Successful mediation nears resolution of long-standing dispute over Carroll Co. Middle project, attorney praises board members for involvement; new tax rate to give max 4% revenue hike

News-Democrat, Carrollton, Sept. 8, 2016

CCMS construction dispute settled in arbitration
By KRISTIN BECK

As Carroll County Board of Education Attorney Jim Crawford said, “Cross your fingers,” but the Carroll County Middle School construction project should finally be complete Oct. 7.

Board Chair Carolyn Jones, Vice Chair Mona Kindoll, Crawford, Superintendent Bill Hogan, Marrillia Design and Construction President Josh Marrillia and Marrillia attorney Cassidy Rosenthal spent the majority of the day Friday, Aug. 26, hammering out a mediation agreement, which the board approved at a special meeting Sept. 1. Jones, Kindoll and Dru Maiden were present for the meeting.

According to the agreement, the Carroll County Board of Education and Marrillia Design and Construction entered into a construction contract March 24, 2014, for the construction of the CCMS gymnasium renovation and the new gymnasium addition. The substantial completion date was Sept. 2, 2015, however it did not occur by then.

Crawford said the biggest argument during the mediation was the actual substantial completion date: Jan. 25, which was the day the first CCMS basketball game was held in the new gym, or April 11. Crawford argued that it was April 11, and presented photographs to the mediator from Jan. 25, that showed visitors could not enter the gym through the gym exterior doors because the sidewalks were not poured.

Ultimately, Carroll County Schools Chief Executive Officer Jon Conrad put together a hard figure of $133,000, which included Crawford’s attorney’s fees, as the additional cost to the district by the delay, Crawford said. He predicted his bill would be an additional $1,500-2,000, so $135,000 in liquidated damages and April 11, was agreed upon.

Under the terms of the contract, the district can collect $1,000 a day for each day Marrillia was late, up to substantial completion, Crawford said.

“Once substantial completion is achieved, under the terms of the contract, we can’t continue to collect $1,000,” he said. “What we can do is what we’ve done here. If they don’t get the punch list completed in 30 days, we can ask Ron [Murrell, principal of RossTarrant Architects] to value that, double the amount of value that he places on those unfinished items and hold that money, in effect freeze that money that they can’t get it.”

As of the mediation meeting, there were still 26 items left on the punch list, however some work had been done since then, so there were likely less than that remaining as of Sept. 1, Crawford said. In addition to the punch list, change orders 35 and 37 also must be complete by Oct. 7, known as the “drop dead date.”

Change order 35 is for materials and labor to install the fire alarm electromagnetic releases on the doors coming off the stairwell in the basement into the renovated classroom area. Change order 37, which was approved later in the meeting, is to install a seat wall to help direct water away from the gymnasium doors and to correct the sidewalk due to the work. The original cost to the district was $3,800. However, the district received credits for labor to install some steel beams, so the net increase was $1,945, Murrell said.

Murrell valued the work yet to be complete at $17,500. Under the terms of the contract, the board is allowed to hold twice the value until the work is complete, totaling $35,000, Crawford said.

Paragraph two of the mediation agreement states that Marrillia shall take all steps necessary to immediately have the Carroll County Board of Education dismissed as a party defendant in a civil action with Technicrete Corp. Crawford said the company sued the district because it was holding Marrillia’s money.

A representative from Technicrete contacted him Aug. 29, and legal counsel called Aug. 31. Crawford said he put him in contact with counsel for Marrillia to get it worked out.

In paragraph three, it was agreed that all warranties per the contract and Marrillia’s one-year period for correction of work per the terms of the construction documents would begin April 11, the substantial completion date.

“The two board members were certainly on top of the tax dollars Friday,” Crawford said, adding that Jones and Kindoll asked how much the mediator cost. The mediator ultimately cost $5,100, and Marrillia paid the entire fee, according to the mediation agreement.

“They acted like it was their money that they were fighting over,” Crawford said of Jones and Kindoll. “They sent that message pretty clearly with the mediator back downstairs to the Marrillia crew, and I think they finally got the message.”

As of the mediation Aug. 26, Marrillia is potentially owed $348,046.18, Crawford said. The district is holding $69,500 until the Technicrete lawsuit is resolved, as well as $35,000 for the remaining punch list items and change orders. Crawford also subtracted $135,000 in liquidated damages, bringing the total to $108,546.18.

The board voted 3-0 to approve Pay App No. 25, which would pay Marrillia that amount immediately. They still have people unpaid, so they can use that money to pay the other subcontractors, Crawford said. The board opted to table change order 38, per Crawford’s recommendation. The change order pertained to additional paperwork from Marrillia’s attorneys that the company wanted the board to sign regarding the final completion date.

Crawford said it would come up again at a later meeting, but it was not ready for a vote.

Could the work be done sooner?

Oct. 7, is the Friday of Carroll County Schools’ upcoming fall break. Crawford said change order 37 would be complete over the break so that it would not interrupt the flow for bus drop off.

During the mediation meeting, Crawford said Kindoll asked if the bus drop off could be altered so the work could be completed sooner, in case of rain or other inclement weather. He said he spoke to Murrell about bringing this up with Marrillia. Murrell said he already talked to the contractor about getting materials ordered ahead of time. He said he would check on this and encourage them to get started, as long as it does not interrupt the school’s routine.

Approving the initial payment is “going to grease the wheels, if nothing else, over all the contractors that are out there trying to get down to 26 items, and a lot of them are complete,” he said. “… This money is helpful over everything moving forward to continue to pay some people and show good faith as Marrillia releases this to the subs.”

Tax rate

The board voted to set this year’s tax rate at 58.3 cents per $100 assessed value.

Chief Financial Officer Jon Conrad said this represents a 4 percent increase, totaling about $153,000 in revenue.

The board has not taken the increase in the past five years, he said.

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