Board Rankled by Stalemate In Town Utility-Rate Dispute

Loudoun County supervisors expressed frustration Tuesday with Leesburg officials for not having settled a dispute over the utility rates paid by out-of-town customers.

The Board of Supervisors voted in December to wait 90 days before deciding whether to allow Leesburg -- rather than the Loudoun County Sanitation Authority -- to provide water and sewer service to the Crosstrail development, a complex of offices, restaurants, stores and 1,200 homes proposed for a 500-acre site just southeast of town.

At the time, the supervisors said they were concerned about the 100 percent utilities surcharge that Leesburg imposes on out-of-town customers. They said the 90 days would give the town time to reach an agreement with homeowners who have filed suit over the rate structure.

But the waiting period ended Monday, and Town Manager John A. Wells told the supervisors Tuesday that Leesburg needed until April 10 to resolve the dispute.

Stewart Curley, a representative for the homeowners, also appeared before the board, saying that the residents were not satisfied with the town's initial offers to lower the surcharge. Curley added that the homeowners did not meet with town officials until Monday, despite several attempts by his group to set up an earlier meeting.

Supervisors Vice Chairman Bruce E. Tulloch (R-Potomac), who proposed the 90-day window, said he was disappointed by the town's lack of progress.

"At this point, I think this board needs to move forward with Crosstrail," he said.

Several supervisors agreed, saying they were not sure why it was taking so long to resolve the issue.

Supervisor Sarah R. "Sally" Kurtz (D-Catoctin) said Leesburg officials failed to justify the difference between their in-town and out-of-town rates. Supervisor Stephen J. Snow (R-Dulles) noted that the rate paid by the homeowners was 120 percent higher than what the county sanitation authority would charge.

"I don't understand the huge fees, given that someone could do the job a lot cheaper," Snow said.

The Leesburg Town Council approved the 100 percent surcharge in December 2005. The council has argued that the surcharge is reasonable compared with the practices of other Virginia jurisdictions, and that it makes up for out-of-town customers not paying taxes to support the town's utilities.

The group of homeowners, which says it represents 2,765 families living north of Route 7 and east of Leesburg, contends in its suit that the rate structure violates Virginia law. The suit, filed in October in Loudoun County Circuit Court, also says that a 1986 town-county agreement requires the residents to receive water and sewer service from Leesburg rather than from the county.

In January, the town's attorney asked the court to dismiss the suit on the grounds that the rate increase was justified and that state laws were not applicable. A hearing is set for March 21.

Wells told supervisors Tuesday that town officials had presented the homeowners with four options for rolling back the surcharge. The most aggressive of the rollbacks would cut the 100 percent surcharge to a 50 percent surcharge over the next five years.

Members of the homeowners group said none of those options is satisfactory.

Wells said the Town Council would hold a public hearing on the utility rate issue Tuesday before adopting water and sewer rates April 10 as part of Leesburg's fiscal 2008 budget.

The developer of the Crosstrail project, Peterson Cos., wants to get water and sewer service from the county, while town officials say they had long planned on providing utilities to that property.

The supervisors' vote on whether to grant the developer the necessary rezoning also has been held up by town and county officials' concerns about the project's impact on traffic. The developer is to address those concerns again at a meeting of the board's transportation and land-use committee March 26. The meeting is open to the public.