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Tuesday, September 13, 2005

"Put the phone down, Ms. Tacker, and step away from the door and nobody will get hurt. It was a mere oversight. ESHA, SMESHA, who can keep all this stuff straight and why would a bonding company need to know that kinda crap anyway? Geeeze!"

Well, it seems after yesterday morning's special 8 a.m. meeting to get a CSD Board vote on spending $4,501.20 to buy a Performance Bond that would get the CSD $225,060.00 worth of "restoration work" (i.e. safety and erosion control only, no cute little treelings and shrubbery, an image that usually pops into your head when you hear the word "restore") in case the recall and/ or sewer initiative passes and work on the Tri W site stops and things are left in a mell of a hess.

Board member Tacker stated at the meeting that she wasn't sure the $225,060 would be enough and inquired as to whether CSD General Manager Buel had sent along all the ESHA info on the land in question to the bond company (since, I presume, ESHA land comes with waaaaayyyy more headaches -- ie. mo' money! mo' money!-- required to "restore" it). Mr. Buel said he'd sent along an excerpt of an EIR summary, or some such.

So, the plot thickens as Board member Tacker calls the bonding company, The Insco-Dico Group and speaks to someone there and asks, Did you get the documentation that this property you're bonding was ESHA? And the person on the other end of the phone says, "Huh? What are you talking about? What ESHA?"

And then the you know what hits the you know what and ka-blooey, the next thing anyone could hear is the pitty-pat of all those Insco Dico Group's little feet as they yanked the agreement and headed for the door muttering, "Nuh, huh, we changed our mind we're outta here buh-bye no tickee no washee no deal no dice hava nice life hasta la vista see ya later we just remembered we gotta go to France!" and thundered down the stairs from Suite 105 and headed down Glendale Blvd, spatta-spatta-spatta!

So, no bond. No bond, no grading. Just grubbing and scraping, with the big cats going pockety-pockety, potketa, until some new bonding company can be found.

Which might get a little dicy since if word of this gets out, bond people might ask, Hey, if you "forgot" to mention "whether there are any unusual environmental issues with these sites, beyond being some sort of sewer treatment facility," like it said on the Insco/Dico Group's fax of August 23, 2005, then we gotta ask What else have you, uh, forgotten to mention that we could get stuck with should things go ker-flooey so we'll hafta charge you pots more money?"

Thus demonstrating yet again that Honesty is always the best and the cheapest policy in the long run. And, meantime, don't be surprised to read in the police report that Board member Tacker's cell phone has gone mysteriously missing.

Hey, don't look at me. I didn't take it!
Posted by Churadogs at 7:53 PM

5 comments:

Shark Inlet said...

Another interpretation comes to mind.

Bruce did everything necessaray the bonding agency was simply negligent in their ability to read carefully. If this is the case, Julie's actions are not defensible as "she was just trying to make sure they really understood what they were getting into." Julie's actions would only make sense as a way of stalling the construction and raising the construction costs.

I don't actually know which is correct, but it makes sense to point out the other reasonable interpretation. Of course, those who view Bruce as the villan will agree with Ann's interpretation and those who view Julie as a bit of a doofus will take the other.

6:58 PM, September 16, 2005
Churadogs said...

If you had attended the morning special meeting, in the agenda package was a letter to the Jim Marshall Insurance Agency. In the middle of the one page brief letter are three numbered items. Item number 3 states: "We need to have the understanding of what work needs to be done, who the contractors are, and whether there are any unusual environmental issues with these sites [one of the sites being bonded is, not only Tri W but the Broderson discharge fields], beyond being some fort of sewer treatment facility."

Now, the queston you should have asked: Why did Insco/Dico yank the agreement and head for the door AFTER Tacker's phone call? Is it possible that the information they were given did NOT indicate that the property in question was ESHA, was facing a recall election and had an outstanding lawsuit on it? It it possible that had they been given full disclosure up front, that the amount they would have charged for that bond would have gone over the $5,000 limit that Bruce can spend without having to go for official board approval?

Let's ask another question. Bonds of this sort are like fire insurance policies; the rates are based on liabilities. If you take out a fire insurance policy and tell the company you live in a brick house, fifty feet from a hydrant and don't smoke, they'll quote you one rate. Let's say you do that and get the policy and your house then burns down and the inspector comes out and sees that you house is actually made of straw, is three miles from a hydrant, you smoke like a chimney and store tanks of gasoline in the basement. What then? Does the insurance company honor the policy or do they void it out on account of deliberate fraud and misrepresentation on your application?

