Garbage in, garbage out ... for $700,000

Submitted by Suanne Z. Thamm

Reporter - News Analyst

The City of Fernandina Beach and Florida Public Utilities (FPU) have reached an uneasy agreement to avoid protracted litigation over removal of an abandoned city household waste dumpsite dating to the 1970’s uncovered during FPU construction on land purchased from the city.  The estimated cost for cleaning up the site is $700,000 on the 8-acre parcel of land located at the municipal airport FPU purchased from the city for $730,000 in 2012.  The size of the former dumpsite has been estimated but cannot be determined with accuracy until work begins.

Attorney James Middleton looks on as FPU's Mark Cutshaw responds to FBCC concerns.

The agreement, worked out between City Manager Joe Gerrity and FPU Manager Mark Cutshaw, was presented to the Fernandina Beach City Commission (FBCC) as Resolution 2013-89 at a special meeting on June 24, 2013.  The FBCC passed the resolution on a 4-1 vote, with Commissioner Ed Boner dissenting.

FPU has contended that while the current elected and appointed city officials did not know about this site, there was information available in public records clearly indicating that this site had been used as a city dumpsite.  The City has maintained that FPU and its agents had ample time to exercise due diligence in testing the land prior to purchase and claims that therefore the City is not liable for remediation of the landfill site under Florida law.

Commissioner Gass to FPU: "You didn't do the heavy lifting."

Both FPU's Attorney James Middleton and City Attorney Tammi Bach agreed that the proposed agreement between the parties was a way to move forward, not to assess blame, which could only come about through protracted and costly litigation.

This argument did not sit well with all the commissioners.  Commissioner Ed Boner, who has a background in real estate, appeared to be unhappy with FPU’s failure to follow through with more in depth testing, since their agent, Ron Flick, had encountered similar conditions on a neighboring land parcel.  Commissioner Pat Gass said that FPU did no “heavy lifting” in checking out the site, but instead “followed the letter of the law.”  She said that FPU has a corner on the energy marked locally and did not go above and beyond what they had to do, “so they will penalize the people.”

Ron Flick, Nick Gillette and Andy Curtin (l-r) listen to discussion.

FPU’s attorney James Middleton asked, “Was it incumbent on the owner to do more research on a heavily wooded area that was undisturbed for 40 years?”  Middleton claimed that as far back as 1995 the city knew about this dumpsite.  He cited a 2000 letter from former city public works director Jim B. Higginbotham to Steve Stubbs of First Coast Moving and Storage, claiming that it would cost the city too much to clean up the landfill and recommending that the land be left as it is.  While the public record indicates that FPU’s general contractor, Ron Flick, was copied on the letter, Flick maintains that he never received the copy and never had a conversation with Higginbotham over the matter.  Flick also maintained that he had identified as many as 12 potential sites for the FPU building. Upon settling on the current site, Middleton added that FPU paid the city more than the appraised value for the property.

Commissioner Filkoff returns discussion to remediation.

Commissioner Arlene Filkoff tried to refocus the discussion on what actions FPU proposed to remediate the landfill.  Flick indicated that Gillette and Associates, Inc. would oversee the work done by Flick’s subcontractors to excavate the area to 10-12 feet, screen the excavated material to save as much soil as possible, and haul the waste to a site in Camden County, GA.  The site also needs to be de-watered, and the ground water will be tested to insure no contamination.

Flick assured the FBCC that there would be full and complete documentation produced to prove that the remediation has been done properly and in accordance with applicable law.  He also informed commissioners that he would not receive funds under this agreement.

Cutshaw said that the $700,000 figure represents costs to remove the material and clean the site only.  It does not include consultant or legal fees.  Both FPU and the City reasonably believe that the waste contained on this site is limited to Class 1, or household, waste.  Both parties have reserved their rights to revisit the issue should that not prove to be the case.

Under the agreement the city has also agreed to provide up to 6,000 cubic feet of clean fill for the site and relieve FPU from the Street Lights payment commitment to the city in the amount of $75,000 for the current fiscal year and $25,000 in the next fiscal year.

Commissioner Ed Boner asks why FPU did not conduct more investigation on land before purchase.

As part of the agreement, the city has also agreed to changes in FPU’s franchise agreement and the electrical code.  These amendments help offset FPU’s remediation costs.  These items were approved on First Reading on a 4-1 vote.  Commissioner Ed Boner again dissented, claiming that he did not have sufficient information to vote to approve.

The proposed ordinances provide in part for:

• Repeal of sections 11, 15, 18 and 21 of the city’s existing franchise Agreement with FPU (Ordinance2013-13).  Andy Curtin, member of the public, rose to question these modifications.  Mark Cutshaw replied that concerns regarding rate increases were now addressed by the Public Service Commission, and that there has never been a penalty assessed against FPU for non-performance.  Cutshaw also stressed the need for confidentiality in negotiating wholesale electric supplier contracts, meaning that they could not make the city privy to such discussions.   Vice Mayor Charlie Corbett expressed his opinion that the proposed changes were not detrimental to the city’s interests because of the Public Service Commission oversight.  Also, he reminded commissioners, that with respect to removing the right of first refusal for purchase, the city retained the right of condemnation.  Cutshaw stated that FPU is not looking to sell at this time.
• Extension of the natural gas franchise by one year to 2043 (Ordinance 2013-14).
• Amending the electrical code to clearly state that costs for customer- requested underground utility connections will be charged to the customer and done in compliance with all national, state and local codes (Ordinance 2013-15).

Mayor Pelican reassures Commissioner Boner that concerns may be addressed at Second Reading.

Mayor Sarah Pelican reminded commissioners that there was still time to do their homework on the ordinances before second reading on July 16, 2013.  She also expressed her expectation that the FBCC will hear from more citizens at that meeting.

Since passage of the ordinances is part of the agreement with FPU, it would appear that while the ordinances may be modified before final passage, they must be passed if litigation is to be avoided.

Editor's Note:  Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city.  We are grateful for Suanne's many contributions to the Fernandina Observer.

June 25, 2013 1:18 p.m.