BIRMINGHAM, Ala. (WIAT) — The city of Birmingham has sued a major commercial air conditioning company for $25 million, claiming the company engaged in a “bait-and-switch scheme” that diverted taxpayer funds away from critical infrastructure needs and into their coffers.
The lawsuit, filed against Trane, Inc. and two of its employees in circuit court on Wednesday, claims that Trane told city officials that upgrading 119 city facilities — including City Hall, museums, libraries, and police and fire stations — would result in $102 million in energy and operational savings over 18 years. Those savings failed to materialize, the city claims.
“Trane engaged in nothing short of a bait-and-switch scheme that promised massive savings the company knew it could not deliver,” Birmingham Mayor Randall Woodfin said in a statement. “We entered into this energy performance contract in good faith based on promises from Trane. Unfortunately, Trane has violated that trust and the city now seeks full restitution from Trane for the citizens of Birmingham and the financial losses they have caused.”
In the lawsuit, the city accuses Trane of fraud, negligent representation, negligence, breach of implied warranty and good workmanship, and unjust enrichment. In addition to promised savings that never surfaced, the lawsuit claims that the company provided “piecemeal upgrades that fail to address facility needs and undercut savings from the project.”
For example, the lawsuit said that Trane guaranteed water savings “based on the replacement of flush valves and toilets in several buildings.” Trane’s “upgrades” reportedly created problems, though, the lawsuit claims, in situations where new low-flow toilets and flush valves are connected to old water pipes.
“In fact, at least one toilet at a public facility (Legion Field) exploded due to this issue,” the lawsuit stated.
The company also promised savings related to converting the city’s pool from chlorine to saltwater, the city claims.
“However, Trane fails to account for how the saltwater would impact the existing infrastructure of the pools and the additional cost of servicing the pools after the conversion,” the complaint stated.
That lack of foresight left the city on the hook for the costs of repairing corrosion and other damage to the pools, the lawsuit claims.
City facilities have also “experienced significant challenges with temperature control settings” after upgrades by the company, according to the suit.
The city must contact the company to adjust temperature settings in some facilities, the suit claims, leaving “city workers and guests suffering through unbearable temperature conditions.”
Trane’s “piecemeal upgrades,” the city said, have forced the city to cancel, postpone, and cut short events. On multiple occasions, it led to the closure of a city-run warming station, the suit claims.
“The City even had to shut down its well-known Boutwell Auditorium homeless warming station on some of the coldest days of the year because of Trane’s failure to provide and maintain working boilers in the building,” the suit stated.
The city’s lawsuit seeks to recover “more than $25 million in actual and consequential damages.” City lawyers may increase that amount “as the City continues to investigate” injuries caused by the project, their court filing said.
On Thursday morning, Trane representative Kelly Hydeck said that the company received notice of the suit yesterday and is “looking into the matter.”
“While we do not comment on litigation, we will continue to fulfill our obligations to the city of Birmingham under the terms of our agreements,” Hydeck said in a written statement.