December 6, 2011

Late this afternoon the Fairfax County Board of Supervisors unanimously approved an ordinance which amends the County Code to require that developers hook up with Fairfax Water’s system, even in cases where new lines must be built to reach sites having access to existing Falls Church City, Vienna Town, or Fairfax City lines.  This exclusive service area would apply to both new development and redevelopment.

The measure also allows the Board to fix rates and charges for water service provided to customers located in Fairfax County so that no County customer of the City of Falls Church water system will be charged rates and charges that exceed those of Fairfax Water, unless the City can demonstrate the need for higher rates and charges to the County’s satisfaction.

Falls Church repeatedly asked Fairfax County to defer a vote on the ordinance, most recently via a December 1 letter from City Manager Wyatt Shields to County Executive Anthony Griffin.  Local leaders were quick to criticize the Board’s action.

Mayor Nader Baroukh said the City had sought a deferral to allow time to respond to its serious concerns and create a mutually beneficial outcome that ensures the safety and reliability of the City water system and reflects the value of that system.  ”Instead, the Board chose to rush to enact an ordinance that is anti-competitive and not in the best interests of our County water customers” said the mayor.

Vice Mayor Dave Snyder also voiced dismay. “Over the years, the City has taken on significant risk so that Seven Corners, McLean, Merrifield, and Tysons Corner—the economic engine of the County—could develop. Today’s action by the Fairfax County Board of Supervisors is a blow for regional cooperation” Snyder said.

Councilman Lawrence Webb, a member of the City’s Public Utilities Commission also was critical.  “It is unfortunate that the County Board rushed to enact this ordinance.  The effect of the new regulations will be to increase water costs for County residents, create an expensive new County bureaucracy,  [and] invite litigation” he said.  ”[The action] will force County developers to construct new water mains that overlap the existing system in order to hook-up to Fairfax Water, an enormous unnecessary cost that could stop Tysons and Merrifield redevelopment effort in its tracks.”

Although the vote was unanimous, Supervisors Pat Herrity (Springfield) and John Cook (Braddock) expressed some reservations.  Herrity observed that he didn’t see how dual infrastructure would save anyone any money and said he didn’t think this was how the County should be doing business with its partners.  Cook warned of possible unintended consequences and referenced Senator Petersen’s recent suggestion that he would introduce legislation in the General Assembly to override the Board’s vote.

Representatives of several Fairfax neighborhood associations, who spoke against the City’s rate increase at Council sessions last summer, spoke today in favor of the ordinance.  All reiterated their view that County residents serviced by the City’s water system are subjected to an unconstitutional tax due to their having no means of voting in Falls Church elections.

About 92% of the Falls Church’s customers reside in the County.  However, the City does not impose a rate differential between its City and County customers.  Its water rates are lower than average for water utilities in the region, and in the lowest quartile statewide.

Over the past five years the City invested $20 million in upgrades in the Tysons, Merrifield, and Dunn Loring areas, keeping water rates flat until an 8% increase in 2011.  Fairfax Water has increased water rates by 33% since 2005.  The County has raised sewer rates 80% since then.

Background on the Board’s actioin is available here at Page 611.

September 21, 2011

The Fairfax County Consumer Protection Commission (CPC) has issued a report that is highly critical of Falls Church City’s water rate structure.   The report calls on the County to fix rates and charges for water service so that no Fairfax customer of the City’s system will be charged rates and charges that exceed those of Fairfax Water, unless the City demonstrates the need for higher rates and charges to the County’s satisfaction.

The report also recommends that the County establish Fairfax Water as the exclusive water service provider for all new development and redevelopment in Fairfax County.  It cites Section 15.2-2111 of the Virginia Code as the authority in both cases.

City Councilman Lawrence Webb, a member of the Falls Church Public Utilities Commission, said the report appears to be a political document.

“That’s disappointing,” said Webb.  “Where is the Commission’s research into water rates of other water systems in Fairfax County, all of which have raised water rates in recent years?   Where is the Commission’s research into Fairfax County’s own sewer rates, which have gone up 80% since 2005, a rate of growth ten times higher than City of Falls Church’s water rates?”

Webb added that the report raises questions about the Commission’s independence.

