Archive for Thursday, December 4, 2008

Judge rules on Eudora motions in RWD case

December 4, 2008

Douglas County Rural Water District No. 4 officials think the latest chapter in their lawsuit with the city of Eudora could be an indication of how the judge might rule on the case.

The city of Eudora made a motion to certify questions that could better be answered by the Kansas Supreme Court, as opposed to the U.S. District Court for Kansas where it currently is being heard.

The motion was denied Nov. 14 and the case will stay in federal court.

“It appears that the judge is leaning toward resolving the case by saying that the water district has the right to serve territory, and that’s been our position all along,” RWD No. 4 administrator Scott Schultz said. “So, this ruling affirms our beliefs as to what the law is and we’re pleased to be in the appropriate court of jurisdiction.”

At question is who should provide service to property Eudora has annexed in recent years south of Kansas Highway 10 along Douglas County Road 1061.

Kansas State statute K.S.A. 12-257 states that when a city annexes territory served by a water district, the water district must negotiate a fair price for the city to acquire the territory and serve its residents.

However, RWD No. 4 filed a lawsuit against Eudora last 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 The 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.

Court documents state the city questioned whether the Kansas Supreme Court could better answer whether K.S.A. 12-257 was mandatory or just a guideline; and whether a rural water district can retain an “unnecessary” federally guaranteed loan in order to gain protection from 7 U.S.C. section 1926(b).

U.S. District Judge Julie A. Robinson’s ruling puzzled City Administrator Cheryl Beatty, but she didn’t think it would hurt the city’s case.

“I’m not sure that I understand the judge’s decision not to certify,” Beatty said. “You could tell by some of her responses that she’s not clearly understanding what the attorney’s are asking her to certify. It doesn’t have a negative impact, but it doesn’t have a positive impact, either — for both sides.”

Beatty also said it made no sense for the state statute to be on the books if it didn’t have to be followed. But RWD No. 4 believes the federal law pre-empts the state statute.

About a year ago, Eudora tried to settle the suit out of court by offering to pay the district’s $235,000 loan.

The district asked for

$6 million because it said it would make nearly that amount by serving present and future customers within the roughly 153 acres in the Fairfield district during a 40-year period.

Though a federal mediator hasn’t called parties back to the table since spring, Schultz still hoped the case could be settled out of court.

“We believe that neighbors should cooperate, and this is just a utilities dispute that should be worked out,” he said.

Beatty doesn’t think there’s much chance for an out-of-court settlement and said the whole suit will come down to what the court defines as a reasonable settlement.

“The original offer they (RWD No. 4) made was astronomical before we had the economic downturn, and now it’s even more ridiculous for them to want $6 million to purchase the lots outright.”

The case is scheduled to go to trial Jan. 13, 2009.

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