With the holiday season upon us, the Town of Cape Charles is once again ready to send out those joyful, yearly tax bills. Along with this seasonal joy, another humiliating kick in the crotch will be when we receive our utility bills. What used to a be a marginal annoyance has become a real burden on many in our community, especially those on a fixed income. The exorbitant increase we have witnessed over the last few years is the direct result of the failed policy of the Town, of both the legislative and administrative bodies. In this case, the rate hike is to pay debt service on the Town’s misguided sewer plant.
But why are low income citizens being stuck with the bill? This of course, goes back to the the Brown and Root annexation agreement. The 1991 Commission on Local Government report originally boasted the planned development as good thing, a unique way to bolster the town and to provide more services to the residents,“Brown & Root has predicated its development plans on the incorporation of all its property into the Town of Cape Charles and on the expansion and utilization of the Town’s utility system. To this end, Brown & Root has entered into an agreement with the Town by which it has committed itself to supporting the proposed annexation and to investing its resources into an expansion and enhancement of municipal facilities,” the Commission wrote. [Annexation Action Report, February 1991, page 11]
It is important to note that at the time, Brown & Root agreed to all the Commission’s proposals, especially that it would be “investing its resources into an expansion and enhancement of municipal facilities.”
Within the agreement, it is also clearly spelled out that the developers would paying for the expansion of the wastewater plant, “Brown & Root and the Town agree that any reservation of treatment capacity in or from the Town’s water or waste water systems, as provided in the Prior Agreement, for the use of Accawmacke Plantation shall be derived from the capacity created by investments in the Town’s water and/or waste water systems, made by Brown & Root.”
Of course,Brown and Root never did any of that, and instead sold the Accawmacke Plantation to Richard “Dickie” Foster in 1996, thus leaving the town with Bay Creek. When Foster acquired the Accawmacke Plantation, he also acquired the obligations. This is clearly stated in the annexation agreement, “The obligations of Brown & Root, contained herein . . . shall run with the land and be binding upon the subsequent owners of Accawmacke Plantation, which owners shall assume all of the obligations and relieve the prior owner thereof.” That is, the developer, not the individual landowners, are responsible for paying for the waste water plant, “It is the intent of the parties not to impose the obligations of Brown & Root contained herein upon the consumers who purchase lots, condominiums, and/or memberships within Accawmacke Plantation.”
So, why didn’t the Town go after Foster to make him pay what he was obligated to pay? Actually, they did.
In 2008, then Town Manager Joe Vaccaro wanted to deal with what he saw as a dark cloud hanging over the future of Cape Charles. Council, however told him to stay away, and to instead leave all water issues to Bob Panek. Vaccaro did instruct staff (Panek?) to pen a letter to Steve Bennet, who was the construction manager at Bay Creek, offering that Bay Creek either pay in one big chunk of $21.1 million, or an upfront payment of $8.9 million and the Town would make up the margin by increasing water and sewer connection fees for new residences to $10,047.
Sources tell the Mirror that the letter was a source of internal strife, as it appeared to run counter to the annexation agreement – the second option actually relieved the developer of a large part of the payment and shifted the financial burden to homeowners who would have to pay higher connection fees.
Of course, Foster and Bay Creek did not pay anything. Vaccaro told council that if Bay Creek did not pay their share, the Town would need to find other revenue sources, which it did (hence, your higher utility fees). Foster, however, did respond to the Town with the below letter:
Then Mayor, Dora Sullivan published the Town’s response to Foster in the Gazette:
January 5, 2009
Mr. Richard S. Foster
Owner
Bay Creek Resort & Club
1 Club House Way
Cape Charles, VA 23310
Dear Mr. Foster,
This is in reply to your letter of December 11, 2008, in which you provide your opinion of when Bay Creek is obligated to pay for their share of wastewater treatment capacity expansion and ask what is expected of you to indicate movement on this matter.
The Town has previously addressed the issue of when Bay Creek is obligated to pay several times, both in meetings and in correspondence, including our September 12, 2008 letter. We do not agree with your opinion that payment should occur only when the existing plant reaches permitted capacity; i.e. 250,000 gallons per day (GPD). The Annexation Agreement states, “Brown & Root agrees to pay the cost of the physical expansion of the Town’s sewer and water treatment systems, i.e. collection, distribution and treatment, to accommodate the additional treatment demands of the Brown & Root Property beyond the limits of the Town’s current permitted capacities.”
