PRESENT: Koontz, Kinser, Lemons, Millette, and Mims, JJ.,
Carrico and Russell, S.JJ.
TOWN OF LEESBURG
OPINION BY
v. Record Nos. 091455 JUSTICE LEROY F. MILLETTE, JR.
& 092329 November 4, 2010
STEVE GIORDANO, JR., ET AL.
FROM THE CIRCUIT COURT OF LOUDOUN COUNTY
Thomas D. Horne, Judge
In this appeal, we consider whether the circuit court
erred in ruling that the Town of Leesburg failed to present
sufficient evidence to meet its burden under the fairly
debatable standard in a challenge to a town ordinance that
imposes a 100% surcharge on water and sewer consumption rates
charged to residents of Loudoun County who reside outside of
the Town of Leesburg. 1
BACKGROUND
Seven individuals and three homeowner’s associations (the
complainants) filed this civil action against the Town of
Leesburg (the Town), challenging a town ordinance that
increased the water and sewer rates affecting properties owned
by the complainants that were located in Loudoun County, but
outside the Town. By a series of agreements with Loudoun
County, the Town was given the exclusive right to provide water
1
We previously considered this case and issued an opinion
in Town of Leesburg v. Giordano, 276 Va. 318, 667 S.E.2d 552
and sewer services to properties located in a certain area of
Loudoun County, but outside the Town. The water and sewer
utilities are owned and operated by the Town. In contrast to
the circumstances prevailing in many other states, the out-of-
town municipal utility rates, which are at issue in this case,
are not regulated by the state regulatory authority. By a 1998
ordinance, the Town increased the water and sewer consumption
rates by imposing a 50% surcharge on out-of-town customers. By
an ordinance adopted in 2005, effective January of 2006, the
Town Council again increased the rates by imposing a 100%
surcharge on water and sewer consumption rates charged to out-
of-town customers. 2 The water and sewer services provided to
in-town and out-of-town customers were the same.
Prior to enacting the 100% surcharge, the Town hired
Municipal & Financial Services Group (MFSG) to conduct a study
regarding the pricing of utility services. This was done
pursuant to the Town’s policy to conduct a cost of service
study for water and sewer rates every five years to assure the
stability and financial health of the water and sewer utility
(2008). The issues we considered in that case are not relevant
to those presented in this appeal.
2
It is important to note that these surcharges are imposed
on the consumption rates charged for water and sewer services,
which is only one charge, among others, imposed upon customers
for water and sewer services. Therefore, a 100% surcharge on
consumption rates does not increase an out-of-town customer’s
bill for water and sewer services by 100%.
2
fund. MFSG issued two reports as a result of its study. In
its initial October 2005 report, MFSG concluded that the Town’s
existing user rates for water and sewer did not produce
sufficient revenue to cover the revenue requirements for fiscal
year 2006 and beyond. MFSG recommended that the Town establish
an “O&M Reserve” and a “Repair, Replacement, and Rehabilitation
(‘3R’) [R]eserve” for both the water and sewer systems. These
reserves would provide funds necessary for “unplanned repairs
or other significant cash outlays,” and “unexpected major
repairs and planned replacement or rehabilitation of equipment
or other major fixed assets.” To establish these recommended
reserves and raise sufficient revenue to cover cost, MFSG
recommended that the Town increase water and sewer rates
incrementally over the next five years.
In its November 2005 final report, MFSG recommended that
the Town adopt a 100% surcharge on water and sewer consumption
rates charged to out-of-town customers as a means to collect
sufficient revenue to establish reserves and cover costs.
However, MFSG stated in its final report: “It should be noted
that the surcharge in-Town vs. outside-Town is proposed to
increase from 50% to 100% based upon policy guidance provided
by the Town Council.” In addition to the 100% surcharge on
out-of-town customers, MFSG recommended that the Town increase
the water and sewer rates incrementally, similar to its initial
3
recommendation, but in smaller increments, for fiscal years
2006 through 2010. In its final report, MFSG concluded that
the proposed rate increases, including the 100% surcharge, were
necessary to increase revenue to meet costs and establish the
two reserve funds. MFSG’s study was conducted using a “cash
basis” method to determine the revenue that the Town needed to
cover the cost of service, meet revenue requirements, and
establish the recommended reserves. MFSG also used this method
to design a rate structure consistent with the Town’s goals and
objectives.
