City Making Plan To Retrieve Funds

By Gordon HopkinsMore than seven months after a company that contracted with the city to remove thousands of dollars worth of equipment from the now defunct Fairbury municipal power plant left town without paying, no criminal charges have been filed or legal action taken. No insurance claim has been filed.The debt has not been sent to a collection agency.All this was recently confirmed by Fairbury Mayor Spencer Brown. When asked why, the mayor responded, “The old power plant is a low priority.”“City staff is running with a very heavy workload with priority items that have strict deadlines,” Mayor Brown added. “($)108,000 is a lot of money, however, we have deadlines on projects, grants, financial contracts that could cost the city if we are not taking care of our priorities.”Fairbury City Council President Kelly Davis told FJN via direct message, “My thoughts-we need to get on it. I think it should be reported to and however it needs done, and a lawsuit should be put into action.”Davis previously noted in a message, “I absolutely think we should sue/press charges against IES if we can find them. From what I understand, they have broken the contract and if they have sold the equipment they took out without paying the city, that is the same as stealing, and they should be prosecuted to the highest extent of the law. These dollar amounts are felonies.”Mayor Brown disputes any suggestion that nothing is being done, “I’m having conversations with our legal team on how to pursue this. It’s not something we do every day, and it’s not as simple as you make it.”When asked for details, Mayor Brown said, “Those are conversations kept between the city and its legal team.”After a conversation with the Mayor on Monday, Davis came back to FJN and said, “I can tell you that it is being worked on in the background, and with the possibility of litigation in the future, we will not being (sic) talking about this openly until the appropriate time.” Regarding the Mayor’s comments, Davis clarified, “By not being a priority, he means staff in the city offices, the clerk included, are working on a lot of time sensitive stuff, and have their plates full.”In 2022, the City of Fairbury signed a contract with a California-based company, Industrial Engineering Solutions (IES), owner James Daniels, to buy several large machines from the power plant no longer in use, such as generators, turbines and condensers. The contract also included the draining and demolition of a large oil tank, still filled with oil. The total payment agreed upon was $120,000.To date, only the initial $12,000 ‘deposit,’ required prior to begin work, has been paid. The city later had to hire a different company to complete the tank demolition.On May 10, 2023, the mayor issued a public memorandum which stated, in part, “To date, IES has failed to fully perform its contract obligations. I was in contact with Mr. Daniels on numerous occasions and he continued to assure me IES would perform. That has not happened.”FJN has obtained two demand letters send by city attorney Kurth Bashear to James Daniels, the first on January 10 and the second on January 23. The first was sent to the address on the contract and was returned by the post office due to ‘insufficient address.’ In the second letter, Bashear wrote, “Upon investigation, the contract set forth the incorrect zip code for the address you provided for Industrial Engineering Solutions. Accordingly, so that you have the original letter, we are re-sending it to the corrected address, as confirmed by the United States Postal Service.”An online reverse address search indicates the address on the contract is for a beauty salon.Brashear noted the letters had also been sent via email and were not returned as undeliverable, so the city is working under the assumption the letters were received. The city has received no response from IES on the letters.The city has been unable to locate Daniels and has not had contact with him for several months.FJN asked Brashear via email if a lawsuit had been filed. He said, “Responding to your question, no, our firm has not filed a lawsuit against either IES or Mr. Daniels on behalf of the city. While we handle all civil matters for the city, any criminal matters are handled by the county attorney and that would be true in this matter as well.” The city has had contact with the Nebraska Department of Health and Human Services (DHHS). According to a representative of DHHS, the matter was forwarded to the Environmental Protection Agency (EPA).Mayor Brown said, “I am hoping the EPA criminal division will come through with some help on this.”It should be noted that the city did not initiated contact with DHHS. FJN approached DHHS with questions about the storage of used oil from the demolished oil tank, which remain inside the power plant. DHHS then reached out to the city.“I wasn’t exactly pleased to hear the newspaper turned in the city for the barrels of oil,” Mayor Brown told FJN. A representative of the EPA told FJN, “After sending the information you provided to our EPA Region 7 Spill Line, they contacted the Nebraska Department of Environment and Energy (NDEE).”NDEE responded, “Thank you for bringing this to our attention. At this time, it appears to be a private, contractual matter between the city and vendor.”When asked if he considered the incident a criminal matter or a contract dispute, Brown responded, “That’s something we are working through with guidance from our attorneys.”Both Jefferson County Attorney Joseph Casson and Jefferson County Sheriff Nick Georgi told FJN the city has not contacted them about the matter. Sheriff Georgi said, “I don’t know much of what happened except what I have read in the paper.”

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