Wastewater Collection Facilities Agreement
[HISTORY: Adopted by the Board of Commissioners of Henderson County. Amended 12-20-2000.]
THIS AGREEMENT made and entered into this the _____ day of December 2000, by and between
Henderson County, a body politic and corporate, hereinafter "County," the Mud Creek Water and
Sewer District, a body politic and corporate, hereinafter "District," and the City of Hendersonville, a
municipal corporation, hereinafter "City."
WITNESSETH:
WHEREAS,
the County and the District own and operate a sanitary sewerage collection system
located in and serving a portion of the Mud Creek Water and Sewer District, hereinafter the "Mud Creek
Collection System"; and
WHEREAS,
the City owns and operates a 3.2 million MGD Sewerage Treatment Plant, and is in
the process of constructing a new 4.8 MGD Sewerage Treatment Plant; and
WHEREAS,
the County and the City entered into an agreement in 1986 to provide for the
provision of sewerage treatment services to the County and the District for the Mud Creek Collection
System, hereinafter the "1986 Agreement"; and
WHEREAS,
there is outstanding litigation between the County and the City related to the 1986
Agreement, to wit Henderson County v. City of Hendersonville, 92 CVS 1186, hereinafter the "Lawsuit";
and
WHEREAS,
the County and the City are desirous of replacing the 1986 Agreement with a new
agreement to establish a joint undertaking by the City and the County for the provision of sewerage
treatment services for the citizens of the Mud Creek Water and Sewer District, as amended, and upon
reaching such a new agreement, terminating the Lawsuit; and
WHEREAS,
as part of the new agreement, the City is desirous of purchasing a portion of the Mud
Creek Collection System from the County and the District; and
WHEREAS,
as part of the new agreement the County is desirous of securing an option for certain
real property owned by the City currently being utilized by the City for its water and sewer operations, said
property being more particularly described herein below; and
NOW THEREFORE THIS AGREEMENT, that for and in consideration of the mutual
promises and covenants contained herein below, the parties agree as follows: 
Article I
Purpose, Authority and Definitions
Section 1.01. 
Purpose.
The purpose of this Agreement is to serve as a contract of purchase between the City, the County, and the
District for a portion of the Mud Creek Water and Sewer System, and to establish a joint undertaking
between the City and the County for the provision of sewer treatment services by the City primarily to the
citizens located in a portion of that area currently encompassed in the District. It is understood and agreed
that with respect to cooperative planning it is impossible to control the actions of the respective future
elected officials; however it is hoped that the cooperation and joint planning efforts started with the
execution of this Agreement will continue into the future for the benefit of the City and the County and the
residents thereof.
  
Section 1.02. 
Authority.
This Agreement is entered into pursuant to the Authority of N.C.G.S. 160A Article 20, and 160A-274.
Section 1.03. 
Definitions.
Unless the context otherwise clearly requires, the following terms are defined as indicated:
1.
Mud Creek Equipment means all wastewater collection, transportation, conduction, 
pumping and similar equipment, and includes equipment used to facilitate or enable the 
above actions. The term may be used to indicate real property, fixtures, and personal 
property, or any combination of them, but does not include movable personal property in 
the nature of tools, generators, unconnected pumps and the like used by the County for 
work with systems other than or in addition to the Mud Creek Collection system.
2.
The Mud Creek Drainage Basin means all area of Henderson County, North Carolina 
naturally draining into Mud Creek at or upstream from the Hendersonville sewer 
treatment plant existing on the date of execution of this agreement.
3.
Private Lines means wastewater lines, including all types of real and personal property 
and fixtures as defined in the provision for Mud Creek Equipment above, which lines and
equipment are constructed, installed or initially owned for a nongovernmental entity or 
for an individual.
4.
Non City Customers means those customers located outside of the City limits. [Note: 
This was an omission from the agreement that has been filled in after conversation with 
City Attorney, Sam Fritschner.] 
Article II
Sale of Assets
Section 2.01. 
Assets to Be Conveyed.
The County and the District will convey by Special Warranty Deed to the City a portion of the Mud Creek
Collection System, hereinafter "Mud Creek Equipment," Mud Creek Equipment being more particularly
described in Exhibit A, attached hereto and incorporated by reference as if fully set forth herein.2 The Mud
Creek Equipment will be conveyed "AS-IS," with NO WARRANTIES, express or implied, including but
not limited to NO WARRANTY OF MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, NO WARRANTY OF TITLE, NOR ANY OTHER WARRANTY ARISING
AT LAW, IN PRACTICE, OR IN EQUITY.
The County and the District shall convey by special warranty deed any real estate for which it has
marketable title upon which is situated any of the Mud Creek Equipment.
Section 2.02. 
Assets to Be Retained.
The County will retain all right, title and interest in that portion of the Mud Creek Collection System
located in the Naples Area and the Mountain Home Area, and will also retain ownership of the Prison
Camp lines, the retained portions being collectively referred to hereinafter as "Retained Portion of the Mud
Creek Collection System" or "Retained Equipment". The Retained Portion of the Mud Creek Collection
System is more particularly shown and described in the attached Exhibit B, said Exhibit B being
incorporated by reference as if fully set forth herein.3 The County may opt to lease any or all of the
Retained Equipment to the City in accordance with terms hereinafter provided.
Section 2.03. 
Easements and Encroachments.
The County and/or the District will convey all right, title and interest to any and all easements and rights-
of-way related to the Mud Creek Equipment that have been secured by the County to the City. All of the
easements and rights-of-way to be conveyed are listed in the attached Exhibit C, Exhibit C being
incorporated by reference as if fully set forth herein.4 Exhibit C also lists easements which will be secured
by the County and conveyed to the City within one hundred twenty days after closing.
The parties shall take such action with respect to any encroachments on road rights-of-way as may be
required by the North Carolina Department of Transportation.
  
