A state bill that would have merged Lake Junaluska with the town of Waynesville is dead for now.

A Maggie Valley man wants to extract himself from the town limits, claiming the services he gets from the town don’t warrant the taxes he pays.

He stands to save $2,450 a year in town property taxes if successful in wresting his three-acre gated mountaintop tract out of Maggie Valley’s town limits.

Joe Manascalco has cleared the first hurdle in the two-step process. He won support from a majority of Maggie Valley town leaders to remove his property from the town’s borders. Redrawing the town limits to de-annex someone’s property also requires a special vote of the General Assembly in Raleigh, a step Manascalco must tackle next.

Maggie leaders were narrowly split on the issue when it came before them last month, approving the request by a 3-to-2 vote.

Mayor Ron DeSimone thinks the vote to de-annex Manascalco was bad policy. DeSimone called the decision “nebulous, contradictory and inconsistent.” DeSimone believes the aldermen who went along with Manascalco’s request did so because of their philosophical views concerning annexation rather than the facts of Manascalco’s actual situation.

“There is a big difference between agreeing or disagreeing with forced annexation and going back and dismantling something that was done,” DeSimone said.

DeSimone said it also opens the doors for other residents to ask to be de-annexed.

“I think it was a mistake,” he said.

DeSimone warned the board they would be opening Pandora’s box by granting Manascalco’s request.

Indeed, two more residents have stepped up in the past month asking to be de-annexed as well. One appeared simply to be making a point by putting forward a tongue-in-cheek request. The second had originally asked to be annexed in order to get on town sewer, but once they got on the sewer lines, wants to be de-annexed.

But Alderman Phil Aldridge, who supported Manascalco’s request, said the town would just have to “weed out” the illegitimate ones as they come in.

In Manascalco’s case, Aldridge believes he was wrongly brought into the town limits in the first place. It is at the top of a steep, one-lane road and is difficult to provide services to.

“The road will never meet the town’s standards. When a snow plow or garbage truck goes up that road, it has to back all the way back down,” Aldridge said.

Aldridge agreed with DeSimone on one front: he isn’t a fan of forced annexation.

“I have always been against forced annexation,” Aldridge said.

Aldridge questioned whether the town annexed Manascalco because it saw dollar signs.

“That’s the $64,000 question,” Aldridge said. “Quit taking in these areas just because they have a half-million home on them.”

The rest of the subdivision where Manascalco lives, Evergreen Heights, was annexed into the town limits at the same time.

“When we annex subdivisions, it is usually the entire subdivision not just part of the subdivision,” said Town Manager Tim Barth.

A tale of annexation

Manascalco’s property hasn’t been in the town limits long. His property was brought into town in 2009 as part of a large-scale annexation. Seven different residential pockets and subdivisions — totaling 166 acres and more than 130 homes — were part of the annexation that year.

Barth said the goal of the 2009 annexation was to bring those who were already on town sewer officially into the town limits.

“The request was to try to annex as many of the people who had sewer as possible,” Barth said.

Aldridge said simply being on town sewer isn’t justification to annex someone. There are 400 people on town sewer that aren’t in the town limits, and the town isn’t going after those people, Aldridge said.

Manascalco’s property is known locally as “the compound.” He lives at the top of a mountain, up a one-lane road that dead-ends at a gate across his driveway. Two pillars flank the road on the approach to his property, with a sign on one alerting people they have entered a private drive.

There is nowhere to turn around without going through the gate, so the town’s trash truck had to back down the road after reaching his gate. The trashmen didn’t have a problem doing that, Barth said.

But, Manascalco said he didn’t think it was safe and told the town to stop picking up his trash last year.

“He said he didn’t want garbage service,” Barth said.

The town offered to have trash trucks come through the gate and turn around, but Manascalco didn’t want to provide a key.

DeSimone found it ironic that Manascalco canceled town trash pick-up then complained he wasn’t getting town services.

When DeSimone drove up to Manascalco’s property to get a lay of the land before voting on the issue, he encountered a propane truck — backing up no less.