“Certain Fairfax County Board members have been very outspoken that they want to take over the City’s Water Utility,” he said.  ”A professional and objective consumer commission should not be involved in raw politics.  We had hoped that Fairfax County would move away from this litigious, confrontational approach after its water refund cases were summarily dismissed in Fairfax County Circuit Court last month.”

On April 25 the Fairfax County Board of Supervisors authorized the CPC to undertake a comprehensive review of the City’s water rate making practices.  The measure was introduced via a motion by Supervisor Linda Smyth (Providence).  The motion was approved by voice vote.

Smyth asked the Commission to determine the basis for Falls Church’s rates; whether it was in compliance with the rate making principles established by the Board in May 2010; the nature, location, and cost of any capital improvements made over the past five years and how those improvements were funded;, and the location and cost of projected improvements.

The Board’s action followed the City Council’s initial discussion of a rate increase, which was unanimously approved on September 12.  The 8% increase, which will take effect on October 1, will add from $2.00 to $7.00 to the average customer’s quarterly bill, based on usage.  Over 90% of the system’s customers reside in Fairfax County.

The complete CPC report is available here.

September 12, 2011

Leaders of the Vietnamese-American Chamber of Commerce and several Eden Center patrons this evening criticized recent actions of the Falls Church police and called on the City Council to improve the relationship between the Center and the FCPD.  The comments came in the wake of last month’s raid on the Center, which allegedly uncovered gambling operations at numerous establishments.

The speakers charged that the raid has given people a false image of the Eden Center, which in turn has hurt business.  They criticized police procedures and conduct, before, during, and after the raid.  Several said they had never heard of the Dragon family, which police alleged ran the gambling racket.  Some maintained that suspects were not read their rights or were banned from the Center without due process.

Spokesman Ty Nguyen offered the Council a list of suggestions for better policing.  He recommended establishing a drug free zone; creating an Eden Center community watch; designating an FCPD liaison, which he termed a full time bridge to Vietnamese community; appointing a City Council liaison, who would sit in at Council meetings; permitting “walk along volunteers” to assist the police; and having Miranda rights texts available in English and Vietnamese, while providing translators to read suspects their rights whenever a warrant is being served.

Vice Mayor Dave Snyder stated that he had never heard of the issues presented tonight, but called the speakers’ comments constructive.  ”We cherish and highly value our relationship with the Eden Center and will work to assure a safe and prosperous environment for all concerned,” he said, to considerable applause.

Mayor Nader Baroukh added that he felt the vice mayor’s comments summed up the feelings of the entire Council and pledged to continue the dialogue and outreach to the Eden Center community.

Councilwoman Robin Gardner pointed out that at one time the police had maintained a sub-station at the Center.   “I’m glad we’re taking this as seriously as we are,” she said.  “Some of the stories are extremely disturbing.”

City Manager Wyatt Shields said that Falls Church is committed to community policing.  “The police are there to protect and to serve and I have no doubt about that,” he said.

Water Rates Rising

The Council approved an ordinance authorizing an 8% water rate increase, effective October 1.  The measure was adopted, 6-0, with Councilman Lawrence Webb absent.  According to Mr. Shields, the impact to the average customer would vary from $2.00 to $7.00 per quarter, based on usage.

The monies received through the increase will remain in the City’s water fund in accordance with a 2010 order of the Fairfax Circuit Court.   That order did not enjoin the City from setting its rates, only from transferring water system profits to its general fund.

Prior to the vote, Councilman Ira Kaylin noted that Fairfax Water had advised Falls Church in writing that it would not challenge the rate increase.  Many Fairfax County residents have protested the measure, which they regarded as unfair.  Over 90% of the water system’s customers reside in the county.

City “Bailing Out” on the Voting Rights Act

At the request of the Electoral Board and the General Registrar, the Council approved, 5-1, a resolution to begin the process of “bailing out” from the pre-clearance requirements of the Voting Rights Act of 1965.  Ms. Gardner cast the only negative vote.

The Act requires certain jurisdictions, including the City of Falls Church, to notify the U.S. Department of Justice before making changes in their local voting procedures, such as changing a precinct/ward location, adding an absentee voting location, or conducting registration drives.  Exemption from the requirement will provide overall financial and personnel efficiencies, while continuing to abide by the letter and spirit of the Act.

