BY ANNE MICHAUD
The Cincinnati Enquirer
Responding to criticism, Cincinnati officials said Thursday that they are exploring a new type of insurance requirement for Fort Washington Way contractors -- but they have waived no requirements yet.
Earlier this week, Hamilton County Auditor Dusty Rhodes threatened to hold up the remainder of the county's $10 million contribution to the project, based on his understanding that some bid requirements had been waived. He said the waiver violated state law and asked the county prosecutor for a legal opinion.
City engineer John Deatrick said Thursday that Mr. Rhodes has been "stirred up pretty good" by insurance industry lobbyists. "We keep turning over rocks and lobbyists jump up," Mr. Deatrick said.
City council adopted an emergency ordinance last week to allow city staff to explore the new insurance idea, which could save the city $500,000 by one estimate. It may also encourage smaller firms to bid.
Mr. Rhodes said Thursday that his objection stands, even if no waivers have been approved.
"I'll be glad to accept the correction, but I'm going to stick to my guns," he said. "They opened the barn door. Fortunately, none of the animals got out yet."
Officials from the Ohio Department of Transportation (ODOT) met Thursday morning with Chuck Haas, risk manager for the city, to discuss the insurance idea.
Instead of requiring each contractor to buy a performance bond, Mr. Haas said, the city may buy into a contractor default insurance program. Because the city is essentially buying in bulk, he said, it could save $500,000. Such insurance protects against contractors failing to finish the work or pay their subcontractors, and other performance issues.
State and local officials have received many complaints from the insurance industry over this proposal, Mr. Haas said.
He blamed insurance industry lobbyists for the misinformed complaints.
"These guys are writing letters all over the world," he said. "They make it sound like we're waiving all the financial protections on this project."
Michael Gilroy, one of the lobbyists in question, said Mr. Haas told him "flat-out" that the city would be waiving bid bonds for bids due next Thursday.
"They're backpedaling here; they're backpedaling real fast," said Mr. Gilroy, regional vice president of the National Association of Surety Bond Producers.
