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Failed sewer authority’s debt results in litigation

The reasons the supervisors went behind closed doors with legal counsel following completion of the public deliberations of May 10 were another mystery until the public learned a creditor of the failed Montross-Westmoreland Sewer Authority has gone to court in an effort to collect the fees that consultant purports he is owed.
It will be two years this Thursday since the Westmoreland supervisors, the Sewer Authority and Montross Town Council convened the joint session that authorized the county government to acquire the failed authority’s assets and public debt obligations.
On April 23, 2010, Waste Water Management Inc. of Fairfax filed papers in Westmoreland Circuit Court asking the court to compel the failed authority, Westmoreland County, Montross Mayor David O’Dell, Montross Town Manager Brenda Reamy, Montross Council Councilman Joseph King, Authority member Bonnie Chandler and Westmoreland Supervisors Darryl Fisher and Russell Culver to pay Waste Water Management the $50,000 it is owed for that firm’s design services and another $350,000 in damages associated with failure to meet the outstanding debt obligation.

According to the complaint, the defendants “maliciously misrepresented material facts” when they engaged Waste Water Management at a time when the money was not available to pay for the contracted services.
The April 23, 2010, court papers state additionally that Waste Water Management later learned that the authority had been insolvent for a number of years prior to December 2007, had not paid its obligations as they came due in the ordinary course for some years prior to engaging the consulting firm to provide design services and was in default of obligations to others approximating $3.2 million at the time it engaged Waste Water Management.
The papers relate that in December 2007 the Montross Town Manager asked the design consult-ants to begin their work and a written contract was approved in January 2008. The contracted services were close to completion three months later, when Waste Water Management asserts the Authority terminated the services agreement without an explanation.
The April 23, 2010, filing purports that Waste Water Management learned after the Authority’s April 25, 2008, termination of its services that “at the time [the authority] agreed to pay for de-sign services from [Waste Water Management], [the authority] did not have the funds to pay [the design consultants] or to complete the scope of work [Waste Water Management] was engaged to design.”
The court papers reference award of a Virginia Department of Environmental Quality grant associated with development of that agency’s mandated wastewater treatment plant upgrades and Waste Water Management’s purported willingness to work with the agency’s engineers as noted in the exhibit contract.
Exhibits include six payment invoices sent to the authority between February and June 2008 and a June 10, 2008, letter from Waste Water Management’s collection firm advising the Montross mayor of the authority’s outstanding debt. Nearly two years have passed with no response, the court paperwork asserts.
By the early 1990s Montross was actively contemplating replacing a small, outdated wastewater treatment plant. In 1995 Westmoreland County adopted a countywide sewer master plan that included a service area immediately east of Montross, where an industrial park was planned.
The county’s high school, courts and offices were already situated inside the town’s incorporated user and the county’s public facilities utilized the largest portion of the old plant’s capacity.
Montross Town Council agreed to partner with the county government and construct a larger treatment facility whose construction and operations would be administered by the entity known as Montross-Westmoreland Sewer Authority.
Collection lines were installed all the way to the county’s middle school. When new development did not occur as quickly as had been initially supposed, incoming revenues failed to support the authority’s debt service obligations to the federal agency that had financed the project.
When Westmoreland County assumed ownership of the system and its debt, an agreement had been reached with the federal creditors and all but $1 million of the authority’s debt obligation was excused. The paperwork that was ratified on May 20, 2008, included no provision for paying Waste Water Management.
Parties named in the suit will be expected to respond with joint or separate filings and hearing dates will be established. The filings will be available for the public to review in the office of the Westmoreland Circuit Court.

Betsy Ficklin

 

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