Deal to Sell Falls Church Water Reached

A deal to sell Falls Church Water to Fairfax Water for $40 million has been reached and will now go before City of Falls Church residents for an approval vote in November of 2013.

The 80-year-old water company could be sold to Fairfax Water following successful negotiations Tuesday. The Falls Church City Council, the Fairfax Water Board of Directors and the Fairfax County Board of Supervisors approved the negotiated terms.

“The City of Falls Church is proud of its long-standing commitment to regional cooperation,” City of Falls Church Mayor Nader Baroukh said in a release Tuesday afternoon. “The potential sale of the water system is a testament to that ideal and in the best interests of its water customers, taxpayers and utility employees.” 

Mediation to sell the water company started Nov. 8, but no deal was reached then. The city had spent months of trying to sell the water company, and in August the city announced they would continue operating Falls Church Water. Back in April, the city set a minimum bid to buy the 80-year-old system at $44 million. The city received nine inquiries from other water companies to buy the system including one from Fairfax Water.

The settlement calls for the reduction in water rates to customers in the Falls Church system’s service area. It also calls for certain adjustments of the city’s boundary line with Fairfax County. Acquiring the water system will create a robust system for Fairfax Water and will also mean the settlement of all litigation between them and employment for Falls Church Water Utility employees.

“We are excited that we reached an understanding that will benefit all of the people served by these two water systems,” Philip Allin, Chairman of Fairfax Water said in a statement. “Providing the highest quality water at the lowest rates continues to be our mission and we are delighted to add the 140,000 persons served by the Falls Church system to the nearly 1.7 million people in northern Virginia we currently have the privilege of serving.”

According to officials, Fairfax Water, the City of Falls Church, and Fairfax County have entered a period of “due diligence” and will proceed to prepare and finalize the contract documents. The pending litigation between the parties will be stayed and in accordance with the Falls Church charter, the question whether to approve the transaction will be subject to a referendum next year.

If the city residents vote to approve the deal to sell, the two water systems will become one in or around January 2014, according to officials. For Falls Church Water customers, the deal would mean rates would be reduced to the same rates paid by Fairfax Water’s existing customers within two years. The Washington Aqueduct water supply to Falls Church would be combined with Fairfax Water’s two existing treatment plants, providing additional back-up supply and creating one of the most robust, integrated water systems in the country.

“Fairfax County is pleased that all parties have reached an agreement on the purchase of the Falls Church water system,” Fairfax County Board of Supervisors Chairman Sharon Bulova said in a statement. “This settlement marks a step in the right direction towards providing a better, more affordable water service for residents and ensuring a first-class water system in the long run.”

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