Mayor, council authorize settlement process for airport terminal subcontractor claims

City leaders on the dais approved a motion to authorize payment or settlement of claims related to construction of the new airport terminal and to allow the city manager to execute documents needed to carry out those payments.

The motion, read by the city attorney and presented by the Mayor, covers claims against the prime contractor for work at the South Airport terminal and applies to settlements that exceed the city manager's $100,000 spending authority. A council participant said the subcontractors' total claimed amount is "about $233,000 for 4 subcontractors." The Mayor described an escrow approach as a way to ensure subcontractors are paid while preserving the city's contractual obligations: "So we came up with, let's put it in escrow. We're fulfilling on our end. We're giving you the final payment. And then through the attorneys or escrow, whoever, they can come back and and say, okay. I'm owed this much for this particular job, and they can pull that out of escrow." (transcript)

Why it matters: Council staff said the timing is urgent because of year-end close; they hope the invited parties will attend a settlement meeting on the 18th so the matter can be resolved without litigation. Council members emphasized the city's need to comply with the prime contract while protecting unpaid subcontractors.

Council action and next steps: The council approved the motion by roll call. Staff said funds have been encumbered; if parties settle at the scheduled meeting staff may issue direct payments, otherwise the encumbered funds will be placed in escrow and accessed through settlement procedures. The Mayor closed the item after announcing the vote and the meeting was adjourned.

Representative quotes from the meeting include: "The total amount for the subcontractors total about $233,000 for 4 subcontractors." (Clerk) and "So we came up with, let's put it in escrow..." (Mayor). The council did not state a precise deadline beyond the stated aim to resolve the matter at the upcoming settlement meeting. No statute or ordinance was cited at the meeting.

The council did not announce a separate follow-up date for reporting back other than the scheduled settlement meeting; staff said they will proceed with payments or escrow actions consistent with the council authorization.