Palm Beach County OKs borrowing up to $35 million for debris removal

Oct. 18--Palm Beach County commissioners approved a $35 million line of credit Tuesday to pay for Hurricane Irma debris removal and to replenish the reserves of the Solid Waste Authority.

The line of credit, obtained through Wells Fargo, reflects both the high costs of storm cleanup and the slow pace of reimbursement from the Federal Emergency Management Agency, which has yet to pay the state of Florida and Palm Beach County for expenses incurred during Hurricane Matthew, a storm that menaced the state's east coast a year ago.

Dan Pellowitz, the SWA's managing director, said the authority expects to get back from FEMA about $1 million of the $1.4 million it spent during and after Matthew.

County commissioners, who serve as the Solid Waste Authority's board, voted unanimously in favor of obtaining the line of credit to pay for Irma cleanup. SWA Executive Director Mark Hammond said the line of credit would "help give us working capital to help us pay for the cleanup that's been going on for about a month."

In addition to voting in favor of having the SWA obtain a line of credit to cover Irma-related costs, commissioners sought to provide assistance to those struggling in the aftermath of yet another hurricane, Maria, which blasted Puerto Rico and the U.S. Virgin Islands, washing away roads, crippling the electrical grid and choking off clean water supplies.

Commissioners voted to spend up to $100,000 to help a disaster relief coalition, Palm Beach County Cares, which was created to assist residents of Puerto Rico and the U.S. Virgin Islands in the aftermath of Hurricane Maria. The money will come from various departments' operating budgets and the county's general fund contingency reserves.

Deputy County Administrator Jon Van Arnam said the county will seek reimbursement for whatever it ends up spending to help with Maria disaster relief. But because the federal government did not include Florida in its Hurricane Maria disaster designation, the county might not be eligible for reimbursement.

Thousands of Puerto Ricans are expected to come to Florida as the U.S. territory struggles to recover. Some Puerto Ricans have already made their way to Palm Beach County, whose officials are working with Palm Beach County Cares coalition members to make sure those who come get help obtaining federal aid and housing.

"So far, most of those that we are aware of have found housing with family and friends," Van Arnam said. "We suspect that this could change."

Paling in comparison to the destruction Maria brought to Puerto Rico and the U.S. Virgin Islands, Hurricane Irma's swipe across Palm Beach County left a big mess and caused an estimated $100 million in property damage.

Bill Johnson, director of the Palm Beach County Division of Emergency Management, said about 147,000 people in the county have sought individual FEMA assistance.

The mess Irma left, including an estimated three million cubic yards of vegetative debris, is drawing down the SWA's reserves, which stood at $27 million before the storm.

So far, the SWA has spent about $23 million on debris removal and processing.

"Of course, that will continue to go up as we receive more material," Hammond said.

About 1.6 million cubic yards of debris has been cleared from unincorporated Palm Beach County, Hammond said.

All together, about 2.1 million cubic yards of Irma debris has been brought to SWA facilities. That figure includes debris brought to SWA facilities from Boca Raton, Wellington, Delray Beach and Palm Beach Gardens, which have their own contracts with haulers.

The line of credit comes with a six-month draw period, giving the SWA the flexibility to obtain as much -- or as little -- of the $35 million it needs during that time. After that period, the outstanding balance will covert to a three-year loan at a variable rate that currently stands at 1.29 percent.

Wells Fargo was selected by the SWA after five firms responded to the authority's request for proposal.

"As FEMA reimbursement comes through, this line of credit goes down," Pellowitz said. "This is similar to what we did during (2004 hurricanes) Frances and Jeanne."

The county obtained a $50 million line of credit to cope with those storms.

"Ultimately, this is not unchartered territory," Pellowitz said.

While commissioners ultimately voted unanimously in favor of obtaining the line of credit, one commissioner, County Mayor Paulette Burdick, wasn't thrilled that the source of the funds is Wells Fargo.

The bank has been buffeted by allegations that it tricked people into paying higher fees and mortgages, charged customers for car loan insurance they didn't need and created a climate that led to employees creating 3.5 million fake bank and credit card accounts.

In August, The Washington Post quoted Wells Fargo Chief Executive Timothy Sloan saying, "We apologize to everyone who was harmed by unacceptable sales practices. We are working hard to ensure this never happens again and to build a better bank for the future."

Burdick voted to have the SWA do business with Wells Fargo, but not before getting in her own shot at the bank.

"I do have a problems with Wells Fargo," Burdick said. "They do not have a good reputation. They have had ethical lapses in judgment at the highest level."

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