Family Courthouse Before Local Finance Board

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.
On March 8, 2017 a contingent representing the Union County Improvement Authority went before the Local Finance Board to get approval for another $8 million bond issue to build the Family Courthouse on Cherry Street.  The transcript of that meeting is now out and, in addition to the quote above, here is what was said:

CHAIRMAN CUNNINGHAM: Please introduce yourselves. Those that aren’t Counsel be sworn.
CHRISTOPHER LANGHART: Good afternoon, Chairman. I’m Chris Langhart from McManimon, Scotland & Baumann, Bond Counsel for the Improvement Authority. To my left I have Dennis Enright, from NW. To my right I have Dan Sullivan, Executive Director. Ryan Scerbo from the Decotiis Law Firm.
TED DOMURACKI: Ted Thalmeracky, Mast Construction.
CHRISTOPHER LANGHART: Sean Edmonds is here from Mast as well. We’re here before you today seeking positive findings for the approval of eight million dollars worth of completion bonds for the Union County Family Courthouse project. Also, the positive findings to the County Guarantee on those bonds. We have an introduced copy of the Guarantee and the application. Chairman, I know we had a call about this, but just to put it on the record, we need to do the completion bonds, because this project was started back in 2012. We issued approximately $43 million worth of bonds for the project. In the interim we’ve had a default by the General Contractor. We’ve had the bonding company come in and take over the construction. We’ve had change orders for safety changes to the project. And we’ve had costs from the delays of the General Contractor defaulting. We have plenty of representation up here. We’re happy to answer any questions you might have about the project.
CHAIRMAN CUNNINGHAM: So Chris, thank you for that introduction. So we did. We had a rather lengthy conference call on Monday, I think, where we talked a little bit about the project. In 2012 the Improvement Authority Issued $43 million in bonds and coming back in front of the Board right now for an eight million dollar issuance likely expected to be issued about seven three.
CHRISTOPHER LANGHART: Well, if you put in the costs, so I think we’ll be close to the eight million dollar mark.
CHAIRMAN CUNNINGHAM: Still however even more so significant increase to the overall project. And we talked a little bit about that. And I think we have to put on the record — and I
know the board members had a brief conversation in public session, but certainly not substantive. i think we need to put on the record what happened with the contractor, the bonding company, and with Mast being brought in to finish the job. So rather than ask a series of questions, I’d ask you or all of you to just kind of put a narrative in front of the Board in terms of, you know, what had happened. And the other thing I’m going to ask you to do is and I’m just going to ask you to do it one time is one of the things I was really driving on the call the other day was trying to figure out which of these change orders were related to contractor lack of performance or inability to perform, and which were project redesigns, because I think we kind of want to hear that as well.
RYAN SCERBO: Director, I could answer the first question. And I think what I would like to do is ask Mast Construction, our construction manager for the project to go over site plans.

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: To try to answer the second part of the question, which is how the costs have increased due to the contractor default. Speaking specifically for the contractor default, which Ryan alluded to a couple moments ago, that was actually back — the process started back in April 2015. And by July of 2015 Premi Management, who is now the contractor, was on
board. Overall it wound up spanning about 18 months to the project. And with Mast Construction being on-site every day, that increases our time on-site for the project in addition to the architect for construction administration services. All told with construction management, architectural fees and as well as legal fees, we’re about $1.5 million in professional services for just — excuse me — just for the contractor takeover. But also just to take on a point that I wanted to mentioned is those weather permit delays also did add for the overall professional services cost for the time on the project as well. All told, you’re looking at $2 million when you add the weather permit, read the delays in addition to the contractor default. And that’s over the course of approximately 24 months.
MR. CLOSE: How much of that was covered by the bonding company?
RYAN SCERBO: As part of their agreement with the bonding company, we are now making a claim against them. Essentially our claim would have been liquidated damages and would have been roughly in the $2 million range. They put forward communications to us indicating that they had a claim of over $3 million, claims of delayed work by the owner. I won’t go into the merit of their claims, but they had a series of claims, including delayed work; that was the most significant one. They also had other claims related to design and engineering, but we agreed, as part of the communications when we settled just at the end of December of this year, that they would continue working, because they were aware we did not have funding and they did say they would stop working if there was not funding secured, which would have led to an increased delay claim on their side of the table. We agreed that we would resolve all claims that day, dropping all claims against each other. If there are claims from January through April, those claims are still on the table for discussion. We’re not aware of any at this time. And we don’t have any against them at this time.
DAN SULLIVAN: I was also going to note — and Mast can comment on this — how much actually the bonding company has paid over and above the contracted price?
TED DOMURACKI: $15 million.
MR. CLOSE: Over and above 12 to 15 to date?
DAN SULLIVAN: On their own. Over the contract amount to correct the errors that were caused by the original contractor.
RYAN SCERBO: To give you a sense, one of the things they had to do to understand the magnitude, is the building was nearly entirely populated with stone panels on the exterior. All of those stone panels were removed, demoed and re-fabricated and then reinstalled. And that is not a cost that we had borne at all. That is a cost purely on the bonding company’s shoulders.
DAN SULLIVAN: That alone was probably $5 million.
RYAN SCERBO: That’s $700,000 of proposed change orders that we rejected through the process. They agreed to take those off the table as well as part of our settlement.

