MINUTES

STATE OF NORTH CAROLINA BOARD OF COMMISSIONERS

COUNTY OF HENDERSON OCTOBER 12, 2000

The Henderson County Board of Commissioners met for a special called meeting at 10:00 a.m. in the Commissioners' Conference Room of the Henderson County Office Building.

Those present were: Chairman Grady Hawkins, Vice-Chair Bill Moyer, Commissioner Renee Kumor, Commissioner Don Ward, Commissioner Marilyn Gordon, County Manager David E. Nicholson, County Attorney Angela S. Beeker, and Clerk to the Board Elizabeth W. Corn.

Also present were: Public Information Officer Chris S. Coulson and County Engineer Gary Tweed.

CALL TO ORDER/WELCOME

Chairman Hawkins called the meeting to order and welcomed all in attendance. Mr. Hawkins stated that the purpose of this meeting was to take an indepth look at the regional water supply and water service agreement that initially was brought about in about 1994 or 1995. The Board had asked the County Attorney to make a review, see how we=re doing on complying with the provisions and what progress has been made on that water agreement.

DISCUSSION/ADJUSTMENT TO THE AGENDA

Chairman Hawkins asked the Board to make an adjustment to the agenda to add a closed session as allowed by NCGS 143-318.11(a)(6) to consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial employment of an individual public officer or employee or prospective public officer or employee; or to hear or investigate a complaint, charge, or grievance by or against an individual public officer or employee. Chairman Hawkins made the motion to amend the agenda and accept it. All voted in favor and the motion carried.

REGIONAL WATER AGREEMENT

Chairman Hawkins reminded everyone that the agreement that we will be discussing is in Chapter 503 of the Henderson County Code and is accessible by Internet.

Angela Beeker had distributed four documents to the Board:

1. An overview of the first amended and restated Regional Water Supply and Water Service Agreement.

2. A summary (she had prepared) of the First Amended and Restated Regional Water Supply and Water Service Agreement.

3. A copy of the actual 1995 Regional Water Supply and Water Service Agreement.

4. An Ordinance to Enact Water Policies to Govern the Provision of Water Services by Henderson County pursuant to the First Amended and Restated Regional Water Supply and Water Service Agreement dated November 11, 1995 (has not been adopted).

Ms. Beeker stated that she would be talking mainly from the first document.

In 1994, Henderson County was approached by the Asheville/Buncombe Water Authority to see if the County might be interested in allowing them to come into Henderson County and construct a water treatment plant in Henderson County. Substantial negotiations went on at that time and a Regional Water Agreement was entered in June of 1994. She reminded the Board that this followed very closely on the heels of a joint meeting that occurred at the Mountain Horticultural Center between Henderson County, Buncombe County, the City of Asheville, and the Water Authority to discuss studying the formation of a true regional water and sewer authority. At that meeting in April of 1994, a Resolution was adopted by all parties present in which they agreed to direct staff to study the formation of a regional water and sewer authority. In June this Regional Water Agreement was entered into.

The first Regional Water Agreement set out the basic terms of the future Regional Water Agreement which is the present Regional Water Agreement that we have now. The Water Agreement that we have now was approved by all the parties in 1995, dated November 11, 1995.

Parties to the Agreement:

Henderson County

Cane Creek Water and Sewer District

Asheville/Buncombe Water Authority

The City of Asheville

Buncombe County

The Role of each Party (to help everyone gain a broader understanding of where everyone sits with respect to the agreement):

STATEMENT by Commissioner Kumor - Prior to all of this, the original Asheville/Buncombe Water Authority (ABWA) approached the City of Hendersonville. Often times people feel that this whole process was done to circumvent any participation by the City of Hendersonville but they were approached first with the possibility of a partnership in the plant that the City of Hendersonville now owns for their water treatment. The City Council declined any type of partnership with the then existing ABWA and that=s why Henderson County was approached. Henderson County did not move in any way to do harm to the City of Hendersonville or to their water capacity and in fact as this documentation goes along, people will understand that we made sure to secure and protect the intakes and the water supply for the City of Hendersonville and made sure that all of the water supply and intakes that would be used by the now Asheville/Buncombe/Henderson Water Authority are downstream of the water supply that supplies most of Henderson County through the Hendersonville water supply system.

STATEMENT by Commissioner Moyer - Commissioner Moyer offered a different opinion, stating it was debatable whether the City of Hendersonville was given an equal opportunity to be a participant in this agreement.

Angela Beeker continued, addressing the role of each party to the agreement as follows:

Henderson County - had the water supply and the available land

Pursuant to NC General Statutes, before the ABWA could purchase land in Henderson County they had to secure the permission of the Henderson County Board of Commissioners.

