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Blue Array officially defunct after JH Kelley acquisition

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After six months of poor relations with local officials and ongoing financial setbacks, sewer company Blue Array has officially dissolved, with it’s remaining components being absorbed by former backer JH Kelley.

While it had has been unclear if Blue Array itself would remain in tact after previous owners James Reilly and Victoria Jelderks defaulted on their debt to JH Kelley Jan. 1 (a debt acquired when the two agreed to purchase JH Kelley’s stake in Blue Array back in July), it has since been reported their experimental wastewater treatment plant has been decommissioned indefinitely and neither Reilly nor Jelderks are in any way associated with the company.

Their experimental plant, a membrane bioreactor designed to fit within a cargo container, had been installed in Vader at the end of 2012 as part of a pilot program and remains there today, with Vader Mayor Ken Smith stating during the Jan. 23 City Council Meeting it is unclear when, or if, the equipment will be removed.

City Attorney Joe Rehberger has reportedly been in contact with JH Kelley to determine how the two entities should proceed, though details of their discussions have not yet been made public.

While Blue Array is defunct, Vader’s ability to offer sewer service to its customers has remained unaffected, as the Blue Array system had been installed redundantly, at the request of the Department of Ecology, so a failure of the experimental system would not harm the city.

Sewer services themselves are currently being provided with the help of the City of Winlock, who approved an interlocal agreement Jan. 27 allowing Sewer/Water Superintendent Dennis Baker to oversee the maintenance and testing of Vader’s plant. Simultaneously, Vader is seeking state certification for Public Works Employee Nev Peltier to eventually maintain the plant on his own, and this certification process is reportedly expected to take around six months.

The interlocal agreement requires Vader to pay $48.30 per hour for Baker’s assistance, as the work will be considered overtime on top of his duties at Winlock, plus $0.56 per mile for his travel to the plant (an estimated 6.5 miles one way from Winlock).

Vader had previously been paying former employee Dennis Montgomery a flat fee of $1,300 per month to service the plant until he left in July amid council displeasure at his refusal to submit to city guidelines, including the documentation of his hours. As a result, City Clerk Jill Neilson indicated Vader is currently not in a position to estimate the volume of hours they expect Baker to work.

Though Baker will be overseeing plant operation, Vader is expected to retain all liability for the plant, including insurance coverage and all fees associated with permitting and any violations of said permits, according to the agreement.

As for Blue Array’s previous owners, Jelderks had originally submitted a proposal to the Vader City Council Jan. 9 offering herself as a sewer employee, given she was still engineer of record for the Blue Array system at the time. As of Jan. 23, it has been reported Jelderks no longer retains that position and her proposal has been withdrawn.

Reilly has also contacted the council, but rather to express his frustration with Blue Array’s demise and Vader’s supposed responsibility, in part, for allowing it to happen. In a letter sent to officials Jan. 19 he identifies the city’s Capital Improvement Fund (currently containing around $110,000) as a source of revenue that could have helped sustain Blue Array’s operations in Vader, but implies the funds were withheld because officials are attempting to manage the money in secret.

City Clerk Jill Neilson said the Capital Improvement Fund appears with all other line items in the city’s publicly-accessible budget and has been the subject of discussion during multiple council meetings, including talks around the end of last year when officials explored financial options available to help keep Blue Array from going under.

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