SECOND MONTHLY MEETING JUNE 16, 2025 VOLUME 29 PAGE 515 MINUTES June 16, 2025 SPECIAL CALL MEETING OF THE CITY COUNCIL CITYE HALL 2ND FLOOR MEETING ROOM I 160 6" AVENUE E. I 4:80 p.m. Present: Mayor Barbara G. Volk, Mayor Pro Tem Dr. Jennifer Hensley and Council Members Lyndsey Simpson, Melinda Lowrance and Gina Baxter Staff Present: City Manager, John Connet, Assistant City Manager Brian Pahle, City Clerk_Jill Murray, Staff Attorney Daniel Heyman, Communications Manager AllisonJustus, Communications Coordinator II Brandy Heatherly and others. Via Zoom: City Attorney Angela S. Beeker 1. CALL TO ORDER Mayor Barbara Volk called the meeting to order at 4:30 p.m. and welcomed those in attendance. A quorum was established with all members in attendance. 2. CONSIDERATION OF AGENDA Council Jennifer Hensley moved that City Council approve the agenda as presented. A unanimous vote ofthe Councilfollowed. Motion carried. 3. PRESENTATIONS A. Closed Session - John Connet, City Manager Councill Member. Lyndsey Simpson moved that City Council enter closed. session pursuant to NCGS S 143-318.11 (a) (3) to consult with an attorney employed or retained by the public body in order toj preserve the attorney-client, privilege between the attorney and the public body. There being no further business, closed session adjourned at 5:27 p.m. and Council went back into open session to discuss New Business. 4. NEW BUSINESS A. Consideration of a Proposal Committee Substitute to Senate Bill 69 - John Connet, City Manager SECOND MONTHLY! MEETING JUNE 16, 2025 VOLUME 29 PAGE516 GENERAL ASSEMBLY OF NORTH CAROLINA SESSION: 2025 S 1 SENATE BILL 69 Short Title: Hendersonville! Public Enterprises Operation. (Local) Sponsors: Senator! Moffitt (Primary Sponsor). Referred to: Rules and Operations ofthe Senate Jume 2025 1 ABILL TOBE ENTITLED 2 AN. ACT REGARDING THE OPERATION OF PUBLIC ENTERPRISES BY THE CITY OF 3 HENDERSONVILLE AND TO PROVIDE FOR ZONING JURISDICTION OVER 4 SATELLITE. ANNEXATIONS 5 6 The General Assembly ofNorth Carolina enacts: SECTIONI. G.S. 160A-312reads: as rewritten: 8 $1 160A-312. Authority to operate public enterprises. 9 10 11 (d) Wherea a separate water or sewers system is operated byacitva and byac county within 12 thes same countv. the citva and countys shall bv Resolutionf form a water ands sewerc commission. 13 14 The water and sewer commissions shall bec composed as follows: 15 a. The commission shall consist of eight (S) members and a chair-Derson. fora 16 totalo ofn nine (9) members. 17 b. Four (4) members oft the commission shall be appointed by the city. and four 18 (4)n members shall bea appointed bvt thec county. 19 C. Terms oft the members shall be staggered: therefore two oft the appointees 20 appointed byt the city and the county shall be appointed fora ani initial three (3) 21 vear term. and two shall be appointed by each for a five (5) vear term. 22 Thereafter. all members appointed by the city or county shall servea a five (5) 23 year term. Members appointedt to fill a vacancy shall serve for the remainder 24 oft the umexpired term oft the seat vacated. No member shall serve more than 25 two(2) consecutivet terms withouta a one-year period ofr non-service. 26 d. Thea appointment oft the chair-person oft the commissions shall altemate between 27 the county board ofc commissioners andt the city council. The initial terms shall 28 bea appointed bv the countv commission witht the secondt term appointed bvt the 29 cityo council and altemated everyt twoy years thereafter. The chair-persons shall 30 servea a two (2) year term. 31 e. Members shall serve at the pleasure of the appointing authority. and may be 32 removed bvt the appointing authoritywith or without cause. 33 f. Noe elected official. and no employees of the City or County may serve as 34 voting member oft the Commission. however. att theire election, the mavor and 35 chair-person of the county commission may serve as ex officio non-voting SECOND MONTHLY! MEETING JUNE 16, 2025 VOLUME 29 PAGE 517 GeneralAssembly OfNorth Carolina Session 2023 1 members of the commission: however neither shall count towards the 2 establishment ofa quorum. 3 g. Aquorum shallo consist toffive(S)membersp plust the chair- Derson ory vice-chair- 4 person. h. The commission. once appointed. shalla adopt bylaws. i. Thec commissions shall ber manageda as an advisory boardo oft the citv. Thev watera and sewer commissions shall! havet the following duties: a. Toreceive publics commenta andh hold public hearings. 