The Virginia General Assembly is looking at whether to allow Greene County to withdraw from the Rapidan Service Authority (RSA). Senate Bill 1355, introduced by Sen. Emmett Hanger Jr., R-24th, would make it possible for a locality to withdraw from RSA. The bill was reported out of the senate Committee on Local Government on Monday, Jan. 18, with a vote of 14-0 with one abstention.
RSA was created as a regional water and wastewater authority on June 17, 1969, by the counties of Greene, Orange and Madison.
SB 1355 comes after the RSA Board of Members voted 4-2 July 16, 2020, to end monthly facility fee billing to help fund the reservoir project. After that vote, the Greene County Board of Supervisors passed an ordinance requesting boards of supervisors in Orange and Madison allow Greene to withdraw from the service authority but both counties refused.
The Greene County supervisors filed a six-count lawsuit on Sept. 14, requesting more than $25 million for alleged contract breaches, alleged violations of fiduciary duty and alleged non-compliance with its duties to Greene County.
On Sept. 17, the RSA Board of Members voted 4-2—with Greene County’s representatives voting no—to prohibit Greene County representatives from participating in any business at meetings, including last month’s discussion about upgrading RSA’s water treatment plant in Greene County with membrane technology.
“Greene County is becoming a bedroom community, I guess; it’s north of Charlottesville,” Sen. Hanger told the committee. “A lot of new people, a lot of new development in Greene County. They have relied on a fee that was charged by the service authority for servicing the debt. The service authority discontinued that and will not allow them to withdraw, so this bill is to allow the withdrawal.”
The bill allows the withdrawal of any locality that is a member of RSA to withdraw, whether there are outstanding bonds or not. However, that locality must meet certain requirements before that can take place, including: written obligation to RSA incurred by a locality while it was a member remains in full force; the withdrawing locality shall assume ownership and management of any RSA asset located within the boundaries of the withdrawing locality; the withdrawing locality shall assume any debt related to any asset the locality takes on; RSA shall obtain the unanimous consent of all the holders of any outstanding bonds unless all such bonds have been paid or cashed or United States government obligations have been deposited for payment.
The wording regarding debt, according to Sen. Hanger, was included in a substitute bill at the request of the Virginia Resource Authority, which helps finance such bonds.
Gregory D. Habeeb, the attorney representing the county in the lawsuits against RSA, spoke to the committee about the bill.
“The point here is to allow Greene County to withdraw from an authority that is no longer meeting its needs,” Habeeb said. “And this is done in a way that protects the existing localities by requiring Greene to meet their ongoing obligations, as well as bondholders, which is what the substitute does. Quickly, Mr. Chairman, to anticipate Sen. (Amanda) Chase’s questions about this authority: this is the exact concern that she has raised. Sometimes these unelected authorities don’t meet the needs of citizens. That’s what’s happening with the RSA. So rather than letting unelected bureaucrats, unelected authority members, run water and wastewater for Greene, we are asking to allow Greene to revert to maintaining their own systems, which would put both the taxing and operational authority back with the locality where it ought to be so they can meet the needs of their citizens.”
Greene County Board of Supervisors Chairman Bill Martin, Stanardsville, thanked Sen. Hanger for his work.
“Greene County appreciates Sen. Hanger’s sponsorship of Senate Bill No. 1355 and for his leadership in getting the bill through committee so that it can go to the full Senate,” Martin said.
At press time, the bill had not been added to the floor calendar, but is expected to reach the floor by the end of this week.
Demurrers in the ongoing lawsuit case are scheduled for 9 a.m. on Tuesday, Feb. 9, in the Greene County Circuit Court.