Section 2.04. 
Consideration.
The City will pay to the County $449,185.00 as partial consideration for the purchase of the Mud Creek
Equipment, the remaining consideration being the obligations and covenants of the City made for the
benefit of the County and the District as stated herein. The $449,185.00 represents the County's
contributions towards the Mud Creek Equipment, less applicable depreciation, as shown in the attached
Exhibit D, Exhibit D being incorporated by reference as if fully set forth herein.
Section 2.05. 
Possession.
Possession of the Mud Creek Equipment shall be delivered at Closing.
Section 2.06. 
Date of Closing.
Closing on the conveyance of the Mud Creek Equipment and related easements, rights-of-way, and
encroachments shall occur on December 19, 2000, or as soon thereafter as both parties agree, but in no
event later than December 31, 2000.
Section 2.07. 
Risk of Loss.
The risk of loss on the Mud Creek Equipment shall rest with the County and the District until the date of
Closing. Upon Closing, all risk of loss shall pass to the City.
Section 2.08. 
Outstanding Liens or Debts.
The County and the District warrant to the City that there are no outstanding liens or debts on or
encumbering the Mud Creek Equipment. This covenant shall survive the grant of property at closing by
deed or otherwise.
Section 2.09. 
Closing Expenses.
The County and/or the District will pay the costs of preparation for the Deed of Conveyance and the Bill of
Sale associated with the purchase of the Mud Creek Equipment by the City. The City will pay all recording
costs, if any, associated with the recordation of the Deed of Conveyance. Each party will be responsible for
any other expenses, including attorneys' fees, which they incur as part of this transaction.
Section 2.10. 
Delivery of Documents.
The County agrees to deliver to the City not later than 5 days prior to the Date of Closing a copy of all
documents in its possession regarding the ownership and construction and easements associated with the
Mud Creek Equipment.
Section 2.11. 
Defense of Title.
Notwithstanding the foregoing, where the City's title to any of the Mud Creek Equipment and its associated
easements is disputed by a third party, the County and/or the District agree to provide whatever assistance
is necessary to the City to defend such title. 
Article III
Creation of the Mud Creek District Advisory Council
Section 3.01. 
The Mud Creek District Advisory Council.
There is hereby created with the execution of this Agreement the Mud Creek District Advisory Council,
hereinafter "Advisory Council." The Advisory Council shall consist of nine members.
Section 3.02. 
Purpose of the Advisory Council.
The purpose of the Advisory Council shall be to advise the City and the County on all matters involving the
provision of sewerage treatment services to the citizens of the District, as amended.
Section 3.03.
Powers and Duties.
The Advisory Council shall have the following powers and duties:
1.
To name officers, other than the Chair.
  
2.
To adopt bylaws consistent with the terms of this Agreement, which bylaws must be 
approved by both the City and the County.
3.
To appoint subcommittees.
4.
To conduct studies as requested by the City and/or the County.
5.
Recommend to the City and the County new boundaries for the District (referred to 
herein below as the Amended Mud Creek District), and upon approval of the new 
boundaries by both the City and the County, securing a legal description for the new 
boundaries. The recommended new boundaries shall be based upon the Service Area 
(defined herein below), and shall be compatible with (though they need not exactly equal)
the boundaries of the Mud Creek Drainage Basin(s).
6.
To create, within the planning departments of the Advisory Council members, and to 
recommend to the City and the County a short term and long term sewer development 
plan for the redrawn Mud Creek Drainage Basin, including, but not limited to the Village
of Flat Rock and the Town of Laurel Park.
Section 3.04. 
Appointment of the Advisory Council.
The Advisory Council shall be appointed as follows:
1.
Three members shall be appointed by the City, one of whom shall be a sitting member of 
City Council;
2.
Three members shall be appointed by the County, one of whom shall be a sitting member
of the Board of County Commissioners;
3.
One member shall be appointed by the Village of Flat Rock;
4.
One member shall be appointed by the Town of Laurel Park; and
5.
One member shall be appointed by the other eight appointed members.
Section 3.05. 
Terms of Membership and Vacancies.
Each member shall serve a three year term. Members may not be appointed for more than two consecutive
three-year terms. In the event of a midterm vacancy, the successor appointed shall fulfill the remainder of
the unexpired term. Serving the remainder of an unexpired term shall not preclude the successor from
serving two consecutive full three-year terms.
Section 3.06. 
Selection of the Chairman.
The Chairman of the Advisory Council will be appointed by the City for the first two-year term. The
County will appoint the Chairman for the second two-year term. The City and County will thereafter
alternate the appointment of the Chairman between them, each appointment to be for a two-year term.
Section 3.07. 
Duration of Existence.
The Advisory Council will exist for so long as this Agreement is in effect. Notwithstanding the foregoing,
the Advisory Council may be dissolved sooner upon the mutual Agreement of both the City and the
County.
Section 3.08.
Additional Duties.
The City and the County may jointly assign additional duties to the Advisory Council.
Section 3.09. 
Reporting of Activities.
The Advisory Council shall be required to provide an annual report of its activities to the City and to the
County. In addition to the annual report, the City and/or the County may request a report at anytime, and
the Advisory Council will be required to provide such a report.
Section 3.10. 
Finances.
The City and the County agree to jointly provide any funding necessary for the Advisory Council to fulfill
its duties. The cost for delineating a legal description for the Amended Mud Creek District (defined herein
below) shall be shared equally between the City and the County, upon approval of budgets submitted to the
City and the County.
  
Section 3.11. 
Staff to the Advisory Council.
The County Engineer and the City Water and Sewer Director, shall serve as staff to the Advisory Council.
Section 3.12. 
Frequency of Meetings.
The Advisory Council shall conduct regular meetings once per month, but shall hold special meetings as
necessary to conduct its business. The regular meeting dates, times, and places shall be determined by the
Advisory Council and stated in their bylaws. The Advisory Council Chairman shall have the authority to
call special meetings and to continue meetings to another date and time as necessary for the conducting of
the Advisory Council's business. 
Article IV
Mud Creek Service Area and the Cane Creek Expansion Area
Section 4.01. 
Mud Creek District Boundaries.
The City and the County agree that the boundaries of the Mud Creek Sewer District will be redrawn to
more accurately reflect the drainage basins for the Mud Creek District. It is anticipated that certain areas
lying in the Mud Creek District will be annexed into the Cane Creek Water and Sewer District and
removed from the Mud Creek Sewer District, said areas hereinafter referred to as "Cane Creek Expansion
Area" and particularly shown and/or described on the attached Exhibit E, Exhibit E being incorporated by
reference as if fully set forth herein.6 The Mud Creek District Advisory Council will be asked to study and
recommend an appropriate boundary for the District, which will be subject to the approval of both the City
and the County. Upon such approval, the legal description for the Amended Mud Creek District shall be
attached hereto and made a part of this Agreement. The Mud Creek District as redrawn is hereinafter
referred to as the "Amended Mud Creek District."
Notwithstanding any other provision of this agreement, the Mud Creek District boundaries shall include
only places that drain into Mud Creek upstream from the Hendersonville 3.0 MGD Wastewater Treatment
Plant on Mud Creek as it exists as of the date of closing hereof. Unless specifically stated otherwise in this
agreement, the City shall not be obligated by this agreement to accept, from the County or otherwise,
wastewater collected from any place that does not drain, directly or indirectly, into Mud Creek upstream
from the Hendersonville 3.0 MGD Wastewater Treatment Plant on Mud Creek as it exists as of the date of
closing. [This is a proposed change to make sure that the City must accept the wastewater from the Naples,
Mountain Home, and Prison Camp systems.]
Section 4.02. 
Procedures for Amending Boundaries.
1.
Mud Creek District Boundaries.
(a)
The parties agree that as of the date of closing, the Mud Creek District is a 
County Sewer District formed in accordance with N.C.G.S. Chapter 162A,
Article 6. The parties further agree that in order to accomplish the intent to
redraw the Mud Creek District boundaries, it may be necessary to abolish the 
District in its entirety, and to form a new district encompassing the desired area. 
It shall be the County's sole option whether to form the new district pursuant to 
the terms of N.C.G.S. 162A, Article 6 or not.
(b)
The newly drawn district shall, for the purposes of this Agreement, be 
considered the "Amended Mud Creek District," regardless of whether formed 
under N.C.G.S. Chapter 162A, Article 6. Until such time as the Amended Mud 
Creek District Boundaries have been determined and become effective, the 
primary service area to be governed by the terms of this Agreement 
shall encompass the portion of the Mud Creek District shown on the attached 
Exhibit F, hereinafter "Mud Creek Service Area" or "Service Area," said Exhibit
F being incorporated by reference as if fully set forth herein.8
(c)
It is acknowledged by both parties that the Mud Creek Service Area shown on 
the attached Exhibit F has very generalized boundaries. The parties agree that 
such generalized boundaries shall be sufficient for purposes of this Agreement 
until such time as the generalized boundaries are made more specific and given 
  
