One month after narrowly avoiding a costly federal lawsuit, the city faces yet another – this time brought by Baze Chemical. The latest suit could cost the city millions of dollars in damages and attorneys' fees.
In a suit filed Friday in State Court, attorneys for Baze Chemical allege the city has overcharged the company for water by nearly $50,000 – or 1 ½ million gallons – since October.
Baze also said the city threatened to shut off the company's water supply Wednesday, unless a judge stops the city from doing so. Without water, Baze said, it could not operate its fire suppression system and, under state and federal regulations, would have to shut down, costing the company millions of dollars.
The suit states the chemical company's relationship with the city turned sour, following the resignations of City Manager Michael Hornes and Public Works Director Tim Perry, as well as the termination of Finance Director Steve Broom.
Their replacements, including City Manager Leslie Cloer, the suit alleges, became hostile towards Baze.
“Employees of the city are defiant, inaccessible, and completely indifferent to their errors and omissions,” the suit states.
In their court pleading, Baze officials state they are bringing suit against the city not only for themselves, but for countless residents who became victims of errors made by the city's water and billing departments.
“Employees of the city have been engaged in a monumental disservice to its customers,” the suit states. “Errors in reading, reporting and billing for water use...have resulted in staggering overcharges to customers.”
If the city wins, Baze Chemical, with multiple locations in Texas and Louisiana, might decide to leave Palestine, taking its school tax money, and 44 high-paying local jobs with it.
Cloer declined to comment, and told the Herald-Press Monday she also has instructed city officials not to comment. Council members, she said, will discuss Baze in closed-session during Monday's city council meeting.
In December, the chemical company, which produces surfactants used in industrial detergent, received a water bill for nearly $50,000. Experts say using that much water would take a constant flow of water through a six-inch pipe, 24 hours a day, at 35 pounds per square inch. That's similar to an operating fire hose.
“Apparently, they've been using water for other things,” Palestine Mayor Steve Presley told the Herald-Press Monday. “The city is in the business of selling water. The more customers we have, particularly commercial customers, the better.”
Baze Chemical receives its manufacturing and potable water from the Walston Springs Water Supply Corporation.
Baze, located outside city limits, hooks up to Palestine's water supply solely for fire suppression. Unless the fire systems are being tested, city water remains static in the lines, company officials said.
A 2016 contract between the city and Baze states water services for firefighting cannot be terminated without 90-days notice. Even so, the company received notice earlier this month that water will be cut off Wednesday if the bill is not paid in full.
Baze Chemical officials declined to comment, upon advice of their lawyer, Charles Nichols of Palestine.
This is not the first time the city has billed Baze for water it did not use, the suit alleges.
Shortly after the company installed a $40,000 six-inch water line, as per its contract with Palestine, the city installed a meter with shut-off valves on either side.
The valve on the Baze side of the meter, the suit alleges, leaked from the moment it was installed. Despite repeatedly notifying the city of the leak, the Baze suit states, the city “ignored the leak for years, and unilaterally without notice started billing Baze.”
Moreover, the suit alleges that city workers had to pump water out of the bunker simply to read the meter. “This has resulted in not only the overpayments for water and sewer, but the loss of income, and the inconvenience and harm inflicted on the city's customers.”
Earlier this month, 180 residents were disconnected from the city's water supply – 111 without any notice.
Those disconnected without notification were either refunded, or reconnected at no charge. Finance Director Jim Mahoney said multiple issues, including computer outages, employee error, and poor communication were to blame for the mass-disconnect.
District 6 Council member Ann Connor, during a Jan. 13 council work-session, however, said the blame laid solely on Mahoney.
“You need to step up,” she said. “You need to be aware of what's going on in your department, and say that it's your fault.”