The complainants filed a complaint against the Town
seeking a declaratory judgment that the water rates charged to
out-of-town customers were “unfair and unreasonable,” in
violation of Code § 15.2-2143, and that the sewer rates charged
to out-of-town customers were “impracticable, inequitable, and
non-uniform,” in violation of Code § 15.2-2119. The
complainants also sought injunctive relief directing an
adjustment of rates for water and sewer service provided to
out-of-town customers, and a monetary judgment for money paid
to the Town that was in excess of a reasonable and fair rate
for water and sewer service.
At trial, Glenn A. Watkins, an economist specializing in
public utilities rate-making, testified as the complainants’
expert witness. Watkins stated that his work has focused on
4
regulated utilities rather than unregulated utilities.
Although Watkins had testified before the State Corporation
Commission regarding regulated utilities, he had not previously
testified before a Virginia court in a case involving municipal
water and sewer rates.
Watkins testified that the rates charged to out-of-town
customers were excessive. In formulating his opinion as to the
reasonableness of the out-of-town rates, Watkins conducted a
rate study. Watkins testified that the purpose of the rate
study is two-fold: first, to determine if the rates at issue
are fair and reasonable; and if not, second, to determine the
extent to which the rates are excessive. Watkins further
testified that a rate study is a three tier process, consisting
of the following steps: (1) determining the revenue that is
needed to operate the utility; (2) allocating the costs among
the various groups of customers the utility serves, after
determining if there is any reason to allocate costs
differently to one group of customers than to another group;
and (3) establishing the “rate design,” which is the
development of the actual rates charged. In performing the
rate study, Watkins sought to estimate the “maximum rate that
could be deemed fair and reasonable.”
Watkins used the “utility” method in conducting his rate
study. By using the “utility” method, Watkins considered
5
issues such as “cost of capital, availability fee
contributions, absence of quality issues, transfers from the
utility fund to the general fund, system capacity,
depreciation, owner’s risk, operations and maintenance costs,
fair return on investment, and a reasonable profit.” Watkins
testified that the “utility” method is the “most applicable
pricing standard for determining out-of-town rates.” However,
he also pointed to authority that acknowledges that “revenue
requirement studies using the cash needs approach are simpler
than studies using the utility approach.”
Watkins was questioned concerning the Town’s policy
decision to impose a 100% surcharge on consumption rates
charged to out-of-town customers, particularly the relevance of
the differential in rates charged by other localities. When
asked by the complainants’ counsel if there are other ways of
establishing reasonable rates not based on cost, Watkins
responded, “Unequivocally no.” In a competitive world, Watkins
said, “costs are the standards for prices.” Because the Town
is operating as a monopoly, however, Watkins testified that the
rates must reflect costs to “act as a surrogate for
competition.” Watkins also testified that from an operational
standpoint there is “essentially no difference” in cost to
serve out-of-town customers versus in-town customers.
6
Based on his preliminary analysis, Watkins testified that
the water and sewer rates for out-of-town customers that became
effective on January 1, 2006 were excessive. Watkins did not
examine the fairness or unfairness of in-town rates because, in
his opinion, the fact that there is a differential between in-
town and out-of-town rates is irrelevant. Watkins testified
that the rate differential was not of grave concern, but what
he found excessive was the absolute level of the rate charged
to out-of-town customers. According to Watkins, as customers
of a monopoly service, the most the out-of-town customers
should pay is the cost base rate.
After his preliminary analysis, Watkins performed his rate
study, which utilized audited financial data from fiscal year
2007. Watkins’ rate study focused on the water and sewer rates
that became effective on July 1, 2008. Watkins opined that
these rates were not fair and reasonable. Watkins’ rate study
concluded that the then existing water rate for out-of-town
customers was 45.51% excessive, and that the sewer rate for
out-of-town customers was 28.36% excessive. Watkins concluded
that the water and sewer rates for out-of-town customers must
be reduced by these percentages to be reasonable. However,
Watkins conceded that rate making, while an objective process,
involves a subjective element such that reasonable people may
differ as to what a reasonable rate is.
7
Myron Olstein, a certified consultant with over 40 years
of experience in the water and wastewater field, testified as
an expert witness for the Town. Olstein testified that he had
experience with cases involving unregulated, municipally-owned
utilities throughout the country. Olstein had also completed
rate studies for unregulated utilities in Virginia, and
examined water and sewer rates in various localities in
Virginia. Olstein had previously testified as an expert
witness in cases involving municipal water and sewer rates, and
as an expert before state regulatory bodies regarding water and
sewer rates.
