DATE: Wednesday, October 15, 1997           TAG: 9710150498

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY KAREN WEINTRAUB, STAFF WRITER 

                                            LENGTH:   93 lines

SETTLEMENT LIKELY IN WATER DISPUTE SUFFOLK CITY COUNCIL IS EXPECTED TO OK AGREEMENT WITH NORFOLK, VIRGINIA BEACH AND CHESAPEAKE

The Suffolk City Council is expected to approve a settlement with Norfolk, Virginia Beach and Chesapeake tonight, averting a protracted court fight over water.

The settlement would help Virginia Beach focus on its continuing legal battles with pipeline opponents in North Carolina and the Roanoke River Basin, and give Suffolk some extra cash and greater confidence in its water system, sources close to the deal said Tuesday.

``I'm very optimistic that this matter will be resolved and there will not be a need for any further legal action,'' Suffolk City Council member S. Chris Jones said Tuesday night.

No one would talk on the record about the proposed agreement because of a court-ordered silence and a history of last-minute dealing. But, off the record, several officials said that Virginia Beach had agreed to pay Suffolk $3 million and that Chesapeake had agreed to give Suffolk more than $1 million.

The Beach and Chesapeake, the primary partners in the Lake Gaston pipeline project, also would give Suffolk up to five years to exercise an option to buy up to 1 million gallons of lake water per day.

Suffolk would withdraw its demand for more restrictions on Norfolk's use of the deep-water wells it owns in Suffolk.

The legal dispute started when Suffolk decided to take advantage of some rare leverage it had over its more populous neighbors.

The 76-mile pipeline to Lake Gaston is completed, but Norfolk needs Suffolk's permission for a larger pumping station there to handle the new water destined for Virginia Beach and Chesapeake.

In February, Suffolk said it would only allow Norfolk to expand its pumping station if Norfolk agreed not to use deep-water wells it owns in Suffolk. Suffolk residents, who rely on the same aquifer, say Norfolk's use of the groundwater threatens their own supplies.

Norfolk, Virginia Beach and Chesapeake filed suit against Suffolk in March, after early attempts to negotiate a settlement failed. Today's Suffolk council meeting is the last scheduled before the Oct. 27 trial date in Suffolk Circuit Court.

The Suffolk council is expected to consider the matter in its executive session tonight.

Jones said he had not seen a final version of the proposed agreement but is comfortable with the draft he has read.

``If they are, in fact, substantially one and the same, then I'm confident that this will be unanimously approved by council,'' he said.

Tuesday, the Norfolk City Council discussed the proposed settlement in its closed session and then publicly approved an ordinance authorizing its city manager and city attorney to sign the deal.

The Virginia Beach and Chesapeake councils have not taken formal action on the agreement, but both discussed the proposal in executive sessions Tuesday.

Beach council member John A. Baum said he was ``pretty certain'' the deal would go through today because it was in everyone's best interest.

``We couldn't afford to lose and set things back several years,'' he said. ``We'd appeal and all the rest of it, but that's not good. . . . I think everybody has learned that all of this legal wrangling is costly in money, but even more costly in time, so it drives everybody to reach a settlement, even if they're reluctant.''

Without the Suffolk permits, Norfolk could not start the 27-month process of expanding the pumping station. And without the bigger pumping station, not enough Gaston water would reach Virginia Beach, and the region could face another water shortfall as soon as the summer of 1999, Beach officials have said.

In the suit, Norfolk alleged that every month of construction delays was costing it between $30,000 and $55,000. If the pump station were never permitted, Virginia Beach and Chesapeake would have wasted their entire investment in the pipeline, which is expected to top $250 million.

The pipeline will provide Virginia Beach with up to 48 million gallons per day and Chesapeake with up to 10 million gallons per day. Isle of Wight County and now Suffolk would be entitled to 1 million gallons per day each.

Work on the concrete-and-iron tube connecting Lake Gaston with South Hampton Roads is just about complete, with a dedication ceremony scheduled for Nov. 7.

Virginia Beach has no water source of its own and now relies entirely on Norfolk. Norfolk, which will continue to treat Virginia Beach water even after the pipeline is operational, stores most of its water supply in reservoirs it owns in Suffolk.

The cities have been in court over water before.

In 1980, during the most serious drought of this half-century, Suffolk challenged Norfolk's effort to drill deep-water wells inside Suffolk'sboundaries. The two cities have previous legal agreements limiting the amount of water Norfolk can draw from the wells. ILLUSTRATION: Graphic

PROPOSED DEAL

OFFICIALS SAY VIRGINIA BEACH WOULD PAY SUFFOLK $3 MILLION AND

THAT CHESAPEAKE WOULD PAY SUFFOLK $1 MILLION.

THE BEACH AND CHESAPEAKE ALSO WOULD GIVE SUFFOLK FIVE YEARS TO

EXERCISE AN OPTION TO BUY UP TO 1 MILLION GALLONS OF LAKE GASTON

WATER A DAY.

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