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.

DAN SULLIVAN: On their account.
MR. AVERY: So the panels, were they designed improperly, or were they fabricated improperly, or were they installed according to the architect’s design?
CHRISTOPHER LANGHART: They were actually — it was a performance design. It was a performance design. And it was — in all honesty, it seemed like they tried to cut corners by performing — you know, instead of having a one stop shop where somebody who had full experience with fabricating stone, and attaching it to the trusses, they tried to have one contractor fabricate the steel truss, and another one did the stone. In their shop they tried to put them together. So it was in an effort on their end to try to save money.
TED DOMURACKI: They owned the design and they fabricated the panels’ offset.
MR. AVERY: Who was the fabricator for the panels, the stone?
CHRISTOPHER LANGHART: It was a sub company.
RYAN SCERBO: Yeah, it was APS and it was High Mountain.
TED DOMURACKI: Just so you know, in the bid spec itself, we recommended a panel manufacturer or someone to put together the panels. That person was not selected by APS, the contractor
who won the bid. Ultimately the bonding company went to that contractor that we specified and used them to manufacture the new panels that are on the new building because of their qualifications in this area. I hate to say it but it’s part of the low bid process in this state and we all suffer from it.
MS. RODRIGUEZ: Yes, you get what you pay for.
DAN SULLIVAN: And the prototype of the panels was approved by both Mast and the architect.
TED DOMURACKI: The first prototype was.
DAN SULLIVAN: The first prototype and then they proceeded to just change.
MR. AVERY: Right. Well, who inspected them upon delivery? Are you telling me that you couldn’t see the defect upon delivery?
TED DOMURACKI: Some of the defects we were able to see and we documented. And they gave us fixes for those.
MR. AVERY: You didn’t reject them.
CHRISTOPHER LANGHART: Most of the latent defects came about when they hung the panels.
TED DOMURACKI: Chipped panels for instance. They gave an industry accepted method for correcting those chips. Repair. But you have to be a qualified individual to do it.
MS. RODRIGUEZ: Right. And you were just a construction manager, am I correct?
TED DOMURACKI: Can’t dictate their means and methods.
Ms. Rodriguez: Exactly.
MR. AVERY: Who retained the architect originally? Was it the county? Wasit —
DANIEL SULLIVAN: The county retained the architect, probably going back to 2010, and then the project was turned over to the Improvement Authority in 2012.
MR. AVERY: So the County selected the architect based on a RFP or something process.
MR. AVERY: And then the county approved the design and it turned it over to the Improvement Authority to construct it.
MR. AVERY: And man it, the construction. And Mast — Mast is the construction management firm.
RYAN SCERBO: For the authority.
MR. AVERY: For the authority.
RYAN SCERBO: For the owner, correct.
Was Mass involved from Day 1?
RYAN SCERBO: Yes. I will say a lot of the reason we’re able to hold the bonding company to the fire on this project was because of the documentation that Mast kept and accumulated throughout the process.

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: Yes, actually we’re just inside two months from completion. The TCO date, Temporary Certificate of Occupancy is April 28th and we’re — Perini is heavily into the finishes right now. Each of the floors in the building is just about substantially complete with final cleaning underway. Fire alarm has been tested. Fire pump has been tested and passed. Door active controls, final terminations are going on. So just to give you an idea of where things are, the building, if you were going to walk in there today, it looks like it needs to be cleaned. And it’s very close to being cleaned on the inside
TED DOMURACKI: Furniture being delivered the end of March. Card access programming needs to occur in April.

