Ruling Raises Worries About Local Boards
Agencies May Lose Authority to Collect Money, Some Fear

By Anita Kumar
Washington Post Staff Writer
Wednesday, March 12, 2008

RICHMOND , March 11 -- The recent Virginia Supreme Court ruling that eliminated much-needed transportation money could also wipe out the actions of dozens of local boards that raise millions of dollars each year to pay for water and sewer services, parks and toll roads, local and state officials say.

If the General Assembly does not correct the problem, several local and state officials said, they worry that a Virginia resident could refuse to pay his water bill and sue the local water board, arguing that the panel is not allowed under the state constitution to collect the money.

The legal snag, which Gov. Timothy M. Kaine (D) and local and state officials have discussed in recent days behind closed doors in Northern Virginia and Richmond, could hand the General Assembly a massive legal problem to address this spring.

Lawmakers are already exploring a special session to address the court ruling as it applies to transportation.

"No one wants to talk about it, because it could result in overturning water authorities, toll road authorities. . . . It could be a real nightmare," said Del. David B. Albo (R-Fairfax), a lawyer who chairs the House Courts Committee.

"No one seems to know. People have no idea how far-reaching this court decision may be," he said.

In a decision stemming from a lawsuit filed last year, the state Supreme Court ruled Feb. 29 that the regional authorities that legislators set up to collect money for road and transit projects in Northern Virginia and Hampton Roads cannot impose taxes and fees.

That duty, the court ruled, falls only to elected bodies.

Although there is disagreement among state and local officials, some said they think the ruling also applies to dozens, possibly hundreds, of unelected boards in Virginia, including those that charge fees for water and sewer services, parks, ports, airports and economic development.

Those boards could include Fairfax Water, the state's largest water utility, which serves Fairfax, Loudoun and Prince William counties and Alexandria.

The utility, which is run by a 10-member board appointed by the Fairfax County Board of Supervisors, sets water rates, among other things. It collects $160 million annually.

"I think there's legitimate cause to be concerned," said Board of Supervisors Chairman Gerald E. Connolly (D), a member of the now-powerless Northern Virginia Transportation Authority.

Connolly said his board has privately discussed the court ruling, which he says reiterates that fees are taxes and that taxes must be imposed by an elected body.

Corey A. Stewart (R-At Large), chairman of the Prince William Board of County Supervisors, said his board met privately with the county attorney after the Supreme Court ruling to discuss the fate of several boards, including the Prince William County Service Authority.

The authority, which collects $62 million a year for water and sewer services, is run by an eight-member board appointed by the supervisors.

"I think the Supreme Court ruling could be interpreted to include those boards as well," said Stewart, who is running for lieutenant governor next year.

But Del. Robert G. Marshall (R-Prince William), who opposed last year's transportation bill and was later among those who challenged it in court, said legislators are raising the concern only so they can justify asking the Supreme Court to reconsider its ruling.

Marshall, who is seeking the Republican nomination for U.S. Senate, said local boards act as "collection agencies" for others, such as the county boards of supervisors, and do not impose the fees.

"It has nothing to do with that," he said.

Patrick M. McSweeney, a Richmond lawyer who argued the case before the Supreme Court, agreed. "I think they are creating concern where none exists," he said.

McSweeney said "traditional user fees" such as water rates are different from taxes that are designed to raise revenue.

Officials at the Richmond Metropolitan Authority, which last year collected $25 million on four toll roads in the Richmond area, said they are not worried about the court ruling.

Spokeswoman Linda McElroy said that drivers make choices about whether to use toll roads and that a toll is a "user fee," not a "tax that pays for road maintenance."

"This does not apply to the authority," she said.

Kaine and others involved in the case decided not to ask the Supreme Court to reconsider its ruling. Local and state lawmakers who want to clarify whether the court ruling applies to unelected boards said they might not know until another court case provides more clarity.

But many are looking to Kaine's office or Attorney General Robert F. McDonnell (R) for guidance.

"It is one of several issues we are discussing in the aftermath of the ruling," Kaine spokeswoman Delacey Skinner said.

The attorney general's office, which represented Kaine and the General Assembly in the transportation lawsuit, does not represent regional authorities and is not looking into how the case could affect them.

J. Tucker Martin, McDonnell's spokesman, said that in the past 28 years, the Supreme Court has repeatedly upheld the validity of fees when "the amount of revenue raised is reasonably related to the value of the service provided."

The court reaffirmed that position in 2006, he said.

Some legislators said Tuesday that they might need to discuss the potential problem later, perhaps at a special legislative session.

"I've read the [Supreme Court] opinion," said House Majority Leader H. Morgan Griffith (R-Salem). "I think the opinion raises many issues that we will have to look at over the next several months."

The concern about the unelected boards comes as legislators are trying to finish their regular session, which has been extended twice to complete work on the state budget.

The House and Senate are scheduled to return to Richmond on Thursday to pass a two-year, $77 billion spending plan.