Former City of Falls Church Water Customers to See Rate Reductions Effective July 1

(The following is a press release from the office of Dranesville District Supervisor John Foust, who sits on the Fairfax County Board of Supervisors.)

Effective July 1, 2015, Fairfax Water will equalize water rates for customers previously served by the City of Falls Church Water. This equalization of rates was part of the agreement made when Fairfax Water, an independent utility, acquired Falls Church Water in January 2014. At that time, Fairfax Water agreed that within 2 years, it would lower the rates of former customers of Falls Church Water to match Fairfax Water rates. Fairfax Water is making good on that promise six months ahead of schedule. Fairfax Water announced that it was able to accelerate the rate adjustment as a result of efficiencies and economies of scale made possible by the merger.

Lower rates will take effect beginning with meter readings taken on or after July 1, 2015. At that time, all Fairfax Water customers will be on the same rate schedule which includes a commodity rate of $2.55 per 1,000 gallons. That is a savings of over 20% on the existing charge of $3.27 per 1,000 gallons for former customers of Falls Church.

Many of the County residents who were served by the City of Falls Church Water live in the Dranesville District. “For far too many years, Fairfax County residents served by the City of Falls Church paid too much for essential water services. I am pleased that our efforts to challenge this inequity have been successful and that we have achieved a fair result for those County residents. I am grateful to Fairfax Water for agreeing to purchase the Falls Church Water system and equalizing their rates. I also appreciate the residents and elected leaders of Falls Church for working with the County and Fairfax Water and agreeing to the purchase,” said Dranesville District Supervisor John Foust.

Background of “Water War”

The so-called “water war” between Fairfax County and the City of Falls Church has a long history going back a number of decades. Approximately 100,000 Fairfax County residents received water from the City of Falls Church. They paid rates significantly higher than the rates charged by Fairfax Water to the County residents they served. Falls Church used the profit made on higher rates to support other services it provided to Falls Church residents. In January 2010, a state judge ruled that Falls Church’s transfer of water utility profits to its General Fund was an unconstitutional tax on people who lived outside the boundaries of the City. After that ruling, Falls Church officials claimed that they had to significantly raise rates to establish new reserve funds and to expand the water system infrastructure to serve its new customers in Tysons. The City raised its rates 8% for fiscal year 2011 and announced plans to raise rates a total of 30% by 2016. Since most of the City’s water customers lived in Fairfax County, most increased revenues would have come from Fairfax County residents.

Supervisor Foust, along with several of his colleagues on the Board, challenged the rate increase and asked the Fairfax County Consumer Protection Commission, with assistance from the Consumer Affairs branch of the Department of Cable and Consumer Services, to undertake a comprehensive review of the City’s rate-making actions. Among a number of recommendations the Commission made was that Fairfax County fix the rates for all water customers in the County so that no resident pays more than the rate set by Fairfax Water unless Falls Church City or other municipal providers could justify higher rates.

In December 2011, the Board of Supervisors adopted an ordinance requiring that effective July 1, 2012, the City of Falls Church, the City of Fairfax and the towns of Vienna and Herndon must charge Fairfax County residents the same rates that Fairfax Water charges unless they could demonstrate that a higher rate is fair and reasonable based on their costs.

The passage of the ordinance led to additional legal proceedings with many starts and stops. With the assistance of the Board of Supervisors and a federal mediator, a settlement was reached in late 2012. Under the terms of the agreement, Fairfax Water agreed to purchase Falls Church Water for $40 million. In addition to the commitment to equalize the rates for former customers of Falls Church Water, that agreement included a commitment to adjust the City of Falls Church boundary to include several parcels in the City that were owned by the City but were located in Fairfax County. The acquisition was approved with a referendum passed by voters of the City of Falls Church in November 2013.