Joe Nelson, Staff Writer
Posted: 11/22/2012 10:18:31 PM PST
A legal settlement with an engineering company has made the city of Victorville $54 million richer, but the city has a ways to go before its financial woes are resolved, City Manager Doug Robertson said.
The city agreed to accept the $54 million settlement offer from Jacobs Engineering, formerly Carter & Burgess, which contracted with the city to design and build the ill-fated Foxborough power plant, which was abandoned after inflated costs and blown project deadlines forced the city to scrap the project.
“We still have a little work to do before we’re all the way back, but we’re certainly a lot better off than we were six months or 12 months ago,” Robertson said of the city’s financial situation. “This (settlement) will help eliminate a majority of that interfund borrowing we were criticized for, and rightly so.”
In its annual report released on June 30, the Grand Jury was highly critical of the city’s use of interfund loans and restricted funds and its botched power plant projects, including the one at the Foxborough Industrial Park and Victorville 2, or VV2, a planned 500-megawatt power plant at Southern California Logistics Airport.
The Grand Jury concluded that a lack of controls allowed the city to enter into the high-risk projects that ended in failure and cost the city millions, including $13 million the city was unable to account for.
Robertson said $30 million of the $54 million settlement will go toward reducing the debt burden of bonds issued for the Foxborough power plant’s construction.
The remaining $24 million will be used to repay about $22.5 million in interfund borrowing between the Victorville Municipal Utility Services fund and the Victorville Water District. The Water District in turn will repay roughly $20 million in additional internal borrowing.
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