Tensions are mounting for local businesses who have yet to be paid by Prime Construction Company for work they did on Stephenville's new fire station.
City Administrator Mark Kaiser said the city sent out notification this month to businesses who were contracted by Prime.
"I sent out notifications, copies of the surety bond, the certificate of completion that says the subcontractors did wonderful, timely work on the fire station and copies of some of the paperwork from Prime so that they can file claims with the bonding company," Kaiser said. "The city understands this is a frustrating situation and we are trying to do everything we can to help local business owners get paid."
Kaiser said the first delay business owners saw was from the time the fire department moved into the station in November to when final payment was released to Prime in February. He said during that time Prime should have paid subcontractors who were owed money, something the city believed they had done.
"We were making sure the paperwork was all in order and that all the 'punch list' items were handled before we released final payment," Kaiser said. "Usually during that time the contractor makes sure everyone is caught up on their payments. When the city was given the sworn affidavit saying the subcontractors were all paid, we had no reason to think everything wasn't on schedule."
With the release of the final payment, Kaiser said the contractor usually takes 30 days to make final payments to subcontractors and settle all debts on a building contract. When March 7 came and went with no payments, the city of Stephenville begin hearing from business owners.
"We did all the work we were asked to do and we're having to send notices of nonpayment to Prime Construction and now the bonding company," said one local business owner who spoke on condition of anonymity. "Now we're having to place a lien against the bond."
Because the city purchased a bond on the company, local businesses aren't going to place liens on the fire station or against the city, and will get their money. The liens will be handled by the bonding company, something Brady Pendleton, attorney representing some local businesses, said Prime doesn't want to happen.
Pendleton said bonds are like insurance on the contract and the company doing the construction. The company the city used is Hudson Insurance Group in Atlanta, Georgia.
Pendleton said each business that has not received payment will file a claim with Hudson. Normally, the bonding company will pay the businesses, then investigate the reason for non-payment.
"The job was bonded and that's like having insurance for these exact kinds of things," Pendleton said. "If Prime doesn't pay, the bonding company will have to and then they won't bond Prime anymore."
Kaiser said upset business owners can contact the city, but the only thing he can do at this point is give them information to file a claim.
"I have all the information and forms they need to make the claims," he said. "I know this is frustrating. We are sorry for such an unfortunate situation. But this is why we have bonds on projects like this, and we will continue to make every effort we can to help businesses get payment."
But business owners understand it's not the city's fault.
"It's frustrating," said Mark Miller, owner of MEMCO. "But we appreciate everything Mr. Kaiser and the city has been doing to help us. They've gone above and beyond in trying to point us in the right direction."
Jerry Moody, Prime representative who signed the sworn affidavit stating everyone had been paid, did not respond to requests for comment. However, following the review, the city is within its right to pursue charges for falsification of documents. It is not yet clear if they will.