Meddling in local business

Meddling in local business

- in Law and the Courts


With all that followed in later months, it’s easy to forget that lawmakers opened the 2013 long session with an all-out assault on cities.

By the end of March, the GOP-controlled majority had filed bills to block a lease of Dorothea Dix Park to Raleigh, wrest control of the Charlotte Douglas International Airport from that city and force Asheville to hand over its water system to a regional authority.

Those steps came on the heels of laws passed in 2012 which limited the ability of cities to grow by annexation, confirming to many that North Carolina’s cities had few friends in the General Assembly.

“If this is the beginning of a long-term trend to make cities weaker financially and less attractive to citizens and business, that’s a bad thing,” said Keith Crisco back in March.  Crisco is chair of the bipartisan North Carolina Communities and Business Alliance, a group formed to promote economic growth throughout the state.

Supporters said the bills reflected the changing demographics of Republicans working with a super-majority in Raleigh – more rural and suburban than their Democratic colleagues  – and the perception from those areas that cities had become overgrown with power.

But critics called the moves by proclaimed “less government” pols as hypocritical, casting the state’s meddling in local affairs as more about returning favors for allies than about sound fiscal policy.

And as happened with so much of the legislation passed last session, the cities responded by going to court.

While the Dorothea Dix deal remains the subject of negotiations between state and city officials, both Charlotte and Asheville are knee-deep in litigation, with resolutions not likely until after the 2014 elections.

Airport Takeover

The dust-up over control of the Charlotte Airport went full tilt in February, when state senator Bob Rucho introduced a bill immediately transferring conrol over the airport from the city to a newly-created regional authority.

But before that bill was ratified by the General Assembly, and with concerns mounting that an immediate transfer might trigger a default under airport bonds, the city challenged the bill in court and got a temporary injunction blocking the new authority from taking any action.

Lawmakers then went back to the drawing board and, in the waning days of the session, stripped out a landfill bill and inserted an alternative takeover plan, one creating a commission rather than an authority and purportedly leaving ownership of the airport with the city.

Although the General Assembly ratified that bill as a local law (not requiring signature by the governor), the parties landed back in court, with the city arguing this time that the new law was unconstitutional because lawmakers failed to obtain necessary approval to operate an airport from the Federal Aviation Authority.

That lawsuit is continuing, with the city continuing to operate the airport.

Pundits on both sides of the partisan divide have since asked why Rucho was in such a hurry to seize control from the city.

Some argue that the move was just one more example of power grabbing by Republicans looking to upset Democratic control in Charlotte city government.

But others have speculated that Rucho saw opportunity in a developing tussle between the city and Jerry Orr, its long-time aviation director.

As one commenter posted on the Locke Foundation board:

Rucho wants the airport out from under the city now — and I think the now part is pretty clear — because of the impact the city could have on something happening at the airport soon. Jerry Orr pretty much has been a one-man band when it comes to running the airport for years now and whatever he says when it comes to aviation is taken as gospel by the city’s business community. Recently though, he been getting some push back from the city about taxi cabs, some dodgy accounting at the airport, and, most importantly, who provides police protection at the airport and how much is required. (The airport had its own police until the incident Delvont Tisdale stowaway incident prompted the CMPD to takeover and assign more officers to the facility — at airport expense.)

Running Water in Asheville

The battle over control of Asheville’s water system had been simmering since 2012, when lawmakers proposed a merger of that system with the municipal sewage district.

Although city officials vehemently objected to that proposal, arguing that it would lead to a dangerous precedent of legislative intervention in local affairs, the General Assembly passed a bill that called for further study and recommendations with a view towards a consolidation bill in 2013.

Asheville then went forward with the study process while at the same time soliciting support from other municipalities opposed to the state’s forced taking of local water systems.

But in May 2013 the General Assembly proceeded with forced merger plans, enacting a law that created new Metropolitan Water and Sewage Districts and immediately transferred Asheville’s water system to such a district.

On the same day that bill became law, the city filed a lawsuit in Wake County and obtained a temporary injunction from Superior Court Judge Howard Manning.

In September, the parties appeared before Manning  — who couldn’t help but note the similarities between the Asheville situation and the attempted takeover of the Charlotte Airport — to argue whether he should continue the injunction.

State senator Dan Clodfelter took the lead for the city, as reported by NC Policy Watch’s Rob Schofield:

Clodfelter offered a lengthy and detailed presentation in which he explained the history of the Asheville system and the almost comically ham-fisted efforts of conservative legislators to remove the system from city control as part of a longstanding partisan battle.

Manning, one of the state’s most experienced and respected jurists, clearly grasped the legal (and political) realities of the case from the outset of the hearing.

At one point, after Clodfelter had explained in great detail how clear it was that the bill had been designed only to target Asheville (a fact that would likely make it unconstitutional given that the state constitution bars the legislature from passing local bills dealing with health and sanitation). Manning remarked that the only thing that would have made the legislature’s intent to target Asheville more obvious would have been a provision spelling out that the affected area would “have to have the Grove Park Inn.”

Following argument, the parties agreed to a continuation of the injunction while they complete document exchanges and other discovery. New papers seeking a ruling on the merits of the lawsuits are likely to be filed in the spring.

Who’s in charge?

Lawmakers dug in last March and began exercising their legislative muscle, making clear their intentions when it came to city governance.

“There is a definite feeling that cities have too much power and want to control everything,” Sen. Tom Apodaca said. “We have to look after counties.”

But city officials suspect just the opposite – that conservative legislators in Raleigh want to control everything and take advantage of municipal assets.

“The Mayor and City Council remain vigilant in doing what is necessary to protect Charlotte Douglas International Airport, an incredibly important asset that has been developed and nurtured by the City for over 78 years,” said city attorney Robert Hagemann.

Advocates at organizations like the League of Municipalities agree that, by their recent actions, lawmakers are treading on dangerous ground when it comes to concepts of local rule.

In this issue brief, the league notes the situations in Asheville and Charlotte and encourages discussion of these points:

  • Local communities should decide how to meet the water/wastewater needs of a local area, and how to pay for those investments – not lawmakers in Raleigh.
  • Cities should be able to operate water/wastewater enterprises like a business, without external interference from the state legislature. Decisions over rates, extensions, financing, and service should all be left to the discretion of system owners.
  • Intrusive legislative decisions impacting individual water/wastewater systems disrupt predictable rate structures for existing customers.

That’s a discussion that should have logically occurred before the passage of the bills affecting Charlotte and Asheville.

Now, courts will decide.