Chattanooga area businessman Don Lepard has filed a whistle blower lawsuit "on behalf of the city of Chattanooga and the city's taxpayers" against EPB. The lawsuit was filed on July 3 in the Circuit Court of Hamilton County. The lawsuit has been "under seal" since July 3, and the confidentiality seal was lifted Friday by the court.
The lawsuit claims the EPB overcharged the city of Chattanooga for energy charges on its monthly billing for the municipal lighting system due to the bills reflecting energy charges for lights that did not exist for at least 20 years. The overcharges are said to be $5.9 million for a 20-year period. The filing also states that due to the "false claims" made by the EPB, "plaintiffs are entitled to a civil penalty of not less than $2,500 and not more than $10,000 for each false claim. Over a period of 20 years, defendant has presented false claims in monthly billings, representing at least 240 false claims."
The lawsuit could result in damages of more than $10 million, Mr. Lepard, who heads Global Green Lighting, said.
Harold DePriest, president and CEO of EPB, said "It's notable that the City of Chattanooga declined to participate in Don Lepard's lawsuit. Like the city, EPB remains committed to working together in good faith to find a fair solution for both citizens and our customers. Because this involves pending litigation, we can't comment on Lepard's claims."
Global Green Lighting officials said, "As is its right, the city of Chattanooga has declined to lead in prosecuting the case against the utility but pledged its support to Lepard and his legal team. Mr. Lepard filed the suit personally and not on behalf of his company."
City officials denied they have pledged support for the suit.
"The lawsuit is a simple, straight-forward way for citizens to hold public entities accountable for wasted tax dollars," said Mr. Lepard. "I simply want the issue of street light billing to be vetted once and for all by an independent court. I strongly believe the city and its taxpayers will benefit financially from a judge and jury gathering and hearing all the evidence."
A statement from Global Green Lighting says, "The discovery of the overcharges was made by Mr. Lepard when his company, Global Green Lighting, deployed for the first time ever a new lighting system with a wireless monitoring and control system containing a utility-grade residential meter for the city of Chattanooga. In order to measure the energy savings, it was necessary to create a detailed profile of the lights that came down off the poles as the new LED lights were installed.
"The misclassification discrepancy was discovered when Mr. Lepard attempted to reconcile the city's monthly billing to the lights that had actually been removed from the poles and benchmarked into a spreadsheet. Mr. Lepard was taking inventory of each light that was taken down. In the course of that inventory, Mr. Lepard discovered the information that led to the allegations of overcharging by EPB. In an effort to measure the performance of the new lighting technology, Mr. Lepard found that the EPB was billing the city for more costly lights while less costly lights were actually on the poles.
"For example, Mr. Lepard found that the EPB had billed the city for more than 6,000 mercury vapor lights each month for years although there is no documentation to suggest these antiquated, more expensive lights even exist in the municipal lighting system.
"Mr. Lepard made the EPB and the city aware of the overcharges. After months of trying to work with the EPB and the city to unravel the confusion that was effecting the city's ability to properly evaluate the performance of the new GGL lighting and control system, Mr. Lepard gladly accepted the offer made by the city council to have the Office of Internal Audit (OIA) evaluate the projected future operating costs of the existing lighting infrastructure owned by the EPB and the new lighting system that the city would own and pay GGL separately to maintain and operate as a third party vender.
"It was the OIA's April 25,·report that made public for the first time the concerns of overcharges. In September 2013, Mr. Lepard shared his findings with the EPB and the city. The EPB began reclassifying the lights on its billing in 2013 in significant numbers. There is no indication that the city was made aware at that time of EPB's reclassifying the lights on the city's bill.
"Since April, the EPB has released two audit reports that do not deny the overcharges but instead offer three different theories on how the utility underbilled the city in asserting that it is entitled to an offset of the energy overcharges. Mr. Lepard says none of the theories has merit."
"Even if the EPB's claimed underbillings are factually accurate, which is in dispute, we have not been able to identify a proper basis for the EPB to go back and retroactively amend the bills," said Mr. Lepard.
Click here to read the overview prepared by Mr. Lepard.
Click here to read the response from City Attorney Wade Hinton.