Lewes utility dispute spinning out of control

It was all meant to be amicable. Short, sweet and decisive.

But now it appears that the hoped-for quick resolution of a dispute between the City of Lewes and its Board of Public Works, about who has ultimate authority over the city’s utility services, is spinning out of control.

“We had agreed to disagree,” said BPW President Pres Lee. “The city suggested we take it to a judge for a declaratory judgement and then live by the decision. We agreed with that. We hadn’t decided who would file for the action so we went ahead, hoping for a quick resolution. Now it’s become a big mess.” 

Reaching back at least two and a half years, the controversy has already cost taxpayers and ratepayers thousands of dollars in legal fees. BPW filed the action against the city in Sussex County Superior Court. It then filed an amended suit to strengthen its arguments. Now the city is preparing its response to the suit.

Meanwhile, the city has also petitioned the state's Public Service Commission to halt all BPW requests for expansion of its utilities until the lawsuit is settled. (See related story in this edition.) 

Several lawyers are at work trying to sort it all out. Their bills are being paid with checks funded by taxpayer and ratepayer dollars.  

BPW President Pres Lee agrees the litigation could end up costing a hundred thousand dollars or more. Mayor Ted Becker said he’s not sure costs will go that high, but agrees the whole process is expensive.

Since 1901, the Board of Public Works has been providing water, sewer and electricity services, primarily for the residents of Lewes, but also for some property owners close to, but outside city limits.

Delaware’s General Assembly granted the BPW a charter to provide and manage those services for the City of Lewes, which has been an incorporated municipality since 1818. Throughout its existence, BPW’s five-person elected board has worked cooperatively with the five-person elected Mayor and Council to ensure reliable and affordable utilities. That cooperation came to an end this year with BPW’s filing of the suit. Despite amicable intentions, the suit has put the two organizations in adversarial mode.

Annexation agreement spurs action

BPW members don’t like enforcing a city policy requiring property owners outside city limits who want utilities to willingly annex when the city deems the timing appropriate. BPW members don’t think the policy is legally enforceable. They don’t want to be held legally liable if property owners sue them if they don’t provide utilities, especially in areas where the BPW is the only provider, and they don’t want to be told by the city that they can’t expand services without enforcing the annexation policy.

Basically, the BPW asserts in its suit that its charter gives it total autonomy when it comes to managing utilities for Lewes.

In their court filing, BPW members say the utility’s authority to expand with or without city approval is in the best interests of its ratepayers. “The more ratepayers we have, the lower the costs for all. Costs are spread out over greater numbers,” said BPW’s Lee.

City documents, nonetheless, show the BPW has honored the annexation policy informally and formally, as far back as the 1960s when Otis Smith was mayor.

For the city’s part, Mayor Ted Becker said taxpayers and ratepayers alike benefit from expansion of utilities coupled with annexation. Responding to BPW concerns about liability, Becker said Lewes Mayor and Council approved a resolution absolving the BPW of any legal responsibility related to the annexation requirement.

“We feel that properties served by our utilities,“ says Becker, “should be full-fledged parts of the city. All city services would be more affordable if spread out over more taxpayers and ratepayers.”

Lee said it sickens him, especially in his role as BPW president, that after 118 years of cooperation between the city and BPW, that spirit is being broken by this dispute. However, he clearly thinks the board is in the right. Its members are obviously willing to risk that spirit to nail down their autonomy.

Mayor and Council members, likewise, aren’t giving up their perceived authority without a fight.

Both men say they still have a close working relationship. Knowing them both, I don’t doubt it. They both would like a quick answer from the court as to who has ultimate authority over utilities in Lewes. No one expects that before sometime in 2020. After years of discussion and already months of  expanding legal proceedings, quick is no longer possible.

“We’re not looking for blood,” said Becker, “but while we are two separate entities, they need to recognize they are part of us.”

The Cape Gazette will be following this historic dispute closely. We plan to tally and report all taxpayer and ratepayer dollars being spent for a resolution.

For my money, as a ratepayer and taxpayer, that resolution should have already been achieved by these elected officials without litigation. It’s not too late to abandon the suits, stem the hemorrhaging of legal bills, and try again.