Rushford Village is nearing the end of its 2016 road improvement project and there is hope it could end with cooperation from contractor McHugh Excavating. At the council’s December 6 meeting, discussion centered largely on wrapping up the $878,000 plus project and the best path to doing so. The council has been forthcoming with frustrations, but is looking to offer a compromise as a first step.
The project had a substantial completion contract date of September 17 and an October 1 final completion date. Three days prior to the first date, the contractor sought additional days in the contract timeline, extending the date to October 25, but did not formally file for extension with written justification, according to engineering firm Bolton & Menk. “By virtue of the contract, they had to give 30 days notification of extension.” The company formally asked for extension November 6.
Project engineer Josh Pope noted at the time that some extension was likely due. Liquidated damages of $850 per day past the substantial completion date and $85 per day past the final completion date began accruing for the contractor according to the contract. In November, a closed meeting was held to discuss pending or threatened litigation over the penalties. To date, no litigation was filed.
After review, Bolton & Menk believes a seven-day extension to the project is justifiable, setting a September 24 and October 8 as potential substantial and final completion dates. Pope stated that the company achieved what was deemed substantial completion on September 28. Final completion has not been achieved and due to weather, will likely not be completed until spring. Two concrete repair items remain on the punch list and Pope indicated they would not fare well if done now.
“November 18 is significant,” said Pope. “McHugh completed all other punch list items. It’s a valid date to stop liquidated damages.”
Now, Pope indicated there are three options for wrapping up the project with McHugh. Option one is a “hard stance” and only considers days requested after November 6. That equates to 11 days at the $850 per day rate, or $9,350. An additional $4,000 in damages could be applied for final completion. Option two is to give seven days justifiable equaling four days at $850 per day, or $3,400. There were 41 days at $85 for an additional $3,485, making a cumulative total of $6,885 total.
“Option three, if you want to take a further hard stance, is to say it’s still not completed,” said Pope. In this case, the $85 per day would apply every day from the final completion date until the project is completely wrapped up. “I’d advise against this,” he cautioned. If the contractor is amenable to the decision, Pope said the council could expect the next to final pay application ready by the next meeting. “At this point, that’s a big assumption to make,” he added.
“I’m exceptionally disappointed in how they’ve responded. Accountability is… if you’re going to be in this business, you either step up to the plate or…” said Mayor Gordon Johnson. “They should have considered this ahead of time. Do we let them off the hook completely? No. He made it a challenge when he said they’d never been penalized before and we won’t be the first.”
Councilor Rich Smith agreed. “We have a contract for a reason. They had 30 days to submit. My feeling is, if we give them the seven days, they’ll dig in their heels and we’ll have to back down.”
“It would be fun to dig in and fight it, but I don’t think that’s the right thing to do,” added Councilor Chad Rasmussen. He further questioned what happens with future contracts and how they would be expected to be upheld. “It would be hard to wipe our feet and walk away. That’s not what we’re here to do.”
Bolton & Menk has indicated that the City of Rushford Village has the legal leverage, in their opinon. “We’ve got all the leverage in the world, but is it worth it? There has been a financial burden for the Village has undertaken.”
“I like seven days. It’s a compromise,” said Councilor Dennis Overland. “If they dig in their heels, then we fight it.”
“If we can look at the days and have the openness to allow you to do some negotiating, we’re willing to compromise, to a point,” added Mayor Johnson. “If they’re not willing to accept a compromise, we’re in the driver’s seat. We stand in a good position.”
The Village approved amending the substantial completion date to September 24. November 18 will be capped as the final completion date and no penalties will have accrued after that point.
In other news, a site visit by FEMA on roadway issues related to heavy rains this fall is shedding some new light on a report the Village submitted to agency through the county. “By the way their talking, we’re going to get some help through FEMA,” said Public Works/Maintenance Supervisor Travis Scheck. “There’s plenty of reasons for help.”
Josh Pope indicated that the Department of Natural Resources standing on one crossing may actually help further the assistance request. “The second you raise or alter it, the DNR will say you’re changing the hydraulics. It’s now an improvement,” explained Pope. “If the DNR says you have to, FEMA would have to fund it. They can’t fund something that doesn’t meet code. Their stance is helping us.”
The FEMA visit also brought about some additional preventative measures that can be done. Scheck will continue working with the FEMA representative to help bring about some assistance.
The next regularly scheduled council meeting is Tuesday, December 20, at 7 p.m., at the Village Hall. The public is encouraged to attend.
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