DeKalb Utility District board members have offered a rebuttal to comments made during a recent meeting of the Smithville Mayor and City Council.
In a contract proposal presented to the city last fall, DUD offered to share in the cost of a study to determine exactly how much it costs the city to produce water.
At the Feb. 4 meeting of the council, some members  expressed dissapointment over information that DUD officials do not approve of the firm (Warren & Associates)  that the city hired to perform the study, and that DUD will not share the cost of the study if the firm is retained.
City Attorney Vester Parsley, Jr. was mailed a letter signed by DUD Manager Jon Foutch and Board Chairman Roger Turney last week, contending that he (Parsley) and Secretary-Treasurer Hunter Hendrixson have not given “full and accurate information” to the aldermen concerning DUD’s unwillingness to split the cost of a water study with the city.
In the letter from DUD, officials state that a standard contract was sent by DUD to the City of Smithville on Aug. 28 to initiate negotiations on a new water purchase contract.
According to the letter, it was clearly stated that the city and DUD were to “agree” on a firm to complete a study to determine the cost of water from the city’s treatment facility, and that the entity chosen for the job “shall be unbiased as reasonably possible.”
DUD officials also claim in the letter that the firm the city has hired to find the cost of water is not “unbiased” nor an “independent entity,” because “David Pine and Jerry Warren of Warren & Associates are expected to be called as expert witnesses in the Utility Management Review Board proceeding (on April 4 in Smithville) and will be presenting evidence against the DUD on behalf of the City of Smithville.”
While DUD has recommended another firm to perform the study, city officials said Warren and Associates was already well into the project, which will cost $7,500, by the time they received DUD’s objections.
Parsley sent a letter to Foutch on Feb. 6 voicing the city fathers’ unhappiness with the DUD’s choice.
The letter read:
“The City of Smithville was very disappointed in your response to the City hiring Warren & Associates to conduct the cost study for the City of Smithville.
“Your previous letters had not set out any particular firms or conditions for hiring someone to do the cost study.
“The City was under the impression that we were going to share equally the expense of the cost study.
“Hunter (Hendrixson) had previously attempted to contact the Jackson Thornton firm that you mentioned in your letter. However, they did not return his call until after Warren & Associates had been retained.
“The City feels that DUD has at least a moral obligation to pay one-half of the $7,500 cost for Warren & Associates to perform the cost study. However, since Warren & Associates has already started the work the City will fulfill its obligation to pay them as contracted.”
The DUD's reply to Parsley last week, signed by Turney and Foutch, read:
“On behalf of the DeKalb Utility District, I wish to respond to your letter of Feb. 6, 2013. The ‘disappointment’ of the City of Smithville was no doubt created by the misinformation and lack of information that you and Hunter Hendrixson have shared or failed to share with the city council.
“It is clearly evident from your letter, as well as the relentless information in the media regarding the efforts on a proposed contract, that the city council is not receiving full and accurate information.
“Therefore, I am providing each alderman a copy of this letter so that there can be a full understanding of what has transpired in this process.
“For your benefit and the benefit of the recipients of this letter, I wish to point out the following:
“1. On Aug. 28, 2012, a rather standard contract was sent by DUD to the City of Smithville, to initiate discussions regarding a water purchase contract. Included in that contract, specifically on page 4 and 5, it was clearly spelled out that the parties were to agree on an entity to perform a Cost of Service Study and that the entity shall be unbiased as reasonably possible.
“2. On Jan. 3, 2013, after waiting over four months for some type of information on whether the proposed contract was agreeable and whether a cost study was going to be done, a letter was sent by the Chairman of DUD addressing this issue once again. In that letter, a copy of which was mailed to all aldermen, it was clearly spelled out that DUD is willing to share one-half of the cost of an ‘independent entity’ to conduct a cost study of the city's water production operation. It was referenced in that letter that as of Jan. 3, 2013, that DUD had received no input as to whether that offer was acceptable or whether any effort was being made to have a cost study accomplished.
