DATE: Saturday, May 10, 1997                TAG: 9705100272

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY TONY GERMANOTTA, STAFF WRITER 

                                            LENGTH:  217 lines

COURT PULLS N.C.'S PLUG ON PIPELINE BEACH EXPECTS GASTON WATER TO FLOW BY EARLY DECEMBER RULING STACKS ODDS AGAINST ANY JUDGE STOPPING PIPELINE

Virginia Beach won a ruling Friday to tap Lake Gaston for water its leaders say will stimulate the area's economy and lift years of annoying restrictions on homeowners.

The legal ruling does not end the 15-year struggle with the state of North Carolina, but could give the city an important legal advantage in future appeals.

Jubilant city officials acted as if the battle was all but over.

``It appears that by the end of the calendar year we will be drinking Lake Gaston water,'' an exultant Beach City Manager James K. Spore said Friday.

A three-judge panel of the U.S. Court of Appeals issued a split ruling upholding permits for a 76-mile pipeline that would bring the water from the lake on the North Carolina border.

The pipeline is now 98 percent complete and its last section is scheduled to be laid Friday.

The judges, in a 30-page ruling, dismissed every argument brought by North Carolina and other pipeline opponents.

The majority ruled that North Carolina did not have the right to block the permit under provisions of the Clean Water Act and that none of the decisions made by the Federal Energy Regulatory Commission in issuing the final pipeline permit were improper or arbitrary.

The court was seen as pipeline opponents' prime opportunity to block the nearly 15-year-old project, both sides have said. Still, as is the norm in the seemingly endless Lake Gaston saga, appeals are likely.

But the ruling stacks the odds against any judge ordering that the pipeline cannot be turned on.

``What this means is that Virginia Beach has all the permits necessary to build and operate the pipeline and, at least for the moment, there are no pending appeals or court proceedings that could stop this,'' said M. Scott Hart, an attorney with Mays & Valentine, which helped guide the case through the courts.

Pipeline opponents have pledged to keep battling and can ask the entire 11-judge appeals court to review the panel's decision as well as bring it to the U.S. Supreme Court if that is rejected.

``We believe that North Carolina must have the right to protect its resources,'' said Jonathan Howes, the state's secretary of environment, health and natural resources. ``Therefore, we will continue to take every step possible to protect our environment.''

Howes said North Carolina would appeal, and that the battle was far from over.

The process could take months - if not years.

Beach attorney Hart noted it would be a tough fight.

``As you go up the ladder,'' he said, ``it always gets harder if you're on the losing end . . . If North Carolina were to attempt further appeals, they would be swimming upstream against the opinions. I'd rather be in our position than theirs.''

The battle is likely to go beyond the courts. The hydroelectric dam that forms Lake Gaston must be reauthorized by 2001, and Howes promised to use that process, in which his state has reviewing authority, to attack the pipeline.

The iron and concrete conduit across Southside Virginia is nearly finished. All but two miles had been installed by the end of last month, and much of it has already been tested. The pumping station that will remove the water from Lake Gaston is also close to completion.

The Beach has estimated that the work will be done by August and that the entire system will be tested in September with water flowing to Norfolk's reservoir system in Isle of Wight County about the beginning of December.

Friday's ruling could be viewed as validation for Virginia Beach's decision to risk $100 million in taxpayers' money by laying the pipe while the project still faced legal challenges and the possibility it would be banned.

And it could mean a boost to the economy that will return less-restrictive spending by the city in coming years, making more money potentially available for schools and new quality-of-life projects.

``Since the 28th of February 1992 we have not allowed a water main to be extended,'' City Manager Spore said. ``Obviously this will have a beneficial impact on the economy - and not only for Virginia Beach but the whole region.''

With Friday's decision, the focus shifts to a pipeline hurdle within Hampton Roads.

Norfolk, which will treat and deliver all of the Lake Gaston water, must expand a pumping station it has in Suffolk to handle the extra flow.

After some delays, Suffolk granted permission for the new station in February, but imposed restrictions that Norfolk has refused to accept. Norfolk, Virginia Beach and Chesapeake then sued Suffolk to remove those restrictions.

Norfolk Utilities Director Louis Guy said the only holdup in the project is the litigation against Suffolk.

Although water could begin flowing from the pipeline into the reservoirs in December, Norfolk will not be able to handle the entire 60 million gallons a day - including up to 48 million gallons targeted for Virginia Beach - until the pumping station is built. That will take 27 months to build.

Any delay in the pumping station caused by the litigation could therefore slow the entire project and would cost Norfolk money - more than $1.3 million, according to papers filed in the suit.

``Virginia Beach has done a magnificent job in fighting the opponents,'' Guy said. ``But it only goes as far as Suffolk.''

Should the pipeline begin operating, it could have an impact that extends beyond healing browned lawns.

