Everybody Pays Their Share of the Water

Editorial

Middleburg finally has water rates that charge the town's largest users for the water they use. Council was right to adopt them in May, over Salamander's objection, and it is right to defend them now that the resort has taken the Town to court.

Here is what changed on July 1. Under the old flat rate, every gallon cost the same, whether it went to a retiree on a fixed income in Windy Hill or to a resort's lawns and laundry. Under the new tiers, the minimum two-month bill is $64, down from the $85.54 the flat rate would have charged this year. Water up to 10,000 gallons every two months got cheaper, and water above that got more expensive. The Town expected the average household to pay about 23 percent less. Total revenue stays the same, plus the 3 percent a year the Town has added for a decade. Nobody's taxes went up, and nobody made a profit on it. The bill was simply divided more fairly.

Salamander does not like the division, and it is easy to see why. It is the town's biggest water customer by far. When the Town studied the numbers in February, twenty-two users took 62 percent of the water and Salamander alone took about half. The Town's own figures in April showed the biggest bill in town rising about 15 percent. Salamander puts its extra cost at more than $230,000 a year.

The resort's argument rests on a 2005 memorandum of understanding. Chip Dicks, its lawyer, told Council that under it Salamander was "going to build water and sewer facilities in the amount of $11 million, and in exchange, the utility rates for water and sewer are going to remain uniform in perpetuity."

On June 25, Salamander sued (Salamander Resort LLC v. Town Council of Middleburg, Loudoun County Circuit Court, case CL26-4292). The complaint says the tiers break the 2005 memorandum and a 2007 utility agreement, single out the resort, fail the state's test that water and sewer charges be "practicable and equitable" and "fair and reasonable," amount to an unconstitutional tax, and are really a low-income discount that state law lets only a few localities offer. It asks a judge to void the rates and block them, and it claims damages of more than $230,000 a year "in perpetuity," plus about $12 million for the water and sewer facilities the resort built. In July the Town asked the judge to dismiss the case. No hearing has been set.

Salamander did build that plant, and the town is better for it. But the agreements the resort attached to its own complaint don't say what it says they say. The 2005 memorandum does promise "uniform rates applicable to other users in the Town." In the same document, all three parties agreed that nothing in it "is intended to, or can, affect the authority or discretion" of the Town's governing body in "taking other legislative action." The 2007 agreement, which calls itself "the entire agreement" between Salamander and the Town, promises service "at the rates then in effect" and says the Town must still follow the state laws on water and sewer rates.

And "uniform" is the word doing all the work here. The new rates are uniform: the same tiers, at the same prices, for every customer in town. The first 10,000 gallons cost Salamander exactly what they cost everyone else, and every gallon after that costs Salamander what it costs anyone who uses that much. State law asks that sewer charges be uniform "for the same type, class and amount of use or service," and it names the consumption of water as a fair basis for setting them. A rate that rises with use is not a rate that singles anyone out. And "in perpetuity" cannot sensibly mean that the smallest users of a water system carry the largest users forever.

Whether the 2005 promise binds the Town at all, and whether the resort skipped the notice and mediation that its own 2007 agreement requires before anyone sues, a judge will decide. The rest of the complaint doesn't need one. A rate that rises by the same 3 percent the Town adds every year is not a new tax; the constitutional limit Salamander cites, the Town points out, governs assessments on property next to a public improvement, not what customers pay for the water they use. And the tiers are not a low-income discount. They are set by how much water comes through the meter, not by who owns the house or what they earn.

The fairness case doesn't need a lawyer. A system built to serve a resort, a hotel full of guests and a neighborhood of new estates needs bigger pipes, bigger storage and more treatment than a small town would. Mayor Bridge Littleton put it plainly before the vote. The consultants recommended tiers twice, he said, so that everybody would "get their proportional share of what strain and stress they're causing on the system." Two consultant studies, about a dozen Strategic Finance Committee meetings and more than a year of Council discussion, all in public, came to the same answer.

Then there is who lives here. "The perception that Middleburg is this big, wealthy town. It's not," the Mayor said in May. Town households earn about half what Loudoun's do. About a fifth of the town's housing is subsidized. Middleburg's residents were paying the highest water rates in the county. Asking them to keep subsidizing the biggest bills in town was never fair.

And there is the drought. This summer the wells fell, Council made conservation mandatory, and the heaviest use came from irrigation, including new lawns at the Salamander Residences, the interim town manager said. A rate that costs more when you use more is the plainest conservation tool a town has. A flat rate rewards waste.

None of this makes Salamander a villain. It is the town's largest employer and its largest taxpayer. Meals and lodging taxes, which its guests help pay, bring in most of the Town's revenue. Mr. Dicks said Salamander and the Town "should be partners and shouldn't be adverse parties with each other." We agree. But partners split the bill by what each one uses. The Mayor offered the right opening: anyone, Salamander included, can bring a different rate structure for next year, and he said the offer stands "for everybody," not just the biggest users.

A lawsuit asking a town of modest means to pay a resort $230,000 a year forever, and $12 million besides, is not how partners talk. Council should defend the rates in court and keep the door open to talk. The rates should stand. Everybody pays their share of the water. That's what uniform means.