The Dallas City Council stood by its appointed Park and Recreation Board last month as it refused to amend a change order at the request of contractors building the Hi Line Connector trail project.
The project has been delayed eight months due to litigation with the original low bidder. The contractor ultimately awarded the bid, Fain Group, cited rising construction costs and asked for an additional $2 million to be added to the existing $11.5 million contract.
Park and Recreation Board members negotiated to remove from the contract features such as lighting and utility burial, for which The Loop Dallas will have to raise private funds. That dropped the price, so the change order was about the net decrease for a project with fewer amenities.
The Park Board voted 8-7 to reduce the contract by $366,844.
But what the Fain Group negotiated and agreed to was a $168,844 decrease. Fain is still getting about a 17 percent increase over its original bid even though the scope of the project has been reduced, council members pointed out in a June 28 meeting.
The City Council backed the Park Board in a 9-5 vote.
“I think it’s remarkable that we had courageous Park Board members that are going to say, ‘We’re tired of accepting all these change orders,’” said Councilwoman Cara Mendelsohn. “They stood up for the taxpayers. I think they’re actually the heroes in this. As much as we all want this to happen, I think we’re actually being taken advantage of by the Fain Group because they know that we have to do this.”
Hi Line Connector
The Hi Line Connector is part of a 50-mile circuit trail along Victory Avenue and Hi Line Drive near Victory Park.
Philip Hiatt Haigh, executive director of The Loop Dallas, said the project has been under construction since January.
Discussion during last month’s council meeting was heated at times as council members reiterated accusations from the Park Board meeting that Fain Group created a hostage situation.
A Dallas Morning News editorial published ahead of the council vote referred to the negotiations as a “risky game of chicken” and indicated that if Fain doesn’t accept the counteroffer, the project will be rebid, starting the process over again.
Hiatt Haigh asked the council to amend the change order to decrease the contract by $168,844, the amount agreed to by the Fain Group.
“It’s about halfway done,” Hiatt Haigh said. “Right now we’re on track to complete it by early 2024. What you’re looking at today is a change order needed to keep the project on track, to keep the schedule that we have today … What we are asking the council [to do] is amend the item that you have before you and move back to the original agreement that the Park Department and the contractor agreed to, which is $168,844 back to The Loop Dallas. We really appreciate what the Park Department did in sending you this award that has a higher number, however we do not believe that the additional $198,000 back to our organization is worth the risk of [losing] the contractor.”
Council members Gay Donnell Willis and Jaime Resendez supported amending the change order, in the spirit of keeping the project on track, but that motion failed 8-6.
“Our Park Board is usually fairly harmonious and they have lots of thoughtful debate,” Willis said. “When news of this item reached me before it even hit our agenda, it made me take a deeper look at this. As a former nonprofit CEO who has walked a mile in the shoes of someone who’s trying to bring private dollars to the table to add to [Council of Government] dollars or other dollars and city dollars to make what we do go farther in advancing our goals for our residents, I just wanted to take a look at this.”
Special Circumstances
Park and Recreation Department Assistant Director Christina Turner-Noteware said staff had not talked to the Fain Group since the Park Board vote, and therefore was unsure whether they’d agree to the change. Staff reached out to Fain Group representatives three times and did not get a return call, she said.
“I do believe the Fain Group and Dallas Park and Recreation negotiated in good faith,” Turner-Noteware said. “I do believe the Fain Group has given us everything they can give us out of their project without basically having no profit margin at all.”
When representatives of the Fain Group were contacted in December to move forward with the project, they immediately advised they were going to have cost increases, particularly related to concrete, Turner-Noteware said.
Councilman Jesse Moreno, a former Park and Recreation Board member, said the Fain Group has delayed previous water park projects and gone over budget on other matters when doing business with the city.
“The chatter I keep hearing is that if we don’t move forward with this project, it will kill trails to our southern sector,” Moreno said.
Councilman Chad West questioned whether the contract language covers cost escalation.
Turner-Noteware said staff entertained the price increase because of special circumstances caused by delays with the lawsuit. Some council members expressed support of the Park Board vote — which was not unanimous — but had questions about how they arrived at the number presented in the change order.
To be fair, a lot of numbers, percentages, contract values, and change orders were tossed around in both the June 15 Park and Recreation Board meeting and the June 28 City Council meeting.
Mendelsohn said the procurement process also is creating challenges.
“There’s something really wrong about this process,” she said. “All the procurement laws that we have were meant to protect the taxpayer so we’re going with the lowest [bid] and not with a friend or campaign treasurer. Instead it’s actually being weaponized against us. This is crazy. Many conversations we’ve had today have to do with how long it takes to get through procurement. The entire idea that we can’t effectively address a challenge because of all the different laws that are working against us is absolutely crazy.”
