C070901MClosed Session (Item M) - July 9, 2001
At 6:55 p.m. the Board went into closed session to discuss matters that require attorney-client
privilege between the County Attorney and the Governing Board concerning potential claims resulting
from the construction of the courthouse from Crutchfield Plumbing & Heating Co., Inc. and Amwest
Surety Insurance Company, pursuant to North Carolina General Statute 143-318.11(a)(3). Commissioners
Kemp, Frye, Davis, Holmes, and Mason were present. Also present were Frank Willis, County Manager;
Alice Dawson, Clerk to the Board; Alan Pugh, County Attorney; David Townsend, Public Works Director;
Patty Brown, Assistant to the Public Works Director; and Bill Moser of Moser, Mayer, Phoenix,
architectural firm for the new courthouse.
Alan Pugh explained that several weeks ago Mr. Townsend began receiving information that
Crutchfield Plumbing & Heating, the HVAC contractor for the new courthouse under construction, had
begun falling behind the revised schedule that they and the other three contractors had agreed to, thereby
hampering J.H. Allen, the general contractor, from moving ahead with their work. Our contract with
Crutchfield was for a February, 2002 completion date, not November, 2001. We understand that
Crutchfield has not been paying their subcontractors, and on July 2, Crutchfield called all their employees
off the job. On July 2 the County received notice that Crutchfield's bonding company, Amwest Surety
Insurance Company, is in the process of being liquidated as of June 7, and the County had to respond with
any claims against Crutchfield by July 7. The County Manager sent a letter to Crutchfield on July 3
notifying them of the County's intention to terminate their contract. Crutchfield appears to be in
bankruptcy. Our contract with them was for $1,340,000, and we have paid out approximately $850,000.
Mr. Pugh stated that North Carolina General Statutes allow us to negotiate with another contractor
to finish the job. Our biggest exposure is delaying other contractors in completing their work. We have
three alternatives: 1) let the general contractor, J.H. Allen, negotiate with someone else to finish the job;
2) the County can negotiate directly with another company to finish the job; 3) let the supplier of the
equipment, Hoffman & Hoffman, finish the job since they are licensed to do so.
Mr. Pugh asked the Board to do the following: 1) ratify the Manager's letter to Crutchfield; 2)
terminate their contract effective July 10; 3) authorize the Manager and the Chairman to enter into a
contract to finish Crutchfield's work; and 4) authorize the Manager and Attorney to retain construction
and bond counsel to assist them.
Mr. Moser said that the general contractor had already talked to Hoffman & Hoffman, and
Hoffman & Hoffman is not interested in completing Crutchfield's work.
On motion of Frye, seconded by Davis, the Board voted unanimously at 7:30 p.m. to return to
regular session.
Phil Kemp, Chairman
Robert B. Davis
Darrell L. Frye
Robert O. Mason
J. Harold Holmes
Alice D. Dawson
Clerk to the Board