Lawsuit Over Water Service Is Dismissed

By Bill Turque
Washington Post Staff Writer
Thursday, May 17, 2007

A federal judge yesterday threw out a lawsuit filed by the City of Falls Church charging that Fairfax County's water utility was improperly offering service to new customers in areas traditionally served by the city.

The ruling, which clears the way for the county to sell its water more widely, deals a potentially serious blow to the finances of the city of 11,000.

Falls Church depends heavily on revenue from its water system, which serves more than 34,000 businesses and homes, most of them in the surrounding county. Critics have contended, however, that the city unfairly subsidizes low property tax rates for its homeowners by selling high-priced water.

For decades, Falls Church has purchased water from the Washington Aqueduct, operated by the U.S. Army Corps of Engineers, for sale beyond its boundaries, including areas such as Tysons Corner and Dunn Loring. In February, the city sued Fairfax Water, formerly the Fairfax County Water Authority, alleging that it contacted the developer of a major residential project near the Dunn Loring-Merrifield Metro station about providing water service.

Falls Church officials argued that a series of federal laws controlling the aqueduct's water, and a 1959 agreement with the county, give the city exclusive rights to sell service in certain parts of Fairfax. But Judge Claude M. Hilton of U.S. District Court in Alexandria said in a 15-page opinion that the government never specifically granted that privilege to Falls Church.

"Had Congress intended to grant the City of Falls Church an exclusive federal service territory in Fairfax County, it certainly knew how to say so," Hilton wrote. "But there is nothing in any of the federal Acts upon which the City relies in support of its claim." The agreement with the county expired in 1989, Hilton also noted.

Falls Church City Attorney Roy Thorpe said in a statement yesterday that the city was disappointed with the decision and would be reviewing its legal options. "We are prepared to defend our water system and preserve our water service area. We believe we should be able to do business as we have for the past 75 years," Thorpe said.

The city charges $3.03 for 1,000 gallons of water, while the county charges about half that. Fairfax County Board of Supervisors Chairman Gerald E. Connolly (D) said the decision "opens the door for the Fairfax Water Authority to compete anywhere and everywhere in the county." The city, he said, "was seeking protection from competition." The authority serves about 1.3 million people in Fairfax, Loudoun and Prince William counties and the city of Alexandria.

According to testimony and exhibits submitted by Fairfax Water attorneys, Falls Church has taken large sums out of its water system funds for general city operations. From 2000 to 2006, the city transferred an average of $4.6 million a year from the water system.

Because only 10 percent of the city's water customers live in Falls Church, attorneys said, it meant that about 110,000 other Fairfax County rate payers were subsidizing the cost of city government.

Halsey Green, the city's former finance director, testified that he went along with the policy of transferring water funds "but did not believe it was justified by the amount the city had invested in the system."

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