Toledo to sue to recoup Summit Street project funds

·8 min read

Jun. 11—The city of Toledo is suing Block Communications, Inc., in an effort to recoup taxpayer dollars spent to move Buckeye Broadband's underground equipment as part of the Summit Street reconstruction project.

BCI owns Buckeye Broadband and The Blade.

The Kapszukiewicz administration announced the move on Thursday, about 24 hours after seven Toledoans submitted a formal taxpayer demand to city Law Director Dale Emch compelling him to file suit in order to recover the funds.

VIEW FORMAL TAXPAYER DEMAND LETTER

Mayor Wade Kapszukiewicz on Thursday said his opinion on the matter hasn't changed in the last year when the law director issued an opinion that it was the city's responsibility to cover the costs. He called the decision to pay for Buckeye Broadband's utility relocation costs a matter of policy that was focused on preparing downtown Toledo for the Solheim Cup.

"The legal issues were unresolved a year ago, and they're still unresolved today. The legal part of this hasn't changed, the timing has changed," he said. "Last year BCI threatened to get an injunction that would kill the Summit Street project. Our goal and objective all along was getting that project done in time for the largest international event that our city has hosted in 30 years

"We were under an incredible time crunch, and so, given that BCI was essentially going to kill the project by fighting this out in court, we made the only decision that was available to us," the mayor said.

Block Communications, Inc. released a statement on Thursday night disputing the mayor's account.

"The mayor's statement that Block Communications was going to seek an injunction to stop the project is not correct. In fact, the company had no need to seek an injunction, but would have filed a lawsuit to show that the company had no legal responsibility for the costs while the project continued. We never filed that lawsuit solely because the city expressly agreed to pay for the costs of moving Buckeye's lines, and did pay those costs," the statement said.

The mayor stood by Mr. Emch's legal interpretation from last year that concluded the city was on the hook for utility relocation costs, but he said he now supports a legal battle to recoup those expenses because it is the will of Toledo City Council and legal precedent "is murky."

He noted multiple lawyers have weighed on the matter, including Mr. Emch, and said their conclusions were "across the board."

"This is a public policy decision. It has nothing to do with special treatment or anything like that. If Columbia Gas was the utility that was threatening an injunction, then we would have had to adopt a strategy to accommodate them," Mr. Kapszukiewicz said.

The mayor said at one point his administration was discussing reimbursing the other utility companies that had to move their equipment at their own expense, in the interest of fairness, but he decided instead to pursue reimbursement from Buckeye Broadband.

"Now is simply a better time to resolve the legal issues that were unresolved but up until now weren't worth fighting for in court because it could have threatened the project," Mr. Kapszukiewicz said.

Block Communications said in a statement on Tuesday that Toledo officials acknowledged that the city, not Buckeye Broadband, is responsible for the cost of relocating the company's fiber optic communications lines on Summit Street.

"Longstanding Ohio law and precedent support the conclusion that the city is the financially responsible party in this situation, notwithstanding any provisions of the Toledo Municipal Code. As recently as three weeks ago, the city administration again publicly reaffirmed that it had acted properly in covering these costs," the statement said. "But now it appears that after experiencing some political pressure, the administration is backpedaling. If the city decides to spend substantial legal fees in an effort to change the law of Ohio, Buckeye stands ready to vigorously defend its legal position."

The citizen lawsuit threatened Wednesday is an action allowable under the Ohio Revised Code and the Toledo City Charter. Terry Lodge, attorney for the plaintiffs, gave Mr. Emch until noon Friday to comply or else he'd file a taxpayer lawsuit against Mayor Kapszukiewicz and relevant city officers, contractors, and subcontractors.

"If you, the mayor, and relevant city administrators do not act to rescind the Supplemental Contract and recoup the misspent city funds, you will be subjecting Toledo's taxpayers to needless costs of litigation, when your respective duties to act otherwise under the charter are plain," Mr. Lodge's letter stated.

