City of Lawrence, water company face lawsuit 

Claim says no-bid contract to mayoral ally violates state law

Claim says no-bid contract to mayoral ally violates state law
Alleging improprieties in awarding a contract to manage the city’s water utility (“Water Fight in Lawrence,” NUVO, Oct. 14), a resident of Lawrence has filed a notice of intent to sue the City of Lawrence and Lawrence Utilities LLC. The Notice of Tort Claim, a legal prerequisite for filing suit against a local government, was sent on Oct. 14 to Mayor Thomas Schneider and the company run by his former Deputy Mayor Michael Lawson. Schneider hired Lawrence Utilities LLC to manage the water utility in July 2001 just days after the company was newly incorporated. The notice of a class action represented by Lawrence resident Matt Vail says state law was broken when the mayor and council approved the management contract without issuing a request for proposals from any other companies.
The lawsuit will apparently be based on a provision in the Indiana Code stating that a governmental body “must” request proposals before entering into a public-private agreement. In 2002, the City of Indianapolis interpreted the law as requiring such a request and reviewed several proposals before awarding the contract to manage the Indianapolis Water Company to U.S. Filter. According to the Lawrence lawsuit notice, the class action suit will request the Lawrence Utilities LLC management contract be voided and a refund be issued to ratepayers for the amount paid in increased water bills. Mayor Schneider declined comment on the tort claim notice, but Lawrence Utilities LLC’s president said politics are behind the action. “We regret that some residents of the City of Lawrence are injecting the utility company as an issue in the upcoming election,” Lawson says. “Our sole objective is to provide safe, reliable water at a reasonable price.” The transfer of the management of the water company and rate hikes totaling over 100 percent have indeed been an issue in the city elections set for Nov. 4, where Schneider is being challenged by Democrat Deborah Cantwell. Cantwell opposes the contract and the rate increases and alleges Lawrence Republicans have “set this up to be their own personal cash cow.” One of the attorneys representing the class of Lawrence ratepayers is Stan B. Hirsch, president of the Lawrence Township Democrat Club. Attorney Phillip Bayt of Ice Miller, who represented the City of Lawrence in the 2001 transfer of management to the private company, told NUVO the city interprets other portions of state law as allowing the contract to be issued without a requests for other proposals. “It is also important to note that there was a significant amount of public process involved in this,” Bayt says. “There were four different public meetings at which this contract was discussed.”

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