It is clear that the Annexation Agreement defines what Bay Creek is obligated to pay for, i.e. accommodation of additional treatment demands beyond the limits of current permitted capacities, not when. In this regard, we agree that Bay Creek bears no responsibility for replacing the existing capacity. That is why we have discounted the Bay Creek share by half (34% vs. 68%), in recognition that the first 250,000 of the 500,000 GPD capacity of the new wastewater treatment plant (WWTP) represents replacement of existing capacity. As you know, 68% represents the share of projected treatment demand beyond current permitted capacity that is attributable to Bay Creek property subject to the Annexation Agreement. If we were only building new capacity, the Bay Creek share would be 68% instead of 34%. We have explained this in our letters of July 11, 2008 and September 12, 2008.
The Town is responsible for planning for the replacement of existing facilities and providing additional capacity to accommodate projected growth. In the case of the WWTP, timing is complicated by state regulations that require the Town to meet the specified nutrient waste load allocation by January 1, 2011 in order to maintain the permitted discharge of 500,000 GPD. If we don’t meet the deadline, our waste load allocation will be reduced to the capacity of our existing plant; i.e. 250,000 GPD. Any treatment capacity beyond that will require reuse of the effluent, rather than discharge into the bay. Effluent reuse is significantly more costly than discharge because of the need to build reject storage, pipelines and off-season storage. Our growth projections indicate that the 250,000 GPD capacity will be reached in 2013, only three years after the waste load allocation compliance date. Because of these cost and timing implications, we are currently designing and planning to build a 500,000 GPD WWTP. These planning considerations dictate when the Town needs to incur costs and, consequently, when Bay Creek is obligated to pay their share under the Annexation Agreement.
You state in your letter, “I want to understand what you expect of me? What “movement” are you looking for?” In short, I expect you to pay the bills for the Bay Creek share (34%) of design and construction of the new WWTP as they are rendered by the Town. After application of anticipated grant revenues, we expect the Bay Creek share will be about $3.5 million to $4.5 million. As indicated in our September 12, 2008 letter, absent these revenues the Town will need to consider downsizing the WWTP to minimize the financial risk to existing wastewater customers. This will result in significantly higher costs in just a few years, as noted above, to build capacity beyond 250,000 GPD. The greater portion of these higher costs, 68%, will fall to Bay Creek.
I hope the above provides sufficient information to spur movement on this issue on the part of Bay Creek.
Sincerely,
Dora Sullivan
Mayor
Note: How did the Town think it could possibly settle this matter without the concurrence of the County and the Court, since all were parties to the Annexation Agreement which called for Bay Creek (Brown & Root) to pay for the upgrades and expansion of the Utilities to provide capacity to and for Bay Creek’s 34 planned subdivisions (9 started, one abandoned – Marina Village East)?
With the possibility of having to cough up millions of dollars, Bay Creek decided to do nothing, and engage with Town in a game of chicken. The question was who was going to blink first. While the Town was willing to spend well over $250k to fight the citizens group over the old school, not a penny was spent trying to make the developer live up to the annexation agreement. Instead, the course chosen by the town was to attempt to fund the new wastewater plant by increasing connection charges (shifting financial responsibility onto homeowners). That increase was from $10,000 to $20,000. But even this did not stay around for long, as council eventually voted to reduce charges down to $12,350. The reasoning used for the drop was that the new estimates were based on a “significant payment for such capacity expansion pursuant to the Annexation Agreement.”
True to form, there never was a payment, just increased debt piled onto the citizens of the town. A few months after sending the letter to Bay Creek, Joe Vaccaro was fired as Town Manager…
Bay Creek construction manager Steve Bennett is still on Town Council…
Bay Creek’s Joan Natali sits on Town Council and the Planning Commission….
Bay Creek’s Andrew Follmer is president of the Cape Charles Business Association….
….. and Bob Panek is still behind a desk at the Town offices…
So it goes….
David Boyd says
In addition to allowing for Bay Creek to dodge it’s obligations to pay for the sewer plant expansion, this is one of the town’s biggest problems:
“Our growth projections indicate that the 250,000 GPD capacity will be reached in 2013”
Has anyone noticed we didn’t get there?
At what point will those who do the planning for Cape Charles start to believe the 80 years of census data showing a population decline during every single census between 1930 and now, save one.
