Board contemplates countersuit

SEELEY LAKE – The Seeley Lake Sewer District Board discussed counter suing Don Larson and the people who joined Larson’s lawsuit against the District at their Oct. 18 meeting. The board also received a manager’s report, discussed the inter-local agreement with the county, sewer service contracts and interviewed candidates for the open board position.

Director Davy Good said he felt the District should consider a countersuit against Larson and approximately 50 other plaintiffs who sued the District. The countersuit would be to recover the money the District has spent defending itself against what many have called a “frivolous lawsuit.”

Board President Beth Hutchinson said she was reluctant to pursue a counter lawsuit because she didn’t feel Larson’s lawsuit is frivolous. She said the District’s attorney has done a good job defending the District but she felt that the community at large has been concerned about the same issues Larson raised. She felt the previous board didn’t handle those issues appropriately.

Hutchinson added that she felt a countersuit would stifle community participation in the project. She said more input from the community would help the success of the project.

Good argued that Larson is suing the volunteer board for doing its job, to construct a sewer system. He didn’t think that the people who signed on to Larson’s lawsuit realize what they signed up for.

Director Mike Boltz said he thought the District’s attorney Jon Beal should deal with the lawsuit. Beal should be the one to recommend a countersuit to the board if that is the best option, not the board making the recommendation.

Boltz added he felt Larson’s lawsuit was full of holes and lies and Larson should have to pay for the District’s costs.

Beal was in attendance and suggested that he could look into what a countersuit would involve based on facts, laws and public policy and then make a recommendation to the board.

The District had already filed a motion asking the judge to dismiss Larson’s lawsuit and for the court to award the District its attorney’s fees. Beal said a countersuit would be another possibility. In the motion to dismiss, there is a very specific legal argument used to ask for attorney fees whereas a countersuit has different grounds for asking for attorney fees.

Good said that a good defense involves offense and he felt that counter suing may force Larson to come to the table and discuss how to bring the case to a close instead of dragging it out in court.

Good made a motion to request more information from Beal about pursuing a countersuit. Boltz seconded the motion. The motion passed on a split vote with Hutchinson joining Good and Boltz explaining that while she was not in favor of a countersuit she is always in favor of having more information on decisions. Director Troy Spence voted against the motion.

Discussing Larson’s lawsuit in general, Beal said he felt that whatever people’s differences were, their time, energy, money and intelligence was better spent understanding the sewer system and using those resources to work on solutions for low-income people. Beal felt that the District is legally obligated to move forward with the sewer project because it signed a resolution to do so.

“I think that a lawsuit is a poor way to solve this problem,” said Beal. “Unfortunately the board and the community is forced into it. It has far reaching, unintended and very expensive consequences if not handled appropriately.”

Beal said he thought the board did their best and nobody intentionally did anything wrong. Everything could be done better in hindsight. Until Larson wants to come to the table and be reasonable about it, Beal thinks the community and the board should just move on rather than losing millions of dollars in grants and risking other lawsuits for what he feels the board is legally obligated to do.

In an email to the Pathfinder, Beal explained that the Sewer District made two written attempts inviting Larson to meet and resolve his lawsuit outside of court. These attempts were made prior to the Aug. 14 hearing on Larson’s motion for a preliminary injunction. Larson’s attorney Colleen Dowdall responded with a stipulation that parroted the motion.

If the District had agreed to the stipulation it would have stalled the sewer project and potentially risked losing its funding package including millions in grants. The District didn’t take the stipulation and the hearing was held. The court denied the preliminary injunction on Oct. 1.

Both Beal and Dowdall have said their clients would be willing to come to the table but neither has made any formal requests since before the Aug. 14 hearing.

District Manager Greg Robertson reported that the bond council is nearing completion of the transcript, a document required for debt issuance. Robertson has had monthly conference calls with funding agencies. Those agencies want to know the future of the project.

Robertson said a decision would need to be made soon. He was hoping to report back to the funding agencies a “clear and unambiguous intention of the board” after the board meeting. This would allow them to start planning on how to meet start up conditions prior to bidding, some of which were very time consuming.

“That is where things are standing right now. There is no other activity that’s happening with respect to the project until I get some better direction, which I have not received to date,” said Robertson.

