MVSD Board settles claims with building company
Gilbane Building Co. agreed to drop a $250,000 claim in return for the board's decision.
By STEPHEN SIFF
and PEGGY SINKOVICH
VINDICATOR TRUMBULL STAFF
NILES -- The Mahoning Valley Sanitary District has agreed not to pursue any legal action against its former construction project manager.
The board voted during Tuesday's meeting to "settle all claims between MVSD and Gilbane Building Co.," according to the resolution.
The district supplies water to about 300,000 Mahoning Valley residents and had been a party in a suit, filed by the state attorney general's office on its behalf, to recover $2.4 million from the Rhode Island-based Gilbane Building Co.
In return for the board's decision, Gilbane agreed to drop a $250,000 claim for money it said MVSD still owed on the contract.
"Two different courts have ruled that the contract was legal and no laws were broken," said William Burgess, a member of the MVSD board. "The attorney general wanted to appeal it one more time, but we didn't feel they would find anything different."
Al Fleming, a member of the MVSD board, voted against the resolution, stating he felt "all parties, including the state attorney general's office, should be part of the agreement."
Fleming also said that he believed certain aspects of the settlement agreement did not properly serve the MVSD or the people who have to pay for the water.
Fleming declined to state the parts of the settlement agreement that he did not agree with and referred questions to the board's attorney, Chuck Richards, who could not be reached.
Special audit
Gilbane served as construction manager on MVSD's $50 million capital improvement project, until the company was removed from the job after a 1997 special audit of the district.
The audit concluded Gilbane was being paid for work never performed. The contract provided for periodic payments to the company, regardless of the progress of work, Burgess said.
A federal judge dismissed the lawsuit in October, saying the payments were not illegal. The MVSD board's decision to drop the case does not change the attorney general's resolve to pursue an appeal, said officials with the attorney general's office.
The Gilbane case was among three lawsuits resulting from the 1997 special audit.
Last month, the attorney general voluntarily dismissed one of the other cases, against former director Frank D. DeJute, although they reserve the right to file the case again.
The case against another former director, Ed Flask, has been postponed while Flask goes through bankruptcy proceedings.