“This is the mountains,” DeSimone said. “People have to back up all over the place.”

Town snowplows did not plow the road because it was considered a private street, even though it was in the town limits.

In addition to trash pick-up, being a town resident gets you police protection, which Manascalco will continue to receive even if he isn’t on the tax rolls.

Technically, property outside the town limits is under the jurisdiction of the county sheriff’s office. But if there were an emergency, Maggie town cops would respond since they are naturally going to be closer.

Annexation a can of worms

Ultimately, Manascalco’s de-annexation claims come down to a technicality.

The town only can target urban or suburban areas for annexation. Annexed areas essentially must be meet the definition of being “in town” — as opposed to farmland or large empty tracts.

There’s a litmus test to ensure towns don’t unfairly target large tracts, simply sucking up property taxes without providing services to many residents in return. The law says 60 percent of both the total area and total number of tracts being annexed have to be fewer than three acres.

At the time Manascalco’s property was annexed, it was listed as three separate lots, each a little more than an acre.

But he believes his property should have been considered for annexation purposes as a single lot of 3.5 acres rather than three separate ones.

“He believes, even though they weren’t combined at the time, they should have been considered one lot because he owned all three of them and had no plans to sell any of them,” Barth said. “But we don’t know that and didn’t know that at the time.”

DeSimone doubts Manascalco’s chances of getting a de-annexation bill passed in Raleigh are very good. A bill would have to be introduced and passed in both the state House and Senate in order to go forward. Whether legislators from the mountains would be willing to expend their political capital to rectify Manascalco’s plight isn’t known.

“That is not likely to happen. These bills have been somewhat cantankerous,” DeSimone said.

Maggie Valley has steadily increased its town limits during the past three decades. In the 1970s, Maggie Valley was nothing but a strip of motels, restaurants and gift shops — the town limits draw like a long skinny snake along the main commercial drag. It had only a few dozen actual residents.

But as mountainside subdivisions sprung up around Maggie, giving rise to both a seasonal and year-round population, the town limits expanded to bring the newfound residential population into its fold.

The way town leaders saw it, the town’s infrastructure was being maxed by the burgeoning residential population cropping up all around it but not contributing their fair share through property taxes.

The annexations were nearly always fought by residents who thought they were getting a raw deal. The town services they got weren’t worth the taxes they paid, opponents claimed.

DeSimone’s own neighborhood was annexed into the town limits of Maggie Valley during the past decade. DeSimone said the majority of those in his subdivision are now glad they are in the town limits, however.

De-annexation request follows small campaign contribution

Two Maggie Valley aldermen who voted to de-annex Joe Manascalco had gotten a modest campaign contribution from him in the last election.

Aldermen Phil Aldridge and Phillip Wight voted to de-annex Manascalco after receiving a $200 shared campaign contribution. The contribution was also to be shared by Mayor Ron DeSimone, although he voted against Manascalco’s request when it came up last month.

Manascalco had donated $200 to Aldridge, DeSimone and Wight in the fall election. The three ran as a team, putting all three of their names on signs and brochures.

While Manascalco gave the $200 to Aldridge, according to campaign finance reports filed in the Haywood County Board of Elections office, it was shared equally by the three for campaign literature.

“Joe said, ‘Make sure everybody gets this.’ It was all put into one pile and shared in one kitty,” Aldridge said.

Aldridge said the political donation from Manascalco played no role in how he voted on the de-annexation.

“It was $200,” Aldridge said, pointing out the sum is way too small for anyone to honestly think it could be considered a bribe.

Aldridge said he “honestly felt in my heart” that Manascalco had been treated unfairly four years ago.

The donation obviously didn’t influence DeSimone, since he voted against Manascalco’s request.

This is not the first time Aldridge and DeSimone have been at odds after having run on the same ticket.

In the coming months Lake Junaluska residents will weigh in on whether to become part of the town of Waynesville.