Congress amended the Act in 1982 to establish a process for local governments to be exempted or “bailed out” from the pre-clearance requirements if they have demonstrated a positive record of protecting voter rights in their jurisdiction for a period of at least ten years.  Since 1982 over 18 counties or cities in the Commonwealth have successfully gone through the process.

City Manager’s Report

Mr. Shields stated that the City received over 8 inches of rain during last week’s storm, something that could be expected only once every 85 years.  He said that the storm management system was well maintained but that it had been overwhelmed by an event it was not designed to handle.  Many homeowners have reported flooded basements, especially along Sherrow Avenue, Timber Lane, W. Columbia St., and lower portions of Broadmont.

The City is waiving the excess trash fees for the next two pickups but is not waiving the bulk pickup fee.  Mr. Shields cautioned that appliances under water should be replaced rather than repaired.   Only qualified contractors should be hired to deal with sewer backflows.  A list is available on the City’s website.

Mayor Baroukh suggested that the City hold a town hall meeting to address the flooding problems and other emergency management issues.

Cox Cable soon will be shifting FCC-TV from Channel 12 to Channel 11.  The new channel will be available throughout the City and Fairfax County.  Channel 12 is only available in eastern portions of the county.

Mr. Shields cited Gary La Porta for his recent work in conjunction with the City’s planning efforts.

Vision Statement and Work Plan

The Council passed resolutions, 6-0, approving its vision statement and the work plan for the current term.  The Council amended the work plan prior to the vote to include references to the Eden Center.

August 18, 2011

Fairfax County Circuit Court Judge Jane Marum Roush granted motions by the City of Falls Church today (Aug. 18) to dismiss 14 consolidated water refund cases.  A copy of the Court’s order is available on the City’s web site. 

The Court ruled that the right to seek a “tax” refund is created by statute and that the statute expressly required that the suit be filed in the city where the assessment is made.  In this case, that means that the plaintiffs should have filed in Arlington County Circuit Court, not Fairfax County, since Arlington (the 17th Judicial District) is the court of record for the City of Falls Church.  Judge Roush further ruled that the plaintiffs’ filing in the incorrect court warranted dismissal of the cases. 

While the lawsuits were dismissed today because they were filed in the wrong jurisdiction, the City maintains that on the merits, the claims for refunds are baseless.

Late in 2010 and early 2011, the City was sued by several City water customers for refunds based on Judge R. Terrence Ney’s decision in Fairfax County Water Authority v. City of Falls Church.  That ruling enjoined the City from “transferring any moneys from its water fund to its general fund for purposes unrelated to the water system, including the ‘management fee’ transfer for the City’s Fiscal Years 2009 and 2010.”  The ruling did not call for refunds.  The City complied fully with that ruling.

The City continues to welcome the opportunity for constructive dialogue with Fairfax County on water service in the County.

July 11, 2011

Facing continued criticism from Fairfax County residents, the Falls Church City Council this evening declined to approve the second reading of a water rate increase. 

The Council adopted a motion introduced by Councilman Ira Kaylin to defer a vote on the proposed ordinance until September 12.   The motion also directs City Attorney John Foster and the City’s outside counsel to request that Fairfax Water agree that the proposed increase, if adopted, is in compliance with the final decree issued by Fairfax Circuit Court Judge R. Terrence Ney on January 6, 2010 in the case of Fairfax County Water Authority vs. City of Falls Church. 

That decree enjoined the City from transferring profits from its water system to its general fund.  It also ordered that Falls Church must comply with its Charter, which states that “water rates .  .  will result in receipts equal to expense (including any future expense of the water system).”  

The motion further directs that if an agreement is obtained, Mr. Foster then is to seek a decree from the Court resolving that the rate increase complies with the 2010 ruling.   If Fairfax Water declines to join in securing the Court’s concurrence, then the City will seek it unilaterally.  

The motion was approved, 3-2, with members Johannah Barry and Robin Gardner absent.          

Mayor Nader Baroukh and Councilman Ron Peppe voted with Mr. Kaylin to approve the motion.  The mayor and Mr. Kaylin both urged caution, given the prior litigation with Fairfax Water. 

Vice Mayor Dave Snyder and Councilman Lawrence Webb opposed the motion.  Mr. Snyder cited the pressing need to maintain the system’s infrastructure.  Mr. Webb concurred, stating that the City was only seeking to charge what it takes to run the system and that deferring action only served to delay what is inevitable.

