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RSA continues 9-0 losing streak

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Lack of water claims yet to be substantiated

For the ninth time, the Rapidan Service Authority (RSA) has lost to Greene County in the ongoing lawsuit of the county versus the regional water authority stemming from alleged breach of contract in 2020. The RSA Board of Members also last week failed to substantiate claims that there is no longer enough water to support already-approved development projects in Greene County based on the current water plant’s capacity.

At its monthly meeting April 21, the board of members discussed the recent public hearing on reinstating the facility fee on Greene customers’ bills; since there was not a quorum of board members present, it was decided that a second public hearing will be held during the May 19 monthly board meeting, at 2 p.m. in the PVCC Giuseppe Center in Stanardsville. All residents are welcome to attend and voice their concerns regarding the facility fee at that time, after which the board will vote on the matter.

Not enough water?

Greene County RSA board member Bill Martin brought up the subject of last week’s Greene County Record article in which RSA told developers from the Timmons Group (assigned to the Arbors at Greene and Creekside development projects) that there was not enough capacity at the current water plant for those developments to proceed as planned.

“In our usual course of business, Greene County asks RSA to review and approve every land use application, subdivision application and site plan received by Greene County,” Greene County Administrator Mark Taylor wrote in a letter to the Record. “To date, Greene County has not received any comment from RSA saying that they do not have sufficient water to provide service.”

RSA Board Chairman Lee Frame asked RSA General Manager Tim Clemons to comment on the article as referenced by Martin.

“From our administrative records and from our engineering records, there’s approximately 4,529 EDUs that have been sold in Greene County,” Clemons said. “Some of those are not yet connected—some of those are, but some of those are not yet connected.”

An EDU, or equivalent dwelling unit, is the unit of measure by which users are charged for water or sewer services, with one EDU equaling a single-family residential household.

“We generally have looked at that plant and said 5,000 EDUs would be about the limit on it—that would be a million gallons a day for that plant, which would mean we really wouldn’t have any downtime,” Clemons continued. “So we’ve always calculated that plant at about 5,000 EDUs; records indicate 4,529 so that would leave 471 EDUs that could still be sold in Greene County for water.”

Clemons indicated that he’s been working on an audit of these numbers for the past few months and that he intends to put together a letter on this topic soon.

“From what I read in the article, on one of the projects listed, (Greene) had approached our engineer recently and he just told him based on what we know … Greene has approved somewhere over 1,600 units at this point,” Clemons continued. “They do not have EDUs sold but they’re approved. We can’t continue approving units. … While those units are not built yet, I think out of an abundance of caution we can’t continue approving projects not knowing when they may get built.”

“I guess that leaves it to Greene County then to decide which projects have priority for the remaining EDUs,” Frame added. “Does that deal with your question, Bill (Martin)?”

“Mr. Chair, I’m not in argumentative mode today,” Martin responded. “I’ll wait for Mr. Clements’ letter.”

Court Hearing Part Nine

During another virtual hearing April 25, Judge Claude Worrell heard RSA’s Demurrer and Plea in Bar in the ongoing lawsuit of Greene County against the RSA. The Demurrer was sustained in count one without prejudice and counts two and three were dismissed with prejudice.

Greene County and RSA first entered into an agreement in December 2014 to add a facility fee to the monthly bills in order to help pay for the water impoundment project. With help from financial consultant Stantec, the funding plan was established in 2017 and raised more than $3 million towards that end.

In July 2020, the RSA Board of Members voted 4-2—with Greene’s representatives voting against—to end facility fee billing and return control of the project from Greene County to RSA. Greene filed its first lawsuit against RSA in September of that year for breach of contract. The second was filed two weeks later after the RSA board decided not to allow the Greene County representatives to speak or vote on anything while the lawsuit was ongoing.

Since September 2020, the issue has come before Greene County Circuit Court a total of nine times. Each time, Judge Worrell has ruled in favor of Greene County—including overturning RSA’s Plea in Bar calling the fee an “impermissible tax” and another claiming RSA had sovereign immunity. In July 2021 Judge Worrell declared that the RSA facility fee was not illegal.

In Monday’s hearing, RSA Attorney Terry Lynn outlined RSA’s most recent counterclaim, which was rebutted by Greene County Attorney Greg Habeeb.

“With regard to count one, the counterclaim asserts that documentation [e.g. a bill] was submitted to Greene County and ignored,” Lynn said. “I believe that our counterclaim counts—all of them—are nothing more than trying to get Greene County to live up to the obligations set forth in the contracts which are part of this lawsuit that they filed.”

Lynn went on to discuss numerous cases cited in the lawsuit which she did not believe applied to the Greene County vs. RSA situation.

Count two of the demurrer was for indemnification—also known as (financial) compensation. According to Oxford English Dictionary, a demurrer is “an objection that an opponent’s point is irrelevant or invalid.”

“The counterclaim alleges that the parties agreed that the availability and facility fees that were going to be paid by RSA customers to Greene would be placed in enterprise fund,” Lynn continued. “Those monies were supposed to be paid to us from the enterprise fund, so now we had to file a lawsuit to get money that the enterprise fund was supposed to cover. So we would additionally be entitled to indemnification.”

“Why did you ‘have to’ file a lawsuit, Ms. Lynn?” Judge Worrell asked. “Greene County’s Board of Supervisors didn’t ‘have to’ file a lawsuit—they filed a lawsuit. Why did you ‘have to’ file a lawsuit?”

“Because they weren’t going to pay us the $285,000,” Lynn began.

“How do you know?” Worrell interjected.

“I believe Mark Taylor’s letter made it pretty clear,” Lynn replied.

Lynn went on to count three—breach of contract.