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.

DAN SULLIVAN: And getting this courthouse opened is critical to the County and the court system, because once this courthouse is complete, and the move — they will move from the old courthouse into the new house, there’s a whole project, a renovation project in the old courthouse that had been waiting now several years to get started and can’t until the courts move from, you
know, Point A to the new courthouse. And so it’s critical that everything finally gets complete.
MR. AVERY: I understand how that works. I don’t want to dominate. How did the size — I mean we’ve had some public comment on this obviously. I hope it’s been shared.

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

I guess, late yesterday but I have not had a chance to read them. And I think Allen is referring to a pretty substantial letter from Mr. Bruce Paterson of Garwood. And he outlines, I guess, his analysis of change orders. And it’s really a difficult position for the Board to be in right now, because these look like substantive criticisms of questions. Yet, here we are at the meeting, you know, forced to take a vote today, or potentially forced to take a vote today. So Allen, were there particular things in his letter that we should address?
MR. AVERY: Well, the thing that jumped out at me was the comments on the change orders, you know? I know that Dingie is the original contract and the odd is change orders. How did the building increase so much in size, if in fact it did increase in size?
DAN SULLIVAN: It hasn’t increased in size at all.
RYAN SCERBO: From the time of its award.

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.

CHAIRMAN CUNNINGHAM: And I don’t know that we really kind of articulated them. But just what was brought up on the call, as an example, when we ran through the change orders: Switching space out, the Improvement Authority was not going to occupy space and the Prosecutor’s office was, and there was chairs requests for various things that made the communication between the courtrooms and the safety response more accurate — so those type of things.
RYAN SCERBO: To be fair, they’re added components and revised components to the project, but the footprint of the project has not changed.
MS. RODRIGUEZ:Just a fit out.

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: I mean this is in the correspondence that we reviewed today. And it may not be accurate and I understand that.
DAN SULLIVAN: I would just say, I haven’t received that.
RYAN SCERBO: I haven’t.
MR. AVERY: You can have mine.
DAN SULLIVAN: I could say this: I know Mr. Patterson. And just to the point of the OPRA requests, those requests have been completed.
MR. AVERY: Well, this is a factual question.
MR. AVERY: It states that the RFP or the original architectural services was for a 24,000-square foot building. What’s being built is a 75,000-square foot building. Is that —
DAN SULLIVAN: That’s not the case, no.

MR. AVERY: Is it close to the 4,000 square feet?

RYAN SCERBO: No. They eliminated the basement.
DAN SULLIVAN: When the project was given the go-ahead, the footprint that stands now is again the footprint that exists today. I don’t know where that 24,000 —
MR. AVERY: I don’t know.
DAN SULLIVAN: I will tell you this: I was a freeholder at the time and approved this project prior to becoming the Executive Director of the Improvement Authority. So I can tell you at no time that 24,000-square foot number is a made-up number. Never, never. Never was that considered —
MR. AVERY: What was the square footage of the original RFP? What did the freeholder board approve for the original contractin terms of —
MR. AVERY: — size?
RYAN SCERBO: It was either 58 or 78.

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.

MR. AVERY: Parking.
DAN SULLIVAN: But the footprint of the building has not changed at all.
MS. RODRIGUEZ: The actual building.
DAN SULLIVAN: The actual building. No. The number of courtrooms and additional space is exactly the same as it was five years ago.
TED DOMURACKI: 2009 program document.
DAN SULLIVAN: There was never a case where there was a 24,000-square foot that became 78,000-square foot. That’s just not true.
MR. AVERY: That’s why I asked the question.
DAN SULLIVAN: Well, I’m not saying – I’m just telling you, that’s not true.
MR. AVERY: I am also curious, is the architect, I assume, went to the City to get a building permit?


