With the third-year anniversary of the Deepwater Horizon oil spill approaching, the Board of County Commissioners met in special emergency session Tuesday morning to hear the latest offer from BP to settle claims against the oil giant from the county and Gulf County Tourist Development Council.
Commissioners politely but firmly declined.
Though only one component of the proposed settlement – that for TDC losses – was made public, commissioners decided to press ahead on potential litigation after BP provided a lump sum proposal to settle county and TDC claims.
“They kind of put you in a box,” said Drake Martin with the law firm handling the TDC’s claim. “All or nothing. That is a change in policy for BP.”
Martin added that for the county to press its claim, commissioners may want to consider accepting the TDC settlement offer if the BOCC was provided an opportunity to accept it without accepting a settlement on the county’s claim.
The clock is ticking.
By Thursday, county attorney Jeremy Novak said, the statute of limitations on any claim will be become a factor in litigation.
He said the county, which had filed a preliminary presentment of its claim within the required time period, would likely have to file litigation if an acceptable offer on the county’s claims – which rest in large measure on loss of ad valorem taxes and erosion of property values since 2010 – was not forthcoming by the end of the week.
“We should know a lot more in the next 48 hours I would think,” Novak said.
During the open public portion of Tuesday’s meetings, Martin presented the case for the TDC claim and an offer from BP that arrived over the weekend.
Martin, noting that the TDC had received an interim settlement of $119,000, which did not bar the TDC from pursuing additional claims, said the TDC claim proved tricky.
Martin said BP has used a comparison model to examine claims and that meant comparing 2010 TDC revenue against prior years.
However, the TDC experienced growth in 2010, though less than in immediately prior years, and had continued that growth since the oil spill.
For example, TDC revenue was $642,000 in 2007 before steadily climbing to $741,000 in 2010.
That growth in the TDC continued in 2011 – revenue was up $100,000 – and 2012.
“That made our argument tougher,” Martin said.
However, Martin said his firm had crafted an econometrics model that showed loss of potential revenue – in part the new international airport in Bay County should have driven more travelers and revenue to the county – and by comparing his model to BP’s, he was able to arrive at a claim for additional losses.
Martin said BP’s offer before the presentment of the TDC case was insufficient, but that an offer over the weekend for $246,000, bringing the total payout to the TDC at $365,000, was reasonable.
The number, Martin noted, represented roughly 50 percent of TDC revenues in 2010.
“We have an offer within the zone of reasonableness,” Martin said.
Commissioners seemed inclined to accept that component but would not accept any settlement after a closed-door session on the county’s claims.
That claim, commissioners were informed, was tied to the TDC claim in a lump sum. Novak noted that was not how BP settled claims to the west in Bay County.
The amount of the offer to the county was not made public on Tuesday.
Commissioner Warren Yeager motioned that the county should proceed as if headed to litigation.
“I think there is room for further discussion with BP,” Yeager said. “We should pursue litigation on the county claim.”
A motion was also made to settle the TDC claim if the opportunity to separate it from the county was realized.
“That may be helpful to resolve this,” Martin said.