THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, May 19, 1995 TAG: 9505190511
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY ALEX MARSHALL AND KAREN WEINTRAUB, STAFF WRITERS
DATELINE: NORFOLK LENGTH: Medium: 60 lines
The City Council called a special session for 8 a.m. today to consider Virginia Beach's latest offer to pay Norfolk to agree to certain conditions of the Lake Gaston pipeline settlement.
The deal Virginia Beach struck three weeks ago with North Carolina requires Norfolk to agree that it won't sell surplus water to communities outside of South Hampton Roads and northeastern North Carolina.
Virginia Beach and Norfolk officials agree that there can be no Lake Gaston settlement without Norfolk's support.
Virginia Beach buys 30 million gallons of water a day from Norfolk and pays as much as 60 cents for each 1,000 gallons. Once the Lake Gaston pipeline is operating, Virginia Beach won't need Norfolk's water, and Norfolk will need another customer for its surplus.
In a letter dated Thursday, Virginia Beach offered to buy roughly half of Norfolk's surplus - 15 million gallons a day - at a fixed rate of 30 cents per 1,000 gallons. It also offered to pay up to 9 cents per 1,000 gallons for any of the remaining 15 million gallons that Norfolk is unable to sell elsewhere.
Norfolk began negotiations last week by asking Virginia Beach to buy all its surplus at a starting price of 60 cents per 1,000 gallons, with a 5 percent annual increase.
Virginia Beach calculates that it would pay $495 million over a 32-year-old period under Norfolk's proposal, compared with $68 million under its own counteroffer.
Beach officials say the sales price should go down as the water supply increases when Lake Gaston water becomes available. Norfolk's position is that the cost should go up because the supply is not unlimited.
``This requested restriction of Norfolk's water sales area, which would be in effect many years, is a substantial imposition on Norfolk's freedom to operate its water system and sell its surplus water to customers wherever they may be found,'' Norfolk City Manager James B. Oliver Jr. wrote in a May 12 letter to Beach City Manager James K. Spore, ``and also is at odds with the philosophy behind the water contracts signed between Norfolk and Virginia Beach in 1993 and regionalism in greater Hampton Roads.''
But Virginia Beach officials said Norfolk is trying to profit from their troubles.
``It is unfortunate that Norfolk apparently now seeks to seize a perceived opportunity created by the settlement agreement to force Virginia Beach to insure Norfolk a continuous market for its surplus water at an artificially high price,'' Spore wrote in Thursday's letter.
The Norfolk council may not act on the Beach's offer in today's meeting. City officials will brief the council on the water situation with Virginia Beach, Norfolk Councilman Herbert Collins said.
``This is the first time since I've been on council that something has been considered so critical that the mayor has called a special session,'' said Collins.
Spore said his city must reach an agreement with Norfolk by the middle of next week to keep the settlement plans on track. by CNB