Council has voted to find a new contractor to complete the pier, after learning this week that the bonding company for the current contractor has rejected the city’s claim on the $3.5 million bond to finish the project.
That left the city with two options: complete the pier with the current contractor, and pay for additional costs without relief from the bond; or find a new contractor and pay the additional costs, while maintaining the city’s lawsuit against all parties to this dispute (including the contractor, design engineer, bonding company and others), hoping to recover costs through court action.
Council chose the latter course, with one dissenting vote (mine) and one member absent (John Taylor). Council felt that a clean break with the existing contractor and engineer was the best way for the city to keep its legal options open and move beyond the current deadlock.
This course of action was essentially a continuation of steps put in motion last September, when negotiations for the contractor failed to produce an agreement, and council at that time voted to retender. That process was effectively put on hold because of the election, and council returned to it this week.
I’ve now seen the details of the original September HSS offer, which was reissued with minor modifications in January. In my view reaching an agreement would not have been insurmountable, and I would have liked us to try harder to do that. In fact the contractor repeatedly requested meetings with council, and I asked that HSS be invited to speak to our meeting on Wednesday to provide additional information. But there wasn’t an openness or willingness from enough members of council to make that happen. I got the sense that minds had already been made up.
Going forward, the worst case scenario is that the re-tendering process will take several months to complete and add to our costs and timelines. Bids could come back at significant additional costs – if anyone bids at all on this project (given the pier’s well-known troubles, other bona fide contractors may take a pass). Bids could be well above the amount of the redesign proposal offered by the current contractor (the metaphor of a bird in the hand being worth two in the bush comes to mind here). Our legal bill will escalate and that money could be spent on finishing the pier. And finally, the legal process itself compromises our ability to be transparent and accountable with taxpayers.
There’s no certainty that the city will recover its costs through legal action. The design engineer blames the contractor for faulty concrete pouring; the contractor blames the engineer for poor design. The city is leaving this in the hands of the courts to render a decision, or lawyers to cut a deal with the various parties. In the end, we may never know who is at fault and costs may simply be apportioned against all parties, including the city.
My take: The re-tender process and the litigation pose significant risks in cost and time delays to taxpayers, so I could not support it. I also believe a deal could have been reached with the contractor. Your feedback also influenced my decision. Since I wrote about this in January, dozens of you, including residents with significant experience in construction, engineering and law, have told me your prefer a negotiated settlement and abandonment of the legal action.
Council and senior staff are counting on the best case scenario here: that the new bids for the pier project come in at reasonable cost, the shovel is in the ground this fall, and the city wins recovery of cost overruns in the courts. For taxpayers’ sake, I sincerely hope it turns out that way, and as a member of council I will do whatever I can to make it so.
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