Contractors: Settlement talks over city hall at a standstill

Two local contractors who claim they haven’t been paid for work completed on the new Corbin City Hall over three years ago expressed fresh frustration regarding the situation this week, and claim city leaders have done little to help solve the problem.
A.J. Carr, Vice-President of Corbin Glass Company, told the city commission Monday night he is owed over $15,000 for completed work and work he is contracted to complete at city hall. He said he’s refused to finish an enclosed entryway that leads from the new city hall building to the police department because of unpaid bills.
“To me, the part that makes me the angriest about it, is that I’m owed money … and at this point and time, we are no closer now than we were before,” Carr said.
Mel Chandler, Sr., owner of Mel Chandler Contracting, Inc. and Ken-Ten Coating Company, Inc., filed a lawsuit in Whitley Circuit Court earlier this year asking for a $16,280 judgment (plus interest and attorney fees) against the City of Corbin for work he completed on the project. Chandler said he reached an oral agreement with City Manager Bill Ed Cannon in Oct. 2001 to do work on a canopy, but was never paid. Since filing the lawsuit, he said one offer was made by Hoover and Companies to settle the case but was rejected because it didn’t include interest or attorney fees, and required a confidentiality agreement. Chandler said his attorney, Wayne Shepherd, plans to send out subpoenas soon to city leaders so that depositions in the case can be taken in the near future.
“The city hasn’t done diddly squat to settle this,” Chandler said. “Really, the way I feel right now, we are going to have to do something. The city has just adopted an attitude that it doesn’t seem like anybody cares. They were the beneficiaries of our loss. Everyone on that commission and at city hall thinks we should get paid, but nobody has the guts to pay us.”
Hoover Companies of Corbin, Ky, Inc. won the bid to complete the new city hall project in 2000. Since then, the contractor has declared bankruptcy, left portions of the city hall project incomplete, and failed to pay some subcontractors. The city is currently embroiled in a legal battle against the bonding company that insured the completion of the project for failure to pay when Hoover Companies and owner Vin Hoover sought bankruptcy protection.
Both Carr and Chandler claim Cannon promised payment for work despite the fact that Hoover and Companies left the project early. Cannon denies he made such a promise.
Carr questioned City Manager Bill Ed Cannon about the legal case between the city and the bonding company, and some of the circumstances surrounding the city hall project. Cannon would not comment on several of Carr’s questions, but did say that $3,500 was still owed to Hoover and Companies and that the bond on the project was still valid.
“The contract that you have is with Hoover and Companies and I’m not privy to that contract per se,” Cannon told Carr. “The litigation is continuing.”
In an earlier interview, Carr said he had conversations with a representative of Hoover and Companies regarding a possible settlement, but it never developed.
Carr said Cannon and the commission bear much of the blame for subcontractors not being paid because they didn’t have enough oversight on the project. He said commissioners were misled about what was going on with the project.
“Commissioners were approving payments when work wasn’t completed,” he said. “I really don’t believe they made their decisions based upon visuals as much as what they were told … There was too much buddying going on, I would almost bet on it.”
Carr said he thinks Hoover used money paid by the city for other projects instead of paying subcontractors. He also claims the bond on the project was less than the total cost of the building, about $1.7 million.
“Anytime you get close to maybe an answer, nobody will talk about it. Everybody is afraid if they say something, they are going to provoke somebody else.”
Monday, commissioners voted to hire Covington attorney Jeff Mando to help settle subcontractor claims and expedite the city’s case against the bonding company. Mando replaces attorney Thor Bahrman who some commissioners have criticized as proceeding too slowly.
Chandler said Hoover was recently denied bankruptcy protection and likely will be added to his lawsuit against the city. Cannon said Hoover used personal assets to secure the bond on the city hall project.
Mayor Amos Miller said he was saddened that payment has not been made and said he hopes everything can be resolved in less than a year.
“These problems that we found like this, they fell on us,” he said. “You let it wait long enough, it takes a while to get it cleaned up. It will not happen again, I promise you that.”
Commissioner Alan Onkst said he is “equally frustrated and embarrassed” that subcontractors had not been paid and said he did not know that Corbin Glass Company still had an outstanding claim on the project.
City leaders confirmed Monday that Harris Drywall Company – another local contractor that had overdue bills out against Hoover and Companies – accepted a settlement recently.