Taxpayers are required to first request a city attorney take action on a matter before they are permitted to file a taxpayer lawsuit, according to Toledo City Charter.

The citizen plaintiffs include former Toledo Mayor Carty Finkbeiner, city council candidate Alfonso Narvaez, activists Mike Ferner and Julian Mack, Old West End resident Toni Moore, central city resident Harold Mosley, and West Toledo resident Harry Johnston.

The Kapszukiewicz administration released this statement Thursday afternoon: "For several weeks, the city of Toledo has been exploring ways to best protect the long-term interests of its citizens regarding various issues related to the Summit Street project. As we've said before, the administration intends to work with city council on any effort that would help recover costs owed to the city of Toledo.

"Toward that end, the city of Toledo Law Department will be filing suit against BCI to recoup costs associated with the utility work done during the project."

The lawsuit will be filed Friday morning, a city spokesman said.

The $10.55 million Summit Street reconstruction and waterline replacement project is under way, and it recently received renewed attention after Toledo City Councilman Rob Ludeman revealed an FBI agent had contacted him and asked questions about the utility relocations related to construction.

The street is being rebuilt between Lafayette and Jackson streets following replacement of a water main between Washington Street and Jackson. Beautification efforts also are set to be complete ahead of the Solheim Cup golf tournament, which is coming to Toledo in late August.

A July 29, 2019, letter addressed to "all utilities" announces the start of design plans for the Summit Street reconstruction project and states the plans include a 12-inch undercut below the proposed pavement. The letter tells the utility companies to review what facilities were in the construction zone and identify any potential conflicts.

"All necessary field work to your facilities, not limited to relocation, to resolve all conflicts with this city of Toledo public infrastructure project must be completed by you no later than 1/1/2020," the letter states. "If your work is not complete by this date, the city will seek compensation from you for all additional costs incurred by the city related to your failure to complete the relocations by the required date."

A year later, Mr. Emch wrote to the city auditor with a different take. The Summit Street renovation, he wrote July 20, was an aesthetic project, not one born out of necessary infrastructure improvements. Because it's a beautification project, he reasoned, the impacted utilities do not have to pay to move their equipment.

Project plans approved in May, 2020 show utilities impacted by the work include AT&T, Toledo Edison, Columbia Gas, Verizon, Buckeye Broadband, and communications infrastructure provider Zayo Group.

Mr. Ludeman and Councilman Nick Komives have asked the Kapszukiewicz administration for a breakdown of how much each utility relocation cost and who paid for it, but they have yet to receive an answer. They told The Blade last month they were informed the city paid about $973,000 to relocate Buckeye's equipment. It's their understanding the other companies moved their equipment at their own expense.

"It's my clients' position that the appropriation and expenditure of any taxpayer funds for the relocation of Buckeye Broadband, which may so far total as much as $973,000, was and is unlawful and contrary to the city charter and Toledo Municipal Code," Mr. Lodge wrote to Mr. Emch on Wednesday.

A Sept. 3, 2020, email from Doug Stephens, deputy director of the city's department of public utilities, to the mayor's Deputy Chief of Staff Abby Arnold shows a draft ordinance requesting Toledo City Council approve spending another $600,000 on the Summit Street contract. The ordinance has not yet gone before council.

The expenditure would be "to enter into contracts for the relocation of utilities to allow for successful completion of the Summit Street Reconstruction Project," the draft ordinance states. Mr. Stephens also included a breakdown of how much it would cost to relocate utility equipment for Columbia Gas ($275,000), AT&T ($87,000), Zayo Group ($200,000), and Charter Communications ($25,000) for a total of $587,000.

Mr. Ludeman and Mr. Komives this week announced plans to introduce legislation at the Tuesday council meeting to recoup those costs and to strengthen the requirement for utilities to cover their costs for relocating equipment on future city infrastructure projects.

First Published June 10, 2021, 11:11am

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