REVISIONIST HISTORY:
How Town Changed Its Story on Sewer Charges
New Town sewer plant was designed to double wastewater capacity, but when developers of Bay Creek refused to contribute to the cost, the capacity — but not the expense — was halved. (Wave photo)
By DORIE SOUTHERN
Cape Charles Wave
September 30, 2013
The official Cape Charles Gazette printed a September 17 statement on sewer charges by Assistant Town Manager Bob Panek contradicting earlier Town policy. Panek wrote, “. . . there has been much public commentary asserting that the reason for [the sewer charge] increase is because the developer of Bay Creek Resort & Club did not pay the Town for their share of the cost of building the new plant as required by the Annexation Agreement. This is not accurate.”
He continued: “The agreement requires the developer to pay the cost of expansion to accommodate the additional treatment demands of the annexed property beyond the limits of the Town’s current permitted capacities. The capacity of our new plant is the same as our old plant, 250,000 gallons per day.”
Therefore, Panek concluded, “The requirement for the developer to pay for a share of expansion was not triggered.” (click here to read Panek’s complete “Wastewater Treatment” statement).
Panek now contends that Bay Creek developers are not required to pay a penny of the new $19 million wastewater plant, because it is the same size as the old plant. But earlier official correspondence by Panek obtained by the Wave reveals a different story.
Key to Panek’s statement is the word “triggered,” as in “The requirement . . . to pay . . . was not triggered.” But Panek earlier had insisted just the opposite. Following a December 1, 2008, closed meeting between Town officials and Bay Creek developer Richard “Dickie” Foster, Panek sent an email to Town Council contending that “Clearly, there is no firm ‘trigger’ of ‘once the plant reaches design capacity’ as maintained by Bay Creek.”
Panek argued in the 2008 memo that “we must expend effort and resources sufficiently in advance of when the new plant must be operational.” Furthermore, he wrote Town Council, sewer expansion plans were based on Bay Creek’s own growth projections “personally approved by Mr. Foster.”
CONTINUED FROM FIRST PAGE
Panek also accused Bay Creek of misstating the Annexation Agreement by saying: “The Annexation Agreement requires Bay Creek, as assigns to Brown & Root, to pay the cost of expanding the plant once the plant reaches design capacity.”
“That is NOT how the Annexation Agreement is written,” Panek informed Town Council, and then provided the “direct quote”: Brown & Root agrees to pay the cost of the physical expansion of the Town’s sewer and water treatment systems i.e. collection, distribution and treatment, to accommodate the additional treatment demands of the Brown & Root Property beyond the limits of the Town’s current permitted capacities (emphasis added).”
“Clearly,” Panek wrote, “there is no firm ‘trigger’ of ‘once the plant reaches design capacity’ as maintained by Bay Creek.”
Panek went on: “We have consistently stated that we must expend effort and resources sufficiently in advance of when the new plant must be operational.”
In other words, Panek maintained that Bay Creek was responsible for a share of the costs of planning and constructing a new sewer plant even if the existing plant had not yet reached capacity (click here to read the December 2008 email).
Since 2006, the Town had labored to persuade Bay Creek to pay a share of the planned new wastewater treatment plant, and sent invoices to Bay Creek for design services. But after three years, the Town gave up without initiating litigation against Bay Creek as it had threatened to do. Instead, Town residents (including Bay Creek residents) are footing the bill for the new sewer plant.
Ironically, Panek’s current statement in the Gazette echoes what Bay Creek developer Dickie Foster had been maintaining all along. But a September 12, 2008, letter written by Panek from then-Town Manager Joe Vaccaro to Foster refutes Foster’s arguments point by point (click here to read the letter). Panek concluded: “. . . we are very disappointed that you have still neither accepted one of the alternative proposals offered by the Town nor provided your own meaningful proposal. Instead, you have simply criticized the Town’s efforts and continue to offer reasons to postpone any payment. Given this state of affairs, we appear to be heading towards litigation and perhaps downsizing the planned Wastewater Treatment Plant due to funding challenges.”
And indeed, the Town did “downsize” the sewer plant (although it easily can be doubled to the size it was designed for) — but no litigation occurred.
Pants on fire!
Stoic philosopher and Roman Emperor Marcus Aurelius summed it up, “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” I’m not sure Mr. Panek is trying to revise history so much as, due to the passage of time (almost 6 years), and the current legal opinions of our Town Attorney, that his perspective has changed. Is anyone’s perspective on events exactly the same now as it was in 2006 (well, mine are, but I’m deranged, so I don’t count).
Not sure what fully constitutes a trigger, yet it seems that good faith and the partnership between the development and the Town is being strained by Bay Creek’s refusal to step up and help the ordinary people of Capes Charles, who did act in good faith (by assuming the debt service) by building a robust plant that would meet all of Bay Creek’s needs.
Bay Creek is part of a multi-billion dollar enterprise, so it would appear that stepping up, acting like gentleman, and fulfilling the agreement that anyone with any common sense understands existed between the parties should not be a difficult task to accomplish.
Whether there turns out to be any legal obligation has yet to be determined (this is very murky territory, and may ultimately have to be resolved by litigation), but it seems that this a golden opportunity for the development to do the right thing and make a statement that it is indeed part the real Cape Charles and not just a segre(gated) community (sēgregāre, Latin ‘to part from the flock) that merely happens to share the 23310 zip code with homes in the historic district.
The Town has not changed the story. The Wave is misinterpreting the 2008 correspondence. The Town and Bay Creek were in disagreement over the timing of the obligation under the Annexation Agreement when we were designing a new 500K gpd plant. Bay Creek’s position was that the obligation did not exist until the 250K gpd capacity of the existing plant was exceeded. The Town’s position was that the lead time to design, engineer and build the new plant needed to be taken into account. In this regard, there is no firm trigger specified in the Annexation Agreement. The disagreement became moot when the size of the new plant was changed from 500K to 250K gpd, as the developer has an obligation to pay only to meet Bay Creek’s treatment demands beyond existing capacity. The Town would still expect the developer to commence payment in the future when the engineering process is started for capacity expansion to meet projected demand.
Your input is appreciated, but the Wave maintains that the linked memo and letter, when read in full, do not support your contention that “the disagreement became moot when the size of the new plant was changed from 500K to 250K gpd.” The Town appears to have lost its nerve and decided not to litigate to make Bay Creek fulfill its obligations under the Annexation Agreement, which were to participate financially in creating capacity and tertiary cleaning of wastewater. When Bay Creek refused to pay for any part of the plant designed for 500,000 gpd, residents of Cape Charles were left to pay for a plant that “will have a capacity of 250,000 gpd and will be capable of expansion to 500,000 gpd and beyond in the future as needed,” according to the Wastewater Project Preliminary Engineering Report about the Southern Node on the Northampton County Website. –EDITOR