IN AN EXCLUSIVE interview with the News-Press yesterday at City Hall (left to right), Falls Church Councilman Ira Kaylin, City Manager Wyatt Shields and Vice Mayor David Snyder lashed out at the "illegal" action to end competition in water services by the Fairfax Board of Supervisors last week. (Photo: News-Press)

County’s Action to Eliminate Competition Called ‘Bad Public Policy’ & ‘Offensive’

City of Falls Church leaders expressed anger and frustration yesterday at the Fairfax County Board of Supervisors' action last week to mandate that all new water hook ups in the county be solely with their own water system and to regulate what other water providers can charge their customers in the County.

In an exclusive interview with the News-Press in the City Manager's office at the Falls Church City Hall yesterday morning, F.C. Vice Mayor David Snyder, Councilman Ira Kaylin and City Manager Wyatt Shields shared the view that the Fairfax Board's decision last week was illegal, and that legal and other remedies will be sought.

Snyder, who has been the F.C. City Council's point man on numerous regional task forces and initiatives, was particularly incensed at what he called the County's "denigration" and "attacks" on the Falls Church water system. "It is bad public policy and deeply offensive," Snyder said.

In his career as an attorney, he told the News-Press, it is evident the County Board's move was "designed to destroy a competitor" by means of two actions: to deny the entity the ability to break even financially (with the County Board already signaling its intent to force down Falls Church's water rate) and to deny it the ability to take on new business.

"These two factors combine to show an intent to destroy competition," he said. He noted the County's action was also against the interests of its own citizens.

"It isn't good policy from the standpoint of the County's residents, either," he said. "It is wasteful, requiring the laying of redundant lines of water pipe, bearing the cost of litigation and, having only one provider after there had been competition runs counter to everything we know about maximizing consumer service."

Kaylin said that the Falls Church water system, because of the constraints placed upon it, is from a financial point of view "a non-performing asset."

Shields, Snyder and Kaylin concurred that the City's leaders are mulling an array of options for responding to this latest county move, including in the courts, in the state legislature and perhaps by selling the system to a private entity. No final decisions on a future course of action will be made soon or without a lot of deliberation, they said. Any major change to the current functioning of the system would be put to the City's voters in a referendum.

The impact of the County's action on the Falls Church water system, which serves over 100,000 customers in Fairfax County, will also be felt by two other water systems based outside the County and serving customers inside it - the water systems of the City of Fairfax and the Town of Vienna.

Vienna made a request to its representative in the state legislature, Sen. Chap Petersen, to carry a bill that would ban the county's action. Petersen promised to do so, expressing his own concerns for the anti-competitive consequence of the County's action.

Shields said yesterday that his office has not yet been in direct touch with Petersen, but that a legislative remedy is one course of action Falls Church will pursue. Del. Jim Scott, who represents Falls Church in the state House of Delegates, said in comments to the News-Press Monday that he is interested in learning more about the whole matter.

At the core of the claim by Falls Church officials that the county action is illegal is the Consent Decree issued by Judge R. Terrence Ney of the Fairfax Circuit Court on February 25, 2010, and signed off on by both Falls Church City Attorney John Foster and attorneys representing the Fairfax County Water Authority.

The decree states that the two water systems "shall each have a full, free and fair opportunity to provide water service within the City's traditional service area in Fairfax County." It goes on to stipulate explicitly, "Fairfax Water shall not, directly or indirectly, seek to exclude the City of Falls Church from offering public water service to customers in Fairfax County," and, "nor shall anything in this Consent Decree be deemed to preclude Fairfax Water or the City from lawfully pursuing or exercising any of their common law or statutory rights and powers."

Snyder stressed yesterday that repeated attempts at initiating discussions on these matters with the County failed. He called the County's behavior and action "a new low standard for regional cooperation."

Shields stressed that the City's water rates are "based on costs" and are the same for all customers, in the City or the County. They are set "only after considerable consultation with outside experts," he added.

But Snyder noted that it was stated explicitly in the County Board meeting last week that Falls Church's rates charged to County customers would be forced down under terms of the ordinance, with such actions to occur as early as next summer.

Although not present at yesterday's interview, Falls Church Mayor Nader Baroukh emailed the News-Press with the following comment:

"The City of Falls Church is disappointed that the Fairfax County Board of Supervisors rushed to enact the ordinance instead of working together to find a mutually beneficial outcome that ensures the safety and reliability of the City water system and reflects the value of that system. The City is assessing all the options to protect our customers and our City against this unprecedented, unreasonable, anti-competitive ordinance."

Summarizing yesterday's interview, Shields wrote the News-Press citing "a couple of key points." He wrote:

"• The County ordinance is bad public policy that will likely increase the costs of water services for county residents and dramatically increase costs for new development in the County.
"• The City informed the County of these concerns, and invited the Fairfax County Board of Supervisors to work together to find a viable solution that would most benefit the water customers; instead, the Board hurriedly passed an ordinance that hurts competition and may increase costs.

"• The City's tax payers and employees have made a tremendous investment of money and skill to build a world class water system that constitutes the City's single most valuable asset.
"• The City will consider all options in terms of protecting its customers and the taxpayers of the City. But our focus will be on continuing to serve our customers with reliable and safe drinking water with rates below average for the region."