Palm Beach battling lawsuits challenging utilities pay plan

Article Courtesy of The Palm Beach Daily News

By William Kelly

Published August 17, 2017


The town is asking a judge to rule in its favor without a trial in its legal battle with two residents over the payment plan for the utilities undergrounding project.

The town filed the motion for a summary judgment Tuesday in Palm Beach County Circuit Court against Carol Kosberg and Michael Scharf, whose lawsuit challenges special assessments on property owners.

“Hopefully, we will have a quick resolution of that matter,” Town Manager Tom Bradford told the Town Council Wednesday.

A hearing date has not been set.

Meanwhile, the council approved $175,000 to pay for legal counsel, consulting and experts to fight the Kosberg/Scharf suit and another class action suit filed Aug. 1 by PBT Real Estate LLC, based at the Palm Beach Towers condominium building. That suit, also filed in Palm Beach Circuit Court, alleges the owners of the 273 units at the Towers building at 44 Cocoanut Row should not be assessed because the building already has underground utilities. The Towers’ condo association has disavowed any connection with the suit.

Town Attorney John Randolph said the town plans to file a motion in the PBT Real Estate suit similar to the one filed in the Kosberg/Scharf case.


Kosberg, a South End condominium owner, and Scharf, a North End resident and former zoning commissioner, sued the town July 28, alleging the special assessments are invalid because the town relied on a consultant’s “arbitrary assessment methodology.” The consultant’s report “hypothesized” special benefits of safety, reliability and aesthetics based on a property’s size, density, location and other factors, they contend in the suit.

Bobbie Lindsay, from left, Tony Dowell, Richard Kleid and Julie Araskog and Tom Bradford attend a groundbreaking ceremony for the utilities undergrounding project at Phipps Ocean Park in Palm Beach on Aug. 4, 2017

The residents want a judge to certify the case as a class action, declare the special assessments void, and permanently block the town from imposing special assessments.

In its motion, the town noted that a judge recently ruled in its favor in another legal case involving the utilities project. In that instance, South End resident Arthur Goldmacher asked a judge to void the result of a March 2016 referendum in which voters approved up to $90 million in bonds to finance the utilities project, secured by the special assessments.

Goldmacher argued the town misled voters in the ballot language about how it intended to repay the bond debt. Palm Beach Circuit Judge Cymonie Rowe disagreed, granting the town’s motion for a judgment without a trial.

“In essence, Kosberg and Scharf are simply unwilling to accept the results of the vote and the effect of this court’s ruling determining the validity of the bonds and allowing the town to proceed to issue bonds …’’ the town’s motion states.

The town also notes that the court has “validated bonds, secured by special assessments based on similar categories of benefits and methodology, for the Town of Gulf Stream and Jupiter Inlet Colony.”

Goldmacher has appealed the judge’s ruling to the 4th District Court of Appeals in West Palm Beach. Kosberg has dropped an earlier lawsuit she filed against the town, also challenging the referendum.

To date, the town has spent $168,000 battling the original Kosberg suit and the Goldmacher suit. The legal costs are not part of the underground utilities budget and are not paid with the special assessment revenue. Instead, they are paid by the taxpayers of the town, Town Council President Richard Kleid said.