By Jim Hagerty
CITY HALL — Mayor Tom McNamara cast the deciding vote Monday to award bids on road projected needed as part of the $505 million Mercyhealth hospital project.
Before the vote, the debate was whether to award a $9.8 million bid from William Charles Construction and $804,714 engineering agreement with Fehr-Graham. Costs of both bids are expected to be covered by a $10 million grant from the Illinois Department of Transportation that will pass through the city.
Some council members voiced concerns about ongoing city and state budget constraints. IDOT said last week that if there is not state spending plan in place by the end of the month, it will halt all projects and likely the flow of the grant money. However, per the city’s development agreement with Mercy, the hospital is responsible for covering construction costs.
However, per the city’s development agreement with Mercy, the hospital is responsible for covering run over construction costs.
“In the event that IDOT does not have the funds, we would bill Mercyhealth for the project as a whole,” City Administrator Todd Cagnoni said. “Mercyhealth would have 30 days to reimburse the City of Rockford.”
Fifth Ward Alderman Venita Hervey said while she doesn’t question the validity of the contract between Rockford and Mercyhealth, she is reserved about those between the city and contractors tapped to do the work. She said even though Rockford is promised payment by Mercy, the city is still on the hook for paying the contractors, one being William Charles for approximately $9 million.
Hervy added she would like some assurance that the city would not be in breach of its agreement with contractors Rockford is not reimbursed and is forced to stop the work.
“They’ve allocated resources, people and equipment, and scheduled them for this project,” Hervey said. “If something goes wrong and they don’t have the funds, do we have the authority per our agreement with subcontractors to stop construction without incurring a breach of contract?”
According to Cagnoni, Rockford would have the authority to stop work per the city’s agreement with William Charles in the event of allocation issues. Costs for halting the project would be incurred, however.
Alderman Frank Beach, R-10, had a similar concern.
“If we don’t get the money or (Mercy) decides it can’t pay, and everything we’ve agreed to in this amendment goes south, what is our ultimate liability?” Beach asked.
McNamara said in the event Mercy is unable to reimburse the city, a letter of credit covers $3.9 million. The city would account for the difference up to $10 million.
“That is if everything does not go through,” the mayor said. “If (Mercy) can’t pay the $10 million they wouldn’t be able to finish their project. We wouldn’t have a $500 million hospital on the far-east side of Rockford.”
Under terms of the agreement with Mercy, the city has 30 days to stop the project for non-payment.
“Yes” votes came from Aldermen Jonathan Logemann, D-2; Chad Tuneberg, R-3; Kevin Frost, R-4; Frank Beach, R-10; Tuffy Quinonez, D-11; John Beck, R-12; and Joseph Chiarelli, R-14. Hervey, Natavias Ervins, D-6; Ann Thompson Kelly, D-7; Karen Hoffman, D-8; Bill Rose, D-9; and Linda McNeely, D-13; voted “no.” Because he works for a competing healthcare provider, First Ward Republican Tim Durkee abstained.
In other business, the city approved a liquor and gaming license for downtown restaurant Magpie, which is planning to expand. The vote as 12-2. Frost and Beach voted against the license. R.