Settlement with BCI

For a while now, the Common Council Legal Committee and the full Common Council have been going into executive session to discuss settlement negotiations with BCI Construction, the company that upgraded Hudson's waste water treatment plant and whose president is Michael Benson, the county supervisor from New Lebanon. Tonight there was a special meeting of the Common Council to consider a resolution to settle the contract dispute between BCI Construction and the City of Hudson, and the public got the chance to learn the nature of the conflict.

Photo from BCI website

Rob Perry, superintendent of public works, spelled out the predicament. The improvements to the waste water treatment plant cost a total of $12.4 million, and the money came from multiple sources, including $6 million in federal stimulus money. "Each source," said Perry, "created issues for reimbursement that delayed payments to contractors." The City's contract with BCI required payment in 30 days with penalties for late payment. Perry explained that it took 20 days after a bill was submitted for the engineers to inspect and OK the work, leaving only 10 days for the City to make the payment. In the end, BCI claimed that the City of Hudson owed more than $100,000 in penalty interest for late payments. BCI offered a $65,000 settlement; the City offered $45,000, which BCI accepted. Last night in a special meeting, the Common Council voted on a resolution to accept the settlement. 

In the discussion before the vote, Alderman John Friedman (Third Ward) said the contract, as it was, should never have been signed in the first place. Acknowledging that corporation counsel had changed since the City entered into the agreement in December 2009, Friedman said the City should have known that it could not meet the 30-day payment expectation and pointed out that the interest rate specified in the contract for late payment was "unheard of"--"eight times the statutory limit for municipalities." 

Alderman Cappy Pierro (Fifth Ward), who was aide to Mayor Rick Scalera when the contract was signed, said he blamed it all "on the engineering firm and the person who got sick." He defended the action saying, "We almost lost $6 million [in stimulus money]. Things were done very hastily because we had to switch engineering firms."

Before the Common Council voted on the settlement agreement, Council president Don Moore asked the aldermen and the public to consider "how much the infrastructure of the city has benefited from the federal stimulus plan." The Council then voted unanimously on the resolution to enter into the settlement agreement.