Cane Creek Water and Sewer District - would be the first service area in Henderson County to receive water services in Henderson County as a result of any agreement entered into

Asheville/Buncombe Water Authority - needed the water

Ms. Beeker explained the make up of the ABWA and the agreement that forms the Authority:

1) Is a NCGS 160A-462 entity

2) Formed by contract between Buncombe County, the City of Asheville, and eleven smaller water and sewer districts

i) Contract goes through year 2024

2) Determines composition, powers and duties of the Authority

1) Authority has powers to determine water extension policies and to determine share of costs of the extensions to be paid out of the water system

2) May hire consultants

3) May fix and enforce the water rates

4) May sue and be sued

5) May acquire, construct, etc. any water system

6) Acquire land in the name of the City

7) Enter into contracts, except those related to loans or debt

3) Provides that the City of Asheville and Buncombe County receive revenues from the water system: City 5%, County 2.5% (in this current year=s budget, projected to be $1.4 million total)

4) City of Asheville maintains the Water Funds

5) Water budget must be approved by City of Asheville and Buncombe County annually

6) Provides that Asheville City Manager hires and fires the Water Authority Director, and all water employees report to the City Manager

7) City provides all support services to the Authority and is reimbursed on a cost of service basis

8) Authority must lease office space at fair market rental value from the City of Asheville

9) Requires that water be provided to each class of customer at equal rates

10) County pays money to City for law enforcement and recreation every year

11) Agreement may be terminated by mutual agreement, by the City for causes stated, and by the City or the County by giving one year=s notice, except that the County cannot terminate if bonds issued to finance new water source are outstanding unless arrive at agreement for payment of bonds and bond counsel approves. In the event of termination, property conveyed to the City by the County and the 11 districts will revert to them. Otherwise, City owns it all

12) Provides that the City of Asheville will hold title to all real estate associated with the water system

The City of Asheville - needed the water and owns all of the property of the water system; manages the water system for the Authority, receives revenue from the water revenues

Buncombe County - needed the water and receives revenues from the water revenues (used to pay debt service on airport)

The Regional Water Agreement

Ms. Beeker stated that there were basically two purposes that were stated for this agreement:

1. To establish a joint undertaking for providing water for consumptive and/or industrial uses to citizens of Henderson and Buncombe Counties.

2. To establish the basis for the formation of a Regional Water and/or Sewer Authority, which would, at a minimum, include as members Henderson and Buncombe Counties, the Authority and the City of Asheville.

General Statement of the Agreement:

1. Henderson County agrees to let ABWA and Asheville purchase land in Henderson County for the construction of a water treatment plant.

2. In exchange for Henderson County=s consent to let ABWA and Asheville purchase land in Henderson County, ABWA and/or Asheville must do the following:

1. Provide potable water in unlimited quantities to citizens of Henderson County from the water treatment plant.

2. Construct and pay for Regional Water Lines in Henderson County to serve Henderson County citizens at Henderson County=s request when the revenues from the Regional Water Line will reimburse Asheville and/or ABWA in 9 years or less.

3. Seek the immediate declassification of the watershed created by the intake approved at the Brevard Road Site, located in Bent Creek, upon the approval of the intake at the Water Plant Site for either the Mills River or French Broad Rivers.

4. Expand the ABWA Board and give Henderson County two seats.

5. Convey the Brevard Road Site (located in Bent Creek) to Henderson County.

6. Make a good faith effort to make available 25% of jobs created at the treatment plant to Henderson County residents.

Detailed Analysis of Obligations of the parties to the Agreement:

1. Henderson County agrees to let ABWA and Asheville purchase land in Henderson County for the construction of a water treatment plant. (Section III)

Section 3.0 describes the property to be purchased by Asheville and ABWA (the AWater Plant Site@)

Section 3.1 provides that the Water Plant Site and all improvements serving only customers located outside of Henderson County will become part of the water system of the City of Asheville.

Section 3.2 provides that Henderson County=s consent to purchase the Water Plant Site carries with it the consent to acquire easements and rights-of-way as necessary to process and distribute water from the treatment plant.

Section 3.3 provides that ABWA must give Henderson County thirty (30) days advance notice before purchasing any property including the easements and rights-of-way, to allow Henderson County the opportunity to suggest an alternate route. If the alternate route proposed by Henderson County is reasonable, ABWA must use that route. The Authority has the sole discretion to locate lines that will be serving only customers located outside Henderson County.

Section 3.4 provides that should the Agreement end, the permission granted by Section 3.2 acquire easements and rights-of-way ends.

Section 3.5 requires Henderson County to assist ABWA and/or Asheville in these acquisitions.

2. In exchange for Henderson County=s consent to let ABWA and Asheville purchase land in Henderson County, ABWA and/or Asheville must do the following:

1. Provide potable water in unlimited quantities to citizens of Henderson County from the water treatment plant. (Section 4.0)

Section 4.0 provides that in no event can the quantity of Mills River water provided to Henderson County customers ever be reduced or eliminated in order to provide water to customers of ABWA located outside of Henderson County.