MR. AVERY: And the requirement for the smoke evacuations system came at that point and the architect was not aware of that requirement.
DAN SULLIVAN: I would say this: The architect has had a running disagreement with the City in terms of whether that smoke evacuation system was necessary. To this day, I would say he feels it’s an interpretation of the law that he has a disagreement with.
RYAN SCERBO: And there was a change of inspectors, too.
DAN SULLIVAN: And there was a change of inspectors. To the point, though, if it was necessary at the beginning, it would have been put into the beginning and the cost at the beginning. So I believe he was trying to save us money, in terms of feeling that that system was not necessary. And then the City ordered it and that was —
RYAN SCERBO: It’s important that even though there is a change order for the smoke evac system, that there was a delay in the project due to the smoke evac system. It was just married with the weather delays and the same change order.
MS. RODRIGUEZ: Additional costs.

RYAN SCERBO: The additional cost, right. And it wasn’t that we paid for a design that was not — it was new.

DAN SULLIVAN: That was what I’m saying, in this letter, the criticism of that, from my perspective and the Board’s perspective, all it was, he was trying to save us money. And it was the City who finally said we’re not — we’re not moving ahead with the permits until this piece of the project gets put in place.
MR. AVERY: I think my question is whether the architect has any liability of his errors and omissions, and if that was evident in the code. I understand fire inspectors have their own opinions on how code applies.
DAN SULLIVAN: Well, as Ryan said, we had one inspector that said it wasn’t necessary and the inspector changed, and the new one said it was.
MR. AVERY: You got your building permit early.
MR. LIGHT: A question I might have is certainly this wasn’t something that occurred overnight. How come we’re receiving this just in the morning of the day that we have the –submitted before us?
CHAIRMAN CUNNINGHAM: This particular public commenter has been writing us for the last week or so. His allegation is that he sought information from the Improvement Authority through the Open Public Meetings Act — Open Public Records Act. And we had conversations as part of our meeting with the executive director and the clerk explaining why some of the OPRA requests required additional clarification. So it was a bit of a timing issue, but I’m uncomfortable, you know? And I understand the frustration it must cause you. I’m sure you have a history here, but I can pick up on kind of sidebar conversations going on and I’m hearing there’s discomfort from the Board. And I’m going to have to ask you the question — and I know you don’t want to hear it — but if the Board were to defer the vote on this for a month, would that impact the financing schedule?
DAN SULLIVAN: It absolutely would.
RYAN SCERBO: It would.

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

receipt. The way it was established is after speaking with Bond Counsel, we put together a financing schedule that would have us selling bonds and having funds on hand in late April, which would
meet the first requisition that was submitted by the bonding company, post the settlement agreement. So while I do understand your concern and your discomforts, I appreciate your desire to ensure that the public is fully informed. With all due respect to the commenter, you know, this is a person who is making comments and statements, two of which are completely said are flat out not true. We would be happy to go through that letter for you post this meeting and provide answers to the commenter. And debunk the things that are actually not correct in the letter, but the OPRA requests, as we mentioned on the telephone, we did comply with OPRA. We provided communications to the requester within the seven-day window. We also required or provided him with
a request for clarification. And I understand your point on the telephone, but when someone asks for any and all of any documents, I have an absolute objection to using OPRA as a resource to do

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

financing and allow us to keep an agreement we made with the bonding company which I understand is not your concern but it does mean a lot to us in completing the project.
CHRISTOPHER LANGHART: Mr. Chairman, I just want to touch on that, too. I agree with Ryan. I think the OPRA requests is vague and overbroad and I think the Improvement Authority did a great job in getting the information out as they did in a timeframe. It was only through Ryan’s efforts that we were able to extend our timeline that we could issue the bonds post April 1. That was the original deadline that we had discussed.
CHAIRMAN CUNNINGHAM: I can appreciate that. And I know you haven’t had the benefit of seeing it. I haven’t had the benefit of–
RYAN SCERBO: Going through it.
CHAIRMAN CUNNINGHAM:– going through it in detail, but I can tell you this is specific, and it’s enumerated by change order. And Ryan, just challenging a little bit for the — kind of figuring the discussion out here. So you made the offer and it was greatly appreciated that you would go through and respond point by point. Hypothetically, what if we don’t like your answers?
RYAN SCERBO: Understood.
CHAIRMAN CUNNINGHAM: I’m seldom at a loss for words on this dais.
RYAN SCERBO: And I certainly am —
CHAIRMAN CUNNINGHAM: As many attend will tell you, but I’m just trying to figure out and be honest with you somewhat. While people are talking, I’m trying to think through concepts like contingent approvals and —
RYAN SCERBO: That is what I was going to suggest. And I would also like to point out, too, that while I understand this Board takes its job very seriously, the freeholders take their job very seriously. And the Executive Director can tell you, we sat with them on several occasions before we could have even got permission to come here and speak with you.


