Andover Townsman, Andover, MA

January 14, 2014

Toxic sludge case costs top $1.1M

Water customers, taxpayers will foot payout, legal fees

By Bill Kirk
bkirk@andovertownsman.com

---- — The three-year fight between the town and a Bancroft Road resident over the dumping of toxic sludge into wetlands on his property may be over, but Andover’s water users — and taxpayers — are left footing the bill.

Between legal fees, engineering expenses and a $450,000 payout to James Berberian of 2-4 Bancroft Road, the town will have spent $1.1 million since 2011 on the case.

Town officials remain mum on the controversy, and neither Berberian nor his lawyer have been available for comment since the settlement was inked last month.

The case started in November 2010 when Berberian saw dark, mucky water flowing out of a drain pipe and into a wetland at the corner of his property.

He videotaped it and found that the water was drained from an underground storage tank near the Bancroft School by Water Department employees. The muck that ended up flowing into the wetland was from sludge that had accumulated on the bottom of the 6 million-gallon tank over the years.

Later, it was determined that the sludge contained heavy metals, including arsenic. When Berberian asked the town about the spill, it was only partially cleaned up, he has said. As a result, he sued in U.S. District Court under the federal Clean Water Act to have the rest of the wetland cleaned up.

On Dec. 26, the town and Berberian signed an agreement reached after months of negotiations, depositions, executive session meetings and even a Fox-25 TV news report. The agreement was released to The Andover Townsman last week.

As it stands, the agreement calls for the town of Andover to pay Berberian $450,000 — a cost being borne by water ratepayers, Town Manager Reginald “Buzz” Stapczynski said Pennoni Associates, an engineering firm that did work for the town, is scheduled to pay Berberian an additional $50,000.

Not all of the money goes immediately to Berberian, however. The Bancroft Road resident remains embroiled in a dispute with another attorney over work done on the case. As such, some $253,000 of the $500,000 will be placed in an interest-bearing escrow fund until that dispute can be ironed out.

The town’s $450,000 share of the settlement will come out of the Water Department’s reserve, or surplus account. There is currently $2.9 million in the water reserve account, which is generally used for infrastructure upgrades, Stapczynski said.

But that’s not the only cost related to the case that will hit ratepayers.

According to a breakdown of town costs provided by Stapczynski as the result of a Freedom of Information request made by the Andover Townsman in November, the Department of Public Works spent $322,065 on the case from fiscal year 2011 to fiscal year 2014.

The DPW spent about $6,000 in 2011, $88,000 in 2012, $191,000 in 2013 and $37,000 this year. Those funds, Stapczynski said, were drawn from the water surplus account.

Stapczynski said the town attempts to keep about 20 percent of the total water budget in the reserve account, which would come to $1.35 million. The account is currently well above that as the town is working to beef up the reserve fund so it can pay for repairs on the water system without having to borrow money.

Taxpayers, meanwhile, have been hit with the legal costs in the case, amounting to about $336,500 over a three-year period. The town paid its regular law firm, Urbelis and Fieldsteel, about $116,000 over the three years and outside counsel, Sherin & Lodgen, $220,000 from 2012 to 2014.

Stapczynski said the money for legal fees came out of the legal department budget, which generally runs around $450,000 a year. He said if there is a shortfall, he would have to go back to Town Meeting for additional funds or transfer money from another department.

Selectman Dan Kowalski, however, has argued all of the costs should be paid for out of the Water Department.

“Other funds have been expended outside of water to pay legal fees and I think the board needs to discuss and determine if fees that have already been paid should be refunded from water reserves,” he said. “If we are looking for the Water Department to be a self-sufficient fund, you’d expect all expenses associated with water funds to come out of that.”

Currently, Andover residents are charged about $3 per 100 cubic feet of water used, with the average annual water bill coming in at less than $360. Andover’s water rate is among the lowest in the state.

Stapczynski said he didn’t think the settlement and other costs would have a significant impact on the water reserve fund or the town budget.

The agreement between Berberian and the town still needs approval from the U.S. District Court judge in the case as well as the Environmental Protection Agency. Tom Urbelis, general counsel for Andover, said he did not know when the court or the EPA would rule on the document.

Under the agreement, Berberian and the town state they will not pursue further legal action against each other. Berberian has also agreed not to challenge the results of a state review of an engineering report on the cleanup.