CRRA Settlement Close at Hand?

NEW HARTFORD — The ongoing legal dispute between the Connecticut Resources Recovery Authority and the 70 towns in its Mid-Connecticut Project hit a snag Wednesday morning, when a final mediation session concluded without the two sides reaching an agreement.

A new judge, Hon. Lynda Munro, was called to act as mediator Wednesday, but apparently was unable to get the two sides to agree.

New Hartford’s first selectman, Bill Baxter, who last week said he hoped a settlement may be approaching, said Wednesday he was unhappy with the way the mediation sessions had gone.

"Our negotiating team is very discouraged and we are of the opinion that CRRA did not negotiate in good faith," he said.

Baxter said now the ball is in CRRA’s court, and if they do not come up with an acceptable proposal, the case will return to Waterbury Superior Court to await a verdict.

This is an unwelcome turn of events for Baxter, who, as recently as last week, seemed to believe the settlement was a distinct possibility.

"There’s some movement," he said last week, referring to the willingness of both parties to amend their demands to reach a settlement, but said previous attempts at reaching a compromise have been unsuccessful. "We’d like to think there’s movement on both sides, but we’ve already made three offers of settlement. They were rejected."

But he expressed optimism, saying that even though they were rejected, those offers have now "become a part of the mediation process."

"We both know what the numbers are now. And the judge knows what those numbers are," he said. "I think it’s in the interests of both parties to resolve this."

Apparently, knowing those numbers did little to help the two sides see eye to eye.

Baxter has long held that the 70 towns in the CRRA’s Mid-Connecticut Project deserve to be reimbursed for the extra tip fees they have been forced to pay as a result of the company’s botched trash-for-energy deal with Enron. The project lost a reported $220 million, though CRRA spokesman Paul Nonnenmacher said the actual losses were much greater.

State Attorney General Richard Blumenthal has been representing the CRRA in its court cases related to the Enron debacle; in this case, four towns are representing the Mid-Connecticut Project in court: New Hartford, Hartford, Guilford and West Hartford.

In December, the New York law firm of Hawkins, Delafield & Wood LLP settled with the CRRA, agreeing to pay $21 million to help reimburse the 70 Mid-Connecticut Project towns.

But that may not be enough. Baxter was unwilling to discuss specific numbers, but nearly two months later, an agreement is still just out of reach.

"Our issues are that the towns should be reimbursed for the losses that were passed on to them, as well as surpluses that were supposed to be used to offset rates, and reserve practices that were beyond reasonable projections," he said.

He said that, despite having a sizeable surplus, the CRRA failed to return any of those funds to the towns.

"There was admission in court that they didn’t return $25 million in surpluses," he said. "We also know that $38 million was taken out of reserves when the initial Enron deal went sour."

In 2005, the CRRA was able to get back $111 million by selling off assets.

But thus far, the towns themselves haven’t been satisfied with any of the CRRA’s offers in settlement.

"What was taken from the towns in raised tip fees over the last four to five years should be returned," Baxter said.

The contract between the towns and the CRRA, negotiated in the 1980s, will come up for renewal in 2012, he said, but added he would like to settle this and stay with the CRRA.

"In our opinion, a fair settlement will not disrupt the ongoing operations of the CRRA," he said. "We’d like to get this issue resolved so we can look forward and eliminate the conflict and distrust between us."

Baxter said the 70 towns have been actively pursuing redress for over two years now.

"Our objective hasn’t changed from the beginning," he said. "We want to be reimbursed for any costs to the town that are directly attributable to the Enron loss, and not a cent more or less. The CRRA has already retrieved over $110 million; we estimate the cost to the towns to be about half of that."

Baxter has also argued that, going forward, the rate charged per ton of solid waste collected by the CRRA should be "cost-based," and not subject to market rate consideration, and that CRRA’s cash reserves should "be reduced to reflect prudent practice."

"We’ve learned through the trial that some of these reserves are excessive," he said. "They reduced their debt; that should be reflected in reduced rates."