City OKs $1 million bridge financing to pay late bill
Mayor questioned on his handling of issues he claims were left by prior administration
In a special meeting Wednesday, Mayor Derek Slaughter found himself on the receiving end of a volley of questions regarding an outstanding invoice of about $1 million owed to street reconstruction contractors who completed a portion of renovating work on the East Third Street Old City Gateway Revitalization project.
“We transferred the money from the general fund into a capital
projects account and are waiting for reimbursement through a state Redevelopment Assistance Capital Program grant,” said Council President Randall J. Allison.
“We are not spending money we did not intend to spend on the project at East Third, Basin and Franklin streets,” Allison said.
The discussion was over an invoice that was not paid to Glenn O. Hawbaker, and Reynolds Construction Management Inc., contractors who did the work finished in October, he said.
The $5.5 million dollar street reconstruction, paving and streetscape project required the city to take a $2 million line of credit out in order to satisfy the bills, he said.
Slaughter found himself having to defend his role as chief executive officer of the city.
“This project was years in the making,” Slaughter said. “There has to be somebody else that can answer it besides me because a lot of checks are going out to this project already.”
“The contractor has been very gracious to say the least,” Slaughter said. “Any longer delay and the contractor may or may not be as gracious. I realize it’s a lot of money but I didn’t realize until yesterday that something was going on,” Slaughter said.
Slaughter said it was the city treasurer and controller who brought the invoice issue to his attention Tuesday.
Councilman Adam Yoder and Councilwoman Bonnie Katz asked for more answers from Slaughter.
“Who was the point person in terms of the financing for the overall project?” Yoder asked.
Slaughter said the project started in the previous administration and there were various funding matrices including those approved when he was on council.
Slaughter served on council two years before running for mayor.
Slaughter said the point persons were: Hawbaker, Reynolds, Chris Keiser of Larson Design Group, and Jon Sander, city engineer.
“The point person I guess as far as the work would be those individuals I just mentioned and they don’t have any issues with any of it,” Slaughter said.
Yoder said he thought there was a gap whether it be in leadership or training or documentation.
“There’s no gap here,” Slaughter said. “I spent 13 months trying to fix this. This is not on me. This is not on my administration.”
Yoder was understanding but pressed the mayor further.
“I understand very much that you inherited a mess and right or wrong you’re administering it now,” Yoder said.
Slaughter, again, said it was a mishap caused by a prior administration.
“Clearly somewhere along the line back there, something happened,” Slaughter said. “We are trying to be aboveboard and transparent and say ‘here’s what we are trying to do.’ I’m in the same position as you are,” Slaughter said.
“Who was overseeing everyone signing off to make sure everything was finished?” Katz asked.
The mayor said to his understanding it would be Sander, but Katz didn’t think it was fair for the mayor to single-out the engineer.
“He (Sander) was new to the game and wasn’t part of anything that was going on and I don’t think that is fair,” Katz said.
Slaughter disagreed with that assertion.
“He was caught up,” Slaughter said. “He knew everything that was going on with East Third Street. … actually it is fair. … That’s his job,” Slaughter said. “He had everything and all the documentation in that final piece of the project since he came on board and knew everything that was happening. That is fair. Actually, he was up to speed and got it all taken care of.”
“Why did it not filter through finance in order to get the bills paid?” Katz asked. “We’ve had since October and we are not realizing what was needed to pay the bills. Maybe in the future the city needs a spreadsheet or documentation of where everything is and what’s going out and who’s doing what to whom,” Katz said.
Pawlak said council finance and public works committees will get updates. He noted the bridge financing (temporary until the state grant reimbursement arrives) will allow the city to make final payments to the contractors.
“We can get the payment to the contractor, cancel checks that are necessary and work on getting the final quantities from the engineer to break out information,” Pawlak said. “We will get them in as quick as we can and get them out for the grant sources to review.”
Allison said oftentimes the reimbursements from state grants do not show up before existing finances are used up.
“I think it is a great project and moving along smoothly,” he said.
A multitude of funding streams and resources for the $25 million investment in the city’s future will be documented and updates given to council, he said.