Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Council approves $300,000 appropriation from Water & Sewer retained earnings to settle litigation after heated debate
Summary
The Malden City Council voted 8–2 to appropriate $300,000 from the Water & Sewer enterprise retained earnings to fund a tentative settlement with TUS Construction; councilors raised questions about executive-session timing, use of enterprise funds, and whether the solicitor’s office had authority to negotiate without prior council appropriation.
The Malden City Council on Jan. 27 approved a $300,000 appropriation from the Water & Sewer enterprise fund’s retained earnings to resolve pending litigation with TUS Construction Inc., following a contentious floor debate over procedure and transparency.
City legal staff told councilors that during pretrial negotiations the parties reached a tentative settlement and the court entered an NSAI (not-signed-agreement-in) order giving the parties 30 days to finalize terms. Special counsel Mark Rumley said the court expects a final filing by Feb. 19 and that the parties had agreed on a payment schedule including an initial $300,000 payment to be appropriated by the council.
Councilors pressed several questions: whether the city solicitor’s office had authority to negotiate (and report) a tentative settlement before a council appropriation, whether Water & Sewer enterprise retained earnings were an appropriate funding source, and what would happen if the council declined to approve the appropriation.
City Controller Charles Renigan described the $300,000 as an appropriation from unallocated retained earnings in the Water & Sewer enterprise fund, not money currently committed to capital lead-pipe replacement or other projects. “The paper before the council tonight is to appropriate $300,000…from retained earnings from the water sewer enterprise fund,” Renigan said. He noted the enterprise fund retained-earnings balance at the previous fiscal year close and explained unspent funds carry forward.
City Solicitor Alicia McNeel told the council she had consulted and that it was her legal opinion the Water & Sewer retained earnings were the appropriate fund for this payment. “It is my legal opinion that this is where the funds would legally come from,” she said. Special counsel and city attorneys also warned that failure to complete the tentative deal could expose the city to further litigation costs and attorneys’ fees.
Several council members called for committee review; others said the timing imposed by the court’s 30-day window made immediate action necessary. After a motion to suspend the council’s referral rules carried, the council approved the appropriation on the floor by roll-call vote, recorded as 8–2 in favor.
Councilors who opposed or expressed reservations said the episode highlighted a need for clearer internal processes about when council approval is sought and how executive-session negotiations are reported to the council and public. The council also placed an Open Meeting Law complaint that had been filed about the emergency session on the agenda and referred it to the city solicitor’s office for investigation.
