The waiting continues for the trial between Pate Transportation Partners and Forney Roadbuilders (FRB) versus the City of Forney. The already rescheduled trial date of February 26th has once again been rescheduled for trial on April 30 through May 3, allowing for three and a half trial days.
The waiting continues for the trial between Pate Transportation Partners and Forney Roadbuilders (FRB) versus the City of Forney. The already rescheduled trial date of February 26th has once again been rescheduled for trial on April 30 through May 3, allowing for three and a half trial days.
Several court documents label this a “breach of contract case”. If a potential settlement is not reached before the trial date, the case will be heard by Kaufman County Judge B. Michael Chitty in the 422nd District Court.
Thousands of Forney drivers utilize the US Highway 80 and FM 548 intersection and the improved FM 741 daily and many of them are unaware of the pending litigation. The entire scope of the project includes improvements to the US Highway 80 and FM 548 intersection, FM 740 from Ranch Road to US Highway 80, FM 741 from Bois D' Arc to east of Forney High School, and the Forney Marketplace interchange.
The City of Forney hired Pate Transportation Partners (PTP) for their knowledge of the state's once-new financing program called “pass-through” funding. The “Project Development Agreement” between the City of Forney and Pate Transportation Partners (PTP) was entered into on March 6, 2007.
Essentially, the City of Forney agreed to borrow the money for the project, assume the financial risk, build the road, and would then be reimbursed by TxDOT over a period of time based on traffic reports.
As the developer, PTP assumed the construction risks by setting a “maximum agreement price” of nearly $50 million that includes a “contingency fee” or “developer's risk fee” of $5.5 million. If the project comes in under budget then PTP is entitled to 60% of the contingency fees and the City of Forney would take the remaining 40%. Any overages would be charged back to PTP.
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Trouble began on December 22, 2009, after TxDOT reduced the initial bottleneck funding to the City of Forney from $16 million to $5.6 million. Project bids came in lower than originally estimated by engineers and TxDOT proportionally reduced the grant money based on lower construction bids. On March 23, 2010, the City of Forney attempted to mitigate the funding cuts by requesting an additional $3.7 million from TxDOT. TxDOT declined the request stating those funds were now slated to be used on other projects in Kaufman County.
In late 2010, the City of Forney requested a mutual agreement to terminate the contract with PTP. PTP responded on December 20, 2010, in a letter to the City of Forney agreeing upon mutual termination if the City of Forney fully compensated PTP in an amount PTP claims totaled over $3 million. On December 21, 2010, the Forney City Council officially voted to terminate the contract with PTP effective January 13, 2011, but did not compensate PTP the amount requested.
In response, PTP did not return critical documents needed to complete the project which would have allowed for the City of Forney to receive state and federal funding from TxDOT. On May 9, 2011, Pate Transportation Partners filed the lawsuit jointly with Forney Roadbuilders against the City of Forney.
According to court documents, the City of Forney paid out approximately $12.5 million to PTP before the contract was terminated. PTP is requesting that approximately $1.175 million be paid on unpaid invoices. Court documents claim three-quarters of the work was completed under PTP. Additional potential contingency fees could be requested in the amount of nearly $2.475 million after the completion of the project and if it is still under budget.
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The City of Forney is charging that PTP kept crucial project documents and drawings after the contract was terminated and also breached the contract in five different ways citing missed timelines and PTP's failure to pay utility relocation fees. The documents were critical to ensuring the projects were up to TxDOT standards and qualifying the City of Forney to receive “pass-through” funding from TxDOT. The City of Forney is also claiming damages imposed by a settlement of delay claim requested by FRB to be payable to subcontractor Webber. The $180,000 was described as a "motivator to Webber to employ all forces necessary to complete the job as reasonably close to the original completion date as possible."
Despite the pending litigation and removal of Pate Transportation Partners and Forney Roadbuilders, the projects were completed on time and construction is expected to begin soon on the Pinson Road improvements from Ranch Road to US Highway 80. Many of the critical documents required to recieve pass-through funding from TxDOT were recreated and the City of Forney is on track to begin to recieve the funding from the project.
Notes:
Forney Roadbuilders, LP, is a specific purpose entity created by Pate Transportation Partners, LP, to be the operating entity on the “City of Forney Pass-Through Project”.
Forney City Manager Brian Brooks and Mayor Darren Rozell are not being sued individually in this case. Pate Transportation Partners, LP, and Forney Roadbuilders, LP, Plaintiffs, v. City of Forney, Texas, Defendant. See attachment A
