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

DATE: Thursday, June 1, 1995                 TAG: 9506010449
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
SOURCE: BY KAREN WEINTRAUB, STAFF WRITER 
                                             LENGTH: Medium:   64 lines

SPARRING OVER WATER'S PRICE ESCALATES IN GASTON DEAL

Virginia Beach officials raised their anti-Norfolk rhetoric a notch Wednesday, rejecting Norfolk's latest offer and accusing their sister city of bad-faith negotiating over the Lake Gaston pipeline settlement.

Norfolk and Virginia Beach have been sparring for about a month over a proposed settlement between the Beach and North Carolina that was to have ended the 12 1/2-year water battle.

Norfolk has said it will only agree to limit the places it sells its water - as the settlement requires - if it is well-paid by Virginia Beach.

Beach City Council members have offered to pay, but not nearly as much as Norfolk is suggesting. After a three-hour special session Wednesday, the council rejected Norfolk's offer, which would cost Beach residents about $200 million over the next 35 years.

The asking price was too high, Mayor Meyera E. Oberndorf said in a prepared statement after the closed-door meeting, and Norfolk's proposal does not guarantee that Virginia Beach residents would have continued access to water in times of drought.

Norfolk's City Council rejected the Beach's offer Tuesday, which would have provided $84 million over that period.

Norfolk wants the Beach to buy 12 million gallons of water a day for 32 years and up to 18 million a day more for the first five years, whether its residents need the water or not.

Norfolk officials have said they would have been able to sell that water to other communities if Virginia Beach had not agreed to restrict Norfolk's sales rights in the agreement with North Carolina.

The general assemblies of both states must approve the settlement with North Carolina by June 27 or the Gaston dispute is likely to end up back in court.

The Beach delegation to the General Assembly held a news conference Wednesday to speak out against Norfolk's offer and reiterate its interest in getting the settlement approved by the state legislature. The delegates warned of dire long-term consequences to regional economic development if the two cities cannot work out their problems.

Republican delegates Robert F. McDonnell, Harry R. Purkey, Frank Wagner and Leo C. Wardrup Jr., Democratic Del. Glenn R. Croshaw and Republican Sen. Kenneth W. Stolle attended the news conference. Sen. Clarence A. Holland, D-Virginia Beach, arrived at the end of the meeting.

``As far as I'm concerned, this is nothing short of extortion,'' Stolle said.

``I don't see any legitimate negotiation effort from Norfolk. They know they have us over a barrel.''

Stolle said the delegation would continue to push for state legislative approval of the settlement with North Carolina, even if Norfolk continues its opposition.

``Certainly it makes it much more difficult without Norfolk,'' Stolle said, because the speaker of the House and the president pro tem of the Senate are both from Norfolk.

Purkey said the governor should call a special session so Norfolk legislators are forced to try to kill the settlement in public, rather than behind the closed doors of a negotiating room.

KEYWORDS: WATER SUPPLY PLAN TIDEWATER LAKE GASTON by CNB