wpostServer: http://css.washingtonpost.com/wpost

The Post Most: Local

Virginia Politics
Posted at 06:58 PM ET, 03/06/2012

Possible sale of Falls Church water system attracts strong interest from several suitors, city says

Nine potential suitors have approached Falls Church since the city took the step last month of publicly inviting interest in the possible sale or merger of its water system, a spokeswoman said Tuesday.

Among those outside utilities taking a look was Fairfax Water, whose general manager late last month made public its interest in an friendly merger between the two systems. Other water utilities that responded to Falls Church’s overture include American States Utility Services, Aqua Virginia, Corix Infrastructure, Government Services Group, United Water and Virginia American Water.

“I am pleased by the strong expressions of interest from national and regional leaders in the water and wastewater field,” Falls Church Mayor Nader Baroukh said in a written statement.

For now, the substance of the water utilities’ proposals will remain confidential as city officials review their options, city spokeswoman Susan Finarelli said. And city officials said all options remain on the table, including maintaining the current ownership structure of a public water utility that has operated since the 1930s and generates about $20 million in annual revenues.

After years of conflict with Fairfax County over water service outside city limits, the Falls Church City Council issued a Request for Expressions of Interest on Feb. 13 to see whether a privately or publicly owned utility might be interested in purchasing the system.

Falls Church’s overture came after the Fairfax County Board of Supervisors’ decision late last year to assume authority for setting rates for all county residents, regardless of whether they received their water from a municipal utility. The move triggered complaints of a power grab by the county’s smaller neighbors, and the City of Fairfax has taken legal action to block it. Officials in Falls Church, Vienna and Fairfax said the county simply wanted a water monopoly in order to benefit from millions of dollars in revenue from thirsty new development in Tysons Corner and Merrifield.

About 90 percent of Falls Church’s 34,500 water service accounts belong to customers in Fairfax County, and that is where the troubles arose. County residents who received water from the city have complained that their rates run much higher than those of neighbors who receive water from Fairfax Water, the county-controlled water authority that supplies most county residents. Many county residents were doubly angry that the city’s overcharges for water service were returned to the city’s treasury. They argued that it amounted to being taxed without representation. But the city argued that, having built and incurred debt to operate the system, it was justified in retaining any revenues the system generated.

After years of sparring — and a legal battle — the Fairfax County Board of Supervisors voted Dec. 6 to set water rates for all county residents and establish exclusive service areas for Fairfax Water. Beginning in July, a municipal utility that set higher rates than those set by Fairfax Water would have to demonstrate why the higher rates are justified. The Board said it had no choice but to protect county consumers who were paying much higher rates for municipal water than neighbors who receive Fairfax Water.

By  |  06:58 PM ET, 03/06/2012

Tags:  Nine show interest in [possible Falls Church water system sale

 
Read what others are saying
     

    © 2011 The Washington Post Company