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Contract dispute costly in Carroll; It is partly to blame for budget overrun


Once touted as an affordable cure for overflowing classrooms in Westminster, Cranberry Station Elementary has proved to be a taxpayer burden instead. Officials are cutting corners as the school is being built -- with thinner roofing material and fewer play areas -- to pay for a project that is already $1.7 million over budget.

Why does the school have such a hefty price tag?

Two words: "I apologize."

Documents obtained by The Sun show that the bulk of the school's 20 percent cost overrun stems from Carroll County school officials' relentless pursuit of an apology from the man they hired to build the school, James W. Ancel.

Prompted by a relatively common dispute over rock removal at the site, the demand for an apology soured the relationship between school officials and Ancel, turning a minor disagreement into a costly battle, documents show.

Frustrated by what he called a "vicious and hostile" approach to his firm, Ancel decided to leave. School officials let him go. The dispute has cost taxpayers dearly.

A review of more than 1,500 documents -- correspondence between Ancel and the Carroll County public school system school board minutes, budget requests and bid documents -- shows that:

The Board of Education paid Ancel $1,165,000, part of which was a settlement, to walk away from the project in March 1998.

Since Ancel's departure, the board has hired dozens of contractors to finish the job. Because of market conditions and tight deadlines, the board paid hundreds of thousands of dollars more than it had expected.

To make up the budget overruns, school officials are cutting corners on the project: using thinner roofing material and a chain-link fence instead of a masonry wall; deleting a play area and cabinets and reducing the size of an emergency generator. School officials said the changes will increase the building's long-term maintenance costs.

School officials have taken more than $900,000 from other construction projects to make up for Cranberry Station.

All totaled, a school building that was expected to cost $8 million will now cost taxpayers $9.7 million -- more than 20 percent over its projected budget.

And the board is still scrambling to find $347,000 needed to finish the project.

"It's a big waste of taxpayers' money," said Bernard C. Schisler, who served in 1997 on a construction panel that made funding recommendations for the county.

"The county should look into this and see why this happened," said Schisler, a contractor who has built or renovated more than 90 schools statewide, including 11 in Carroll County.

School officials have been reluctant to discuss details of the breakup with Ancel. Brian L. Lockard, who was superintendent of schools at the time of the split, refused to comment.

Vernon Smith, who oversaw school construction through June last year and has since been promoted to assistant superintendent of administration, acknowledged that disagreements with Ancel contributed to termination of the contract.

He denied that his demand for an apology led to Ancel's departure.

The main reason for the breakup was the board's concern that Ancel would not meet an August 1999 deadline to complete the school, he said.

Smith, who said there was no problem with the quality of Ancel's work, could not cite any time during which Ancel was behind schedule.

The dispute began during the first full month of work, when Ancel's crews struck a rock field where the school parking lot was planned. Before figuring out how much rock was there, school officials asked that excavation begin, letters mailed by the school system show.

Ancel objected. Under a standard clause in his contract, the amount of rock and cost of removal had to be determined before it was blasted away.

Ancel's company also questioned how the rock was measured, saying in correspondence with the school system that the method used made it appear there was less rock than there was.

Last February, Ancel's project manager for Cranberry Station wrote a letter to school system administrators pointing out the problem.

Smith took issue with one passage of the letter:

"Quite frankly, we are becoming increasingly concerned that CCPS is not dealing in good faith. These actions are fraudulent and a fundamental breach in contract."

Smith responded by asking for an "unequivocal apology," demanding that it be on his desk by 1 p.m. Feb. 17, 1998.

When no apology came, relations between Ancel and the school system deteriorated, their correspondence shows. Finally, Ancel terminated his contract.

School officials first threatened to find Ancel in default.

In March, instead of pursuing its allegations of default, the board paid Ancel $1.165 million to terminate his contract.

A portion was for work performed; the rest was settlement money, school officials said. Under its agreement with Ancel, the board is not allowed to discuss the financial details of the settlement.

Ronald Smith, president of the Geo-Institute of the American Society of Civil Engineers, said rock removal is the most common source of disagreements between contractors and their clients in the Baltimore-Washington region.

Most cases are settled peaceably, but a few land in court, he said. It is rare for the contractor and client to terminate a contract, he said.

Although he is disappointed about spending more than anticipated on the school, Vernon Smith said he had no regrets about the termination of the contract.

Ancel has since moved on to other construction projects, including a $4.9 million school project in Anne Arundel County.

Pub Date: 2/28/99

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