County makes case against FCCF

Published 12:00 am Wednesday, October 30, 2002

The county filed a memorandum and affidavits that support its request for a $5 million surety bond to be posted by the Freeborn County Committee for Fairness, and set the deadline at 4 p.m. on Nov. 4.

A Minnesota statute gives the court authority to require a surety bond by a plaintiff when public projects are held up as a result of a lawsuit.

In the affidavit filed to the court, Evensen & Dodge Vice President Charles Upcraft exhibited two scenarios to calculate the increase of interest payments: One is based on the current market rate, and the other is based on a projection that the interest rate will rise by one percent.

Email newsletter signup

If the bonds for the $26 million courthouse project had been issued on Oct. 15 as originally scheduled, the total interest payment would have been $15,006,114.62.

As of Oct. 25, the interest rate had risen by 0.35 percent. That pushed up the total payment by $1,108,604.42.

And, the high-end projection would result in an increase of $3,260,116.66. &uot;The current municipal bond market is very upwardly volatile at the present time, and, in my opinion, an increase in interest rates of one percent over those that existed on Oct. 15, 2002 is clearly within the realm of reasonable possibility,&uot; Upcraft wrote in the affidavit.

BKV Group architect Jack Boarman provided his estimates of the incremental construction costs.

Boarman said the delay has already caused a loss of between $224,874 and $513,996 because of the inflationary rate. And, if the litigation is not resolved by next February, the cost will further increase by as much as $1,798,996. He stressed that in addition to the annual 3.5 percent to 4 percent construction cost increase, the county will miss a favorable bidding window in winter when prices from contractors are lower.

Jay Squires, an attorney for the county, emphasized the vexatiousness of the litigation in his memorandum.

&uot;If the action in this case had been undertaken earlier, it might have proceeded without putting the county, the public, and taxpayers of the county at the risk of suffering substantial damages,&uot; Squires wrote. &uot;Plaintiff, instead, chose to wait until two business days before scheduled issuance of the bonds to file suit, and simply cannot complain of the posting of a substantial bond to protect the public interest.&uot;

He also denied the violation of the Open Meeting Law by the county board as the FCCF alleges. &uot;When analyzed in light of existing law, not only is it clear that there is no merit to any of the claim, but none of the claims has any bearing on the validity of the bond sale or the project.&uot;

The county also demands the disclosure of FCCF membership.

Squire pointed out that the Secretary of State’s office does not have the FCCF as a registered non-profit organization.

Suggesting a future counterclaim for restitution, Squire asked the court to order the FCCF to change the plaintiff’s name from the FCCF to its individual members.

Thomas Kraus, an attorney for the FCCF, did not return a phone call Tuesday.

&uot;My biggest fear is this frivolous lawsuit sets a precedent,&uot; County Administrator Ron Gabrielsen said. He pointed out that the FCCF litigation would make firms skeptical to local governments’ commitment for providing incentives in fear of potential litigation by angry citizens. &uot;They’re going to question, ‘What if another group comes in to stop the project?’&uot;

Warren Stowell, a spokesperson of the Save the ’54 Building Committee, said, &uot;Ron Gabrielsen has gone too far. He does not fit us at all. He has got a garbage mouth that we can’t tolerate.&uot;

&uot;I was born here 81 years ago. I’ve lived in this community all my life. My father and mother lived here. My grandmother and grandfather lived here. We had times when this community was a great community,&uot; he said. &uot;We had a free-enterprise system. Now we have too much government. We’ve got the government on every side we look. The government has to be reduced, and we are ought to give the people a chance to speak.&uot;

The Save the ’54 Building Committee evolved into the FCCF. About whether he is a member of the FCCF, Stowell said, &uot;I am a citizen of Freeborn County and I believe in fairness. That’s all I can tell you.&uot;