Fairfax County residents won’t have their money spent by the Falls Church government any more. And that will mean lower water bills in the future.
Falls Church, which supplies water to about 110,000 residents in Fairfax County, must end its 40-year-old practice of charging high, for-profit water rates, which the city would then transfer into its general fund on projects unrelated to the city-run water system, according to a court order.
The Virginia Supreme Court denied the city’s final appeal to hear the case on Monday, ending a three-year legal battle between Falls Church and the Fairfax County officials.
In January, a Fairfax County Circuit Court judge found that since about 92 percent of the city’s water customers live in Fairfax County, those county residents were in essence funding part of the city’s budget, and received no corresponding benefit for paying a higher rate. The judge ruled that the high water rate was an “unconstitutional, extra-territorial tax.”
At the time, The Falls Church Times reported that the city had about $4.4 million in surplus water funds, and the judge disclosed that Falls Church was charging Fairfax County residents higher rates than the city’s own residents.
Residents who get water from Falls Church have been paying almost twice as much as county residents served by the Fairfax County Water Authority, which filed the lawsuit against Falls Church.
Falls Church must now lower its water rate, and in accordance with the city’s own charter, charge a rate that generates only enough money to pay the city’s cost of operating the water system.
The city is prohibited from making transfers from the water fund to its own general fund budget for any purpose unrelated to the Falls Church water system. The city also has 30 days to transfer $2.3 million back to the water fund.
Falls Church originally ignited the three-year legal battle by suing Fairfax Water, claiming that it had an exclusive right to provide water services to portions of eastern Fairfax County. The court ruled in favor of Fairfax Water, saying that both providers had a fair opportunity to serve the residents of Fairfax County, and ordered Falls Church pay Fairfax Water $750,000. Fairfax Water then sued Falls Church on the grounds that its water rate unfairly taxed some Fairfax County residents.
