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Virginia Politics
Posted at 07:44 PM ET, 06/11/2012

Falls Church officials want to tap $1 million from water fees to pay legal bills in water war

Falls Church’s City Council Monday night was set to consider whether to tap about $1 million in surplus fees collected from customers of its water utility — most of whom live outside the city in surrounding Fairfax County — in order to pay legal bills from a long-running battle with the county over the city’s right to set those water rates.

“Legal fees are normally part of the running of any organization,” Falls Church Vice Mayor David F. Snyder said Monday shortly before the council was to meet. He said the litigation has been necessary to fight off the county’s “confiscatory legislation.”

The city’s feud with the county over water service became a broader conflict in the region after the county’s Board of Supervisors voted last year to assume authority for setting water rates for all county residents, including those who receive their supply of drinking water from municipal authorities. The county said it was acting to protect the interests of thousands of county customers whose water bills are significantly higher than those of their neighbors, who get their water from a county-controlled utility. Falls Church and several other municipalities accused the county of a power grab.

Earlier this year, the city of approximately 12,000 people took steps to auction its water utility to the highest bidder, including investor-owned utilities. But a U.S. Army Corps of Engineers’ legal opinion forced the city at the last minute to cancel plans to auction its approximately 80-year-old water utility.

Since the federal agency’s ruling last month, Falls Church officials have been considering several possible steps to resolve its long-running conflict with Fairfax County over its water utility, including the possible creation of an independent authority that would not be subject to a measure enacted last year by the Fairfax County Board of Supervisors that assumes authority for all water rates in the county. City officials also have been discussing whether to appeal the Corps’ administrative ruling or pursue a merger with county-controlled Fairfax Water, while the legal battle also grinds on.

Soon after Fairfax County amended its water ordinance, Falls Church and several other municipalities whose water utilities provide service to county residents outside their borders took legal action seek ing to block the sweeping new law. The measure gives Fairfax Water the right to set water rates countywide, including those for county residents who receive water from Falls Church or another municipal provider. The ordinance also creates exclusive areas of service for Fairfax Water.

Challenges to the ordinance filed by Falls Church, Vienna and the City of Fairfax to the ordinance are scheduled to be heard this Friday before U.S. District Court Judge Leonie M. Brinkema in Alexandria.

Despite the legal battle, Snyder said the city would still prefer to work out a merger with Fairfax Water, an independent water authority whose board is appointed by the Fairfax County Board of Supervisors. But the sticking point so far has been whether Fairfax Water would offer any compensation to the city for a merger that would effectively take over the smaller system.

Falls Church officials say they would be remiss if they did not require some compensation for its citizens who took on the risk and expense of creating and operating the system. But Fairfax County officials argue that because most of the City of Falls Church water utility’s customers are county residents, they have already paid for the water system over the years.

In the meantime, city officials are also trying to find out what made the U.S. Army Corps of Engineers reverse a key legal opinion that forced the city to call of its proposed sale less than 24 hours before it was to take bids on a system valued at upwards of $44 million.

The city had proceeded with the auction on the basis of a March 8 legal opinion from a Corps attorney that the Corps’ Washington Aqueduct could supply water from the Potomac River to a government-owned or investor-owned utility. On May 17, however, Earl H. Stockdale, who is chief counsel for the Corps, issued an opinion that contradicted the earlier one, saying that a 1947 law allowed the Corps to deliver its water only to a governmental utility. Stockdale said his opinion also tracked a 1963 legal opinion issued by the Corps.

Eugene Pawlik, a spokesman for the Corps, said the first opinion had only been a preliminary one that changed with further research.

“At the time, we had no concrete proposal from Falls Church, all necessary research had not been completed, and the opinion had not been fully coordinated within Chief Counsel’s office,” Pawlik said in an email. He said the chief counsel, who has final legal say, came to a different conclusion from another staff attorney after considering all of the relevant materials, statutes, congressional legislative history, and the 1963 opinion.

By  |  07:44 PM ET, 06/11/2012

Tags:  Falls Church racks up $1 million in water war legal fees

 
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