Before the vote seven Fairfax County residents spoke against the rate increase, maintaining that it violated Judge Ney’s decree.  Some called on the City to merge its system with Fairfax Water in order to achieve greater economies of scale.  Others were visibly angry.  One called on Fairfax customers to boycot Falls Church businesses if the increase were approved.

Falls Church is proposing an 8% increase.  The City has not raised its rates since 2005.  Ninety-two percent of the system’s customers reside in Fairfax County.

CDC Task Force  -  The Council unanimously approved a resolution extending the Child Development Center Task Force’s deadline until August 8. 

City Manager’s Report  -  Mr. Shields announced that Falls Church’s recycling rate has risen from 57% of solid waste in 2009 to 60% in 2010.  The state average in 38.6.  The annual hazardous waste collection will be held Saturday, July 23.  Residents are encouraged to  

Closed Session Cancelled  -  At the end of the meeting the Council removed the session from the evening’s agenda, presumably due to the earlier decision to defer action on the water rate increase.

June 28, 2011

The Falls Church City Council unanimously approved the first reading of a controversial 8% water rate increase Monday evening.  Prior to the vote, several Fairfax County residents spoke in opposition, insisting that the increase was unjustified, due in part to earlier court rulings against the City.    

Dennis Hennigan, an attorney, said he did not see how a system that had been so profitable  now needed a rate increase. “Something does not add up here,” he said.  “Falls Church should be reducing its rates and returning its overcharges to customers.”  He added that he found it somewhat disturbing that the City showed so little deference to the findings of Virginia courts. 

Hennigan cited Judge R. Terrence Ney’s Jaunuary 2010 finding that Falls Church could not transfer profits from its water system to its general fund.  As only 8% of its customers reside in the City, most of the system’s revenue is collected from Fairfax residents, who derived no benefit from transfers to the general fund.  The judge ruled Falls Church’s practice an unconstitutional tax on non-residents and enjoined it from making further transfers. 

McLean Citizens Association president Ron Jackson criticized the water rate study the City used to justify the increase.  “We’re paying twice,” he said, claiming that the system’s reserves were already built up due to past overcharges to Fairfax customers.

Elaine Cerriano called on the City to give people more time to review the study and raise.  She asked for at least 45 more days and suggested the information be made available in county libraries. 

Larry Sexton of the Falls Hill Civic Association concluded his questions for the Council by asking “Do you think if you didn’t have a monopoly we’d still be your customers?”  Another speaker was even harsher, calling the Council arrogant and its actions unconscionable.

In response to the customers’ comments, Vice Mayor Dave Snyder stated that the City’s intention is to insure that the water rates are set so that the system will provide safe and reliable water to our customers, whether in Falls Church City or Fairfax County. 

“I will not be swayed by political arguments or arguments directed to keep our rates artificially low that the system suffers,” he said.  “Nor will I delay needed rate actions, even though politically popular, if those rate actions are essential to providing the quality of the water we provide all of our customers.”

Snyder said that the City was in full compliance with Judge Ney’s ruling and that the proposed rate increase is consistent with that ruling and not based on any such profit transfer.   He added that traditionally, such organizations that are running a risk have a right to a fair rate of return, and that he respectfully did not agree with the court’s decision. 

The vice mayor noted that the rate study had been posted on Falls Church’s website on June 1 and that copies have been provided to Fairfax officials and anyone who’d asked for it, but he agreed to furnish copies to libraries within the system’s service area.    

Snyder said the bulk of the rate increase is to fund reserves and that the monies received would remain in the water fund.  He also lauded the system’s water quality and its past performance during inclement weather, when it maintained its high standards while other systems could not.

Second reading of the ordinance is scheduled for July 11.  If approved, the rate increase, the first in six years, would take effect on August 1.

Child Development Center Parents Seek Extension  -  Over a dozen parents of children attending the CDC asked the Council to consider extending the Easter Seal’s lease on the property, which is scheduled to expire in November.  Speakers had high praise for the quality of care provided at the Center and the dedication of its staff.  Many were concerned that they would not be able to find an alternative if the CDC were to close on short notice.

