To the Editor:

To this day, I have no doubt that the Lake Junluska and the City of  Waynesville annexation issue will eventually be resolved in favor of annexation. However, in the interim, the consequences of the political decision to prevent even a supporting House floor vote and then a majority vote of the registered voters in both Waynesville and Lake Junaluska are becoming clearer.  

My understanding is that this October (2016) the governing bodies at Lake Junaluska will have to decide how to proceed. The matter of the engineering reports that laid out a necessary $10 million estimate of overall infrastructure/equipment costs over 10 years did not go away. The issue of Lake Junaluska’s structural sustainability did not go away and the ability to meet the financial obligations inherent with keeping the infrastructure sustainable is unresolved at this time.

Here is the approaching financial dilemma for Lake Junaluska as I see it.  With current revenue collected by the Public Works Department of approximately $400,000 per year, a 10-year projection (with no fee increases) would be $4 million in revenue brought in, or $6 million underfunded at the end of 10 years based on the engineering study figures.

The homeowner fees for Lake Junaluska property owners of the monthly charge for water and sewer generates approximately $250,000 per year.  That equates (with no fee increases) to a 30-year period to reach the $7.5 million, 10-year timeline in the engineering study to update/replace the patchwork of the existing water/sewer system which dates back, in part, to over a hundred years and requires continual maintenance. The annual service charge to homeowners generates approximately $150,000. This money covers such items as repairing and paving the roads, equipment repair and replacement, and tools. At the current rate of the annual service charge, it will take 17 years to generate the funding the engineering study indicates should be covered in their 10-year timeline.  

In any case, it is very likely, in my opinion, that the governing bodies at Lake Junaluska will have no choice but to address water/sewer monthly fee increases and an increase to the annual service fee to allow the community’s infrastructure to remain sustainable. If those bodies choose to address the issue head-on and adhere to the 10-year timeline in the engineering study, it will cost (based on my figures) an approximate increase of 100 percent in the monthly water/sewer fees and a 55 percent increase in the annual service fee beginning in January of 2017.  

However, the governing bodies will likely enact fee increases more incrementally — maybe extending the timeline to 15 or even 20 years — while being keenly aware that the incremental increases will necessarily have to be adjusted higher to cover the effect of inflation over and above the 10-year timeline initially planned. In other words, it will no longer be a $6 million dollar deficit, but a substantially higher figure. And the water and sewer infrastructure will become an increasing liability to maintain and repair.

If annexation had been approved, the current fees paid by Lake Junaluska’s homeowners would have remained almost exactly equal to what they are paying now. Then, as time moved forward, fee increases would be much smaller than what I projected above (without annexation) due to economies of scale from joining the city of Waynesville and their ability, if needed, to tap into outside funding such as bonds. And, those increases would be the same as those being imposed on the citizens of Waynesville. No surcharges that I am aware of for Lake Junaluska.

The consequences of not yet approving annexation are quite real. Lake Junaluska homeowners now must realize that to stay unincorporated with the current fee structure is unsustainable. The monthly charge for water and sewage and the annual fee will both have to be raised. How much and how quickly that will happen is an intriguing question, but one that will require a well thought out and possibly very painful answer.

James Ryer, 

Lake Junaluska