Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 18, 1992 TAG: 9203180204
SECTION: VIRGINIA PAGE: B1 EDITION: METRO
SOURCE: By MARK LAYMAN and JOEL TURNER STAFF WRITERS
DATELINE: LENGTH: Long
For Roanoke County, which is spending more than $70 million on the Spring Hollow Reservoir project, the issue isn't just whether it also will have to share the cost of improvements to Roanoke's Falling Creek water treatment plant.
The county's bigger worry might be that one day it will have to share the $28 million cost of improvements to the city's Carvins Cove treatment plant and installation of new water lines.
When the county signed a contract in 1979 to buy water from the city for 30 years, it also agreed to share the cost of improvements to the city's water system.
At least that's the way city officials interpret the contract.
Up to now, that hasn't been a problem. Naturally, the county didn't like paying a 25 percent surcharge on the 2.5 million gallons of water it purchased each day from the city. The bill comes to $1 million each year.
But without a reservoir of its own, what choice did the county have?
"Over the years, [the contract] has not been unreasonable," the chairman of the Board of Supervisors, Lee Eddy, said this week.
"It's only now, when the city is embarking on capital improvements [to its water system], that some things are entering into it that might not have been anticipated" in 1979, he said.
At the beginning of each fiscal year, the city estimates the cost of the water it will sell to the county during the next 12 months, plus the 25 percent surcharge. At the end of the fiscal year, the city determines the actual cost of the water and sends the county a settlement bill.
Last fall, the county got a 1990-1991 settlement bill for $320,000, most of which was for capital improvements to the city's water system.
The city is billing the county for part of the cost of:
Improvements to the Falling Creek treatment plant.
New water lines and fire hydrants.
Extension of water lines to the new United Parcel Service distribution center.
Replacement of water lines in the Edgewood neighborhood.
In a letter to City Manager Bob Herbert in December, County Administrator Elmer Hodge wrote, "The county cannot be expected to pay for expansion of the city water system . . . [and] for facilities that are constructed to benefit only certain areas of the city. The county does not intend to participate in any major upgrade or expansion of the city's water system" beyond what is necessary to comply with state or federal standards.
The county's settlement bill, Hodge told Herbert, "should be around $0."
But the language in the 1979 contract is so broad that it might indeed require the county to share the cost of those capital improvements.
It is so broad, County Attorney Paul Mahoney said only half-jokingly, that the county could be required to share the cost of "a new Jeep for Bob Herbert."
He argues, though, that the intent of the contract was for the county to share the cost of only those capital improvements that benefit both localities.
City Finance Director Joel Schlanger disagrees. He said the capital improvements in dispute benefit the entire system, not just the city.
Mahoney didn't say it, but if the county has to pay this bill, it's almost certain it also will have to share the cost of the Carvins Cove improvements. The city sold bonds for the improvements in December, and engineers now are drawing up plans.
City and county officials last met Jan. 31 to discuss the bill. City officials "weren't pounding on the table saying, `We're going to file a lawsuit,' " Mahoney said. "But this didn't come like a bolt out of the blue."
Still, county officials didn't find out until the last minute that City Council would be asked Monday to give the go-ahead to file a lawsuit. Mahoney got the word by telephone from City Attorney Wil Dibling just before the council meeting.
"I thanked him for calling me," Mahoney said. "I didn't try to talk him out of it."
Asked why the city didn't let the county know sooner that it was ready to file a lawsuit, Schlanger said, "If I owed $320,000 for three to four months, I wouldn't be surprised if someone sued me for it."
The contract allows arbitration of accounting and engineering disagreements. But it's questionable whether this dispute falls into either of those categories. And anyway, Mahoney said, it's the city's choice.
Schlanger refused to say why the city chose to threaten a lawsuit rather than seek arbitration.
Mahoney said there had been only one similar dispute with the city in the eight years he has been county attorney. That one involved charges for fire hydrants. To the best of his recollection, he said, the disputed charges were dropped.
The county is bound by the 1979 contract to purchase water from the city until 2009 - even after the Spring Hollow Reservoir goes into use in 1995.
But county officials have said that's OK. The first phase of the reservoir project includes construction of a treatment plant with a capacity of only 8 million gallons per day. And the first major transmission line will provide water to Southwest Roanoke County.
Construction of a major transmission line to provide water to North Roanoke County isn't planned until years later. In the meantime, the county intends to use the water it purchases from the city to supply those customers.
by CNB