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