In closed meeting, following the Tuesday, November 1 open meeting, the Rushford Village Council met with City Attorney Tom Manion to discuss “pending or threatened litigation.” The issue pertains to a contract dispute with McHugh Excavating of Onalaska, Wis.
May 3 of this year, the council awarded a $665,000 bid, part of a larger $878,000 project to the 40-year company. The roadway and culvert project was bid with a base project and alternates A and B, and was approved by the council as such following recommendation by Project Engineer Josh Pope, of Bolton & Menk, Inc. At the time, it was indicated that the contractor would like the project wrapped up by July and a substantial completion contract date of September 17 was set.
By the June 7 council meeting, Rushford Village Mayor Gordon Johnson and Public Works Supervisor Travis Scheck had met with several property owners in the affected area to take a closer look at the cause of the problems, options, and impacts of those options. At the meeting, Josh Pope further discussed the drainage issue and additional options, including a project change order. Pope noted at that time that he had been in conversation with the contractor regarding agreed pricing and the potential change order, which was approved pending contractor pricing with a not-to-exceed cost of $15,000.
As the June 21 council meeting came, the project was underway, but communication between residents and the city was a problem, as noted by both Mayor Johnson and the engineer. Pope also noted that the project course had changed, due to the weather and project timeline constraints. “They’re going to attack road by road, making improvements and pavement right behind it. When this thing goes, it’s gonna go in a hurry. We’re not sure if that’s just lip service from the contractor, but we’re hoping it’s the contractor’s intent,” said Pope at the meeting.
Problems persisted by the time the August 16 meeting came and additional work came with an unexpected culvert on Ridgeview Road, widening on Highway 43/Whitmore Street, and paving of the culdesac on Nordic Court. The month was also ripe with substantial rains. As September came, multiple media outlets began reporting frustrations with the project, as noted by both the council and residents.
“Everybody here in this room is a little concerned that McHugh isn’t going to be able to meet the deadline. In terms of resident feedback, everybody that’s been impacted shares the frustration that the project has gone on this long,” stated Pope, at the September 6 council meeting. He did acknowledge the contractor was probably due some increase to the date, not including possible weather increases. Bolton & Menk issued a notice to McHugh the same day regarding contractual obligation.
“There is a clause of liquidated damages. It’s not a penalty; it’s a recognized damage recovery,” Pope explained. He further noted the method protects the contractor through awareness of contract parameters and consequences and it serves the city by recovering financial damages for lack of completion. He indicated damages are difficult to quantify, so reasonable damage estimate amounts are determined pre-bid and that for every day the project was not substantially complete, the city would recover $850 per day via deductions to the contract amount.
As the substantial completion date came and went, frustrations continued to mount. At the September 20 council meeting, it was noted that McHugh had sought additional days in the contract timeline, extending the date to October 25, but hadn’t formally filed. According to Pope, per the contract, requests for extensions must be filed with written justification. “We’re not even going to attempt to look at that without justification,” stated Pope. “It’s all part of the discussion. But, we’re not going to give credit for days that weren’t warranted. Nobody expected to be here today with this project running late. We have a contractor that flat hasn’t performed.”
By the October 4 meeting, roadway progress was moving along. “We’re very happy the work is being done here finally and we’re happy to be seeing the finish line,” noted Pope at the time. It was determined that McHugh would not be granted any extension on the project due to lack of submitting the required supporting data with the request. According to Pope, per the contract, supporting evidence documentation must be provided within 15 days of the request.
A third pay application to McHugh, in the amount of $263,297.89, was approved at the October 18 meeting, which included a liquidated damage deduction of $7,650 in the city’s favor. At the time, it was recommended by the engineer to approve the application, but to wait in sending it. According to Mayor Johnson, the contractor had not yet been paid half of the contracted amount.
It is unclear whether or not litigation will be filed against the city. The city has not made an official statement regarding any potential litigation.
In other news, the city has received a 2016 Bridge Inspection Report from Fillmore County. One bridge, located on Village Drive, was noted for decking issues. The city has been given one year to replace the decking faults. The council will work with engineers to determine what needs to be done and at what cost.
The next regularly scheduled council meeting is Tuesday, November 15, at 7 p.m., at the Village Hall. The public is encouraged to attend.
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