Township Sitting on Insurance Money for Town Hall Project

Thanks to its insurance policy, the township is still sitting on roughly $2 million it can use to help pay for construction of the new municipal complex.

After fire severely damaged town hall in 2007, the township settled a claim with Lexington Insurance for $3.18 million, according to documentation provided by the township, of which a little more than $2 million was supplied right away.

Financial officer Tom Merchel said of that $2+ million, about $1.25 million has already been spent on new computers, a telephone system, a “fit-out” for the (the building at 2 Executive Drive had to be redesigned to accommodate the office space), and down payments on bond ordinances associated with planning for the new complex.

The township is holding onto the remaining balance—a little more than $1 million—to cover the down payment for the bond ordinance on the new municipal complex construction, according to Merchel.

Included in the township’s $3.18 million claim is also a $900,668 “holdback” that the township only gets once the municipal complex is finished, Merchel said.

Fortunately for the township, there is no expiration date on the claim, including the holdback.

“Normally if you’re a homeowner, they give you (a deadline),” said Merchel. “There was no timeline (for the township).”

Given how drawn out the planning process has been for the municipal complex, some have questioned whether the township risks losing the holdback money, and Merchel said, “It’s understandable for people to have that concern.”

He explained the township has a good deal of insurance purchasing power because of its membership in the local Joint Insurance Fund (JIF), which is itself a subsidiary of the Municipal Excess Liability (MEL) system.

Township council will meet with the various professionals working on the municipal complex project during a special workshop at 8 a.m. Tuesday, at the township offices.

Township manager Scott Carew said the purpose of the meeting is for the professionals to “give council a full accounting of where we are,” and also for council to give he and Merchel some direction as to whether they want to bid the project first, then bond for it—or bond, then bid.

“The logic of going out to bid first is obvious; then you know how much you need to bond,” said Carew. “The logic of bonding first … is because you have a better chance of getting a more serious bidder and a more serious bid.”

Carew said he and Merchel, along with the professionals, recommend bonding first.

The township has adjusted the timeline of the project multiple times, but with a 90 percent project estimate supposedly ready for Tuesday’s meeting, it’s expected to be put out to bid sometime in August.