Published: August 07, 2007 11:50 am      

New Albany City Council taking utilities to court

A divided New Albany City Council on Monday night directed its attorney to challenge recent contracts signed by the sewer utility and drainage utility, on the grounds that no bidding competition was allowed.

The resolution authorizes council attorney Jerry Ulrich to lodge a complaint in Floyd County Circuit Court. That court’s judge, J. Terrence Cody, already is presiding over a similar challenge — he granted drainage-workers union American Federation of State, County and Municipal Employees a temporary restraining order to block the drainage deal until a hearing Friday morning.

Environmental Management Corp. has been New Albany’s sewer contractor since 2001. With a contract set to expire at

the end of the year, Sewer Board members Kevin Zurschmiede — also a city councilman — and Bill Utz negotiated a new one.

On July 3, the parties signed a five-year sewer-management deal through 2012, starting at $3.3 million for 2008 and possibly escalating to $4 million in the final year. EMC’s 2007 fee is $3.6 million.

Seventeen days later, the Stormwater Board accepted EMC’s proposal for a three-year management deal at $507,000 annually. Unlike their five sewer colleagues, the three members of the Stormwater Board were divided, with Sam Asberry voting against the proposal while Tim Deatrick and Al Goodman voted in favor.

Several members of public spoke in support of a contract-bidding standard or of abolishing the Stormwater Board altogether. Others praised EMC for its work in solving drainage problems.

The period of public comment lasted an hour, much longer than usual, but nearly half of that time featured testimony from Jerry Taylor, a drainage director for EMC. He defended EMC’s performance and criticized the motivation of the city drainage employees, sparking an argument between Dan Coffey and himself.

The debate

The tenor of Monday night’s debate didn’t reach the acrimony of recent debates over Fire Department operations, but it was clear from the meeting’s outset that there would be no overwhelming consensus.

Coffey, Steve Price and Jeff Gahan have been vocal opponents of the failure to seek competitive bids for the contracts, while Zurschmiede and Larry Kochert, another Sewer Board member, have defended the procedure followed by the Sewer Board.

Bill Schmidt, who eventually abstained without explanation, seemed opposed to the measure when he spoke up: “All I’ve heard [from residents] is what a good job EMC is doing.”

Jack Messer said the Stormwater Board had “overstepped its bounds,” but the Sewer Board had been more responsible. Donnie Blevins, an AFSCME member, took exception to Taylor’s characterization of drainage workers’ performance. Whether it was for that reason or not, he made his support for the resolution clear.

Beverly Crump told other members that she’d follow Ulrich’s suggestion.

“What are we supposed to do as responsible council members if we don’t listen to the attorney that we’re paying?” Crump wondered.

With the outcome still in doubt, Zurschmiede asked the attorney whether separating the complaints against the two utilities might be a better idea. Zurschmiede was willing to vote for the stormwater challenge if it could spare or delay the sewer challenge.

Ulrich replied that a simpler complaint might prove swifter and more successful, or it might not, and added that separating the complaints would mean duplicating work down the road. Coffey, the bill’s sponsor, said he wouldn’t agree to amend the resolution anyway.

After that opinion, Crump voted for the challenge, completing its majority support of Coffey, Price, Gahan, Blevins and Crump.

Moments after the vote, Coffey turned to Kochert and asked, “Now, can we put that behind us?”

Messer interjected, “You just put it in front of us.”

What’s next

Ulrich said he expects to file the court challenge before Friday’s hearing. He doesn’t intend to mix the council’s complaint with AFSCME’s, though he conceded Cody might choose to consolidate the two.

Based on a letter from Sewer Board attorney Greg Fifer to Ulrich, that utility is virtually certain to launch a legal defense of its contract. City attorney Shane Gibson already is involved in rebutting the union’s complaint.

One of Zurschmiede’s and Messer’s reasons in opposing the court challenge was the prospect of high attorneys’ fees. Coffey said Ulrich’s fees were expected to be less than the city paid to fight the establishment of New Albany DVD, which he estimated at $60,000 to $80,000 and Kochert placed at $100,000.

In related developments:

• The council’s agenda contained a proposal to disband and reconstitute the Stormwater Board, but sponsor Dan Coffey postponed the measure after Ulrich advised against it.

• The council finalized approval of a new accounting law that separates the bank accounts for the sewer system and garbage collection. The garbage utility owes the sewers about $5 million.