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

DATE: Tuesday, May 23, 1995                  TAG: 9505230248
SECTION: LOCAL                    PAGE: B1   EDITION: NORTH CAROLINA 
SOURCE: STAFF REPORT 
DATELINE: VIRGINIA BEACH                     LENGTH: Short :   47 lines

A GASTON AGREEMENT IS POSSIBLE, BEACH SAYS

The City Council believes it can resolve its dispute with Norfolk in time to get a Lake Gaston settlement, according to a statement released Monday after a two-hour closed meeting.

Council members declined to talk about the session, but Mayor Meyera E. Oberndorf read a prepared statement that said the council is hopeful about meeting the June 27 deadline.

``We will continue to explore all options with the goal of making the Lake Gaston pipeline project a reality, hopefully with the support of all our neighbors in southeastern Virginia,'' Oberndorf said. Virginia Beach and North Carolina reached the settlement agreement at the end of April and gave themselves 60 days to get the required support of both state legislatures and the city of Norfolk.

Gov. George F. Allen has said he will not call a special session of the General Assembly until he is reasonably sure the settlement has enough votes to win approval. Without Norfolk's help in the Assembly, the Beach will not be able to garner the necessary support.

Norfolk officials have said that they favor the Lake Gaston pipeline but that their city must be compensated for agreeing to certain provisions.

The Beach has offered to pay Norfolk $68 million in exchange for Norfolk's promise not to sell its surplus water to the Peninsula or Eastern Shore. But Norfolk has said it needs as much as $495 million to be willing to give up its sales rights.

North Carolina negotiators insisted that Norfolk restrict the market for its surplus water because they didn't want Hampton Roads' cities to make a profit on what they consider ``their'' water. Lake Gaston sits mostly on the North Carolina side of the state border, although Virginia Beach would tap into the manmade lake on Virginia land.

Beach and Norfolk officials havebeen working for several weeks to come up with a viable compromise, despite their acrimony.

``Norfolk's mayor has indicated that his council is working to protect the best interests of the citizens of his city. We appreciate that,'' Oberndorf said. ``At the same time, Virginia Beach Council must be just as cognizant of the wishes of our own residents, one of which is not to pay more for water than is necessary.'' by CNB