a legal description through the work of the Advisory Council, the County and 
the City, and are reclassified as the Amended Mud Creek District boundaries.
(d)
Upon the effective date of the Amended Mud Creek District, the primary area to
be governed by the terms of this Agreement shall be the Amended Mud Creek 
District, regardless of whether it is formed pursuant to N.C.G.S. Chapter 162A,
Article 6, and any reference in this Agreement to "Service Area" or "Mud Creek
Service Area" shall be deemed to refer to the Amended Mud Creek District.
2.
Cane Creek District Boundaries. The parties agree that the Cane Creek Sewer District
will be expanded to include, at a minimum, the Cane Creek Expansion Area. Pursuant to N.C.G.S. Chapter
162A, Article 6, however, such an expansion will not be effective until the start of the fiscal year following
the expansion. Notwithstanding the expansion of the Cane Creek Sewer District, the Cane Creek Expansion
Area shall be governed by the terms of this Agreement to the extent explicitly stated herein.
Section 4.03. 
Applicable Ordinances.
It is agreed by both parties that the City's ordinances, policies, and procedures, as each may be amended,
shall apply to the Mud Creek
Equipment, any lines owned or to be owned by the City or leased to the City
within the Mud Creek Service Area or leased to the City within the Cane Creek Expansion Area. To the
extent that any grant of authority for such ordinances policies and procedures from the County and/or the
District is necessary, such grant of authority is hereby deemed given. The County's and the District's
Ordinances, as amended, shall continue to apply to any lines in the Service Area and/or the Cane Creek
Expansion Area for which the County retains ownership and control. The City, County and the District
agree to review their ordinances, policies and procedures, and to make such amendments as are necessary
to provide for the obligations of each under this Agreement, and to remove any inconsistencies with this
Agreement from said ordinances, policies and procedures. 
Article V
Extension and Lease of Lines in the Service Area and the Cane Creek Expansion Area
Section 5.01. 
Extension of Lines by the City.
The City shall not extend any sewer interceptor or collection lines into the unincorporated areas of the
County, whether within the Service Area, the Cane Creek Expansion Area, or any other unincorporated
area of the County, without the express written approval of the County Board of Commissioners, except as
follows:
1.
The City may install any collector or interceptor line requested to be installed by the 
County.
2.
The City may install collector lines and/or interceptor lines in the Service Area whose 
purpose is to bypass a pump station or otherwise to eliminate a pump station.
3.
The City may install collector lines and/or interceptor lines in the Service Area that 
connects to a portion of a system within the City, the Village of Flat Rock, the Town of 
Laurel Park, or any other then existing incorporated municipality situated in the Mud 
Creek Drainage Basin which by reasonable economic or engineering necessity must run 
through an unincorporated area of the County; and
4.
The City may install a collector line or an interceptor line to serve an area for which an 
ordinance of annexation has been adopted by the City, regardless of the effective date of 
such ordinance. The City shall supply all annexed areas, (whether by voluntary or 
involuntary annexation) with sewer service.
Notwithstanding the foregoing, the City shall give to the County a minimum of thirty days advance written
notice prior to the beginning of construction of any lines allowed by subsection (b), (c) or (d), above. Such
notice shall state the purpose for the lines to be constructed with specific reference to (b), (c), or (d) above,
and shall contain a map showing the location of the proposed lines. Additionally, potential customers
located in the unincorporated areas of the County shall not be connected to any line built by the City
pursuant to subsection (b) or (c) or (d) above without the express written approval of the County Board of
Commissioners and/or the District Board of Commissioners, as appropriate. Upon annexation by the
  
appropriate City, Town or Village, the City may connect customers to lines constructed in accordance with
Subsection (d) above without the permission of the County. The City shall be responsible for the operation
and maintenance of any lines installed by the City pursuant to this Section 5.01 in accordance with Article
VI below.
Section 5.02. 
Methods of Acquiring Land and Easements Necessary.
Where the City is authorized by this Agreement or requested by the County to construct a line in the
Service Area, the Cane Creek Expansion Area, or any other unincorporated area of the County, the City
may use all available legal means to acquire the land and easements necessary for the project, including but
not limited to condemnation.
Section 5.03 
Extension of Lines by the County and/or the District.
In the event the County and/or the District requests that a collection line(s) or interceptor line(s) be
constructed by the City in the Service Area and the City denies the request, the County and the District
shall have the right to extend or construct the collection line(s) or interceptor line(s), and to connect the
line(s) to the City's collection system at any appropriate location as provided for below. In such event, the
County and the District will be responsible for paying the costs of constructing the line(s) (less any
available grants or other funding sources). The County, the District, and/or the Cane Creek Water and
Sewer District may extend or construct sewer lines in the Cane Creek Expansion Area without making any
request to the City.
1.
The County and/or the District may elect to convey any line(s) extended by the 
County and/or the District in the Service Area to the City, and the City shall 
accept ownership thereof. Additionally, the County and/or the District may elect 
to lease any line(s) extended by the County in the Service Area and/or the Cane  
Creek Expansion Area to the City, and the City shall accept the demise thereof, 
for the annual price of $1.00, provided that any such lease may be terminated by 
the County upon six months prior written notice to the City. As another 
alternative, the County may elect to retain both ownership and control of the 
lines(s). Notwithstanding any other provision of this agreement, the City shall 
not be obligated by or under this agreement to accept any sewer lines whose 
specifications it has not approved in writing before construction.
2.
In the event the County elects to convey or lease to the City any line(s) extended 
by the County pursuant to this Section 5.03, the following terms and conditions 
shall apply to said line(s):
(a)
The City's Ordinances, policies, and regulations shall apply to said 
line(s) unless specifically stated otherwise in this Agreement;
(b)
All persons connecting to said line(s) shall pay the rates as provided in  
Section 6.02 of this Agreement.
(c)
The City shall pay to the County twenty percent of the impact fees for 
future customers connecting to conveyed (but not leased) line(s) in 
accordance with the Ordinances and Policies currently in place for 
developers' installation of lines.
(d)
All persons connected to lines owned or leased by the City shall be 
considered to be City customers; however, for lines leased to the City, 
the County will still have the authority to enact rates, fees or 
assessments for the customers connecting to said lines in addition to the 
City rates, and the City shall collect any such rates, fees, or assessments 
on the County's behalf and remit the revenues received from the 
additional rates, fees and/or assessments to the County. The City may 
charge its normal administrative fees to the County for the collection of 
the County's rates, fees, and assessments.
(e)
The City shall accept and allow customers to connect to any of said 
lines in accordance with the same priorities under which customers are  
given service in the incorporated areas of the City, except that the rates  
provided for in Section 6.02 below and any rates, fees, or assessments 
imposed by the County and/or the District shall apply.
  
