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Cape officials say city suffered no BP revenue losses

By Staff | Jul 24, 2015

The city of Cape Coral did not file a claim because staff apparently concluded the city did not suffer economic losses from the BP oil spill in 2010.

City Attorney Dolores Menendez provided the mayor and council members with that information late Wednesday afternoon, explaining why the city did not pursue money from the settlement.

Reaction to the news was mixed.

Some believed the city should have sought every penny it could possibly justify, especially since BP set a low bar for entities to receive claims.

Others believed it was ridiculous that Lee County and the school system received any money at all.

In the memo, Menendez explained there were three categories of BP oil spill claims.

“Two of the main categories, related to economic damages and medical damages, were set up as private, non-government claims processes that excluded participation by governmental entities… The third category involved governmental claims ranging from federal environmental civil penalties to strictly local government damages,” Menendez said.

Claims in the final category were based on showing a loss of revenue during the period during the spill, Menendez said, adding that filing for claims for damages expired in January 2013.

The memo explained that the City Clerk’s office reviewed the minutes of city council meetings and found “few, if any” references to the city suffering any damages.

Menendez and Assistant City Attorney Steve Griffin met with Assistant City Manager Mike Ilczyszyn and city spokesperson Connie Barron on Wednesday. Nobody was aware of any damages suffered by the city that would have warranted a claim, the memo said.

Last Wednesday, the Lee County School Board voted unanimously to approve a $2.5 million settlement from BP, part of an $18.5 billion multistate settlement by the oil giant.

Meanwhile, the Lee County Board of County Commissioners also voted unanimously for a $5.2 million settlement. Sanibel will receive $460,000.

Fort Myers Beach and Fort Myers were among the cities that did not seek settlement funds.

Former mayor Eric Feichthaler, who represented businesses seeking damages in the BP settlement, said it is difficult to say whether the city should have filed a claim without knowing the numbers.

Because of the condition of the economy at the time, Cape Coral’s numbers were down.

“It’s all numbers driven and in 2010 everything was down and there were many different angles in which to take that claim. For anyone who thinks they may have suffered financially, it was a good idea to make a claim,” Feichthaler said.

Under the terms of the settlement, entities could be considered damaged by the spill if a company lost 8 percent in 2010 compared to the years before and after that, Feichthaler said. With the economy the way it was in 2010, he said that made for a low bar.

“I told my clients if you fit that scenario, then you may be eligible for compensation. Many of my clients were successful,” Feichthaler said. “You didn’t have to show why you had a loss. You only had to show your revenue went down. That’s why thousands in Lee County made claims. It made a lot of people eligible.”

John Sullivan, who was mayor at the time, said staff should have brought those potential losses forward to the council. But nothing ever was. He said a letter was sent to the city attorney, but nothing came of it.

“Staff is supposed to bring that up. Council sets policy. Council doesn’t bring forward grant money. We have grant writers who are supposed to bring that forward,” Sullivan said. “They needed to let us know if seeking settlement money was plausible or not to make the claim. It should have been brought to council to at least discuss it with staff.”

Councilmember Richard Leon, who was not on council at the time, said he thought some of the settlements, such as with the school system, were ridiculous.

“I have to applaud the council between 2011 and 2013 for not. Many people have taken advantage of this money and it’s a shame because it could go somewhere else, like the environment,” Leon said. “If any entity was affected, then absolutely. But the school district has no shoreline or any issues with the oil.”

Councilmember Rana Erbrick said she didn’t want to second-guess the decision to not pursue, but didn’t know if there were any damages the city could prove.

“If you’re going to undertake something like that, you have to prove something. I’m not willing to go back and blame someone. It is what it is. I don’t think we were entitled to something,” Erbrick said.