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Firestone, Central Weld settle dispute about overcharging

FIRESTONE — The town of Firestone and the Central Weld County Water District have settled their multi-year, multi-million-dollar lawsuit, and it does not appear that anyone has written settlement checks.

After Weld County Judge Shannon Lyons granted in part and denied in part Central Weld’s motion for summary judgment, the parties returned to negotiations and reached a settlement. The judge vacated the planned jury trial June 2.

The issue stems from what Firestone believed was Central Weld’s overcharging for water taps. It filed a lawsuit in the summer of 2021 alleging that Central Weld continued to charge premium rates or surcharges that were supposed to sunset once capital projects were completed. Firestone said it was owed $8.6 million in overpayments.

Central Weld countered that Firestone knew about the issue as far back as 2006, triggering the statute of limitations. It also said that Firestone did not have standing to sue because its residents, not the town itself, paid the tap fees.

Judge Lyons determined that Firestone did have standing to sue and that a six-year statute of limitations should apply, meaning overpayments prior to Aug. 2, 2015, could not be claimed. Still, alleged overpayments after that time totalled $5.2 million, according to town calculations.

“The undisputed facts presented by the parties demonstrate that the town knew by Aug. 31, 2006, that it was overpaying for the tap fees and the district had no reasonable explanation for the excess payments,” Lyons wrote.

A memorandum of understanding between the parties, entered April 7 of this year and ratified by the boards of the two parties in May and June, does not mention any cash payments or admit any liability.

The parties decided to write a new service agreement governing their relationship. In the time between the MOU and the service agreement, certain provisions would immediately kick in. They are:

  • Firestone will transfer to the district 112% of the total water metered for treatment and delivery to the town.
  • The district will treat raw water that the town owns in Carter Lake, including Colorado-Big Thompson shares and Windy Gap shares, and the district may treat future water supplies from the Northern Integrated Supply Project — NISP — in which both entities participate.
  • The town will assure that water it treats at its own treatment plant does not flow back into Central Water’s system.
  • The district will retain any retail customers that later become annexed into Firestone. 
  • The district will charge $6,000 per tap for the next 150 single-family water taps that Firestone buys. This is half the price listed on the Central Weld website, meaning that the town will receive a $900,000 break on tap fees.
  • The town will set uniform prices for water service in the community.

Central Weld manager Stan Linker said in a written statement that he was appreciative of the work that Firestone did to bring the dispute to an end.

“The Central Weld County Water District has agreed to mutual terms for a settlement on the lawsuit and claims made by the town of Firestone. The Central Weld County Water District board of directors is appreciative of Mayor Drew Peterson’s and Mayor Pro-Tem Frank Jimenez’s effort to build a working group to address concerns and issues raised by both sides during this litigation, beginning in November of 2021,” he said

Linker said claims by both sides are being resolved so that “the focus can be on resuming a collaborative relationship with the town and the district … to continue providing high quality, reliable and affordable water as it has done for nearly five decades.”

A.J. Krieger, town manager at Firestone, said he would reserve comment on the settlement until the final releases are signed. He said he doesn’t expect anything to change from the memorandum of understanding and that the end result “is very good for the town.”

The court case was Town of Firestone v. Central Weld County Water District, 2021cv30465, filed in Weld County District Court.

Source: BizWest