DAN SULLIVAN: I can tell you this: He’s never come to an Improvement Authority meeting to comment on any change order that occurred in this process. Never.
UNION COUNTY IMPROVEMENT AUTHORITY (COUNTY GUARANTEED LEASE REVENUE BONDS-UNION COUNTY FAMILY COURT BUILDING PROJECT -ELIZABETH UNION NJSA 40A: 5A-6 $8,000,000 Proposed Project Financing
RYAN SCERBO: As I mentioned on our conference call there is a lengthy history associated with this project. When it was first initiated after an initial bidding, it had to be reengineered and then rebid. That was to remove, essentially, a parking facility that was to be associated with the new family courthouse. The costs came in higher than anticipated until it was reengineered to bring the project costs down. Ultimately the contract was rebid and awarded to a company through a low bid process. That company began performing the project. We initially ran into some significant weather delays. This project ran through one of the coldest winters that we had in a while. That led to some significant weather delays. And in addition at that same time the project was reviewed by the City of Elizabeth and required the installation of a system that was not included in the original project called the “smoke evacuation system.” When you enter buildings that have very large open areas — this is not a technical explanation — but large foyer areas, there’s a need for the evacuation of smoke for fire safety suppression issues. So that was ordered to be installed as part of the project by the City for code inspection and enforcement. It was added to the project as the initial change order to the contractor. And as part of that initial change order, some of the weather delays were also caught up in that which gave the contractor additional time. Each time we had extended the timeline of the project, we also extend other costs, professional costs associated with construction management. Architectural folks also have people on the job during the construction management process. The contractor then started to proceed. We were concerned about the lack of performance by the contractor in terms of the speed at which he was moving. Also, some of the work became questionable. I will say though that at every turn when work was questioned the contractor came up with a plausible explanation for how he would correct the work. It wasn’t a running dispute about: No, the work is not, not acceptable. He did agree with the construction manager in most instances and agreed that he would undertake the work and complete it. We were just not seeing the job populated the way it should have been with manpower in order to get it done as it was projected to be done under the construction schedule. So several times the Executive Director, myself, other members of the team here today, met with the contractor, gave him stern discussions over meeting his contractual obligations and our lack of faith in him being able to meet schedules that he was putting forward. We met several times after a second meeting. We called in his bonding company and asked them to witness the meeting and conduct their own internal investigation of the contractor. I won’t say that they declined to do it. They indicated they would look into the matter. They never really said much to us. Ultimately if the work became so tenuous, our situation with them became so tenuous that we decided that we had no choice but to default the contractor. He was hanging large scale stone panels on the outside of the building. We weren’t comfortable with the way he was doing it pursuant to the safety issue. And the quality of the work was deteriorating rapidly. At the same time he had subcontractors that notified us of failure to be paid. That’s something we take very seriously obviously. We have people that were working on these jobs, and they’re union jobs, and folks expect to be paid. So the Authority looked into it. We immediately withheld funds from the contractor. And we took the final step to default him in the spring of last year. So after having done that, we settled in, because we figured we were going to be in a long fight with the bonding company before someone show up on that job. It did take about six weeks but we were able to negotiate a takeover agreement. The bonding company stepped in, brought in a high quality contractor that, I think, everyone here today would say that they are performing admirably. We had some conversations with the bonding company over damages, but we agreed to set that aside temporarily to work out the takeover agreement and get the job going again. We have a judiciary that’s waiting to move into this building and has been waiting over a year now behind schedule to move in. So we eventually, as the project proceeded — and it is anticipated to be completed this April — as it proceeded, and the contractor remained on schedule, we did eventually sit down and talk about our disputes with one another. We of course, as you can see by this application, did not have enough funds to complete the project. One of the consequences is the contractor could have ceased working which would have made our situation and the judiciary situation much worse. Part of an agreement to settle our claims between each other, drop all claims against each other up to that date, was that the contractor would continue to perform sequential work that could not be performed out of sequence. Even though he knows we do not have the funds at this time to pay him, that we would go out and secure financing through this process. And we’ve kept the freeholders of the County, obviously, informed through this process as well, meeting with them several times. The contractor has continued to perform. And as I said we do expect the project to be finished in April.
CHRISTOPHER LANGHART: If I can just point that out. A lot of the defects with the stone that went up on the building were latent defects. So when the stone arrived there was no way to tell that there was an issue with the stone. It goes up on the building, and all of a sudden you start to see lippage with panel movements and rust coming through the caulk joints, which they improperly fabricated offsite. And there was metal shavings from when they did — made — you know, any of the penetrations to attach the rails to the steel trusses. They never cleaned that off and all that stuff started to rust and leak through the stone. Through investigations we found areas where it didn’t have proper insulation, so on and so forth. And Perini made the decision to Dan’s point about how everything was taken down — or Ryan’s point. They made the decision that the only way to really correct it was to demolish the whole entire thing.
CHAIRMAN CUNNINGHAM: One thing we talked about on the call the other day was how close to completion the project is. Can you talk about that as well?
CHRISTOPHER LANGHART: On the exterior of the building, they already have the baseboard, of course the asphalt in. They’re looking at the 1st of April to finish al the paving outside. Cleaning of all the stone of the building has started.
CHAIRMAN CUNNINGHAM: Well, if I can just mention, we discussed on the call that there’s a Union County resident, an engineer who has expressed concerns and submitted open requests to the Improvement Authority. A lot of those documents weren’t provided. I mean certainly not in violation of OPRA, but he had been seeking them. I was just handed something that came in, and
CHAIRMAN CUNNINGHAM: Let me interject for a second. Because we did talk about the contractor deficiencies that resulted in, you know, the longer time on-site and professional expenses. But when we talked on the call the other day, there were scope changes by the owner.