This year, Beach officials decided to delay any unnecessary projects and tighten spending until the pipeline begins providing enough water for the city to better attract industry and its diversified tax dollars.

Beach residents have been barred from sprinkling lawns and washing cars with city water since 1992. A city moratorium on new connections to its water supply has crimped residential building, helping to push new developments into Chesapeake and Suffolk.

Beach officials Friday said it was too early to talk about lifting those water restrictions.

The pipeline, however, is not likely to return the region to a time of uncontrolled growth, Virginia Beach and Chesapeake officials said Friday.

Spore said his city now issues about 1,200 to 1,500 building permits a year, down sharply from the hectic mid-1980s when between 6,000 and 7,000 permits were issued annually.

``You may see growth go up slightly, but you won't see a huge surge,'' he said.

Virginia Beach Mayor Meyera E. Oberndorf noted that the recently installed Agricultural Reserve Program, which preserves farmland, will help control development.

In addition, she said, the city has focused on growth through businesses, which produce higher tax revenue than do homes.

Chesapeake Mayor William E. Ward said the ruling, and the resulting 10 million gallons a day for his city, ``will allow us to proceed with a progressive approach to growth in the city and will make us more attractive to new businesses.''

Ward said that, in the past, South Hampton Roads cities have lost out to other regions in luring large industrial businesses when they were scared off by this area's dearth of available water.

``Lake Gaston will enhance economies in all of the cities,'' Ward said. ``It's a victory for the entire region.''

Ward said he does not believe the new source of water will ignite a rash of residential development in Chesapeake because of policies put in place to manage it.

``We will still adhere to our (level of service) policy'' to make sure that newly approved residential developments do not overtax the city's schools and roads, he said.

Ultimately, Friday's ruling may give Suffolk additional leverage in its negotiations over water with Norfolk.

Suffolk is interested in buying some of the surplus Norfolk is now selling to Virginia Beach, but at a better price. Privately, officials have said that the permit process is part of those negotiations, which continue.

Suffolk Mayor Thomas G. Underwood, who hailed the court ruling, would not comment on the impact the decision would have on his city's dealings with the its neighbors.

But City Councilman S. Chris Jones said he's hopeful a resolution to the litigation will come soon.

``I felt from the beginning that Gaston is a very important resource for this region,'' said Jones. ``I'm pleased to see the Beach was successful. Hopefully, the issues that are outstanding will be resolved.'' MEMO: Staff writers Karen Weintraub, Tom Holden. Toni Guagenti, Terri

Williams and Matt Dolan contributed to this report. ILLUSTRATION: CONSTRUCTION WORK REMAINING

Last section of pipeline to be laid Friday.

Pumping station that will remove water from Lake Gaston nearly

finished.

Testing of system in September.

LEGAL WORK REMAINING

Panel's decision could be reviewed by entire 11-judge U.S. Court

of Appeals and U.S. Supreme Court.

Suffolk is being sued to remove curbs on expanding a pumping

station.

Map

The Virginian-Pilot

SOURCE: Virginia Beach Departmetn of Public Utilities

[Color Photo]

TAMARA VONINSKI/The Virginian-Pilot

``Truth and justice has prevailed. . . . We have been pulling this

project into existence for 15 years. We are not going to blink. It's

going to be a reality.''

- Virginia Beach Mayor Meyera E. Oberndorf, who said that the city

would press on despite any appeals.

MOTOYA NAKAMURA/The Virginian-Pilot

The Lake Gaston pipeline is now 98 percent complete and its last

section is scheduled to be laid Friday. This portion is in Windsor.

Pipeline proponents say it will help spur growth in South Hampton

Roads.

Gilmore

Warner

Oberndorf

REACTIONS TO THE DECISION

``Today's decision will mean a g1tgname

brighter future and a faster growing economy for working families

in Tidewater and throughout the state. This tremendous win will

bring an environmentally sound solution to the water supply crisis

in South Hampton Roads.''

- Attorney General Jim Gilmore, whose office has argued for the

Beach's right to build the pipeline.

We believe that North Carolina must have the right to protect its

resources, therefore, we will continue to take every step possible

to protect our environment.''

- Jonathan Howes, the N.C. secretary of environment, health and

natural resources

I am aware that the state of North Carolina may wish it had

veto power over Virginia. The fact is they do not. Today's decision

should be the clearest message yet that the endless efforts to

defeat or delay the Lake Gaston project have failed.''

- Sen. John W. Warner, R-Va.

Truth and justice has prevailed.

. . . We have been pulling this project into existence for 15

years. We are not going to blink. It's going to be a reality.''

- Virginia Beach Mayor Meyera E. Oberndorf, who said that the

city would press on despite any appeals.

The best news I've had all day.''

- Chesapeake Mayor William E. Ward

It should not have taken this long to resolve this issue.''

U.S. Rep. Owen B. Pickett, D-Virginia Beach KEYWORDS: LAKE GASTON RULING APPEALS COURT

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