Fairbury Power Plant Continues To Cost City

By Gordon HopkinsLast year, the City of Fairbury sold several large machines from the now defunct Municipal Power Plant to a California-based company, Industrial Engineering Solutions (IES). The purpose was to save the city the expense of removing the equipment.According to Jacob Matthews, City Administrator in 2022, the remaining municipal power plant assets no longer serve a practical purpose, but could constitute future liability and maintenance expense. In a memorandum, Matthews wrote, “It is believed these assets could potentially generate at least $120,000 dollars.”The ContractItems included in the sale were: three turbines, three generators, three condensers and one air compressor. IES offered $120,000. Ten percent, $12,000, was paid up front. The contract was signed October 13, 2022, and stated the remaining $108,000 to be paid within 45 days after completion of the project.According to Fairbury Mayor Spencer Brown, IES has not yet paid the balance owed.Mayor Brown also said IES has not lived up to other terms of the contract. Included in the contract was an agreement to drain and decommission a large oil tank.IES did not complete the demolition. Mayor Brown indicated some metal was removed from the oil tank but did not specify what or how much.ScrapNot included in the contract was scrap metal. Multiple sources have told FJN that IES also removed scrap from the facility and sold it.The mayor acknowledged IES took the scrap but insists it was done with the full knowledge of the city, “Yes they were allowed to sell the scrap that was removed while they were removing the equipment.”Mayor Brown has referred to the scrap as a ‘by-product’ of the removal of those large machines.Kelly Davis, president of the Fairbury City Council, told FJN, “I had heard that they were going to be selling stuff that they took out, and I don’t know what all that was to consist of. I am guessing that it was probably the hand rails and probably catwalks around the turbines and such. I guess that could be called a by-product and I would expect them to get it out of the plant as part of the clean up process.”“We monitored what went to scrap and I have been in contact with the company who paid them for their scrap materials,” said Mayor Brown. “They had a trailer outside. They would toss the scraps in that.”The mayor said, “City staff monitored them on a day-to-day basis.”When asked how much scrap IES took and how much they were paid for it, Mayor Brown responded, “They weren’t required to submit receipts or anything to the city.”Costs to the CityOn January 25, 2022 the Line Department received a quote of $129,651 for the decommissioning of the oil tank and removal of the various equipment in the power plant, so the contract was expected to save the city considerable money. However, the alleged failure of IES to fulfill the contract has left the city with the tab to complete the job.The city paid $6,000 to Midwest Torching and Maintenance LLC to complete the demolition of the oil tank. In addition, the city is still in possession of much of the used oil, currently stored in drums inside the power plant’s building shop, in a parking stall on concrete, to minimize the risk of oil leaking into the environment and to keep them out of the elements.However, the city cannot store the oil in this manner indefinitely. The Department of Health and Human Services (DHHS) has advised the city that used oil is banned from landfills and cannot be bulked with soil or other absorbents for landfill disposal.In an email to DHHS, the mayor indicated the city is awaiting a formal bid for disposal of the oil drums. Mayor Brown reported that the cost is expected to be in excess of $10,000.Another possible expense is the remediation of asbestos in the power plant. While there is asbestos in the building, mostly in the form of insulation, asbestos is normally not a health threat unless it is friable, meaning crumbly, which allows asbestos fibers to be inhaled.An asbestos inspection of the power plant was completed in February of this year. The report indicates 23 samples of asbestos were taken. All but one were found to be friable.Mayor Brown put the blame for the current condition of the asbestos squarely on IES, calling it, “demo debris,” which is why he said he ordered the asbestos inspection.It is unknown how much remediation of the asbestos will cost. The city is looking for a grant from the EPA.What is Being Done?According to Mayor Brown, the city has been unable to contact James Daniels, the owner of IES.A demand letter was sent by City Attorney Kurth Brashear of Rembolt Ludtke LLP on January 10 of this year. The letter as sent to the address on the contract. It was returned as undeliverable due to an invalid zip code on the contract. A second letter with a corrected zip code was sent on January 23, 2023. The letters were also emailed.When asked if the city is pursuing legal action, Mayor Brown said, “Working with legal council and following their direction.”Kelly Davis told FJN, “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.”When asked if the matter has been reported to law enforcement, Brown said, “I’m not going to speak on active litigation.”The city reached out to DHHS regarding the matter. According to a representative of DHHS, the matter was forwarded to the EPA.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.”

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