             3.
In the event the County and/or the District elects to retain both ownership and 
control of any lines extended by the County and/or the District in the Service 
Area and/or the Cane Creek Expansion Area, the following terms and conditions 
shall apply to these lines:
(a)
The City shall charge the same rates and system development charges 
to customers on the lines as provided in Section 6.02 below; however, 
if requested to do so by the County, the City will collect any additional  
rates, fees or assessments enacted by the County from the customers on 
the lines and remit the revenues received from the additional rates, fees  
or assessments to the County. The City may charge its normal  
administrative fees to the County for such collection of the County's 
rates, fees, and assessments.
(b)
The Ordinances, regulations and policies adopted by the County and/or  
the District shall apply to said lines.
(c)
The City shall allow the County or the District, as the case may be, to 
connect any of the lines to any portion of the City's sewer collection 
system.
(d)
The City shall accept and allow customers to connect to any of said 
lines in accordance with the same priorities under which customers are  
given service in the incorporated areas of the City, except that the rates  
provided for in Section 6.02 below and any rates, fees, and assessments 
imposed by the County and/or the District shall apply.
4.
The City shall maintain and repair all lines extended by the County/or the 
District in the Service Area in accordance with Article VI herein below, at the 
City's sole cost, regardless of whether the County and/or the District conveys the 
lines to the City.
Section 5.04. 
Extension of Lines by
a Third Party.
The parties hereto acknowledge that the Mud Creek Equipment, the Retained Equipment, and/or the City's
collection system may be extended by independent third parties, hereinafter "Developers" or "Owners," to
serve their properties.
1.
The Mud Creek Service Area. Any persons desirous of extending collector lines (or 
interceptor lines) in the Service Area shall be bound by the following terms and  
conditions:
(a)
The Developer or Owner must make application for a sewer line extension of 
any line to the City. Except as provided herein below, the City will evaluate the 
application in accordance with its standard procedures and policies.
(b)
If the Developer is constructing an extension of a City-owned line, the City may
require the Developer or Owner to convey title to said lines to the City, and may
pay back to the Developer or Owner a portion of the system development 
charges in accordance with existing City policy for other customers which attach
to said line. If the Developer is constructing a gravity extension of a line owned 
by the County, the City shall inquire as to whether the County wishes to take 
ownership of said gravity extension (regardless of whether the line is leased to 
the City). If the County elects to assume ownership, the City shall require the 
Developer to convey title to the extension to the County, which the County may 
lease to the City. All provisions of Subsection 5.03 (b) shall apply to any such 
extensions conveyed or leased to the City. All provisions of Subsection 5.03 (c) 
shall apply to any such extensions for which the County retains both ownership 
and control.
(c)
The City may not permit the Developer or Owner, or any other customers, to 
connect to private lines within the Service Area, except as allowed by County 
Ordinances, policies and procedures.
(d)
Where the Developer proposes to install a private force main system to serve 
property (ies) which could be served by a gravity system, the City shall ask the 
County whether the County wishes to pay the difference in cost between the 
  
force main system and a gravity system to serve the area. Nothing herein shall 
prevent the City from participating in the installation of such a gravity system by
the Developer in order to avoid a forced main system. If the gravity system is 
paid for in whole or in part by the City, the City shall require the Developer to 
convey ownership of the system to the City. If the gravity system is paid for in 
whole or in part by the County, the City shall require the Developer to convey 
ownership of the system to the County. If both the City and the County share in 
the cost of the gravity system, the City shall require the Developer to deed the 
system to the City if it connects into a City-owned line or to the County if it 
connects into a County-owned line. The County may lease any or all of the 
gravity system owned by the County to the City in accordance with Section 5.07
of this Agreement.
(e)
The City shall not work indirectly through a Developer or Owner in order to 
avoid the restrictions of Section 5.01 above.
2.
The Cane Creek Expansion Area. In the event the County and/or the District elects to 
lease all or a part of the County's Retained Equipment or any other lines installed by the 
County and/or the District in the Cane Creek Expansion Area to the City, all of the 
provisions of Subsection 5.04(a) shall apply to such lease. If the County and/or the 
District chooses to retain both ownership and control of the lines within the Cane Creek 
Expansion area, the County's policies, ordinances, regulations and procedures shall apply.
Section 5.05. 
Quality of Construction.
All lines constructed by the City or the County pursuant to this Agreement shall conform to the uniform
construction standards of the City of Hendersonville and the State of North Carolina. 
Section 5.06. 
Extension of Lines in Areas in the District Which Are Annexed.
It is recognized that the duration of this Agreement is thirty years, and that during this time, portions of the
Service Area and/or the Cane Creek Expansion Area may be annexed by the City, the Village of Flat Rock,
the Town of Laurel Park, or other municipality existing at such time. The County shall have no
responsibility for extending any lines in any annexed portion of the Service Area or any annexed portion of
the Cane Creek Expansion Area. The City agrees to meet its statutory responsibilities for the provision of
sewer collection and treatment services for any areas annexed by the City. However, the City may not meet
its statutory responsibilities for providing sewer through the use of County-owned lines. The City shall
therefore purchase any lines annexed by the City for a price equal to the County's depreciated cost, less
grants funds, regardless of whether the lines are leased to the City or not. [This was a change requested by
the Board.]
Section 5.07. 
Lease of Lines.
As provided within this Agreement, the County and/or the District may elect to lease County-owned lines
within the Mud Creek Service Area and/or the Cane Creek Expansion Area to the City. It is agreed by the
parties to this Agreement that a Master Lease Agreement shall be entered to govern the terms of such
lease(s), such lease(s) to be exhibits to the Master Lease Agreement. The Master Lease shall provide the
following terms and conditions (at a minimum):
1.
The annual lease rate shall be $1.00 per year.
2.
For so long as the lease is in effect, all provisions of this Agreement pertaining to lines 
leased to the City shall apply to the lines covered by such leases.
3.
The County may terminate any leases for any lines by giving the City six months' 
advance written notice. In such event of termination, the lines for which the lease are 
terminated shall revert to the control of the County, and all County policies, ordinances, 
regulations and procedures shall apply. For all lines within the Service Area, the 
customers shall continue to pay the rates as specified in Section 6.02 of this Agreement. 
For all lines within the Cane Creek Expansion Area, the customers shall continue to pay 
the rates specified in Section 6.02 of this Agreement for so long as the lines are 
connected into the City of Hendersonville wastewater treatment system. However, the 
County may elect to reverse the flow of wastewater and begin providing wastewater 
treatment services through a contract with Metropolitan Sewerage District or another 
  