9 b. To adopt policies tos govem the day-to-day operation and maintenance oft the 10 water or sewer system operated by the city and the water or sewer system 11 operated bv the countv. includings service connections. 12 C Tor recommend plans and policies for adoption by the city to govem capital 13 improvements ande extensions oft the city's water or sewers system. 14 d. Torecommend plans and policiesf for adoption byt the countvt to govemo capital 15 improvements ande extensions oft the county'swater ors sewer system. 16 e. Toapprove extensions of the water or sewer system in accordance with the 17 policiesa adopted byt the city fort the city'ss systems. andt the policies adopted by 18 thecountvf fort the county's ss systems. 19 f To conduct studies conceming the construction. operation. maintenance and 20 expansion oft the city's systems or the countv's systems. in accordance with 21 fimdsb budgeted bvt the citvor countvf for their respective systems. 22 g. Tor recommend fees. charges. and rates to the citv and the county for their 23 respectives systems accordingt to classes ofs service anda areas ofs service. inc order 24 tog generates sufficientr revenuet tor meeta all costs of operating andi maintaining the 25 systems. all debt service costs. all operating capital. a reasonable reserve for 26 improvements and enlargements. and all other costs ore expenses necessaryor 27 desirable for carrying out of the govemmental authority and responsibility 28 relating to the provision of water and sewerage services bv their respective 29 systems. The Citv and the County, and not the water and sewer commission. 30 shallb ber responsiblei fora adopting thef fees. charges and rates fort their respective 31 systems. 32 h To provide quarterly reports to both the city and the county regarding the 33 performance ofa all water systems ands sewers systemsi int the county operated by 34 the city or the county. 35 L To make recommendations to the city and the county conceming a new 36 interlocal sewer agreement betweent the citya and the county fort the Mud Creek 37 Drainage Basin. Until sucht time asan new agreementi is reached. the existing 38 Mud Creek Agreementls shall remaini ini fullf force ande effect notwvithstanding 39 itsp provisions regarding termination. 40 i Tos studv and adviset the city and the county ast tot the future ownership ofthe 41 county's water ands sewer svstems. 42 k Such other duties as mav be agreed lupon by the citv and county byr resolution. 43 (3) Thewatera ands sewer commission: shall Inoth havet thea authorityt toe enteri into contracts. 44 nort toi issue bonds. ori incur any debt. The contracting. and the funding and timing ofall 45 capitali improvements and thei incurrence of debts shall bel bv the citv fort the citv'ssvstems. 46 andbyt the countyf fort the county'ss systems. SECOND MONTHLY! MEETING JUNE 16, 2025 VOLUME 29 PAGE 518 GeneralAssembly OfNorth Carolina Session 2023 1 (4) The city and county shall each remain fully financially responsible for their 2 respectiver water or sewer systems. including incurring debt and fora all costs ande expenses 3 fort their systems' operation. maintenance ande expansion. The monies in the enterprise 4 fundanda anvi interesta accruedi from investments ofthesen moniest willl beb budgeted. expended 5 and managed by the city or county ast to their respective systems. taking into account. but 6 not being bound bv. the recommendations of the water ands sewer Commission. 7 (5) Staffing for the water ands sewer commission shall be by the city staffv which shall S remaine emplovees ofthe city. subjecttot the direction and control ofthe city manager. The 9 reasonable costs ofsuchs staffing services andr routine clerical service as well as necessary 10 offices space ands supplies fort the operation ofthe Commissiont will bef fumished bvt the citv 11 andy paidf forf from water and sewer revenues ofthe city. 12 (6) Staffing for the maintenance and operation of the city's systems shall be city 13 emplovees. Staffingf for the maintenance and operation oft the countv'ss systems shallbe 14 çounty emplovees. unless otherwise contracted forbythec countv. 15 () The Citya and the County shall each amend their ordinancest top provide consistency 16 with the terms oft this section. The city shall retain ordinance making and enforcement 17 authority over the entirety ofi its water and sewer svstems. and the county shall retain 18 ordinance making and enforcement authority over the entirety ofits water and sewer 19 systems. Tot the extent the policies oft the water and sewer commission conflict witht the 20 ordinances oft the cityor county. the ordinances shall govem. 