20051457 Ver 1_FW H955 3.msg_20120521

Strickland, Bev
From: Reeder, Tom [tom.reeder @ncdenr.gov]
Sent: Monday, May 21, 2012 2:20 PM
To: Peele, Linwood; Ramsey, Dennis R
Subject: FW: H955
Can you give me the contact info for the Cape fear folks? Thanks.
roc
Tom Reeder
Director, NC Division of Water Resources
Phone: 919 - 707 -9027
email: tom.reeder @ncdenr.gov
E -mail correspondence to and from this address may be subject to the North Carolina Public Records Law and may be disclosed to
third parties.
From: Erin Wynia <ewynia @NCLM.ORG>
Date: Mon, 21 May 2012 10:17:04 -0400
To: Tom Reeder <tom.reeder @ncdenr.gov>
Subject: RE: H955
Shortly, I will be inviting you and the others involved in this issue to a discussion to try to work through the concerns
over liability that Dan articulates below and in other correspondence. I'd like to extend an invitation to the two systems
that are currently pursuing an agreement with DWR under HB 609. While I've made contact with Cleveland County
Water District, I cannot recall the name of the system down on the coast. Could you remind me of the system, and if you
know of a good contact to include on this discussion, would you mind giving me the person's contact information?
Thanks so much,
Erin
Erin L. Wynia
Legislative & Regulatory Issues Manager
NC League of Municipalities
215 North Dawson Street
191 011111
„I I11"
919.715.4126 office
919.961.6108
•

From: McLawhorn, Dan [ mailto : Dan. McLawhornCa)raleighnc.Qov]
Sent: Thursday, May 17, 2012 09:55
To: 'Reeder, Tom'; Smith, Robin
Cc: Fransen, Tom; McCormick, Tom; Leapley, Dottie; Kelli Kukura; Erin Wynia
Subject: RE: H955
Tom,
From the narrow perspective our office, we do not typically approve such hold harmless clauses to go into city
contracts. There are a number of reasons for that position. I think that many other city attorney offices take a
similar view of such clauses. For this situation, several questions come to mind. Since I have never engaged in
substantial representation for the city in defense of tort claims, I am not expert in these matters and have
asked our more versed attorneys to give me their advice.
1. Does the clause constitute a pledge of the credit of the city as that phrase is used in Article V, §4 of the
State Constitution? If so, then a vote of the people is required before the regional authority can enter
into the contract. It is unclear to me if a challenge to a contract without a vote of the people can be
raised by any citizen of the city, or only a more narrowly defined class of plaintiffs can bring the
challenge. Admittedly, the Constitutional clause reefers to a pledge of credit to guarantee the debts of
"an individual, association, or private corporation." The clause does not expressly forbid a pledge of
credit for the state, so it may not be applicable.
2. Who will represent and defend the State in these matters? If the State is not a party, then can the
regional authority assert the State Tort Claim Act as a remedy for injuries by State employees? Can the
regional authority assert the sovereign immunity of the State in defending claims asserted against
State officials? Can the AG defer representation and sent it to outside counsel who charge high rates
for representation? Who will control costs in the representation? Even insurance companies have that
capacity to reduce the ultimate amount awarded from their assets.
3. How is the regional authority able to control the conduct of State agency employees which give rise to
penalties and fines? The regional authority's liability extends to any awards against the State
irrespective of participation in or control of those actions by the regional authority.
4. The State does not always defend its employees if they have acted outside the course and scope of
their duties. This provision appears to make the regional authority liable for defense costs of those
lawsuits and for damages, etc awarded from the lawsuits irrespective of regional authority
participation in or control of those actions. It is sufficiently broad that it would potentially include
criminal acts and defense of those by agency employees, agents and assigns.
5. We strongly oppose accepting liability for persons over whom neither we nor you have control, i.e. the
agents and assigns of the state agency. The provision does not limit that liability to instances where the
state directed and controlled the actions of the agents and assigns.
6. The uncertainty about the scope of damages that may be awarded to downstream riparian owners for
impact on flow post the L &S Hydro v PTRWA case makes the breadth of potential damage claims
virtually unlimited. That factor alone should dissuade regional authorities from accepting a contract

provision which is made so potentially onerous by the uncertainty of state defenses and limits on
liability for the purposeful, and even potentially criminal, misconduct of the state agency and its agents
and assigns.
57.rali"AW.T.To . a:
Associate City Attorney
PO Box 590 Raleigh, NC 27602
(919) 831 -6560 [office] (919) 857 -4453 [fax]
Email dan.mclawhorn @raleighnc.gov
From: Reeder, Tom [mai Ito: tom. [e-mail]
Sent: Thursday, May 17, 2012 7:38 AM
To: McLawhorn, Dan; Smith, Robin
Cc: Fransen, Tom
Subject: Re: H955
Dan — We were asked to submit language by the GA (Env Review Commission) because they were concerned about potential
liability issues arising from the Dept being a co- applicant on the federal permit. I would be interested in hearing, from your
perspective as a potential customer (City of Raleigh), why you think this will undercut /kill participation in this program. For
the record, the Dept supports this program 100% and we (DWR) are happy to help anyone who requests our assistance under
this Bill in any way that we can. Thanks.
Tom Reeder
Director, NC Division of Water Resources
Phone: 919 - 707 -9027
email: tom.reeder @ncdenr.gov
E -mail correspondence to and from this address may be subject to the North Carolina Public Records Law and may be disclosed to
third parties.
From: Dan McLawhorn <Dan.McLawhorn @raleighnc.gov>
Date: Wed, 16 May 2012 17:35:25 -0400
To: Robin Smith <robin.w.smith @ncdenr.gov >, Tom Reeder <tom.reeder @ncdenr.gov>
Subject: H955
Did the Department ask for this bill? It has thepotential to undercut, if not kill, enrollment in a program
that I thought was well- received by the Department.

"E'mai| correspondence toand from this address may be subject to the North Carolina Public Records Law and may be
disclosed to third parties by an authorized City or Law Enforcement official."