treatment provider, or from a wastewater treatment plant owned or operated by the 
County or a County affiliated agency, district, or board. In such event, the customers shall
become County customers.
4.
All other terms and conditions contained in this Agreement shall apply as the context 
requires. 
Article VI
Operation of the Mud Creek System, Maintenance and Rates
Section 6.01. 
Maintenance and Operation.
1.
Lines within the Service Area. The City shall operate and maintain the Mud Creek 
Equipment and all other lines constructed in the Service Area in good repair, whether 
owned or constructed by the City, the County, or the District, from and after the date of 
this Agreement at their sole cost and expense. The City shall have the discretion to decide
the scope and timing of any maintenance or repairs for any system which they are 
maintaining pursuant to this Agreement, provided that due diligence and care is  
exercised. Notwithstanding the foregoing, the City shall repair or replace lines as 
necessary in order to maintain the level of treatment service provided hereunder. The City
shall insure the Mud Creek Equipment and all lines owned by, to be owned by, or leased 
to the City in the Service Area, and shall use any insurance proceeds received to repair
or
replace damaged lines as necessary.
2.
Lines within the Cane Creek Expansion Area. The City shall have no responsibility for 
maintenance or operation of any sewer lines installed or owned by the County inside the 
Cane Creek Expansion Area unless the County elects to lease such lines to the City as 
provided in this Agreement. In such event the City shall operate and maintain the leased 
lines in good repair from and after the date of any such lease at their sole cost and 
expense for so long as said lease is in effect. In the event the County leases Retained 
Equipment to the City, the City shall also operate and maintain these systems at their sole
cost and expense. The City shall have the discretion to decide the scope and timing of any
maintenance or repairs for any system which they are maintaining pursuant to this 
Agreement, provided that due diligence and care is exercised. The City shall repair or 
replace lines as necessary in order to maintain the level of treatment service provided 
hereunder.
Section 6.02. 
Rates.
The City will charge to all non City customers whose wastewater is being treated by the City of
Hendersonville wastewater treatment plant as of the date of closing, regardless of whether they are located
in the Service Area, the Cane Creek Expansion Area, or other unincorporated areas of the County, the
outside-of-City rate plus a surcharge of 90 cents per thousand gallons for a period of ten years, after which
said customers shall pay the outside City rate. [This was a clarification requested by the Board.] All new
non City customers, including those having an allocation but having not yet paid a system development
charge, regardless of whether they are located in the Service Area, the Cane Creek Expansion Area, or
other unincorporated areas of the County, whose wastewater is treated by the City after the effective date of
this Agreement will pay the outside City rates and the appropriate system development charge, but will not
pay the 90 cents surcharge.
Section 6.03. 
Adjustment of the Rates.
If the City raises or adjusts the sewer rates in the future, the difference between the inside-City rates and the
outside-City rates shall remain in the same relationship that presently exists (60% differential), unless a
cost analysis indicates that the cost of maintenance and service to the outside customers is higher than the
differential. The City shall give the County a minimum of sixty days advance written notice prior to the
proposed effective date of any change in the sewer rates. If the City's proposed outside City rate will
increase the differential of 60% between the inside City rate and outside City rate, the City shall include
with the written notice a copy of the cost analysis indicating that such increase in the differential is
  
necessary because the cost of maintenance and service to the outside customers is higher than the
differential. In the event the County disagrees with the cost analysis provided by the City, the County shall
notify the City at least thirty days prior to the effective date of the increase. In such event, the City shall
postpone the effective date of the rate increase until the Chairman and Mayor can meet and agree upon a
proposed rate increase, if any, to recommend back to both the Board of Commissioners and City Council. If
both the Board of Commissioners and the City Council agree, then the City may enact such agreed upon
rate increase. If the Board of Commissioners and the City Council are unable to reach an agreement, either
party may proceed in accordance with Section 9.05, which shall stay the effective date of the rate increase
until procedures under Section 9.05 have been concluded.
Section 6.04. 
Billing and Collection.
The City will be responsible for billing and collecting from all customers connected to any line in the
Service Area, or any line in the Cane Creek Expansion Area. The City may charge to the County its normal
administrative fee for billing only those customers for which the County has enacted a rate, fee, or
assessment (regardless of whether in the Service Area or the Cane Creek Expansion Area), and those
customers connected to a County owned and controlled line in the Cane Creek Expansion Area; otherwise
billing and collection shall be performed at the City's sole cost and expense. The City shall make available
to the County during normal operating hours its billing and collection records for those customers paying a
County rate, fee, or assessment. 
Section 6.05. 
Outstanding Allocations.
The City agrees to honor any allocations which it has already made to customers in the District, regardless
of whether said customers have actually connected into the Mud Creek System; provided however that said
customers must pay the City's normal system development charge before connecting into the system if they
have not already done so. 
Section 6.06. 
Future Applicants for Service.
1.
The Service Area. All persons requesting sewer treatment services in the Service Area 
shall make their application to the City. For those non City customers requesting service 
from a line constructed by the City in accordance with Section 5.01(b), (c), or (d), the 
City shall not approve any application for service without the prior written consent of the 
County or the District as appropriate. For those persons requesting to connect into a 
County-owned and -controlled line, the City shall forward the application to the County 
for processing in accordance with the County's Ordinances, policies and procedures. The 
City shall process all other applications in accordance with its Ordinances, policies and 
procedures, and the provisions of this Agreement.
2.
The Cane Creek Expansion Area. In the event the County elects to lease the County's 
sewerage system within the Cane Creek Expansion Area to the City, persons requesting 
sewer treatment services shall make application to the City. The City shall in such case 
process all applications in accordance with their normal Ordinances, policies and 
procedures. Subject to the requirements of law, the applications for service received from
customers within the City limits shall not be given a higher priority over applicants from 
within the Service Area or the Cane Creek Expansion Area. All applications for service, 
whether within the City, the Service Area, or the Cane Creek Expansion Area shall be 
granted on a first-come-first-serve basis, unless otherwise directed by the County. 
Section 6.07. 
Appeals Process for Persons Denied Service.
Persons denied wastewater treatment services from a City owned line, or a line leased to the City, shall
follow the normal appeals procedures established by the City. Persons denied service from a County-
owned-and-controlled line shall appeal to the Board of Commissioners in accordance with the policies and
procedures to be established by the County. In reviewing a denial, the Board of Commissioners shall be
bound by the technical standards for connection established by the City. The City shall be bound by any
decision of the Board of Commissioners with respect to any County-owned and -controlled line in the
Service Area or the Cane Creek Expansion Area. 
  
