Whitehall city council rejects change to security bond with Hi-Crush

The Whitehall city council voted 4-2 against changing the letter of credit with Hi-Crush to a surety bond. The matter had been brought up at the March meeting, but was tabled to allow more time to examine the paperwork.

With a letter of credit, a company sets aside funds for reclamation, while a surety bond functions like insurance. Hi-Crush pays a premium to another company, Philadelphia Indemnity, which would pay out if necessary. The dollar amount would not have changed.

Tim Lambrecht of Hi-Crush pointed out that the company had already dismantled the buildings on the site.

“I would hope that the work we’ve done to date is a goodwill gesture,” Lambrecht said. “We’re not looking for any form of reduction.”

“It is appreciated,” council member Frank Juresh said. “It’s the DNR concerns that affect me still.” 

Juresh alluded to the city’s ongoing problems with the library site, pointing out that unforeseen problems could arise.

Juresh also pointed out the difference in process between a letter of credit and a surety bond. With a letter of credit, the city submits the claim and tells the bank what needs to be done, which the bank then investigates.  For a surety bond, the insurer tells the city that the project is incomplete and then awards the money.

After discussion, the city council held a roll call vote. Council president Bob Sendelbach and member Kurt Johnson voted yes; all other members voted to reject the proposal.

Council members also met in closed session for 27 minutes to discuss hiring employees for the Whitehall Aquatic Center this summer. No decisions were made in open session.

The Whitehall Fire Department was granted a temporary liquor license for the fireman’s dance May 20 and 21.