For Waynesville, the move could mean a million or more dollars in additional property taxes each year and the benefits of being a larger and possibly stronger town.

For Lake Junaluska residents, the daily logistics of running a community of 800 homes could be placed in accomplished hands. And perhaps most importantly, the burden of repairing the community’s aging water and sewer lines would be punted to Waynesville.

But, there are downsides, too. Lake Junaluska residents could lose autonomy and identity. And, Waynesville may not want the hassle of managing Lake Junaluska’s infrastructure if it would cost more than the town stands to reap in new property taxes.

“It appears on the surface to be a win-win, but how much? How much to provide the services?” wondered Waynesville Alderman Wells Greeley during a discussion on the idea at a town board meeting last week.

Discussion of the issue is in its earliest stages and will take months to explore.

“This decision is going to impact Haywood County for the next 100 years and beyond, so we want it to be in all of our best interests,” said Jack Ewing, the CEO of Lake Junaluska Conference and Retreat Center.

While Lake Junaluska is not an official town, the community already looks and acts like one. It has its own trash pick-up, water and sewer system, street maintenance and even security force. The roughly 800 homes that make up Lake Junaluska’s residential community pay a yearly fee for those services.

The idea of merging with Waynesville comes as Lake Junaluska residents stare down the growing problem of aging water and sewer lines.

“The community will need to decide whether they would like to bear that burden alone, or as part of a larger group,” according to a report by a consultant hired to analyze the pros and cons.

The idea of merging with Waynesville was borne out of that reality.

Lake Junaluska Assembly hired a consultant to study the issue and prepare a report outlining various options — merging with Waynesville, forming its own town or remaining as it is now.

Ultimately, the decision will rest with Lake Junaluska’s residents.

“Each option has some advantages and disadvantages,” said Ron Clouser, president of the Lake Junaluska Community Council. “I would hope that people would have an open mind and take time to read the study and see what it proposes.”

Ewing said leadership at Lake Junaluska is not endorsing any option and has no preconceived notion about which course is best.

“Over the next three to six months, there will be multiple opportunities for people at Lake Junaluska to provide input on these options,” Ewing said.

Down the road there could be a vote to gauge residents’ opinions.

Clouser said he wouldn’t want to factionalize residents by moving forward without a “practically unanimous” consensus.

“I don’t want to see us go down a road that has a split with anybody,” said Clouser, one of seven members elected by homeowners to lead their residential community association.

Ewing shared the consultant’s report with Waynesville leaders at their town board meeting last week. Ewing told the five town board members they will obviously need to embark on a fact-finding mission of their own.

“You may say, ‘No, we are not interested in partnering with you in that way,’” Ewing said.

Which is cheaper?

One question that will likely weigh heavily in the decision is cost: Will residents of Lake Junaluska pay more in property taxes than they would in annual fees?

Currently, the town’s property tax rate is 40 cents per $100 of property value. That’s more than what Lake residents currently pay in fees, set at 28 cents per $100 of property value.

But, that fee is bound to go up if the lake has to tackle its water and sewer problems on its own. By how much is not yet known, however, thus making a true dollar for dollar comparison impossible right now.

“Property owners want to know is this going to cost me more or is it going to save me money,” Ewing said. “The report is intentionally silent on finances. It is important, but we didn’t want people to begin with ‘what is the cheapest option for me, and I like that option best.’”

Indeed, that’s not the only issue that will weigh on residents’ minds, Clouser said.

“I think it is going to be more complicated than that. I think it will be more than just an issue of that number,” Clouser said.

What may be more important to residents is how their community character and identity could be impacted. Lake Junaluska has a 100-year history, and residents who cherish that may not want to place their future in someone else’s hands.

“There is a track record of what it means to live at Lake Junaluska. That is an issue at this point,” Clouser said.

Waynesville has a track record of its own: one of bringing independent communities into its fold. The neighboring town of Hazelwood merged with Waynesville two decades ago, but Alderman Gary Caldwell says it didn’t lose its identity.

