HomeMy WebLinkAbout2016-10-13 Board of Selectmen Minutes - Executive Session 4� Fq
g , Town of Reading
�` � r Meeting Minutes
' Board - Committee - Commission - Council:
Board of Selectmen
Date: 2016-10-13 Time: 7:30 PM
Building: School - Memorial High Location: Superintendent Conference Room
Address: 82 Oakland Road
Purpose: Executive Session Session: Executive Session
Attendees: Members -. Present:
Chairman John Halsey, Secretary Barry Berman, Vice Chairman Kevin
Sexton, Dan Ensminger &John Arena,
Members - Not Present:
Others Present:
Linda Snow-Dockser, Jeanne Borawski, Elaine Webb, Julie Joyce, Chuck
Robinson, Gary NihanSuperintendent John Doherty, Director of Finance Gail
Dowd, Town Manager Bob LeLacheur, Town Counsel Ray Miyares, Fincom
member Peter Lydecker, Attorney David Doneski
L Minutes Respectfully Submitted By: Secretary
Topics of Discussion:
Selectmen Chair Halsey called the Executive Session to order at 7:45 p.m.
High School Construction Litigation
School Committee Chair Borawski explained that a tentative agreement has been reached with
TLT.
Mr. Doneski provided the background to the case. The lawsuit was filed in 2007. TLT alleged
the Town owed them $4.4 million dollars for work performed under the contract. The Town
denied that claim and asserted a counterclaim against TLT for breach of contract.
In 2013 the case was referred to a Special Master who conducted evidentiary hearing which
started in December of that year and concluded in March of 2015. In June of 2015, the parties
submitted to the Master their respective requests for findings of fact and rulings of law, and
closing arguments were presented in July of 2015.
Mr.Doneski said that the first draft ruling was on the issue of asbestos abatement. He went on to
review this ruling. The Master found largely in favor of TLT. He determined that the material
' contained in the exterior walls was an unforeseen condition therefore TLT was entitled to
additional compensation. In the draft report regarding the track the Master determined that the
Town was entitled to a credit for costs incurred for replacement of the original track surface. The
master also determined that the Town was entitled to a partial credit for the stadium lighting and
additional site work and TLT was awarded a credit for the additional site work performed.
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Board of Selectmen Executive Session Minutes—October 13 2016—pare 2
The next steps in the process is that each party had an opportunity to respond to the individual
draft pilings with proposed amendments or revisions. After issuance of all draft reports and '
receipt of proposed revisions from counsel, the Master will then prepare a final ruling and report
to the Superior Court. Mr. Doneski pointed out that the Superior Court would not address this
case,if it got to this point,until sometime in 2017.
At various times since April of 2014 TLT had been approached with settlement offers. The
offers were consistently met with rejection. Following the issuance of the Master's first three -
draft reports (asbestos abatement, track and stadium light) in April of 2016, the School
Committee met with counsel to review the rulings. At that time, it appeared that the net result of
the Master's ruling could be $2.6 million dollars or more,which would be subject to 12% annual
interest from the date of the complaint which was November of 2007. After the meeting, the
School Committee voted to authorize a settlement offer to TLT of up to $5 million dollars. An
offer of$4.1 million dollars was made. This offer was rejected.
A draft report on the project schedule and phasing which includes liquidated damages was issued
in early September. The Master Wiled in favor on portions of the claim for both sides. If
judgement were to entered into on this date, an award of$3 million dollars would be subject to
interest in the amount of$3.2 million dollars. If the case were to continue without settlement, it
would likely be several months before a judgement would be entered in Superior Court.
At their meeting on September 26" the School Committee voted to authorize counsel to make a
settlement offer of up to $6.5 million dollars. Counsel contacted TLT's counsel with a revised ,
offer of $5.75 million dollars which was countered with an offer of $6 million dollars. Mr.
Doneski informed TLT's counsel that he would recommend that the Town accept this offer.
TLT's counsel confirmed agreement on the settlement figure and understands that a Town
Meting vote will be required. The Town will endeavor to complete the process by December
30 but cannot guarantee final payment within that time frame. TLT's counsel understood and
agreed to that stipulation.
Mr. Doneski reviewed the process to formally complete the process. Lastly he indicated that a
former associate of TLT is asserting an attorney's lien on any payment by Reading to TLT. This
matter will be addressed in the settlement agreement — to protect the Town from any further
claims—by some form of assurance or indemnification obligation.
Funding options were discussed which include the amount of the remaining balance of the
project appropriation, free cash and a source to be determined. There are two liens on the
settlement(Western Surety and the former associate).
The settlement agreement will be structured as a Change Order.
Mr. LeLacheur asked if Town Meeting should act prior to an executed agreement. Mr. Miyares
indicated Town Meeting could appropriate the fonds contingent on a signed settlement. Mr.
Berman feels this matter should not go before Town Meeting prior to having a signed agreement.
Mr. Doneski pointed out that the action of the body will be the appropriating the funds. '
A question was asked about MSBA reimbursement. Mr. Miyares indicated that $1.8 million
dollars has not been disbursed to the Town on this project. The funds are in different categories
and we may not be able to get the full amount.
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Board ofSelecdnen Executive Session Minutes—October 13. 2016—Pare 3
Mr. Ensminger left the room at 8:29 p.m.
Mr. Doneski continued by sharing that the Master is now on hold and the settlement is not bound
by the Master.
Dr.Nihan asked to focus on the settlement. Mr. Berman is concerned about what is going on in
the community with an override election approaching. He had hoped for a little more disclosure.
Mr.Ensminger returned at 8:32 p.m.
Mrs. Borawski said that the School Committee has made every effort to be inclusive in sharing
information on the lawsuit.
It was agreed that the sooner the information regarding the tentative agreement was shared with
the community the better. All agreed that the timing of this announcement is not great.
Dr. Doherty pointed out that due to the Columbus Day holiday and Yom Kippur this was the
earliest we could have this meeting. Chair Borawski will read the press release when the Boards
return to open session.
Mr. LeLacheur reviewed the funding options. Options include the use of$800,000, which is the
remaining balance in the construction line, $1.2 million dollars in free cash and $4 million
dollars to be borrowed. There will be adjustments to the capital plan such as deferring projects.
' The high school project is a capital project.
Mrs. Borawski asked if we have cases against other parties.
Mr. Miyares shared that in order to win a malpractice case there needs to be proof that the advice
or specific item would have resulted in a different outcome. At this point there is no evidence of
malpractice and does not recommend pursuing this matter.
Mrs. Webb said the School Committee had asked, while Brackett& Lucas was counsel, if letters
should have been sent out putting people on notice. Mr. Robinson added that the Committee was
under the impression that the litigation was progressing and did not receive appropriate updates
until Mr. Doneski and his firm were hired as replacement counsel.
Mr. Ensmin¢er moved, seconded by Mr. Halsey, adjourn and return to omen session at.
The roll call vote was 5-0. Mr. Halsey, Mr. Ensmineer, Mr. Arena, Mr. Berman and Mr.
Sexton.
The Executive Session adjourned at 9:24 p.m.
Res ctfully submitte ,
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