Homeowners File Suit Against Town Over Water Rates

By Arianne Aryanpur
Washington Post Staff Writer
Thursday, October 5, 2006

A group of homeowners who receive Leesburg water and sewer services but live outside the town has filed a lawsuit contending that out-of-town rates being charged are excessive.

In a lawsuit filed Monday in Loudoun County Circuit Court against town officials, the homeowners argue that Leesburg is violating Virginia law by imposing a 100 percent water and sewer surcharge on out-of-town residents.

The homeowners also say they have no recourse but to pursue legal action because they are required, under a 1986 town-county agreement, to receive utilities from Leesburg rather than from the county. The rate they pay is 120 percent higher than what the Loudoun County Sanitation Authority would charge.

The plaintiffs, who say they represent 2,765 families, include the homeowners associations for the communities of Lakes at Red Rock, River Creek and Spring Lakes and some residents of Potomac Station and Lansdowne on the Potomac. All of the communities are north of Route 7 and east of Leesburg.

In December, the Leesburg Town Council voted to increase its out-of-town water and sewer fees by 36 percent while leaving the fees for in-town customers unchanged.

The in-town rate per quarter is $2.86 per 1,000 gallons for water and $3.61 per 1,000 gallons for sewer service, compared with the out-of-town rate of $5.71 for water and $7.21 for sewer.

The council's vote met with much resistance from residents and homeowners associations in the affected areas, and they formed a group called Loudoun Citizens for Fair Water Rates.

"Since last December, we've had open conversations and very cordial meetings with the council members," said group member Stewart Curley, who lives in River Creek. "I wish I could say that the town attorney and mayor have been as interested in having a conversation as much as the other council members have."

The plaintiffs say that Leesburg is violating sections of the Virginia code that call for utility providers to set "fair" and "equitable" rates. They are seeking lower rates as well as a refund for the increase they have paid since the rates took effect Jan. 1.

Leesburg Mayor Kristen C. Umstattd said that the town has complied with Virginia law and that a 100 percent utility surcharge on out-of-town customers is reasonable compared with the practices of other Virginia jurisdictions.

According to a rate consultant hired by the plaintiffs, it costs the town no more to serve out-of-town customers than in-town customers. But Umstattd argued that the difference in rates is fair because in-town customers pay taxes that support water and sewer services. "Our out-of-town water users don't pay taxes," she said.

The lawsuit also argues that Leesburg failed to conduct proper research before making its decision to increase the out-of-town surcharge.

"I fundamentally disagree," Umstattd said of that allegation. "Town staff and council did extensive research and analysis before deciding that it was the fair and equitable thing to do."

Leesburg first voted to enact a surcharge on out-of-town customers in 1998. The increase was phased in, and by 2001 those customers were paying rates 50 percent higher than those paid by town residents.

Town Attorney Barbara Beach declined to comment on the lawsuit Tuesday. Umstattd said she expected the town to aggressively defend itself against the suit in the coming months.

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