Asheville – Following a very thorough response from the City of Asheville’s Kim Miller to a reader’s question about what was being done to prevent all the post-Helene deadwood from engendering forest fires, the following was asked. “How would you like to interview someone from the city that might know the answer to: How can we be assured that we don’t have a water pipe situation again, like the one that apparently helped cause Helene?”
Memories of all that bottled water, boil advisories, trying to keep things sanitary, for 52 days, are too depressing to relive. Then, the year before, a major water outage plagued the city for 11 days through Christmas. Granted, the City of Asheville can’t guarantee immunity from force majeures, but it would be nice for the public to see the water department’s capital improvement plan.
A study performed by Raftelis in 2023 resulted in a plan for phasing in rate hikes greater than city council thought the public would tolerate. This is for a water system that has been notorious for the last three decades for its deferred maintenance. A cringeworthy illustration was the Great Flush a few decades back. Whereas normal water systems open a few hydrants at a time on a rotating basis to clean out all the grunge, Asheville decided to close down its entire water system and flush everything at once.
The city didn’t even have a map of where pipes were laid. A contractor charged with making the maps sent cameras through the system and determined that a lot of the pipes were almost a century old and in bad shape. At a recent city council meeting, citizen Nina Tovish asked council to do end the whack-a-mole leaks in her neighborhood.
Modernizing this decrepit system was going to be expensive before Hurricane Helene, or Fred, for that matter. Much has been written about repairs and improvements to the water plants. Are they all being funded with state and federal money?
At a recent budget worksession, staff discussed water rate increases for the coming fiscal year. Comments have been favorable, as it is easier emotionally to spend a few extra bucks a month than to bear the thought of a major hospital and multiple healthcare facilities without running water for weeks.
The increases are in accordance with the second year of Raftelis’ 3-year plan for rate increases. Residences and commercial establishments would see a 7.5% increase; commercial establishments, a 14.1% or 19.9% increase, and wholesale purchasers, like Woodfin and Biltmore Forest, a 32.2% increase.
Finance Director Tony McDowell said that last fiscal year, the first year of water rate increases, the city issued $26.9 million in water revenue bonds to fund its meter replacement project. The automated system the city had installed had a lot of failing transmitters, and it was determined that it would be less expensive to upgrade the whole system than to replace batteries in the old one.
In addition, new positions were created for a capital projects manager, a departmental public information officer, and a crew of four servicing the southern part of town “to improve response time for emergency water breaks.” Increased revenues also gave the city $2.7 million more for infrastructure replacement.
In the coming fiscal year, McDowell said the water system will continue to implement its five-year capital improvement plan, which was first estimated at $239 million. That was prior to Helene. The department intends to float $12.5 million in water bonds for water treatment plant rehabilitation, $75 million for advanced techniques and technologies for water treatment, and $40 million for continued expansion of Asheville’s water treatment plant at Mills River.
“We also need to make sure that we maintain our debt service coverage in reserves for the rating agencies,” said McDowell. “We’ve been having some meetings with the ratings agencies after Helene, and Standard and Poor’s has put the water system on what they call a ‘credit watch with negative implications.’ So they’re watching the system closely over the next few years to make sure that we continue to meet those metrics, those debt service coverage ratios, and that we continue on with this rate adjustment phase-in plan that we started.”
The watch means that the water system’s credit rating has deteriorated and is at-risk of a downgrade. Unfortunately, just being on a negative watch is enough to caution potential lenders and subject the water system to higher interest rates. Incidentally, the city as a whole is also on a S&P negative credit watch.