Double Indemnity: Vallejo’s Pair of Million-Dollar Mistakes

“Mare Island, Industrial equipment” by Telstar Logistics is marked with CC BY-NC 2.0.

There’s a certain irony in the fact that the City of Vallejo will be paying $1 million dollars to fix soil on Mare Island after just selling the entire north end to developers for $3 million. The argument that the City made for letting the land go for that low price was that Southern Land, the developer, would have to spend millions to remediate the soil there, so they were really doing a us a favor. Residents who supported the sale went along with this, though many of those that opposed the sale didn’t even balk so much at the price, but at the fact that the contract was weak on guarantees to build. Now Vallejo will be paying a cool million out of the General Fund to clean soil contaminated by a building demolition that really should have been taken care of as part of a contract with the demolition firm. I think it’s fair to say that the City of Vallejo has now given Mare Island away for $2 million, not three.

The city contracted with a Southern California firm, Resource Environmental, to demolish Building 571 in 2019, according to staff reports. 571 contained transformers that had PCBs, or Polychlorinated Biphenyl, a highly toxic product banned in the US in 1978. Apparently when the building was taken down, those suckers spewed everywhere and have now contaminated the site. Surely the firm charged with taking down the building, especially a firm with “Environmental” in its name, should be responsible for leaving the site free of toxins? You’d think so, but the original contract with the company apparently had no indemnification for any contamination resulting in the demo. This was a million-dollar oversight. Kind of like the nearly $1 million oversight in the Project Roomkey contract which left the city on the hook for damages to the motel. It appears that indemnity clauses were left out of both. Surely such things are basic parts of contracts? Isn’t a municipal contract specifically drawn up to prevent million-dollar liabilities?

On April 22, I asked the City’s spokesperson: “Can you ask public works and the city attorney’s office if there is/was a contract with the entity that destroyed the building and spread the PCBs into the ground to pay for this pollution clean-up, or at least finish the job and not make the tax payer foot the bill? In similar situations in other cities, it is written in the contract that the entity hired to demolish a building must pay for any and all contamination that results from their work. It seems similar to the Project Roomkey bill that the City had to pay for damage; shouldn’t there have been a contract saying the City is not financially liable for such things?”

To which they responded: “The City is in the process of investigating and has been in contact with the insurance companies for the contractors who designed and performed the demolition work.”

So, not a lot of info there. If I had to guess, the City is trying to get the contractor to use its insurance to pay for the clean up and the contractor is going to say, “Stuff it, V-Jo, there is nothing in our contract that said we had to do that.” If they say sure, we are happy to use our insurance to pay a million bucks and subsequently have our premiums go up, then more power to them I guess. Or better yet, sue us and we will win and still pay less than $1 million for the trouble.

I reached out to the contractor, Resource Environmental, and they did not respond.

Another head scratcher is how anyone charged with writing up or overseeing contracts for a city is allowed to make $2 million dollar mistakes and keep their job. Because make no mistake, someone screwed up bigly. Then Public Works Director Terrance Davis, who was just promoted to assistant city manager; Randy Risner, chief assistant city attorney, and City Attorney Veronica Nebb need to indemnify Vallejo tax payers.