City and Farnsworth split difference on disputed invoice

[January 20, 2018] 

LINCOLN

On Tuesday, January 16, Lincoln Aldermen met for what would have been their regular Monday voting session. The meeting had been delayed one day due to the Martin Luther King holiday on Monday. Seven of the eight aldermen were present, with Kathy Horn being absent for the evening.

Among the items on the agenda was a motion to pay an invoice issued by Farnsworth Group that included engineering and oversight for the fall 2017 sidewalk repair projects for the city.

The invoice had come before the council in December and aldermen voted 3-5 to deny the request for payment.

The invoice, was originally issued in October for the amount of $38,728.70. At the January 16th meeting, Farnsworth discounted the bill by $5,610 to a net amount of $33,118.70. By unanimous vote, aldermen agreed to pay the reduced amount.

The problem with the invoice originally began with a change order for the 2017 city sidewalk repair and replacement projects, let out for bid in August, with bid packets returned in September.

The city had budgeted $125,000 from the Motor Fuel Tax budget to go to sidewalks for the 2017-18 fiscal year. The bid packets had been prepared naming specific sidewalks that were to be included in the project. When the bids were returned, the cost of working on that specific list of sidewalks came in much lower than the city had anticipated. Kinney Contractors bid $77,644.42 for the entire project. City Street Superintendent asked the council to permit him to add more sidewalks to the list in order to utilize the full $125,000 and the aldermen granted that request.

Later in September, the city opened bids for the 2017-18 street resurfacing projects and found a similar situation. The bid placed by United Contractors Midwest came in at $331,456.02 when the city had budgeted a total of $500,000. Again, Landers asked to add more streets to the project list and aldermen agreed.

In October, when the bill arrived from Kinney Contractors, aldermen discovered that the total amount due was $136,818.98. This amount was $11,814.44 more than the city had authorized. The contract with Kinney had stated that work was to be done for an amount “not to exceed $125,000.”

Aldermen discussed the situation at the November 28th Committee of the Whole, and agreed that there was an issue with allowing the amount to go over the “not to exceed” amount, but that the issue wasn’t as much with Kinney Contractors as it was with the project engineers, Farnsworth Group.

Consequently, at the December 4th voting session, aldermen voted to pay Kinney Construction the full amount. They then denied payment on the accompanying invoice from Farnsworth. Those who voted against paying the Farnsworth invoice were Heidi Browne, Rick Hoefle, Kathy Horn, Steve Parrott and Tracy Welch.

Gary Davis with Farnsworth had come before the council to discuss the situation and said that the extra cost had come from the discovery that some of the sidewalk areas on the list appeared to be grass walkways when the initial engineering was done, but when it came time to do the actual work, it was discovered that there were brick sidewalks underneath the soil and grass. This had caused extra work and additional engineering to complete the full list of sidewalks.

Aldermen questioned how this happened and were told that the initial assessment of the work had been done quickly and that no one had realized the brick was there. He said he felt that the work had been done that needed to be done, thus justifying the cost.

On January 9th, Davis appeared before the council again, this time offering a compromise on the more than $11 K invoice. Farnsworth would discount the unpaid invoice by $5,610, approximately half of the overcharge amount on the Kinney invoice.

Michelle Bauer commented that the work that had been done by Kinney and Farnsworth was adequate, and needed to be done. She noted that the street projects for the year had still come in under budget after adjusting that list, so in reality, the city was still within the budget for the two projects total.

Parrott asked if the engineering firm had done an onsite inspection of the sidewalks before the work was done. Davis said they did, but the engineer had not seen that there was brick below the grass. Parrott asked Landers if there were areas in the city where there is a grass walkway with no brick underneath. Landers said that was hard to say.

Davis said that the quick decision had led to the error, and that there may have also been a misunderstanding or miscommunication between Farnsworth and Kinney that led Kinney to believe the budget for sidewalks had been increased.

Bauer said there was also some confusion in the way the work had been invoiced, and that Farnsworth would change the way they do their invoicing to the city if and when it does other projects.

At the January 16th voting session, the invoice with the $5,610 discount came before the council once again. Bauer and Jeff Hoinacki made the motion and second respectively to pay the new amount of $33,118.70.

After the motions were made, Browne said that she would vote in favor of paying the invoice, but she wanted to send a message that if the city chooses to use Farnsworth in the future, the firm will be held accountable, and she expects them to hold themselves more accountable.

Hoefle said that after the committee of the whole meeting, which he was unable to attend on January 9th, he received a call from Davis. Davis asked if Hoefle was satisfied with the discount. Hoefle said during that conversation Davis had agreed with Hoefle that the firm’s oversight on this project and others had been questionable.

Hoefle said that he had asked Davis if a city engineer, and employee of the city, might have helped prevent this situation, and Davis had said that yes it could have helped.

Hoefle said that the city does indeed need a day-to-day qualified engineer to oversee all its projects. Hoefle said that he would vote to pay the discounted invoice.

When the roll call vote was taken all seven aldermen present voted “yes” to the request for payment of the outstanding invoice.

For the past year, there have been instances where Farnsworth has made errors that ended up costing more money. In some cases the firm absorbed the extra costs and in other instances, the firm asked the city to share the added financial burden.

Farnsworth has been the official engineering firm representing the city, but their contract has run out. For the past few months, conversations have been ongoing in the council chambers regarding how the city should proceed in securing an engineer.

The council is divided on the topic, with some feeling a firm that offers a team of professionals is the best route, while others feel that a single person who is an employee of the city would best look after the interests of the city.

Prior to his departure in December, Interim City Administrator Bob Mahrt was asked to put together a comparative “pro and con” list showing the advantages and disadvantages of hiring a firm, hiring one individual, or selecting a number of firms to be called upon to serve the city based on the project and the firm’s expertise. The request was made to Mahrt on December 12th, and he left the city’s employee on the 15th. No one has said whether or not Mahrt had time to compile the requested pro and con list.

[Nila Smith]