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Insurance policies for school contractors don't cover loss.
By S.I. ROSENBAUM
Published January 12, 2008
RIVERVIEW -- Soon after Symmes Elementary School opened in 2001, it began to fall apart.
Walls cracked, floors buckled and sidewalks split open.
Now, it appears taxpayers will be on the hook for the bulk of the $5-million the School Board spent rebuilding part of the school.
And one School Board member says the board is to blame.
"That's our fault," said Jennifer Faliero, who represents eastern Hillsborough County. "We can't do business like this."
The board had sued the three companies involved in the school's construction, seeking reimbursement.
The board argued that the companies should have known that the school was being built on a significant clay deposit that would contract and expand with moisture, warping the buildings above.
The board had a good case, Faliero said, against at least two of the companies: Portela & Associates, a local architecture firm more used to building office complexes and car dealerships; and Test Lab, a local engineering firm.
But even if the board won its case, neither Portela nor Test Lab had much money to reimburse them, said Hillsborough School Board attorney Tom Gonzalez.
Neither company carried more than $1-million worth of insurance, even though they were working on a multimillion-dollar project.
To make matters worse, Test Lab's insurance carrier said the company hadn't given them adequate notice of the claim and balked at paying.
The only company with pockets deep enough to make litigation worthwhile was Skanska USA Building, the project's construction manager.
But there, Gonzalez said, the School Board's legal team concluded they didn't have a strong enough case.
"There wasn't a theory of liability," he said.
The problem, he said, was the board's 2005 decision to demolish and rebuild the three most damaged buildings.
The board's legal team wasn't certain it could convince a jury that the demolition was necessary, as opposed to a cheaper fix such as filling in the cracks, Gonzalez said.
Faliero stood by the decision. "We did the right thing demolishing these buildings," she said. "There were children in these buildings."
She added, "We can't do anything for it. We're going to have to eat the cost."
All three companies have made settlement offers: $775,000 from Portela, $500,000 from Test Lab, and $150,000 from Skanska.
That leaves roughly $3.5-million for taxpayers to make up.
Faliero said she is angry that the board chose to deal with companies who weren't insured for the full cost of the project.
"That's unacceptable," she said. "I fully expect the staff to make immediate changes in the way we select architects and construction managers in the future. They're going to have to be able to back up their work."
Until now, she said, the district's policy has been to deal with smaller local companies when it can. A Test Lab official declined to comment Friday.
Portela's attorney , Ed Savitz, said that if the board starts requiring companies to carry more insurance, it will be hard for small firms to compete.
"In my experience, the smaller firms are generally not able to get $10-million or $5-million policies," he said. "One-million is fairly standard."
And he warned that large firms may carry more insurance, but they also charge higher fees and employ brigades of lawyers to defend themselves from liability.
The School Board will consider the settlement agreements at its meeting Tuesday.
S.I. Rosenbaum can be reached at firstname.lastname@example.org or (813) 661-2442.
[Last modified January 11, 2008, 23:51:20]