County will not fight arbitration ruling on Regional Justice Center construction costs
Clark County Commissioners won’t challenge a binding arbitration decision that requires the county to pay AF Construction more than $53 million to settle dueling lawsuits over the building of the Regional Justice Center.
The county blamed AF for construction problems, but on Nov. 30 the arbitration panel said the county was responsible for more problems than the contractor, particularly since the county breached its contract first by firing the contractor.
The decision not to appeal was reached in a closed door meeting Wednesday with county attorneys and won’t be put on a future agenda for discussion because they’re accepting an arbitration decision, County Manager Virginia Valentine explained to me today. (I found that pretty outrageous too.)
“The board reviewed the arbitration decision, the statutes and case law and after lengthy discussion, decided not to challenge the decision,” Valentine said. “The primary reason is the high legal standard required to challenge the decision. The county disagrees with the decision, but it’s not worth risking taxpayers’ money to appeal it.”
The board will appeal some of the arbitrator’s calculations of about $3.7 million in interest, but that’s a small portion of the award.
That’s not the same interest as the $10,000 a day interest that’s been building since Nov. 30 when the award was issued, roughly $52,000. However, by the county’s calculations, since they’re earning interest on the $53 million, the interest costs are a mere $3,200 a day. By my math, that’s more than $166,000 in interest since Nov 30. And they’re not appealing that.
Me, I’d have moved a little faster. The commissioners began discussing the arbitration award starting with their first meeting of the year in early January and met at least three times with their lawyers.
To me, that’s real money. I understand that plunking down $53 million (on top of the $22 million in legal fees) shouldn’t be taken lightly, but you know if it was their money, it wouldn’t have taken since Nov. 30 to decide.
There’s a reason it’s called binding arbitration, folks.
The decision had some pretty tough words for the county, as I detailed in columns on Dec. 18, Dec. 20 and Dec. 22.
Hopefully, the county learned something about project management. See, I am an optimist.