Moran voices concerns over high wire cost overruns
Tom Moran, president of Moran Iron Works, came early and stayed late at the EDC/CDC meeting last Thursday. After sitting quietly through the entire proceedings with his lawyer and his assistant, Bridget LaLonde, Moran was asked by the chairman, Dave Viegelahn, if he wanted to address the board. Moran rose from his seat and addressed the board of directors about his concerns over the cost overruns on the high wire project.
“I am here because we were sent an agenda and we thought there was going to be a report and discussion about the high wire corridor project,” he said. Moran said there were some things he wanted to add to the discussion. He said the importance of the maintenance issue has been known since the beginning of the project.
He noted that a new line across M-68 near Klee Road was observed at a level of 16 feet, well below the 28 feet minimum set for the corridor. Moran added that another important issue is about the cost overruns.
“We still don’t have an accounting of what the whole project cost and our hands are tied until that happens,” he said. “I believe we are all frustrated by the unbelievable slowness of getting final costs,” replied executive director Mary Ann Heideman. “At this moment we don’t have any final costs from Verizon or NEGC,” continued Heidemann, who was attending her last meeting as executive director. The project end date may have to be extended beyond March 31, according to Heidemann, in order to get the bills finalized from the utility companies involved in the project.
“You can’t deal with the issue until you get the bill. That’s where it stands at this moment,” she said. She went on to explain that the other part of the issue is the finalization of the second grant amendment with the Michigan Economic Development Commission. Moran had a question about how much the final amount of overages on the project would reach and when will it be known. “Has any contact been made with any of the utilities as far as our position on that or am I alone on that position?” he asked. Heidemann replied she didn’t think the issue should be discussed without county prosecutor Don McLennan being present.
“Actually the question was: am I alone on this matter? As this is an open meeting, I think that’s an important question,” Moran said. Michael Stack, an attorney for Moran Iron Works, added, “Without trying to put words into Tom’s mouth, we want to know, basically, who and when and how are we going to address the utilities whether these are reasonable and appropriate charges, without just taking their word for it?” Stack said, “The original estimates of the overages was in the range of $40,000 but now they’re running toward a quarter million.”
Moran acknowledged that additional grant money was being sought to cover some of the overage but it is for an amount covering less than half of the overages at this time. With more bills still to come, he was concerned about recouping more of the cost. A board member asked how much the project was over budget at the present time. Moran said it was more than $200,000 over and Heidemann added it was between 23 and 24 percent. Moran told the board that he was given the impression that any further grant money would effectively end the matter and he would give up his right to demand an accounting from the utilities.
“My response to that is ‘No.’ If there is grant money available, fine. If I have to pay the overages, that’s fine. But I want to be able to go back in a business-like fashion and find out why these charges are as much as doubled,” Moran said. Moran reiterated that he has a contract with the county that he will fulfill but he asked why no one from the CDC/EDC ever questioned the bills.
When asked if he had an opinion of the engineer’s report about the overruns, Moran simply said it was “ridiculous.” “Presque Isle Electric and Gas knows the county better than anyone in this room. They came up with their own budget and they exceeded it by $100,000. I don’t think the engineer’s justification for that is good enough for me. “He notes that they are encountering more rock, well, Presque Isle County is solid rock,” Moran concluded. A member of the board asked if there was any recourse to the situation and Heidemann replied, “That’s why we brought the prosecutor’s office into it. And just to remind the EDC, this is not an EDC grant, it is a grant in dollars to Presque Isle County and the payments Tom is referring to went to the contractors, not the utilities.” She said the oversight of the contracts was not by the county but by the utilities because they are very particular about what contractors can work on their lines.
Moran was reached at his office the next day for his comments about the meeting. “I could not believe that they made payments based on estimates that were $30,000 but then wrote checks for $60,000,” he said. “Presque Isle Electric and Gas came in with a bid of $250,000 and then they submitted bills for over $400,000. My hands are tied, I agreed to pay the county the overages but when they start running 100 percent, that’s hard to take,” he concluded.
On a positive note, Moran stated that a number of good opportunities have come together for the company as a result of the high wire corridor project. The prospect that the new jobs promised at the beginning of the project were starting to take shape was especially gratifying to him. When reached for comment on Monday, McLennan explained that there were separate contracts between the county and individual utilities with a third party contract between Moran and the county to cover the overage on the project.
“Now, Moran’s point is: ‘How do I know they haven’
“Somebody has to be held accountable for the numbers. Tom Moran has every right to know what there is to know about that,” said chairman Viegelahn. Viegelahn noted that the commission had approved the concept and design for the original ordinance and sent it to the commission. He said in order for the ordinance to be enacted, it requires timely action by the county board of commissioners.