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Water billing issue now in judge’s hands

By Kevin Kelley

Westlake

Whether or not Westlake residents and businesses will receives bills of $291 or more next month from the Cleveland Division of Water is now up to Cuyahoga County Common Pleas Court Judge Michael Astrab.

Astrab said he plans to rule on Westlake’s motion for a preliminary injunction against the billing before Feb. 15, when Cleveland plans to mail the bills. The judge made his comments late Monday afternoon at the conclusion of five days of testimony in the legal battle between Westlake and Cleveland. Attorneys from both sides will now have an opportunity to submit findings of fact after reviewing printed transcripts of the hearing, a process expected to take about two weeks.

In September, Cleveland officials announced plans to bill Westlake residents over five years for fixed costs associated with the suburb’s departure from the water system. Westlake officials have said no decision to leave has been made. While Westlake has explored purchasing water from Avon Lake Municipal Utilities, the suburb also wants to consider buying water in bulk from Cleveland, Mayor Dennis Clough has said.

At the heart of the battle are two questions: Has Westlake taken steps to leave the Cleveland Division of Water? If so, can Cleveland raise the rates of Westlake water customers under the water service agreement between the two municipalities?

In a strong closing argument, Rob Hanna, the lead attorney representing Cleveland, said evidence cited during five days of testimony showed that Westlake was doing more than just exploring water supply options.

“Westlake has done everything except sign on the dotted line,” Hanna said.

Hanna said Westlake hired an engineering consultant to create a water supply transition plan, hired financial consultants and obtained pricing information for water storage tanks and other equipment for setting up the suburb’s own water department. Westlake also held a meeting with the Ohio EPA, to which ALMU officials were invited but Cleveland Water officials were not, Hanna added.

“Judge, it is not a close call,” Hanna told Astrab. “They have taken steps to leave.”

Dennis O’Toole, the attorney hired by Westlake, denied the suburb has decided to separate itself from Cleveland’s water system.

“We haven’t separated. Yet they [Cleveland] want $58.8 million from us,” O’Toole said, referring to the dollar figure Cleveland has given for costs Westlake should be responsible for.

On Friday, Paul Bender, Cleveland’s director of public utilities, acknowledged under cross-examination by O’Toole that the water service agreement did not define “steps to leave the system,” nor criteria to make such a determination.

“I’m not aware of a formal process to make that determination, no,” Bender said.

Westlake’s position has been that the water service agreement contains no specific language calling for customers to pay for any costs associated with leaving the system either. The section of the agreement stating that higher rates can be charged to customers taking steps to leave is negated by an adjacent section, O’Toole argued.

Besides, O’Toole argued, the calculations Cleveland used to arrive at the $58.8 million they say Westlake is responsible for are “wrong and bogus.” While questioning two employees of Arcadis, a consulting firm whose report calculates what charges Westlake is responsible for, O’Toole attempted to cast doubt on the figures. He pointed out apparent discrepancies between two lists used to make those calculations. The Arcadis employees said the figures were reliable.

O’Toole also argued that it was Cleveland’s responsibility to take into account the risk of a suburb leaving its system, and that in fact, it had, by charging its suburban customers more for water than Cleveland residents are charged. Cleveland and Arcadis officials denied costs associated with a suburb’s possible departure had been built into its rates.

On Wednesday, Westlake Mayor Dennis Clough testified that Westlake has not taken any steps to leave the Cleveland water system nor terminated the water service agreement. He said a May 2, 2013 letter to Cleveland stating the city could not purchase water after March 2015 simply indicated that the current water service contract expires then because of a provision in Westlake’s charter limiting any utility contracts to 25 years.

Cleveland officials had initially cited the letter as the suburb’s official termination notice announcing its departure from the water system. Clough denied this and later retracted the letter. He said he thought his retraction would cause Cleveland to drop the additional charges against Westlake residents and businesses. Cleveland officials then said Westlake’s series of actions since 2007 amounted to steps to leave the system.

On Thursday, Astrab said Clough’s May 2 letter could not be held as an official termination notice of the suburb’s relationship with Cleveland’s Division of Water. Astrab said he noticed that the water service agreement between Westlake and Cleveland states that an official termination notice must be sent by certified mail.

“I’ve got a 46-cent stamp on the letter,” the judge said as he looked at his copy of the letter and accompanying envelope in his binder of documents associated with the case.

“I’ll just tell you right now, I’m not going to let that letter serve as the notice of cancellation that Cleveland interprets it to be because I don’t believe it was served properly, unless you can come up with a certified return receipt that shows it was mailed by certified mail,” Astrab told Hanna.

Astrab said his conclusion about the letter was not the “death penalty” for Cleveland’s plans to bill Westlake water customers the additional fees, but told the city’s attorneys to take his opinion into account as the hearing continued. The judge noted the letter appeared to be one of the linchpins in Cleveland’s defense of the planned billing of Westlake customers.

Hanna said Westlake had nevertheless taken steps to leave its water system, and its customers are liable for charges.

“Whether (the letter) is proper notice or improper notice, we received that letter,” Hanna told the judge. “And that letter is the culmination of all the other information, and the combination of that is a step toward leaving the system.”

Also on Thursday, Alex Margevicius, Cleveland’s interim commissioner of water, testified that a departure by Westlake from the Cleveland system would have detrimental effects on water service to the suburb’s neighbors.

“Bay Village, for example, has seven points of connection, six of which come from the Westlake direction, but only one of which comes from (the east),” Margevicius said. “If Westlake were to separate and the systems be totally severed, Bay Village would be relying on only one connection. We feel that’s highly inappropriate and insufficient for Bay Village.”

In such a case Cleveland would need to install an additional seven main pipes into Bay Village, Margevicius said. Cleveland officials have said they need the money from the planned additional billing of Westlake customers to pay for this infrastructure work. Cleveland officials have said it would be unfair for the system’s other customers to have to pay for costs associated with Westlake’s departure.

 

 

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