Va. bill aims to end utility rate battle

Washington Post Staff Writer
Sunday, January 30, 2011

The Loudoun County Board of Supervisors is expected to vote this week on whether to support state legislation that aims for a permanent solution to a years-long dispute over water and utility rates in Leesburg.

Senate Bill 1475, introduced in the General Assembly on Jan. 21 by state Sen. Mark R. Herring (D-Loudoun) and state Del. Joe T. May (R-Loudoun), would require supervisors to approve any increase proposed by Leesburg in the percentage difference between water and sewer rates charged to Leesburg customers and the rates out-of-town customers pay. The rule would apply to any increase beyond the percentage differential established as of Jan. 1.

The bill is scheduled to be discussed by supervisors at their business meeting Monday. County staff members recommended that the board support the legislation, saying in a report that "this is a town issue which has little or no fiscal impact" on Loudoun. Staff members noted that the bill would not prevent Leesburg from increasing utility rates, fees and charges and will restrict only the proportion of those increases between in-town and out-of-town customers, unless the board agrees to approve any changes.

The legal battle between Leesburg and out-of-town customers began in 2006, when a group of out-of-town customers sued Leesburg for imposing a 100 percent surcharge on water and sewer bills. The Loudoun County Circuit Court ruled in favor of the out-of-town customers in 2009, outlawing the Leesburg ordinance. The town appealed the decision to the Virginia Supreme Court, which overturned the ruling Nov. 4.

New rates for water and sewer service were adopted in September 2009 and remained in place after the November ruling. Herring said that under the bill, the percentage surcharge that took effect in 2009 would remain in place.

"Let me be clear: This bill in no way inhibits the town of Leesburg's ability to raise its rates, nor does it affect the currently adopted rate schedule through FY16," Herring said in a statement. "Should it be the will of the mayor and Town Council to implement high differentials in the future, they may do so, provided the Board of Supervisors agrees."

May said the bill would address a central concern expressed by the dissenting justices in the Virginia Supreme Court's November decision: "Out-of-town customers are currently subject to the decisions of the mayor and members of the Town Council, for whom they cannot vote," May said. "This bill would provide redress for those customers."

Leesburg Mayor Kristen C. Umstattd opposed the bill in an e-mail to Herring and May.

"I believe you have done a grave disservice to all your constituents living within the town of Leesburg," she wrote.

On Tuesday, the Leesburg Town Council voted unanimously to oppose the bill. Umstattd sent an e-mail to the Board of Supervisors on Thursday urging them to do the same. She also contested the county staff assessment that the bill would have no financial impact on the county, pointing out that the board's decision-making authority would constitute a new area of financial liability for the county.

"County bondholders and bond rating agencies will perceive that the county has become directly involved in an area that is increasingly litigious," Umstattd wrote.

Umstattd said she is reaching out to other local governments for help defeating the bill. Comments reported by local news media indicate that the General Assembly might consider extending coverage of the bill to other counties, cities and towns throughout the state, she said.

After supervisors vote Monday, the bill will go before the state Senate Local Government Committee on Tuesday.

© 2011 The Washington Post Company