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The city of Asheville lost another decision in its legal quest to gain control of the city water system’s rates and revenues by charging residents who live in water districts outside city limits a higher rate for water than those residents living inside the city of Asheville. The N.C. Court of Appeals reaffirmed a lower court’s decision, finding that state lawmakers were within their constitutional authority in enacting a law preventing the city from charging higher water rates to customers living outside its municipal boundaries. The ruling also upheld the legislature's right to require that the Asheville use water-system revenues only on water-system maintenance and operation. The current legal dispute has its roots in the adoption of the Sullivan Act in 1933, a 1981 city/county agreement known as the Water Agreement and the adoption of Sullivan Acts II and III in 2005. The first Sullivan Act prohibited Asheville from charging residents who lived in water districts outside city limits a higher rate for water than those residents living inside the city of Asheville.

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