Times Obtains Copy of Final Water Ruling
By STEPHEN SIEGEL
Falls Church Times Staff
May 30, 2012
Ever since a new legal opinion from the US Army Corps of Engineers rocked Falls Church City last week, forcing the suspension of the plans to sell the City water system to the highest bidder, many people, including City officials, wanted to see the opinion.
City officials still hadn’t seen it by Wednesday, but now the Times has a copy. Signed by Earl Stockdale, chief counsel of the Corps, it cites a number of reasons for concluding that a 1947 law authorizing the Washington Aqueduct to sell water to Falls Church also precludes the Aqueduct, which is managed by the Corps, from selling it to an investor-owned utility.
Mr. Stockdale’s memo cites a passage in the law, as well as a failed attempt to modify the law, as the basis for his opinion. He also cites a 1963 opinion on the topic from the Corps’ Baltimore office.
The passage he quotes says “the Secretary…is hereby authorized…upon request of the town council of Falls Church, Fairfax County, Virginia, or any other competent State or local authority in the Washington metropolitan area in Virginia, to permit the delivery of water from the District of Columbia water system for the purpose of supplying water for the use of said town; or to any other competent State or local authority…”.
Mr. Stockdale then writes that the language of that passage causes him to believe that “the law provides authority for the Secretary of the Army to deliver water” from the Aqueduct “only to governmental authorities.” He underlined “only” for emphasis.
He then adds that an attempt was made to modify the law in 1953 to specifically permit the sale of water to “public utility corporations”, but notes that the legislation failed, which “further informs and reinforces my opinion regarding the limitations on the delivery of water to non-governmental entities.”
Mr. Stockdale also says that there is precedent for his view in the Corps’ legal department, citing a 1963 opinion from attorneys for the Corps’ Baltimore district, who advised the Fairfax County Water Authority that it was “prohibited from reselling a portion of the water it had purchased from the City of Falls Church to a public service corporation for resale to its customers.”
The remaining outstanding questions are whether any other government agency or attorney could reverse the decision, and why the Corps apparently released the earlier opinion that said the provision of water to an investor-owned utility was acceptable.
It was that legal opinion, from senior counsel Susan Greenwood in March, that City officials relied on as they issued invitations to bid on the City’s system.
Asked why the earlier opinion was released if it wasn’t final, Gene Pawlik, a spokesman for the Corps, said he would inquire.
City officials met in a closed session Tuesday night to discuss the water issue and what the City will do in response. They issued this statement Wednesday, which appears to indicate that they haven’t made any final decisions:
“In light of the recent reversal by the Army Corps of Engineers with respect to the ability of the Washington Aqueduct to sell water to investor owned utilities, the City Council and staff are continuing to evaluate options for the future of City water system, with the goal of providing the best possible long-term solution to its taxpayers and customers. The City remains committed to providing superior service to customers by delivering safe, dependable drinking water at a competitive price.”
Separately, City Councilor Ira Kaylin, emphasizing that he was speaking for himself and not the Council, said in a written statement: “I believe that it is important to place the recent Army Corps decision that prevented the sale of the water system to interested buyers in context. Of course we are very disappointed that the Army Corps reversed an earlier approval on which we based our decision to move forward. However, we were well aware that there was no guarantee that our minimum price would be reached so we have always have had alternatives which we will now carefully explore.”
Mr. Kaylin also told the Times that the City received a letter from one of the companies that had been planning to bid for the system. The letter said the company would have initially bid at the City’s minimum price of $44 million, had the Corps’ decision not intervened.
“The market has spoken; we have a valuable commodity, which Fairfax would like us to give to them for free,” he said.
“As a member of the City Council, I believe it is our fiduciary responsibility to obtain fair market value for one of the City’s largest assets. I will continue to make all and every effort to ensure that we can secure an arrangement that is the best for the City and by extension for our Fairfax customers as well.”
By Stephen Siegel
May 30, 2012
A definite longshot, but the City could ask that the COE opinion be reviewed by the General Counsel of the Department of the Army.
So, the FC legal beagles did not know this? Seems they should have before going through this process. Another black eye for the City in the water world.
Fairfax looks better and better. With rates 60 percent lower than ours, seems a no-brainer to me, that is of course, if we can get something from them for the water system assets.
I wonder how political consideration shows up as a line item expense for Fairfax…
But if anyone thinks that the water rates will remain low once Fairfax has no competition – what planet are you from. Fairfax has a huge deficit and I expect at least a 30% raise in rates once there is no reason to artificially keep them low. Fairfax will need to maximize the revenue from all of the new construction around Tysons and the average homeowner will just have to pay more and more. While I admit I don’t know, or even understand, the whole history of what has been going wrong, to me Fairfax has acted more like a crime family than a public sector commission. The only thing they haven’t done is threaten bodily harm, but every thing else – threats, extortion, misleading information, public attack, artificially low prices. they have been like a dealer – low water rates to entice homeowners and then once they’re hooked.. the real costs.
Does anyone think any Falls Church employees will have a job after Fairfax takes over? Does anyone think our service will not change, and not for the better. Fairfax has already said that commercial development is primary in their future plans – good luck getting you r meter fixed if it leaks, or you get an incorrect bill.
Hey Michael, what planet are you from?
The Fairfax (like Falls Church’s) water system is a closed system with no competition, it’s not like I can, as a city resident, tell the city “Hey screw you Falls Church, I am gonna go buy my water from Fairfax” and then get a better price. It’s not like Fairfax water is mixed in with Falls Church water and I can somehow magically separate the two at the spigot.
So, the rules of supply and demand don’t operate here, the rates for water are set by the governing bodies in each system’s location not by the market. Also, I can’t physically build a pipeline to the fairfax water supply and get that water to my house, so the rules of common sense do apply.
You’re logic is flawed.
What’s it cost to drill a well?
Mr. Baker… You must be dehydrated… Your doomsday screed on the Fairfax County boogeyman is absurd. Remember, if Fairfax jacks their rates by 30% (and they wont) they would still be 30% lower than your rates are now!!!
Particularly galling to those of us in FX County who have been robbed all these years by FCC water, is the concept that FCC is attempting to snatch a ransom from FX County on their way out the door!
Michael is in for a pleasant surprise when he learns that (surprise!) Fairfax County is actually very competent and efficient in its administration of public services. Congratulations!
Btw… Mr. Baker… When you say “Fairfax County has a huge deficit” what in the world are you talking about?
Try this site Michael:
http://www.fairfaxcounty.gov/dmb/fy2013/adopted/fy2013-adopted-package.pdf
I’ll speak up for Michael Baker. Right on target with that “crime family” description. Fairfax has been the bully all along and, strangely, they seem to have convinced a small but vocal minority of the City’s customers that they will be better under Fairfax Water. Ask a few of Fairfax’ customers what kind of service they get.
Mr. Smith…
I’ll describe the behavior…
And you guess who the “crime family” is…
Monopoly.
Illegal overcharging.
Illegal funds transfers (to general fund).
Threatens victims when publicly exposed.
It sure sounds like The Little City to me!
Mr. Vand:
Actually sounds like Fairfax Water and Fairfax County in general. But if you enjoy the way you are treated by Fairfax, by all means continue not living here in the Little City.
Well put Charles. Unfortunately Mike Smith has his head in the sand and can not see what is in front of him.