The City of Falls Church has initiated a public relations offensive in the wake of a spate of lawsuits seeking refunds for its water fees.
On Monday, the City placed a major document on its website spelling out the advantages and services provided by the Falls Church Water System to its over 120,000 customers, including the fact that the City has the fourth-lowest water rate among 17 jurisdictions in the region.
F.C. City Manager Wyatt Shields amplified the offensive with a 30-minute interview on Falls Church News-Press Live, carried live on Falls Church Cable TV prior to the F.C. City Council meeting Monday.
Shields noted that despite the City’s legal difficulties stemming from a ruling by a Fairfax County Circuit Court judge that it could not take a reasonable “return on investment” for the operations of its water system, that the City has not lost a single customer in its traditional area of service in Fairfax County.
He noted the Falls Church system’s advantage of an established infrastructure means that it can offer water “hook up” fees to new large scale developments in the County at rates as much as $2 million less than the county’s water system charges.
The City has been plagued by 12 lawsuits filed by customers in Fairfax County demanding “refunds” for “overcharges” that have arisen in the wake of the the ruling last year by Fairfax Circuit Court Judge Ney that the City acted illegally in taking a “return on investment” from its water fund.
The judge’s ruling stated that the practice was akin to an unconstitutional tax on Fairfax customers, as the funds were taken to buoy the City’s annual operating budget, even though numerous other jurisdictions in Virginia do just that.
The lawsuits have been based on interpreting the judge’s ruling that the alleged overcharges were, in fact, a tax as opposed to being “akin” to a tax, and therefore the plaintiff in the lawsuits has been the City’s Commissioner of the Revenue, because he is mandated by state law to refund overcharged taxes.
“This has introduced a confusing element, since the Commissioner of the Revenue has nothing to do with setting water rates,” Shields said.
In fact, the City filed two complaints in the Arlington Circuit Court last week seeking “declaratory judgment” and “injunctive relief” for its Commissioner of the Revenue, Tom Clinton, against the legal claims against him.
The City’s complaints argue that the sums the City has charged its water customers do not constitute taxes, and the suits against it go beyond what was mandated in Judge Ney’s ruling last year.
In another development, the insurance programs of the Virginia Municipal League filed a complaint last Friday contending that it is not liable for covering any funds the City of Falls Church might have to reimburse its customers if the lawsuits against it are successful. This came after an Arlington Circuit Court judge ruled in November 2009 that the same insurance program was liable to cover the cost of the City’s legal defense against the Fairfax Water System.
In distinction from lawsuits, the County of Fairfax and its School District have sent stern letters to the City of Falls Church calling for “refunds” for alleged overcharges, but Shields said Monday that he’s aware of no official court filings from either entity.
In his interview, Shields focused on the superior service the Falls Church Water System, with its 450 miles of pipes, has provided its over 120,000 customers, more than 100,000 located in the Tysons Corner, McLean, Seven Corners and Merrifield sections of Fairfax County.
“We’ve been in this business since the 1930s, and are very proud of our record of service,” he said. “We have 50 employees who do a wonderful job. This is water main break season, and you will see our crews out there at all hours of the night, under all weather conditions, attending to those needs.”
He credited the Falls Church Water System with “contributing to the economic development of Fairfax County,” and added, “We want to continue to be a partner.”
Despite Judge Ney’s ruling denying the City’s ability to take a return on investment, Shields said the City remains committed to operating the system “because of the history of it all, and the know-how we bring.” He said that in addition to the general government and the schools, the water system constitutes a third of the City’s operations.
He said there have been no discussions at City Hall of unloading the system. “We have a strong commitment to it, and are very proud of it,” he said.
