BY ANNE MICHAUD
The Cincinnati Enquirer
The Ohio Department of Transportation (ODOT) has asked Cincinnati to abandon an unusual insurance arrangement the city was considering for Fort Washington Way construction.
The idea could have saved up to $500,000, city officials claimed, but it violates an agreement between the city and ODOT, wrote Gordon Proctor, ODOT's chief of staff.
Chuck Haas, the city's risk manager, said there are still some money-saving ideas he is considering that will also encourage small firms to participate in the project. But, he said, ODOT's objection will probably reduce the potential savings.
Hamilton County Auditor Dusty Rhodes, who objected to the insurance arrangement, called Mr. Proctor's letter, dated Monday, "a victory."
Mr. Haas replied, "Big victory -- they actually lost because they kept the taxpayer from saving money."
Instead of requiring each contractor to buy a performance bond, the city was considering buying into a contractor default insurance program.
Because the city would be essentially buying in bulk, it could have saved $500,000 by at least one estimate. Such insurance protects against contractors failing to finish the work or paying their subcontractors and other performance issues.
The city may still be able to consolidate the traditional insurance and write the agreement with one agent, Mr. Haas said.
That could save a smaller amount that Mr. Haas has yet to calculate. Mr. Rhodes and lobbyists from the National Association of Surety Bond Producers objected to altering the traditional coverage of the project.
City officials have said the insurance lobby is simply protecting its income.
