Baltimore County, utilities fighting over pole-removal costs

Daily Record, The (Baltimore), Feb 2, 2009 by Danny Jacobs

Baltimore County is attempting to save taxpayers about $500,000 annually by claiming utility companies must bear the expense of moving utility poles for public works projects -- and it's willing to go to trial to do it.

A settlement conference last week failed to resolve the county's lawsuit against Baltimore Gas & Electric Co. and Verizon Maryland Inc. over the expense, which topped $1.2 million between 2006 and 2008 and averaged close to $500,000 for the last two years. A non- jury trial has been scheduled for October.

"The case is simply about who pays for the cost of removing utility poles," said Ellen Kobler, a county spokeswoman who declined further comment on behalf of the county attorney's office because the lawsuit is pending.

Sandra Arnette, a Verizon spokeswoman, defended the company's charges.

"Verizon's dealings with Baltimore County have been fair and in accordance with the law," she wrote in an e-mail. "We hope to quickly resolve this issue with the county and reach an agreement that works for everyone."

A BGE spokeswoman struck a similar tone.

"If utilities have vested property rights where their equipment is located and are forced to move the equipment they must be reimbursed the relocation costs," Linda Foy wrote in an e-mail. "This is in accord with the law around the country; anytime vested property rights are taken there must be just compensation."

According to court documents, the county is relying on the common law as well as dicta in a 2004 Court of Appeals ruling which dealt with a dispute between a utility and a developer.

In that case, the top court held that the developer owed PEPCO for the cost of the move. In reaching that decision, it noted that "[a]t common law, public utilities were required to bear the cost of relocating equipment in a public right of way when the relocation was required by public necessity." It also noted that the common law has been abridged at times to require the government to pay, if the reason involves a proprietary function as opposed to a governmental one.

Paid with reservations

Whenever the county undertakes an infrastructure project, the Department of Public Works sends design plans to utility companies to determine if utilities, such as poles and underground lines, have to be moved, Kobler said. If so, the county and the companies reach a "cost-sharing arrangement on a case-by-case basis," she said.

"Sometimes their cost is nothing, sometimes our cost is nothing," she said.

Both BGE and Verizon have long-established policies for when the county pays for utility pole removal, according to the complaint filed last April.

The costs to the county are "ongoing and substantial," the complaint says; in 2007, for example, the county paid BGE more than $284,000 and Verizon more than $240,000 to remove utility poles.

The county continues to pay costs for pole removal because it does not want to hold up public works projects, according to the lawsuit.

Since March 2007, however, the county has been paying those costs "under reservation," according to its complaint. That month, County Attorney John E. Beverungen sent a letter to BGE officials stating the county would only pay for removal when BGE holds an easement on the land or when the county's request is for a proprietary function.

Chuck Thompson, general counsel and executive director of the International Municipal Lawyers Association in Bethesda, said utility pole removal disputes happen across the country but are typically related to right-of-way issues or aesthetic versus public safety concerns.

Arguments about governmental-versus-proprietary functions are generally related to liability questions, with governmental functions creating immunity, said Thompson, a former county attorney for Carroll and Montgomery counties.

Courts have regularly held that if a government is operating an activity that makes a profit -- be it a swimming pool or a landfill - - it is considered a proprietary function, Thompson said. Maryland courts historically have ruled that the operation of roadways is a proprietary function but the designing of roads is a governmental function, he said.

"It's kind of a crazy, patchwork set of rules," he said.