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Board committee questions indemnity language in tax-assessment vendor contract
Summary
Members of the finance committee pressed district counsel and staff about indemnification language in the assessment-evaluation contract, raising concerns about whether the vendor’s clause would leave the district solely responsible for legal costs if assessment appeals triggered litigation.
Members of the Mill Creek Township School District finance committee on Monday probed language in a proposed assessment-evaluation contract that would require the district to indemnify and defend the vendor in certain tax-assessment appeals.
Committee members said the paragraph gives the vendor broad protection from liability. One board member said the clause “gives them a complete out” and that the district should expect professionals it hires to share some responsibility for legal exposure. The committee also questioned the vendor’s hourly rate, which a participant said is $200 per hour for valuations produced for appeals.
District solicitor Attorney Sennott (district counsel) told the committee the contractual language has been used for years in the district’s assessment-appeal work and that the underlying legal risk is limited because courts have already upheld the assessment-appeal process the district follows. Sennott said the common-law cause of action the speaker described was litigated in prior cases and that, as long as the district follows the recognized process and thresholds, a new cause of action against the firm is unlikely.
Board members pushed back on that legal characterization and said the clause still creates an open-ended obligation for the district to pay defense costs if the vendor is named in litigation. One board member asked whether the district effectively would be paying to defend the vendor and said the clause is “stupid” if it purports to remove vendor accountability.
District staff said they would revisit the clause with the vendor and provide an update before the item proceeds to the full board. The committee moved the item forward to the board as part of the block of finance items, with the administration agreeing to seek clarification on the indemnity language.
No final board vote on the vendor contract occurred at the committee meeting; the discussion focused on risk allocation and whether the vendor would accept revised language.
