THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, May 31, 1995 TAG: 9505310458
SECTION: LOCAL PAGE: B2 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 89 lines
In dollars and cents, Norfolk and Virginia Beach seem closer to making a deal over how much Virginia Beach should pay Norfolk for restricting its future water sales and supporting the Lake Gaston pipeline agreement.
But beyond the numbers is an increase of rigid rhetoric.
In what represents substantial change from a week ago, both cities have agreed that Virginia Beach would buy 12 million gallons of water a day from Norfolk at a price of 60 cents per 1,000 gallons, Virginia Beach Councilman Louis R. Jones said Tuesday. Initially, Norfolk was asking Virginia Beach to buy up to 30 millions gallons of water daily, and Virginia Beach was offering to pay 30 cents per 1,000 gallons.
But despite this movement, leaders from both cities say they are ready to walk away from the negotiating table.
The two sides have yet to agree on whether to include an inflation factor in the price and whether Virginia Beach would buy a larger quantity of water for a transition period.
Norfolk Mayor Paul D. Fraim, after a two-hour closed-door session Tuesday, said his city is tired of being made to look like the bad guy because of an agreement between Virginia Beach and North Carolina that Norfolk never asked to be a part of.
Norfolk and Virginia Beach reached an agreement on water in 1993, Fraim noted, that both sides called ``a win-win'' deal. Norfolk is ready to abandon negotiations with Virginia Beach, Fraim said, and stick with the conditions of the 1993 agreement.
Jones, who is leading the Beach's negotiations, said Norfolk is requiring too much money for the sale of its surplus water. The Bayside councilman said he would recommend that the city reopen negotiations with North Carolina and start pursuing federal approval of the contract without necessarily an agreement with the neighboring state.
``When we sent them this last offer, we told them it was our final offer,'' Jones said, adding that the two cities ``are so far apart we can't even consider recommending this to the City Council.''
The Virginia Beach City Council meets in a special closed-door session at 1 p.m. today, Jones said.
The heart of the contractual dispute is whether and how much the price Virginia Beach pays for Norfolk water should rise over time.
Under Virginia Beach's agreement with North Carolina, Norfolk must agree not to sell its expected surplus water outside a specified area, generally South Hampton Roads. To compensate Norfolk for this, Virginia Beach has offered to buy a certain amount of water if Norfolk is unable to sell it elsewhere. Even with the 48 million gallons a day from the Lake Gaston pipeline, Virginia Beach eventually expects to have to use some of Norfolk's water.
Virginia Beach also acknowledges that it is in its interest to reserve a portion of Norfolk's surplus water for expected growth.
In a May 25 letter released by Jones, Virginia Beach's attorney acknowledges that the city possibly would have to buy water anyway from Norfolk after 10 or 12 years, because of rising demand. The attorney notes that Norfolk offered to make the contract for surplus water last only 10 years, but Virginia Beach had requested it last for 30 years so that Virginia Beach would be assured of a longer-term water supply.
Under the offer which Jones called the city's ultimate, Virginia Beach would buy up to 12 million gallons a day of Norfolk's surplus water at a price of 60 cents per 1,000 gallons, for 32 years, beginning in 1998. This would mean payments by Virginia Beach to Norfolk of $2.6 million a year.
In a May 30 response by Norfolk to Virginia Beach, which Jones also released, Norfolk spells out a counter-offer.
Norfolk agreed to sell 12 million gallons per day but wants the price to rise either by 5 percent a year over the length of the contract or at the rate of the Consumer Price Index. It also wanted Virginia Beach to buy an additional 18 million gallons a day for five years at a price of 60 cents per 1,000 gallons, also beginning in 1998.
Norfolk would receive $6.6 million the first year. After the transition contract expired in five years, payments would drop to about $3.3 million, but the cost of water would continue to increase by 5 percent a year.
The two cities are negotiating under a tight deadline. The General Assembly must ratify the agreement before the 60-day deadline on the deal with North Carolina expires.
On Tuesday, Del. Franklin P. Hall, D-Richmond, said the special subcommittee formed by House Speaker Tom Moss of Norfolk would meet June 6 in Richmond to discuss the agreement. The subcommittee has 10 members, including Hall.
The Senate subcommittee, led by Sen. Clarence A. Holland, D-Virginia Beach, has scheduled public hearings on the agreement in Danville on June 12 and in Virginia Beach on June 13.
The hearing in Virginia Beach will be held at 7 p.m. at the Pavilion. by CNB