City of Lamar Can Take ARPA to Jury Trial over Repowering Project

The Senior District Court Judge, Scott Epstein, in the cases against ARPA by the City of Lamar and the Ratepayers comprised of several local business owners, ruled that although the Ratepayers case has no standing and their case was dismissed, the suits brought by the City of Lamar and Lamar Utilities Board can move forward to a jury trial.  City Administrator John Sutherland presented a brief outline of the findings during the Monday night city council meeting.  Councilman Kirk Crespin noted, “Our early approach in the lawsuit was like a shotgun, covering a lot of different aspects.  With this new ruling from the court, we can narrow our focus on settling this with a win for Lamar citizens.”

Various claims by the Ratepayers group were dismissed for either lack of standing or a failure to state a claim upon which relief may be granted.  This includes the bond insurer company, Syncora, the issuance of bonds in 2010, failure to obtain voter approval and claims related to the failure to pay debts with revenue from the Repowering Project were also dismissed.  In a separate case Syncora was separated as a defendant and ARPA’s motion to dismiss the lawsuit was denied by the judge.  In that ruling, the judge decided that a jury trial would be held for those claims that were not dismissed.

The claims that remain intact include a breach of the Organic Contract between the City of Lamar and ARPA, the power supply agreement, operating agreement and the lease agreement, as well as damages arising from those points.  The city has the ability to bring their case to a jury trial to have no further obligation to ARPA, even as a separate ratepayer and an ARPA member and be out of that early agreement.  They also have a chance to prevent ARPA from passing along its debt to the city, the Lamar Utility Board or to ratepayers in general.  Sutherland added, “We came out of that in a pretty strong position.”

Monday night, Kirk Crespin gave thanks and credit to the initial Ratepayers whose suit was dismissed, adding, “They were the ones who initiated this movement from the beginning and they were the ones who approached the City of Lamar and asked them to join in the suit.”  Those businesses listed as the Ratepayers in the suit included:  JBS 5Rivers, The Rodeway Cow Palace Inn, The Lamar Truck Plaza and Colorado Mills, all major ratepayers to ARPA.

Lamar Mayor Roger Stager said he had been asked on numerous occasions why the city was involved in the lawsuit.  He explained, “We’re paying for something we didn’t get.  It’s not just the fact that costs went up originally from what it was supposed to be, but the fact that we were promised a power plant that would run.  We have no power plant.  We were promised jobs from the plant and there are none.  We were promised back up generation; there is no back up generation. And through this whole ordeal, ARPA has said they want to work with us, but we’ve seen no signs of that.  And for our citizens to sit here and pay for something for the next 30-40 years, that doesn’t operate, that we have nothing to show for…it’s totally wrong.”

Both Sutherland and City Attorney Garth Nieschburg pointed out that the legal battle is really just beginning following the judge’s ruling.  There are still a number of legal protocols that need to be followed just to get the case before a jury, but the city is committed to following them through to the end.  Sutherland added, “There are still many possibilities than can be brought to the table for both parties; we could see a different contract agreement between ARPA and the City, but we have come to the point where they have to take notice and act on resolving this failed project.  Things just can’t continue to slide along for the next several decades as they have been.”

Additional information regarding the ramifications of the judge’s ruling will be forthcoming in future articles in The Prowers Journal.

By Russ Baldwin

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