“Hazelwood will always be Hazelwood and Lake Junaluska will always be Lake Junaluska,” Caldwell said.

Yet Clouser said Junaluskans have a deep sense of pride, both emotional pride in where they live and financial pride in taking care of their own.

Ewing agreed.

“One of the issues our residents are going to talk about is their desire for independence,” Ewing said “Many people may wish to stay the way we are.”

But, there’s a caveat. A true “status quo” simply isn’t an option, he said. Residents must understand “the responsibility of going it alone when it comes to upgrading our infrastructure,” Ewing said.

This is where Waynesville may prove its mettle.

“Waynesville is better resourced to address the needs of the Lake Junaluska community, such as replacing the water and sewer infrastructure, the capital equipment of Lake Junaluska and paving the roadways,” the consultant’s report states.

But, joining forces with Waynesville has other perks as well. Simply put, Waynesville is seen as a quality-run town.

“Waynesville already has a well-established, successful, and relatively progressive governance structure,” the consultant’s report states. “They have established a culture of efficient, effective, and professional administration that has not yet been created at Lake Junaluska.”

Sister communities

Waynesville leaders, meanwhile, have to figure out the financial pros and cons of the different options.

“My original reaction is there is a distinct opportunity for the town of Waynesville. The question is, is it cost effective?” Mayor Gavin Brown said.

While the extra property tax looks good on paper, the town would have to hire additional trash crews, police officers and street workers to take on such a large new area.

But, the cost of repairing the lake’s water and sewer system will be the kicker. If it appears that it will cost more than the town is getting in return, the town could temporarily impose higher property taxes on residents of the Lake than the rest of town.

“If there is a need to bring a certain system up to code, they can charge a higher rater to that specific area for a set period of time,” said Andrew d’Adesky, a graduate student with the Institute of Government at UNC-Chapel Hill that prepared the study on behalf of the Lake.

The town, like the residents of the Lake, has more to consider than just economics. Waynesville and Lake Junaluska are kindred spirits in some ways, both forward-thinking communities on each other’s doorstep. Waynesville Alderman Leroy Roberson said the two have a cross-over relationship.

“There is a mutual community,” Roberson said.

Bringing Lake Junaluska into the town’s fold could be a once in a lifetime opportunity to forever change the town’s course in a positive way, Brown said.

“It would be a nice addition to the town of Waynesville,” Brown said.

But, the town must also ask whether it is worth the hassle. Lake Junaluska is three miles from downtown. Can the town afford to have its attention diverted when there are existing parts of town that need attention?

“Should we add another issue to the town’s plate? Would we spread ourselves too thin?” Brown asked.

Waynesville could also enjoy the benefits of a simply being a larger town.

Lake Junaluska community has around 800 homes — about half are seasonal homes, the other half are lived in by year-round residents. Waynesville’s population of 10,000 would increase by at least 10 percent.

That could mean benefits beyond the obvious increase in property taxes. There are numerous slices of state revenue that towns get based on their population — from a cut of sales tax revenue to street and sidewalk funding.

Bigger population numbers also carry bigger clout, which can come in handy when recruiting businesses or lobbying for the town’s interests in Raleigh.

Lake Junaluska: past and present

Lake Junaluska began as a religious community more than 100 years ago, and as a summer retreat for the United Methodist Church. Pastors, bishops and other church leaders founded the Lake Junaluska for religious gatherings and conferences in 1908.

Almost immediately, they began building summer homes there for their families to escape the heat of the South and a like-minded community quickly built around the Methodist Church retreat.

Lake Junaluska is no longer a private Methodist community. Anyone can buy a home and live there, and it is no doubt the lake community is growing increasingly secular.

But, its roots in the Methodist church have hardly disappeared. Many homes have been passed down through the generations. Children with fond summer memories of the lake came back to live permanently. Lake Junaluska also is a hotbed of retired pastors and bishops. The grounds of the conference center, which dominate the main campus around the lake shore, bustles with conferences and retreats throughout the year.

