Monticello Live

Dear Mayor Rogers and Members of the City Council:

In response to the request of the City of Monticello to retain our Firm to provide legal assistance regarding the referenced matter, we advise that our Firm would be pleased to again be of assistance to the City and note that such continues the tradition of our Firm providing legal services to the City that dates back to and includes the administrations of Mayors Anderson, Rogers (first term), and Maxwell.

In the past the engagement of our Firm was made by the then sitting Mayor of the City, but this time we understand that there are certain Members of the City Council who object to hiring legal counsel in addition to the City Attorney. In light of that, we believe that the engagement of our firm should be reduced to writing and approved by both Mayor Rogers and the City Council. We do, therefore, set forth in this letter the terms upon which we will provide legal services to the City of Monticello. It will be necessary that a copy of this letter be signed by Mayor Rogers certifying that the City is agreeable to the terms of engagement, and that the City Council has approved same in open session.

We would note that we have been providing some general legal advice to the Mayor’s office relative to the contract between the City and Siemens and the problems being encountered by the City relative to Siemens’ performance under that contract. We have coordinated that legal assistance with City Attorney Whit Barton. We have not made and do not intend to make any charge for those services, and have provided same as part of our effort to support our hometown in a confusing time that arose in connection with the untimely death of Mayor Maxwell who we understand negotiated and made the contract with Siemens. That noted, we are nevertheless fortunate to have obtained a

general working knowledge of several of the issues involved from our earlier consultations with the Mayor’s office and other City personnel on this matter.

Mayor Rogers is correct to identify the failure of the City to have its own consulting engineer as one of, if not the biggest problem facing the City in trying to deal with Siemens on the project. As things sit now, the contract negotiated and signed by the previous administration has put the City in the position of having to rely on an engineer selected and employed by Siemens. The conflict of interest of this engineer should be apparent to anyone. It is our opinion that the City must have its own engineer in order for it to get an unbiased assessment of Siemens’ performance under the contract and to obtain a proper interpretation and application of the contract terms and provisions. This is especially true for the yet-to-be-started water line replacement part of the project whose costs are projected to run into many millions of dollars. We understand that the plans for the water line replacement project have yet to be put in final form acceptable to the City. One would have thought that those plans would have been in place and approved by the City and made part of the contract before it was signed, but it wasn’t.

Having an engineer whose undivided loyalty is to the City would also be of critical importance to any lawyer attempting to advise and represent the City respecting the project. That engineer would bring expertise to determinations of what the technical terms of the contract mean, and with respect to determining the quality of, and defects in the performance of Siemens under the contract. One thing is clear – neither the Mayor nor the Members of the City Council have the expertise needed to know if Siemens’ performance meets contract specifications.

It is, therefore, a requirement of our Firm that the City retain the professional services of its own engineer to work with the City and our Firm. If the City fails or refuses to employ an engineer, then our Firm would respectfully decline the City’s request to employ our Firm on this matter. In saying this, we are not being unmindful of the cost of having one’s own engineer, but to proceed without one is, in our mind, being penny wise and pound foolish.

Mayor Rogers is also correct to be concerned about Siemen’s performance not being secured and assured by a proper Performance Bond. We requested that the file on the contract be searched for a Performance Bond, and when that didn’t turn up a Performance Bond the City requested its Bond Underwriter on the water project, Stephens, Inc., to check its files. The response was that they were unaware of any requirement for a Performance Bond on this $10 Million water project.

Many would find such a circumstance to be highly unusual on a project of this size, especially where the City has already advance approximately $7 Million to Siemens on a $10 Million project before any work or material was provided and with nothing more than a promise that Siemens will do what it said it would do. Without a Performance Bond issued by large insurance company, the City is basically left to rely on the financial strength of Siemens to assure due and proper performance of what Siemens is supposed to do. While some might respond that Siemens is a big company, we would point out that the contract is with “Siemens Industry, Inc.”, a Delaware corporation, not the big German company that goes by the name “Siemens AG”. Many times large conglomerates such as “Siemens AG” have a multitude of subsidiary corporations through which it operates, thereby protecting the big company’s assets from claims of customers such as the City of Monticello. Since there is no Performance Bond securing and assuring proper performance of Siemens’s duties to the City, we recommend that “Siemens Industry, Inc.” be requested to provide a current financial information and tax returns which reflect that Siemens has the financial ability to perform the obligations of its contract with the City of Monticello.

