Archive for Thursday, April 10, 2008

Mediation begins for Eudora, RWD No. 4

April 10, 2008

Six hours of talks last Thursday between Eudora city officials and representatives of Douglas County Rural Water District No. 4 produced new offers and a promise to meet again but no immediate settlement of a federal lawsuit.

Eudora has annexed into the city in recent years property south of Kansas Highway 10 along Douglas County Road 1061.

As a result, RWD No. 4 filed a lawsuit against Eudora in September in U.S. District Court of Kansas City, Kan., under a federal law - 7 U.S.C. section 1926(b) - that states as a result of borrowing money from Farmer's Home Administration, the district is protected from a municipality or private entity that would curtail or limit the district's water territory or customers.

Mayor Tom Pyle, City Administrator Cheryl Beatty and city attorney Curt Tideman attended the 6-hour mediation session. RWD No. 4 officials in attendance were all members of their board, Schultz, a secretary, and three attorneys.

The session, which lasted about 6 hours, included an offer made by Eudora to increase their initial settlement figure of $235,000. Officials could not comment on the amount of the increase.

There also was discussion on labeling a boundary around the city that neither party would cross.

The mediator recessed the meeting and asked city officials to make a counter-offer to RWD No. 4's proposed settlement of about $4.5 million - down from $6 million. No date has been set for the next and possibly final mediation before the suit goes to court Nov. 18.

"I think we made some progress," RWD No. 4 Administrator Scott Schultz said. "I think we were able to exchange ideas and information that may in the long run bring the two parties closer together, and I think the mediator must have thought the same thing or he wouldn't have recessed the mediation session - he would have declared it at an impasse."

Beatty agreed with Schultz's opinion regarding idea exchanges, but still was not pleased.

"It was productive in the sense that we got better ideas of their position," she said. "But we don't feel like they showed us anything that didn't make it worthwhile for us to just continue on to court, and that's a sad scenario."

Both sides conceded that even if the case fails in mediation and goes to court, it still could be tied up for the next two to three years as a result of appeals.

"This is not the type of case that ends up being a win-win; it's win-lose or lose-lose," Beatty said. "It's likely in this case that it will be lose-lose. The really sad thing is that it's not the board members or council that loses on this. It's the customers that are going to be owning those homes and drinking that water."

One of the many reasons why both sides are having trouble coming to an agreement is that they serve to different sets of customers.

Eudora serves customers located within the city boundaries of Eudora, while RWD No. 4 serves those in rural areas.

Schultz said by annexing the 153 acres in the Fairfield district, the city of Eudora would cause the price of water to go up for the district's current customers.

"You have a certain set of fixed costs and you start spreading those costs to fewer and fewer customers, it's going to drive water rates up for the remaining customers," he said. "We are focused on the best interest of the customer. It's just s different group of people because our constituency is in the rural areas."

Schultz also said he would like to see more Eudora City Council members at the next mediation because the power to decide the settlement is delegated to those who are present.

He said the district would be open to requesting a mediation session in the evening if it would make it easier for them to attend.

Both parties would like to reach a settlement before going to court, if for no other reason than to save money.

"The sooner we settle, the more reduction there is in legal fees incurred on both sides," Schultz said. "So, I do hold out hope that we can reach a settlement through the mediation process."

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