Board of Education Members Approve Settlement with Referendum Contractor

Manchester members last week approved a settlement agreement with the contractor of its referendum project, which will release funds owed to subcontractors and remove a lien on the school district. 

The project, which included improvements to schools and playing fields, was contracted between the district and Chanree Construction in April 2010 and has been "complete for several months," said school district Business Administrator Craig Lorentzen.

"We've been in litigation because the contractor owes his subcontractors several hundred thousand dollars," Lorentzen said.

Because of the owed money, municipal mechanics liens — which under state law allow a subcontractor to seek payment from a municipal agency even though the two do not have a direct contract — were filed against the school district by LCI, American Athletic Courts and Electrical Design Corporation, according to the resolution. 

The school district is able to pay the balance owed on the contract with Chanree, which would then enable the company to pay its subcontractors. The district, however, cannot issue the payment until the liens are discharged under the settlement agreement. 

"Until the liens are released, we cannot continue to pay the contractor if he owes more to his contractors," Lorentzen said.

Performance and payment bonds totalling $5,822,041 in penal sums were issued by Arch Insurance Company in May 2010 on behalf of Chanree and in favor of Manchester, according to the resolution accepting the settlement. 

The settlement requires the district to pay the balance owed on the contract provided that all of the parties involved agree and sign the settlement agreement. Once that has happened, the district will receive the discharge of liens. 

As of last week, all but one party have agreed to the settlement. 

"This agreement will not be final until we get that last party," Lorentzen said. "If we don't, there isn't an agreement."

The resolution approving the settlement also states that Chanree has provided a maintenance bond as required by its contract with the board of education and American Athletic Courts will provide a two-year warranty covering the surface of tennis courts at the high school beginning from July 2011.