21 22 (e) Thecitys shallre reduces water rate differential for customers outside ofthe city but within the 23 çountya att the rate of 5%1 per vearuntilr rates for customers inside ando outside ofthe Citvy within the 24 county) have beene equalized. The citvs shalle equalizes sewer rates forall customers. both inside the 25 citv and outsidet the city but withint the çouty. within ten (10)vears of the date ofthisa agreement. 26 This does not preclude the city council from establishing assessments. fees or rate differentials to 27 çover capitale expenditures necessitated! byt the extensions ora additionst tot the water ors sewers system 28 ofthec cityf for customers servedb bys suche extensions ora additions. 29 ( A cityo or countys shallh havet thea authorityt towaived or discounty water ors sewer fees including 30 but not limited to. system development charges or fees and connection fees. to anv housing 31 development providing) housing to persons ato or below 80% oft the arean median income. Thecity 32 orc county shall, by ordinance. establish the criteria ands standards to govem the application and 33 implementation ofa anvo discounted orv waived fees. 34 (g) Acitvor countys shallhavet the authoritytowaived or discount water rorsewerf fees. including 35 but not limited to. system development charges or fees and connection fees. for economic 36 developmenty whichy would qualifv for economicd developmenti incentives pursuantt to G.S. 158-7.1. 37 Thecityorc countys shall. by ordinance. estbisht the criteria ands standardst tog govem thez application 38 andi implementation ofa any discountedo or waivedf fees. 39 40 SECTION 2. Except as otherwise provided in the other sections of $69, contracts 41 governing the provision ofwater and: sewer services existing between the city and the county are 42 hereby terminated. 43 44 SECTION3. G.S. 160A-58.1 reads as rewritten: 45 "S1 160A-58.1. Petition for annexation; standards. 46 SECOND MONTHLY MEETING JUNE 16, 2025 VOLUME 29 PAGE 519 GeneralAssembly OfNorth Carolina Session 2023 1 (e) Ac city maynotr require annexation under this sectionf for any property located wholly 2 outside oft the Mud Creek Drainage Basin as a condition of receiving sewer service for such 3 property. butr mavrequire: annexation asa conditiong GfPcMREEGTENEE service for parcels 4 located in whole or in part within the Mud Creek Drainage Basin upon whichi is proposed new 5 gemmerialer ind dustrial development. or any redevelopment oft the parcel which is intendedto 6 increaset the assessedt tax value oft the parcelb bvatl least fiftypercent(509e. 7 S () When a property is annexedi intoac citv's corporatel limits. and the property wasapart 9 ofthet taxing district where fire coverage isc contractedf for bya volunteer fire department priorto 10 the annexation, the Citv shall contract with such volunteer fire department to provide fire 11 protection servicest tot the property forar minimum of5years. The contracts shall establish a level 12 ofservice to be provided by the volunteer fire department consistent with the requirements and 13 standardsofthe Officeofthe State Fire! Marshalf for liked departments. Nothingh hereins shallprevent 14 the City from terminating anys such contracte entered for failing to provide the established levelof 15 service. The cityshallc compensatet the volunteer fire department based ont the following formula: 16 (1) Thec contracts shalla applytoa allp properties annexedb bvthe cityf froma andafter January 17 1.2015. andd duringt thet term ofthe agreementr twith the volunteer fire department. including 18 allrenewals. be 19 (2) The annual fee paid bv the Citv to such volunteer fire department shall the 20 amount whichi is one-halfoft the ad vaioremt tax which would) have been owed andy paid on 21 suchvear's assessed value of the annexed real property or real properties at that vear's 22 adopted fire district tax rate that would have applied to the real property but for_the 23 annexation. 24 (3) Fees shallr not! be paidr retroactivelv. 25 26 27 SECTION 4. G.S. 160D-201 reads as rewritten: 28 'S1 160A-201. Planning and development regulation jurisdiction. 