A local water district could be in some legal trouble after a lawsuit was issued this week.

Assured Guaranty Corporation of New York City has filed a lawsuit in Dallas County District Court against the Xenia Rural Water District.  The action seeks to have a receiver appointed to increase water rates charged by the district.

Assured Guaranty is the insurer of revenue bonds issued by Xenia for an expansion project in 2006.

Xenia Board of Directors Chairman Walt Tomenga says they’re “very disappointed that Assured Guaranty has taken this unnecessary action.”  Tomenga says Xenia has made substantial progress on its financial problems during the last two years “including making full principal and interest payments in June”.

Tomenga adds that Xenia plans to strenuously defend the lawsuit and continue working to develop a debt workout plan that is acceptable to all of its creditors and customers.  They do not expect any change in the district’s current operations or rates as a result of the legal action.