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Extra $300K settles BWD/Liverpool dispute

January 25, 2013
By TOM GIAMBRONI - Staff Writer (tgiambroni@mojonews.com) , Morning Journal News

LISBON - East Liverpool's lawsuit against the Buckeye Water District appears to have finally been resolved, with the city agreeing Thursday to accept another $300,000 from the BWD to settle the dispute once and for all.

This brings to $6.2 million the total amount East Liverpool will be paid by the BWD under the proposed settlement agreement reached during a hearing held in Columbiana County Common Pleas Court.

"It seems like you had a lot more hair when this thing started," East Liverpool Mayor Jim Swoger joked afterwards to a newspaper reporter, referring to the fact the lawsuit dates back to 2005.

The hearing was in response to a BWD motion asking Judge C. Ashley Pike to enforce a verbal agreement reached last April that would have paid East Liverpool $5.9 million to settle the lawsuit. After the BWD came up with the money, the city changed its mind, saying it wanted another $600,000 to $700,000 in interest.

The interest was on the $4.8 million judgment awarded East Liverpool for winning its breach-of-contract lawsuit against the BWD after the BWD quit purchasing water from the city in the early 2000s.

Prior to the start of Thursday's hearing, Judge Pike gave the attorneys another chance to resolve the dispute through negotiations, and they agreed to give it one more shot.

"I don't mean to twist arms ... but I think the public is more than ready for this thing to be settled," Pike said.

Later that day the attorneys returned from closed-door meetings with a tentative agreement that will need to be put in writing and signed by the judge before it becomes final.

To resolve the lawsuit, the BWD agreed to:

-Pay East Liverpool a total of $6.2 million - the $4.8 million judgment, plus $1.4 million in interest. The abovementioned additional $300,000 will come from BWD funds that had been frozen by the court pending the outcome of the lawsuit.

-Pay East Liverpool an additional $350,000, plus interest, should the U.S. Department of Agriculture file a lawsuit laying claim to any of the BWD funds used in the settlement.

The USDA has loaned the BWD millions of dollars to fund various projects, and East Liverpool wanted the federal agency to waive any right to USDA money that the BWD may have used as part of the settlement agreement.

The USDA had already told the BWD, which informed East Liverpool, that it could not grant a waiver since it was not a party to the lawsuit. The USDA assured the BWD in an email it had no intention of filing any such lawsuit, but the city remained concerned.

-Hold East Liverpool harmless should the USDA file such a lawsuit against the city and the BWD and win. The BWD would then be required to reimburse East Liverpool dollar-for-dollar for its losses from such a lawsuit.

"No one believes even remotely that this could happen," BWD attorney Fred Emmerling said of a USDA lawsuit.

Everyone expressed relief the lengthy lawsuit appeared to finally be put to rest nearly eight years after it was first filed.

"I'm just glad its behind us and we can move ahead doing what we do, putting in lines and making the district better," said BWD Director Al DeAngelis. "That what we're here for: To get water to the people."

DeAngelis said the BWD can pay the settlement without having to raise rates. The BWD is putting up $3.6 million of its own funds, plus $1.1 million received from leasing property for shale gas development and $1.5 million loaned the BWD by county commissioners.

Mayor Swoger said all of this could have been avoided if BWD had simply lived up to its agreement. "This never had to happen if they just would have communicated with us," he said, adding it would have only cost the BWD $2 million to continue purchasing the minimum amount of water from the city over the remainder of the contract.

County Commission Chairman Mike Halleck expressed his relief the lawsuit was finally resolved. Commissioners were also on the hook for the judgment as co-defendants because Pike ruled they were liable by virtue of having created the BWD in the 1990s out of the former county water district.

"I still contend the board should never have been put in this position in the first place, but the court ruled otherwise. I think it's a bit of a stretch for anyone with common sense to say that commissioners should be held liable when we only appoint three of the nine (BWD) members," Halleck said.

 
 

 

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