Town Council Surprised by $650,000 Bond Request

A Board of Finance resolution to issue $650,000 in bonds to pay an arbitration award in a dispute stemming from the construction of a bridge on Lakeview Ave. was rejected by the which voted instead to take the money out of the town’s general fund. The vote was taken at the Council’s meeting on Wednesday, May 18.

 The American Arbitration Association handed down its decision on Feb. 25, ordering the town to pay Loureiro Contractors, Inc. (LCI) $597.086, plus arbitration and administrative fees that will cost the town an additional $102,756.25, according to arbitration documents. In addition, the town has accrued close to $1 million in related costs, including approximately $800,000 in legal fees, town officials said. 

According to the documents, the town contracted with LCI in March 2007 to build the bridge. The project ran over budget and nine months over schedule (see arbitration award document at right). The town withheld a portion of the payment, and when the dispute could not be resolved, it went to arbitration.

The town paid the award in full in March.

At issue for the Town Council were questions about who knew the judgment had been handed down, and when they knew. Council members said the information was relevant to the town budget discussions which ended on April 13, when the 2011-2012 budget was approved by the Town Council.

 “Throughout our whole budget process, we were meeting weekly,” Council member Beth Jones said. “Nobody told us this was a done deal.”

Council member John Emert told the Council he was "outraged" by the story that unfolded at the May 18 meeting.  On Friday morning, he told Patch that he learned about the $650,000 award when he saw it on the Board of Finance's May 10 meeting agenda, which was posted on the town's website. He said he downloaded a copy of the arbitration report from an online news site, and sent it to Council members.

"The actual text of the award was not distributed with the materials for the meeting, so I distributed it to the other members," he told Patch.

, who also serves as the chair of the , told the Council that he had informed the Board of Selectmen about the judgment in Executive Session on May 10, the same day the Board of Finance voted to recommend the bond appropriation. Selectman Rob Mallozzi III disputed this, and said the Selectmen had not been informed of the award against the town.  Walker could not be reached for comment.

 “Nobody’s happy with the way the meeting ran [Wednesday] night,” Vice Chair Stephen Karl told Patch. “At this point we’re still trying to find the process and what broke down.”

Emert said Chair Mark DeWaele has called a meeting for Monday, May 23 at 7:30 p.m., but he has not yet seen an agenda for that meeting.

Resident Michael DeFelice attended the May 18 meeting, and expressed his dismay.

 “This is a pretty extraordinary set of circumstances. It’s unfortunate at best,” he told the Council. “Clearly there’s a mechanism that broke down or does not exist. Does a mechanism not exist or does it exist and it broke down?

Mallozzi said the information about the award should have been disseminated in time for the town’s governing bodies to use it in their budget deliberations.

“There was information that should have been spread out among all town bodies when we had two months to discuss the impact on our budget and decisions going forward. We in effect voted to spend money for next year, and we may not have that money to spend,” he said. “We based our decisions on information we had and there was information out there we didn’t have. And that is wrong.”

The Council voted 6-4 against issuing bonds to cover the payment of the award. Voting against were Kit Devereaux, John Emert, Paul Foley, Robert Hammill, Christine Hussey and Elizabeth Jones. Voting for the bond issue were Jeff Campbell, Karl, Tom O’Dea, and Penny Young. Chair Mark DeWaele and Council member Tucker Murphy were absent.