to work with Buncombe County, work with Henderson County when that was appropriate, and there has been so much in the way of misleading statements made in connection with this controversy that have tried to set the stage for their taking that just are not true. As I said a minute ago, I just really cannot believe that this is happening to us. It's almost like a nightmare and I hope that we can prevail ultimately in the courts and in the court of public opinion to convince our legislators ultimately that this has been a very bad decision. Thank you. [APPLAUSE]

LENI SITNICK: First, I'd like to thank the mayor, my mayor, Terry Bellamy, for scheduling this meeting and I thank the city council for being right here with her. Thank the citizens of Asheville and Buncombe County for the amazing advocacy they've done on behalf of this community. And I want to especially thank all of those folks, the mayor, the council, the citizens for not making this a partisan issue. From the get-go that has been kept out of it and I am very proud of everybody for doing that because it's not a partisan issue. My printing machine did something whacky on me this morning and being the techno-nincompoop that I am, I didn't know how to correct it before I came over here, so, I will read this with as few halts as possible. You know, when I was mayor and would meet or speak over the phone with various company heads, business people, who were thinking about coming to our community to set up shop, the three prime issues they were concerned about for their companies and for their personal families was the water, the schools and the convenience of the airport. And, so, it tells you how important these issues are that are being confiscated and threatened by some folks in the state legislature. You know, recently Governor McCrory stated in referring to the federal government, he said that states should have more independence and flexibility in spurring its own growth. Well, eighty-six percent of the people in Asheville asked for the same consideration from the state and didn't get it. So I guess what's good for the goose is not necessarily good for the gander. I'll try not to repeat anything that's been said or that will be said so I'll keep my remarks limited. At its worst, the Moffitt-McGrady-Ramsey bill is discriminatory legislation because it uniquely, in many ways, targets just Asheville. Several cities, as Susan Fisher just mentioned, Wake County, were actually granted exemptions from this legislation by simply asking for it. This House bill offers no compensation to the taxpaying, ratepaying public that has invested over many years in a water system that's the envy of cities across this country. Even eminent domain has a return for its taking. This bill also allows for the privatization of the authority's administration in spite of the fact that Mr. Moffitt has repeatedly promised that privatization was not on the agenda. This would allow an unelected, private administration to condemn property, set rates, impose taxes and more. What this legislation also allows is for Henderson County to get a disproportionate number of seats on the authority and will ultimately result in Buncombe County residents, which includes Asheville residents, to subsidize growth, jobs, the economy, water and sewers for Henderson County. Asheville and Buncombe County have come a long way. Recognized for its early visionaries, its hard-working people, its businesses and tourism and its inclusion on so may "best" lists. The question that remains unanswered is, why mess with success? Thank you. [APPLAUSE]

