Jefferson Healthcare commissioners approved last week a $550,000 settlement that ends a dispute over the last change order for the hospital’s new Emergency and Specialty Services building that opened last year. (Jesse Major/Peninsula Daily News)

Jefferson Healthcare commissioners approved last week a $550,000 settlement that ends a dispute over the last change order for the hospital’s new Emergency and Specialty Services building that opened last year. (Jesse Major/Peninsula Daily News)

Settlement ends dispute between Jefferson Healthcare, contractor

PORT TOWNSEND — The $550,000 settlement Jefferson Healthcare commissioners approved last week ends a dispute with the Bothel contractor for the hospital’s Emergency and Specialty Services building that opened last year.

The issue stems from a disagreement on the worth of change orders and costs associated with the $24 million building, said Rena Sleight, director of risk management.

The contractor, Aldrich & Associates, believed the changes were worth $1.825 million, but Jefferson Healthcare disagreed, Sleight said.

“We assigned a much lower value and requested voluntary mediation to help find agreement and avoid future litigation,” she said in an email. “We settled on $550,000.”

The settlement agreement was approved following a closed-door session last week.

Commissioners unanimously approved the settlement following an hour-long executive session Dec. 20. They did not discuss details of the settlement publicly and opted not to read aloud what they approved.

No one from the public was present during the vote.

After the closed-door session, the hospital’s chief legal officer, Jon French, cautioned those who participated in the meeting not to talk about the settlement publicly.

The agreement, which Jefferson Healthcare provided to the Peninsula Daily News on Tuesday, says Jefferson Healthcare must pay Aldrich & Associates the $550,000 within 30 days of Dec. 19.

Amy Yaley, director of marketing and communications for Jefferson Healthcare, said the dispute arose over the last change order on the project.

She was unsure what Jefferson Healthcare valued the change order at, but it was lower than what was settled on through mediation.

“We agreed upon the $550,000” she said. “We both felt that was what was fair and adequate.”

She called the change order a “catchall” that covered all modifications and costs associated with the building that hadn’t yet been accounted for.

The settlement excluded any issues related to the HVAC system, which Yaley said is still being fine tuned.

“Neither party felt it was reasonable to tie the claim to HVAC,” she said.

She said the hospital’s goal was to avoid litigation that would cost “way more money even if it were found that our value was validated,” she said. “Continuing an ongoing claim would only over use financial resources.

“We look at cost benefits and how we can best serve the needs of the community. A long, drawn out legal process isn’t it and we wanted to compensate fairly for the work done,” she said.

She said mediation was a day-long process that allowed the hospital to quickly address the claims.

The hospital debuted the 50,000-square-foot building in October 2016. The building features a new emergency room, medical short-stay areas — including cancer treatment units — and more space for specialty clinicians.

The new building also added a significant amount of parking, which has been an issue in the past.

The new building also boasts environmentally friendly features such as green roofs, solar shades and herb gardens for the hospital kitchen.

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Reporter Jesse Major can be reached at 360-452-2345, ext. 56250, or at jmajor@peninsuladailynews.com.

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