CHAIRMAN CUNNINGHAM: Let me throw one other idea — –
CHAIRMAN CUNNINGHAM:– because I just want to figure out where we’re going to go from here. I can posit another idea. Probably in the back of my mind, and the executive secretary just mentioned it. So I assume it wouldn’t take you very long to respond to this letter.
RYAN SCERBO: I would agree.
CHAIRMAN CUNNINGHAM: We would provide you with copies immediately. You can have my copy.
RYAN SCERBO: I would agree.

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

something that you think could work as you as the Applicant?
RYAN SCERBO: The only question I have is for Chris —
RYAN SCERBO:– is from a timing perspective: Will one more week throw off any of the approvals we need to get to the County?

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.

CHAIRMAN CUNNINGHAM: Yes. Because I want to move forward.
CHAIRMAN CUNNINGHAM: I don’t want to completely bring the project to a halt. And I hope you realize how hard I’m trying to get there.
RYAN SCERBO: Yes, absolutely.
CHAIRMAN CUNNINGHAM: But as I said I can kind of pick up — where I sit, I can kind of hear the conversations and see the conversations, and I’m seeing two different sidebar conversations
that are clear discomfort: What do we do with this? So I think what I would propose is — and before I even go any further, what are the thoughts on my colleagues on that? I kind of Bill, I saw you shaking your head a little bit. I know Allen you were looking at the letter. I mean is that a potential solution that would give you —
MR. CLOSE: Yeah, I’m comfortable with that as a solution, Director. You know, it’s unfortunate this came so late. And really, as you said, if it wasn’t point by point on each change orders — it has been unfair to the applicant by the way. To some extent obviously they haven’t seen it either, so that they can properly respond to the points, which I would prefer they have the opportunity to respond to this in an informed detailed fashion, rather than put them on the spot here at the table. And while I respect their timeline, and I certainly want to make sure we try to help them stay on track with that, but at the same time, as you said, address the public’s concerns. I would feel comfortable with the alternative solution that you put forth with an option that would allow for both, from my perspective.
MR. AVERY: Mr. Chairman, my questions, reading this letter, I think, are primarily oriented towards addressing what I think are the commenter’s concerns about the overall project. Having been a county administrator, I understand how wonderful it is to present change orders to a freeholder board. Welcome with open arms. I know they’re —
DAN SULLIVAN: I sat on both sides myself.
CHAIRMAN CUNNINGHAM: Especially what you do with late starters.
RYAN SCERBO: Bruises are not showing.
MR. AVERY: And I understand all of this. I’ve built courthouses. I’ve built jails as project administrator. So those — and I understand the change orders aren’t approved lately. So I have less concern with the change orders that some of the other issues, like the size of the building, did it change? You represent that it did. The other question I have is whether the original RFP — and I think this is important because it’s $890,000 required the architect to do a lead certified building —
MR. CLOSE:Right.
MR. AVERY:– you know, because this —
DAN SULLIVAN: That was a requirement from the County, as far as they wanted it to be a lead certified building.
MR. AVERY: I understand that. Then in this comment today, is there a change order now for $890,000 or thereabouts to do a lead certification?
DAN SULLIVAN: I assume you’re asserting something that he wrote in.
DAN SULLIVAN: I really can’t comment on —
MR. AVERY: Those are the really –and the last one would be the costs of — the legal costs, which are not construction costs, but the legal costs that are included or alleged to be included to terminate the original contract.
DAN SULLIVAN: I won’t go into that either, but to the process, if anybody is — like you said you’ve done construction — to terminate a contractor under, you know, the public bid laws is– is — cumbersome is being kind.
RYAN SCERBO: Our call is good luck with that.
MR. AVERY: I had one voluntarily default. That was–

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.

