The continued use of a sludge hauling service while the city contends that wastewater utility contracts approved by the Board of Public Works and Safety are unenforceable drew more criticism Tuesday.

A Terre Haute attorney, Noah Gambill, renewed that criticism at the city Board of Sanitary Commissioners’ meeting.

“The city has taken the official position that the contract is unenforceable and illegal, but yet [it] continues to pay the company for the work it has, and still, performs,” Gambill said.

Gambill represents former city engineer Pat Goodwin, who filed a tort claim against the city.

That notice allows Goodwin to file a future lawsuit against the city involving a sludge-to-diesel project with Powerdyne, with whom the city administration has negotiated for months.

The city is operating under a contract signed July 28, 2014, with Renewable Transport Services Inc., a subsidiary of Sodrel Fuels, to haul wastewater sludge from Riley and West Terre Haute to Terre Haute’s wastewater treatment facility.

In a board meeting earlier this month, Terry Modesitt, attorney for the city’s sanitary board, said he and Dennis Otten, an attorney for Indianapolis law firm Bose McKinney & Evans, each believe the contract must be approved by the Board of Sanitary Commissioners.

Modesitt said Tuesday he is still reviewing that contract. It was one of five contracts signed as part of a sludge-to-diesel project in which the city’s sludge would be reformulated into diesel fuel.

“The whole issue is this board approving it (the contract), and it was never brought to this board,” Modesitt said after the meeting. “At some point this board has to look at this and decide whether they want to approve it or try to renegotiate it. I am still reviewing it. We will get other opinions as far as whether it makes sense or not or if there are cheaper alternatives.”

Modesitt said the hauling continues under the old contract until the sanitary board takes action. “We just want to be wise about how we proceed. We have different options. We could continue the contract as is, could decide not to approve it and or could just try to renegotiate it.”

Gambill said delaying a decision may open the city to liability concerns.

“The problem is that the longer that the city kicks the can down the road and doesn’t deal with resolving this issue, the greater the liability is for the city,” Gambill said after the meeting. “This is contradictory and another indication that the administration is failing to be a good steward of taxpayer money.”

Under the contract, Renewable Transport Services Inc. is paid for each trip, charged on an hourly basis of $86.10 an hour. Additionally, a charge of $2.99 per mile for each trip is also charged. The contract gives an example of loading and transporting wastewater within a 15-mile radius of Terre Haute’s wastewater utility. With driving to a site, loading, transporting and unloading, a typical trip will take 2.33 hours, which results in a bill of $200.61.

City Engineer Chuck Ennis said the company has been making five to six truckload trips daily to the city’s wastewater treatment facility from West Terre Haute and Riley.

• In another issue, Gambill suggested to the board that because the city is paying Bose McKinney & Evans from its wastewater treatment budget for legal services, the sanitary board should consider budgeting for any potential settlement or damages award that could stem from a federal lawsuit filed in June by Highland TH LLC and Overseas Lease Group.

Gambill told the board he made a public records request of an insurance review done for the city. Gambill referred to a June 8, 2015, letter to the city’s legal department about a review by Trident Legal Services involving insurance coverage for the Highland/OLG lawsuit. That review stated the city would not be covered under Argonaunt Insurance Co. for payment of a settlement or court order should one be made against the city. However, Robert St. Jean, a principal claims examiner for Trident Insurance Services, urged the city to put “any other insurance carriers who issued policies to the city on notice of this claim,” the letter states.

St. Jean said his review is not to “be construed as an exhaustive listing of the policy terms, conditions or exclusions that might preclude coverage pursuant” to its policy with the city. “We reserve the right to supplement this letter, should the facts and circumstances not currently known to us, indicate the application of additional grounds.”

Modesitt responded, saying, “It is my understanding, it is just the city itself,” that may have to pay for any lawsuit judgment, not the sanitary board.

• The board approved the release of $729,000 to Plocher Construction Co. for work completed and inspected on the city’s new wastewater treatment facility. Kellen Hurst, engineer for HNTB, told the sanitary board the $117 million project was substantially complete as of Tuesday. The board also voted to hold on to a final $701,000 payment to Plocher pending a final punch list check made by HNTB. “With it substantially complete, this is the day that warranty dates for equipment will be assigned,” Hurst said.

Reporter Howard Greninger can be reached 812-231-4204 or howard.greninger@tribstar.com. Follow on Twitter@TribStarHoward.

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