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Niles Questions Glenview Motives in Water Dispute

Glenview acted fraudulently in water dispute, Niles says,
as it seeks more than $5.84 million in payments and penalties

April 12, 2012 – The Village of Niles today said that the Village of Glenview now owes Niles more than $4 million in unpaid water bills and is asking for $1.84 million in punitive damages from Glenview for fraudulently misrepresenting the reasons it refuses to pay the bills.

Niles charged that Glenview has failed to honor the terms of a longstanding water agreement between the villages and is intentionally misrepresenting the issue in dispute. Glenview purchased North Suburban Utility Co. in 1997 for $6.95 million and renamed it North Maine Utilities.

Niles made the allegations in a recently amended lawsuit originally filed last June. The suit asks Glenview to pay water bills of $3,686,803 plus interest of $336,630 and punitive damages of $1,843,401.

Niles purchases Lake Michigan water from the City of Chicago and in turn sells it to Glenview for distribution by North Maine under a 30-year water supply agreement extending to 2020. Niles said Glenview has held back all water payments since last April by falsely claiming all water charges are in dispute.

“We are acting to protect the interests of our Niles citizens and our only goal is to have Glenview honor the terms of our agreement,” said Niles Village Manager George Van Geem. “Niles has been providing water to Glenview without interruption or controversy since 1990 and it remains our hope that we can resolve this matter and move on as good neighbors. This dispute arose only after Niles would not agree to Glenview’s request to renegotiate our water agreement. It is regretful that Glenview has resorted to misrepresentations in responding to our claims.”

Niles said the agreement provides that Glenview shall pay Niles all undisputed amounts and place any disputed amounts in an interest-earning escrow account chosen by Niles. Instead, Glenview has disputed every dollar and has engaged in delays slowing the progress of the lawsuit, Niles said.

Niles, with its approximately 30,000 residents, faces a loss of approximately $350,000 each month in monthly receipts from Glenview.

Niles indicated the dispute began when Glenview met with Niles in early 2011 and asked it to reduce the water rate it charges to Glenview. When no agreement could be reached, Glenview sent a May 23, 2011 letter to Niles Mayor Robert M. Callero accusing Niles of overcharging for water and refusing to pay its bills.

At the heart of the dispute, Niles said, is a 19 percent discount or credit Niles offered to 74 Niles residential water customers for 15 and a half months between April 2010 and July 2011. The residents received sewer service from North Maine and paid North Maine sewer service charges. The agreement between Niles and Glenview provides that the water rate Niles charges Glenview shall be the lowest rate to any user in Niles. Niles said the water rate charged these customers was the same as that charged to its more than 8,700 other residential water customers. Niles does not include a sewer charge on its water bills.

To correct the extra sewer charge, the Niles Board passed an ordinance providing these customers with a 19 percent discount because they believed the 74 customers were paying more for sewer service than they paid to receive water and the ordinance was a means to correct a wrong.

In its suit, Niles said Glenview knew the dispute was over only the 19 percent discount and said Glenview said so in a June 22, 2011 letter from Glenview Village Manager Todd Hileman to Niles Mayor Robert M. Callero. In the letter, Hileman said that “in the interest of working with Niles to reach an amicable resolution, NMU (North Maine Utilities) is willing to pay a portion of the outstanding invoices; specifically, NMU will disburse eighty-one percent (81%) of the invoice amounts to Niles, retaining the balance in escrow….” In doing so, Glenview acknowledged that it was disputing only 19 percent of the monthly water bills, Niles said.

Niles alleged in its suit that Glenview was intentionally and fraudulently misrepresenting the disputed issue in order to cause Niles to cancel the water agreement, enabling Glenview to purchase water from the Village of Wilmette, a less expensive source, or alternatively to force Niles into lowering its water rate charge.

Niles is continuing to provide water to North Maine. The water is distributed to approximately 44,000 customers in unincorporated Maine Township.

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