A Greene County Circuit Court judge ruled Monday evening that the county has the right to seek court intervention in its contracts dispute with the Rapidan Service Authority (RSA). The boards of supervisors of Madison, Greene and Orange counties formed RSA in 1969 to provide water and sewer services to residents. More than 50 years later, Greene County formally requested to leave the partnership.
Hon. Judge Claude Worrell II denied RSA’s Plea in Bar that said the jurisdiction is not proper because RSA has sovereign immunity.
According to Virginia Code section §15.2-14-5, “members of governing bodies of any locality or political subdivision and members of boards, commissions, agencies and authorities thereof are immune from lawsuits arising from the exercise or failure to exercise their discretionary or governmental authority.” However, they are not immune if there is willful misconduct or gross negligence.
Until July 2020, RSA had billed facility fees per an agreement with Greene County beginning in 2015. At the July 2020 meeting, the RSA Board of Members voted to end facility fee billing and to have all water hook-up fees submitted directly to RSA instead of the county. The two Greene County representatives voted against the change, but it passed 4-2.
Greene County filed a lawsuit in September 2020 citing an alleged breach of contract by RSA for the vote in July and it was at that meeting that the board voted—again 4-2—to prohibit the two Greene County representatives from speaking or voting on anything while the lawsuit was ongoing. That changed in February 2021 when the board voted to again allow them to continue to participate in business decisions for the board of members.
RSA attorney Terry Lynn argued that according to the Virginia Water and Waste Authority Act §15.2-5100 through 15.2-5158, RSA has the sole right and discretion to set rates and fees for its customers. As such, she argued, RSA cannot enter into a contract that takes away the legislative functions outlined by the General Assembly—making the contract between RSA and Greene County void. Judge Worrell said it can’t be void because it exists.
At the July meeting, Madison County Member Troy Coppage spoke about whether the facility fee was legal.
“Until we know this fee is permissible I just can’t see how we can even consider raising something that may not be permissible to start with,” Coppage said at the July 2020 meeting.
Lynn said at that time, in her role as attorney for the authority, that she had concerns regarding the legality of the fee.
Judge Worrell ruled on June 28, 2021, the fee was legal.
Judge Worrell asked Lynn whether RSA and Greene County could enter into a contract with each other as they did in December 2014 and if there was any enforcement for the parties to meet the contracted details.
“We can contract with people to build things,” Lynn said. “We cannot contract out the setting of fees and rates. We’re not in any way saying we cannot enter into contracts … we’re the only one to set rates and fees.”
“I think that’s not true,” Judge Worrell responded. “There are enforcement rights under the contract … localities no longer have any control can’t be the law.”
“Yes, that is the law,” Lynn said.
Judge Worrell disagreed, adding he believed there has to be oversight for the contract.
The judge also noted that in the agreement with the county it says both the county and RSA must agree to the facility fee.
“RSA agreed … (to collect the fees and it’s) not collecting anymore,” Judge Worrell said. “RSA agreed to work with Greene County … (and they) failed to do so perhaps without good faith.”
He noted that since RSA is no longer collecting any fee, it’s a violation of the agreement with the county.
“Charging none is not a fee,” he said.
Lynn noted that Virginia Resources Authority (VRA)—bond holders for water and sewer improvements by both RSA and Greene County—gets to have a say in whether the county is permitted to leave RSA.
RSA General Manager Tim Clemons testified to the timeline of the events and noted that Greene County and RSA are not signatories on bonds together.
The boards of supervisors for the counties of Greene, Madison and Orange voted unanimously to allow Greene County out of RSA, but the RSA Board of Members has not. At the September 2021 board of members meeting, the board voted unanimously to allow Clemons and Lynn to mediate with Greene County under a conditional withdrawal opinion by VRA. In a letter dated Oct. 29, 2021, VRA noted its conditional withdrawal consent.
Greg Habeeb, a partner at Gentry Locke Attorneys in Richmond and Greene County’s counsel, asked Clemons whether he is aware that the county has been asking for unconditional mediation for more than a year, but that RSA has said no? Instead, RSA has requested the county dismiss the lawsuit with prejudice (meaning it could not bring again) and have conditional withdrawal consent from VRA. Additionally, Habeeb noted that the county submitted its proposed withdrawal agreement to RSA about five to six months ago but has received no response, to which Clemons agreed.
Judge Worrell has set a Dec. 28 hearing for demurrer, partial summary judgement and other pretrial issues.