Morgan Hill School Board trustees announced on Monday the
settlement of a lawsuit with Jacobs Facilities, Inc., the
construction management company responsible for building Barrett
Elementary School and part of the renovation work on Live Oak High.
The district will pay Jacobs $500,000. Reporting at the beginning
of the public session of Monday’s regular School Board meeting,
Board President George Panos said,
“In closed session, the Board approved a proposed settlement
arising out of mediation of the district’s claims against Jacobs
Facilities, Inc. and Jacobs Facilities, Inc.’s claims against the
district. “Under terms of the settlement, the district will pay
Jacobs Facilities, Inc. $500,000 for a f
ull and final mutual release of all claims. Jacobs Facilities,
Inc. will provide further services for the close out of Barrett and
Live Oak projects.”
Morgan Hill School Board trustees announced on Monday the settlement of a lawsuit with Jacobs Facilities, Inc., the construction management company responsible for building Barrett Elementary School and part of the renovation work on Live Oak High.
The district will pay Jacobs $500,000.
Reporting at the beginning of the public session of Monday’s regular School Board meeting, Board President George Panos said, “In closed session, the Board approved a proposed settlement arising out of mediation of the district’s claims against Jacobs Facilities, Inc. and Jacobs Facilities, Inc.’s claims against the district.
“Under terms of the settlement, the district will pay Jacobs Facilities, Inc. $500,000 for a full and final mutual release of all claims. Jacobs Facilities, Inc. will provide further services for the close out of Barrett and Live Oak projects.”
Superintendent Carolyn McKennan said Wednesday she is pleased to see the litigation resolved.
“The district believes that this is an excellent settlement of a contentious case,“ she said. ”The settlement came out of a two-day mediation presided over by nationally recognized construction” mediator Randall Wulff, who wrote a letter to the board recommending approval of the settlement.
The letter notes that ‘the district agreeing to pay Jacobs $500,000 to end the litigation represents a strong settlement for the District.’ ”
According to the district statement, “the district’s termination of the Jacobs’ contract with the district in 2003 led to the litigation. If the mediation was not successful, the district … was preparing for binding arbitration in November of this year.”
Originally, the district had paid Jacobs $2 million to acquire architectural plans for the new Sobrato High, which were drawn up before trustees voted to replace Jacobs with Turner Construction.
Deputy Superintendent Bonnie Tognazzini said the district could have had to pay an additional $2.5 million.
Jacobs was seeking $8 million in damages from the district.
Officials from Jacobs could not be reached for comment.
The district’s $500,000 will come from the Sobrato budget. Tognazzini said $1.5 million had been set aside in the budget to pay Jacobs; the $1 million that remains after the district pays Jacobs $500,000 can now be used anywhere in the Sobrato budget.
“This is a nice extra,” she said of the $1 million. “The budget had been built without the $1.5 million, and it was a bit pinched.”
Trustee Shelle Thomas said Monday she was pleased the lawsuit did not go to trial.
“They will close out the books with Barrett and Live Oak, we will still have a relationship with them,” she said. “Over the past year and a half we have worked hard to sever our relationship with Jacobs. As our FCMAT audit emphasized, the district contract favored Jacobs and not the best interests of the district. The mediated settlement is better than the result that could come from trial.”
In answer to community concerns about construction and financial practices with Sverdrup, which later became Jacobs, in the building of Barrett and the renovation of Live Oak, the Santa Clara County Office of Education requested an audit focusing on specific charges of financial mismanagement, fraud and other charges by the Financial Crisis and Management Assistance Team, or FCMAT, a state agency. The report, recently released, showed “ordinary negligence” but no criminal activity on the part of the district.
