2006-05-11 / Front Page

Engineer takes town officials to task for firing his firm

By Dotti Farrington

Lazlo Siegmund, president of Siegmund and Associates of Providence and a former Jamestown resident, presented copies of a letter to the Town Council Monday in which he reviewed the arbitration case recently settled in his favor. Other than identify himself, he did not speak at the council meeting. The councilors did not discuss the issue in public session and did not have litigation as a topic for its scheduled executive session that night.

In the letter, Siegmund criticized the town for its handling of the four-year-old case. A statement last week by Town Administrator Bruce Keiser defined the arbitration decision as a "draw." Siegmund said all the town's claims were denied and that the decision "completely exonerates my firm." He also recounted evolution of the arbitration case, the decision, and his complaints about town officials.

The American Arbitration Association issued its decision on April 6. The town did not release the decision, but Keiser wrote a statement about it for publication last week.

Siegmund said the dispute arose in late 2003 while his firm was overseeing $7.24 million in sewer work for the town. He said the town administrator then, Maryanne Crawford, tried to replace his firm with Vollmer Associates LLP of Boston. SAI, Siegmund's firm, was accused of design and management errors and failure to deliver the completed project by December 2003.

Siegmund said that after some discussions the contract was terminated by "mutual consent" and financial negotiations were started. Talks narrowed the dispute to less than $10,000, and then the town decided to end negotiations, he said. Told it would not be paid, SAI filed for arbitration for $50,000. The town "retaliated," Siegmund said, with a $1.1 million countersuit.

Siegmund said termination of his firm's contract "was used as a convenient way to hire Vollmer." The Vollmer contracts were awarded without following mandated procedures, and he said the case was portrayed as the means of getting SAI to pay for increases in engineering fees, Siegmund said. Totaling more than $500,000, the contracts with Vollmer were the subject of some controversy among councilors in 2004-05.

Siegmund said the town's claims were amended to $1.5 million on claims that improper SAI work on sewer pipeline infiltration work had to be repeated.

Siegmund called that aspect "a virtual open checkbook for Vollmer." He said, "In reality, it was to punish SAI for daring to have opinions different than those of town officials. . .and to intimidate me and to inflict as much damage on my firm as possible and at same time it created a new revenue source for the town solicitor."

Siegmund suggested that councilors "showed poor judgment or complicity in escalating a personal vendetta into a shameless and bogus claim. The town solicitor knew, or should have known, how baseless the suit was."

Siegmund said the arbitration process "revealed the true nature of the lawsuit, first resulting in the dismissal of the town's claim of engineering errors, then rejection of the claim that SAI breached the contract." Keiser wrote last week that the arbitration decision was made on the basis of jurisdiction and "mutual agreement to end the contract" and not on evaluation of claimed work deficits.

Siegmund pointed out that his firm was awarded $47,105 and that the town was awarded nothing. He said the awarding of attorney fees to his firm to defend itself was unusual and represented "the frivolous nature of the town's suit."

He summarized the town's wrongs as "the arbitrary and capricious decision by the former town administrator, the blind approval of her action by the council, the reckless filing of a baseless suit by the town solicitor and the hiring of new engineers (that) resulted in huge cost escalation for the sewer project, delays

in its completion by years, and the incurrence of large legal expenses for the town of Jamestown." Keiser reported last week that legal and witness costs to the town to date were $162,373 and would be more than $200,000 when all bills are paid, but not counting extra engineering costs for the sewer projects.

Siegmund said he estimated "the ultimate cost of this fiasco to the taxpayers may well be over a million dollars." He said, "The damage to my firm was less in raw dollars but proportionally more significant."

He claimed the arbitration award "demonstrates that no engineering and no management mistakes were made, and that the charges against my company and me were nothing but politically and personality driven lies. The incident also demonstrates how the legal system and public money can be used to punish private enterprise when the search for the truth is supplanted by greed and political expediency. It also shows that corruption is not limited to taking money, it is not limited to taking place in large municipalities but can find a home in even the smallest town in the state."

He concluded, "As a former resident of Jamestown I no longer have an interest in how the town evaluates this sorry episode but in my opinion the present council owes it to the taxpayers to call for a serious investigation to determine why huge legal bills were generated rather than settling a minor claim, who did what and why, and who benefited politically and financially. And when the investigation is completed, the results should be made public."

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