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B.E. wants oil company to pay up

By Staff | Jul 27, 2009

Dick Maher

Blue Earth officials have patiently waited for $25,000 they are expecting from Exxon/Mobil.

Because company executives have not been in contact with the city for awhile, City Attorney David Frundt has been asked to send them a letter requesting payment.

“I don’t recall being told we were not going to be reimbursed. If I missed something in between, then it’s my fault,” says Mayor Rob Hammond.

The issue came to light when the city’s latest audit was being conducted.

City Administrator Kathy Bailey says the $25,000 was a budget item listed as “receivable funds” the city anticipates collecting.

“Our auditor made the point, ‘Are you realistically going to get the money, otherwise, you have to write it off,'” she says.

The amount has been taken off the books.

If the city receives the $25,000, Bailey says it will be put into the general fund as revenue.

The money would be reimbursement for removal and disposal of contaminated soil when the Public Safety Center was built in 2006.

Bailey says paperwork was completed last year for a $640,000 state grant the city received to help pay for the $1.8 million facility.

Although there was no contract with Exxon/Mobil, city officials believe company executives were aware of a verbal agreement to repay the money.

“There’s no question. We need to fight this. They were told real, real early,” says Councilman Dick Maher, a member of the council at the time.

In fact, Maher was chairman of the committee to build the police and fire department center.

He says the possibility of soil contamination topped the list of concerns when the city bought the property because a gas station was once located at the site.

“They knew they had a responsibility to clean it up. They just kept dragging their feet,” Maher says.

Former City Administrator Ben Martig says contaminated soil was discovered shortly after site development work got under way.

The contractor for the project, he says, determined the dirt had to be removed and work should not be put on hold.Exxon/Mobil officials told Martig because they are a very bureaucratic organization, it could take a long time to get funding approved.

Delaying the project, says Martig, would have added “considerable costs.”

He says the contaminated soil had to be taken to a disposal site approved by the company — either in Iowa or Wisconsin.

“We felt that the good faith effort was enough to go ahead. We took them on their word.

“In the grand scheme of things and scope of the project, delaying it would have cost much more than the $25,000,” he says.

Bailey says the money may be a fraction of the project’s total cost, however, it’s still worth pursuing.

“In some ways it’s the principle of the thing. But, we aren’t going to spend a lot in attorney fees to get it,” she says. “At some point we may have to decide it is costing too much.

Maher agrees with Bailey, saying the funds are needed more than ever because of state aid cuts and tough economic conditions.

“Absolutely. Every little bit helps,” he says.