Despite pending lawsuit, Lebanon moves forward with water main project

City’s only inspector is brother of construction company owner.



Family ties put a wrinkle in a recent bid for a water main replacement project when City of Lebanon officials did not accept or consider a contractor’s bid to avoid a direct conflict of interest and an appearance of impropriety.

KT Holden Construction LLC filed a lawsuit June 8 in Warren County Common Pleas Court seeking emergency injunctive relief and a declaratory judgment against the city. The company was seeking the contract and said they submitted a bid of $88,787, which was $27,533 below the bid of W.G. Stang LLC of $116,320. The engineer’s estimate for the project was $131,768.

KT Holden has done construction work for the city in the past, but that was when the city employed two construction inspectors.

According court documents, city officials had several communications with KT Holden regarding their legal and ethical concerns about their bid last month.

A June 8 letter from Joseph C. Pickens, a Dayton attorney representing Lebanon, said the city decided not to consider the bid of KT Holden Construction because the city’s only construction inspector, Hank Holden, is the brother of Tyler Holden, an owner of the construction company. The letter said that decision was made to avoid a direct conflict of interest as Hank Holden would be the person to administer and approve components of the contract.

The city also disagreed with KT Holden’s position that it could simply hire another inspector for this project, saying the city is not obligated to spend additional tax dollars for another inspector or hire another inspector just because KT Holden’s bid was less than the next bidder’s for the contract, according to Pickens’ letter.

“Again, we believe that the City’s decision not to consider the bid of KT Holden was proper. While the City values its corporate citizens, particularly KT Holden, it has an obligation to comply with Ohio’s laws and ethical provisions. It has an obligation to act in a fashion that best protects itself and its employees. Moreover, it possesses broad discretion, both pursuant to the bid documents and well-settled Ohio law, to accept what it deems the lowest and ‘best’ bid on Project 23-05. In the City’s opinion, the ‘best’ bid on this project is not one that: (1) creates an appearance of impropriety, (2) creates a conflict of interest if the contract is awarded to KT Holden, (3) subjects itself and its employees to ethical and legal violations if Hank Holden inspects the construction work of his brother, and (4) would require the City to hire an alternate inspector just to avoid a conflict of interest.”

Representatives from the city and KT Holden appeared before Magistrate Carrie A. Heisele on Monday on a motion for a temporary restraining order. However, Heisele denied the motion in the city’s favor saying “the city is not required to award the contract to the lowest bidder, rather it is empowered to make a qualitative determination as to which bid was both the lowest and best. To determine whether to award a contract based on the lowest and best bid is solely within the sound discretion of the city.”

In addition to denying the motion for the temporary restraining order, Heisele ordered both parties to contact the assignment commissioner to schedule a hearing on the preliminary injunction motion as soon as possible. No court date has been scheduled as of Tuesday for that hearing.

Heisele’s decision was filed in the court on Tuesday. Later that day, Lebanon City Council awarded the contract to W.G. Stang as the “lowest and best bid.

The project is to install an 8-inch water line on Pleasant Street between North Broadway Street and Mechanic Street. The water line will complete the loop in the block and serve future development for the Legacy Landing project. It will also eliminate a section of undersized main. City officials said the project is expected to begin soon and be completed by Sept. 15.

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