Frankford: Disagreement continues over well drilling issue, Mountaire settlement

FRANKFORD – Ripple effect from well-drilling debate spurred in 2016 by Mountaire Farms’ secession from the town system to meet high-volume water pressure needs for its feed mill production continues in Frankford.

Frankford town council July 10 approved first reading of a proposed town ordinance relating to the drilling wells.

Frankford’s proposed ordinance is scheduled for a second reading/public hearing at council’s August meeting. It was created to coincide with a proposed amendment to Delaware Code Title 7 – House Bill 38 – that would have given municipalities authority to sign off on well permits.

Greg Welch

Marty Presley

 

 

The simmering issue has council members Greg Welch and Marty Presley on opposite sides of the fence.

House Bill 38, which would have reverted to 2001 law that gave municipalities authority to sign off on well drilling, passed the state House of Representatives but died in committee in the state senate. A legislative change in the law in 2001 removed municipal governments from having approval authority over non­potable wells.

“We know what it is right now,” said Mr. Presley. “We know that a law was passed in 2001, and we also know that the state government or state legislature put forth a bill at the beginning of its session that reverted back to the 2001 law that said municipalities had the ability to sign off on wells in the town. So, we know that that bill didn’t pass.”

“We know that the state legislature, the governor, the senators and legislators looked at this very carefully over the last six months and decided not to change the law. That is where we are now,” added Mr. Presley. “We don’t know what the law is going to be going forward. We are hopeful that the legislature will bring it back up the next legislative session. That’s January of next year, meaning we are year away from anything possibly being passed.”

“They clarified it, our town does have that authority,” said Mr. Welch. “They had a clarification.”

“That didn’t pass,” countered Mr. Presley. “There was nothing passed in this General Assembly that changed that law in any fashion. Nobody voted on it.”

“It didn’t need to pass; they clarified,” Mr. Welch said. “They clarified it, that towns do have the approval right. They have the ability to make ordinances.”

“No, it clarified the proposed bill that was pending,” said Mr. Presley. “The fact of the matter is the governor looked at it, the legislators looked at it, the senate looked at it and they feel for whatever reason that it doesn’t need to be changed at this point in time.”

Last summer, the town initiated a local ordinance proposal pertaining to drilling wells in Frankford’s town limits.

“I talked to our council, talked to AG’s office. It was an emergency situation where we were being told that they were going to change the regulation and the laws, not requiring our approval,” said Mr. Welch. “And we needed to get an ordinance in place as fast as we could to maintain the continuity of the necessity of our approval. So, we passed it on one reading, and had subsequent readings after it, and discussed it.”

At its September 2016 meeting, council tabled the second reading.

Frankford resident Jerry Smith poses a question during the Mountaire settlement discussion.

Frankford resident Jerry Smith inquired, “Why do you need a second?”

“I’m of the opinion you need to have two readings for an ordinance to pass,” said Frankford council president Joanne Bacon. “The first one is the reading. The second one is the public hearing of it. That is the only reason I am bringing this back up – to make it totally official – so that the legality of it can’t be questioned.”

Mr. Presley explained why the issue was tabled and postponed.

“The reason we postponed it last fall was to wait until the legislature passed the law, so that we could pass an ordinance in confluence with the law. We can go ahead and pass this – as a matter of fact, I’ll vote for it – but you can’t be under any illusion that this will hold up in court. It won’t,” said Mr. Presley.

“Will it stop somebody?” said Mr. Presley. “My question to the Attorney General was when they actually said we should think about passing an ordinance, I said it seems to me like the point of passing an ordinance is to take advantage of somebody’s ignorance. Because the only people that will pay attention to this ordinance are people that haven’t read the state law – because they would know that state law overrides ordinances.”

“We can no more pass an ordinance against wells than we can pass an ordinance exempting every Frankford resident from state income tax. It doesn’t work,” said Mr. Presley. “I don’t think we should be under an illusion this will hold up in court.”

The well issue snowballed last spring when town officials noticed a sharp drop in its water revenue. Mountaire historically had been the town’s top water user for decades, accounting for about one third of the total annual amount, according to town officials.

Citing inadequate pressure and quality issues with the town’s water system, Mountaire applied for and received a permit from DNREC to meet its high volume/pressure needs. That well went into operation January 2016.

Facing a projected $80,000 loss in annual water revenue, the town in August 2016 challenged the validity of DNREC’s approval without sign-off authority from the town with an appeal to the Delaware Environmental Appeals Board.

In February 2017, town council backed off on its appeal with 4-1 council approval to accept DNREC’s loan-forgiveness proposal that at the time totaled about $500,000. In return, the town had to complete a feasibility study as well as installation of fluoride in the town’s water system. After three months of continuous fluoridation, DNREC will considering writing off the loans the town obtained for its water plant and water system.