“3. On Jan. 7, 2013, I understood from comments made at the council meeting that a cost study was going to be pursued and that Mr. Hendrixson would contact DUD accordingly. On Jan. 24, 2013 after hearing nothing about the study, proposed entity or cost, I called Mr. Hendrixson to ask about the progress of a study. On that same date, he faxed to me one sheet of paper that included the business card information for Jerry Warren and David Pine of Warren & Associates. I told Mr. Hendrixson in this phone conversation that DUD would have to be agreeable with the entity to perform the cost study if they were going to pay one-half of the cost. Mr. Hendrixson agreed and provided no opposition.
“4. On Jan. 25, 2013, after trying to find information on Warren & Associates, I called Mr. Hendrixson and told him that DUD would not be willing to share in the expense of Warren & Associates due to us not having any information regarding their expertise and credentials in performing cost studies. At no time did Mr. Hendrixson provide me with any credential-type information on this entity and clearly no information like was discussed at the city council meeting on Feb. 4, 2013.
“5. On Jan. 28, 2013, Mr. Hendrixson called wanting me to respond by letter regarding the denial of DUD in not agreeing to share the cost of the work of Warren & Associates. At that time, Mr. Hendrixson stated that the city had not yet made up their mind on what they were going to do regarding this study but that he would provide our letter to the city council and be back in touch on their response. Again, no information at all was provided regarding Warren & Associates. Pursuant to Mr. Hendrixson's request, I provided a letter setting out DUD's position on the use of Warren & Associates and proposing other experienced entities that would be agreeable for the cost study work.
“6. On Feb. 1, 2013, in the contested case matter pending before the Utility Management Review Board, which the City of Smithville has requested to be allowed to intervene and present evidence at that hearing, Mr. Hendrixson, on behalf of the City of Smithville, signed written interrogatories, which disclosed David Pine and Jerry Warren of Warren & Associates as being persons expected to be called as expert witnesses in the UMRB proceeding and would be presenting evidence on behalf of the City of Smithville. This information was not discussed at the council meeting of Feb. 4, when the credentials of Warren & Associates were questioned.
“Clearly with Warren & Associates being the paid expert witnesses of the City of Smithville, they would not be an ‘unbiased’ and ‘independent entity’ as referenced earlier in the proposed contract. Evidently you and Mr. Hendrixson failed to advise the council on what experts had been paid on behalf of the city to attempt to defeat the efforts of DUD on the construction of a water treatment plant, but instead tried to get DUD to help fund such an effort. You and Mr. Hendrixson, while touting the credentials of this entity on Feb. 4, for some reason completely failed to mention the hiring of them as experts in the pending matter.
“7. On Feb. 4, 2013, when the council met I heard information regarding Warren & Associates for the first time, and information that was clearly contrary to what I had been earlier told. It appeared to me from statements made by you, Mr. Hendrixson and the mayor, that Warren & Associates had already started working on the cost study and were ‘already underway’ and had been working on the study for at least three weeks. Again, no mention of this was made to me in my earlier mentioned phone conversations with Mr. Hendrixson. There was also much information shared at the council meeting as pertains to the experience and credentials of Warren & Associates but this had never been shared with DUD. You made many strong assertions that at no time did DUD ever place any requirements on their agreement to share the cost of a study. You evidently did not wish to share with them the proposed contract terms mentioned above or the correspondence regarding the required independence of such a study.
“It is very troubling to hear the inaccurate information coming from the council meetings and from representatives of the city regarding this issue, but even more so when it is known that the information will be shared with the public via media outlets in a way that provides false or incomplete information. It has always been specifically pointed out both in the proposed contract and in follow-up letters that DUD would share in an independent unbiased study and that continues to be DUD's position. As referenced herein, Warren & Associates does not meet that criteria and DUD respectfully cannot agree to use them.
“While it is disappointing that the City of Smithville has chosen to spend tens of thousands of dollars on public relation efforts and attorneys to defeat the business decisions of the DUD board on its future plan for its customers, it would be nice if full and complete information was provided to those in authority at the city who must make the final decisions on the best course of action for its citizens.”
The letter concluded.