Mayor Rogers is also correct to be concerned about Siemens changing the type of new water meter required by the contract specifications to another brand without obtaining formal approval from the City for such a major change. Siemens did not seek a Change Order approving this change of contract specifications on the meters, nor was one granted by the City. That coupled with the multitude of problems being experienced by the City with the performance of the different brand of meters installed raises serious questions about what the City should do about this breach of contract by Siemens in failing to follow contract specifications relative to the water meters.

Mayor Rogers is also correct to be concerned about the continuing difficulties being experienced by the City in issuing water bills. We understand that the City has had to make over 1,000 corrections to water bills before they could be mailed out. That has resulted in delayed issuance of water bills to the point that water bills are being received by citizens only a few days before they are due. Then there is the problem created by Siemens unilaterally changing the 100 gallon water rate for billing purposes to 10 gallon increments, a thing Siemens knew the City was against doing. While we generally understand that Siemens is now taking action to go back to the 100 gallon increment for water billing purposes, one again has Siemens making changes to the project that have not been approved by the City.

Mayor Rogers is also correct to be concerned about the 40% failure/remediation rate of the water meters installed by Siemens. We understand that this failure/remediation rate was obtained from an inspection of 18% of the Siemens installed water meters. Certainly such a failure/remediation rate is unacceptable.

Mayor Rogers is also correct to be concerned with the additional payment request recently made by Siemens to the City for almost a half-million-dollars. First, this Siemens payment request is not recommended for payment by its own engineer who presumably is supposed to make payment recommendations to the City. Second, this Siemens payment request is for the type of water meters that should have been installed under the terms of the contract, but weren’t. Third, this Siemens payment request has been made in the face of the fact that Siemens has already received some $7 Million in City funds, the vast majority of which has not been earned by performance by Siemens under the contract.

And there is much more, but we believe the above covers most of the main points in contention, and which will need to be addressed by the City’s own engineer and its lawyers. If employed, we plan to immediately interview Mayor Maxwell’s assistant Zach Tucker relative to his involvement in the making of the contract with Siemens and as to the history of the negotiation and making of the City’s contract with Siemens.

With the above background in mind, our Firm will require monthly payment of the regular hourly rates of its lawyers and legal assistants for legal services rendered to the City. Lead counsel at our Firm will be C. C. Gibson, III, and his regular rate of charge is $275 per hour. If our Firm advances or pays litigation and other expenses associated with its representation of the City, same will be added to the monthly billings made by our Firm to the City without mark-up. All monthly bills made by our Firm to the City will be due on receipt of same by the City. If the City fails or refuses to timely pay amounts due our Firm, or if the City fails to cooperate with our Firm as we deem necessary and appropriate, then our Firm and its lawyers shall have the right to withdraw as attorneys for the City, but any such withdrawal shall not affect the City’s liability for payment of all fees and expenses accruing before any such withdrawal. The City will have the right to terminate the services of our Firm at any time upon giving 10 days advance written notice of such termination to our Firm, but such termination shall not affect or release the City from liability for fees and expenses accrued prior to the effective date of termination.

It should be clearly understood by the City that our Firm has made no guarantees respecting the outcome of this matter, and that all expressions relative thereto are matters of our professional opinions only.

It should also be understood that our Firm intends to coordinate its legal services with that of City Attorney Barton throughout our representation of the City in this matter. Duplication of services is something that we intend to avoid at all possible opportunities.

No changes may be made to the terms of this engagement except by a writing signed by authorized representatives of both our Firm and the City.

Finally, while we do appreciate every opportunity we have had over the years to represent the interests of the City of Monticello, we will be unable to accept the City’s offer to employ our Firm unless the above-stated terms are agreeable to both Mayor Rogers and the City Council. We look forward to hearing back from the City on this shortly. Certainly enough delay has already occurred, and whether the City employs our Firm or another law firm the subject matters need to be addressed on an immediate basis. There is an old saying that comes to mind here, “a man who sleeps on his rights will lose them”.

Sincerely,

GIBSON & KEITH, PLLC

By:________________________________
C. C. Gibson, III
CCG/vk

cc: Mr. Whit Barton

This entry was posted on Wednesday, October 15th, 2014 at 6:45 am and is filed under City. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.