Undergrounding Legal Bills Top $766,000 in Palm Beach

In this undated image from the Palm Beach County Clerk’s office the entrance to the courthouse is seen. (Palm Beach County Clerk via Key News)

Legal bills for a trio of court cases challenging the legality of an underground utility project in the Town of Palm Beach have hit more than $766,000 to date in advance of a key July judicial hearing, according to the project’s manager.  

The fate of the case could have ramifications for Key Biscayne, which is considering a similar $46 million dollar project. 

Palm Beach Circuit Court Judge James Nutt will hold closing arguments July 19 as he decides whether to grant class action status to opponents of an “assessment” method of paying for the town’s undergrounding project. Carol Kosberg and Michael Scharf are challenging the assessment, contending that is an illegal tax. If they persuade the judge to grant class action status, the case would sweep in many more plaintiffs. 

So far, the Town has prevailed on a number of differing court challenges to the $90 million project, which is about 1/8 complete, said Steve Stern, the project manager. 

“I believe we will be awarded a favorable decision by the judge,” he said of the Kosberg case. “If the class isn’t certified, it’s just two people versus the Town.” 

The assessment methodology, which was just as controversial in Palm Beach as it is in Key Biscayne, differs from a general tax in that a calculation is made for each property to determine the “special benefit” it would receive from the undergrounding project. The heart of the plaintiffs’ challenge is that the Town failed to show that the benefit was “special.” 

“There is no evidence to show that it benefits the property,” said Henry Handler, an attorney for the plaintiffs. “We are saying the record before the Town Council lacked a necessary showing of benefit.” 

Attorneys for the Town say Kosberg and Scharf are “inadequate case representatives” and are asking the judge to deny the class action certification. 

The Kosberg case has consumed most of the Town’s bills so far, about $450,000, Stern said. The Town prevailed at the trial level on the other active case in federal court, but the decision is being appealed to the 11th U.S. Circuit Court of Appeals, he said.

This story was corrected to correct the amount in the lead paragraph.