Edgerton Contractors Inc., which was on the losing end of a Wednesday appeals court decision, still could fight to recoup a $43,900 fee it paid Wauwatosa on a 2006 project.
The Oak Creek-based contractor was the general on a $16.9 million Milwaukee Metropolitan Sewerage District flood-control project in Wauwatosa. The contractor paid Wauwatosa $43,900 for erosion-control inspections during the 144-acre project and since 2008 has been trying to recover the money through lawsuits.
“Frankly, it occurred because they never contemplated a project that large under the ordinance,” said Richard Lewandowski, an attorney representing Edgerton Contractors.
Wauwatosa’s erosion-control permit law makes no mention of a fee for the inspections, and the fee the city charged Edgerton for the 2006 project is so high it violates state law, according to the contractor’s lawsuit.
In March, a Milwaukee County Circuit Court judge agreed and said the builder should recoup its money, plus interest and attorney fees.
But Wauwatosa’s appeal of that decision succeeded in convincing an appeals court that the city law allows the fee. However, according to the Wisconsin Court of Appeals, Edgerton can still sue Wauwatosa in circuit court over the size of the fee.
Wauwatosa’s fee was not excessive, said George Schimmel, an attorney representing Wauwatosa. The city performed more than 30 inspections on the MMSD project, he said.
“I think they were arguing the principle that this was just completely out of whack,” he said. “But the rules were established, and the rules were fairly applied.”
Lewandowski said Wednesday he had not yet talked to Edgerton Contractors about the decision and does not know if the company will return to circuit court to try to recover the fee.
“We’re still reviewing the decision,” he said, “and reviewing our alternatives.”
Representatives from Edgerton Contractors did not respond to a call for comment.
State law lets municipalities charge contractors to recover the cost of processing erosion-control permits and inspecting projects for compliance, but any charges beyond that are illegal, said Ed Huck, executive director of the Wisconsin Alliance of Cities Inc. The fees have been disputed by contractors in some cases, he said, but, generally, the fees are lower than the cost of providing the service because municipalities want to stay within the law.
“What (Edgerton) could find out is, ‘Not only are we charging the proper fee, we are undercharging it,’” Huck said.
Dave Wheaton, Wauwatosa chief building official, said he aims for city fees to represent 80 to 90 percent of the actual cost of performing inspections. Wauwatosa’s fee system is based on the standard rate structures set by the Building Inspectors Association Southeast Wisconsin Region, he said.
Wauwatosa in 2007 collected $6,296 through the fee system and $8,468 last year, according to city budgets.
Wheaton said the Edgerton Contractors complaint is the first such dispute he has experienced in his 30 years at the city.
“It’s a flat rate,” he said. “You pay X amount of dollars.”
Lewandowski said the city in 2008 changed its law to add a $5,000 maximum charge per project because the fee paid by Edgerton Contractors was so high.
“In part,” he said, “this illustrated the need to have an upper cap and an upper limit.”