RUSS MARTIN: Good morning, everybody. Glad you're here. It must be pretty intimidating for people, and creating a lot of anxiety to see nearly 15 people who are in office up here knowing that a lot of us could, well, conceivably, might be long-winded. You see, I learned a lesson when I was mayor, I had hosted a reception up at the Grove Park Inn and there were two hundred people, and I was introduced and expected to make a talk, a speech. Well, let me tell you, I got the most applause I've ever gotten from any speech that I took. What I said was, the speech this evening will be, there is no speech. So, I'll make it quick. I'll go back really, to, 1997. I was mayor then, actually, even before that, 1995. I was mayor between '93 and '97, actually for two terms. I was on the Land of Sky board with the chair of the Henderson County Commission, his name was Vollie Good. We got on famously. We cooperated and created the Mills River water station. OK, everything was going very well. There was a few bumps after I left office but that was just, kind of, detail stuff. OK, Henderson County, then, became part of the overall system because the Mills River station would serve some of the individuals in the county in Henderson. So, we had a good relationship right there. This enhanced the capacity of our North Fork reservoir and Bee Tree because back in 1988 we had such a severe drought that we were down to within days of restrictions from the state. So, it was necessary, and how wonderful it is, that we are in a position now that we can sell water to the surrounding communities. Asheville has been a good steward since that time for the water system. We really have. We've put money into it, millions and millions of dollars, upgrading the system. And when you consider, our system is over a hundred years old in some places, a hundred years old in most areas, maybe 50 and 60 in some. It needs continual, continual maintenance and service because of the high water pressures that we have. Well, this is pretty common knowledge. But to have two legislators, one from Henderson County and one who does not even live in the city of Asheville create legislation to take the water system from us. This is the City of Asheville's most valuable asset and for a long time, since the thirties, we have been adding to and extending water in every area that needed to be built out. But to take this is really a disaster for this city because it could conceivably create a lot of jobs in the future, it will create build-out of assets in other areas to be developed. The City of Asheville has been a good steward. Now, let me just mention: this idea that the people who pay their water bills are owners is ludicrous. The people that, actually, the City of Asheville holds the water system for the benefit of its citizens. Let me give you an example. If you have a farm and you leased out part of your farm for someone to sharecrop, et cetera, et cetera, that person doesn't own your property. If I rent a house, I don't develop any ownership in that house. And so it is, the City of Asheville owns the water system for the benefit of its citizens. If you have stock in Duke Energy, you are part owner because you paid for it, specifically; however, if you are a customer of Duke Energy, do you have ownership? No, you do not. So, this is a taking. It's a taking and takings are provided for by the law, and they're legal, if compensation is provided. I see no compensation in this and I think this is a disaster for the city. I think the legislators should be quite aware of what they are doing and what long term detriments will occur because of this. Thank you for listening. [APPLAUSE]

TERRY BELLAMY: Former mayor Michalove.

KEN MICHALOVE: Russ, I'm glad that wasn't a long speech. [LAUGHTER] [RUSS MARTIN: “I did my best.”] Well, mine'll be shorter than that, for sure. [RUSS MARTIN: "That's your address book"] This is a shotgun wedding. I wrote to the governor Saturday and I said, Governor, if you were still the mayor of Charlotte, you wouldn't let this happen to the city of Charlotte. The other thing I wrote the governor, there are about ten cities that contribute to the regions that they are in, Asheville, Charlotte, Raleigh, seven or eight others. But because of the water system, Asheville has contributed to the economic development of this entire Western North Carolina, particularly the surrounding counties. The city should not be penalized for giving this growth to Western North Carolina. This is an abuse of power. It's a theft. It's violated the city's rights. And I'm concerned about individuals that will profit from this and not the communities. [APPLAUSE]

TERRY BELLAMY: Thank you, Mayor. And I do need to add, Mayor Michalove was also the city manager for some time of the City of Asheville as well, so he speaks with a lot of knowledge about understanding our system. And former council member Joe Dunn would also like an opportunity to speak as well.

JOE DUNN: Well, first of all, I'd like to say I really do feel outnumbered up here. (BELLAMY: "Russ is with you.") Well, that's true. But as a Republican, and serving up here, and Mayor Bellamy and Jan and Charlie, there you go, it was a pleasure. I was on council on 05 when we voted to take the water system back and I supported that 100 percent. I felt like the city should have the right to put water lines in wherever it wants to because there were places in Asheville where water lines weren't there. So I supported that. But I'm going to have to give you a little bit of Republican comeback on this. I don't agree with a lot of this, but, when we took it back, we were going to charge differential water rates, which I strongly opposed. I was the only one on council that did. I said, if we do this, we're going to inherit the wind and I think we have to a certain degree. Now I'm not blaming Asheville for all this, but that's one of the issues. I think there is some pushback on the legislature, there's some anger out there and they want to hit back and I think that was one of the underlying issues. That's why were in this lawsuit now, why they, why he took it back. Another argument is that money has been taken out of the water system for various city issues. I think if we'd take a low-key approach some of this would have been avoided, but, but, I do believe the legislature, and I have a lot of friends down there, are wrong. I don't know how you can say with a straight face, especially after the Bee Tree reservoirs were built and the infrastructure to bring water in to the city, I don't see how you can say that you can just that away without reimbursing the city for it. I think, my colleagues, not my colleagues, my friends in Raleigh are wrong about this and as a Republican I'm going to stand up here and support the City of Asheville on this lawsuit. It's unfortunate. I think that maybe Asheville is a little overstating the fact that they should control all of the water system out here, but, reimbursement's a big issue for me and I do think the Bee Tree reservoir and other places were built way before the Sullivan agreement was ever put in place and personally I'm upset that my colleagues, not my colleagues, but some of my friends in Raleigh would do this to the city. It's going to hurt all of us. It's going to hurt me, it's going to hurt everybody here. And, so, as one Republican I'm going to stand up here and say my party is wrong. Thank you. [APPLAUSE]

