Our network

Town of Leesburg Prevails in Appeal of Water Rate Case | Environment

Title (Max 100 Characters)

Town of Leesburg Prevails in Appeal of Water Rate Case

 State Supreme Court Overturns Circuit Court Decision in 5-2 vote

From the Town of Leesburg – In an action against the Town of Leesburg challenging an ordinance that imposed a 100% surcharge on the water and sewer rates affecting properties owned by complainants located within Loudoun County, but outside the Town of Leesburg, the State Supreme Court has ruled that the Circuit Court erred in ruling that the Town failed to present sufficient evidence to meet its burden under the fairly debatable standard. The Court ruled that testimony of an expert that the increased water rate charged to out of Town customers is fair and reasonable, and that the increased sewer rate charged to out of Town customers is practicable, equitable, and uniform.

“I am delighted by this outcome,” stated Town attorney Jeanette Irby, who, along with co-counsel Monica Monday, have been involved with the case on behalf of the Town since the initial lawsuit was filed in 2006. “This outcome ensures the viability and integrity of our ability to provide water and sewer service to all of our customers in a responsible and efficient manner.”

“This is a great day for Leesburg residents,” Leesburg Mayor Kristen Umstattd stated. “I am thrilled by the Supreme Court’s vindication of the Town Council’s 2005 decision to raise the out of Town differential. “

A group of Leesburg's out-of-town utility customers filed a lawsuit against the Town of Leesburg in 2006 challenging the placement of a 100-percent surcharge on out of Town customers. The trial lasted over four days in January and February of 2009. Circuit Court Judge Thomas D. Horne heard arguments and expert testimony from both sides. While the Town argued that its rate structure-which was changed in 2006 to increase the out of Town surcharge from 50 percent to 100 percent-was fair and equitable, with out of Town residents arguing that the method used by the Town to set the rates was incorrect, and the Town was unfairly putting the costs of running the utility system on out of Town customers. The Town argued that the rates prior to 2006 were not covering the costs of running the utility system.

A ruling came down March 6, 2009 with Horne finding in favor of the out of Town utility customers. While saying they were not due the refunds they requested dating back to January 1, 2006, when the rates in took effect. Weeks later, the Town announced it would appeal Horne's decision to the Virginia Supreme Court.

After significant work by the Town Council, new rates for water and sewer service took effect on September 1, 2009, leading to the same group of out of Town customers filing a contempt motion against the Town, charging that the changes ran contrary to Horne's court order, which dictated that the new out-of-town rates set must be reduced by 45.51 percent for water bills and 28.36 percent for sewer bills. These residents also asked for refunds of their bills from the date of the judgment to September 1. Horne said the litigants could ask the Town for those refunds, but he also said he could not find the Town in contempt for its newly-established rates as that would be the subject of another lawsuit. By year's end, the litigants continued to leave the door open for a future lawsuit.

The Town continued its effort to overturn Horne's original ruling and argued why its case should be heard before a writ panel of the state Supreme Court October 20, 2009, and, one month later, was informed that the court had chosen not to take up its appeal. The Town then filed a petition for rehearing, so that the full high court can read the Town's arguments and decide whether to set a trial date.

Town Attorney Jeanette Irby received word early in 2010 that the Virginia Supreme Court had agreed to hear the Town's appeal of the Circuit Court decision, leading to yesterday's decision.