Section 4.1 provides that if the water produced by the treatment plant is inadequate to serve Henderson County customers, ABWA will make available water from their reservoirs at Bee Tree and/or North Fork in accordance with their normal policies.

Section 4.2 provides that the area to be served in Henderson County is the Cane Creek Water and Sewer District, but it can be expanded to include all or part of Mud Creek Water and Sewer District and other areas of the County.

(Sections VI and VII)

Section 6.0 provides that Henderson County will determine the location, size and materials of the Regional Water Lines.

Section 6.1 details the procedure to be followed by Henderson County in requesting a Regional Water Line.

Section 7.2 places the burden of installing Regional Water Lines on ABWA at their sole expense where the projected Pay Back Period from projected revenues only is nine (9) years or less. Section 7.3 places the burden of installing Regional Water Lines on ABWA where the projected Pay Back Period from projected revenues plus contributions by Henderson County is nine (9) years or less. Sections 6.2, 6.3, and 6.4 outline the responsibilities of ABWA when installing a Regional Water Line.

Section 8.0 provides that title to the Regional Water Lines built and paid for in whole or in part by ABWA will be in the City of Asheville until ABWA and/or Asheville have been reimbursed.

Section 8.2 provides that all revenues from a Regional Water Line will go to ABWA as long as the line is titled in the City of Asheville. The net effect of Sections 8.0 and 8.2 is that ABWA gets the revenue until ABWA and/or Asheville have been reimbursed for the line.

Section 10.0 places the burden of maintenance of a Regional Water Line on ABWA for so long as they hold title.

Section 7.5 requires that at the end of a Pay Back Period, if ABWA has not been reimbursed completely for the Regional Water Line, Henderson County must pay the difference to ABWA. Henderson County would then receive title to the Line and revenue from the Line.

Section IX governs the financing of the Water Plant Site, and the Regional Water Lines.

Section 9.0 allows ABWA and Asheville to determine the method of financing. However, they must credit Henderson County with the revenues received from the Regional Water Lines for the purposes of determining when reimbursement of ABWA has occurred.

Section 9.1 provides that in no event can the amortization period exceed the Pay Back Period for a Regional Water Line.

Section 6.7 gives Henderson County the option of constructing water distribution lines in Henderson County.

$ Net revenue from these lines would go to Henderson County.

$ Title to these lines would be in Henderson County.

$ These lines would be maintained by Henderson County.

3. Seek the immediate declassification of the watershed created by the intake approved at the Brevard Road Site, located in Bent Creek, (Section 3.7), upon the approval of the intake at the Water Plant Site for either the Mills River or French Broad Rivers.

4. Expand the ABWA Board and give Henderson County two seats. (section 16.0)

Section 5.1 states that one of these seats shall be placed on the Policies and Priorities

Committee of ABWA. [Commissioner Moyer and Jack Tate currently fill those two seats]

5. Convey the Brevard Road Site (located in Bent Creek) to Henderson County. (Section 22.0)

Section 22.0 provides that within ten (10) years from the date of conveyance to Henderson County, Henderson County must either:

$ Convey the Brevard Road Site to MSD for the construction or a Wastewater Treatment Facility or

$ Convey the Brevard Road Site to a Regional Water and Sewer Authority of which Asheville, ABWA and Henderson County are a part.

or else Henderson County must convey the property back to Asheville in fee simple absolute.

6. Make a good faith effort to make available 25% of jobs created at the treatment plant to Henderson County residents. (Section 19.1)

Miscellaneous Provisions:

Section 3.6 provides that Henderson County will assist in the application procedures for approval from the State of North Carolina, and will take reasonable measures to protect and improve the watershed in accordance with its classification, including, but not limited to, enforcement of all applicable watershed regulations.

Section 4.3 provides that the term of the Agreement is forty (40) years, which may be renewed for subsequent forty (40) year periods with the consent of all parties.

Section 4.4 provides that the Agreement is contingent upon:

(1) The sale of the Water Plant Site to Asheville;

(2) Approval from the State of North Carolina of an intake on the Mills River and/or French Broad Rivers with a quantity of at least 10 MGD;

(3) Approval from the State of North Carolina of the plans for treatment and separate storage of waters from the Mills River and/or French Broad Rivers; and

(4) Receipt of funds by Asheville and/or ABWA for the construction of a 5 MGD water treatment plant at the Water Plant Site.

If any of these conditions do not occur before June 30, 1997, the Agreement is null and void.

Section 5.0 requires Henderson County to adopt policies for usage of the Regional Water Lines. Section 5.2 requires Henderson County to adopt a fee schedule. Section 5.3 limits the fees that ABWA may charge for customers in Henderson County to equal to or less than those paid by customers located outside of Henderson County.

