Minutes - Council - 10/02/2007 - Special

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City Administrator Ulrich asked what the possible scenario would be for suing CoIinexus Energy at this point and whether the City would need to spend a lot of money. City Attorney Goodrich stated that a summary judgment against us would be available. He stated that he feels that Connexus Energy will say that the City does not have damages until the City tries to collect the bills. He stated that the attorney who researched the litigation possibilities stated that the City should have had a contract with Connexus Energy to collect and not just to receive payment. Councilmember Strommen reiterated that these under billed accounts are not and have never been delinquent because they were never billed. Councilmember Dehen stated that he feels that the City should send out the bills to the businesses and start a breach of contract action against Connexus Energy, which will not be a great cost for the City to begin. City Attorney Goodrich cautioned that the City could begin this process, but Connexus Energy could bring a summary judgment against us. City Administrator Ulrich stated that another drawback to this approach is that if the City likes Connexus Energy handling our billing, this could spoil that set up. Mayor Gamec stated that he feels Councilmember Dehen's suggestion could go on a long time and cost the City quite a bit of money in attorney's fees. He stated that he feels the City should go to Connexus Energy and ask them to settle this once and for all. He stated that the City could ask for $65,000 and be done with it. Councilmember Look asked how Mayor Gamec came up with $65,000. City Attorney Goodrich stated that Connexus Energy has offered around $42,000 already. Councilmember Jeffrey stated that he feels that City Administrator Ulrich makes a good point about our relationship with Connexus Energy. He asked what the out clause on the contract is and asked, for example, if we make them mad, do they have to give us a certain time in which we can start out own billing or can they just quit and say they are done handling our billing. Councilmember Dehen read aloud from the contract and stated that either party can terminate the contract after a 30-day period, after identifying a failure. Councilmember Jeffrey asked if the City was ready to begin our own billing within 30 days. He asked how long it would take the City to be prepared to take on our own billing. Finance Officer Lund stated that it is a big process to get the required software into place. She stated that typically you run a parallel billing with the existing billing to make sure the totals are comparable for about 6 months. She stated that utility billing is a very complex billing process. City Council Special Meeting /October 2, 2007 Page 7 of 11