Olstein opined that the water rates for the out-of-town
customers were “fair and reasonable,” and that the sewer rates
for the out-of-town customers were “practicable, equitable, and
uniform.” In formulating his opinion, Olstein spent at least
100 hours examining MFSG’s report, reviewing Watkins’ report,
interviewing a number of persons, and reviewing various
financial documents from the Town.
Olstein identified four justifications for his opinions
and conclusions. First, Olstein testified that the Town’s
process of reviewing its water and sewer rates every five
years, and hiring MFSG to perform a rate study, was sound and
reasonable. According to Olstein, five years is the time
period recommended in the rate manuals, and MFSG has excellent
8
qualifications as a rate consultant. Olstein testified that
the purposes of the study were to secure sufficient revenue,
forecast future demand, and look at the rate-related objectives
of the local governing body. Olstein opined that it was
necessary for the Town to adopt MFSG’s recommendations,
although he might have recommended a larger reserve. Olstein
did not believe that Watkins considered the recommended
reserves in his calculation.
Second, Olstein stated that the Town customers are the
owners of the utility, and as such, bear certain “owner’s
risks,” which include the risk posed by damage to the water and
sewer system, a change in regulations affecting the utility, a
water main break, increases in demand, and an economic
downturn. Olstein considered these “owner’s risks” in reaching
his conclusion that the water and sewer rates charged to out-
of-town customers were fair and reasonable. Olstein stated
that incorporating these risks into a rate is ultimately a
qualitative rather than a quantitative assessment because many
of the risks involve the probabilities of future events.
Olstein also said he did not know any Virginia municipality
that actually quantified such risks. Additionally, Olstein
stated that these risks, which are borne by the Town, are
independent of and in addition to the risk of default the Town
bears on the bond issued to finance capital improvements to the
9
utility if revenue is insufficient to satisfy principal and
interest payments. Olstein opined that given the risks borne
by the Town as owners of the utility, it is “fair, reasonable,
and equitable to impose a 100 percent rate differential on the
out-of-town customers.”
Third, Olstein disputed Watkins’ testimony that there was
essentially no cost difference in serving out-of-town versus
in-town customers. Olstein performed calculations which
supported his opinion that the demand for water services for
the out-of-town customers is more variable than the demand of
the in-town customers. Based on these calculations, Olstein
concluded that it costs more to provide water service to the
out-of-town customers than the in-town customers.
Fourth, Olstein testified that it was not uncommon for
municipal water and sewer utilities to have a rate differential
for out-of-town customers. Olstein stated that he could not
recall a case where he did not look at other localities to
present a rate comparison. According to Olstein, rate-setting
bodies are interested in knowing how their rates compare to the
rates of their peers, and the differential gives insight into
how other localities have valued owner’s risks in a qualitative
way. Olstein testified that he relied on the range of
differentials in preparing his report, and that the rate
10
differentials ran as high as 200% in Virginia, and as high as
300% nationally.
Regarding the MFSG study, Olstein opined that it was
reasonable for MFSG to use the “cash needs” method in
developing its proposed rates. Olstein stated that the “cash
needs” method was appropriate because it takes into account the
payment the Town must make on its outstanding debt used to
finance the utility. Olstein further testified that it is
appropriate to use the “cash needs” method in setting rates for
municipal utilities because it ensures that the municipality
has coverage for its debt obligations. According to Olstein,
the “utility” method is more appropriate for investor-owned
utilities, as it provides for a rate of return or profit.
Further explaining this, Olstein stated:
One of the things that rates have to do – not the
only one, but an important one – is to allow the
utility owner to finance the system. If you’re in
the private sector, that means you have to show good
return on equity. If you are in the public sector,
you are going to most likely be using revenue bond
financing or some variant of that. And in a revenue
bond issue, you have to show coverage on a cash
basis.
Olstein did not conduct an independent rate study, nor was
he asked to by the Town. However, Olstein independently
reviewed MFSG’s rate study and the rates enacted by the Town,
and based on this review, concluded that the rates were fair,
reasonable, and equitable.
11
After the parties rested, the circuit court took the
matter under advisement. In a letter opinion, the circuit
court held that the complainants had shown that “the existing
surcharge for water and sewer for out-of-town residents is
unfair, unreasonable, and inequitable; and that the surcharge
for water and sewer service for out-of-town residents [is]
impracticable, inequitable, non-uniform, and unlawful; and that
the [complainants] have met their burden of proving the actions
of the Town[] in enacting the rates unreasonable; and that the
Town has failed to produce evidence to make the issue fairly
debatable.” The court entered a final order in favor of the
complainants, and in that order, the court enjoined the Town
from enforcing water and sewer rates for out-of-town customers
in excess of a 45.51% reduction for water rates, and a 28.36%
reduction for sewer rates. The court stayed enforcement of its
order for ninety days, so that “the Town may consider the rates
and the Court’s opinion and Order.” The court did not award
the complainants monetary damages. The Town appealed from the
circuit court’s final order.