TERRY BELLAMY: Now we have former state representative Jane Whilden who's going to say something.

JANE WHILDEN: I would like to thank everyone that came today. I appreciate your support. I appreciate your interest. I appreciate all of these behind us that are working to solve this situation. I'd like to say from a little bit of experience that they've chosen some very fine law firms, and I'd like to say that one of the things that Leni said, this is not a Democrat Republican, this is an issue of fairness and the right thing and obviously what has been done in the legislature is not fair and it's not right and I am proud to stand here in opposition to this bill and this takeover of the water system. Thank you. [APPLAUSE]

TERRY BELLAMY: Now we're going to hear from councilman Bothwell.

CECIL BOTHWELL: I wanted to pass along that I had breakfast with board of commissioners chair David Gantt this morning. He said he couldn't be here but he said he's 100 percent behind this. He's on board with Asheville in regard to this lawsuit. And I want to say that I'm only being slightly hyperbolic when I say that they'll get the water system when they can pry my cold, dead hands from around the pipe. [APPLAUSE]

TERRY BELLAMY: All right. Councilman Pelly.

CHRIS PELLY: Very briefly, mayor, a lot of foresight was shown a hundred years ago when the leaders of that day brought together the Bee Tree and North Fork reservoirs and preserve that today and I appreciate all of the support being shown here by past and present leaders to continue to protect that asset here and I think one thing that I've sort of seen in this process here and this legislation here, it's served to bring Asheville together in a way that few other issues have and I really appreciate the broad spectrum of opinion represented here today and thank y'all for coming. [APPLAUSE]

TERRY BELLAMY: Councilman Davis.

JAN DAVIS: Thank you, Mayor. I think it's really important to be here today because I think one of the hardest decision we ever made was to dissolve the original, or the latest agreement back in 2005. That was when Charlie and Joe and the mayor and my time there and to have lived through this whole thing and it's come to this at this point. We have improved that system greatly since that dissolution and in fact it was in very serious disrepair and had we not done that that would not have happened in this period of time, so we developed a tremendous system. It still needs lots of work and we're in a position to be the steward of that work and that's the way it should be, that's the way it's intended to be and for us to lose the ability to do that would be a tragedy for this whole area and whole region. So, thank you for coming out this morning. [APPLAUSE]

TERRY BELLAMY: I want to thank everyone for coming out today, and again I want to thank all the current elected officials as well as the former elected officials for being here. I will open it up for questions but I won’t hear any of the subjects that have already been touched on. But please know that we’ve made sure that we’re transparent in this process and I think it’s fair to state, or restate, that when it was put upon us that the committee said that we are to work with MSD to look at a possible merger scenario, we took that challenge on seriously. It wasn’t something that we slighted, we sent a lot of information over, we received a lot of information and we did a lot of analysis, we looked at collaborations, and we were getting to a good place where there was some possibilities for us to collaborate, to have some cost savings, and we’ve looked at those. I think that it’s important to point out with the Capital Improvement Program that the City of Asheville has, we work with the MSD program and their Capital Improvement Program. We have never been against partnerships as a City, as a Council, as a community. We’re always looking at positive partnerships and I think what the State is doing is a little heavy, is quite heavy-handed. And I don’t think that it’s in the best interests of Asheville, Buncombe County, or any municipality or county in North Carolina. I will open it up for questions at this time. And if there aren’t...y-yes, Miss Hoh?

