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Published: Friday, 3/16/2007

Gorham Fayette to get $3.9M in water settlement

BY JANE SCHMUCKER
BLADE STAFF WRITER

The tiny Gorham Fayette Local School District has negotiated a $3.9 million settlement with two corporations for contaminating groundwater with a probable cancer-causing compound near the elementary-through-high school building in Fayette, Ohio.

The settlement is expected to reduce taxes in the district, where property tax rates are among the highest and median household income is among the lowest in Fulton County.

"We will be good stewards of the money," school board President Kelly Bentley said, adding the board's finance committee is checking on maturity dates and early payment penalties for its bond issues and other debt.

The board's law firm, Eastman & Smith Ltd., is to get 25 percent, or $975,000, of the settlement.

The board's suit against the companies responsible for the former Fayette Tubular Products Inc. plant was filed in U.S. District Court in Toledo in 2004. It is expected to be dismissed in the next few weeks after the settlement is signed by leaders of the defendant corporations, D.H. Holdings Corp. and Hutchinson FTS Inc.

The board approved the settlement Tuesday by a 4-1 vote, with Kim Winzeler voting no.

Attorneys for the defendants did not immediately return a call from The Blade yesterday.

The suit, which was to go to trial this month before it was tentatively dismissed late in January, asked for D.H. Holdings and Hutchinson to pay for the school district's expenses for a new building.

District leaders feared groundwater contamination from the former Fayette Tubular plant in the far northwest corner of Fulton County might vaporize trichloroethylene into classrooms. The district closed a fifth-grade classroom after a detectable level was found there.

Trichloroethylene was used as a degreaser at Fayette Tubular where automotive air conditioning components were made from 1962 to 1997. The school is about 50 yards north of the former plant.

Yesterday, the district was starting the foundation for a school that is to replace both the Fayette building and the district's Franklin Elementary School south of the village.

The Ohio School Facilities Commission's Extreme Environmental Contamination Program put $13.6 million toward the project. District leaders wanted the corporations that now have responsibility for the former Fayette Tubular to pay the rest.

Cost of the new building has been estimated at more than $18 million. That doesn't include land - the school board paid $230,000 for 55 acres last fall - or interest, which is expected to add an additional $3.4 million.

To cover those expenses, district voters approved a 7.1-mill bond issue in 2005 that is to collect almost $4.9 million over 28 years. It costs $217 a year to the owner of a $100,000, owner-occupied home and raised $260,000 last year.

This year, it is expected to raise nearly $267,000.

Property owners in the district still are paying on an earlier bond issue for the building in Fayette that will be vacated with the completion of the new building, which is expected to be in the summer of 2008.

But the board president said the settlement will help, and she added, "I'm glad it's over."

Ms. Bentley and board member Terry Kovar used vacation days from their jobs - without compensation from the district - to attend mediation sessions to resolve the suit. The board paid legal expenses in addition to the $975,000 that will go to Eastman & Smith, she said.

Contact Jane Schmucker at:

jschmucker@theblade.com

or 419-337-7780.



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