29 (a) Cities. Alloft the powers granted by this Chapter may be exercised by any city within its 30 corporate limits. Whenap property is annexedi intoa city's corporatel limits the Citvy shall, 31 atthet time of adopting the annexation ordinance. also adopta resolution requesting that 32 thec countya assume jurisdictionf forl land developmentr tregulation undert thisc chapterf for the 33 annexed property. The county shall havet thirty (30) davs from the effective date ofthe 34 annexation ordinance to adopt a resolution declaring the county's assumption of land 35 development regulation jurisdiction overt the annexed property. Int the event the county 36 doesn notadopta aresolutiona assuming land derelopmentr regulation jurisdiction within said 37 thirty(6Odavti time period. thecitys shallretain! land development tregulation jurisdiction 38 overt the annexed property and NCGS160D-202) shall applv. 39 40 41 SECTION: 5. Session law 2025. Part X, reads as re-written: 42 43 PART X.1 ELIMINATE: ETJINI HENDERSON COUNTY 44 SECTION 10.1.(a) Notwithstanding the provisions of G.S. 160D-202, no 45 municipalityi in Henderson County shall exercise any ofthe powers granted to cities under 46 Chapter 160D ofthe General Statutes or its predecessor, Article 19 of Chapter 160A ofthe 47 General Statutes, beyond its centiguous corporate limits. SECOND MONTHLY MEETING JUNE 16, 2025 VOLUME 29 PAGE 520 GemeralAssembly OfNorth Carolina Session 2023 - SECTION: 10.1.(b) The relinquishment ofjurisdiction) pursuanttos Section1 10.1 .1(a)ofthis 2 act._over an area that a municipality in Henderson County is regulating under the authority of 3 Chapter 160D ofthe Generals Statutes orits predecessor, Article 19 ofChapter 160A ofthe General 4 Statutes, shall become effective. July1 1, 2025. 5 SECTIONI 10.1.(c) Upon relinquishment ofj jurisdiction pursuant to Section 10.1(a)of 6 thisa act.overa an area that a municipality in Henderson Countyi ist regulating under the authority of Chapter 160D ofthe GeneralStatutes or its predecessor, Article 19 ofChapter 160A ofthe General S Statutes, thei following shall apply: 9 (1) The municipality'sr regulations and powers of enforcement shall remain in 10 effect until @ Henderson County! has adopted the regulation or (in) aj period of 11 60 days has elapsed following July 1,2025, the date the relinquishment 12 becomes effective, whichever is sooner. Prior to the transfèr ofjurisdiction, 13 Henderson County may hold hearings and take other measures consistent with 14 G.S. 160D-204 thatz may ber required in orderto adopt and 15 lapplyits development regulations for the area att the same time ita assumes jurisdiction. 16 (2) Any person who has acquired vested rights inar municipality in Henderson 17 Countyr may exercise those rights as ifno change ofjurisdiction had occurred. 18 Henderson County, ina acquirngjurisdiction overt the area, may take any action 19 regarding the derelopment approval, certificate, or other evidence of 20 compliance that couldh have been taken byt the municipality pursuant to its 21 developmentr regulations. Except as provided int this subdivision, any building, 22 structure, or other land use in an area over whichl Henderson County has 23 acquiredj jurisdiction is subject to the development regulations ofHenderson 24 County. 25 26 SECTION 6. G.S. 160D-201 reads as rewritten: 27 'S 160D-601. Procedure for adopting, amending, or repealing development regulations. 28 29 (d) Down-Zoning. No amendment to zoning regulations or a: zoning map that 30 down-zones property shall bei initiated, enacted, or enforced without the written consent of 31 ally property owners whose property is the subject of the down-zoning amendment unless 32 such amendment is initiated by the applicable county or municipal govemment. For 33 purposes ofthis section, "down-zoning" means a zoning ordinance that affects an area of 34 landi linc one ofthef fllowing ways: 35 (I)By decreasingt the development density ofthe land to be less dense than 36 was allowedt under its previous usage. 37 (2) By reducingt thej permitted uses ofthe land that are specified ina azoning 38 ordinance or land development regulation to fewer uses than were allowed under 39 its previous usage. 40 (3) By creating any type of nonconformity on land not in a residential 41 zoning district, includingan nonconforming use, nonconformingl lot, nonconforming 42 structure, nonconforming! improvement, or nonconforming site element. 43 44 SECTION 7. This act applies only to the City of Hendersonville and Henderson 45 County. 