Before the Orange Water and Sewer Authority (OWASA) was established, water and sewer services in southeastern Orange County were provided by systems which were separately owned and operated by the University of North Carolina at Chapel Hill (the University), the Town of Chapel Hill, and the Town of Carrboro. Rapid growth during the 1970s raised concern about The University's role as the long-term supplier of public water and sewer services in the area.
In November 1971, the Governor of North Carolina appointed a Utilities Study Commission to study the feasibility of retaining, selling, or otherwise disposing of the water and sewer systems operated by The University; to make recommendations to the Board of Trustees of The University; and, in consultation with officials of The University, to negotiate the terms of sale or other disposition of any of such utilities. The Utilities Study Commission determined that the interest of the State of North Carolina and of all concerned would be best served by The University divesting itself of the majority of its utility holdings.
On May 28, 1976, the Utilities Study Commission determined that the conveyance of The University's water and sewer utility system and properties to a public entity would be in the best interest of the State of North Carolina and The University. On June 11, 1976, the Board of Trustees of The University approved the conveyance of The University's water and sewer utility system in accord with the Agreements of Sale and Purchase. On August 9, 1976, the Governor and Council of State approved the conveyance of The University's water and sewer utility system.
The governing bodies of the Town of Carrboro, the Town of Chapel Hill, and Orange County determined that a water and sewer authority be organized under Chapter 162A, Water and Sewer Authorities Act, of the General Statutes of the State of North Carolina, as the appropriate organizational structure to acquire and operate the utilities.
The Orange Water and Sewer Authority was officially born when the Agreements of Sale and Purchase for acquisition by OWASA of the separate water and sewer systems were executed in 1976 by the Town of Carrboro, the Town of Chapel Hill and The University. Closing was held on February 15, 1977 and OWASA commenced operations on February 16, 1977.