Hutchinson said it was her understanding that the project was on schedule based on an email she received from Rural Development (RD). In the letter, RD Area Specialist Dan Johnson also wrote that he was encouraged to see the District move forward with a vote last month to continue designing the project.

Robertson, who is Missoula County’s Chief Public Works Officer, is provided to the Sewer District as a contracted District Manager though an inter-local agreement. The agreement has been renewed several times since 2011 and is coming due in November.

Good said he thinks the District should pursue renewing the inter-local agreement and keeping Robertson as District Manager “at any cost.”

Hutchinson agreed that Robertson had done a lot of good work on the project in the past but she was concerned about his lack of communication with the board over the last five months. Her concern included Robertson not attending very many board meetings and showing minimal initiative in attempting to communicate with the board.

Hutchinson said she is not opposed to renewing the agreement but felt it needs to better spell out the hours Robertson can dedicate to the project and address the communication issues.

Missoula County Commissioner Jean Curtiss defended Robertson’s lack of communication saying that the board had not given him direction that he needed.

Robertson defended his lack of communications saying that because the county is named as a defendant with the District in Larson’s lawsuit the county attorney has told him to curtail communications with the board.

Robertson recommended that if the board wanted to renew the agreement, the board needed to approach the county commissioners with their intentions.

Curtiss said the county would not offer as much of Robertson’s time for a dollar per year as they have for the past seven years. She suggested that the board think about hiring a different District Manager in case an agreement cannot be made with the county.

Boltz said the current annual assessment was originally used to pay for a manager and that could go back to paying a manager if needed.

Curtiss also said an agreement for the construction engineering Robertson has committed to the District should be discussed. Hutchinson added that the District has also been told the county would be providing a vehicle for the District.

The board voted to have a committee consisting of Good and Boltz initiate conversation with the commissioners. All the board members individually will research an alternate manager.

The board discussed the 148 Sewer User Agreements that, according to RD’s Letter of Conditions, must be signed prior to advertising the project for bids. Hutchinson said she had received a sample copy the day before and didn’t have time to circulate it among the board. She felt the board should discuss some of the policies that the board might want to have in the agreements.

Spence said he felt that if the cost to hook up individual houses was included in the construction bids for the project then there shouldn’t be a charge to hook up at a later date.

Good disagreed saying that hooking up houses while the contractor is in town building the whole system is going to be less expensive. He also felt that the grant funds were a use it or lose it situation.

Hutchinson said that how vacant lots would be handled is an issue too because those owners are paying the same thing as everyone else but possibly not getting the “free hookup.”

Robertson said that the user agreements are generally intended for projects where there is a cost to the user to hook up to the system. He said the purpose of the agreements is to demonstrate that property owners are supportive of the project and that they will connect at their own cost.

Robertson said Seeley’s project is different because it includes the cost of individual hookups as part of the overall budget of the project. He said the requirement for user agreements is discretionary on the part of RD and he felt it is probably not as much of a concern on this project for RD because of the “free hookups.” He felt that the required number of user agreements is negotiable.

For vacant lots, Robertson said stub-outs from the main to the property line are generally installed during construction of the main. If a person wants to develop a vacant parcel in the future they would only be responsible for the cost between the stub-out and their building. Tapping into sewer mains is typically the most expensive part of hooking up.

Robertson agreed with Good that once the project is completed, remaining grant funds would be lost. Homeowners who chose not to be hooked up would then be responsible for the connection from their house to the stub-out. The District could create a fund to pay for those hookups but it can’t come from any of the current grants.

Once a sewer system is in place, the health department could require hooking up if the old system fails or if the person wants to change the use of the property such as adding a bedroom.

Other ideas for policy included individual landowners having to okay the work completed before the contractor is released, what kinds of waste can and can’t be disposed of in the sewer and what size of development could be done on the property.

Three people applied for the open board position left vacant when Director Juli Cole resigned in August. Applicants Pat Caffrey and Walt Hill were in attendance while Pat Goodover was unable to make the meeting.

The board interviewed Caffrey and Hill but voted to postpone making an appointment until Goodover could be interviewed at the board’s November meeting.

The next regular board meeting is scheduled for 6 p.m., Nov. 15 at the Seeley Lake Senior Center, 707 Pine Drive, Seeley Lake.