HomeMy WebLinkAbout09-08-08 Public Works and Property Vacation and Utilities CommitteePUBLIC WORKS AND PROPERTY VACATION SEPTEMBER 8.2008
AND UTILITIES
Public Works and Property Vacation Committee Members Present: Chairperson David Varner,
Derek D. Dieter, Tom LaFountain, Henry Davis, Jr.
Utilities Committee Members Present: Chairperson, Oliver J. Davis, Ann Puzzella, Tom
LaFountain, Tim Hudak, Citizen Members
Councilmember's Present: Timothy A. Rouse, Karen White
Others Present: Rita Kopala, Jamie Loo, Gary Gilot, Mayor Stephen Luecke, Catherine Fanello,
Derek Spier, Jennifer Laurent, Marty Wolfson, Marco Mariani, Jeff Gibney, Jim Bognar, Catherine
Andres, John Leszczynski, Bob Mathia, Jitin Kain, Paul Meyer, John Tarwacki, Greg Conrad,
Linda LaMont, Tom Price, Mark Smith
Chairperson, David Varner, Chairperson, Public Works and Property Vacation Committee and
Chairperson, Oliver J. Davis, Utilities Committee, called the joint meeting to order at 3:30 p.m.
BILL N0.54-08 -APPROPRIATE -PUBLIC WORKS SEWER GENERAL OPERATING FUND
N0.641 TO PAY COMPROMISE JUDGMENT
Aladean DeRose, Chief Assistance City Attorney, City of South Bend Legal Department, 14tH
Floor County-City Building, 227 W. Jefferson Blvd., South Bend, Indiana, made the presentation
for this bill.
Ms. DeRose advised that on February 14, 2008, the St. Joseph Superior Court entered a
judgment against the City of South Bend in the sum of $614,725.64 The Court found that the City
had improperly charged its non-resident Clay Utilities customers for debt service after the City's
debt to acquire Clay Utilities had been paid and retired. Both the City and the rate payers asked
the Court to reconsider its decision. The City claimed that the Court exceeded its power by
altering and existing utility rate schedule; the class members claimed the City owed prejudgment
interest of $304,229.85. The Court denied both requests and affirmed the priorjudgment of
$614,725.64 on May 12, 2008. She noted that presently, this case is in the process of appeal to
the Indiana Court of Appeals. If the City were to prevail on appeal, the result would be a $0
judgment. If Clay customers prevail, the judgment would be in excess of One Million Dollars
($1,064,953.49 to be precise) plus post judgment statutory interest at 8% from February 14,
2008. As of August 14, 2008 post judgment interest alone is about $24,600. Ms. DeRose stated
that considering the financial risks of an adverse judgment notwithstanding. The City's firm belief
in the merits of its legal position, it is wise and prudent to resolve this dispute. The City's Legal
Department and attorneys for Clay Utilities have agreed to settle this claim in full for the sum of
$710,000 subject to Court approval. Hearing on the Court's approval is set for September 8,
2008. This ordinance will authorize the appropriation of funds necessary to pay the agreed
settlement promptly on Court approval. The Sewer Works General Operating Fund No. 641 has
sufficient funds to pay this sum.
Gary Gilot, Director, Public Works, 13'n Floor County-City Building, 227 W. Jefferson Blvd., stated
that he recommends favorably that the compromise judgment is a fair compromise to resolving
this dispute.
There being no one else present wishing to speak in favor or opposed to this bill. Councilmember
Dieter made a motion to recommend this bill favorably to full Council. Councilmember Oliver
Davis seconded the motion which carried.
Respectfully Submitted,
Council Member David Varner, Chairperson
Public Works and Property Vacation Committee