Water Resources

The Highfield Water Company has claimed that it should receive between $17.7 million and $52 million from the U.S. Army as compensation for lost property and damages. Highfield argues that Fort Ritchie, located in Maryland, excessively pumped the aquifer during periods of drought between 1974 and 1978, thereby depriving the company of water it needed to meet its customers' needs. As a result, the Maryland Public Service Commission revoked the company's right to exercise its franchise to sell water to its customers. Highfield is appealing for legislative relief, asserting that it has never received a fair hearing on the merits of its case since court actions were dismissed on technical grounds. After reviewing the case, GAO concludes that Highfield was not damaged by the Fort's reasonable use of the groundwater and that Highfield neither owned nor had superior rights to the water. As a result, GAO does not believe that Highfield is entitled to any compensation from the Army.

GAO found that: (1) the firm did not support its claim against the Army's use of groundwater; (2) the Army's operations did not exceed the aquifer's capacity or derive the firm of the resources it needed; (3) the firm's inability to meets its customers' water utility needs resulted from a lack of wells, structural and maintenance problems, and the firm's inability to meet financial requirements for distribution system repairs; (4) the firm's authority to sell water did not constitute ownership or rights to the groundwater shared with the Army, since the state of Maryland initially drilled the wells; (5) the Army was not required to obtain the firm's permission, obtain a state water appropriation permit, or use surface water before pumping groundwater; and (6) the firm was not entitled to any compensation.