DISCUSSION
The key issue in this appeal is whether the circuit court
properly ruled that the Town failed to put forth some evidence
of reasonableness of the water and sewer rates charged to out-
of-town customers sufficient to make the issue fairly
12
debatable. We hold that the circuit court erred in ruling that
the Town failed to meet its burden under the fairly debatable
standard.
This Court has held that “setting rates and fees for sewer
or water services is a nondelegable legislative function.”
City of South Boston v. Halifax County, 247 Va. 277, 283, 441
S.E.2d 11, 15 (1994) (quoting County of York v. King’s Villa,
Inc., 266 Va. 447, 450, 309 S.E.2d 332, 333 (1983)). Thus, the
ordinance establishing such rates is afforded a presumption of
validity. Eagle Harbor L.L.C. v. Isle of Wight County, 271 Va.
603, 615, 628 S.E.2d 298, 304 (2006). This presumption of
legislative validity is a presumption of reasonableness. Board
of Supervisors v. Robertson, 266 Va. 525, 532, 587 S.E.2d 570,
575 (2003); Board of Supervisors v. McDonald’s Corp., 261 Va.
583, 590, 544 S.E.2d 334, 338 (2001); Board of Supervisors v.
Snell Constr. Corp., 214 Va. 655, 659, 202 S.E.2d 889, 893
(1974). Legislative action is reasonable if the matter at
issue is fairly debatable. Robertson, 266 Va. at 532, 587
S.E.2d at 575. An issue is fairly debatable “when the evidence
offered in support of the opposing views would lead objective
and reasonable persons to reach different conclusions.” Board
of Supervisors v. Williams, 216 Va. 49, 58, 216 S.E.2d 33, 40
(1975). Under the fairly debatable standard, “[t]he governing
body is not required to go forward with evidence sufficient to
13
persuade the fact-finder of reasonableness by a preponderance
of the evidence.” Ames v. Town of Painter, 239 Va. 343, 348,
389 S.E.2d 702, 704 (1990).
We have stated the following principles for determining
whether the presumption of reasonableness in a particular case
should prevail or is overcome:
Where presumptive reasonableness is challenged by
probative evidence of unreasonableness, the challenge
must be met by some evidence of reasonableness. If
evidence of reasonableness is sufficient to make the
question fairly debatable, the [legislative action]
‘must be sustained’. If not, the evidence of
unreasonableness defeats the presumption of
reasonableness and the [legislative action] cannot be
sustained.
Robertson, 266 Va. at 533, 587 S.E.2d at 575 (citations
omitted).
The General Assembly has expressly granted localities the
power to provide and operate water and sewer facilities, and
has placed limitations on the rates that localities’ governing
bodies may charge for water and sewer services. Code §§ 15.2-
2119, -2143. Specifically, Code § 15.2-2143, titled “Water
supplies and facilities,” provides that localities’ governing
bodies may only charge “fair and reasonable” fees for water
services. Similarly, Code § 15.2-2119, titled “Fees and
charges for sewer services,” provides that localities’
governing bodies may only charge fees “as the governing body
14
deems practicable[,] equitable, [and] uniform” for sewer
services.
On appeal, the Town argues that it offered sufficient
evidence to prove that the issue of reasonableness of the rates
is fairly debatable. The Town asserts that the fairly
debatable standard imposes a low burden on the Town, which it
met with sufficient probative evidence of the rates’
reasonableness. Specifically, the Town contends that it met
this low burden by presenting expert testimony from Olstein
that the water rate for out-of-town customers was fair and
reasonable, and that the sewer rate for out-of-town customers
was practicable, equitable, and uniform.
The Town also asserts that the circuit court improperly
applied the fairly debatable standard. According to the Town,
the circuit court treated this case as a battle of the experts
by improperly weighing the opinions, reasoning, and
methodologies utilized by the opposing experts. In doing so,
the Town contends that the circuit court failed to give effect
to the Town’s evidence that supported the reasonableness of the
rates.
