Tuolumne sewer row brewing

Construction of a new sewer plant to serve the Tuolumne Band of Me-Wuk Indians’ planned business expansion is imperiled as Tuolumne City Sanitary District officials claim the district is owed $2.9 million.

The Me-Wuk tribe, whose hotel and golf course plans rely on the $6 million plant, count that data used by the district to bill the tribe for the expansion work was inaccurate and possibly fraudulent. The tribe has already paid $4.27 million, and says it’s been overcharged.
   

Work on the sewer plant, which will replace an old one, began in the spring.

A July 1 letter from a law firm representing the tribe accuses the district of breach of contract, fraud and misrepresentation.

The claim letter arrived at the district’s office via fax machine Wednesday afternoon, just as the sewer district’s board members were complaining that the tribe had issued no reason for its refusal to pay its $2.9 million tab.

A legal paper server later plopped down another copy on the table in front of board Chairman Kevin Burns while he was speaking.

The board, per advice from its attorney Pat Greenwell, refused to make copies of the letter available to the public, which drew complaints from people attending the board meeting. Greenwell said the letter fell under the legal claim exemption of the state’s Public Records Act.

The tribe’s Oregon lawyer, David Lundgren, provided a copy to The Union Democrat.

The letter, citing statements from two former district employees, claims at least one plant employee altered data to make it seem like the casino’s wastewater was more potent than it really is.

A plant manager, the letter claims, would allow samples of the casino’s water to settle, pour off the clear liquid at the top, mix the remaining sample, and send it to a lab for testing.

By using the allegedly altered samples, the district was able to charge the casino more, according to the letter.

Wednesday’s letter also claims the district manipulated data to make it seem as if the casino was using more water than it truly was.

Aformer district employee claims data he entered into a water flow database for the casino was regularly altered, according to the letter.

The board didn’t address the claims Wednesday due to their legal nature. They did, however, criticize the tribe’s refusal to pay.

If the tribe doesn’t pay the $2.9 million plus interest, it’s not paying its fair share for the new plant, according to the district’s engineer Harold Welborn, who developed the casino’s billing formula.

The casino’s sewer use, per Welborn’s calculation, is equivalent to 1,250 homes. All of Tuolumne, meanwhile, uses the equivalent of just 850 homes.

Welborn explained that just after Black Oak Casino was completed, the district’s calculations showed that the facility’s sewer usage was equivalent to 853 homes. When multiplied by the single-home connection fee (at that time $5,000) the casino owed the district $4.27 million, he said.
 

The tribe paid, and the two parties agreed the casino would be monitored for 15 months to determine if more connection fees were required, according to Welborn.

Welborn last year found the casino was actually using the equivalent of 1,250 homes. By then, the sewer hookup fee for homes had grown to $7,200, bringing the remaining balance to $2.9 million.

“They’ve used more capacity than they’ve paid for,” Welborn said.

Doug Benton, owner of Sierra Mountain Construction Inc., which is working on the sewer project, expressed concern Wednesday about the district running out of money and not being able to pay for his work.

He said the tribe wasn’t giving the board “the respect it deserves” by coming to meetings to inform board members of its issues with the additional fees. Benton said if he and his crew are forced to postpone the job due to non-payment, the project will end up costing the district’s taxpayers more money due to mobilization costs.

Welborn said he has been talking to banks to try to secure financing for the remainder of the project, but, due to the frozen credit markets, has had no luck. A broker could likely secure a loan, he noted, but for a fee of $20,000.

Board members scoffed at the idea.

Though the sewer plant isn’t expected to be completed for three months, district officials reported they have only enough money in their construction fund to last until the end of July.