A task force has been formed to address the issue.  Deputy City Manager Cindy Mester informed the council that it had met Monday afternoon and was scheduled to meet again on Thursday.  Staff will set up a website page on the topic that would appear on both the City and Schools sites.  Mester said the task force will ask the Council to extend its deadline to July 30.      

For nearly 50 years the facility has been leased to Easter Seals, who would prefer an extension until at least the summer of 2013.  Easter Seals would be willing to pay $50,000 annually for the space, currently leased at $1 per year. 

City Schools have asked to assume control of the property in July 2012 in order to house the preschool education programs currently located at Mt. Daniel.  This would also free space to permit the relocation of  the Falls Church Community Center preschool program

Economic Incentives Adopted  -  The Council also unanimously approved, 6-0, with Ms. Gardner absent, a resolution establishing a policy which will give the City the opportunity to provide new incentives for commercial redevelopment. The stated goal is to encourage new and sustainable economic development and private investment in targeted areas of the City and to create a better balance between the City’s residential and commercial tax base components.

This will be achieved primarily through land use planning and zoning that provides height and density bonuses for desired outcomes in designed areas. In some cases the City will encourage and accelerate new commercial redevelopment by considering public participation, including tax increment financing and partial and temporary abatement of business taxes.

City Attorney John Foster advised that the resolution essentially serves as a guide to the Council going forward and that it does not extend any rights to developers.

Appointments  -  The Council appointed the following citizens to unexpired terms on various City commissions, committees, and boards:

Robert Loftur-Thun to the Planning Commission:  (01/01/09) – 12/31/12
Julio Idrobo to the Housing Commission:  (01/01/09) – 12/31/11
Paul Baldino to the Citizens Advisory Committee on Transportation:  (02/01/09) – 1/31/12
Steve Selby to the Recreation and Parks Advisory Board:  (09/01/09) – 08/31/12
Ed Henderson to the Historical Commission:  (9/01/09) – 8/31/12

These officials were reappointed to their positions:  

Jeff Peterson to the Library Board of Trustees:  07/01/11 – 06/30/15
Jonathan Fritsch to the Architectural Advisory Board:  06/01/11 – 05/31/14
Mark Gross to the Fairfax-Falls Church Community Services Board:  07/01/11 – 06/30/14

June 17, 2011

The Falls Church City Council is tentatively scheduled to vote on the second reading of a water rate increase on June 27, having approved a first reading of an ordinance in March.  At the beginning of June the City invited Fairfax Water to review a study, prepared by an outside consultant, that recommended the rate increase. 

Earlier this week Fairfax Water’s chairman Philip W. Allin responded via a lengthy letter in which he requested that Falls Church not raise its rates.  Allin viewed the study as flawed and called on the City to “chart a better course.”  He concluded by inviting Falls Church ”to discuss a new relationship that could result in mutual benefits for all of our customers.”

In response, City communications director Barbara Gordon issued a statement noting that “Over the past several months, City officials have suggested to Fairfax officials that we sit down together to talk about water service in the region and we are pleased that Fairfax Water is accepting our overtures.” 

“The City has been fully open and transparent about the proposed water rate increase, and provided a full copy of the water rate study to Fairfax Water, with a request for comment.  Having received the Chairman’s comments, we will review them carefully along with any other comments we receive prior to final adoption.  The City must raise its rate 8 percent next year to fund operating costs and existing and future capital costs.”

Falls Church has not raised its water rates since 2005.  Currently it charges $3.03 per 1,000 gallons.  According to Gordon, Fairfax Water has raised its rates 33 percent over the last six years.  Even with the proposed rate increase, the City’s water rates will be below average for the national capital region and lower than two-thirds of the public water utilities in Virginia.

The pending ordinance calls for gradual increases over the next three years: $3.27 per 1,000 gallons in FY12, to $3.53 in FY13, and to $3.82 in FY14.  Quarterly service charges and peak charges also would be increased annually over the three year period.  A typical quarterly bill, with no peak usage, would rise $2.04 in FY12. 

If approved by the Council on June 27  the new rates would take effect on July 1.  About 92% of the City’s 34,000 customer accounts are in Fairfax County.

May 23, 2011

The Falls Church City Council voted unanimously this evening to deny all claims for refunds received from water system customers for alleged overcharges.

