MVSD board to comply with half-million dollar judgment
By Jordan Cohen
The Mahoning Valley Sanitary District’s board of directors voted Wednesday to pay a judgment of more than $525,000 after losing an appeal of a breach-of-contract lawsuit that lasted nearly three years.
The vote followed a lengthy executive session.
In 2016, Rudzik Excavating of Struthers had been awarded $525,210 by a Trumbull County Common Pleas jury in a dispute over a contract to perform lime sludge removal from an MVSD lagoon. The district subsequently challenged a decision by Judge Andrew Logan to reject the MVSD’s motion for a directed verdict in its favor. Judge Logan’s decision was upheld by the 11th District Court of Appeals last year.
Thomas Wilson, MVSD legal counsel, said the district appealed to the Ohio Supreme Court, but earlier this month, the court declined to accept jurisdiction in the case.
“There is no insurance coverage for breach-of-contract lawsuits,” Wilson said. “The funds will have to come out of revenue.”
“There will be some impact on operating funds,” admitted Ramesh Kashinkunti, MVSD chief engineer. But he indicated the financial setback will not be major. He said that improved operational efficiencies will limit future costs on projects and lessen the need for frequent removal of lime sludge.
“We used to clean three or four lagoons every year,” Kashinkunti said.
Despite the loss, the district’s financial situation appears to be secure based on a recent A+ bond rating that cited its “strong debt service coverage and cash.”
The MVSD recently lost another case when the court of jurisdiction that oversees its rates rejected a plan to pay its member communities – Youngstown, Niles and McDonald – a total of $5 million. The district had cited consultant studies that showed its revenue is “excessive.” The court, without holding a hearing, ruled against it based on opposition to the givebacks from the state auditor.