Cape Charles (and the county) can’t afford to keep planning as if the big economic boom is going to start tomorrow. Continuing to dig a bigger financial hole is not OK.
Joe Vaccaro says
Wayne, it doesn’t take much time for the anyone on “the shore” to contact someone once their name is mentioned in the news and 3 of your citizens did just that after this article was published. First, let me say that you raise some interesting points and let me officially state for the record that I was NOT fired but given the “opportunity to resign” and that resignation was part of an agreement that was suppose to include TWO Cape Charles elected officials (Who later reneged on that “agreement”). Second, I did not hire Bob Panek or Heather Arcos because these good people were already in place when I arrived along with Chief Dave Eder, Sgt. Charles Brown, Dave Fauber, the late great Paul Skolnick, Doug Smith, Tom Bonadeo and professional Harbor Master Smitty Dize. It was a great group of people who worked hard and well with other and we moved the proverbial ball down the field at a rapid rate (That record still speaks for itself). I tried to make things better during my short tenure as the Town Manager and I was not afraid or timid to address the town’s problems head on which included reported conflicts of interest, beach safety issues, water/ waste water issues, children & youth programs, budget issues, personnel issues, re-utilizing the old Cape Charles School etc. Of course this “head on” methodology was not readily accepted by everyone but I’ve never been one to turn my back on the law or what I thought was wrong with a project or personnel issue. Your town is a wonderful place to live in with its functional harbor, magnificent beach and businesses that exemplify “small town America”. However, the most precious thing that you have in that town is the diversity and intelligence of its citizens.
Deborah Bender says
You, Joe were a good town manager. As with all good town managers you had to be gotten rid of, one way or another, because you were too honest and intelligent.
The “powers that be” do not want honest town managers.
The town council hires people they can manipulate into doing what they want.
This town is being run into the ground and put into HUGE DEBT by people that won’t even be alive when the shit hits the fan.
“Just another day in paradise”. 🙁 Said no local tax paying citizen EVER !
Joe Vaccaro says
Ms. Bender, I don’t believe I ever met you but I thank you very much for your kind words. It’s hard to comprehend that all of this craziness took place over 7 years ago and it’s still going on !
B. Taylor says
Very informative article. Nothing will be done as the locals are outnumbered by the Bay Creekers. Too bad you don’t dig a little deeper and find out who were the local leaders who lead the Town and County into the annexation. Some are dead, but not all. They have left a lot of debt and burden on the shoulders of all citizens.
B. Taylor says
For a Town of about 1000 people, Cape Charles has a budget of $8.5 million. For comparison, Exmore has about 40% more population, and the budget is about $1.8 million. Exmore has sewer. Exmore has more income from tourism through lodging and meals tax. Cape Charles budget expenses just don’t make sense for a town that is practically vacant for 8 months a year. A full time planner and two town managers? A full time recreation director? For 1,000 people? Absurd.
Deborah Bender says
B. Taylor,
I have been to many town council meetings and complained about the amount of money the town is spending. I compared Cape Charles to Exmore, Onancock, even Chincoteague. The “powers that be” completely ignored me. They sat shuffling their papers and talking amongst themselves. WHILE I WAS SPEAKING !!! Our town has more people in the offices than Exmore, Onancock and Parskley COMBINED !!! I called for less employees and they hired MORE ! Here is an article that I wrote & read at a council meeting . http://capecharleswave.com/2014/04/bender-wake-up-and-trim-the-fat-cape-charles/
The only reason Exmore is in debt is because they upgraded their sewer system.
Are you aware that we are around 12 MILLION in debt ??? Our town council thinks nothing of the debt we are in. We pay through the nose for water THAT NO ONE DRINKS ! No one complains about the water but me.
Oh and one more thing ….If you go into a town council meeting you are not allowed to verbally attack anyone on council That is a violation of our 1st amendment rights !
Without a large group of people willing to fight our hands are tied.
Read the articles on the Cape Charles Wave. capecharleswave.com
Have a good day !
B. Taylor says
Cape Charles poor management has the potential to take down the entire county.
Deborah Bender says
” Poor management ” is saying it nicely ! My husband has lived here his entire life and never has the town been run into debt so fast. The town is being run by incompetent people and I can’t see any hope for change in the future.
I thank you B. Taylor for caring. Have a good day.