Margate commission approves $111,000 settlement to finish Fire Station 58 construction

The City Commission of Margate on July 9 approved a settlement with Siska Construction Services, LLC to resolve claims tied to construction of Fire Station 58, authorizing payment discussed at the meeting of $111,000 to the contractor.

The settlement resolves a dispute that began after the contractor sought roughly $370,000 for cost increases and delay-related charges. City litigation counsel and outside negotiators told the commission the proposed settlement was a business decision intended to finish the station and avoid higher litigation costs.

City litigation partner Eric Hockman, who handled negotiations for the citys outside law firm, told commissioners that construction disputes of this type can involve large expert and deposition costs and that a trial could cost the city far more than the settlement. "Sometimes we say we're going to fight out of principle...and then when they lose the bill really is tough to take," Hockman said during the meeting.

Commissioner Anthony Rosano argued against approving the settlement, saying a contract is a contract and worrying that the city was setting a bad precedent for future contractors. "A contract is a contract. You give a price, that's the price," Rosano said. Commissioner Simone said she supported settlement after receiving advice from the city's litigation attorneys that continued litigation posed greater financial risk. "When litigation attorneys tell me it is in the best interest of the city to settle, who am I without their knowledge to argue with them?" Simone said.

City staff said the settlement followed two years of negotiations and mediation and was reached in part to ensure firefighters could move out of temporary trailers and into the completed station. Project staff and the citys attorneys said they reserved the citys rights while permitting completion of the work.

The commission voted on the motion to approve the settlement: Commissioners Casciano and Simone and Mayor Schwartz voted "yes." Commissioners Rosano and Vice Mayor Serio voted "no." The motion carried 3-2.

The commission also discussed contract clauses raised during the debate, including an equitable-adjustment clause (identified at the meeting as section 8.2.4 in the construction contract) and force majeure language. Hockman warned those clauses and case law can create litigation risk because courts sometimes award relief in construction cases despite contractual conditions.

Commissioners asked staff to review current city contract language and procurement templates to see if changes are advisable going forward. City staff said they would report back to the commission on contract language and procurement practices.

Mayor Schwartz said the citys priority was completion of the fire station. "This provides certainty; we're talking about less than a 2% increase in the contract amount," she said during the discussion.

The commission approved the settlement under Resolution 6A at the July 9 meeting.