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RSA sees budget argument, resignation, lawsuit appeal in December

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The saga of Greene County’s ongoing dispute with the Rapidan Service Authority (RSA) saw several developments during the month of December. At the Dec. 16 RSA Board of Members meeting, a debate over the proposed RSA budget for 2022 was ended when the board voted 4-2 (with Greene County members Bill Martin and Ron Williams against) to dismiss an amendment to the proposed budget as presented to the board. At a special called meeting of the Greene County Board of Supervisors two weeks later, Williams formally resigned from the RSA board. During the same meeting, an appeal to a recent court ruling in the RSA versus Greene County lawsuit came to light.

On Monday, Jan. 3, the Supreme Court of Virginia denied the appeal and lifted the stay on local court proceedings.

Budget argument

“We are being requested to support next year’s operating budget with a statement from (RSA) general manager (Tim) Clemons that says, ‘staff has prepared the FY 2022 proposed operating budget continuing to use the same general budgetary assumptions as have been used in past years.’ This is not true, at least for one budget line item,” Martin read from a prepared statement during the RSA board of members meeting Dec. 16.

The line item in question is the legal fees incurred from the ongoing lawsuit between RSA and Greene County that have been mounting ever higher since fall 2020. In the approved 2021 budget, that line item was $119,633. As of the end of November, according to RSA budget documents, the authority has gone over that budget by more than $300,000—for a total of $411,206 in legal fees over the past 11 months.

“As a side note,” Martin continued, “Greene County’s appointees to this board were not permitted to vote on that budget. Why? This board voted to take our votes and our voices away.”

In July 2020, the RSA board of members voted 4-2 (with the Greene County representatives voting against) to end the facility fee billing that was being used to pay for bonds related to water and sewer and to fund the upcoming water treatment and impoundment project in Greene County. In September 2020, the Greene County Board of Supervisors filed a lawsuit against RSA for breach of contract over the matter and the RSA board voted to prohibit the two Green County representatives from speaking or voting on anything—including the 2021 operating budget—while the lawsuit was ongoing.

In April 2021, boards of supervisors of both Orange and Madison counties gave unanimous consent for Greene to leave RSA; however, the RSA board denied the request. Meanwhile, RSA failed to make any headway in the legal case as Judge Claude Worrell sided with Greene County on multiple occasions: first when he overturned a Plea in Bar calling the fee an “impermissible tax” and then another claiming RSA had sovereign immunity and in July declaring that the RSA facility fee was not illegal.

Greene County Administrator Mark Taylor estimated in July that the cessation of the fee had so far cost Greene County nearly $1.8 million in funding towards the longstanding reservoir project.

In November, Worrell again sided with Greene in denying a demurrer objecting to wording of the amended lawsuit.

“By my count, RSA is zero for six before the court,” Martin said at the December RSA board of members meeting. “The court has gone so far as to say that RSA is dealing with Greene County ‘in bad faith.’”

Martin went on to describe, with incredulity, that RSA staff never once came before the RSA board to ask for an increase in the legal fees line item, despite spending nearly quadruple the amount budgeted.

“We were all getting the reports each monthly meeting and we all saw it,” he said. “It was almost like watching a car crash—we all saw it but we don’t talk about it.”

The proposed 2022 budget estimates an additional $368,100 in legal fees.

“To our dismay, RSA is billing Greene County $300,000 of this $368,100,” Martin said. “If this amount were to stand, that would be a total of over $800,000 for the two years, once we know the final invoice for December. … The extraordinary legal expense was caused entirely by actions that others on the RSA board took over Greene County’s urgent objections.

“We asked them not to take the action [ending the facility fee billing]; we asked them to reconsider the action once they had taken it; the majority chose this course with no support from Greene County,” Martin continued. “Demanding that Greene County pay for the legal defense of the outrageous misdeeds of the majority is without equity or fairness.”

After requesting that his entire written statement be entered into the meeting minutes for December, Martin proposed an adjustment to the budget that would split the cost between the three localities and urged the board to move swiftly towards an end to the litigation and to Greene County’s withdrawal from RSA.

“The only one that can end the litigation is Greene County—by dismissal of the lawsuit,” RSA Attorney Terry Lynn objected.

The motion was amended to strictly be about altering the budget to split the legal fees, setting the speedy resolution of the litigation to one side, but the argument continued.

“The one thing about this budget is—and I know you’ve seen the backup information, and I expected an argument about those allocations—but those allocations are not part of the motion here,” RSA Chairman Lee Frame, of Orange County, asserted. “What we’re looking at is the total sum. Are you asking that the sum be reduced?”

Martin responded that, yes, he would prefer to see the total line item for legal fees reduced; however that was not part of the motion being made.

“When we vote on the budget, we’re not voting on the allocation?” Troy Coppage asked.

“That’s right,” Frame responded.

