City of Asheville Office ofthe Mayor P0.B0x7148 ‘Asheville, NC28002 928-259-5600 Fox 020-259-5499 wumashevilencgov January 11, 2013 ‘The Honorable Patrick L. McCrory, Governor State of North Carolina Office of the Governor 20301 Mail Service Center Raleigh, NC 27699-0301 Dear Governor McCrory, Thank you for the opportunity to visit with you in Asheville this week to share our concerns about the potential water/sewer consolidation, This letter is a follow up to your comments on the Importance of local utility systems operating in solid financial standing, | want to assure you that the City of Asheville has taken very seriously the operation and management of the water system for this area. We have invested more than $70 million in capital infrastructure since FY 2005-06 (after the Regional Water Agreement was dissolved), two and a half times more than the previous six years. We project $125.9 million in system improvements over the next ten years. ‘Moody's rates our System credit at Aa2, and Standard & Poor's rates the water system credit AA. A copy ‘of the credit agency reports attached to this letter, as well as Third Part Assessments, Water rates are projected to increase by no more than 1.5% annually for residential, multi-family, small commercial and ‘manufacturing customers. Annual rate increases are capped at 3.5% for large commercial customers. Our system was the first water utility In North Carolina to become ISO 14004 reglstered for Environmental Performance Standards, The Asheville water system is in excellent financial shape, sees consistent capital infrastructure investment, and is well positioned to meet projected water demand. We will gladly provide any other documentation desired by you or your staff. Governor, this issue is not about Asheville's management of its water system and the system's financial standing. All of the empirical evidence demonstrates categorically that we are managing an efficient, financially sound system. The real issue is that the forced taking of any local government infrastructure is a bad policy for this state. It sets a dangerous precedent that will have a chilling effect on any local ‘government investing in needed infrastructuré. It endangers business opportunities and economic stability in the State and will likely result in tax increases to our citizens and job losses here and across the State, We ask that you not let the crippling of focal government be the legacy of your administration. The City af Asheville fs committed to delivering an excellent quality of service to enhance your quality of life‘The Honorable Patrick L. McCrory, Governor January 11, 2013 Page 2 The Asheville City Council continues to support thoughtful solutions that achieve costs savings and ong- term stability of our water system, We remain convinced that a local solution arrived by an open, collaborative process will ultimately benefit all stakeholders. The Asheville City Council would welcome ‘an opportunity to meet with you to explore such opportunities further. ‘Thank you for your service to the State of North Carolina and we look forward to working with you in your new role, Sincerely, Terry M. Bel Mayor ‘TMB/pk Enclosures ‘oc; Asheville City Counc | Gary W. Jackson, City Manager Robert W. Oast, Jr, City Attorney