STEPHENS CITY — Town Council voted unanimously Tuesday night to convey three parcels of land totaling about 229 acres to Frederick Water for $50,000.

The land, which has a combined assessed value of $1.07 million, contains the town’s three water quarries.

Town Council also unanimously approved amending the town code to allow Frederick Water, which provides water and sewer service, to operate in any zoning district in the town, as long as those operations are consistent with the Virginia Water and Waste Authorities Act.

The decisions are part of the terms of a settlement agreement the town and Frederick Water entered into on May 7.

For nearly four years, Stephens City and Frederick Water were in a dispute over a 1992 contract in which the town granted Frederick Water the right to pump up to 3 million gallons of water per day free of charge from three town-owned quarries. In exchange, Stephens City received reduced water rates for two decades. Town officials believed the contract — and Frederick Water’s rights to draw water — ended in 2012. Frederick Water maintained it had a perpetual easement that allowed it to continue to draw millions of gallons of water for free from the town’s quarries.

On Aug. 28, 2015, the town sued Frederick Water for $10 million for allegedly violating the terms of the 1992 contract. On Feb. 15, 2018, Frederick Water filed a $5.78 million countersuit for unpaid water and sewer services it says the town owed. The two entities had not paid each other for services since March 2015. The lawsuits were dropped last month when the two entities reached an agreement.

As part of the deal, the town agreed to convey the three quarries to Frederick Water. In exchange, Frederick Water has agreed to provide, in perpetuity, a discounted rate of $1 per 1,000 gallons for the first 250,000 gallons of water the town uses per day. If the town uses more than 250,000 gallons per day but less than 350,000 gallons per day, that water will be provided at a 33% discount below the lowest water rate adopted by Frederick Water at the time service is provided. Frederick Water also will provide the town, in perpetuity, wastewater services at a rate of 33% less than the lowest wastewater rate adopted by Frederick Water at the time service is provided for the first 250,000 gallons per day.

The agreement also says Stephens City will invest $1 million over 10 years in the town’s wastewater system to repair issues with inflow and infiltration. If the town fails to comply, it will lose the water and sewer discounts.

Attending the meeting at the Town Office at 1033 Locust St. were Mayor Mike Diaz and council members Joseph Hollis, Ronald Bowers, Regina Swyert-Smith, Kelly Ann Thatcher and Linden Fravel. Jason Nauman was absent.l

— Contact Josh Janney at jjanney@winchesterstar.com

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