The Virginian-Pilot
                            THE VIRGINIAN-PILOT  
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Thursday, April 27, 1995               TAG: 9504270469
SECTION: FRONT                    PAGE: A10  EDITION: FINAL 
SOURCE: BY MIKE KNEPLER, STAFF WRITER 
DATELINE: NORFOLK                            LENGTH: Medium:   84 lines

A POSSIBLE GLITCH: NORFOLK WATER SALES A PROVISION WOULD PROHIBIT SELLING SURPLUS WATER TO PENINSULA CITIES.

By agreeing to a Lake Gaston pipeline settlement with North Carolina, Virginia Beach could be damaging its relationship with another water partner - Norfolk.

Norfolk officials have raised concerns about a pipeline stipulation that would prevent the city from selling surplus water to Hampton and Newport News.

``By not being able to sell water to the Peninsula, we'd be giving up an option for the city and the region,'' said Norfolk City Manager James B. Oliver Jr. ``It's a major condition which we were not a party of, not being at the table in the mediations between Virginia Beach and North Carolina.''

Oliver, however, would not predict how strenuously Norfolk may object to the stipulation.

The pipeline agreement needs legislative approval in Virginia and North Carolina. The support of Norfolk's delegation is crucial.

State Sen. Stanley Walker, D-Norfolk, president pro tem of the Senate, acknowledged that the stipulation limiting Norfolk water sales could be a stumbling block. But he also said it's not an unmovable obstacle.

Walker said that Norfolk Mayor Paul D. Fraim informed the city's delegation about the issue a few weeks ago.

``I'm concerned about that, too,'' Walker said. ``If you look down the road, we're all striving to bring about unity in the Hampton Roads area.''

But if Norfolk's delegation decides to support the pipeline agreement, it probably would pass the General Assembly, Walker said.

Oliver, meanwhile, said his cautious reaction to the pipeline settlement is based largely on not having enough information from Virginia Beach.

For example, Norfolk might be more agreeable if it knew it could sell water to Hampton and Newport News sometime in the future.

There are at least two reasons, Oliver said, that Norfolk wants to preserve the option of selling surplus water to Hampton and Newport News:

To protect Norfolk's ability to raise revenue.

Because Norfolk's future ability to distribute water to the Peninsula could help reinforce the bonds of regional cooperation, which are forming along other service and business relationships.

On the other hand, Oliver said, Hampton and Newport News traditionally look westward for their expanding water needs and may never need Norfolk's water.

Oliver said Norfolk officials knew that earlier versions of the Virginia Beach-North Carolina agreement contained the stipulation, but Norfolk asked that it be removed.

Virginia Beach City Councilman Louis R. Jones, a participant in the pipeline-agreement negotiations, said North Carolina would not budge on the issue. The pipeline agreement defines the region in which Norfolk could sell water as: Virginia Beach, Chesapeake, Portsmouth, Suffolk, Isle of Wight and Southampton counties, Franklin and Northeastern North Carolina.

Jones said he understood that the Peninsula cities did not want or need Norfolk's water. ``They feel like they can access it easier and cheaper elsewhere,'' he said.

The Peninsula cities are currently working on a long-term project that would supply that region's water needs for the next 50 years. Newport News Water Works plans to build a reservoir in King William County and draw water from the Mattaponi River.

Despite their caution, the Norfolk officials said they saw the pipeline agreement as having potential to spur more regional cooperation, particularly on revenue-sharing from each city's economic development efforts.

``It's a tremendous springboard to regionalism. It gives us the opportunity to take a serious look at the legislative possibility of revenue sharing,'' said Robert Smithwick, Norfolk's development director. ``That's what is needed to take this region light years ahead.

``If you're going to market what you have to sell, you do it better not as any one city, but as a region. You have to do it collectively.'' MEMO: Staff writers Karen Weintraub and Toni Whitt contributed to this

report.

ILLUSTRATION: Staff map

Area shown: Lake Gaston Pipeline

KEYWORDS: LAKE GASTON PIPELINE NORTH CAROLINA VIRGINIA BEACH WATER by CNB