Section 5.7 grants free water to facilities of Henderson County providing general governmental services, except schools.

Section 6.9 requires ABWA, Asheville, and/or Buncombe County to obtain the prior written consent of Henderson County before entering into any agreements to in any way, directly or indirectly, build or construct, or cause to be built or constructed, in whole or in part, any water treatment plant in Henderson County, other than at the Water Plant Site.

Section 11.0 requires ABWA to give Henderson County copies of the draft plans for the treatment plant at least thirty (30) days prior to approval by ABWA for comment.

Sections 14.0 and 15.0 provide that unless otherwise stated in the Agreement, the Agreement may not be terminated or amended without consent of all parties.

Section 16.3 states that if the agreement creating ABWA is terminated before the end of the forty (40) year term of the Agreement, thereby ending the existence of ABWA, Asheville will undertake all obligations of ABWA provided for in the Agreement.

Board discussion followed with a consensus that Henderson County needs to develop a Land Use Policy.

Steps to take to implement the First Amended and Restated Regional Water Agreement:

1. County complete and adopt water policies and adopt fee schedule.

2. Contract with Asheville to administer the policies.

1. Letters of Availability

2. Letters of Commitment

3. Review and approve plans

4. Installation of taps and meters

5. Reading meters

6. Billing

7. Maintenance and Repair (during term of Authority=s ownership, Agreement already requires maintenance to be done by City of Asheville, ref. Section 10.0. Need to have ability to contract with Asheville for maintenance of lines Henderson County owns as well.)

3. Extend service area under the agreement (eventually to become expansion of CCWSD boundary) as desired. (ref. Section 4.2)

4. Asheville complete their revisions to their policies, to include Henderson County, and to comply with provisions of the Regional Water Agreement

5. Agree on definition of net revenue

1. Have a third party auditor determine and review.

2. Asheville needs to establish a fund to track net revenues for regional water lines.

(ref. Section 5.6)

6. Three party agreement form to guarantee revenues

7. Right to connect regional water lines into main transmission lines and other lines must be confirmed

8. Determine right of the Authority to extend water lines and serve customers directly or indirectly in conjunction with another entity in Henderson County without involvement or consent of the County. Anyone applying for water in Henderson County should go through Henderson County to get it.

9. Involve Henderson County in any discussions or negotiations for sale of water to another entity in Henderson County. May even want to require Henderson County=s consent to those sales. Our consent would be contingent on securing agreement from the entity to limit their extension of lines and service within CCWSD.

10. Who owns lines installed by developers? Henderson County should.

11. Clarify a time frame within which deeds for lines will be issued to Henderson County (ref. Section 8.0)

12. Auditors review of performance thus far (ref. Section 9.3) has not occurred.

13. Fix the deed for the Bent Creek Property.

14. Master Plan

15. Setting of a full Authority

There was Board discussion during Angela=s review.

Water Policies - These were distributed to the Board. Angela Beeker asked that the Board review the policies and get any feed-back to her. She expects some feed-back from the Authority Attorneys.

Commissioner Moyer stated that some of these issues will be discussed at the next ABWA meeting.

Commissioner Moyer commended Ms. Beeker for taking the time to give this overview to the Board. This is very important for the County to deal with. This Board of Commissioners has been more than patient, waiting over four years for some of this to take place. Henderson County is at the place now where they may have to take some steps with respect to this agreement to carry out the terms of it that will benefit Henderson County citizens.

Chairman Hawkins stated that Henderson County has a lot of planning efforts going on, a lot of planning efforts in the sewer area, a lot of planning efforts in economic extensions in the industrial park, and it=s time to look at how we can coordinate some of those things with being able to provide water service, particularly in the northern part of the county through the agreement that we have.

Chairman Hawkins stated that the Board looks forward to receiving information back from Commissioner Moyer following the next ABWA meeting.

Charge to County Attorney

Chairman Hawkins stated that the Board needs to be sure that Ms. Beeker is working on those sections of the agreement that we need to be in compliance with or that have not been finished and charged her to do so. Chairman Hawkins stated that this will need to be put back on an agenda of a subsequent meeting.

CLOSED SESSION

Commissioner Kumor made the motion for the Board to go into Closed Session as allowed pursuant to NCGS 143-318.11 for the following reasons:

1.(a)(6) To consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial employment of an individual public officer or prospective public officer or employee; or to hear or investigate a complaint, or grievance by or against an individual public officer or employee.

All voted in favor and the motion carried.

Commissioner Ward made the motion for the Board to go out of Closed Session. All voted in favor and the motion carried.

There being no further business to come before the Board, the meeting was adjourned.

Attest:

Elizabeth W. Corn, Clerk to the Board Grady Hawkins, Chairman