Business owners hoping to be annexed by Waynesville in order to serve alcohol be out of luck.

At a meeting of the Waynesville board of aldermen on April 14, town leaders failed to approve an annexation request by Grandview Lodge Owner Terry Ferguson. Ferguson maintains that he wants his lodge to be annexed in order to gain access to town services like water and trash pickup. He also said becoming part of the town would save money on his insurance rates in a tough economic time.

“What we are trying to do is trim our expenses as a small business,” Ferguson said. “Times are tough right now, and businesses are trying to cut in every way they can.”

But another perk that Ferguson would gain — namely the ability to serve liquor, wine and beer to patrons of his restaurant — quickly became the focus of the debate.

Haywood County is dry, so businesses outside town limits can’t serve alcohol. Though Ferguson said being able to serve alcohol wasn’t his main goal, he filed an application to obtain an ABC permit from the town of Waynesville, according to Waynesville Police Department Lt. Chuck Way. Way said Ferguson’s request was denied because he wasn’t in the town limits.

When Ferguson came before the town petitioning for annexation, neighbors of the Lodge came with their own petition in hand — one opposing the request, namely because it would allow for liquor by the drink.

“We’ve had a very quiet neighborhood for many years now, and I just have a little petition we passed around worried about liquor by the drink,” said Scott Muse, a Grandview area resident.

The petition cited liquor as the primary reason for opposition, saying that isn’t conducive to the family neighborhood that surrounds the lodge, “where children roam and play.” It didn’t mention beer or wine.

Another neighbor stepped up to say he was concerned that the availability of liquor could change the character of the community.

“We have a very quiet, peaceful neighborhood,” said Sam Cable. “I feel that should alcoholic beverages be permitted, this would open the door for our community to not be as quiet as it is.”

Ferguson continued to maintain that alcohol wasn’t the primary reason for his annexation request.

“This is not an issue of liquor by the drink at all, and it should not be presented that way,” he said after the meeting.

But Mayor Gavin Brown stated that whether or not Ferguson presented it that way, “the issues now mix.”

Alderman Leroy Roberson agreed.

“It seems like it’s coming down to liquor by the drink, though I think (Ferguson) made a solid point about the services Waynesville can provide,” Roberson said.

Brown argued that citizens outside of the Waynesville town limits did not get an opportunity to vote on whether they supported having liquor by the drink and it wasn’t the town’s place to force it upon them. Waynesville residents passed a referendum allowing the sale of mixed beverages on May 6, 2008.

“Those folks don’t want liquor by the drink in their community, and I’m not going to impose it upon them,” Brown said.

Brown was an open supporter of the liquor by the drink referendum. In fact, it was one of his campaign platforms when running for mayor two years ago. Shortly after his election he proceed with the ballot measure as an issue of free choice. The desires of Waynesville voters should not be imposed on those outside town, he said.

“It was never my intention to impose my views on that section of the community,” Brown said.

The board seemed concerned about setting a precedent if they granted Ferguson and his lodge the annexation.

“There are a thousand parcels of land that have businesses on them that are outside the city limits that would want to be annexed so they can sell liquor by the drink,” said Brown.

Alderman Wells Greely cautioned that more thought needs to be given to how the two issues — annexation and liquor by the drink — connect with one another.

“What about other places that might choose to be annexed?” Greely questioned. “With liquor by the drink being so new, I think we need to take baby steps as we go through and think about liquor by the drink and how it affects this community.”

Alderman Gary Caldwell said he wouldn’t support the annexation.

“I don’t feel good about it at the present time,” Caldwell said. “It would be unfair, and it would be hard for me to vote on it.”

In general, aldermen agreed that they weren’t opposed to the idea of having liquor. Alderman Libba Feichter pointed out that having a liquor license allows for more control on the part of the proprietor over how much patrons consume. Currently, Grandview Lodge and other places offer brown-bagging, which allows customers to bring in their own bottle and generally consume as much as they want.

In the end, however, aldermen failed to make a motion to grant Ferguson’s annexation request.