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Tuesday, November 10, 2009
Ind. Law - More on "I&M fight costs Fort Wayne $300,000 for lawyers"
The Fort Wayne Journal Gazette, whose story is quoted in this ILB entry from Nov. 7th, today has an editorial discussing the legal fees. Some quotes:
Though I&M has, for various reasons, won the upper hand in the public relations battle, Mayor Tom Henry and his administration do have a responsibility to defend the city’s interests in the high-stakes faceoff. They also have a responsibility to inform the public of how much they are spending on the matter; so the release of the totals last week was a welcome, if belated, response to The Journal Gazette’s request for the information.
Unfortunately for the Henry administration, I&M has no similar legal responsibility to tell its ratepayers how much the company is paying for lawyers. To further add to the city’s underdog position in the public-relations battle, mediation efforts limit what either side should say publicly about the status of negotiations, leaving city officials unable to tell the public exactly what is behind the city’s strategy.
If the issue were not complicated enough, city officials also have to keep in mind that whatever I&M pays will come from the company’s customers, including those in Fort Wayne.
Yet city officials also have a responsibility to make sure its residents receive a fair value for what is left of the former municipal electric company. So far, the city has paid the law firm of the city’s corporate counsel, Tim Haffner, nearly $200,000 in 2008 and 2009. The city cannot be faulted for also hiring an Indianapolis law firm with expertise in electric utility matters (nearly $80,000 over the two years), and with one court case already filed, a separate litigation firm (nearly $15,000.)
With tens of millions of dollars at stake, the $300,000 the city has spent over the past two years appears justified.
At issue is the current value of the “assets” of the former City Light utility, which provided electric service to much of the city’s central core until the city leased the system to I&M in 1974. Now that the lease is about to run its course, both I&M and the city hope the electric company will permanently buy out what is left of the system. The question is the price.
Numerous legal issues are involved, and there is no comparable lease in Indiana that sets a precedent. Considering no real movement has arisen yet in two mediation sessions, residents can likely assume the sides remain at odds over the main point of contention: I&M believes it should pay only for what little equipment still exists, while city officials believe the company must pay a premium for the 30,000-plus customers City Light served. City officials have said that it believes the utility is worth up to $100 million; I&M is likely offering much, much less.
Posted by Marcia Oddi on November 10, 2009 07:10 AM
Posted to Indiana Government | Indiana Law