The complainants respond that the circuit court properly
applied the fairly debatable standard and correctly ruled that
the Town failed to present sufficient evidence to meet its
burden under that standard. The complainants focus their
15
argument on assailing Olstein’s testimony, asserting that his
testimony was not sufficient to make the issue of the rates’
reasonableness fairly debatable. Continuing with this
argument, the complainants note that Olstein did not conduct an
independent rate study to support his opinion or provide any
nexus between the rates he deemed reasonable and the costs and
risks borne by the Town as owner of the utility. The
complainants conclude that the circuit court properly ruled
that Olstein’s testimony was not sufficient to satisfy the
Town’s burden under the fairly debatable standard.
In Board of Supervisors v. Stickley, 263 Va. 1, 556 S.E.2d
748 (2002), this Court addressed a Board of Supervisors’ denial
of an application by a landowner, Stickley, for a special use
permit to raise and release game birds on his property. The
Board denied Stickley’s application, citing concerns from
poultry companies about the possibility of wild game birds
carrying disease into local poultry farms in the area. Id. at
5-6, 556 S.E.2d at 751. In a proceeding in the circuit court
filed by Stickley to declare the Board’s action unreasonable,
arbitrary, and capricious, both parties presented expert
witnesses who testified about the risk of disease posed to the
local poultry industry by the wild birds. Id. at 7-8, 556
S.E.2d at 752. After summarizing the various expert witnesses’
testimony regarding this issue, this Court stated:
16
The question in this case is not who presented
the greatest number of expert witnesses or even who
won the battle of the experts. Rather, the question
is whether there is any evidence in the record
sufficiently probative to make a fairly debatable
issue of the Board’s decision to deny Dr. Stickley a
special use permit.
Id. at 11, 556 S.E.2d at 754.
As this Court stated in Stickley, the issue in this case
is not who won the battle of the experts. Accordingly, this
Court need not critically examine and contrast the
methodologies, processes of reasoning, and calculation methods
used by the opposing experts in formulating their opinions.
Rather, the Court need only examine whether any evidence in the
record is sufficiently probative to make a fairly debatable
issue of the fairness and reasonableness of the water rate
charged to out-of-town customers, and the practicability,
equitableness, and uniformity of the sewer rate charged to out-
of-town customers. Olstein’s testimony that the water rate
charged to out-of-town customers is fair and reasonable, and
that the sewer rate charged to out-of-town customers is
practicable, equitable, and uniform, supported by his
justifications for his opinion, is sufficient to make the issue
fairly debatable. 3 Accordingly, we will reverse the judgment of
3
Having reached this conclusion, the Court need not
consider the Town’s additional assignments of error.
Additionally, we find no merit in the complainants’ assignments
of cross-error.
17
the circuit court and enter final judgment in favor of the
Town.
Reversed and final judgment.
SENIOR JUSTICE RUSSELL, with whom JUSTICE MIMS joins,
dissenting.
As the majority opinion points out, the Town has had, for
many years, the exclusive right to furnish water and sewer
services to an area of Loudoun County outside the Town. The
Town’s out-of-town customers, however, have no voting rights in
the Town and are not constituents of the Town Council members
who set their utility rates. As to those customers, the Town
operates an unregulated monopoly. As the majority opinion also
points out, many other states have subjected such municipal
monopolies to regulation by the state’s regulatory authority,
but our General Assembly has not seen fit to subject them to
regulation by the State Corporation Commission. This situation
operates to the disadvantage of a large number of Virginians in
addition to the complainants in the present case. Five amici
curiae 1 state on brief that more than 80 Virginia cities and
towns, located in more than 50 counties, serve out-of-town
customers and charge them higher rates than their own
constituents. Approximately 140,000 residents of Fairfax
18
County alone are dependent on water supplied by cities and
towns in which they do not reside and in which they cannot
vote.
In this appeal, Leesburg’s out-of-town customers, the
prevailing parties in the circuit court, assign cross-error to
the circuit court’s application of the “fairly debatable”
standard in these circumstances. We granted them an appeal on
that assignment of cross-error, but the majority opinion does
not mention it. Rather, the majority opinion begins its
discussion with the holding: “The key issue in this appeal is
whether the circuit court properly ruled that the Town failed
to put forth some evidence of reasonableness . . . sufficient
to make the issue fairly debatable.” That holding ignores the
fundamental question, fairly presented in this appeal, whether
the “fairly debatable” standard properly applies at all.