Section 6.08. 
Enforcement.
The City shall have the authority to use all legal means for collecting sewer charges, rates, fees and
assessments enacted by the City or the County owed from any customers within the Service Area and the
Cane Creek Expansion Area. The City shall utilize all means available to collect the sewer charges and fees
for those customers owing payment for any rates, fees, or assessments imposed by the County and/or the
District, provided that any direct expense paid by the city for extraordinary collection means, such as legal
fees, shall be reimbursed by the County and/or the district. 
Section 6.09. 
Information to be Submitted to the County.
The City agrees that upon written request by the County it will provide annually to the County maps of its
entire collection system, both in the City of Hendersonville and in the Service Area, on a disc in AutoCAD
compatible format, or in mutually agreed upon format. [This was a change requested by the Board.]
Additionally, the City agrees to provide the County with a copy of all of its ordinances, codes, policies, and
procedures governing the City's collection system, and to promptly update County's copy of said
documents as each is amended or replaced. 
Article VII
Treatment of Sewerage in the Mud Creek Service Area, the Cane Creek
Expansion Area, and Other Unincorporated Areas of the County
Section 7.01. 
Treatment of Sewage.
1.
The Mud Creek Service Area. The City will, without any cost participation by the 
County, treat any and all sanitary sewage that is generated in the Service Area (including 
the Mud Creek Equipment, and any lines owned by the County), regardless of whether 
they are leased to the City without regard to allocation or capacity. The City shall provide
such treatment services at its current treatment plant, its new treatment plant, or any other
treatment plant constructed or operated by the City. The City's obligation to perform 
treatment services shall be independent of which facility is being used to provide the 
treatment services.
2.
The Cane Creek Expansion Area. The City will, without any cost participation by the 
County, treat any and all sanitary sewage that is generated in the lines in the Cane Creek 
Expansion Area, regardless of whether they are leased to the City, without regards to 
allocation or capacity. The City shall provide such treatment services at its current 
treatment plant, their new treatment plant, or any other treatment plant constructed or 
operated by the City. The City's obligation to perform treatment services shall be 
independent of which facility is being used to provide the treatment services.
3.
Other Unincorporated Areas of the County. The City may treat any sanitary sewage that 
is generated in other unincorporated areas of the County not within the Service Area or 
the Cane Creek Expansion Area as its capacity permits. 
Section 7.02. 
Allocation.
The City anticipates that the capacity of the current or new treatment facility will be adequate to meet the
wastewater treatment needs for the City of Hendersonville, the Service Area, and the Cane Creek
Expansion Area for the duration of this Agreement. There is therefore no specific allocation being granted
to the County by the City pursuant to this Agreement. The City agrees to provide the entire wastewater
treatment capacity needed for the City, the Service Area, and the Cane Creek Expansion Area at its sole
cost without any participation by the County or the District for the duration of this Agreement. The County
shall not be obligated to contribute any money towards the construction or repair of the City's current
treatment plant, its planned new treatment plant, any other treatment plants, or any infrastructure upgrades
necessary to provide the sewer treatment capacity as contemplated by this Agreement. The County's request
to connect a collector line or an interceptor line to the City's system shall not be denied on the basis that
there is insufficient treatment capacity in any current or future sewer treatment facility or infrastructure
owned or operated by the City. In the event the current treatment plant, the new treatment plant, and/or any
infrastructure are insufficient to serve all of the City of Hendersonville, the Service Area, and/or the Cane
  
Creek Expansion Area, the City agrees, at its sole cost, to take whatever steps are necessary to secure
additional treatment capacity, whether that be by expanding any plant or infrastructure owned or operated
by the City, building a new plant or infrastructure, or contracting for sewerage treatment capacity from
another provider. 
Section 7.03. 
State Mandates.
The City agrees that it will exercise good faith and due diligence and care in the operation of its sewer
treatment facilities and in the performance of this Agreement. However, it is acknowledged that the City
must provide treatment services in accordance with applicable State and Federal Laws, and must also
comply with any order issued by courts having competent jurisdiction. The County and the District agree
that any orders issued by any State or Federal Regulatory Agency, and any order issued by any court of
competent jurisdiction regarding the operation of the City's sewer treatment facilities, whether constructed
and operated now or in the future, will take precedence over any obligations of the City to perform under
the terms of this Agreement. The City agrees that it will immediately notify the County in writing of any
such orders anticipated or received. If any such orders hinder the ability of the City to perform, the City
shall continue to perform this Agreement to the extent possible; proceed with due haste, due diligence, and
good faith to put itself in a position to be able to fully perform this Agreement; and apply any restrictions
imposed by or resulting from said orders uniformly to all customers, regardless of whether they are located
within the City limits or not. In no event shall the County be required to participate in the cost to comply
with any order of any court, or any mandate issued by any State or Federal agency. 
Section 7.04. 
Annual Report.
The City shall semiannually for the first two years after the date of the Agreement and annually thereafter,
within sixty days of the anniversary date of this Agreement, provide to the County a report showing its
number of customers, treatment capacity available in any and all plants providing sewer treatment services
on the City's behalf for purposes of this Agreement, total allocations to customers, actual discharges into
the treatment plant, and any other information reasonably necessary to apprise the County of the City's
status and ability to continue to perform its obligations under this Agreement. 
Section 7.05. 
Duty to Monitor.
The City shall have the duty to monitor its ability to perform the provisions of this Agreement.
Article VIII
Option to Purchase Property, And Resolution of Disputes
Section 8.01. 
Option.
At closing the City agrees to execute a document granting to the County an Option for that property owned
by the City, located within the City of Hendersonville, having an address of 318 4th Avenue East,
Hendersonville, NC 28792, currently occupied by the City Water and Sewer Department, hereinafter
"Water and Sewer Department Property," in accordance with the terms of Exhibit G, attached hereto,
Exhibit G being incorporated by reference as if fully set forth herein.9
Article IX
Agreement Term, Termination, Amendments, and Resolution of Disputes
Section 9.01. 
Agreement Term.
Except as stated in the provision for termination in Section 9.02 below, this Agreement shall continue for a
period of thirty years from the date hereof at which time it may be extended by the mutual consent of all the
parties hereto or their successors or assigns for multiple periods not exceeding thirty years each.
  
