WASHINGTON, D.C. — The State of Ohio has filed a lawsuit against the U.S. Army Corps of Engineers over what the state and the City of Wilmington claim are problematic expenses and charges the Army Corps has been billing the state, which in turn bills the city.

The 48-page “Motion for Summary Judgment on Liability” was filed Thursday with the U.S. Court of Federal Claims in Washington, D.C. with Judge Carolyn N. Lerner. The suit states, “Plaintiff State of Ohio asks this court to grant summary judgment on the issue of Defendant’s liability for Ohio’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing.”

The action was brought by Ohio Attorney General Dave Yost and the state’s Assistant Attorneys General Ian F. Grant, Daniel Martin, Amber Wootton Hertlein, and Pearl M. Chin. The city is not a party to the action.

The News Journal reported last month that the city had received yet another huge annual water bill through the Ohio Department of Natural Resources (ODNR) from the U.S. Army Corps of Engineers — a “record-high bill” — for purported operations and maintenance activities at Caesar Creek Lake, the city’s primary water source, according to City of Wilmington Public Works Director Rick Shaffer.

“This year’s bill of $425,410.10 is nearly 10 percent higher than the 2021 bill, which at the time was by far the biggest bill received in the 29-year history of Caesar Creek Lake being a drinking water source,” said Shaffer.

The suit states that the Corps “has charged Ohio for expenses that are not necessary for water supply, water storage, or flood control, and thus are not properly passed on to Ohio.” The suit is “to remedy injurious effects resulting from the [P]roject’s subsequent operation”, and “the undisputed evidence confirms” this.

As recently as 2018, the city’s annual bill was $205,031, and it was $133,437 in 2011. Each annual bill between 1994 and 2012 ranged between $96,848 and $166,296, according to figures provided by the city.

The city has been questioning the operations and maintenance bills since 2017.

Information from past bills revealed they included items that would not appear to be related to the water supply — such as the visitors center and public education activities.

According to the contract, the maintenance and operational charges are supposed to be limited to those involving flood control and water supply. However, some available receipts list charges for unrelated purposes, such as travel to a Cincinnati boat show, solar panel repairs, a washer and dryer, and a set of American flags.

The hundreds of questionable charges were for things like birdseed, bathroom fixtures, heating and cooling equipment at the visitors center, travel expenses, cedar chip bedding for duck boxes, maintenance of nature trails and parking lots, pedestrian bridges, environmental management, water quality testing, tree removal, and community outreach.

Another expense charged to the state/city, according to the suit, is for “expenses related to the purchase, transport, and cleaning of the Bobber the Water Safety Dog costume” — an expense which the Corps justifies as “a flood-risk management expense because Bobber’s job is to educate the public about the multiple purposes of Caesar Creek, which include flood risk management.”

The city has requested a line-item breakdown of the charges in the latest bill.

What it means for city

“ODNR is asking the federal court to find that the Corps has engaged in systemic and categorical overbilling,” Wilmington Safety and Service Director Brian Shidaker told the News Journal Friday. “ODNR’s filing of a motion for summary judgment is the next step in its litigation against the Army Corps of Engineers to correct the improper charges that the Corps has billed to ODNR and that ODNR has in turn billed to the City of Wilmington. Hundreds of these charges are absolutely unwarranted under the contracts involved. The taxpayers deserve better.”

Shidaker added, “ODNR’s overall assessment of these charges is in line with the city’s preliminary evaluation. It is the city’s hope that ODNR wins on this motion and continues to pursue damages against the Corps, which would result in a refund to the city and bills for only proper charges going forward. It’s an issue of fundamental fairness and holding government agencies to their word.”

Shidaker concluded by saying, “Mayor John Stanforth has been very clear as to what the city is going to do next: we are going to continue to monitor this lawsuit carefully and do everything we can to protect our taxpayers interests.”

How it all began

According to the city, a series of contracts involving the city, the ODNR, and the U.S. Army Corps of Engineers allows the city to remove water from the lake. The contracts require the city to pay a portion of the operations and maintenance costs attributable to the water supply.

Under an agreement reached in 1970, the ODNR pays the Corps of Engineers for maintaining and operating the reservoir, and ODNR bills the city for reimbursement.

In the court case, to which the city is not a party, a U.S. Department of Justice attorney recently took the deposition of Schaffer and has expressed interest in deposing Safety Service Director Brian Shidaker.

“Despite the city’s request for more information explaining the latest bill, nothing further has been provided by the Army Corps or the Ohio Department of Natural Resources. City officials will continue to seek this information and work to ensure that city funds are paying only appropriate charges,” Schaffer stated last month.

Many other expenses still lacked adequate explanation, including thousands of hours of “labor with no explanation of the work done, which employee was doing it, or how the work relates to operation and maintenance of the Caesar Creek Project,” the suit states.

Taking action

In 2019, Mayor Stanforth told council he received a call from then-U.S. Rep. Steve Stivers (OH-15th District) in regards to the ongoing issue with the ongoing billing issues.

“I just had the best news that I’ve gotten since I’ve been mayor,” said Stanforth then. “Steve Stivers has called me. So, we had finally have gotten somebody’s attention with authority on the way that Caesar Creek/Army Corps of Engineers has taken advantage of us.”

Stanforth quoted Stivers as saying, “They have screwed you over the last 50 years” and that Stivers will be serious in “holding their feet to the fire.”

The News Journal had reported that both Stivers and U.S. Senator Sherrod Brown (D-Ohio) had been “prodding” the Army Corps for answers and for action.

Stanforth also gave credit to Safety/Service Director Brian Shidaker for his work with this. “(Shidaker) was not taking no for an answer,” he said.

What it’s seeking

The 48-page lawsuit states, “The record here leaves no triable issue of fact on Ohio’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing” and refers to the Corps’ “ill-defined and arbitrary methodology that results in categorically billing Ohio for expenses that are not authorized by the Contract and fall outside the Court’s definition of ‘joint-use operation and maintenance costs of the Project.’ ”

It concludes by asking the court to “grant Ohio’s motion for summary judgment on liability and to find that Ohio is entitled to damages in an amount to be determined.”