Fairfax County Water Authority Files Antitrust Lawsuit Against Falls Church
Thursday, June 11, 2009
It's been called Fairfax County's water war.
A longstanding dispute between the county's largest water provider and the city of Falls Church, which serves about 130,000 people through its own water system, has boiled over and is back in court.
The Fairfax County Water Authority recently lodged an antitrust complaint against the city and is suing for $21 million in damages. Falls Church, meanwhile, has charged that the county is improperly requiring developers to hook up to the county system, even when it makes more sense to connect to Falls Church's.
The case is set for trial in September. The debate could have implications for Falls Church's finances, because the city draws about $2.2 million of its $70 million budget from water service fees. About 90 percent of its customers reside outside the city's borders, and the city's rate of $3.03 per thousand gallons of water is significantly higher than that of the water authority, which charges $1.83.
The conflict first flared up in 2007, when the city sued the water authority, which goes by the name Fairfax Water, over which has the right to offer service in the northeastern part of the county. The city argued that Fairfax Water was soliciting customers in that region even though the city had exclusive rights to the area.
A federal judge threw out the suit, ruling that Fairfax Water had as much of a right to reach out to customers in that area as did Falls Church.
Last fall, the conflict erupted again, this time over a proposed development off Gallows Road near the Dunn Loring-Merrifield Metro station.
The developer, DSF Long, had proposed rezoning about 14 acres to build a mixed-use project with shops and more than 1,500 condominiums and apartments. In its agreement with Fairfax County, it agreed to hook up to the county water authority's system, although the property had Falls Church pipes running through it.
Falls Church refused to move its pipes, saying the county was in effect requiring the developer to connect to the county's system as a condition of approving the rezoning.
"The county is forcing developers into choosing Fairfax Water," said Wyatt Shields, Falls Church's city manager. "That's problematic."
But the water authority has argued that the developer's offer, known as a proffer, is voluntary, and filed suit in December demanding that the city allow its pipes to be relocated and pay the damages.
In addition, it is calling into question the city's practice of transferring to its general fund some of the profit it collects through its water charges.
"They are not only holding the developer hostage, they're taking these funds, the vast majority of which are provided by Fairfax County residents, and supplementing the city government with it," said Jeanne Bailey, spokeswoman for Fairfax Water. "We said, 'Enough.' "
Shields said that in Falls Church's view, it is wasteful and costly to move one set of pipes to replace it with another. He estimated that it would cost DSF Long $1 million less in initial start-up costs to use Falls Church infrastructure to hook up the project.
"Fairfax Water seems to be intent on building a duplicative water system in Fairfax County," Shields said. "That's expensive, disruptive and bad public policy."