Hydropower Settlement Reveals $25M Retention Fund in Greensboro

Deliberations over a Piedmont Triad Regional Water Authority hydropower lawsuit settlement caused City Council to review the current $25 million risk retention fund for the city of Greensboro.

Council members expressed concern that residents might continue to sue the city even if the City approved the $1.2 million settlement.

“As long as there are lawyers on the face of the earth, we can’t do anything to protect ourselves,” said Tom Phillips, current Director of Piedmont Triad Water Authority for the City of Greensboro.

Council asked Phillips, a 22-year veteran for the Water Authority, to share his thoughts on whether or not the settlement was fair. “I wouldn’t say it’s fair, but it’s reasonable,” said Phillips

“It appears that a lot of dirty politics played out in this decision,” said Councilman Tony Wilkins. Wilkins then referred to reports that the judge in the case had ruled in favor of a company associated with Senator Kay Hagan’s husband after Senator Hagan had nominated the judge to a lifetime appointment.

“I could talk all night about the things that were wrong with that case,” said Phillips.

Despite the dirty politics the Water Authority had voted in agreement with the settlement almost unanimously.

Ultimately City Council decided that a settlement was in the best interest of the City and passed the item.

“If we vote against this then we are voting against our own interlocal government,” said Mayor Vaughan. “It’s not a great decision but it’s one that I feel we are bound to go with.”

Councilwoman Sharon Hightower then asked where the City would get the money for the settlement. Greensboro City Manager Jim Westmoreland explained that the City has a $25 million risk retention fund to cover liability claims.

This was news to most of City Council, including Mayor Nancy Vaughan. Greensboro City Attorney Tom Carruthers said that the City of Greensboro puts about $2 million into the fund each year.

“That’s a lot of money,” said Mayor Vaughan, who struggled with the reasoning behind maintaining such a large fund that rarely experiences a significant payout.

The fund covers four types of liabilities, including legal protection of City Council members.

Carruthers said that the litigation surrounding the 2006 Duke Lacrosse case had exhausted the City of Durham’s legal resources.

“It sounds like you have seen what other cities keep in their policies,” said Councilwoman Marikay Abuzaiter in defense of Westmoreland’s maintenance of the fund. “This is not just something that’s out of the blue and hasn’t been well vetted and researched.”

Council postponed a vote to continue paying into the resource fund until they could have time to review the fund’s balance history for the last 10 years.

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One thought on “Hydropower Settlement Reveals $25M Retention Fund in Greensboro

  1. Good risk management on the part of GSO. Will the funds to reimburse this loss be paid from the water enterprise fund and not the general fund?

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