City Council approves terms of Foxborough power plant settlement
November 24, 2012 12:24 PM
Brooke Edwards Staggs, City Editor
VICTORVILLE • In roughly two months, Victorville’s debt will drop by $54 million.
The City Council on Tuesday night approved terms of a settlement agreement with Carter & Burgess, designer of the failed Foxborough power plant.
Per the agreement, Jacobs Engineering, which bought Carter & Burgess in 2007, agreed to file a request to dismiss its appeal of Victorville’s jury-awarded settlement for the botched project. The company also agreed to wire the $54 million to a trust account within 60 days from the time the final agreement is executed, which City Manager Doug Robertson said should happen very soon.
The funds have already been pledged to cover past debts, with the first $30 million pegged to pay down an $83 million bond debt issued for the plant’s construction.
The next $22.5 million will be used to pay back loans — with interest — between the city’s Victorville Municipal Utility Services fund and the Victorville Water District. The city used $20 million in water district reserves in 2009 to keep the utility fund afloat, in a move flagged as potentially improper in the San Bernardino County Grand Jury’s June 29 report.
The remaining $1.5 million will be used for current year operations or to help replenish the city’s dwindling general fund reserves, according to Robertson.
“There may be some flexibility there, depending on our reserve amounts once the annual audit is complete,” Robertson said, with that report due by Jan. 1.
Victorville sued Carter & Burgess in 2009, six years after hiring the firm to oversee construction of the Foxborough cogenerational power plant.
To read entire story, click here.