An addendum to the agenda for tonight’s Falls Church City Council system posted on the City’s website this afternoon indicates that the Council will vote on a motion “to authorize the City Manager to release a request for expressions of interest from the investor-owned and government-owned utility market regarding alternatives relative to the City’s ownership and operation of the City water and sewer utility systems.”

It comes as the first step in a review by the City Council of its options in light of recent court-ordered and Fairfax County Board-mandates restrictions on the Falls Church Water System, which has over 100,000 of its 120,000 customers located in Fairfax County. Were the City to sell its water system to an entity that could legally extract a return on investment for its operation, it would be subject to a public referendum by Falls Church voters at the next general election, which could be as soon as this coming November.

The following is the text of the background filed with the report on the proposed new agenda item today:

“The City Council and City Staff have been analyzing options for the future of the City Water and Sewer Utility Assets. In order for that analysis to proceed with full and complete information, it is necessary and appropriate to formally request the input from entities that may be interested in participating in alternatives relative to the City’s ownership and operation of the City’s water and sewer assets. The attached Request for Expressions of Interest is one step in a comprehensive evaluation of options for the future of the City Utility Systems.

The City Council is undertaking this evaluation of the future of City water and sewer systems, with the goal of providing the best possible stewardship of the City’s utility assets on behalf of its taxpayers, customers, and employees. The REI will solicit input from industry, including public water authorities, to inform the evaluation of options, which may include sale to an existing or new utility entity – public or private — or maintaining the status quo.

The City has operated a successful public water supply system since the 1930s. The City’s total service area is approximately 33 square miles, with 34,500 accounts and annual revenues of approximately $20 million. The City is a wholesale customer of the Washington Aqueduct, which provides drinking water for the City of Falls Church, Arlington County, and District of Columbia. The City water system delivers an average of 17 million gallons of water to its customers each day, with a maximum capacity of approximately 38 million gallons per day. Interested organizations and the public can find information about the City Water and Sewer Systems via the City’s website, www.fallschurchva.gov/WaterFuture.

The City Sanitary Sewer Utility is a gravity system which extends over an area of 2.2 square miles with approximately 4,000 accounts. The City contracts with Fairfax County and Arlington County for sanitary sewer treatment.

Over the coming months, the Council will engage in deliberative process with key stakeholders and industry leaders to chart out the future of its water and sewer systems. A sale of the water system would require approval by City voters by referendum. Should that be the preferred option, it is possible that a referendum for sale of the system could be before the voters by the November 6, 2012 General Election.

FISCAL IMPACT: The issuance of the REI has no direct fiscal impact.

TIMING: Immediate.”