Cecil County Commish Vote to Kill Artesian Sewage Plant Sale; Collapse of Deal to Cost Citizens over $10 Million in Plant Upgrades
The Cecil County Commissioners voted, 3-2, Tuesday to kill the long-stalled sale of four county-owned sewage treatment plants to the private Artesian Resources, a step that could ultimately cost county residents over $10 million to upgrade sewer facilities, instead of shifting that burden—and another $6 million in bond debts– to Artesian.
As The Cecil Times reported exclusively last Thursday, Artesian informed the county commissioners it wanted to terminate the 2008 contract for the sale of sewage –or wastewater—treatment facilities but would proceed with separate provisions for purchase of all county-owned water facilities. [SEE Cecil Times report here: http://ceciltimes.com/2011/09/artesian-seeks-to-kill-deal-to-buy-cecil-county-sewage-plants-due-to-commissioners-political-climate/ ]
While sources told Cecil Times the firm was fed up with the ‘political climate’ among the current commissioners’ board and an apparent majority seeking to kill the 2008 contract, the official letter terminating the sewage plant sale cited provisions of the contract governing the condition of the facilities. The county has only performed the most basic maintenance on the facilities during the three years that the sale was tied up in litigation and challenges instigated by the Appleton Regional Community Alliance (ARCA) that were ultimately rejected by the state’s highest court and the state Public Service Commission, which both approved the sale.
The vote on Tuesday came on an “emergency” resolution to terminate the wastewater sale contract by “mutual agreement” of the county and Artesian. Commissioner Diana Broomell (R-4), the leading opponent of the Artesian sale, was joined by Commissioners James Mullin (R-1) and Michael Dunn (R-3) in voting to terminate the contract. Commissioners Robert Hodge (R-5) and Tari Moore (R-2) voted no.
County Attorney Norman Wilson recommended the mutual agreement to terminate the wastewater accord because he had negotiated Monday night an accord with Artesian to agree to give up its franchise that had been awarded by the previous Board of Commissioners. There was some concern, he said, that Artesian could claim it still had rights to a franchise for extension of wastewater services in some areas of the county even if the firm did not buy the county sewage plants. That scenario, Wilson said, could “limit our options” in the future to possibly award a franchise to another firm or extend county services.
By casting the action as a “mutual agreement,” Wilson said, it would be a clean break and resolve possible roadblocks in the future. “I think they [Artesian] are committed to a unilateral termination…they could put the county into litigation again,” Wilson warned, if the commissioners did not go along with the negotiated ‘mutual consent’ termination deal.
Broomell, barely containing a smile, commented, “We’re actually addressing all the concerns we brought up before.” Broomell had tried to delay PSC action on the sale, enlisted the help of her former boss, Del. Michael Smigiel (R-36) to try to stall the PSC hearing, and she appeared before the PSC to speak against the Artesian sale. Those actions by Broomell were cited by Artesian in a letter earlier this summer asserting the county was in “breach” of the contract, a situation that could have exposed the county to a costly breach of contract lawsuit.
Artesian had informed the county that it needed quick action by the commissioners to respond to the termination letter because the publicly-traded Artesian Resources had a deadline to file information documents with the federal Securities and Exchange Commission.
“I think this is a sad day for Cecil County,” Hodge said He chastised fellow commissioners who “were trying to sabotage the deal” without proposing alternatives to bring needed utilities infrastructure to the county’s Route 40/I95 growth corridor. The Artesian deal, and its related franchise, would have allowed the private firm to construct, and incur the costs of, extended utility services to that area without taxpayer expenses.
Hodge noted the high costs—at least $203,000 in legal costs to defend the county against ARCA’s lawsuit—already incurred by taxpayers. “Now I see this effort has gone down the drain,” Hodge said, along with the prospect of new jobs and economic development opportunities in the growth corridor.
“I know certain members of the Board of Commissioners are chomping at the bit” to kill the Artesian wastewater sale, Hodge said, because “that is what they wanted all along.”
Broomell responded that the Commissioners would now “take control of where the infrastructure goes” and said “We need to take the bull by the horns and make it happen.” But she had no response when Hodge repeatedly asked what was her plan to bring infrastructure to the growth corridor to serve economic development goals.
Moore lamented that Tuesday’s worksession vote was “one of the most critical decisions” that the board would ever make. The county needs to create jobs, and “move forward, not move backward,” she said. She said she voted “no” on the termination because it was “not in the best interests of the county.”
Meanwhile, in an interview with Cecil Times, Scott Flanigan, the county’s Director of Public Works, outlined the costs that will be imposed on county citizens as a result of the termination of the wastewater facilities sale to Artesian.
The tally looks like this:
–The Highlands, in the northeast corner of the county: an aging “small package” treatment plant that is over 40 years old and needs replacement, costing $3.3 million. In addition, replacing an old pump station would cost another $500,000, for a total of $3.8 million.
–Meadowview—the newest county plant, put in service in 2005, with no immediate needs for improvements, but a candidate to receive flows from other plants since it is not in the Bay watershed so it helps the county meet ‘nutrient’ environmental limits.
–Cherry Hill—a newer plant, but a candidate for transfer of flow to Meadowview to obtain much-needed “nutrient” credits under new state and federal Bay cleanup mandates. To take advantage of those credits and “de-commission” Cherry Hill would cost $3 million.
–Harborview—an aging, small plant south of the Canal that needs to be replaced, at a cost of $3.3 million.
In addition, $6 million in bond debt would remain on the county’s books. If the Artesian sale had gone through, that debt would have been transferred to Artesian.
In all, the costs total $16.1 million, including the bond debt and $10.1 million in plant upgrades or revisions.