We consistently adhere to the “fairly debatable” standard
because of the constitutional principle of separation of
powers. It is not the proper function of the judicial branch
of government to second-guess legislative judgments made by the
duly-elected representatives of the people. Neither the wisdom
of legislative enactments nor the motivations of those enacting
them are subject to judicial review. The majority opinion
1
Virginia Association of Counties, Virginia Water & Waste
Authorities Association, County of Fairfax, County of Loudoun,
19
correctly states those principles and cites a number of our
decisions adhering to them. Each of those decisions, however,
deals with the ordinary situation in which a legislative body
has made a decision operating upon its own constituency and
affecting the territory it was elected to govern. The
rationale underlying the “fairly debatable” standard is that
the decision affects those who elected the legislators,
empowering those elected to make decisions for them. If
displeased by those decisions, the voters have a ready remedy
at the next election.
In the case of legislative acts affecting persons and
territory outside the jurisdiction in which the legislative
body has the authority to govern, the rationale supporting the
“fairly debatable” standard is non-existent. A town council’s
decision setting utility rates outside the town should be
accorded no more deference than the decision of the board of
directors of a private business operated for profit. 2
Because the Town, as to its out-of-town customers, is
shielded from the competitive forces affecting private business
and Fairfax County Water Authority.
2
Members of the Town Council may in fact have had the best
of intentions, but they had an obvious incentive, in setting
disparate rates, to please their constituents at the expense of
those who could not vote. The existence of such an incentive
demonstrates the unsoundness of legislative deference in these
circumstances.
20
and operates as an unregulated monopoly, the General Assembly
has provided some protection for the out-of-town customers.
That protection consists solely of the requirement of Code
§ 15.2-2143 that water rates be “fair and reasonable” and the
requirement of Code § 15.2-2119 that sewer rates be
“practicable[,] equitable [and] uniform.” The application of
those standards is committed to the courts. In applying them,
in the absence of any reason for deference to legislative
decisions, the courts should be guided by the rules applicable
to any civil litigation between private parties. The
complaining parties should bear the initial burden of showing
that the rates violate the statutory standards. The burden
should then shift to the rate-making body to rebut that
showing. The fact-finder should then decide the issue by the
preponderance of the evidence.
If the “fairly debatable” standard is applied to such
cases, the out-of-town customers are left to the mercies of an
unregulated monopoly against which they have no redress either
at the polls or in the courts. If litigation such as this is
subjected to the “fairly debatable” standard, the rate-making
body, to prevail, needs only to find an expert witness who will
opine that the rate-maker’s pre-determined decision was “fair
and reasonable” with respect to water rates, or "practicable[,]
equitable [and] uniform" with respect to sewer rates. That
21
will end the case, no matter how persuasive the complainants’
evidence may have been. 3 That seems to me to lead inevitably to
an unjust result, defeating the protections the General
Assembly sought to provide. Nevertheless, it is precisely what
will have occurred here as a result of the majority opinion.
For that reason, I respectfully dissent.
I would affirm the decision of the circuit court. That
court, after carefully reviewing the evidence, found the Town’s
evidence insufficient to overcome the complainants’ evidence of
unreasonableness even applying the very low “fairly debatable”
standard. A fortiori, the Town’s evidence would have failed to
meet the more stringent standard of proof by a preponderance of
the evidence. See, e.g., Ames v. Town of Painter, 239 Va. 343,
348, 389 S.E.2d 702, 704 (1990) (distinguishing "preponderance
of the evidence" and "fairly debatable" standards). Because a
pure question of law is presented here, and no further evidence
3
The complainants concede that the Town is entitled to
collect a surcharge in some amount to cover the Town's "owner's
risk." Their expert witness calculated the amount of such an
added charge, which the circuit court found fair and
reasonable. The Town's expert, however, made no such
calculation but contented himself with merely concluding that
the Town's previously adopted "policy decision" to impose a
100% surcharge on out-of-town customers was reasonable. His
only justification for that conclusion was that surcharges
imposed by other jurisdictions are worse. He said that they
ran as high as 200% in Virginia and 300% nationally. Pressed,
he conceded that 500% might cross the boundary of
reasonableness. That is the evidence the majority opinion
found sufficient to meet the "fairly debatable" standard.
22
or fact-finding is needed, remand is unnecessary and final
judgment should be entered here. See Perry v. Commonwealth,
280 Va. ___, ___ S.E.2d ___ (2010) (this day decided).
Our people are not noted for their docility in the face of
monetary exactions imposed upon them by a government in which
they have no voice. In the late eighteenth century, a similar
grievance led to considerable unpleasantness in this country,
leading to a fundamental change of government. That grievance
also arose from the fact that those aggrieved had no redress
either at the polls or in the courts.
23