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Bulova Letter to F.C. City Council Urges Merger of F.C, Fairfax Water

In her first direct, public communication with City of Falls Church officials on the matter of the water dispute between Fairfax County and Falls Church, Sharon Bulova, chair of the Fairfax Board of Supervisors, issued by e-mail a letter to all members of the F.C. Council tonight stipulating her belief that “I believe a merger of the City’s system with Fairfax Water’s whould not only lower rates for both your residents and ours, but if you sell to the ‘highest bidder,’ rates for all your customers very well may increase substantially.” Falls Church is now entertaining the idea of selling its system, which serves over 120,000 customers in Fairfax County.

Bulova’s letter was in response to the public call by F.C. Vice Mayor David Snyder, reported in last week’s Falls Church News-Press, that she make an offer to the City for its system. Snyder’s dramatic remarks became the lead headline in last week’s News-Press, and apparently did get the chairman’s attention.

The letter, addressed to Snyder and copied to the rest of the Council, was titled, “Re: Your reported direct appeal to me as Fairfax County Board of Supervisors Chair to break the County’s refusal to negotiate in good faith on the future of the Falls Church system, while offering nothing but ‘confrontation, litigation and confiscation.'”

Bulova’s letter includes reference to another new development, a legal opinion issued last Thursday by the chief counsel for the Army Corps of Engineers, which currently sells its Washington Aqueduct water to Falls Church to operate its system. The counsel concludes in his opinion, that “the Washington Aqueduct is not permitted to sell water to a non-governmental entity” under a 1947 law. Also, Bulova argued, “Virginia law does not permit the State Corporation Commission to authorize the operation of an investor-owned utility in Fairfax County without the approval of the Fairfax Board of Supervisors.”

“I hope,” she concluded, “that the City Council decides to do the right thing for the benefit of all of our respective constituents. A sale to the highest bidder is not in your customers’ interests.”

The following is the full text of the letter:

Dear Vice Mayor Snyder,

It is my understanding from reports in the press that you stated at a recent Council meeting that “Our doors are open. I want to appeal to Chairman Bulova on the record before the TV camera. Make us a legitimate offer to meet halfway to lead to some sort of accommodation.” You reportedly made this statement “after it was pointed out by City Manager Wyatt Shields that while Fairfax had urged a merger of the two systems, it made no offer of compensation to the City.”

I want to take this opportunity to correct some key points. As you know, the Fairfax County Board of Supervisors created the Fairfax County Water Authority (Fairfax Water) in 1957 “for the purpose of acquiring, constructing, operating and maintaining an integrated water system for supplying and distributing water in Fairfax County.” Fx. Cnty. Bd. Res. Sept. 4, 1957. Fairfax Water still exists for that purpose today. As you also know, Fairfax Water is a separate legal entity from Fairfax County, Virginia, and members of its Board of Directors are appointed by the Fairfax County Board of Supervisors. The Board of Supervisors, however, does not have any involvement in the day-to-day operation of Fairfax Water.

It is important to note, therefore, that it was Fairfax Water, not Fairfax County or its Board of Supervisors, that offered to merge the City’s system with Fairfax Water’s to create one of the most robust water systems in the region, if not the country. Fairfax Water has repeatedly offered to meet with City officials. I believe a merger of the two systems would be beneficial to customers. I also understand from Fairfax Water, however, that the City never responded to its proposal, pushing ahead instead with a plan to sell the City’s water system to the highest bidder.

I believe that the merger of the City’s system with Fairfax Water’s would not only lower rates for both your residents and ours, but if you sell to the “highest bidder,” rates for all your customers very well may increase substantially. An investor-owned utility would have to charge higher rates to recover not only its purchase cost, but also the profit margin and tax obligations that a governmental utility like the City and Fairfax Water do not have.

I continue to believe that combination between the Falls Church and Fairfax Water systems would also avoid the major legal impediments to a private sale of the City’s water system. As you know, Earl Stockdale, the Chief Council for the Army Corp of Engineers, issued a legal opinion on Thursday, May 17, 2012, concluding on behalf of the Corps that the Washington Aqueduct is not permitted to sell water to a non-governmental entity under the 1947 law that authorized the sale of water to the City of Falls Church. (Pub. L. 118, 80th Congress, 161 Stat. 181.) That conclusion restates what the Corps said nearly 50 years ago in a 1963 legal opinion. In addition, Virginia law does not permit the State Corporation Commission to authorize the operation of an investor-owned utility in Fairfax County without the approval of the Fairfax County Board of Supervisors. I do not believe my fellow Board members would be able to support higher water rates from a for-profit supplier, nor believe that action would be in the best interest of the 120,000 Fairfax County citizens and businesses that the City currently serves. For all of these reasons, I hope that the City Council decides to do the right thing for the benefit of all of our respective constituents. A sale to the highest bidder is not in your customers’ interests. I remain open to speaking with you further about this, and I know that Fairfax Water does as well.

Sincerely,

Sharon Bulova, Chair, Fairfax County Board of Supervisors