RYAN SCERBO: New York Parks Department, too.
DAN SULLIVAN:– being successful in getting bids to the projects after —
CHAIRMAN CUNNINGHAM: Which means he was successful in getting bonds.
DAN SULLIVAN: Which is amazing.
RYAN SCERBO: He has to have certified —
DAN SULLIVAN: Which was amazing to me. So any time I’ve had a conversation with any of these agencies, you know —

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 —

DAN SULLIVAN: I can say this — and I’m not going to cast any discursions–
MS. RODRIGUEZ: No, I’m not putting–
DAN SULLIVAN: He is a regular person at every freeholder meeting.
CHAIRMAN CUNNINGHAM: I figured thatmuch.
DAN SULLIVAN: I’ve known him — I was a freeholder back from ’95. Probably for that long. He’s one of the folks that comes to every meeting and has comments on at least 10 resolutions per freeholder meeting.
MR. AVERY: Truly, Mr. Chairman, I don’t have as much concern about change orders, the larger questions that we’ve talked about today.
CHAIRMAN CUNNINGHAM: If you think there’s enough votes that you —
MR. AVERY: I like your idea because that would give them, the Applicant the rest of the numbers.

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.

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.
MR. LIGHT: That leaves a gap.
DAN SULLIVAN: Never. And I’m telling you facts.
RYAN SCERBO: And if I can just tell you —
MR. LIGHT: No problems participating in a phone —

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: I would be happy to do it. The only caveat I have is on your agenda for a later application, I will do my best to be back here at the table.
CHAIR CUNNINGHAM: Which one? Waive your appearance. Rahway.
CHAIRMAN CUNNINGHAM: See how far you go with this one.
RYAN SCERBO: Can I have a copy? Can we have several copies?
COURT REPORTER: I need a break. Five minutes.
CHAIRMAN CUNNINGHAM: We’re going to adjourn.
(A recess was taken.)
CHAIRMAN CUNNINGHAM: We will reconstitute Union County Improvement Authority. Again you gentlemen have all been sworn already. Do you still promise to tell the truth? So you’ve had a limited amount of time but nevertheless you had enough time to –frankly you’ve had more time to look at that than I have.
DAN SULLIVAN: Than you have.
CHAIRMAN CUNNINGHAM: Just to be candid, so are there some initial reactions to it?
RYAN SCERBO: I will say this: We will provide responses to all of these. It’s probably easiest unfortunately for you that we walk through them one by one, but it’s very difficult, I’ll say this, to provide a response to something that’s just factually untrue. So some of our responses will be that something is just false or incorrect. Bit we can provide more color on that as we move forward.
DAN SULLIVAN: And I will just say: I had a flat tire when I walked out this morning. I should have known it was going to be that kind of a day.
RYAN SCERBO: Sorry. Do you want our copy back? We wrote on a couple of them.+
CHAIRMAN CUNNINGHAM: So is your thought that you want to attempt to respond to these point by point now or —
RYAN SCERBO: If we could and if the board feels comfortable to these, I would like to make today as productive as we could.
CHAIRMAN CUNNINGHAM: Let’s give it a whirl.
TED DOMURACKI: Do you want me to start? This issue with smoke evacuation was added after permits were approved in the building as inspectors changed hands, who demanded that it
be included, because he’s allowed to interpret code. So the design was approved without it and a new inspector came on board and asked to add it.
CHAIRMAN CUNNINGHAM: The exact same issue going on with the project Asbury Parks and the rest of them (inaudible)– it’s an unfortunate occurrence but not uncommon.
TED DOMURACKI: The building inspector is allowed to interpret a code and add it if he so desires.
TED DOMURACKI: High Mountain Concrete — I’m just going through specifically item by item here. High Mountain Concrete got into dispute with the general contractor APS on pouring the floors. We found out first when we were verifying the quality of construction was that they were poured out of variance, out of — by as much as an inch. And it was an argument over who would grind the floors back down in order to receive the finished terrazzo finish. The replacement contractor Perini did that all of his own expenses as part of his 12 to 15 million dollars that I mentioned to you. But this basically became a cost dispute between the general contractor and subcontractor on the project.
CHAIRMAN CUNNINGHAM: Okay. I think you’ve already addressed the delay ones. So can we move then to the change order about the prosecutor’s space.
RYAN SCERBO: Yes, I’ll handle that one.
CHAIRMAN CUNNINGHAM: This is something we talked about on the phone the other day. Put that on the record.

