Archive for Thursday, January 8, 2009

RWD 4 lawsuit delayed

January 8, 2009

The trial date for the city’s lawsuit with Douglas County Rural Water District No. 4 has been delayed until March 17.

It’s the second time the trial date has been pushed back. The original date was Nov. 18, 2008, and it was moved to Jan. 13, 2008, in May after an RWD No. 4’s amended complaint for damages was allowed.

“It’s frustrating because the only one who will win on this are the attorneys through attorney fees,” City Administrator Cheryl Beatty said.

But RWD No. 4 Administrator Scott Schultz said the delay could allow more time for an out-of-court settlement.

“A two-month delay in beginning the trial has an advantage in that it gives the city adequate time to consider whether the rulings by the court indicate that a settlement is in the best interest of the city,” he said.

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.

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 — an amount the district has since lowered to $4.5 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.

Beatty said the proposed settlement was evidence of the district’s intent not to negotiate reasonably.

Eudora has yet to make a counteroffer.

Schultz said the district, through its counsel, sent letters in December requesting that Mayor Tom Pyle and City Council members attend settlement discussion, but no formal response has been received.

“This December letter along with the last settlement offer made by RWD4 to the city in April 2008 at mediation — which the city did not respond to with a counteroffer — both demonstrate a continuing pattern in which RWD4 has extended an invitation to Eudora to settle the case before trial, which is obviously best for both parties.”


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