Terre Haute officials have signed an agreement that has paid the city $750,000 as a “refundable good faith deposit” on reaching an operational lease with Terre Haute Dewatering Co.
The city’s administration has until April 20 to reach an operational lease agreement, otherwise the money is to be returned, according to the document.
In addition, the lease must also be submitted to the city’s Board of Public Works and Safety no later than April 30. If the board then fails to agree to the terms and conditions of the operational lease, the city must immediately refund the company by wire transfer.
Mayor Duke Bennett and Robert Murray, president of the city’s Board of Public Works and Safety, signed the deal. The agreement is not dated in the first paragraph of the agreement; however, the agreement has a time stamp of March 30.
The agreement states that the “city has the immediate need for said prepayment funds in order to meet certain financial obligations of the city constituting an emergency situation.” The money, according to the agreement, was wired into the city’s wastewater treatment plant fund account 620.
Asked if the emergency situation was to meet city payroll, Bennett said no.
“No, that is not what the point of this is. It is up-front money we were supposed to have received in December. This is a part of that,” Bennett said.
Terre Haute Dewatering Co. is a restructured entity that allows a contract for dewatering and a contract for diesel fuel production with Powerdyne Renewable Fuels, the mayor said.
Terre Haute Dewatering Co. LLC was formed March 27, and its registered agent is M. Noah Sodrel of Greenwood, according to the Indiana Secretary of State’s office. Sodrel is president of Sodrel Truck Lines Inc. in Jeffersonville. A message seeking comment from Sodrel was left Friday with the trucking firm.
Bennett said Sodrel “has always been a partner in this from the beginning. They are restructuring, so there are separate companies. Powerdyne will be one, Sodrel hauling will be one and one for the dewatering. He has always been a player in this, as he is partners with Powerdyne,” the mayor said.
”This puts us in a much clearer and better business position,” the mayor said. “They all fit together, but if a piece falls apart, then at least you have that (dewatering agreement) as a stand alone component.”
The signed agreement, the mayor said, is to show that the city will negotiate for an agreement with Terre Haute Dewatering Co.
“We asked them to put money up to make this real, since we didn’t get it before, from this group, that we were setting up,” Bennett said. “We wanted to make sure there was money up front, so it is an advance basically of what they will be paying us down the road. It puts some leverage in here; they are putting their money on the table to help us get this done. This is the dewatering contract that will go along with this document.” Dewatering refers to the drying of sanitary sewer sludge.
The current signed agreement “just goes away” when an operational lease is approved. The $750,000 payment would be incorporated in the operational lease agreement, the mayor said.
The mayor said the emergency was to reach a contract agreement.
“I am tired of waiting around,” Bennett said. “We have to get this contract completed. From our perspective, we need to act upon this. This is just a step, and the rest of the contract is being finalized right now.”
The agreement was to go before the Board of Works on Monday, but has since been pulled from the agenda until a final agreement is completed, the mayor said.
Jonathan Stinson, vice president of the Board of Works, and James T. Trimble, secretary of the board, each said Friday that they have not yet had a chance to review the agreement. Stinson said he has been out of town at work and Trimble said he planned to review the agreement over the weekend. A message was left Friday on a telephone voicemail seeking comment from Murray.
City Attorney Chou-il Lee said there is precedence for the city administration to sign a negotiating agreement. “That has been the practice of the Board of Works before this administration. When an opportunity arises, the city signs (a negotiating agreement), and it then must be approved by the board at a later meeting. This does not obligate the city to anything. If the agreement does not happen, the money goes back,” Lee said.
Pat Goodwin — a former city engineer who has publicly raised questions about the city’s sludge-to-diesel plans and who has filed a tort claim notifying the city of possible litigation on the city contracts — said he does not think signing an agreement first “puts the city in a very good negotiating position. The city will be paying this company to do the dewatering, so why would the company pay the city ahead of time? I don’t know what term could be used to describe that, but it doesn’t seem all square to me,” Goodwin said.
Lee said he has yet to review the full dewatering lease agreement. Lee said the city is working on two separate sections, one for dewatering and one for diesel fuel production with Powerdyne. Lee said he is reviewing the dewatering operational lease to ensure it contains a non-appropriation clause, “so there will be a way out,” he said.
The city attorney said the agreement would likely require that funding for dewatering be reviewed annually by the Terre Haute City Council during the city’s budget process. If money is not appropriated for the line item in a budgetary process, “that is an ‘out’ for the city,” Lee said. The city attorney said the agreement would likely be long term, for 10 to 20 years, but reviewed annually by the City Council.
Howard Greninger can be reached at 812-231-4204 or firstname.lastname@example.org.