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Berkeley Co. water, sewer districts lose court battle

April 03, 2010|By MATTHEW UMSTEAD

MARTINSBURG, W.VA. -- A judge has denied a motion to vacate or void a declaratory judgment by another judge who declared in January that the collection of capacity improvement fees by the Berkeley County water and sewer districts was illegal because the county has no zoning ordinance.

The order, signed March 26 by Judge John L. Henning, was filed Thursday in Berkeley County Circuit Clerk Virginia M. Sine's office.

Henning's decision favors Larry V. Faircloth Realty Inc., which has challenged the legality of the fees. The utilities collect a total of $6,770 per proposed residential building lot as part of financing upgrades to their respective systems.

An appeal of the January decision by Judge Elliott E. "Spike" Maynard to the West Virginia Supreme Court of Appeals is pending, but a hearing regarding the case has not been added to the high court's Web-based court calendar.

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In their motion to vacate Maynard's decision, the attorneys for the water district contended the judge should have recused himself before signing the order Jan. 29 because of his decision to run for Congress in the 1st District in southern West Virginia. Maynard filed his candidacy papers Jan. 30, according to Secretary of State Natalie Tennant's office.

While Henning denied the motion to vacate, the judge, who was appointed by the high court to hear the case, separately granted the utility district's motion for a stay in the case for 30 days pending their appeal to the high court, according to an order filed March 29 with Sine's office.

As part of the order, Henning ruled that capacity improvement fees collected by the utilities since Feb. 16, when Maynard's decision was recorded in Sine's office, be deposited into "segregated interest bearing escrow accounts."

The money would be refunded if the utilities fail to file an appeal within 30 days of March 12, the Supreme Court refuses to grant the utilities' petition for appeal or the Supreme Court upholds Maynard's decision, according to Henning's order.

Larry V. Faircloth Realty Inc. separately was ordered by Henning to post bond of $40,620, which amounts to the total amount of capacity improvement fees for six water and two sewer district connections to the utility systems.

If Faircloth's suit is successful, utility district officials have said customers would have to shoulder substantial rate increases to cover the cost of new infrastructure. Both districts had more than 19,000 bill-paying customers last year.

The water district's board already has delayed plans to build a new office/maintenance facility and a water treatment project in the south end of Berkeley County.

In his ruling, Maynard said the utilities exceeded their powers when they imposed the fees, which he ruled are "substantially the same concept and fee as an 'impact fee'" that is allowed under the Local Powers Act. The Berkeley County Commission and its agencies are disqualified from imposing and collecting impact fees because it has not adopted a comprehensive zoning ordinance, which is a tenet of the Local Powers Act, according to Maynard's decision.

The West Virginia Public Service Commission, which regulates the utilities, also was faulted by Maynard for allowing the fees to be collected, according to the judge's order.

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