I&M Fort Wayne Light Lease fight – $500,000 and counting
Posted by Dan in City & County Government
The Henry administration has spent nearly $300,000 on attorneys, and almost $200,000 on consultants. That’s nearly $500,000 in their attempt to railroad I&M on the light lease contract. Of the $300,000 spent on attorneys, $197,464 was spent with Baker & Daniels, where Tim Haffner, the city’s corporate counsel is a partner.
Haffner gave $5,000 to Henry’s campaign on Sept., 5, 2008.
The Indianapolis law firm of Bingham McHale has been paid $14,881 for their efforts and there’s plenty more to come, since Bingham McHale is the lead law firm representing Fort Wayne.
J. Richard Kiefer gave Henry $500 on Jan., 31st, 2008. Mary Solada gave Henry $500 in the same year. Amy Stewart, $250. All of them work for Bingham McHale.
We’re just saying..
It’s a bit surprising that Carson Boxberger wasn’t involved, they gave Henry $15,000 last year.
One thing we’ve been told, but have not actually nailed down as fact is the city had a major FAIL in their notification to I&M that they wanted to terminate the lease. We’re told they missed the deadline by one day. Once we verify that, we’ll report it here.
Henry made this statement on August 26th.
“Fort Wayne’s electric utility is a potential $100 million community asset,” stated Mayor Henry. “Our utility was leased, but never sold, to I&M. For 35 years, I&M has had access to that asset and enjoyed the privilege of serving our customers.”
[...]
“What is important to note is that when the lease ends, I&M must return a viable electric utility system to the City. What troubles me is that I&M is not ready to do that, and the clock is ticking.”
However, if you look at Article XXVII, 27.2 on page 23 of the agreement, it states the following:
27.2 Upon reversion of the Leased Property to the city, upon termination of the agreement and the end of its original term or extended term, as the case may be, all revenue, incomes, accounts receivable, profits and rents in any way relating to the Leased Property prior to such reversion and all property of any kind and nature acquired and owned by the company, (I&M) relating to the leased property, including Betterments, Enlargements and Extensions by the company, shall be shall be and remain with the company, and the city shall execute all instruments and papers required by the company for effecting the company’s receipt, ownership and possession of same.
We have no clue as to where Henry is coming up with the $100 million number, but that aside, isn’t the section above all I&M is asking? For the record, I&M cannot just name an arbitrary price for the betterments. In article XXV, it states:
The city shall have the option to acquire all such betterments… The price to be paid by the city shall be the original cost depreciated to the Company of all such Betterments, Enlargements and Extensions made by the company.
[...]
“Original cost depreciated to the Company,” for the purposes of this paragraph will be determined by the Uniform System of Accounts as adopted by the Public Service Commission of Indiana for electric utilities at the time of such entries.
I&M has spent $86 million on improvements. Those improvements have replaced 95 percent of the infrastructure since 1974. It’s pretty clear what the agreement says, you can view it here [PDF file].
Why have we spent close to 1/2 million dollars on this? If it moves to litigation, it will certainly cost that again, or likely more.
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Today I got my \"Dear Fellow Citizen\" letter from tomhenrythemayor.gov. Well not really … he used snail mail to tell me about his vision for City Electric. I am sure that he wrote it before he spent a half million dollars with lawyers and consultants and the mail date was 11/4/08 but the government-run Post Office was slow in its delivery.
So he starts out telling us that Fort Wayne\’s nonexistent electric utility which belongs to me as a citizen-owner is worth $100 mil. Tom, if you are going to send me a check for my piece of the pot, I am all in favor of whatever legal shenanigans you are pulling.
He goes on and on through 14 paragraphs to point out:
** The city did not sell the assets to I&M in 1974.
**35 years later, the business is <i>potentially</i> worth $100 mil to I&M.
**The nonexistent City Light is a utility with rights to have I&M customers.
**The Mayor promised that utility customers would pay very little for his actions.
**I&M has performed well and has been a good hard-working corporate citizen but …
SOME UNNAMED RESPECTED, PROVEN UTILITY could do the same?
AWB\’s excellent post above defies the mayor\’s logic as does Henry\’s own request that the Indiana legislature pass a law favoring the city in the dispute.
No matter what happens – itKs going to cost us all. Too bad do-gooder politicans don’t subscribe to the concept of “do no harm”.
Add to that the cost of $45,000+ for the mailing of the letters…. Im sure a local news channel would have loved to get an interview and would have brodcast it as well as the local newsapers;x What a fool one to many cocktails at the Frog over the years it seems to have affected his brain as well as his speach lol. No more council members running for mayor period. Liz Brown however would be exempted from this rule as she actualy makes sense unlike most of the others.