County settles solar suit

By Nathan Mayberg
NEWTON — The Sussex County Board of Freeholders decided to settle, rather than continue fighting a lawsuit over $24 million that a solar energy company has been unable to pay back to the county.

With mayors from around the county calling on the Board of Freeholders to delay a vote to settle, county freeholders decided on Wednesday that the risks of prolonging the suit were too risky.

In one of the strangest twists of agreements, the county was never sued for payments and was not a party to arbitration hearings but found itself not only liable for the attorney fees of the solar power company but also liable for the payments it had to make to the contractor since it had guaranteed $27.7 million in bonds.

The county had guaranteed the bonds issued by the Morris County Improvement Authority, and essentially now owes itself the remaining $24 million, which is around $26 million with interest, County Administrator John Eskilson said.

If that weren’t confusing enough, the settlement agreed upon Wednesday will require the county to pay $12.3 million to Power Partners Mastec LLC, the contractor which was responsible for installing solar panels on municipal buildings throughout Sussex County.

Sussex County’s independent counsel David Weinstein, said the money represented funds owed to Power Partners Mastec by SunLight General Capital which had been placed on hold through liens against the solar company.

According to the settlement agreement approved by the freeholders, the county will have to bond $6.75 million bonds to pay the funds due to Power Partners Mastec LLC.

The county will still owe $26 million on the bonds it took out through the Morris County Improvement Authority.

County leaders are hopeful that by completing the rest of the project that wasn’t done by SunLight General Capital through a new firm, Vanguard Energy Partners, and through the settlement’s provisions giving it title to solar energy certificates and access to federal tax credits, will allow the county to gain revenue to offset the majority of its debt burden.

In the end, the county’s ultimate exposure could be in the $6.5 million range, according to financial estimates made by the county’s financial advisors, which include Gabel Associates. Gabel Associates reviewed the original agreement between the county and SunLight General Capital.

Some speakers on Wednesday raised questions as to why the county was listening to some of the same advisors on its newest agreement.

Board of Freeholders Chairman Phil Crabb (R-Franklin) described what happened with the solar company and contractor as being out of the county’s control, calling it “a train that went off the tracks.”

“It turned out to be a dispute between two private companies,” he said.

Several freeholders, including Gail Phoebus (R-Andover), attacked the lack of transparency in the board’s decision to withhold details of the settlement until after the vote.

Crabb said he decided to withhold disclosure because he “didn’t want to do anything that would destroy the benefits of the agreement.”

Crabb said the deal was “complicated,” though he said that didn’t mean the public “couldn’t understand it.”

“We just wanted to ensure that there was no chance to derail it,” Crabb said.

All of the freeholders said they supported a settlement though freeholder George Graham (R-Stanhope) also voted against it.

Joining Crabb in voting in favor of the settlement were freeholders Richard Vohden (R-Green) and Dennis Mudrick (R-Sparta).

Weinstein said that by not agreeing to the settlement, the county would simply spend more money on attorney fees and that the settlement would not change.

Phoebus said she wanted to table the vote and delay, saying the language of the agreements had changed in recent days and she didn’t have time to read it all.

“The only people who have not had their say are the people who are being asked to pay for this,” Phoebus said.

Dick Fitch, of Vernon, told the board, “I’m at a little loss for the information that’s come forward how we got into this mess.”

“Was there no legal oversight?” Fitch asked. “Was there no financial oversight?”