Section 9.02. 
Termination.
This Agreement may not be terminated unless agreed upon in writing by all the parties. Upon termination,
the rights and liabilities of the parties to each other shall cease to exist, and title to all real or personal
property shall remain in the governmental entity then owning said property. Notwithstanding the foregoing,
the City shall continue to provide sewerage treatment services to all customers being served at the time this
Agreement expires. This requirement shall survive the termination of this Agreement.
Section 9.03. 
Amendments.
It is understood and agreed that it is impossible to provide for every contingency which may arise during
the Term of this Agreement. This Agreement may be amended at any time by mutual agreement of all
parties. In order to be effective, the amendment must be in writing and must be signed by the duly
authorized representative of each party. The parties agree to use good faith to attempt to arrive at mutually
acceptable amendments to this Agreement to provide for those unanticipated contingencies.
Section 9.04. 
Prior Statements.
No prior or contemporaneous oral or written statements or material not specifically incorporated herein
shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized
unless incorporated herein by amendment as provided above.
Section 9.05. 
Resolution of Disputes.
In the event there is a dispute among the parties which cannot be resolved, the parties agree to submit to a
non-binding public mediation process prior to instituting any action in a court of law or equity to enforce
the provisions herein. Either party may call for the mediation process. The mediator must be properly
certified by the North Carolina court system to conduct court-ordered mediations, and the mediation shall
be conducted in accordance with all rules applicable to court-ordered mediations, except that the process
shall be public. The party calling for the mediation shall choose the mediator. The parties shall share in the
costs, fees and expenses of the mediator equally. Upon the conclusion of the public mediation process,
either party may elect to pursue any available remedies at law or in equity. 
Article X
Other Covenants and Obligations
Section 10.01. 
The 1986 Agreement.
With the execution of this Agreement, the 1986 Agreement is hereby revoked, terminated, and ended. The
parties shall in no way be bound by any provisions of the 1986 Agreement, hereafter, and each party is
released from any obligations provided for therein. 
Section 10.02. 
The Lawsuit.
At closing each party agrees to execute a Dismissal With Prejudice in the pending litigation between the
City and the County, Henderson County v. City of Hendersonville, 92 CVS 1186, and each party hereto
does hereby release the other party from any and all causes of action heretofore arising from or relating to
the facts, occurrences, agreements and transactions that were the subject of that civil action. 
Section 10.03. 
Abolition of the Mud Creek Sewer District.
In the event the Mud Creek Sewer District is abolished to provide for the formation of the Amended Mud
Creek District, the District shall no longer be a party to this agreement. However, to the extent necessary to
carry out the intent of this Agreement, references to the District in this Agreement shall be deemed to refer
to the Amended Mud Creek District, and shall be deemed viable. Further, if the Amended Mud Creek
District is formed in accordance with N.C.G.S. Chapter 162A, Article 6, the new Amended Mud Creek
District, as represented by the Amended Mud Creek District Board, shall be deemed to be an intended
beneficiary of this Agreement, and shall be able to enforce all of the terms and provisions herein. 
  
Section 10.04. 
Fines and Penalties.
The County shall not be liable for any payment of any fines and/or penalties in whole or in part, imposed
by any State or Federal regulatory agency, and/or any Court of competent jurisdiction, associated in any
way with the City's performance under this Agreement. 
Section 10.05. 
Successor Provisions.
Any references to any laws, statutes or ordinances shall be deemed to refer to the successor provisions also. 
Section 10.06. 
Assignment.
No party may assign this agreement, nor any obligations or benefits under this Agreement, to any third
party without the prior written agreement of the other parties. 
Section 10.07. 
Severability.
In the event any portion of this Agreement is deemed to be unenforceable or illegal by a court of competent
jurisdiction, such a determination shall not affect the validity of the remaining provisions or the Agreement
as a whole. All parties agree that in such event, each will continue to be bound by the benefits and
obligations stated herein. Additionally, the intent of this Agreement shall be enforceable to the greatest
extent permitted by law. 
Section 10.08. 
Governing
Laws.
This Agreement shall be construed and interpreted under the laws of the State of North Carolina. 
Section 10.09. 
Interpretation.
The parties agree that no one particular party shall be deemed to be the drafter of this Agreement in the
event of a breach of contract dispute, and consequently, the provisions herein shall not be construed more
strictly against any party. 
Section 10.10. 
Third Party Beneficiaries.
Except as specifically provided in this Agreement, there shall be no intended nor incidental third party
beneficiaries to this Agreement, and the provisions herein shall not give rise to any cause of action for
enforcing this Agreement to any third party. 
Section 10.11. 
Execution of Documents.
Both parties shall execute any other documents reasonably necessary to effectuate or carry out the intent of
this Agreement, including but not limited to, a Bill of Sale, Master Lease Agreement and subsequent
exhibits (leases) to the Master Lease, Option to Purchase, Dismissals with Prejudice of the Lawsuit, and
any other closing documents. 
Section 10.12. 
Indemnification.
To the extent permitted by law, the City will indemnify and hold harmless the County and the District for
all losses, injuries or damages to third persons related in any way to the operation of the Mud Creek
Equipment and any other lines owned or leased in the Service Area and the Cane Creek Expansion Area,
except for any losses, injuries, or damages caused by the affirmative acts of negligence of the County
and/or the District, its agents and employees. 
Section 10.13. 
Recordation.
This document shall be recorded in the Office of the Register of Deeds for Henderson County. 
Section 10.14. 
Waiver.
The failure to enforce any of the terms of this Agreement by any party shall not be deemed a waiver of any
right to enforce this Agreement. All waivers must be in writing and signed by a duly authorized agent of
the appropriate party in order to be effective. 
Section 10.15. 
Right of Inspection.
The City agrees that any duly authorized representative of the County shall have access to and the right to
inspect, copy, audit, and examine during normal business hours all of the books, records, and other
  
documents relating to the fulfillment of this Agreement during the Term. The terms of this Paragraph shall
survive the expiration or termination of this Agreement, or any determination by a Court of competent
jurisdiction that any of its terms and/or provisions are null and void. 
Section 10.16. 
Compliance with
Applicable Laws.
The City represents and warrants to the County and the District that the City will comply with all
applicable local, State, and Federal laws, rules and regulations in carrying out the obligations incurred by
the City under the terms of this Agreement, including any provisions respecting any requirement that the
City provide sewer service to City customers.
Section 10.17. 
Notice.
Any notice required or referred to by the terms of this Agreement shall be deemed given only if such notice
is written, and is delivered in person, or mailed certified mail, return receipt requested to the persons named
below:
To the County/District:
Mr. David E. Nicholson, County Manager
100 North King Street
Hendersonville, NC 28792 
Copy to the County Attorney at the same address
To the City:
Mr. Chris Carter
P.O. Box 1670
Hendersonville, NC 28793 
With a copy to:
Samuel H. Fritschner, City Attorney
P.O. Box 928
Hendersonville, NC 28793 
Section 10.18. 
Counterparts.
This Agreement may be executed in one or more counterparts and shall become effective when one or more
counterparts have been signed by all of the parties; each counterpart shall be deemed an original but all
counterparts shall constitute a single instrument.
Section 10.19. 
Survival of Terms.
Any provision herein contained which by its nature and effect is required to be observed, kept, or
performed after the termination of this Agreement shall survive said termination and remain binding upon
and for the benefit of the parties until fully observed, kept, or performed. Provided however, that all
provisions of this Agreement which by their terms survive any termination of this Agreement shall survive
indefinitely.
Section 10.20. 
Effective Date of Agreement.
This Agreement shall be effective after it has been duly executed by the two parties, the effective date
being the date above first written.
Section 10.21. 
Headings.
The headings contained herein are for convenience only, and shall not be used for interpretive purposes.
Exhibit A, Part 1
Sanitary Sewer System
Exhibit A, Part 2
Sanitary Sewer System
Exhibit A1
Mud Creek Sewer District Boundary
  
