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Lee County Likely on the Hook for Sewer Project


Lee County paid nearly $50,000 last year to upgrade the sanitary sewer system in the unincorporated community of Argyle. The county was hopeful the money could be recouped through a lawsuit, but it doesn't appear that will be happening.
The sewer system is owned and operated by Regional Utility Service Systems (RUSS), an organization that helps rural communities in southeast Iowa secure federal funding for sewer projects. RUSS hired Warner Engineering in 2007 to design the Argyle project.

In Oct. 2013, RUSS filed a lawsuit in district court against Warner Engineering, claiming the company did not design the system to be large enough to handle the required usage. A couple months later, RUSS Executive Director Bruce Hudson approached the Lee County Board of Supervisors. He told the supervisors RUSS could not wait for the lawsuit to be resolved to upgrade the system.  

Hudson said a federal grant would cover 75% of the roughly $200,000 upgrade, leaving $50,000, which the supervisors agreed to provide. The final bill, according to the Lee County Auditor's Office, was a little more than $49,000.

The supervisors were hopeful that if RUSS won the lawsuit, there would be enough money to reimburse the county for its share of the upgrade. It turns out that that will not occur.

RUSS's attorney filed a motion to dismiss the lawsuit against Warner Engineering in January. Bruce Hudson said the two sides reached an agreement on a settlement, but he said the terms could not be disclosed.

Hudson did tell Tri States Public Radio in an email that the settlement only covered the attorney fees and the cost of the expert witnesses. He said there was not enough money to reimburse the county or even his own organization, following its lengthy investigation into the Argyle system.

The settlement appears to be news to Lee County and several of its elected leaders. Supervisors Gary Folluo and Rick Larkin both told Tri States Public Radio on Thursday that they were unaware of the settlement.

Folluo said he was puzzled as to why the county and the supervisors were not notified since the county is a paying member of RUSS. Larkin simply said, "No" when asked if the county was comfortable with the settlement only covering legal costs.

Jason Parrott is a former reporter at Tri States Public Radio.