Following an executive session the Fairhope City Council approved a resolution Monday evening allowing Mayor Tim Kant to sign a settlement agreement related to its individual claim against BP. Council President Jack Burrell said the city was under a federal gag order and, as of Monday, was unable to discuss the amount of the settlement. Burrell said the city was required to accept or deny the settlement by July 15, which is why it authorized the move at its Monday meeting.
Kant said he expects to be able to release information about the amount of the settlement after July 15, the deadline set by U.S. District Judge Carl Barbier in Louisiana for municipalities to approve or deny settlements. He said the city’s individual claim is for recovery of economic losses directly related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico and is not the same as funds for RESTORE Act projects.
City Attorney Tut Wynne said it is important that the some 400 entities receiving BP settlements keep the results confidential until the gag order is lifted.
“A certain percent of the municipalities have to accept the settlement, then they have to keep the information confidential in order for the settlement to go through,” Wynne said. “If too many let out how much they are getting, the entire settlement could fail.”
Some municipalities have already revealed their settlement amounts, with the city of Pelham reporting a $106,760 settlement and the Birmingham City Council reporting a $1 million settlement. Elsewhere on the gulf coast, New Orleans reported a $45 million settlement.
Before the executive session, during time set aside for public participation, Kant addressed a resident who asked the city to provide the citizens with a report on how the city expects to spend BP settlement money. Kant said the Gulf Coast Recovery Council would meet this week to begin to finalize plans on how it should spend RESTORE Act funds.
“Out of the money going to the state council, a good part of that will be spent on environmental issues,” Kant said. “The state council will have roughly $600 million to spend on economic projects and another roughly $300 million on environmental projects, then there are other monies in the middle. We are a little concerned that the state filed a loss of revenue claim related to the oil spill for about $500 million. We asked the state to consider it not just to be dumped into the general fund. Whether we have any chance of that happening, we don’t know.”
Council creates Educational Building Authority to help new Catholic school
The City Council voted unanimously to create the Educational Building Authority (EBA) to help the Archdiocese of Mobile to gain tax exempt status for bonding related to building at the site of the future St. Michael’s Catholic School on Dick Higbee Road in Fairhope. The EBA will operate as a public corporation and will be under the direction of three Fairhope residents – James C. Bailey, Gary D. E. Cowles and Ellis V. Ollinger III – who the council also approved on Monday.
Mobile Archdiocese attorney Grey Redditt said in order to follow Alabama statute, Chapter 17 of Title 16 in the Alabama Code, the Archdiocese must have an incorporated education authority which can be issued bonds. The statute requires approval to be obtained from the local municipality. At the Monday evening agenda meeting, bond attorney Heyward Hosch told councilors the city would have no liability once it creates the EBA.
“It is a public corporation, it doesn’t have any power of taxation or police power,” Hosch said. “It is controlled completely by the City Council, as you appoint all the directors to six year terms. This will help them obtain the best possible financing they can for the school. As a public corporation they are separate from the city. They cannot create a debt for the city and their obligations do not count against the city’s debts.”
City Council President Jack Burrell pressed Hosch further, asking again if the city has any liability for bond issues related to the EBA.
“The statute prohibits any liability on the city, but we also put that in the documents themselves,” Hosch said.
Because the resolution approved a move that is permanent in nature, not in ordinance form, the City Council had to suspend the rules in order to consider it at Monday’s meeting. The resolution was not discussed at a previous work session.
Before the vote, Councilman Mike Ford asked City Attorney Tut Wynne if it was a conflict of interest for Ford, a Catholic, to vote on a resolution dealing with a Catholic school. Wynne said as long as Ford was not going to profit from the school there was no conflict.
St. Michael’s will be located near the intersection of State Highway 104 and Dick Higbee Road in Fairhope. Officials broke ground on the high school in March and expect to open in August of 2016 with approximately 130 ninth and tenth grade students. The school will eventually hold up to 400 students in grades nine through 12, according to officials.
Mobile native Faustin Weber, headmaster at a Catholic high school in Nashville, was selected to be the school’s first principal.