RYAN SCERBO: Yes, interior to the building. It’s a very technical — and they can speak to it better than I could — but obviously for safety and security reasons. It’s a family courthouse. And some of the things that go on in a family courtroom are highly emotional, and therefore there’s increased levels of safety. But some of the owner changes, I think could be discussed by Mast if you’d like to have a little background about those items.
MR. AVERY: Is it close to the 4,000 square feet?
DAN SULLIVAN: Whatever the current size is now, that’s what was finally approved, because that, as Ryan said, that went out — it went out to bid and changed a couple of times, and the big change was the removal of the parking garage.
RYAN SCERBO: Correct.
RYAN SCERBO: The additional cost, right. And it wasn’t that we paid for a design that was not — it was new.
RYAN SCERBO: I could explain that it would impact our underlying agreement with the bonding company. We are required to make payment on requisitions received within 90 days of their
research. The government should not be involved in having to do that for someone. If you would like specific document, we could absolutely give it, but in this case the clerk had a legitimate question. I personally would have rejected the request, but she did more than that. She just asked for clarification, and ultimately responded to it. So again we have nothing to hide. We have gone over this with the freeholders many times. And we think it’s critical we do receive an approval, if the Board is willing to provide us with one with this meeting because it will keep us on track with
DAN SULLIVAN: Just —
CHAIRMAN CUNNINGHAM: What if we actually did a phone meeting of the Board to actually take a vote early next week. And again, as long as I have a quorum, I don’t necessarily need all members’ availability. We can do it by phone. We wouldn’t require any appearances. But we would just generally table today’s vote and say: You get us a response back by the end of the week, we’ll schedule a conference call for Monday or Tuesday. Obviously this is very out of the norm. I don’t believe we’ve done this. We certainly haven’t done this during my tenure, but I’m looking for some solution that protects the public involvement that satisfies the Board that issues raised by someone purporting to be an experienced engineer, that those questions are answered, but at the same time, I’m really cognisant of your need to maintain the schedule of your project and the deals you have with the bonding company. I’m racking my brain trying to come up with something. Is that
CHRISTOPHER LANGHART: Well, I was going to ask you, Mr. Chairman, tomorrow the County is scheduled to adopt the Guarantee Ordinance. I would ask that we go ahead with that, and you know, if we get it adopted and subject to our meeting next week, there are issues that that ordinance will be on the books, but we can always rescind it. That would help us keep to our timeline.
DAN SULLIVAN: I would say this, just in comments, I have gotten calls from three different public agencies: One, New Jersey Transit about this same contractor.
MS. RODRIGUEZ: I have a comment. Mr. Patterson, and Jacobs Engineering, that’s –because I’d like to know who he is. He claims to be an engineer, 40 years of experience. And I mean because I want to talk about who the letter — the claims are coming from. And so his experience — I worked with multi million dollar companies such as Jacobs Engineering, you know, and personally, Jacobs Engineering, his last thing happens to be Patterson, and Jacobs Engineering in Patterson with the construction corporation. So I think it’s important to, you know, to see where the letter is coming from and —
MR. LIGHT: Not only do I have the comment that I had before about receiving this during the meeting, but at the beginning of the meeting, but also to the fact if he had that much concern and he says: Oh, I cannot attend the meeting, he should have been here. We haven’t discussed it with this — that’s another strike.
MR. DIROCCO: I was going to say I have no problem with the phone meeting. The proposal you laid out is certainly acceptable and I’m happy –not to complicate things more, but we have four — five other items. I wonder if we give the Applicant a minute to go through these and we handle the rest of our agenda. And if we can dispose of these items now —
RYAN SCERBO: So the prosecutor’s space that’s referred to here in this letter is intended to be the home of the Union County Improvement Authority when it was finished being built. The County asked the Improvement Authority if it would lend that space to the prosecutor providing domestic violence counseling services out of that space. Unfortunately at the time that decision was made by the county site. It was already fitted out for the intended use of the Improvement Authority. Part of that fit out included a single point of access to the exterior of the courthouse, but not to the interior of the courthouse. As I said before it’s a highly secured building. So when it became available to the prosecutor and required dual access into the courthouse and out of the courthouse, additional security measures had to be added, including a metal detector, security doors, and the fit out had to be completely reconfigured. So it is an expensive item. We don’t disagree, but it is part of a process, and it is a changed decision made by the County.
CHRISTOPHER LANGHART: And I would just say, we talk about change of scope, the building itself. This is really the only part that changed from the original design, because as Ryan said, the offices for the Improvement Authority were to be separate. This office space was entirely separate from the rest of the building. There would be no access from that space into the– into the court. Once that changed, that necessitated, you know, the cost that we were talking about, but this was done with the full approval of the County, as well as the prosecutor. That was what they wanted. And we made that agreement in order to do that. So, if we talk about change of scope, I think that’s really the only — only thing that was not intended when the building was designed and when construction began.
CHAIRMAN CUNNINGHAM: An alleged duplication is being brought to your attention and I would just like to acknowledge that you’ll investigate that.
CHAIRMAN CUNNINGHAM: To my colleagues on the board, while it’s important to have public comment — and I don’t want to be dismissive of it, we quickly rolled through the majority of the large change orders and it seems at least to me that there are credible explanations. Rather than scheduling a separate meeting, Here’s what I propose. I propose we take a vote on the matter today, and condition it upon receiving a written letter within seven days, 10 days –whatever.