litigation

Staff Writer

The City of Union will get back just over one-fourth of the costs it incurred as part of a group of utilities negotiating a $10 million settlement with the U.S. Environmental Protection Agency.

Union City Council voted unanimously Tuesday not to participate in any further litigation regarding the Carolina Transformer Superfund Site. In a related matter, council also voted unanimously to accept a settlement from Continental Insurance Co. to pay part of the city's cost in settling a claim brought by the EPA against the city and other utilities that used the Carolina Transformer site.

From 1959 to 1986, the site, located in Fayetteville, N.C., was used for the storage, repair, maintenance, uprating and scrapping of electrical distribution equipment of a number of utilities in the southeast. City attorney Billy Whitney said this included 130 transformers the city sent to the site between July 1972 and April 1985.

In 1989, leaking capacitors were found at the site and testing revealed both the soil and ground water had been contaminated with PCBs. The EPA removed the contaminated soil, demolished the buildings on the site and conducted remediation at a cost of $32 million.

Whitney said that in January 2006 the EPA notified Union that it was a Potential Responsible Party for contributing to the PCB contamination at the site. The city then joined a defense group made up of other utilities which has settled the claim brought by the EPA for $10 million.

Union's share of the settlement totaled $85,480.99; legal fees paid to the outside counsel of McAngus Goudelock and Courie LLC amounted to $111,117.10; legal fees to Whitney were $6,907.50; the fee to join the defense group was $15,000; and there was a cash invoice expense of $5,000 for a total cost of $218,505.59.

Whitney said the city actually overpaid and has already been reimbursed $32,280.08 by the defense group. He said the city will receive another $27,933.83 from the Continental Insurance Co., which insured the city from 1972-1976. Continental has agreed to pay the city 15 percent of its legal fees, PRP membership fee and settlement costs.

Heating assistance

In other business, council voted unanimously to allocate $6,000 in Community Change funds to supplement the FEMA funds the Salvation Army uses for its Emergency Food and Shelter Program. The money will be used to help qualified elderly and low-income customers with heating bills. In the event the $6,000 is exhausted prior to the end of winter, a further $20,000 in Utility Funds Retained Earnings is budgeted as a supplement for this use as well.

Water and sewer improvements

Council also voted unanimously to award the bid for a series of water and sewer improvements to Tri-County Utilities LLC for $81,677.

The improvements include installation of water and sewer systems on the site of the Quick Jobs Center on U.S. 176 as well as improvements on Pine Street, Spring Street and Arthur Boulevard.

The award of the bid is subject to a review of Tri-County's qualifications. Utility director Joe Nichols said that since Tri-County has never worked for the city before, he has requested that it submit a statement of bidder's qualifications for review.