WATER BILL DISPUTE CONTINUES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, January 26, 1992                   TAG: 9201260208
SECTION: VIRGINIA                    PAGE: E3   EDITION: METRO 
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE:                                 LENGTH: Medium
WATER BILL DISPUTE CONTINUES
Roanoke and Roanoke County might have to resort to arbitration to resolve a $325,000 bill that could require the county to help pay for renovation of the city's Falling Creek treatment plant and other water projects.
The city sells about 2.5 million gallons of water to the county daily in bulk. The county resells the water to its residents.
City officials have sent the county a year-end settlement bill that includes part of the cost for the Falling Creek project.
County officials have declined to pay.
"What we have to do is go in and see how much that benefits Roanoke County," County Administrator Elmer Hodge said.
City Manager Bob Herbert said the county has raised questions about the bill and officials will meet soon to see if they can resolve their differences.
Hodge hopes the dispute can be settled administratively. "We need time to work it through," he said. "I'm hoping it's going to be easily resolved."
Herbert said there is a provision in the water contract that allows the localities to use a panel of accountants to resolve disputes over finances.
At the beginning of each fiscal year, city officials calculate the estimated rate for producing and treating water sold to the county. Then they impose a 25 percent surcharge, under the terms of the contract.
At the end of each fiscal year, auditors determine the city's actual costs for supplying the water for the preceding 12 months. City officials then impose the surcharge and send a settlement statement to the county.
The point of contention is whether the city's costs for upgrading and renovating water treatment plants, replacing major transmission lines and other large projects should be included in the calculations for determining the rate.
The immediate issue is whether the county should be required to help pay the $1.3 million cost for renovating and upgrading the Falling Creek treatment plant.
The long-range issue is whether the county will have to help pay the $28 million cost for expanding the Carvins Cove treatment plant and other major improvements to the water system.

by Archana Subramaniam by CNB