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ORDINANCE NO. <br />AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, <br />INDIANA, APPROPRIATING $710,000.00 FROM THE PUBLIC WORKS SEWER <br />GENERAL OPERATING FUND NO. 641 TO PAY COMPROMISE JUDGMENT <br />STATEMENT OF PURPOSE AND INTENT <br />The South Bend Sewer Works was sued in a class action lawsuit by non - resident <br />customers located within the former Clay Utilities service area. The lawsuit alleged that the <br />City's municipal sewage utility had a duty to terminate sewer rates applicable solely to the Clay <br />Utilities class of customers as soon as South Bend received sewer rate. revenue from those <br />customers sufficient to pay off the cost of financing acquisition of the Clay utility system. The <br />City contended that the City had no duty to alter rates for the Clay class of customers until it <br />adopted another rate ordinance. The St. Joseph Superior Court found in favor of the Clay <br />Utilities customers, and on February 14, 2008 it entered judgment against the City and its sewer <br />department in the sum of Six Hundred Fourteen Thousand Seven Hundred Twenty Five Dollars <br />and Sixty Four Cents ($614,725.64). It reaffirmed this judgment in a separate order on May 12, <br />2008. Post judgment interest accrues by statute at 8% from February 14, 2008. <br />As part of its decision the trial court denied prejudgment interest to class members which <br />would have resulted in an additional Three Hundred Forty Thousand Dollars ($340,000.00) to <br />class members payable by the City Wastewater Utility. Appeal of this issue by class members as <br />well as the City's counter appeal of the underlying judgment was in progress, but the settlement <br />of Seven Hundred Ten Thousand Dollars ($710,000.00) is a reasonable compromise of disputed <br />issues. <br />NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE <br />CITY OF SOUTH BEND, INDIANA as follows: <br />Section 1. The sum of Seven Hundred Ten Thousand Dollars ($710,000.00)-is hereby <br />appropriated and set aside within Sewer Works General Operating Fund No. 641 to tender to the <br />Clerk of the. Court for settlement and release of all claims arising from the class action lawsuit <br />brought by Clay Utilities customers of the South Bend Wastewater Utility. <br />Section II. This Ordinance shall be in full force and effect from and after its passage by <br />the Common. Council and approval by the Mayor. <br />5 � )� VLDL�_"--A <br />Member, South Bend Common Council <br />. :n <br />¢ R 'did <br />-w11n L�9c - <br />�a�i �i� e�tl� <br />