THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, July 9, 1995 TAG: 9507090192
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY KAREN WEINTRAUB AND ROBERT LITTLE, STAFF WRITERS
LENGTH: Long : 240 lines
Les Lilley's face told the whole story. The usually reserved Virginia Beach city attorney could barely contain himself.
On April 28, Lilley and City Manager James K. Spore, beaming and bubbly, signed their names to a settlement that was to have ended a dozen years of combat with North Carolina.
Their enthusiasm was premature.
On Thursday, Lilley sat stone-faced before the television cameras and then grimaced when the lights went off. North Carolina had just pulled out of negotiations after Virginia officials failed to approve the pact in time.
``I can't believe it. Can you?'' he said.
A little more than two months had elapsed between the signing of a compromise and the death of the ``done'' deal. The negotiators in both Virginia Beach and North Carolina were physically drained from hundreds of hours of work, and mentally exhausted from the repeated ups and downs of thinking they had a deal and then watching it slip away.
No one thing made the difference. No one person killed the settlement.
It was a complicated ballet of faces and factors that pushed the pipeline project closer than it had ever been to completion and then yanked it back to where it was months, even years before.
JANUARY: THE 2 SIDES MEET
Work started on a deal when a federal court in Washington asked both sides to consider solving their problems without the help of a judge.
The first meeting was Jan. 6; a deal, it was hoped, could be reached by the end of February.
A draft environmental report issued Jan. 20 by a federal agency added urgency to the closed-door talks. The preliminary study, conducted by the Federal Energy Regulatory Commission, suggested the commission would issue the final pipeline permit within six months.
North Carolina wanted a settlement while the permit was still up in the air. Virginia Beach wanted a deal while it enjoyed the advantage of apparent support by the commission.
The Beach also was running out of time to get the support of the Virginia legislature, as North Carolina was insisting. The General Assembly was scheduled to go out of session Feb. 25.
That deadline passed.
North Carolina officials told Beach negotiators not to worry: If the pipeline was important enough to Virginia, the legislature would call a special session to ratify a compromise.
FEB.-APRIL: COMMON GROUND
The former arch-enemies were starting to make progress as February turned into March.
What Virginia Beach really wanted was its long-awaited pipeline, and independence from Norfolk, its older, water-rich but tax-base-poor neighbor.
What North Carolina really wanted was to protect the Roanoke River basin's economy and environment by ensuring that Virginia didn't reduce the water's flow. It needed a promise that South Hampton Roads wouldn't come back for more water later, and that Virginia Beach and Chesapeake would conserve water during times of drought.
For the first time, the sides began to realize these demands were compatible.
Word of the deal-making started to leak out in late March as the pressure increased to reach a settlement. Virginia Beach had to notify Norfolk by April 28 whether to proceed with a $100 million treatment plant expansion to handle the extra water from Lake Gaston.
But a compromise was off and on again every few days as the date approached. Virginia Beach didn't want to say publicly that it was willing to conserve water during times of severe drought.
North Carolina wouldn't budge.
Finally, with great relief, both sides announced on April 26 that they had a deal they would be ready to sign two days later. All that was needed was legislative support in North Carolina and Virginia within 60 days, and North Carolina would agree to end its legal challenges to the pipeline.
APRIL-MAY: THE UNRAVELING
Signs of trouble appeared almost immediately.
On April 27, Gov. George F. Allen, who had long supported the pipeline, wrote a letter saying he would call the legislature into special session only if he could be assured the pact had strong bipartisan support and only if the House and Senate leaders agreed to limit their subject matter to the pipeline.
Late the next day - some hours after Beach and Carolina negotiators signed off on the deal and the Beach City Council agreed to pay for the water treatment plant expansion - Norfolk officials began voicing their own concerns.
The agreement required Norfolk to give up its right to sell water to the Peninsula and Eastern Shore and also called for the establishment of a regional water authority - which Norfolk took as a direct challenge to its position as South Hampton Roads' water magnate.
A week later, legislators from Danville, Martinsville and other Southside areas announced their organized opposition to the pipeline. Businesses and residents objected too.
To them, the settlement wasn't an agreement at all - simply a Virginia Beach-friendly proposal that only solved Virginia Beach's problems. The water that fills Lake Gaston comes from Southside, and to remove it would be nothing short of piracy, they said.
They filed motions in Washington in hopes of joining the lawsuit that led to the mediation and the derailing of the settlement.
On May 10, with fewer than six weeks left, Norfolk officials laid down a gauntlet. Their powerful state legislators, including the leader of the House and one of the top men in the Senate, would work against the settlement if their needs were not met.
``Let's look at the reality of it,'' Allen said May 19, besieged by reporters after a speech at the Richmond Marriott. ``If you have the people of Norfolk against it, then it has no chance of getting through the legislature.''
Virginia lawmakers wouldn't start work on the accord until Norfolk was on board. Pipeline fans began to wonder whether they were any closer to striking water than they had been in 1982.
Norfolk wanted to retain control of the one natural resource it had in abundance. Virginia Beach wanted its pipeline and thought the sales restriction was a small price for their sister city to pay to help get it.
The two sides exchanged barbs for the rest of the month, never meeting, but faxing offers and counteroffers. Norfolk wanted $600 million over 35 years, then dropped its request to just over $200 million. Virginia Beach said its final offer was $84 million.
Take it or leave it.
The bid sat for more than a week, as the 60 days ticked by.
JUNE: UP AGAINST A DEADLINE
Still, supporters remained optimistic. And after its ragged start in Richmond, the pipeline agreement slowly came together.
More than three weeks after Allen had asked Speaker of the House Thomas W. Moss Jr. to set up a committee to review the settlement, Moss made the appointments and work began.
