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ii me w oA pays tnis contractor, it’s possible that the Environmental Protection Agency, which supplied construction money for the Sperryville sewer system, may withhold grant funds, Mr. Dennis said. Then user rates for the sewer system would have to be increased to make up the loss, and a disgruntled customer could bring suit, he said.
“There’s uncertainty over howT our sludge will be handled," Mr. Dennis continued, reporting that the WSA is now considering a contract with a private hauler “who would presumably have permission to spread the stuff—but not in Rappahannock (w hich has a moratorium on land application of sludge). It would have to be in another county. . .People sue all the time over landfills. It’s conceivable that someone could be sued for spreading Rappahannock County’s sludge,” he said, adding that the WSA may incur liability, should that happen.
Public officials liability coverage probably will not be available from an independent insurance company until October or November, Mr. Baumgardner said.
According to the state’s Division of Risk Management, a “pool” to provide public officials liability coverage is now being organized, added Mr. McCarthy. “But it won’t be in operation for at least 60 days.”
“I‘m totally confused here. Do we have a problem or not?” asked WSA chairman Martin Woodard.
“We don’t know,” Mr. Baumgardner replied, repeating that the board’s insurance consultant sees no problem in the WSA’s lack of public officials liability coverage.
“Even though the risk is very little, is it fair to put the burden of the whole thing on the few people who are hooked up to the system in Sperryville?” asked Mr. Dennis. He noted that the WSA, if sued, does have the pow'er to raise user rates to bring in revenue to cover defense costs and would probably exercise that option in the absence of liability coverage.
Mr. Woodard asked the supervisors for their reaction, adding that indemnity—even if only for defense costs—“would make the WSA members a little more comfortable in our role as public officials.”
“This board is in the same position you all are in,” said chairman Hubert Gilkey. “We don’t know if you’re covered or not.” If the WSA is not included in the county’s public officials liability policy, Mr. Gilkey said he saw' no problem in indemnifying the Authority against the cost of defending a suit. “But I was under the impression that you all are covered—that only the Welfare Department is excluded.”
Mr. McCarthy pointed out that Commonwealth’s Attorney Peter Luke, legal advisor to the board, advised that the supervisors couldn’t, by law, pay a judgement levied against the Authority, that they can only indemnify the Authority against defense costs.
Supervisor Newbill Miller reminded his fellow board members of legal notice they’d received, announcing that the county’s public officals liability policy had been placed with a Chicago company. That leaves Rappahannock with no protection under Virginia law against default by the insurer due to insolvency, he noted. Should the Chicago company go bankrupt, the county may have to pay any claim lodged and upheld against it, Mr. Miller said.
“The bottom line is that any in
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