And if you then claim, "Oh, darn, did I forget to mention those gas tanks in the basement? Sorry, my bad!" is that denial credible? Will the insurance company say, "Oh, that's o.k. here's your nice pay out?"

I'll ask again: Why did Insco/Dico scamper out the door after Tacker's phone call? What could she have possibly had told them that would cause them to refuse to issue the bond?

Next question, suppose Tacker hadn't called them, the recall actually went through and the company was asked to honor that bond and THEN they found out that it was ESHA land, had a lawsuit pending, a recall hanging overhead, that there WERE "unusual environmental issues with these sites beyond being some form of sewer treatment facility." Would they have refused to honor that bond on account of misrepresentation on the application, thus sticking the taxpayers of the town with the full cost of "restoring" the graded properties in question?

Let's put the best possible spin on this: Should a screw up like that be considered a simple boo-boo? If so, the Board sould have been reconvened in another special, emergenty meeting, and then asked to vote in the higher premium, not a problem. Was this "oversignt" a sign of mere incompetence? Whoever sent along the info didn't know what item #3 meant? Was it lack of due diligence on the part of the CSD's manager?How is it possible that he didn't know what item #3 meant? Or maybe reckelss endangerment of the community's pocketbook because of lack of full disclosure? Deliberate intent to misrepresent? Whaaaaat?

No, that question remains: Why did Insco/Dico scamper out the door.

7:00 AM, September 17, 2005
Shark Inlet said...

I largely agree with you but would like to suggest that if a Board Member calls you on the phone and asks a question like "did you know that ..." it might spook you into thinking that there is more than meets the eye.

Face it, if Bruce had done everything right (which I don't know) and it was the bonding firm that had screwed up, Julie's call cost us money and delayed the construction. If you tell an insurance company about the gas cans in your basement but they choose to ignore that information before issuing you insurance it is their problem.

One interesting mathematical twist on this issue (before the bonding firm backed out) is that the policy was for $225k but cost $5k. This would only work if the bonding company thought there was considerably less than a 2% chance of the need for regrading. Quite clearly this was a company which hasn't been reading up on the project. I would find it quite easy to believe that such a firm would be negligent in doing other homework.

8:26 AM, September 17, 2005
Churadogs said...

Inlet: This bonding stuff is so totally common in projects of this sort that there should have been absolutely NO problem. Full disclosure up front would have meant that when Tacker or any other Board member called, the response would have been, Yep, we know all about the "special" problems on that project, which is why we charged you more for your bond than if it had been a run of the mill project." Instead, they said, HUH? and scampered out of town.

My question remains, Why?

The percentages you quote are interesting. Was that the reason maybe Bruce DIDN'T send along full disclosure? Full disclosure would probably have meant a higher bonding price which would mean prior Board Approval, and if he was convinced the recall will fail, did he think, "Ah, who's gonna know?" That's a possible scenario, but according to what was said at the meeting, Bruce thought he didn't need board approval but was wrong, he did need board approval and since the bid wasn't over his individual spening limit something else must have triggered that board vote. What was it? Did the county insist on that vote? Did they do it as a CYA measure, unaware that maybe Bruce hadn't sent along full disclosure?

Again, WHY did Insco/Dico scamper.

5:22 AM, September 18, 2005
Shark Inlet said...

We have no idea why this bonding agency backed away from an agreement they had made with CSD staff.

I was trying to suggest (by my cost/benefit balance calculations) that it is pretty clear that this firm did not understand anything about the contentious nature of this project. Anyone who thinks there is less than a 2% chance that the project will be stopped by a new CSD majority is a fool. Clearly Insco/Dico has a fool working for them somewhere because they are pretty likely to have to pay out $225k and to only take $5k for accepting this risk is stupid.

Why did they back out? Dunno.

Is it clear that they were agreeing to do something that they did not fully undertand? In at least one way, the answer must be yes. I would find it easy to believe that they also overlooked much of what Bruce sent them. As you say, such insurance is very common.

I would imagine that in such common negotiations, for a boardember to call would cause a pause.

You were quite quick to blame Bruce for being dishonest. That accusation would match the facts you present. I was simply presenting an alternative explanation that, to me at least, makes at least as much sense.

5:02 PM, September 18, 2005

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