VALERIE HOH: Are the citizens allowed to contribute to the legal defense fund?

TERRY BELLAMY: We’ve never had anybody ask to help us with a legal fund. [LAUGHTER] I won’t take...I will take the checks, I won’t say no. How about that? We'll...the Legal Defense Fund to Keep the Water...I think we can come up with a enterprise fund to put it in for the water system, and, I think, Lauren, on your way out you could fix that up for us. (giggles) Yes?

MARK CATES: Didn’t the MSD offer the city 57 million dollars for compensation?

TERRY BELLAMY: The MSD...Mr. Jackson, Lauren, I’m going to have to turn...I didn’t get anything in writing...I’m not sure...who are you pointing at?

MARK CATES: Well, I mean Councilman Pelly and Councilman Manheimer voted against the 57 million in compensation offered by MSD, so I just wanted to clarify that because it seems like that’s something that didn’t get out in this press conference.

LAUREN BRADLEY: Well, I did know about that...

TERRY BELLAMY (interrupting hurriedly): Just a second! Umm, Lauren did we get an official request from MSD?

LAUREN BRADLEY: (pause) I just can’t recall...if we received that in writing...and I can check on that to see if that was received in writing. There was some discussion about what level of compensation might be on the table and through our analysis this November... (inaudible)

MANHEIMER: (approaches Bellamy, whispers in her ear) “I did not...” (inaudible)

TERRY BELLAMY: (whispers to Manheimer) Do you want to speak to that? Do you want to speak to that?

LAUREN BRADLEY: ...value of the system, and based on our initial valuation, that number was far below what we would value the system to be.

TERRY BELLAMY: And I just wanna formally state, as Mayor, I hadn’t gotten anything in writing asking us to accept that but I will turn that over to the Vice Mayor.

MARK CATES: ...but that number...

TERRY BELLAMY: Mr. Cates...Mr. Cates...

ESTHER MANHEIMER: Mr. Cates, I would clarify that the, there was a proposal that was put together by the MSD. It was not officially offered to the city but it was a proposal that made various assumptions about a merger. And the 57 million dollars assumed that the watershed property would not be included in the transfer or any of the infrastructure included in that 20,000 plus acre part of the, part of the asset.

MARK CATES: So, the...

TERRY BELLAMY (interrupting): So, the answer to me? I never received the proposal on behalf of the City of Asheville in writing from MSD for 57 million dollars for our water system that’s valued at over or nearly a billion dollars when you include everything that’s part of it. You can’t take, you can’t have water without the water sources. From the media?

PETE KALINER: Representative Nathan Ramsey said that there were conversations between the agents and conversations with folks offline, it was in the Citizen-Times yesterday, a few days ago, have there been, have there been any relevant discussions with any members of the General Assembly for some sort of a settlement out of court? Has he alluded to anything?

(Bellamy looks behind her, left and right. Gordon Smith points to himself and shakes his head.)

TERRY BELLAMY: As a council...

LENI SITNICK: I certainly haven't.

TERRY BELLAMY: I’ll say, as a council, collectively, we have not.

PETE KALINER: How about individually?

TERRY BELLAMY: I’ll say collectively, as a council, we have not had an opportunity to talk about what opportunities for settlement. We...the legislation was passed, and I think before then would have been a good time for those opportunities to...to come to bear. Mark?

MARK BARRETT: How much do you anticipate the lawsuit to cost the city, in your estimation?

TERRY BELLAMY: Good question. And we will have to get that specific...I don’t want to misquote and so we will have to get that back to you because that’s too important for us to just, for me to do it off the cuff. Alright. Thank you all so very much for coming. I’m, I am available, (audience speaking) I am, I am...available for questions after this. Thank you all so very much. [APPLAUSE]