City to pay $150,035 as result of lawsuit

In a recent judgment against the City of Edmonton, it was ruled that because of a breach of contract, Edmonton must pay Water Management Services, LLC.

Below is a response to the verdict, submitted by City Attorney Sharon Howard.

 

PRESS RELEASE

CITY OF EDMONTON

“We lost the battle but won the war, stated Mayor Doug Smith, “And we are still ahead because the cost of the water project is now $1.5 Million Dollars less than it would have been had we continued to employ Water Management Services (WMS) as the project engineers.  The recent judgment against the City of Edmonton by U.S. District Court in the case of Water Management Services, LLC vs. City of Edmonton resulted in the City having to pay WMS the amount of $150,035 for work they did not perform. “While that is a lot of money to pay, we now have better, more competent engineers who work with us to provide solutions which best meet the needs of our community,” said Mayor Smith.

The Mayor, Council Members, Public Works Superintendent, and city employees are very satisfied with Monarch Engineering, Inc. of Lawrenceburg, Kentucky, a reputable engineering firm, hired to complete the water project after the appropriate procurement process. Monarch has proven themselves most capable with their proposals, attention to detail, and working with the City waterworks employees.

The City became dissatisfied with WMS services when the City Water Service questioned their bill for an installment payment before the funding for the project had been awarded and approved, and before the work had been completed in the current phase of the project design.

Then WMS quickly provided drawings of project plans for water lines which were incomplete, with inaccurate measurements and sizes of lines, sometimes putting the water lines on the wrong side of the road, along with a new bill for $ 150,035.00.

Among the questionable WMS proposals, was one to replace three small tanks currently in service, on Columbia Road near Industrial Drive, at Gascon, and in downtown near City Hall, with one huge tank near Industrial Drive.

After researching this matter, City officials confirmed that the trend among water systems is to have smaller tanks which facilitate water turnover more easily than a large tank. Lack of turnover can result in poor water quality. Furthermore, combining all of the water storage into a single tank would have left residents in the City without any backup option should an issue arise with the proposed mega tank. This and several other issues with WMS brought into question their ability and the City terminated their services on February 14, 2019, leading to the WMS lawsuit.

The Court, in an Order granting a WMS motion for summary judgment, found for WMS as a matter of law, because of the contract terms and the previous practice of the City, paying WMS invoices when billed.

During a closed session to discuss litigation of the September 8, 2020, City Council meeting, Stoll, Keenon & Ogden attorney, Damon Talley, known statewide as a leading expert in water systems law, who represented the City in the WMS lawsuit, explained to the City Council the outcome of the case, answered all questions, explained the options the City could now take and the recommendation of the Stoll, Keenon and Ogden legal team. After discussion and input of the City Attorney, Sharon Howard, the City decided to take no further action and accept the judgment cutting our losses.

“This is a decision that just makes good sense regardless of the court judgment for WMS against the City,” stated Sharon Howard, City Attorney. “The decision of the Mayor, City Council, and Public Works Supervisor Moe Hensley to move forward with the proposal of Monarch Engineering to refurbish three existing tanks instead of building a huge water tank to replace them saves $ 1.5 million dollars over the WMS proposal. The City Water Company, our customers, and taxpayers are coming out way ahead, financially, and with a better engineering firm even after paying off the judgment to WMS. “

“It is clear that the modifications to the project scope which have been implemented will not only save the City a significant amount of money but more importantly, will result in a water system that is more robust and provides improved water quality for the community,” stated Lee Mudd, Project Engineer for Monarch Engineering.  “The City is very fortunate to have a dedicated team of City employees whose decades of experience have been called upon by the staff of Monarch Engineering throughout the design of this project. The end result of this collaboration will be a project which best addresses the needs of the water system in the most economical way.”