After years of legal wrangling with Fairfax County over its water system, Falls Church is hoping to sell its water utility entirely — for about $44 million. Falls Church officials say that the beleaguered water system has faced so many legal challenges over the past several years that it has become too risky to keep the system under the city’s control. So far they city has heard from 10 potential buyers, including the Fairfax County Water Authority itself. Potential buyers can expect to pay at least $44 million for the system, plus another $30 million in obligations like debts and employee pensions.
Fairfax County and Falls Church have long been embroiled in a disagreement over how the city’s water system is managed. Just over 90 percent of Falls Church water customers actually live in Fairfax County, and before 2010, Falls Church had used funds from its Fairfax customers’ bills — which were typically higher than those of Falls Church residents — to pay for city operations and expenses unrelated to the water system. In 2010, a judge ruled that Falls Church could no longer do so, a decision upheld in several appeals.
“There have been a series of legal and political hurdles put in the path of the city … that make it financially risky for the city to keep its water system,” Falls Church city manager Wyatt Shields said.
Two months ago, Falls Church asked buyers to submit “expressions of interest” regarding the water system. Fairfax Water responded, but with a unique request — instead of buying the city’s water utility, Fairfax proposed that the two systems simply merge operations. But Falls Church officials said they preferred to solicit bids from private investors as well.
“What the city is doing with this stuff is trying to make a more open and competitive process, to invite all who might be interested to put forward a bid,” Shields said. “We invite and encourage Fairfax Water to stay in that process.”
Fairfax Water contends that a merger would lower customers’ rates and benefit both communities.
“It’s the most equitable thing for all the customers involved — it combines the ability of both systems,” said Fairfax Water spokeswoman Jeanne Bailey.
Fairfax officials are expected to decide this week whether to bid for the Falls Church system. It has until May 25 to submit an offer, Shields said.
