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City Will Continue Operating Falls Church Water

After months of considering a sale of the water utility, the city decides to retain the system.

Talks between Fairfax County, Fairfax Water and Falls Church Water have been discontinued.

when the City of Falls Church council started entertaining bids for the water system, Fairfax Water emerged as a potential suitor. The minimum bid was set at $44 million by the city. The city will now instead retain operation of the water system.

“The city took a business approach to these negotiations,” Mayor Nader Baroukh said in a written statement Wednesday. “The goal was to explore the possibility of a sale agreement that would benefit city taxpayers and all of the customers of the water system. We did not reach such an agreement and we are happy to continue to provide vital public water services to the city and county as we have for over 80-years.”

The , which produced nine interested private and public utility companies, including Fairfax Water. The City held three meetings in July with Fairfax County and Fairfax Water to discuss a possible sale of the city’s system. The city was clear throughout the discussions that any sale agreement would be based on the value of the city’s utility assets using standard utility valuation methods. Falls Church Water provides water to McLean, Tysons Corner and Merrifield as well as the city.

In a written statement, councilman Ira Kaylin said it was worthwhile to discuss matters with Fairfax Water. He said the city couldn’t justify selling the water company.

“Accordingly, there was no basis for an agreement,” said Kaylin, a member of the city’s Public Utility Commission.

In a statement on their website, Fairfax Water said: “After earnest efforts to negotiate an agreement with the City of Falls Church that respects the citizens of both Falls Church and Fairfax County, Fairfax Water regrets to report that negotiations to merge the water systems have not been successful. The litigation in which the City has challenged the legality of Fairfax County's water regulation ordinance is expected to resume. That ordinance seeks to protect the interests of Fairfax County customers who purchase water from municipalities like the City of Falls Church. Fairfax County and Fairfax Water have filed motions to dismiss the City's lawsuit, and those motions are pending.”

Fairfax County adopted an ordinance in December that would force new development to incur millions in additional costs in order to connect to Fairfax Water, and would have the County attempt to regulate water rates duly enacted by the municipal water systems operating in the County.

In June, U.S. District Judge Liam O’Grady issued an order to stay any enforcement of the Fairfax County water ordinance for a period of 90 days. The city, Fairfax Water, and Fairfax County jointly requested the stay. The city used the 90-day period to explore possible resolution of issues with Fairfax County.  The stay also applied to enforcement of the ordinance with respect to the water utilities owned by the City of Fairfax, Town of Vienna and Town of Herndon.

W. R. Knight August 09, 2012 at 01:24 PM
First, the court told the city mayor that the city must stop profiting from the sale of water to its customers. Second, the mayor and vice mayor decided if they can no longer make a profit, they will dump (sell) the water system. Third, instead of integrating the system into the Fairfax County water system, they chose to put it up for public auction in order to get even more money for it. Fourth, the Army Corps of Engineers who supplies water for the system, told the city they couldn't legally provide water to a private (for profit) company, so no private buyer would buy the system from them. Finally, that left the city two options: integrate the water system into the Fairfax County water system and receive a fair reimbursement for investment costs or keep the system. So they finally decided to keep it. It's nice to know that the Falls Church mayor and vice mayor are so dedicated to providing critical public services to their city's residents.
Tom M August 09, 2012 at 02:32 PM
In September, Falls Church City will resume their appeal of Fairfax County's law that regulates the rates which Falls Church City may charge. If Falls Church wins that case and subsequent appeals, I would like to see the regional boards, such as the Northern Virginia Transportation Commission, either expel or suspend the City of Falls Church. They have acted like pariahs, now let's treat them like pariahs.

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