“For the City to make any payment of public funds to to a private party outside the bounds of established law and precedent would be irresponsible,” said Vice Mayor Dave Snyder.  “The City has viable legitimate legal defenses to the claims of customers seeking refunds.  It is the Council”s responsibliity to protect the City’s financial interests on behalf of its water utility rate payers and the taxpayers of the City, and this motion does that.”

The vice mayor stated that after discussing the matter with the city attorney and outside counsel, the Council has concluded that there are important issues involved that have not been addressed by the courts which have important implications for the financial management of the City and for public service utilities state-wide.

Snyder said that the refund requests stem from an incorrect reading of a January 2010 Fairfax Circuit Court ruling in the case of Fairfax County Water Authority vs. City of Falls Church.  The ruling enjoined the City from transferring funds from its water fund to its general fund for purposes unrelated to its water system, including the management fee transfer for FY 09 and 10.  However, that ruling did not call for refunds.

“The City disagrees with the ruling as it runs counter to the City Charter as adopted by the General Assembly and to established practice across the state,” said Snyder.  “Nevertheless the City has complied with the ruling in all respects and remains in full compliance today.” 

“Never assume anything other than that we  put the highest priority on providing safe and reliable water to our customers on an equal basis, whether in the City or in the County,” concluded Snyder.

No other members commented on the motion, which was introduced by Councilman Ira Kaylin and seconded by Lawrence Webb.  Following the vice mayor’s statement, the Council voted to approve, 6-0, with Councilman Ron Peppe absent.

Currently, there are several cases pending in court where plaintiffs have requested refunds of water utility charges from Falls Church.  The City also has received letters from customers seeking refunds.  In addition to Falls Church City, the water system serves a wide area of Fairfax County.  Ninety-two percent of its customers are County residents.

April 28, 2011

Last Monday the Falls Church City Council deferred final approval of a water rate increase until June 27.  The following day the Fairfax County Board of Supervisors authorized the Fairfax Consumer Protection Commission to undertake a comprehensive review of the City’s water rate making practices.  The measure was introduced by Supervisor Linda Smyth (Providence).  The Board’s action was preceded by two letters from Fairfax Water’s outside counsel Stuart Raphael to City Attorney John Foster, which suggested that higher rates would violate a judicial order and the City Charter.

“Needless to say, all of us who have residents who use Falls Church water are very much concerned,” said Ms. Smyth.  “We would like to get our consumer product protection folks starting to look at this to see  if it conforms to our principles of sound water rate making.”  She added that the Commission also would review the City’s water rate making study, which was prepared by an outside consultant.

Specifically, Supervisor Smyth asked the Commission to determine the basis for Falls Church’s rates, whether the City was in compliance with the rate making principles established by the Board in May 2010, the nature, location, and cost of any capital improvements made over the past five years and how those improvements were funded, and the location and cost of projected improvements.  She asked that the Commission report back to the Board by September 27.

Ms. Smyth’s motion was seconded by Supervisors Gerry Hyland (Mout Vernon) and Penny Gross (Mason), and then approved by voice vote.

Mr. Raphael’s letter of April 15 noted that the proposed rates include a 7.8% return on equity and questioned why this would not violate Judge R. Terrence Ney’s January 2010 decree and Section 13.09 of the Charter.  Mr. Foster responded that the return on equity would remain in the water fund.  However, Mr. Raphael rejected this view on April 23, maintaining that such a return could not be built into the rates and concluding that Fairfax Water was expecting to see a reduction in the City’s charges, rather than a sharp increase.

The City Council gave preliminary approval for the higher rates on March 28, calling for gradual increases over the next three years: $3.27 per 1,000 gallons in FY12, to $3.53 in FY 13, and to $3.82 in FY14.  The current rate is $3.03, which has been in effect since 2005.  Approximately 92% of the system’s customers reside in Fairfax County.  

According to City Manager Wyatt Shields, the City’s Public Service Commission met on March 23 and recommended the Council authorize the increase.  If approved at second reading, the new rate structure would take effect on July 1. 

Video of Supervisor Smyth’s complete statement is available for viewing on the County’s website (click on the meeting link and go to 3:02:35).  Fairfax Water’s letters to the City and Mr. Foster’s response are posted on the utility’s website.

