City Counter-Sues County; It’s Expensive

With the Fairfax Board of Supervisors voting unanimously Monday to reject a settlement offer from the City of Falls Church, the F.C. City Council met in closed session for three hours Tuesday night to discuss legal strategy.

The Council will vote this coming Tuesday to draw $750,000 from its water fund to wage a “vigorous fight” to defend its water system from what it insists is unfair Fairfax County “poaching,” including by strong-arming new developers seeking special exceptions.

The total cost of the legal fight is estimated to go as high as $1.5 million, F.C. City Manager Wyatt Shields told the News-Press yesterday. He said that while the settlement offer was rejected by the County, the City is also petitioning the Virginia Supreme Court to avoid a costly jury trial, currently slated to begin Sept. 14.

The City is asking the Supreme Court to appoint a three-judge panel to settle the dispute, but is not certain when to expect a reply.

Fairfax County Board Chair Sharon Bulova told the News-Press yesterday that the County has offered to settle without a trial, but that Falls Church has chosen to sue, instead. Shields told the News-Press that the only settlement offer from the County came from its water system last December, and it “was out of the league of being even remotely acceptable.”

Disputed is the Fairfax Water System’s new policy of crossing traditional boundaries between the two systems that were in place since the 1930s. The Falls Church system, with over 450 miles of pipe, serves over 100,000 customers in the county in the Merrifield, Tysons Corner, McLean and Langley sections of the county.

Since 1989, there has been no formal contract delineating the boundaries, and in 2006, Fairfax Water began approaching developers in the traditional Falls Church territory for its business.

Falls Church lost initial legal efforts to stop the new practice, but then the County turned around to sue the City, claiming it was engaging in monopolistic practices.

Last week, the City counter-sued against its claim that the County is now making proffers for special exceptions on new developments conditional on signing up with Fairfax Water. “This is a proffer process that unfairly benefits the County,” Shields said.

The City’s filing with the Circuit Court of Fairfax County claims the County is engaged in “manipulation and abuse of the proffer condition process set out in the Virginia Code.”

The filing claims the County’s objectives “are pursued solely for the unreasonable, unlawful, and unconditional purpose of favoring Fairfax Water over the City’s water service, attempting to drive the City out of water service in the County, and withholding approval for the City to exercise its statutory right to operate and expand its water system in the County.”

Shields said the terms of the City’s proposed settlement, rejected by the County board, were confidential.

He reiterated that while the City will “litigate as necessary,” he views “dialogue as a good thing,” and is concerned that there has been no face-to-face talks between County and City officials on the whole matter.

Bulova told the News-Press that the County stands by the court ruling earlier this year permitting the County to compete with the City for customers in the City’s traditional water area.

Shields said the vote to shift $750,000 from the City’s water fund to the current fiscal year’s operating budget to pay for legal expenses does not include provisions for a water rate increase.

Earlier the City Council included $750,000 for legal expenses in the budget it approved for the coming fiscal year, beginning July 1, meaning that a total of $1.5 million has been designated for the court fight over water.

“We’re not expecting to have to raise water rates at this point, but if this legal battle drags on, that will likely have to be the result,” Shields said.

The City has retained the outside legal counsel of Alexander “Sandy” Thomas of the Reed Smith LLP law firm located in Fairview Park, working with F.C. City Attorney John Foster.

The content of the City’s court filings will be posted on the City’s web site Thursday.