Meanwhile, the town of Frankford and Mountaire have been stalemated in settlement talks to address the town’s water revenue loss.

Mountaire settlement update

Mountaire has offered $1,000 a month for 10 years. That equates to a total of $120,000 over that span. The town’s counter offer was much higher.

“If you remember going back to last year we talked about a counter offer to Mountaire of $3,500 a month. They said ‘no.’ We have tried to compromise over the last year. Their best offer is $1,000 a month for 10 years; take it or leave it,” said Mr. Presley. “To clear up confusion: there has been no agreement signed and no agreement voted on. Mountaire several months ago came to us and said in exchange for the loss of revenue from the plant ‘we are willing to pay $1,000 a month for 10 years.’”

The town is having its solicitor, attorney Chad Lingenfelder address stipulations in which Mountaire could have subsequent wells. The town is working on a counter-offer to remove those stipulations.

“We have communicated with our attorney to make some changes regarding the settlement agreement,” said Ms. Bacon.

“I am against the agreement as written right now,” Mr. Welch said. “I don’t think we are getting enough for our approval of that well.”

“So, the only thing that we are voting on and discussing is the ability with Chad to revise Mountaire’s settlement offer on a couple of instances and send it back to Mountaire to see if they will agree to it,” Mr. Presley said. “They gave it to us several months ago for us to look at. The only thing that we have talked about, and it has been dragging on, is that we need to make a couple corrections in there, basically stating that well regulations or well law, we’ll abide by the law going forward whatever that law may be. Because we don’t know what the law is going to be.”

“If Mountaire did not think that it had any obligation whatsoever that that law gave them the right to do what they did without any questions whatsoever, and if the state knew that was the case also, why would it consider forgiving the loans? Mr. Smith asked. “Why would Mountaire consider giving the town $1,000 a month?”

“You’ll have to ask Mountaire about their motivations,” said Mr. Presley.

“Why is Mountaire willing to give anything? If the law is so supportive without question of what they did, why are they even offering $1,000?” asked Mr. Smith.

“Why does Mountaire give money to the school systems? Why does Mountaire to give money to public endeavors that they don’t have to?” said Mr. Presley.

“The schools have not been supplying Mountaire water for all of these years,” said Mr. Smith.

“Jerry, what you are insinuating is that Mountaire is doing this, as Greg insinuated, to buy us off,” Mr. Presley said.

“To get our approval,” said Mr. Welch.

Appeal discussion

“There were a lot of teeth in that appeal,” said Mr. Smith.

“We couldn’t find a lawyer that agreed with that. Our lawyer said you have at best a 20-percent chance of success. And by the way we are paying him $250 an hour to come up with that 20-percent chance,” said Mr. Presley. “We’ve done our due diligence for the last year. We’ve talked to the Attorney General on several occasions. I’ve spoken with three separate attorneys on it. We’ve spoken to every chain of authority in this situation they all tell us the same story.”

“If we go through with the hearing (appeal) we walk away from the settlement. We walk away from $450,000. Is that what the town wants?” asked Mr. Presley.

“If you had not made the appeal, Marty, if the town had not made the appeal they would not be offering anything,” Mr. Smith said.

Mr. Presley said the town had several meetings with DNREC, the Attorney General and “they realized the situation that we were in … and we could probably default on those loans. DNREC through the loan program forgives loans all of the time. They just forgave Selbyville $1 million. They realized that our situation there by losing $80,000 a year of revenue was going to put us in a very difficult situation where we either had to increase our water rates by 50 percent or basically default on the two loans.”

“I don’t think they are being totally up front without with you as to why they are doing that,” said Mr. Smith.

“This is where we are. This is Mountaire’ final offer. This is DNREC’s final offer,” said Mr. Presley. “We either walk away from both of them and go to court. We can’t find any legal representation.”

“Here’s where you’re at: the town dropped the ball; Mountaire wasn’t satisfied, and vice versa. So, you’ve got two parties that really aren’t right, bottom line,” said town resident Wesley Hayes. “The town is not right in some areas and Mountaire is not right in some areas. So, you’ve got to find a common ground to meet in the middle. That is the only way you can do this. You’ve got to weigh your options here.”

“I know you are talking about the water bills going up but at the same time you can’t afford the legal side of it either,” Mr. Hayes added. “What’s more of a realty to you; a little bit in your hand or nothing?”

“A little bit in our hand isn’t going to keep us going,” said Mr. Welch.

“Can the town afford the legal process?” asked Mr. Hayes. “Cut your losses and keep going.”

“We’ve got the settlement agreement with DNREC and the tentative offer from Mountaire,” Mr. Presley said. “What’s on the other side … other than going to court?”

News Editor Glenn Rolfe can be reached at grolfe@newszap.com

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