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.

DAN SULLIVAN: A change in use.

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: No, there were some other owner requests, and scope adjustments that not necessarily changed the footprint or even the design but they were add-ons and I know we talked about the sheriff officer requiring some dedicated cameras and direct run lines and that sort of thing.
RYAN SCERBO: There is one on this page, actually second from the bottom, it says $158,000. That is Active Shooter Program. That was installed in the building and paid for by the county, not paid for by —
TED DOMURACKI:– Sheriff’s department through a Union County board meeting and approved by the County.
CHAIRMAN CUNNINGHAM: Thank you. Let’s go over a couple more of these.
TED DOMURACKI: Change order number seven?
CHAIRMAN CUNNINGHAM: Yes, because that’s a big one. That’s 1.8.
TED DOMURACKI: That’s the cost to complete all the outstanding change orders for the takeover contractor, what he’s done over the last two years to scrub over the documents to try to recover some costs. So every single thing that might be appropriate under the completed design that the original contractor bid on, he’s trying to recover and in addition, it includes $685,000 in contingency, which we may or may not use.
CHAIRMAN CUNNINGHAM: And if there is some duplication, you’ll investigate that.
TED DOMURACKI: Yes. We have vetted every single PCO. Sometimes they are approved at face value. More often than not they’re negotiated with architect’s approval.

CHAIRMAN CUNNINGHAM: An alleged duplication is being brought to your attention and I would just like to acknowledge that you’ll investigate that.

DAN SULLIVAN: Yes, we will.
CHAIRMAN CUNNINGHAM: Other big ones were, okay, the one point eight for the –what’s VE?
TED DOMURACKI: Value engineering.
RYAN SCERBO: Value engineering took place when the first bid failed, and the second bid was necessitated. The parking deck was removed from the project and it required a redesign because
of the connectivity of the parking deck to the building. Were there other changes?
TED DOMURACKI: It was re-bid three times.
RYAN SCERBO: Three times.
TED DOMURACKI: Before it was successfully awarded. And changes had to be made to the design at the budget compliance at each of those stages.
CHAIRMAN CUNNINGHAM: The next big one, why don’t you just address the change order number 2, $890,000 for lead design.
RYAN SCERBO: I can say that the architect doesn’t provide the lead services provided by a third-party who’s hired through the architect. So it’s not money to the architect.
CHAIRMAN CUNNINGHAM: So you’ll respond in writing to us on that one?
RYAN SCERBO: We certainly can do that, yes. And it is a lead certified building. And it has lead requirements.
CHRISTOPHER LANGHART: It’s not only for lead design services. It’s for RSLP for contaminated soil on the site and other cost categories which we can break down and answer.
SPEAKER: Also had some additional where it says CA services, construction administrative services. That’s time on the job related to the one hundred plus days of time extension for contractor to do the weather delays.
CHAIRMAN CUNNINGHAM: Two other change orders over a half a million dollars. The rest we don’t have time to go through. A project of this scope, $183,000, I don’t want to be dismissive of it. Let’s stick to the big ones. Change order DCO number 1, 537,000 for extended services.
TED DOMURACKI: I’d like to address DCO number one, two and three.
CHAIRMAN CUNNINGHAM: All right, please.
TED DOMURACKI: Our services are an extension of time relative to the duration. We had three and a half people on the project, full-time documenting what I would call the failure of APS, the original contractor, okay? We reduced it because when Tuter Perini took over the project it was more under control. So it will reduce the size of the staff based on the percentage completion of the job loss. I can produce time cards to document the presence on-site of personnel or committed to the project for all three of those categories. And it’s related totally to duration and extension of
time on the project.

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.

RYAN SCERBO: Seven days is fine.
CHAIRMAN CUNNINGHAM: Seven days going through point by point. I think it’s probably the most prudent course of action, unless the board feels there’s additional items in this correspondence that they would like the Applicant to address now.
MR. LIGHT: Fully agree.
CHAIRMAN CUNNINGHAM: So with that condition I’ll make a motion to approve this application. And again, there’s a couple different requested actions here, both positive findings and positive findings to the County Guarantee. My motion will encompass both. And I will ask one of my colleagues for a second. Ms. Rodriguez seconds. Take a roll call please, Pat.

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