I’ve often said that MJMEUC’s MoPEP and UPPA contracts are I.Q. tests for city elected officials…when they sign; they flunk, but perhaps even that was too kind. This is a true story about Hermann, Missouri, another MoPEP town, and their city council discussion of the class-action lawsuit against them for allegedly skimming their inflated utility prices which could cost them as much as $5,255,000 in rebates alone. The city of course denies that they ever deliberately inflated utility rates so they could skim off the excess revenues for non utility uses even though this ‘accident’ happened with uncanny regularity month after month, year after year, decade after decade.
On September 27, 2010, the Hermann City Council was listening to a report from City Attorney Politte on the progress of the lawsuit which had just been transferred to the Missouri Supreme Court. It’s a total mystery why Mayor Miskel allowed them to discuss this in open session as “new business” when a report on the status of active ongoing litigation not only isn’t “new” business it’s one of the few topics that they can legitimately discuss in closed session. Oh well….
Nevertheless, the discussion was held in open session where CountyNewsLIVE.com publisher Jeff Noedel could capture this priceless record of the meeting where the collective pants of Hermann’s city government were pulled down around their ankles. In just seconds and in one very long run-on sentence, City Alderman Penning dropped the city’s legal defense into the toilet. It was possibly the most painful, if not the most expensive bombing run on a city since World War II.
This makes Alderman Penning a candidate for the 2010 MoPEP Darwin Awards, not because he blurted out the awful truth in front of witnesses and killed their key legal defense, but because Penning really believes that a local vote in Hermann can supersede a statewide voter referendum to amend the state constitution.
Read the short transcript below and after you quit laughing – or, if you live in Hermann, after you quit crying - see if you don’t agree that there is dumb, dumber and then there is Alderman Penning.
PERILOUS "ARBOR LAWSUIT" DISCUSSED IN CITY MEETING MONDAY NIGHT: City lawyers consider case's transfer to Supreme Court "positive development" -- Ald. Penning says electric department was set-up in 1950s "to make money to run the city"
CountyNewsLIVE.com Mon, 09/27/2010 - 11:20pm — J. Noedel-Publisher
Monday night was the first Board of Aldermen meeting since the "Arbor lawsuit" against the city was transferred to the Missouri Supreme Court. Hermann Mayor Larry Miskel asked City Attorney Dave Politte to offer a report.
Here is a transcript of what was said by Politte and by Hermann Aldermen Dan Wilson and John Penning:
(23:23) MAYOR LARRY MISKEL: Next on the agenda under new business is the status of the of the Arbor-Hancock lawsuit...the Arbor lawsuit. (inaudible) You're up.
CITY ATTORNEY DAVE POLITTE: Just...It won't take long. I just want to report that the Supreme Court of Missouri has accepted transfer and will consider arguments in this case.
As you recall, our local circuit court ruled in the city's favor, without even the need for a trial, saying the city wins.
The plaintiffs took the case to the Court of Appeals of the Eastern District. And, as you recall from Mr. Heinz's discussion, there were five factors for the Court to consider when try to determine whether our electric fees are a tax or not. And if they decide that they are not, then that's in favor of the city.
Well a local circuit court decided in favor of the city on four-and-a-half of the five. The Court of Appeals said, 'No, we want the circuit court judge to look at it again, because we think that three of the five are inconclusive.' They didn't rule in favor of the other side; they just said they needed more information.
But now that the Supreme Court has going to look at it... And we, the attorneys, view that as a good thing, because they may just decide to overrule the Court of Appeals. And in that event...
ALDERMAN DAN WILSON: Can you speak-up just a little bit please?
POLITTE: The Supreme Court is going to take the case, and we think that is a good thing because they may decide to overrule the Court of Appeals and to uphold the local circuit judge's decision. In which case, the case is over. Without the need to come back to the local circuit court and have a trial and go through the expense and hassle of all that, with the possibility of having to go back up the ladder again to the Court of Appeals and the Supreme Court. So...it's, I think, a positive development.
(25:30) WILSON: Is it alright to discuss that there were others that are interested in this case that were not previously? Could you go into that briefly, if it doesn't...?
POLITTE: Well, officially, the Missouri Municipal League and the Missouri Public Utility Alliance have filed what they call amicus briefs with the court, supporting the position of the city of Hermann. What an amicus brief is it's something that the courts allow to be filed by parties who aren't a party to the case but who have a real interest, or a real... (26:00) something at stake in the outcome, and I think those two organizations both...
WILSON: That part is clear. What status are these two groups....are they recognized in the state as having any kind of standing in any way? You know, I mean, what does this do? I mean, I'm not trying to tie you into legal... What I'm trying to find out is... I know what the M.M.L. is, but maybe other people do not. And...
POLITTE: Well, the Missouri Municipal League is an association of Missouri cities or municipalities who associate in order to look out for the interests of the cities and municipalities. And they have a lobbying arm. They'll have individuals that go to Jeff. City trying to lobby on behalf of cities.
(27:00) A lot of what they do, though, is education and support. They host the seminars for the city officials to go to and learn how to become aldermen and mayor. And they hold city attorney seminars. And they provide newsletters to city clerks and mayors and attorneys on updates on the law and so forth. They're basically an organization formed by cities to advocate for cities.
WILSON: And the other group?
POLITTE: It is the same thing with respect to utilities, and municipally-owned utilities. The Missouri Public Utility Alliance is the umbrella under which you have MDGMCK and MOPEP and the Gas Commission and the various...
WILSON: So this means we've acquired quite a few friends in this case.
POLITTE: We have. And we've also made some good friends... If you want to say 'Misery loves company,' but... (27:53) The City of Marceline has been sued by the same plaintiff's law firm under the same theory. And the City of Salem has been sued by the same plaintiff's lawyer under the same theory.
Rumor has it that there are other cities out there that have a target on them. But those are the only two that I know of so far.
WILSON: What was the original date of the filing of this case...when this case started?
POLITTE: It was on or about January first of 2008.
WILSON: 2008. Thank you.
(28:20) ALDERMAN JOHN PENNING: I still have a question that I have... There was a magazine that came out this week that was in our file. Did you read the last page of it? That covered this lawsuit? The City of Hermann and Arbor? Written by a lawyer in St. Louis. I don't know if he represented them or not.
What I don't understand... The Hancock Amendment was passed in 1980. We had an election in the 50s in this town to go into the electrical business to make money to run the city. It's never been rescinded. And that would sure supersede the Hancock Amendment.
And that point has never been argued.
And that was a vote of the citizens of Hermann. And I was asked if I can document that, and I said, 'Absolutely.' Because I voted in that election.
And that was, to me, superseded any Hancock Amendment that may come up. Because it was done specifically to make money to run the city. And that's what the people voted in.
(pause)
MISKEL: I believe our attorneys are well aware of that.
PENNING: But that was never brought up, and it should have been. It's never been changed.
(end of article)
