By NICOLE CARTRETTE
Staff Writer
A vote by phone taken April 5 that one commissioner called “nothing official” resulted in what appear to be official actions and could cost the county an extra $160,000.
It is unclear if pursuing a performance bond would save the county money, some officials say. Still, some commissioners say looking into the possibility of pursuing the bond is worth a try.
Contractor released?
County Attorney Steve Fowler drafted a letter to Goodyear Construction on April 5 releasing the company from its contractual obligations with the county in Water District V construction. The owner died unexpectedly in March and the widow, Joy Goodyear, asked to be released from the contract in a letter dated March 29 and received April 2.
“Columbus County is willing to release Goodyear Construction Inc. from its contractual obligations,” Fowler’s April 5 letter to Goodyear reads.
On Wednesday Fowler said he did not know if the letter had been sent but called back later and said it had been sent.
“I don’t have it in front of me,” Fowler said. “I worked with administration on that; at this time I’d have to check my files.”
No phone vote?
Commissioners voted 5-2 by phone the same week the letter was drafted to release the company from the contract and not pursue a performance bond. Voting by phone is a violation of the N.C. Open Meetings Law.
“Contrary to what has been published in the past, this is the first vote we’ve had on this,” Chairman Sammie Jacobs said.
No comment
After the meeting, Jacobs was asked why a letter was drafted to the construction company releasing them from the bond if there was no official vote on April 5 making that decision.
“I’m not commenting on it — anything I say gets turned around,” Jacobs said.
County Manager Jim Varner and at least one other commissioner said last week the issue would be voted on in public at the board’s meeting. The meeting, held 11 days after the letter was drafted, however, did not result in a vote to end the contract.
Instead, commissioners asked the county attorney and county manager to get in contact with the bond company to see what options the county may have in recouping the expense of hiring another contractor at a higher bid.
Don’t pursue
Varner explained that the contractor was the individual at the company with a license, not his wife who is listed as the owner of the company.
“You normally go with the second bidder,” Varner told the commissioners, pointing out it would cost more than $150,000 more but the man’s death was “an act of God” and something the wife “could not help”.
“I recommend not doing the performance bond,” Varner said. He had not contacted the bonding company as of Friday.
Will fight
“What happens is a bonding company is going to fight you, I will tell you right now,” Varner warned, and pointed out he had called various counties and learned that “one county after years of legal battles won a $20,000 settlement” in a similar situation.
“This is very tragic for everybody concerned,” Varner said.
“Mr. Goodyear had a bond and paid for a bond,” Commissioner Ronald Gore said. “The bonding company’s duties aren’t to step up and take in the difference in Goodyear’s bid and the next bid? Am I right on that?” Gore asked.
Out of time
Varner cautioned time could hinder progress on the project and a September deadline for funds to be used that is fast approaching. A portion of the $6 million plus Water District V project is a federal grant.
“Our seven year grace period runs out in November,” Varner said.
“We’ve run out of time?” Commissioner Ricky Bullard asked.
“That’s part of it.” Varner said. “If you want to pursue it we need to know.
“Hartford (the surety) is definitely going to have high-dollar lawyers,” Varner said.
Gore asked if the contractor had a notice to proceed.
“It was issued the day he passed,” Engineer Adam Kiker with Hobbs and Upchurch said.
What’s a bond
“Isn’t that the reason we require it (bond insurance)?” Bullard asked.
Varner said it was intended for contractors who don’t complete work but did not speak as to whether the true purpose of a performance bond was indeed to cover situations in which a contractor dies.
Kiker said T.A. Loving needed to know by May 1 if they were going to be awarded the contract at their bid of $2.9 million –roughly $160,000 higher than Goodyear’s bid.
“Will it hold up anything if we told the bonding company that we are going to pursue the bond?” Commissioner Bill Memory asked. “Somebody’s got to put that pipe in the ground.”
“Why should the taxpayers of Columbus County pay it?” Bullard asked.
Attorney silent
Varner, seated next to Fowler, called on Assistant Finance Director Bobbie Faircloth to address the board. Faircloth is the county’s former paralegal and worked under Fowler until recently.
“In my opinion the way it is written, the surety has the authority to pick the contractor to do the job if they so choose to pick the contractor,” Faircloth said. “They have the right to choose.”
Faircloth said it appears that “everything stops” if a claim is filed.
Commissioner James Prevatte asked if staff would “at least sit down with the surety and ask what the options are.”
“In roundtable discussion we felt it would be best to go with the second bidder,” Varner said.
“I trust what they have looked into,” Fowler said.
County liable?
A few commissioners asked if it was possible for a taxpayer to sue the county for not pursuing the bond.
“It could be right for litigation,” Fowler said. “There are things in the county’s favor and things (that) might not be in the county’s favor.
“I would hate to speculate on who would win or lose.”
“There is a good chance you could capture that money,” Kiker said. “I don’t think it would be as simple as ‘here’s the check.’ It can only be called an act of God.”
In the interest of time, commissioners asked what they should do.
“I’m not sure of the answer to that question,” Kiker said.
Administrative assistant Gail Edwards explained the Rural Center called and stated that if the attorney said it was legal to go with the next lowest bidder it would be okay.
“Steve (Fowler) told him it was legal,” Edwards said. “I called you because I did not feel I had the authority to do that,” she explained, looking to Chairman Sammie Jacobs.
Jacobs explained that he told Edwards to poll the commissioners.
Subdivision waiting
The progress of a Dothan subdivision planned for more than 200 single-family residences and roughly 100 condo units is dependent upon county water in the area.
Varner said the revenue from the Cottonwood Place subdivision had not been figured in projected income because the prison is expected to be more than enough to pay the bond payments. While it is not a matter of financial need it is a matter of the county having agreed to run the lines.
“We need to get water over to those folks,” Varner said.
“That’s what they are waiting for – water,” Commissioner Lynwood Norris said.
“I don’t want to see the project held up; we have too much at stake for the project to go under,” Commissioner Amon McKenzie said.
Memory pointed out the other situation involved the Grand Strand Water and Sewer contract with the county. GSWSA is to provide sewer if water is provided by Columbus County.
“We’ve obligated ourselves into a situation that could backfire,” Bullard said.
Jacobs pointed out that all the revenue the district needed to break even was water revenue from the prison under constriction.
“The money from the development will be gravy money,” Prevatte said.
Taxpayer’s money
“I think we should ask the attorney to make contact with the bonding company. I feel sorry for the lady but I also feel sorry for 160,000 of taxpayers’ dollars,” Gore said.
“We have a window of 16 days; we can ask our manager just to weigh in all the options --nothing is going to happen for 15 more days,” Memory said.
“T.A. Loving is ready to go to work,” Kiker said.
Already approved
Memory added the county’s action in part would depend on what the Rural Center would allow.
“It has been before the Rural Development board,” Jacobs said.
Prevatte questioned why the issue had gone to the Rural Center even before commissioners approved it.
Recessed meeting
Prevatte asked if a special called meeting was needed for the commissioners to receive additional information about the bond and make a decision.
“We can recess this meeting,” Jacobs said.
Varner still insisted the bond company would fight.
“It’s worth a try,” Bullard said.
Varner added that T.A. Loving was willing to do the work at their original bid, despite an increase in the price of PVC pipe.
“I’m surprised T.A. Loving would go with that price,” Varner explained.
“It’s amazing they would be willing to take it at that price,” Jacobs said.
Commissioners will meet at 7 a.m. on Friday, April 20 in the Dempsey B. Herring Courthouse Annex located at 112 West Smith Street in Whiteville.