“How does the board address issues that are in the allocation, if they’re not addressed here like that?” Martin asked.

“We can have a lot of debate about the allocation,” Frame responded. “I’ve had discussions with Tim (Clemons) with regard to the allocations, and I recognize that’s not an item that is not going to be agreed to by Greene—that allocation; but that allocation is going to affect future operations when we start talking about it in terms of contributions to reserves and things like that.”

“Mr. Chairman, I would like to know—what is the basis of the allocation as $300,000 to Greene water?” asked Carty Yowell, of Madison County.

“As we put together the budget this year, that was just what the allocations were,” Coppage said. “It’s a Greene County issue that’s being dealt with in that way.”

“In the past, if we’ve had a legal issue on any particular system, the legal costs go to that system,” Frame added.

“We wouldn’t be bearing these legal costs if it weren’t for Greene County,” Clemons interjected.

The conversation continued in this way for some time.

“I’ve made my point and I stick by my statement,” Martin finally said. “And I’ll hope that somehow, some way, that some of my partner board members up here will stop the bleeding and let’s get this over with and get Greene County out of RSA; it’s not that hard.”

The board members voted down Martin’s request to amend the budget line item pertaining to legal fees and the meeting ended soon afterwards.

The Greene County Record submitted an open records request after the meeting (by virtue of the Virginia Freedom of Information Act) for copies of documents describing the allocation of line items per county in order to determine how Martin arrived at the conclusion that RSA was billing Greene $300,000 for the legal fees, as admitted by Frame and others during the discussion. In a response dated Dec. 29, RSA FOIA Officer Trace Gaskins stated that “this office has no records responsive to your request of public documents that describe the allocation of the line items per county in the 2022 Rapidan Service Authority budget planning.”

Williams resigns, judge’s ruling appealed

At a special called meeting of the Greene County Board of Supervisors Dec. 28 in the County Administration Building, Chairman Bill Martin announced the resignation of Ron Williams from the RSA Board of Members, effective Dec. 27.

“In light of the bad-faith actions and continued obstruction by RSA and some of its board members (and the resulting litigation), I feel I cannot represent the county’s interests as effectively as a replacement who is fully read-in and directly engaged with the litigation, mediation and future planning for the replacement water/sewer service,” Williams stated in his resignation letter (read aloud by Martin to the board of supervisors).

Steve Bowman was unanimously appointed (4-0, with Bowman abstaining) to fill the unexpired term vacated by Williams, which is slated to end June 24, 2022.

“We all recall that RSA now has been ruled against half a dozen times by Judge Worrell of the local circuit court here in Greene County,” said County Administrator Mark Taylor. “Among those rulings was Judge Worrell overruling RSA’s Plea in Bar which was an assertion of sovereign immunity, attempting to repel Green County’s lawsuit. RSA now has filed with the Supreme Court of Virginia what is called an interlocutory appeal—meaning it’s an appeal of that one issue in the midst of the pending litigation here in our circuit court.”

The petition for appeal was received by the state supreme court Dec. 22 and the brief in opposition Dec. 29. The Supreme Court granted a stay on the current litigation until the appeal was resolved.

“We have great confidence in Jude Worrell’s ruling on that particular issue, and frankly see this appeal as nothing more than a delay in a process that needs to … get resolved—for the best interest of both the citizens of Greene County and … all who are served by RSA,” Taylor concluded.

RSA Attorney Terry Lynn has engaged outside counsel to bring forward the appeal to the Supreme Court.

“To my information, the members of the RSA board—with the possible exception of the RSA Board Chairman, were unaware—were not notified—of the action either to post the appeal or the action to hire outside counsel,” Taylor said.

According to Martin, the Orange County Board of Supervisors also responded that they were not aware of these actions taken by RSA.

“I find it just unfathomable that RSA would continue their legal effort against Greene County and at the same time—supposedly—engage in mediation, without the other two county boards of supervisors knowing anything about it,” Bowman said. “That’s just inexcusable and, in my opinion, indefensible.”

“I think it bears reminding all of us that the Orange County Board of Supervisors and the Madison County Board of Supervisors passed resolutions authorizing the withdrawal of Greene County from RSA,” Taylor said. “RSA alone continues to play an obstructionist role—apparently in defiance of the three member counties.”

On Monday, Jan. 3, the Supreme Court of Virginia filed a response to RSA’s appeal.

“Upon consideration whereof, the Court denies the petition for review because the statutory scheme at issue here allows the RSA to enter into contracts with the counties,” the statement read. “Under this scheme, sovereign immunity is not available as a defense to the enforcement of the contract. Accordingly, the petition for review is refused.”

The stay of proceedings was also lifted. The RSA lawsuit is next scheduled to be heard in Greene County Circuit Court on Tuesday, Jan. 11 at 3 p.m. The next RSA board of members meeting will be on Thursday, Jan. 20 at 2 p.m.

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