Mayor Accuses Company Of Not Living Up To Contract

By Gordon HopkinsThe company the City of Fairbury sold equipment to from the now defunct municipal power plant has not abided by the conditions of their contract. That is according to Fairbury Mayor Spencer Brown.The sale of the equipment was intended to save the City of Fairbury money. The power plant was shut down several years ago. In 2022, then-City Administrator Jacob Matthews reported that the remaining municipal power plant assets no longer serve a practical purpose, but could constitute future liability and maintenance expense. Matthews wrote, “It is believed these assets could potentially generate at least $120,000 dollars.”Therefore, the City Council voted unanimously to sell or dispose of the remaining components of the power plant at meeting of the Council on Tuesday, August 16, 2022. On October 13, 2022, the City of Fairbury signed a contract with with James Daniels, owner of Industrial Engineering Solutions (IES), for the purchase of three turbines, three condensers, three generators and one air compressor. The draining and decommissioning of the oil tank was also included in the price. Last year, the city received a quote of $129,651 to move, clean, and demolish the storage tank.IES agreed to pay $120,000. Thus far, the city has received only a $12,000 down-payment.According to a memo from the mayor, “This project was not a City contract for services but a sale of power plant equipment, which the City Council authorized on August 16, 2022 by resolution. The property did not sell by the resolution deadline of September 8, 2022 and IES subsequently submitted an offer, the only one the City received. Because the City had no other offers, the plant equipment was being sold ‘as is’ without warranty, IES affirmed they would comply with OSHA and other requirements, and the offer was for $120,000 to be paid within 45 days of sale, the offer was accepted, and the deposit was received. The City did not request insurance or bonds and none was provided.” Mayor Brown also noted, “To date, IES has failed to fully perform its contract obligations. I was in contact with Mr. Daniels personally on numerous occasions and he continued to assure me IES would perform. That has not happened. The City sent a demand for performance to IES, advising that it would be responsible for costs incurred in completing the work if IES did not perform, but that did not achieve the desired result. The City mitigated the main concern — used oil on the plant premises that could create environmental concerns.”Another environmental concern is the presence of asbestos in the plant. Mayor Brown told FJN, “There are areas of asbestos involved in this project and they’ll be properly addressed with assistance from NDEE. Furthermore, there are staff guidelines for limited access into the power plant.”Remaining OilThe city hired Midwest Torching and Maintenance of Clive, Iowa, to pump out the remaining oil in the storage tank, as well as dismantle and haul away the tank, itself. According to the Mayor, the tank was at less than 10 percent capacity with used oil at the time. While the tank is gone, some of the 55-gallon oil drums remain at the site. On April 25 of this year, a representative of the Nebraska Department of Environment and Energy (NDEE) met with Mayor Brown and examined the site. According to a report after that visit, 40 oil drums remained at the site at that time “In general, it appeared the contractor had done a good job preventing oil contamination or cleaning up any spillage.”While there was considerable staining on the outside of the drums, it was noted, “the ground around the drums was not stained with used oil.”The remaining drums are closed and wrapped in shrink wrap in groups of four on pallets.The NDEE report noted, “I also agreed to provide Mr. Brown with some contact information for used oil recyclers and waste haulers that could pick up the drums. We discussed the possible testing requirements if the drums could not be disposed of as used oil.”Mayor Brown told FJN that the city is working with a licensed oil recycler to properly dispose of the remaining oil in accordance to NDEE guidelines. One May 3, the recycler collected 650 gallons, “We will continue to work with them and other oil recycling companies until the oil is taken care of.”There are also two polymer 55-gallon drums that are believed to contain old diesel fuel. According to one city employee, those drums have been siting there since before the oil tank was demolished. The NDEE report indicated, “I told Mr. Brown the contents of those drums would need to be verified so they could be properly disposed of as well. Industrial Engineering SolutionsFJN has attempted to contact IES. The address on the contract with EIS is in California. However, the area code of the phone number is 212, which is in New York City. FJN has called this number multiple times and has received only an electronic tone, like the kind for a fax machine.An online search revealed a different telephone number associated with the California address but the individual who answered the phone said it was a wrong number.No California-based company with the name Industrial Engineering Solutions is registered with the California Secretary of State. An out-of-state company with a similar name in Wyoming is registered but it appears to be an unrelated business.FJN has been unable to reach the owner of IES. FJN attempted to contact James Daniels via LinkedIn (a networking site) but have not received a response. Lessons Learned“The City’s primary concern in this process is, and has been, the protection of Fairbury’s citizens. They are not at risk, nor are City finances,” wrote Mayor Brown. “Since this type of project is not an ordinary city operation, in hindsight, we could have handled this differently and we’ll use it as an experience. We will be reviewing how this process unfolded, identify opportunities for improvement, and incorporate those going forward.”

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