Contractor terminates contract: Threatens lien against stalled Griggs County courthouse project
COOPERSTOWN, N.D. — The general contractor on the stalled Griggs County Courthouse and Emergency Operations Center construction project has terminated its contract and is threatening to file a lien against the $3.5 million building.
The contract with Construction Engineers of Grand Forks was scheduled to end at midnight Wednesday, according to Griggs County State’s Attorney Jayme Tenneson.
“The county received the termination notice,” he said Wednesday. “We’re researching and exploring our legal options right now.”
Attorneys for Construction Engineers also sent a notice dated July 25 that it would file a lien against Griggs County and the Griggs County Building Authority if a balance of $709,880.54 was not paid to the company within 10 days.
No lien had been filed against the property as of Wednesday, according to Tenneson and County Treasurer Connie Eslinger.
Construction Engineers and its subcontractors halted work on the project May 2 after the contractor claimed the county was overdue on paying $170,000 in bills. The project was estimated to be 90 to 95 percent completed at the time, and no work has been done since then.
The building, adjacent to the old courthouse that still is in use, remains vacant. The old courthouse, which is on the National Register of Historic Places, has been plagued by mold, roofing and other physical issues. The historic building, built in 1883-84, remains the oldest courthouse in North Dakota still being operated as a county seat of government.
The dispute involves the $1.25 million Emergency Operations Center portion of the $3.5 million project.
The EOC, which is connected to the new courthouse, is being financed through a $1.3 million federal grant, administered through the North Dakota Department of Emergency Services. The county is required to contribute — and has paid — its 25 percent local match.
Two projects, one contract
The Griggs County project is unique in that it involves two separate projects rolled into one contract, with each controlled by a different group. That’s the result of a recall election last October in which all five county commissioners were defeated.
The recall was prompted by the former County Commission’s decision earlier in 2013 to proceed with building a new courthouse and adjacent EOC, despite voters’ rejection of three separate bond issues to finance different versions of the project.
The commissioners then formed a private, nonprofit organization to issue $2.2 million in bonds to pay for it over 20 years, as well as to oversee the project.
Normally, that poses no problems because the County Commission and the Building Authority usually are composed of the same people. But the recall changed that.
The original federal Department of Homeland Security EOC grant was awarded in January 2012.
However, money cannot be released until the North Dakota Department of Emergency Services receives proper documentation that federal funds are being spent only to reimburse the county for money spent for just the EOC, and not for the courthouse portion of the project.
NDDES did release two payments totaling nearly $160,000 to the county earlier this summer. However, it still was holding back about $829,300 as of this week.
The county has until September 2015 to comply with grant regulations, or lose the federal funding.
In a related issue, the County Commission and Building Authority are arguing over which entity is responsible for finishing the construction project.
In a letter dated July 18 to the Building Authority from the Griggs County Commission, Chairman Troy Olson said it is “the duty of the Griggs County Building Authority to construct the facility. It appears that failure to construct the facility is a breach” of its contractual obligation.
In a response dated Aug. 13, attorneys for the Building Authority said the $2.285 million, 20-year revenue bond it obtained through the Bank of North Dakota has already been spent on the project and that the Building Authority “has met its obligation for financing the building.”
The Building Authority contends the County Commission’s failure to comply with terms of the federal grant puts the county at risk of losing the remainder of the grant funds.
“It’s unfortunate for the citizens of Griggs County,” Tenneson said. “There’s a lot of money tied up in this.”