If ever leaders of the City of Falls Church would want to say “good riddance” to a year in the City’s 60-year history, it would be 2010. No sooner had the clean up from last New Year’s Eve’s party been completed, than the ruling came Jan. 6 from Judge Ney of the Fairfax Circuit Court declaring the City guilty of an “unconstitutional tax” on Fairfax County users of its water system.
As the year comes to its end, not only had the City’s efforts to appeal the ruling to the Virginia Supreme Court failed, but the City was required to cease taking from its water fund an annual “return on investment” (ROI) of $2.3 million and to refund $2.3 million from the previous one. Then, the piling on began this month on behalf of virtually every Falls Church water customer in Fairfax County for a refund of what Ney’s ruling intimated was an illegal overcharge.
Fairfax County first demanded the City make a refund. Then followed a couple of apartment complexes, some individual customers and businesses, and this week a “writ of mandamus” filing on behalf of all Fairfax County customers of the City. The potential consequences for Falls Church are dizzying.
But before the City just rolls over and gives up, there are some things to consider. First of all, the new court filings provide the City with a potential to fight the fundamental tenets of the case anew, with the potential for a new and better outcome.
Many observers felt the ruling by Judge Ney ran counter to practices of other jurisdictions in the state and around the U.S., for that matter.
In fact, the City undertook the practice of taking a ROI for the operation of its water system, serving over 100,000 customers in Fairfax County, after retaining consultants to conduct two separate studies of the matter, both of whom recommended the appropriateness of the practice.
One, John Crihfield of the Government Finance Group, told the City Council in the spring of 1999 that it was valid to extract as much as $4.8 million annually from the water system as a ROI, based on the estimated value of the system at $150 million.
The headline in the April 8, 1999 edition of the News-Press read, “City Should Be Charging 33% More for Water, Expert Says,” and the story spelled out the consultant’s briefing to the Council.
Faced with a nine percent increase in the F.C. School Board’s annual budget request to the City that spring, the Council was hard-pressed to pass on the opportunity. That April, it voted the first real estate tax reduction in a decade, and there were many promising developments, including the purchase of the Anderson Tract for the first large-scale mixed use project in the City and the opening of the State Theatre.
As then, the City now has a lot of good reasons to fight for what is right.