By Matt Hoffmann
Published: Jun. 26, 2024 at 4:20 PM CDT|Updated: 23 hours ago
SIOUX CITY (KTIV) - The Woodbury County Board of Supervisors voted 4-1 Tuesday night to give a $400,000 forgivable loan to commissioners overseeing the county’s new jail project.
The loan would fund the jail officials’ case against the general contractor, architectural firm and subcontractors. The loan would also pay for an additional four months of project management fees.
“This would never have come to pass if Goldberg, and Hausmann, and Introba hadn’t damaged us for this long,” said Commissioner and County Supervisor Mark Nelson. “So this is a direct result of the damage we’re incurring everyday. It never should have come to this.”
Chairman Matthew Ung, Supervisors Daniel Bittinger, Keith Radig and Nelson voted to approve the loan. Supervisor Jeremy Taylor voted against. Taylor appeared by phone because of his military service, Bittinger texted his vote because he was in Wisconsin.
The loan will be repaid if the Woodbury County Law Enforcement Center Authority receives more than $400,000 after the legal case settles. If the Authority doesn’t recover more than $400,000, the loan is forgiven, according to the Supervisors’ agenda packet.
“Once we get the money to the Authority, it’s the Authority’s responsibility to spend that money within the parameters (of the agreement),” said Dennis Butler, the county’s finance/budget director. “Yes, we can suggest (how they spend the money), but we can’t tell them. I want to make that clear.”
Taylor said the $400,000 is coming from “un-budgeted reserves.” In other words, Taylor said the money will come from the Supervisors’ savings account, and the expense wasn’t previously budgeted for.
“Obviously, the first priority for me is to get the job done,” Radig said. “So I don’t want to take time away from getting the job done.”
Supervisors also wrestled with the idea that the forgivable loan also funds the Baker Group’s expenses for an additional four months, including after the building is scheduled to be substantially complete and then inhabited.
Baker Group is the project’s “owner’s rep.” They act as the “eyes and ears” for the Authority and Supervisors on the ground. Radig and Taylor questioned whether or not the Baker Group should continue to receive more than $30,000 per month for their services, as authorized by the loan, even after the project is complete.
“For example, if they’re being paid in October (after substantial completion), that we know if they have put in 160 hours (of work),” Taylor said. “I think that’s a very modest and minimal requirement.”
Radig said “it would be nice” if the Baker Group could provide “some kind of documentation of time spent.” However, Radig voted for the agreement as proposed, which Taylor said does not include a provision for timekeeping records.
“I’ve gotten phone calls from other people that are in the same line of work, and they say that ‘we’re getting taken here’ but I have no way of knowing that,” Radig said. “So (I support) having (time keeping records received) into the record and made public.”
Nelson pointed out the Baker Group has been on a month-to-month contract, where the Authority or the Baker Group could walk away, ever since the project missed its September completion deadline. He also said while the Baker Group may not be on site every day after July, they will still be assisting the County and the Authority with their legal action.
“Once the project is over, there is another change because now they’re doing legal services,” Nelson said. “And I think they need to provide and backup their timesheets and what they’re doing to help (the legal case).”
Nelson said if the Authority switched the Baker Group to an hourly contract once the project was complete, the County would likely pay more than the current monthly bill. Taylor and Radig floated the idea the Authority, using the County’s bank account, could pay the Baker Group less once on the ground services are no longer needed.
“I think the Baker Group has been underpaid for the work that they’ve done,” Nelson said. “And so if we go hourly, I think be prepared to pay up.”
Taylor said the loan includes six months of legal fees for the Authority’s attorney, Jodie McDougal, and four months of project management fees for the Baker Group.
In October of 2023, about a month after the previous substantial completion deadline was missed, the Authority voted to raise the Baker Group’s monthly fee from $23,00 to the current $34,000 per month. But the Authority also didn’t agree to a long-term contract, only a month-to-month agreement, to give them flexibility.
Tensions ran high in that October meeting after a spokesperson for the Baker Group confirmed Todd Wieck was working for the Baker Group on the project.
Todd Wieck is the son of Ron Wieck, the Authority’s chairman. Ron Wieck defended the employment of his son as the Baker Group’s decision, not the Authority’s, and said at the time that Todd Wieck has law enforcement experience. A spokesperson for the Authority previously told KTIV the Authority has no conflict of interest policy.
According to a previous agenda item, Radig claimed last fall that the Baker Group “delayed progress at the LEC in order to continue to charge for their services.” Nelson called the claim “completely baseless.”
An independent memo commissioned by the Supervisors found the Baker Group was not to blame for the fire damper issues that delayed the project. The Supervisors have not released the memo because it will likely be used in litigation.
Back to Tuesday, the Authority commissioners also voted to approve the loan. Chairman Ron Wieck and Commissioner Dan Moore voted to support the measure. Moore also serves as Sioux City’s mayor pro tem. Nelson also voted in favor. He serves on both the Board of Supervisors and the Authority.
Woodbury County Supervisors and the Authority are legally separate entities, but they have a close relationship. The three member Authority was created by a joint agreement between Woodbury County and Sioux City in order to lower the percentage of votes needed to pass a bond to fund the new jail.
Essentially, the Supervisors control the project’s bank account, but the Authority controls how the money is spent. By way of example, the Authority chose the insurance policy for the jail, but the money to pay comes from the Supervisors.
For months, the Authority has blamed delays on the project’s general contractor, Hausmann Construction, its architect, Goldberg Group Architects, and the architect’s consulting firm, Introba.
A lawsuit or other legal action is expected after the project is complete. The jail was supposed to open multiple times in 2023, including September 12, but the Authority announced it would be delayed until the spring of 2024 just days before that deadline.
It was then supposed to open in April of 2024, but the jail portion of the complex failed its first inspection. Eventually delayed to “early” July, substantial completion is now slated for “late” July. Taylor floated July 29 as the completion date on Tuesday. For several weeks, Authority commissioners have remained optimistic the late July date will be met.
Documents uncovered by KTIV through a Freedom of Information Act (FOIA) request revealed the Authority previously threatened to terminate the general contractor if delays persisted, but the contractor remains on the project.
The trick, officials say, will be determining which entity, the Supervisors or Authority, have which legal claims. Both have retained their own lawyer.
Supervisor Radig said the legal damages should exceed, “five million (dollars) plus in my book.” Chairman Ung said he “certainly” expects “that our award of damages would exceed $400,000, absolutely.”
A draft memo turned over by the Authority in the FOIA process revealed the Supervisors and Authority may have a legal claim for lost revenue, while the Authority itself may have damages for the “general conditions” billed to the Authority after September 2023. The Authority may also have a claim for “additional services” billed after September.
The draft memo revealed the initial four main issues holding the project back: Haussmann’s general delay and work quality issues, Goldberg’s design errors regarding fire dampers, Hausmann’s failure to install security bars and Goldberg’s error regarding an elevator control box.
But more issues have emerged since then, including issues with balancing pressures throughout the building, struggles to heat the building in very cold temperatures, and noise levels almost double the acceptable level.
Progress has been made on all issues, commissioners said recently, leading to optimism about the late July substantial completion date being met. The Supervisors and Authority Commissioners say the complex will be good for taxpayers in the long run, because the federal government will pay the county $100 per day for each federal inmate held at the jail.
The project will also provide state of the art facilities for the Woodbury County Sheriff and Woodbury County Attorney, alongside other offices, including the Sioux City Attorney. The new complex, officials say, will be a big upgrade from the current jail which is falling into disrepair.
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