“Count three—breach of contract—is based on Greene County’s request to withdraw from RSA, which in and of itself is a repudiation of the contract because that withdrawal would preclude the transfer of assets to RSA,” Lynn said. “If they’re going to withdraw from RSA, that is a clear abandonment of their obligation to build a water plant and the other infrastructure and then transfer those assets to RSA.”

“So the problem I have with this statement, Ms. Lynn, is that it’s conclusory and it has no factual basis,” Judge Worrell replied. “Just because they want out doesn’t mean that you get to anticipate breach (of contract).”

Lynn responded that Greene County has collected $25 million from RSA customers that would have gone to RSA and yet not completed their obligation to build the water plant and transfer it to RSA.

“RSA’s argument would make it impossible for any member of an authority to ever avail themselves of their statutory right to seek withdrawal if simply seeking withdrawal amounts to an anticipatory breach of a contract,” Habeeb said in his rebuttal. “That’s just sort of legal nonsense.”

Habeeb continued by stating that Greene County never refused to pay a bill but merely asked for details of what the bill was for and were denied that information.

Judge Worrell sustained the demurrer on all matters save the breach of contract, with prejudice—meaning that the plaintiff cannot refile the same claim again in that court. The demurrer claim on breach of contract was sustained without prejudice, meaning they can again refile on that single claim.

“For the Pleas in Bar… the Plea as it relates to breach, based on what’s contained in the complaint with regard to what Greene County has or hasn’t done since 2008, is certainly time barred from proceeding as is,” Judge Worrell continued. “All of the other complaints that have been made that are based on activities that took place prior to 2016—all of those will be time barred unless they were all continuing … and as a result, those matters will be dismissed [also with prejudice].”

A Plea in Bar is a defensive plea that sets out special reasons for which a trial cannot proceed; they bar a case entirely based on the merits of the case itself.

In response to further questions by RSA’s attorney, Judge Worrell agreed that the demurrer on count one was sustained without prejudice, meaning that RSA could pursue that further if supporting evidence were found that Greene was refusing to pay a bill that had been sent.

“I hope there’s a way to resolve this without continuing to come to court, but … I appreciate the time and the effort each of you is placing into preparing your papers for the court—it’s never a dull read,” Judge Worrell concluded.

The next RSA board of members meeting is scheduled for Thursday, May 19 at 2 p.m.

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The Greene County Board of Supervisors voted unanimously to request withdrawal from the Rapidan Service Authority (RSA) at its Tuesday, July 28, meeting, citing the fact that RSA has not completed its second purpose in its 50 years: to build an impoundment near Stanardsville.

RSA was established in 1969 as regional authority with the counties of Greene, Orange and Madison.

Another reason cited in the resolution the 4-2 decision of the RSA Board of Members at its regular meeting on Thursday, July 16, to end facility fee billing on monthly water and sewer bills from RSA, effective immediately, and voted to require water hookup fees be submitted to RSA. The RSA board is comprised of two members from each of the member counties. The two opposing votes came from Greene County Board of Supervisors Chairman Bill Martin, Stanardsville, and Greene County Planning Commissioner Ron Williams.

That vote occurred two days after the Greene County Board of Supervisors unanimously voted on Tuesday, July 14, to move forward with the plan to fund its water project by raising facility fees for users annually for the next four years, beginning Jan. 1, 2021.

“The copy of the motion was given to Mr. Martin for the first time when the motion was made orally to the RSA board. The motion was being so hastily acted upon that Mr. Martin had to interrupt the RSA board chairman’s call for a vote,” Greene County Administrator Mark Taylor said. “Each of these actions is contrary to agreements signed by RSA and Greene County. The RSA board’s actions at their meeting on July 16 demand response from Greene County.”

Taylor said it appears that RSA board thinks Greene County taxpayers—everyone who pays real estate tax—should pay a bigger share of the cost of the water project.

“But, setting Greene County’s tax rates is the Board of Supervisors job, not RSA’s,” he said.

In September 2017 the county heard from Stantec a plan to pay for the Greene County Water Treatment Plan and White Run Reservoir project using facility fees, water hookup fees, water costs and 7.5 cents per $1 of real estate taxes.

“Greene County has been moving forward on our water supply plan and we’ve spent millions of dollars—more than $11 million, in fact—advancing our plan forward,” Taylor said during the board’s emergency meeting on July 21. “RSA has participated in our design meetings, has visited a water treatment plant to see the technology in our design in a situation where it’s in use and they have commented on our plans.”

The county has purchased 125 acres for a proposed 900-million-gallon reservoir and a 1,460-foot-long, 75-foot-high dam on land between Watson, Fredericksburg and Dairy roads in Ruckersville. Currently, water is pumped from the Rapidan River to the treatment plant, which is on U.S. Route 29 south. The county is permitted to withdraw up to 1.5 million gallons of water per day and has an average daily demand, according to an engineering consultant for the county, of 1.2 million gallons of water per day.

Greene County Director of Planning and Zoning Administrator Jim Frydl told the supervisors on July 21 that RSA has signed off on the entrance road to the site. The site plan for the water intake has been through engineering approval and is awaiting owner signature by RSA, Frydl said. Site plans for the water treatment plant and the lake and dam are both under review now by RSA and the county has been receiving comments.

“I hope the public understands; we’re doing it for the citizens of Greene County,” Ruckersville Supervisor Davis Lamb said.

The approved resolution will be sent to the boards of supervisors for both Madison and Orange counties, whose approval is required before Greene is released from its relationship with RSA.

Greene notes in the resolution it will take legal action for breaches of contracts by RSA identified within the resolution.

There were representatives of RSA on the Zoom meeting call, no one directed any questions to them in open meeting. The next regular Board of Supervisors meeting is Tuesday, Aug. 4. The next regular RSA Board of Members meeting is Aug. 20.

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