46 GeneralAssembly OfNorth Carolina Session 2023 1 SECTIONS. Sections 1-30 ofthis acts shall become effective. January 1,2 2026. Sections 2 4-6 ofthis act shall be effective when this act becomes law. 3 SECOND MONTHLY MEETING JUNE 16, 2025 VOLUME 29 PAGE 521 STATE OF NORTH CAROLINA COUNTY OF HENDERSON INTERLOCAL AGREEMENT This Agreement is made and entered into this the Coth day of A1 2025, bya and between the CITYOF HENDERSONVILLE, a North Carolina municipal corporation (the City), and the COUNTY OF HENDERSON, a body corporate and politic oft the State ofNorth Carolina (the County). Circumstances A. The City operates a waters system providing potable water service. The City's treatment plant is located outside City limits in the County and serves customers within the City and also outside the Cityi in the County. B. The City operates a sanitary sewer system, which serves customers within the City and also outside the City in the County. C. The County zones all of the land: area not located within one ofits municipalities. D. The City and the County entered into a "Contract for Purchase and Interlocal Cooperation and Settlement. Agreement" December 20, 2000 (the Mud Creek. Agreement). Under its terms, the Mud Creek Agreement expires thirty (30) years after its execution. E. Various disputes between the City and the County have arisen over the years, which the parties seek to resolve hereby. F. This. Agreement is entered under the provisions of Article 20 of Chapter 160A oft the North Carolina General Statutes. Agreement NOW, THEREFORE, in consideration of the mutual promises and covenants made to one another, the parties agree as follows: Water and Sewer 1. The Joint Water and Sewer Commission (the JWSC) created by the General Assembly shall: 00294820.DOCX Page I of3 Pages SECOND MONTHLY MEETING JUNE 16, 2025 VOLUME 29 PAGE 522 A. The. JWSC shall develop policies that will assist in the development of affordable housing projects in the City and outside the City in the County. B. The. JWSC shall work closely with the Henderson County Partnership for Economic Development to provide utility service to existing and prospective industries. C. The. JWSC shall work closely with the County and Henderson County Agricultural Development Corporation to assist the County in meeting its farmland preservation and agricultural development goals. 2. The City will allow the extension oftheir sewer system to the Flat Rock Cidery property (offUpward Road). and the Baystone Glen development (off U.S. Highway 25) without requiring annexation into the City. Such extensions shall bei in accordance to the policies oft the Water and Sewer Commission as approved by the City. 3. After consultation with its counsel, the County waives any possible claim of conflict of interest or any potential conflict ofinterest ofthe City. Attorney in representing the City arising from the negotiation or drafting oft the Mud Creek Agreement or with interpretation and application oft the provisions oft the Mud Creek Agreement while iti is in effect. Land Usel Plamming 4. The City shall have the right to request zoning map and text zoning changes from the County, and City's planning staff may work with County's planning staff when rezonings of interest to both parties are considered. State Action. Required 5. The parties shall jointly request the North Carolina General Assembly to pass a revised version of Senate Bill 69 (copy attached), in order to accomplish their mutual goals. REMAINDER OFT THISF PAGE INTENTIONALLYLEFTI BLANK 00294820.DOCX Pagc2 2of3 Pages 2025 VOLUME 29 PAGE 523 SECOND MONTHLY MEETING JUNE 16, Executed after majority vote ofboth the Hepdersonville City Council and the Board ofCommissioners of Henderson County, this the. + day of June, 2025. CITY OF HENDERSONVILLE COUNTY OF HENDERSON By: hz L - 2 By n. - Ab BARBARA VOLK, Mayor WILLIAM LARSLEK, Chirman Board of Commissiongrs Attest: Attest: lin yunay E Elerk to Board Commissionèrs Boguts Citylclerk GhRso areon Approved as to form: Approved as to form: S C la hink City Attorney County Attorney 00294820.DOCX Page 3of3) Pages Council Member Jennifer Hensley moved that the City Council approve the proposed Committee Substitute to Senate Bill 69 and submitted to the N.C. House of Representatives State and Local Government Committee for consideration and the proposed interlocal agreement. A unanimous vote ofthe Councilfollowed. Motion carried. 5. ADJOURN There being no further business, the meeting was adjourned at 5:30 p.m. upon unanimous assent of the Council. atlake Lbee Barbara Volk, Mayor ATTEST: Jill Clerk Aaunay Murray, City