Meat and Potatoes

A group of us thought it was downright silly to be discussing the propriety of the New Albany deciding to sue the sewer and stormwater boards without learning the particulars.

You will recall that the "old" council authorized its attorney, Jerry Ulrich, to sue after those boards signed management contracts with EMC. EMC had been managing the sewer department under the stewardship of the "old" five-member sewer board. The deadline for dissolving that contract had expired, triggering an automatic two-year renewal.

Given the fact that the board could now see the end of rigid EPA monitoring and the end of the environmental consent decree, several members sat down to negotiate a new five-year contract on terms more favorable to the city. The stormwater board executed a smaller management contract with the same EMC.

A few council members, feeling left out and prone to see a conspiracy under every rock, began to scream bloody murder that the new contract was a sweetheart deal and that it should have been put up for competitive bidding.

A majority voted to file suit in 2007. A majority of the new council voted to withdraw the lawsuit after a few initial hearings before Judge Terrance Cody seemed to indicate their case was weak and after many pointed out their case was destined to be fruitless.

A combination of lobbying by the losing faction and a revised legal estimate created a bizarre situation where the city council, over the course of 12 days, was suing, was not suing, and was again suing to have the contracts (now nearly 15 months on) voided.

So what is the council asking for? And how have the putative defendants responded? Here are the meat and potatoes.

First off, who did the council sue? Instead of suing the utility and the city, they sued the individual members who made up the board when the suit was filed. Then it was nominally a five-member board, but Todd Solomon resigned, leaving Mayor James Garner and Bill Utz, plus Kevin Zurschmiede and Larry Kochert, who also served as council members (Do they get to sit in on the legal wrangling for both sides in the case?).

Council, in its pleadings, describes the EMC contract as a "public work" (more about that later). If that were the case, they say, competitive bidding would have been required. It is undisputed that no competitive bids were solicited. Council asks the court to void the contracts.

The council's claim against Mayor Garner as head of the stormwater board is similar. In addition, the council pleadings seem to consider the stormwater board's inability to provide a budget document as grounds for voiding its contract with EMC.

The council did not, as a body or individually, sue the relevant boards or the city that authorized both.

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Attorneys for the putative defendants (Garner, Utz, Zurschmiede, Kochert, and Garner again) responded with motions to dismiss.

Defendants maintain that the EMC contract doesn't fall under the requirements of statutes governing "public works," but rather is in the nature of a "professional services (management) contract," and thus is not subject to competitive bidding requirements.

A "public work" is defined by statute as the construction, reconstruction, alteration, or renovation of a public building, airport facility, or other structure that is paid for out of a public fund or out of a special assessment...

Construction of sewers and drains is included as a public work provided it is paid for "out of a public fund or out of a special assessment."

Defendants maintain that the contract, on its face and in fact, is for the operation and maintenance of the Plant and Collection System programs. It does not contemplate the construction of anything that is to be paid from relevant funds.

The defendants also cite cases that make it clear that a bidding process are unlikely to provide any advantage to the public body when technical judgment and professional skills and experiences are the subject of the contract.

Perhaps more dispositive is the issue of standing, which defendants assert strongly against the city council's complaint. While "any person interested under a...written contract" may seek a declaration of rights under the contract, the city council fails to identify what rights, status, or other legal relation might be affected by the contract, say the defendants. The established sewer board was, they say, acting within its exclusive duties in executing the contract. The city council has delegated that authority and are not "interested parties" under the contract.

Tellingly, the defendants assert, the city council failed to sue the proper party or parties. Statute requires the suit to be against the city. Under IC 34-13-6-1, neither the sewer board nor its individual members can be sued. Only the city itself.

Finally, the city council waited too long to file its suit. State law requires such suit to be filed within 30 days of the action complained of. Oh, and all defendants claim the suit should fail, also, because it fails to join EMC as a defendant.

Should the city council fail to prevail on even one of these issues, the case is over.

The good news from that is that the exposure to legal fees, absent an appeal, will be limited if the court promptly dismisses the suit on one or more of these grounds.

Which brings us to this: Why, on such tenuous grounds and in the face of almost certain rebuff, did this city council vote 7-2 to proceed with its suit?

Why has the council remained mum about the nature of its case? It is, after all, a public record. Yet we've heard practically no discussion (in public session) about the reasons for this suit. Such attempted secrecy lends itself to suspicion and distrust. And it certainly makes this observer believe that the case has more to do with grandstanding than with actual public policy.

Tell us what you think. The pleadings are available for inspection in the circuit court office, and now, at various other publicly available venues in the city. Read them for yourselves and offer us your own evaluations.