Exhibit B
Legal Description for the Amended Mud Creek District
Beginning at NCGS Grid Monument Bearwallow Fire Tower said point being located under and in the
center of Bearwallow Fire Tower, thence from said beginning point S 67-55-10 E 12,613.40 feet to NCGS
Grid Monument Barnwell, thence S 26-06-27 W 14,288.70 feet to NCGS Grid Monument St. Paul, thence
S 7-18-17 E 8,104.04 feet to NCGS Grid Monument Moriah, thence S 26-28-31 W 13,609.80 feet to NCGS
Grid Monument Piney, thence S-28-46-45 W 13,936,41 feet to NCGS Grid Monument Lane, thence S 4-
43-55 W 4,561.37 feet to NCGS Grid Monument Dwarf, thence S 31-59-24 W 5,297.83 feet to NCGS Grid
Monument Jackson, thence S 44-58-38 W 7,547.26 feet to NCGS Grid Monument Connector, thence 5 11-
18-27 W 3,802.74 feet to NCGS Grid Monument Oak Grove, thence S 24-23-36 W 2,568.45 feet to NCGS
Grid Monument Five Points, thence S 8-56-59 W 2,079.92 feet to NCGS Grid Monument Jordan, thence S
31-57-01 W 2,105.20 feet to NCGS Grid Monument Butt, thence S 14-04-59 W 3,706.15 feet to NCGS
Grid Monument Zirconia, thence S 82-37-58 W 18,870.40 feet to NCGS Grid Monument Oliuet, thence S
86-10-23 W 21,089.47 feet to NCGS Grid Monument The Pinnacle, thence N 4-12-02 E 6,157.69 feet to
NCGS Grid Monument Dornstauder, thence N 7-17-55 W 13,919.31 feet to a point, thence N 9-29-10 W
6,876.33 feet to NCGS Grid Monument Beulahm, thence N 69-25-28 E 9,324.76 feet to NCGS Grid
Monument Jumpoff, thence N 25-29-17 E 5,659.55 feet to NCGS Grid Monument Turley, thence N 1-18-
18 E 7,787.27 feet to a point, thence N 73-49-14 E 4,950.99 feet to NCGS Grid Monument Sedge, thence S
16-28-08 E 2,055.96 feet to NCGS Grid Monument Scott, thence S 43-40-11 E 2,162.01 feet to NCGS
Grid Monument Roe, thence N 36-04-56 E 5,104.83 feet to NCGS Grid Monument Stoney, thence S 67-
31-57 E 4,074.39 feet to NCGS Grid Monument Berkley, thence N 37-49-38 E 9,733.11 feet to a point on
Bryson Mountain, thence N 48-42-17 E 6,835.26 feet to a point on Rocky Mountain, thence N 12-34-21 E
11,957.81 feet to a point on Hightop Mountain, thence N 57-21-35 E 26,880.30 feet back to the point and
place of Beginning being Bearwallow Fire Tower with a NCGS
Coordinate value of, 639,518.101 and a
Easting value of 1,000,437.695.
Exhibit B, Part 1
Mountain Home Sewer System
Exhibit B, Part 2
Prison Pump Station Sanitary Sewer
Exhibit B, Part 3
Naples Sanitary Sewer System
Exhibit D
1993
South Mud Creek:  
Construction
$1,974,617.55
Legal/Administrative/Engineering
     264,583.52
$2,239,201.07
Less:  Depreciation
    -356,983.90
Less:  State Grant 
                -1,045,806.00
Brooklyn Manor
    -536,818.33
   $299,593.84
*
1994
Balfour:  
Construction
    $71,175.78
Legal/Administrative/Engineering
      14,811.09
    $85,986.87
Less:  Depreciation
     -12,302.30
Less:  School
     -24,000.00
     $49,684.57
*
  
1996
Upward Road:  
Construction
            
              $115,025.84
Legal/Administrative/Engineering
    16,378.05
              $131,403.89
Less:  Depreciation
  -11,497.30
Less:  Developer
  -20,000.00
$99,906.59
*
*Net County Contribution to Mud Creek
$449,185.00
Exhibit E
Cane Creek Service Area
Exhibit F
Mud Creek Service Area
Exhibit G
Option to Purchase
Section 1.01. 
Property.
The City covenants and warrants that it is the sole owner of that certain real estate located in the City of
Hendersonville, having an address of 318 4th Avenue East, Hendersonville, NC 28792, currently occupied
by the City Water and Sewer Department, hereinafter "Water and Sewer Department Property," the Water
and Sewer Department Property being more particularly described in the attached Exhibit 1, Exhibit 1
being incorporated by reference as if fully set forth herein.
Section 1.02. 
Grant of Option.
Subject to the terms and conditions contained herein, the City does hereby grant an option to the County to
purchase the Water and Sewer Department Property from the City for the term of this Agreement,
(hereinafter referred to as the "Option"). Said Option shall commence upon the earlier of the City's vacating
the Water and Sewer Department Property, and the passage of four years from the date this Option is
executed by both parties. Once commenced, said Option shall run for a period of two years.
Section 1.03 
Considerations
for Option.
Concurrent with the execution of this Agreement, the County shall pay to the City the sum of $5,000.00 as
payment in full for the Option granted herein for the Water and Sewer Department Property. Both parties
agree that the sum of $5,000 is adequate consideration for the Option.
Section 1.04 
Purchase Price of the Water and Sewer Department Property.
If the County exercises the Option as provided in this Agreement, the parties agree that the purchase price
for the Water and Sewer Department Property will be agreed upon between the City and the County;
provided however that in the event the parties are unable to agree, the purchase price shall be the fair
market value determined as of the date of the County delivers a Notice of Its Intent to Exercise the Option
to the City. [This corrects a typographical omission.] Both the City and the County agree that the fair
market value shall be determined as follows: within thirty days of the delivery of the Notice of Intent to
Exercise the Option, the City and the County will each hire a certified MAI appraiser to render an opinion
as to fair market value. The fair market value (purchase price) of the Water and Sewer Department Property
shall be determined by averaging together the values stated by the chosen appraisers.
Section 1.05 
Exercise of the Option.
Once the option period starts, the County may at any time exercise the Option by first sending to the City a
written Notice of Intent to Exercise Option, and subsequently, when the purchase price has been
determined as stated herein, executing and delivering an Offer to Purchase and Contract for the purchase
price to the City in form substantially identical to the attached Exhibit 2, said Exhibit 2 being incorporated
by reference as if fully set forth herein. [This was a change requested by the Board.]
  
Section 1.06 
Credit for the Option Price.
If the County exercises the Option, the County shall be given a credit on the purchase price in an amount
equal to the option price. [Language regarding five-year period omitted here.]
Section 1.07 
Inspections During the Option Period.
The City shall make available to the County the Water and Sewer Department Property at reasonable times
to conduct such investigations or make such inspections as deemed necessary by the County.
Section 1.08 
Title to the Water and Sewer Department Property.
It is understood and agreed by both parties that if the County exercises the Option, the City will convey the
Water and Sewer Department Property to the County in marketable fee simple absolute title, by general
warranty deed with all normal covenants and warranties of title, free and clear of all security interests,
liens, claims and encumbrances, other than easements and rights-of-way of record.
Section 1.09 
Obligation not to Commit Waste.
The City undertakes that it will not commit waste of the Water and Sewer Department Property for such
period as the County retains an option to purchase in accordance with the above terms.