City Council Questions Contract Validity

The New Albany, Ky., City Council last night voted for taking legal action to determine if two no-bid contracts are valid. The first contract, worth $3.3 million a year, is for running the city sewer system, and the second contract totals $507,000 annually for storm drainage operations.

Environmental Management Corp. (EMC), which has run New Albany's sewers since 2001, received both contracts. But some council members have questioned the agreements because the sewer board and storm water board, though they awarded the contracts, did not seek any bids.

The resolution passed last night in a 5-3 vote with one abstention authorized the filing of a suit in Floyd Circuit Court. It asked the judge to give a "declaratory judgment" and determine the contracts' validity.

Those in favor were Dan Coffey, Steve Price, Beverly Crump, Jeff Gahan and Donnie Blevins. Opposed were Jack Messer, Kevin Zurschmiede and Larry Kochert. Zurschmiede and Kochert are also members of the five-member sewer board that voted unanimously on July 3 to grant EMC the contract. The council's ninth member, Bill Schmidt, abstained from voting and said that many people had told him EMC was "doing a good job."

Coffey said after the vote that he was glad that "we put that behind us." Messer replied that with litigation pending, "it's in front of us."

Those in favor of filing the suits generally said that, considering attorneys' diverse opinions, there was no alternative way to determine whether the contracts stood up. The council's lawyer, Jerry Ulrich, said it was clear to him that bids are needed. But sewer board lawyer Greg Fifer and storm board lawyer Mike Summers both said that the contracts for "professional service" would hold up in court without bidding. Those council members opposed to filing suit said they believed the litigation could "snowball" and cost the city millions in attorneys' fees.

It was not clear last night when exactly the suit would be filed.

Source: The Courier-Journal