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Special Meeting/Workshop - No Division Assigned

Title: Settlement Agreement with Turner Construction

Recommendation:
I recommend the School Board approve the terms of settlement with Turner Construction Company and authorize the Chairman and Superintendent to execute the Stipulation of Settlement and the Full and Final Release, and all related documents and that the School Board find that an emergency exists under Fla. Stat. Sec. 120.525(3) as to an immediate danger to the public welfare requiring emergency and immediate action to approve the settlement today and that the procedures and notice are fair and provide sufficient procedural protections for the reasons as stated within the Board report on this item.

Description:

The following is a brief history of the events leading up to the Settlement, Full and Final Release, Indemnity, and Hold Harmless Agreement.

 

  • On or about August 4, 2006, Turner Construction Company (“Turner”) filed a Petition for Formal Administrative Hearing against the School Board of Palm Beach County, Florida for $3,988,196.19 alleged claims for work performed on the following Projects: 
    • Palm Springs Elementary School Modernization, Project No. 0651-8262,
    • West Boynton Beach High School (91-EEE), Project No. 2001-8320, and
    • Lake Worth Area Middle School (98II), Project No. 2781-8197 (“The Projects”)

Additionally, Turner requested its Retainage in the amount of $2,757.121.00.

 

  • On November 9, 2006 The School Board filed a Complaint against Turner in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida for Breach of Contract for failure to furnish all work for the Projects according to the Agreements on the Projects.

 

  • The School Board retained Two Million Seven Hundred Fifty Seven Thousand, One Hundred Twenty One Dollars ($2,757,121.00) in Retainage pursuant to its contracts with Turner on the Projects.

 

  • Due to the settlement of both the School Board’s claims against Turner and Turner’s claims against the School Board, the net amount to be paid to Turner is Three Hundred Forty Two Thousand Eight Hundred Seventy Nine Dollars ($342,879.00).

 

  • The following are the essential elements of the Settlement, Full and Final Release, Indemnity, and Hold Harmless Agreement:
    • Turner agrees not to submit a Proposal for any SCHOOL BOARD project of any kind for the period of three years; and agrees not to contract or otherwise do business with any entity that is contracted with the SCHOOL BOARD on that particular project for the period of three years;
    • The School Board agrees to pay Turner Two Million Seven Hundred Fifty Seven Thousand, One Hundred Twenty One Dollars ($2,757,121.00) in Retainage, payment of One Hundred Sixty Thousand Nine Hundred Ninety One Dollars and Forty Six Cents ($160,991.46) for claims of work performed during past hurricanes (Such payment contingent upon TURNER’s execution of the Construction Change Directive form for same amount), and payment of One Hundred Eighty One Thousand Eight Hundred Eighty Seven Dollars And Fifty Four Cents ($181,887.54) for settlement of claims for work performed on THE PROJECTS. 
    • The School Board and Turner mutually release each other from any further claims, except as to the parties’ obligations under the settlement agreement and any latent construction defects.

 

  • The welfare of the School Board requires that the Board take immediate action to approve the Stipulation of Settlement and Full and Final Release (Stipulation of Settlement) so as to secure the settlement of outstanding claims brought by Turner Construction Company as alleged in its Petition for Formal Hearing and secure the settlement of outstanding claims brought by the School Board in its complaint in the 15th Judicial Circuit, Case No. 2006 CA 011978XXXX MB.

 

  • The core of the agreement by the parties was only reached today as to the terms of the settlement.  Turner has insisted that the Board vote today to approve the settlement.  

 

  • Board approval of the Stipulation of Settlement is necessary to protect the public interest under this emergency procedure and good cause exists for this matter to be decided today because time is of the essence and Board approval today is necessary to secure the settlement of the above-mentioned claims.  Should the Board not approve the Stipulation of Settlement, then settlement will not be secured and each respective party will proceed with their respective claims, and Turner’s claims far exceed the amount they are willing to accept under this settlement. 

 

  • The procedure of providing notice immediately subsequent to finalizing the terms of the Stipulation of Settlement is fair and provides sufficient procedural protections under the circumstances because it is taking action necessary to secure settlement of the claims outlined above when the parties agreed to the settlement terms today.  Notice of this emergency meeting was posted on the School District’s website today, the Board is holding other special meetings today, and the notice of this emergency meeting will be advertised in a newspaper of general circulation within the county as soon as possible. 

 

Funding:  Source of funding for the Retainage of $2,757,121.00 will be appropriated from the Project Budget of the corresponding budgets of Palm Springs Elementary School Modernization, Project No. 0651-8262, West Boynton Beach High School (91-EEE) (Park Vista), Project No. 2001-8320, and Lake Worth Area Middle School (98II) (Trade Winds), Project No. 2781-8197.

 

Source of Funding for Settlement amount of $342,879.00 will be appropriated from the Project Budget of Palm Springs Elementary School Modernization, Project No. 0651-8262.

Financial Impact:
$3,988,196.19

For Additional Information, contact:

Gerald A. Williams (williamsg@palmbeach.k12.fl.us)

 

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