FARMINGTON — City Council is giving Halliburton Energy Services Inc. until Feb. 28, 2013 to make payments on money owed to Farmington Municipal Schools and San Juan College.

How much money the corporation owes is still unknown. But Halliburton representatives notified city officials that they recently discovered the company hadn't made payments required under a 2008 bond agreement with the city.

In the amendment passed at Tuesday morning's work session, Halliburton will also pay a 1.5 percent penalty per month on the money owed if they do not make the payments in lieu of taxes to the schools by the February deadline.

City Council's amendment still has to be approved by Halliburton, said City Attorney Jay Burnham.

Halliburton officials were unavailable for comment on Tuesday.

Burnham and City Manager Rob Mayes are drafting a new city policy putting safeguards into place for any future industrial-revenue bond projects.

The city should already have such a policy, said Councilman Jason Sandel.

"It's disappointing that we don't have safeguards in place," Sandel said. "This is just one instance where the city needs to step up. It's embarrassing that money is being taken away from our schools. It doesn't matter if it's $1 or $1,000."

Councilman Dan Darnell, who voted in favor of the project in March 2008, said that Halliburton had assured the city that the payments in lieu of taxes would be made.

"It was a contentious issue," he said.


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"I based my decision to vote yes on the hold-harmless provision."

Sandel, who voted against the project, said that Halliburton's failure to make payments to the schools and the college could mean that this happened before.

"When there's a breakdown, it provides cause for concern that there are other breakdowns," he said. "They ought to be self-reporting to the city on payments. The way it is now, who knows how many people have been ripping the city off over the years."

For Sandel, the decision to issue the industrial-revenue bond was doomed from the beginning.

"It was very typical big business pushing the city around," he said.

The Troy King Road property for Halliburton's proposed $24 million facility is located on the western edge of Farmington, on the opposite end of the city from oil and natural gas fields, he said. The facility was never built, and Halliburton is repaying the $22 million in bonds.

Sandel said the location never made sense for Halliburton.

"They'd be having to go through Pinon Hills Boulevard," he said. "Almost within a month or two (of getting the bonds) they decided not to relocate."