Board approves escrow arrangement and awards Elkhart East Area A public improvements contract

The Elkhart City Board of Public Works on Feb. 4 authorized the board vice president to execute an escrow agreement among Almac Inc., Lake City Bank and the city to facilitate developer-funded public improvements in Elkhart East Area A. The board also awarded bid number 24-22 for the same public improvements to CNE Excavating, the lowest responsive bidder, with a contract price of $2,483,600, contingent on full execution of the escrow agreement.

Staff explained the developer will pay for the improvements and seek reimbursement from the County Redevelopment Commission, not the City Redevelopment Commission, so the city ran a public bidding process. Public works staff and counsel worked with the State Board of Accounts to confirm the escrow structure; the State Board of Accounts provided written guidance in an email included in the board packet. Under the escrow arrangement, the city will approve contractor pay applications, sign them, and the escrow agent will issue payment directly to the contractor. The city will own the public improvements when finished, and staff said a dedication document will be prepared.

Board members discussed internal accounting and whether the escrow funds would run through the city’s financial systems; staff said State Board of Accounts indicated the funds would not go through city finances and that the contractor/developer would maintain the escrow account. Staff said they would follow up with the State Board of Accounts for additional confirmations and ensure controller-office involvement where necessary. The board approved the escrow authorization and the award to CNE Excavating by voice vote; staff will not execute the construction contract until the escrow agreement is fully signed by developer and escrow agent.