LAMPASAS — The city’s court case against Kempner Water Supply Corporation wasn’t closed before Christmas, as was previously expected.
Lampasas sued Kempner Water Supply Corporation in September 2013 over a disputed contract.
A trial date initially was set for December, but was extended to Feb. 23 several months ago to give both parties more time to explore and gather evidence, according to court documents.
Both sides requested 27th District Court Judge John Gauntt settle the dispute before trial, however.
According to the most recent court documents, Lampasas is seeking $117,432 in damages and relinquished costs with the addition of legal fees from the water company. The city is requesting a ruling to clarify exactly how much it is required to pay for water from the corporation.
The legal fees are expected to be between $100,000 and $500,000, according to case records.
The dispute between the two parties arose in June 2013 when the corporation changed the way it billed the city for water, according to Lampasas staff. City officials claim the corporation overbilled Lampasas residents by $28,629 for their water usage in June, July and August 2013.
Lampasas also claims the corporation prevented the city from meeting its minimum water use requirement with Central Texas Water Supply Corporation in July 2013, which resulted in a $14,427 penalty.
Delores Goode, the corporation’s general manager, said previously the corporation’s lawyers re-examined the existing contract in September 2013, and interpreted it to read that Lampasas is responsible for all water delivered to the city.
The water corporation then sent an additional invoice to the city requesting $54,868, which included charges dating back to 2010, according to court documents.
The city and the corporation have a long-standing contract and relationship that only recently became complicated.
In 2006, the flow of operations was relatively straightforward. The Harker Heights-based Central Texas Water Supply Corporation drew water from Stillhouse Hollow Lake and treated it. The water was then transported to a pump station owned by the Kempner water corporation, where it would travel through Kempner’s pipes to Lampasas residents.
In 2010, however, the infrastructure grew a little hairier. The Kempner corporation decided to build its own water treatment plant and serviced its customers through it. Lampasas chose to remain with Central Texas Water Supply Corporation because, according to documents, it was in the best interest of residents.
Currently, water treated by Central Texas Water Supply Corporation and Kempner intermix at the State Highway 195 Pump Station — the main pump that delivers water to Lampasas and Kempner residents.
The city says it is only contractually obligated to pay for water from the Central Texas treatment plant, and that contractually, it is KWSC’s responsibility to deliver that water and charge only for Central Texas treated water, according to court records. The city also has paid millions to reserve water at Central Texas’ treatment plant, according to documents, and also pays to preserve its water rights at Stillhouse Hollow Lake.
The Kempner water corporation controls the volume of water the station receives from both plants.
The case today
In KWSC’s most recent petition for judgment filed in late November, it calls Lampasas’ interpretation of the contract “absurd.” In a lengthy statement, the corporation’s San Antonio-based law firm said “the plain and unambiguous language of the agreement reveals one vivid point, that KWSC agreed to deliver treated water and the city agreed to pay for such water, no matter where the source.”
To support some of its claims, lawyers said with the way Lampasas interprets the contract, KWSC would still be obligated to deliver Central Texas Water Supply Corporation’s water even if the Central Texas-owned treatment plant burned down.
The city’s attorneys disagree.
“Kempner’s new and flawed interpretation of the contract is that it can abandon its plainly spelled-out contractual obligation to deliver to the city, the water the city has reserved in Stillhouse Reservoir and the Central Texas treatment plant and replace as much of that water with its own treated water as it unilaterally decides,” its Austin-based law firm said.
The city’s attorneys say KWSC wants the ability to charge for its water because its plant is debt-laden, and uses previous statements between KWSC and city officials to prove its case.
If Gauntt decides to make a ruling before the trial date, the case will be over, but subject to appeals. Gauntt said he couldn’t comment on the case this week.