At the first meeting, the committee decided it had to rewrite the agreement to get it through the General Assembly. There were 21 days left.
Teams of legislators scattered into groups to broker a deal, this time calling in representatives from Southside, Northern Virginia, Norfolk and the governor's office. After two five-hour sessions, a week apart, they invited North Carolina to the table, too.
North Carolina finally dropped its demand that Norfolk's sale of surplus water be restricted to South Hampton Roads. Virginia Beach agreed to a compensation package that would give money to Southside and Carolina for the use of Gaston water.
In an all-day session Sunday, June 25, and a morning meeting June 26, the General Assembly negotiators reached what they thought was an acceptable deal. One of the last concessions: They changed the deadline from June 27 to June 30.
They had five days for legislators in both states to pass it. Two days to get lawmakers to Richmond.
JUNE: POLITICS TAKES HOLD
The four-hour time difference wasn't making things any easier for Del. Toddy Puller, D-Mt. Vernon, not that monitoring negotiations in a state capital 3,000 miles away could ever be easy.
Puller took off at 4 a.m. June 25 the morning after her daughter's wedding, to catch a plane out of Anchorage for the trip back to Virginia, worried that the General Assembly would be summoned to Richmond the next day to vote on the Gaston pact.
Few of her constituents cared about the pipeline. But Puller, like other Northern Virginia legislators, felt she had a stake.
``There was a concern that we weren't getting out of the compact what, perhaps, we should have been getting,'' Puller said. ``I felt like it was important to keep on top of it.''
Few areas of the state have road congestion problems like those in the Washington suburbs. Yet the pipeline accord called for fast-tracking roads to North Carolina beaches; roads that presumably would take tourists out of Virginia.
Puller and other Northern Virginia legislators were among the last to weigh in on the Gaston accord, but their growing concerns plus continuing hostilities from Southside leaders and partisan politics in a crucial election year began to take their toll.
Virginia Beach lobbyists counted 44 House members in support and 33 against. They said support was growing. Speaker Moss said it was beginning to wane.
Allen, who had already told legislators they might be called to Richmond, said Tuesday, June 27, that he would call a session only when the leadership of the House and Senate agreed to his terms. The session could include no issue other than Lake Gaston and it must last no longer than three days.
He went on television, live, Tuesday night to scold his legislative colleagues and plead his case. Without a deadline, he and Virginia Beach legislators said, the Gaston deal would look like a Christmas tree, adorned with every road project Northern Virginians like Puller had ever wanted, and every water policy pipeline opponents in Southside could dream up. It would cost more than Virginia Beach could afford, and Allen's only defense would be a veto.
Legislative leaders agreed to talk only about the Gaston pact but refused to let the governor set their deadline.
The stalemate continued in a legislative committee meeting the next morning. Procedural sticklers joined with regional opponents of the pipeline and refused to budge.
The governor's conditions would not be met. Allen gave a radio interview at noon on June 28, saying he would not ask the legislators to Richmond.
The Gaston settlement expired at midnight, June 30.
JULY: BATTLE RECOMMENCES
The holiday week opened with some enthusiasm by Virginia Beach leaders.
They hoped to reach a deal with North Carolina that wouldn't require legislative approval. Gov. Allen and his staff were lobbying for it as well.
There was still time to make a deal before the North Carolina legislature adjourned and the Federal Energy Regulatory Commission released its environmental study at the end of the week.
Carolina negotiators were less convinced. They knew their governor was committed to winning a guarantee from Virginia to limit water withdrawals from Lake Gaston.
No legislative approval - no guarantee.
But still, they worked hard, hoping to come up with the best offer they could for Gov. James B. Hunt Jr. to consider.
They strategized and negotiated Monday through Wednesday, talking on their cellular phones during the July 4 holiday.
But on the morning of July 5, as the Beach Council members waited in a closed session, Hunt made his final decision. There would be no deal without the support of Virginia's legislature.
``It is unfortunate that partisan politicking took a front seat in Virginia, and that the people of the Roanoke River basin took a back seat,'' Hunt said in a prepared statement. ``We still stand ready to ratify it, should Virginia decide to put politics aside and take constructive action.
``Meanwhile, we intend to fight,'' he said.
A day later, he got his first excuse.
The federal regulatory commission issued its year-long environmental study, siding wholly with Virginia Beach. The pipeline would have no significant effect on the lake and was South Hampton Roads' best option as a new source of drinking water, the report concluded.
Beach officials were as ecstatic as they had been depressed the day before.
North Carolina, which had expected the verdict, was resigned but mad.
``This report is grossly inadequate,'' Jonathan Howes, secretary of the North Carolina Department of Environment, Health and Natural Resources, said in a prepared statement. He repeated North Carolina's threat to recommence legal action, which could begin as early as this week.
THE FUTURE: WHAT'S NEXT?
As miserable and as wonderful, as exhausting and as exhilarating as the past 7 1/2 months had been, negotiators on both sides agree that it was time well spent.
``I think the seven months has been very worthwhile,'' City Councilman Louis R. Jones, the Beach's chief negotiator said Friday.
Jones, who was mayor of Virginia Beach when the Gaston saga began, said the meetings gave both camps a sense of where the other was coming from; it turned leaders on the other side from ``enemies'' into equals. North Carolina officials had been friendlier than many Virginia legislators, fellow negotiator and council member John A. Baum added.
But when will the 12 1/2-year Gaston fight finally end, a television reporter asked the Virginia Beach Water Task Force Thursday.
``We thought we had negotiated an end to it,'' City Attorney Lilley responded glumly. ``In fact, we thought we had negotiated an end to it more than once.'' ILLUSTRATION: Color photo
Virginia Beach City Attorney Les Lilley
KEYWORDS: LAKE GASTON WATER SUPPLY PLAN by CNB