Stephens City council asks mayor to seek governor’s help as dispute with regional water authority grows

Stephens City Council on June 5 directed Mayor Mike Grim to contact the Virginia governor after the town’s Water/Sewer Committee described an escalating dispute with the Frederick County Sanitation Authority over water deliveries and accounting.

Councilman Jason Nauman, chair of the Water/Sewer Committee, told the council the committee had found evidence suggesting Frederick Water had over-pumped from the town’s quarries and that, "Frederick Water has been keeping two sets of books on the water pumping, one that it provided to the State and another that was solely kept for their own operations." The council voted to have the mayor write the governor asking for intervention; the motion carried with Ayes from Vice Mayor Ronald Bowers, Councilmen Joseph Hollis and Jason Nauman and Councilwomen Regina Swygert-Smith and Kelly Thatcher (Councilman Linden Fravel Jr. was absent).

The committee recommended and the council agreed the town should explore three options for securing utility service: (1) contract operation to a private, state-regulated utility; (2) pursue a joint utility venture or a new public service corporation in cooperation with Middletown and the treatment plant at the quarries; or (3) continue to study standalone town-owned water and sewer systems. Chair Nauman said the options should be examined in that order and the motion to explore them carried unanimously among present members.

The Water & Sewer Committee on June 20 voted to adopt "Scenario #1" for FY2018–19 water and sewer rates and asked staff and the Finance Committee to present final numbers to council. Finance Committee documents included in the council packet show recommended changes described in committee minutes as a $4.34 water rate component producing a new minimum two-month charge of $66.58 and a sewer administrative rate of $10.02; the council referred final rate approval to an upcoming meeting.

The town has also pursued administrative remedies. Committee minutes and the council record show Mr. Nauman asked staff to request intervention from state officials; the Virginia Department of Health responded May 25, 2018. Acting Deputy Commissioner Kimberly A. J. Allan told the town that certifying that a shutdown would endanger public health under Virginia Code § 15.2-5138 was not appropriate at that time and recommended the town secure alternative water supply arrangements, for example by negotiating a wholesaler agreement with the City of Winchester or a written agreement with Frederick Water. The VDH letter also offered technical assistance from the Office of Drinking Water.

Committee materials note that Frederick County Sanitation Authority provided a second set of flow records that the committee said were marked "Confidential"; the committee instructed staff to prepare an updated FCSA statement of account reflecting the newly disclosed pump flows for presentation at the next council meeting. Legal counsel indicated a possible trial date of March 11, 2019 on related disputes.

The town manager and committee chair said the Sanitation Authority may owe the town funds and that the town intends to allow the courts to resolve outstanding financial claims while pursuing near-term operational options to ensure continuous service to residences, businesses and the fire department. The council and committee asked staff to prepare public-facing communications explaining the situation to residents once the committee finalizes the draft letter.

Next steps: the Water/Sewer Committee’s rate recommendation and the proposed new rates are scheduled for the council’s consideration at a subsequent meeting; staff will provide an updated FCSA statement of account and the mayor will send the requested letter to the governor.