By Tim O’Meilia
South Palm Beach, Manalapan, Lantana and three other towns will cash tidy checks in the next few months for overpaying for sewage treatment provided by the city of Lake Worth for 16 years.
It’s a stunning reversal for Lake Worth, which sued its seven partners in the regional sewage system in August 2010, claiming it was owed $7 million in operation and maintenance costs built up over years.
Instead, under an agreement reached by the eight participants Feb. 21, $4.5 million will be repaid to seven towns from a significant fund that has built up over the past few years.
It’s like doing your federal income taxes and learning you’re due a refund instead of having to write a check to Uncle Sam.
South Palm Beach will receive $34,000, Manalapan $8,000 and Lantana $222,000. In addition, Palm Beach will get $262,000, Atlantis $58,000 and Palm Beach State College $58,000. Palm Springs will pay $54,000 because it withheld partial payments during the dispute.
Lake Worth overcharged itself $3.8 million, which will pay off the cost of a master lift station the city borrowed money to pay for.
“Instead of paying $8,000, we’re getting money back,” said Manalapan Town Manager Linda Stumpf, who anticipated the town would have to pay a sum when the suit was first filed. “But we disputed their calculations and the way they came up with their numbers.”
An Orlando consulting firm hired by the seven defendants examined regional sewage system records dating to 1997 and discovered faulty record-keeping by Lake Worth. The firm was forced to sue Lake Worth to obtain some of the records.
As a result of its findings, the state auditor general’s office began its own audit of the regional system’s books and issued a critical report in August. The audit cited poor bill practices, faulty record-keeping, inconsistent cost calculations and vague contract terms.
“All along, we have said we want to pay what’s appropriate, our fair share,” said South Palm Beach Town Manager Rex Taylor. “It’s in no one’s interest not to pay their share. But we didn’t want to waste our money for things inappropriate or excessive.”
Since the finding, the eight parties have been negotiating the repayments and new terms to the operating agreement.
“We want an agreement that looks forward X years and gives everyone appropriate methods of handling the contract if anyone wants to leave,” Taylor.
The agreement will be submitted to each town’s governing board for approval in the next month. The lawsuit will be withdrawn once the new agreement is signed.
South Palm Beach socked away $157,000 over the last two years and Manalapan also set aside money in case it had to pay a judgment. Stumpf said Manalapan’s reserves would be used toward an emergency interconnect system with the town of Palm Beach, which is being designed now. Ú