Editor’s Note: Each year, the Times Record newsroom staff votes on the Top 10 local stories of the year. The city’s various lawsuits is the No. 10 story. Reports will appear through Dec. 31.
It’s been an eventful year for the city of Fort Smith’s legal team, filing appeals and going to trial in multiple lawsuits.
The River Valley Sports Complex is the longest-running and an emotional case for the city.
On Jan. 29, after more than a year of investigation into the construction of the complex, former state Sen. Jake Files (R-Fort Smith) pleaded guilty to wire fraud, money laundering and bank fraud. A day later, he submitted his resignation from the Senate to Gov. Asa Hutchinson.
Files was then sentenced in June for the fraudulent use of state General Improvement Funds related to the project and reported to El Reno, Oklahoma, in August to serve 18 months in federal prison.
According to a report by the Times Record, Morrison Shipley Engineers, hired by the city in 2017, recommended the demolition of the complex due to a lack of structural integrity and cost of finishing the project.
Morrison Shipley estimated the project was worth approximately $5.7 million, and the amount of work done was worth roughly $1.2 million, leaving $4.5 million of work to be done. The estimate didn’t include any fees that would be involved with the redesign, bidding and other construction services.
“While some existing construction elements would likely be modified or eliminated, we do believe the re-design would reduce construction costs, lower recurring operations costs, and provide a more versatile complex that would attract a wider range of end users,” the report states.
A little more than two weeks later, a jury ruled against the city of Fort Smith, saying it breached its contract with four subcontractors who worked on the incomplete complex. The verdict required the city to pay $200,100, bringing the cost of the unfinished project to $1.28 million. The Board of Directors originally approved $1.6 million to be spent on it.
Michael Jones, the attorney representing the city in the contractor's lawsuit, presented an update to the Board of Directors one month later saying a motion was filed requesting the city pay the plaintiffs’ attorney fees. The board voted one week later in 6-0 favor of appealing the verdict, despite Jones telling the directors there was a 50-50 chance of the city winning the appeal.
“I’m very disappointed that two people in this city, that represented our city, and still does, (did) what they did to us,” Vice Mayor and At-large Director Kevin Settle said at a study session in October. “After they asked us for the money to do this project, they left us with a pile of crap.”
The city is being sued by Jennifer Merriott for the cost of what it allegedly cost the Department of Sanitation to run recycling trucks despite dropping all refuse at the landfill from October 2014 to May 2017.
According to an email sent to Colby Roe of Daily and Woods, the city’s legal counsel, Merriott is demanding $1.15 million to be paid back to the citizens who paid for services during that time.
A report from LeRoy Duell of Keen and Co. CPAs, provided by Merriott’s attorneys, alleges it cost the city $148,000 in capital equipment and containers. It also suggests the city spent $935,400 in labor and $192,000 to operate the trucks.
The report alleges it cost $1.25 million for all residential recycling, and since about 92 percent of all materials were taken to the landfill, rather than recycled, the city should pay for 92 percent of the costs.
Roe said in October the number presented will likely be less than the $571,000 presented by the city, which is the cost of recycling operations ($17,900) multiplied by 32 months.
The Board of Directors refused at the end of November to accept the settlement offer.
“I have no interest in the settlement offer,” Ward 3 Director Mike Lorenz said. “Just a reminder, there’s a contractual agreement for the city of Fort Smith to provide sanitation services to the residents, which is what they’re paying for. We have fulfilled that contract by picking up the refuse from the houses, regardless of what truck it was in or where it went afterwards. We fulfilled our obligation to our citizens by picking up the trash every week.”
The city plans on fighting the lawsuit at a trial to be set at a later date.
Fort Smith appealed a civil lawsuit alleging it violated the Freedom of Information Act by holding what were supposed to be informal meetings via emails.
Sebastian County Circuit Judge Michael Fitzhugh said using emails to discuss Police Chief Nathaniel Clark’s request to amend the rules of the Civil Service Commission to allow the hiring or appointment of officers to include outside applicants was a violation of FOIA.
City Attorney Jerry Canfield filed an appeal in June to Fitzhugh’s summary judgment, but the Arkansas Supreme Court rejected its request to hear oral arguments, which are typically reserved for more complicated cases.
All materials have been submitted to the court of appeals, and the case is waiting to be reviewed.
“I’m confident that (plaintiff) Bruce Wade will win the appeal and the court will follow 50 years of precedent and rules if public business is likely going to go before the board it can’t be discussed in private email chains,” said Joey McCutchen, Wade’s representation.
Finally, a jury trial has been scheduled for July 2019 in the libel and defamation lawsuit brought against the city by its former sanitation director.
Mark Schlievert began working for the department in April 2016 and was fired 13 months later in May 2017. His dismissal came about two weeks after local media reported that the city’s recyclable materials had been disposed of at the landfill since October 2014.
Records indicate, however, Geffken and Deputy City Administrator Jeff Dingman knew of the issue for several months as Schlievert was tasked with finding a new recycling provider.
The Whistleblower lawsuit and defamation lawsuit will be tried separately at the request of Doug Carson with Daily & Woods.
“The Whistleblower claims are related to his job performance issues and what he alleges he did ‘blow the whistle’ on what he perceived to be issues in the Sanitation Department,” Carson said. “The defamation case related to comments that Carl Geffken, city administrator, allegedly made to the board of directors and in our view those are two separate and distinct issues.”
Schlievert’s attorney Brad Hull disagreed, but Sebastian County Circuit Judge James Cox said he could try the equitable issues and submit any remaining legal issues to a jury, otherwise they would have two trials.
Both attorneys have agreed to these terms.