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Finance committee recommends payment to demolition company

The city appears to be on the path toward paying $360,396 to settle a dispute with Lycoming Supply Co. that occurred during the preparation of the Kohl’s development.

City Council’s finance committee Tuesday gave a positive recommendation to make the payment, a recommendation that will go before the full council Thursday night.

“We had a dispute over a change-order during demolition and making the site (251 William St.) pad-ready,” said William E. Nichols Jr., city finance director and general manager of River Valley Transit.

The demolition company did not accept the financial offer the city made and a mediation attempt was made in Harrisburg, Nichols said.

The mediator then gave each side a figure and the settlement was agreed to, Nichols said.

If the council approves the recommendation of the committee, the money will be transferred to the capital projects budget and will be taken from “unexpended surplus,” an estimated $600,000 in health care savings from the city using a company to manage its health insurance, instead of doing it in-house, Nichols said.

If approved by council, the city can submit to the state Office of Budget for a $500,000 Redevelopment Capital Assistance grant, Nichols said.

That $500,000 will then be used to pay for separate costs related to the William Street redevelopment, he said.

Should the council not agree to the terms, the next step would be heading to court, Nichols said.

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