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The cherry on top

Submitted by on 1, July 31, 2008 – 7:45 amNo Comment

So what would the Alameda Power & Telecom mess ($33 million in bonds due next year, $43 million in interfund transfers owed by the telecom side to the electric side) be without a lawsuit to top it off?

Vectren Communication Services, the Evansville, Ind.-based company that did the initial construction of Alameda’s telecom system, has made a federal case against the city, seeking $6.3 million plus interest they say the city owes them from when it bought out the rest of Vectren’s contract in 2002.

The money was supposed to come from telecom system profits; Vectren alleges that AP&T mismanaged the system badly enough that it didn’t make enough to pay them. The city was supposed to pay Vectren off by June 1, 2009, the suit alleges, by doing a whole list of things – like instituting rate hikes of 5 percent in 2006, 8.5 percent in 2007, 20 percent in 2008 and 10.4 percent in 2009. So far, they claim, the city has paid them less than $200,000.

The city is seeking to have the suit dismissed because they say Vectren failed to file a claim with the city first, as required by law. (The company’s attorney had sent letters to AP&T telling it to pay up, but the city says those don’t count.) And they say it’s too late for Vectren to backtrack and file that claim.

Vectren’s attorney, Rob Bunzel, said he had no comment on the suit. City Attorney Teresa Highsmith did not return a call seeking comment. The motion to dismiss the suit is slated to be heard on October 3.

And here’s an interesting aside: Vectren continues to list Alameda Power & Telecom as a reference on its website.

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