CAPC will seek settlement in billing dispute

Friday, June 19, 2015

After a lengthy discussion, the City Advertising and Promotions Commission during its June 10 meeting took City Attorney Tim Weaver's advice and decided to settle with Epoch Online for $17,500 over a billing dispute involving work the company performed on the website last year.

"CAPC accepted an offer from the other side and is in the process of resolving it that way. CAPC is settling for $17,500. There won't be attorney's fees since it's a settlement," Weaver told the Citizen on Monday.

The dispute arose last summer when the CAPC entered into an oral agreement with Epoch to transfer the website from the hands of Rockfish, CAPC's previous website developer. Weaver told the Citizen the original agreement between CAPC and Epoch was for professional services, negating the need for the work to go out for bid.

"The amount we were caught off-guard with was at the conclusion of the final project when we basically entered into an agreement with them for $18,500 to move the website and ancillary projects. At that point we started seeing a dramatic increase in billing and we cut them off and exited our relationship," CAPC Executive Director Mike Maloney told commissioners in the meeting.

The dispute between the CAPC and Epoch hinged on the amount CAPC says it initially agreed to pay and the amount Epoch charged subsequent to that agreement. The project was delayed because Epoch said it needed the additional assistance of outside vendors that would have incurred more cost.

Finance Director Rick Bright told commissioners during Monday's meeting that the CAPC took over the project and completed it in-house but still incurred some costs.

Chairman Charles Ragsdell said he saw an email in which Epoch acknowledged "dropping the ball" on communications, indicating the delay was not because of Epoch's need to outsource the work.

Maloney reported that Epoch's attorneys issued a motion for a summary judgement earlier this month and the CAPC had a "period of time to respond." During that time, Epoch's attorneys proposed a settlement of $17,500.

According to Weaver, Epoch said it understood the CAPC is at a "disadvantage" because as a public entity commissioners cannot negotiate in private.

"This is not this guy's first lawsuit against a city. They've done this before. They know we are at a disadvantage because we kept paying them longer then we should have," he said.

CAPC's options were to settle or continue the lawsuit.

If a judge grants Epoch's motion for summary judgment, Weaver said, CAPC would have to pay $22,000 plus attorney's fees. If the lawsuit went to trial, the amount could be different, he said.

Commissioner Terry McClung was adamantly opposed to settling with Epoch for $17,500.

"I just don't like rolling over for these people," he said. "If our staff is right in what they are telling us; if they don't earn it, they don't earn it."

McClung moved to make Epoch an offer of $7,500 but no one moved to second the motion.

"We haven't had any time to digest it. I feel like I am under duress. That's why we can't get a second. None of us are ready to commit on something without being able to sleep on it," he said.

At one point, former Eureka Springs Mayor Beau Satori, who was at the meeting to give public comment on the state of Eureka's tourism economy, interrupted commissioners and said they should move for a summary judgment.

After an hour-long discussion about the commission's options, Ragsdell recused himself and commissioner Damon Henke stepped in so Ragsdell could make a motion to settle for $17,500. The motion was seconded and passed with everyone in agreement except McClung, who stood his ground and voted "no."

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