January 15, 2011

For the last four years Falls Church City’s water system has been very much in the news due to nearly continuous litigation.  The latest actions involve a series of refund claims from Fairfax County residents for alleged overcharges, brought about by a circuit court ruling against the City.  City Manager Wyatt Shields recently met with the Falls Church Times to discuss the court filings and to give customers some insight into the system’s operations.

Litigation, Past and Present -  About a dozen claims for overcharges have been received from Fairfax County customers after the Virginia Supreme Court declined to review last year’s lower court decision that Falls Church was charging non-City residents an unconstitutional tax.  Letters requesting refunds also have been received from the Fairfax County Board of Supervisors and the Fairfax School Board.

Mr. Shields said that Falls Church would confer with Fairfax officials regarding the County’s claims.  Aside from this issue, the City continues to maintain a good working relationship with its much larger neighbor.

Falls Church has responded to the lawsuits by seeking relief via two petitions in Arlington Circuit Court (Read them here and here).  Mr. Shields pointed out that Fairfax Circuit Judge R. Terrence Ney’s January 2010 decision against the City made no reference to overcharges or refunds, only that it could not transfer water fund profits to its general fund.  He said that the City is in full compliance with that ruling, which has no state-wide application.  Nineteen Virginia jurisdictions’ utilities continue to earn a return on their operations.

The city manager said he was not surprised that Falls Church’s insurance carrier, the Virginia Municipal League Insurance Programs, had recently filed suit, claiming that coverage for the Fairfax customers’ overcharge claims was not due.  The carrier filed a similar action in 2009, regarding coverage for legal representation.  Falls Church prevailed in that case and the carrier paid all costs incurred during both trials with Fairfax Water.

Under the terms of last February’s consent decree, the City no longer has an exclusive service area in Fairfax County.  However, Mr. Shields said no customers have been lost so far and that Fairfax Water has not secured any agreements to extend its water lines into territories traditionally served by Falls Church.  He believes this speaks well to the quality of service long provided by the City and to the smoothness of its working relationships with local developers.

The City continues to retain the services of attorney J. Patrick Taves as outside counsel.  Mr. Taves represented Falls Church during part of the appeals process last year.

A Long Tradition of Service -  In Mr. Shields’ view, the various legal squabbles since 2007 have served to obscure a larger success story, that of the Little City maintaining a major utility for generations.  The water system, which dates to the 1930s, is older than the City, which was not incorporated until 1948.

The City currently serves 120,000 people, nearly ten times its population, providing 17 million gallons of fresh water every day.  Nearly 500 miles of water mains furnish water to customers in Falls Church City and eastern Fairfax County

Mr. Shields touted the system’s low rates, which are among the lowest of the 17 systems serving the national capital area.  Currently, the average quarterly Falls Church water bill is $80.19.  Despite increased costs, the City has not raised rates in five years and, unlike some systems, charges the same rate for all customers.  While labor costs are higher in this area, the City’s rates compare favorably to most similar Virginia utilities.

Although neighboring Fairfax Water charges lower rates than Falls Church, according to Mr. Shields the City offers developers much lower connection charges.  For example, the City’s “hook-up” charges for a typical mixed-use development in the Merrifield area would be roughly $2 million lower than those charged by Fairfax Water.

The city manager said that Falls Church has invested heavily in the system in recent years, installing new meters and computer systems, to help provide a very high level of customer service.  Over 50 dedicated employees work diligently to maintain the system’s efficiency.

“One-Third of Our Operation” -  Mr. Shields referred to the system as one-third of our operation, viewing its importance as on par with the City’s government operations and its schools.  This seems unlikely to change.

Although the City considered selling the system in the late 1980s, negotiations with Fairfax County gradually were abandoned.  The 30 year boundary agreement lapsed in 1989 and neither party actively sought its renewal.  Since then the City has continued to improve the system’s infrastructure to enable it to assist in the economic development of the County.

Some commentators have suggested selling the system to another utility.  However, the city manager stated that such a sale would be a major step since it would require a public referendum.  That condition would appear to be a significant obstacle in any sales negotiation, given the uncertainty of the public’s final decision.

Clearly proud of the system, Mr. Shields and its employees appear to be strongly committed to serving customer and developer needs.  Although litigation may be ongoing, Falls Church seems determined to continue to defend and operate its utility for the foreseeable future.

Additional information on the water system is available at the City’s website.