Lower Merion School District Settles Construction Lawsuit for $3.75 Mln

Lower Merion School District will pay $3.75 million to settle a decade-old legal battle over construction contracts at , school officials decided Monday.

The district concluded mediation with Counsel Construction and Fidelity and Deposit Company of Maryland that day, and Monday evening, the Board of School Directors approved the settlement.

Counsel got a contract in 1999 to renovate Penn Wynne Elementary, putting up performance bonds with the help of Fidelity and Deposit, but the district fired the company "for cause" the following year, district spokesman Doug Young said, completing the work with another firm in 2002.

The switch in contractors sparked several lawsuits among involved parties before mediation began. The district will pay Fidelity and Deposit the $3.75 million.

"We've been budgeting for this for quite some time. We knew we owed them money," Young said. "It effectively is the conclusion of the last piece of litigation from all the capital-improvement projects for all the elementary schools."

A representative of Zurich in North America, the parent company of Fidelity & Deposit, did not immediately respond to a request for comment. Young said the company sought as much as $14 million from the district.

Other School Board Business

Also Monday night, the board accepted eight retirements and a resignation and approved 22 hires or rehires, including the addition of Gerald Rineer, director of transportation, effective Aug. 2. Rineer's salary will be $107,000.

The board also agreed to an additional raise and bonus for Superintendent Chris McGinley in 2011-2012.

The district's top administrator was already due a 3.4 percent increase in his $208,889 salary from 2010-2011, and to keep his pay market-competitive the board added another 1.3 percent, bringing McGinley's 2011-2012 salary to $218,888, Young said.

With an additional $10,000 bonus to be paid this month, McGinley will make $20,000 more this fiscal year than last.

Finally, the board maintained 2011-2012 cafeteria prices throughout the district at 2010-2011 levels:

• Elementary breakfast: $1.25
• Middle school breakfast: $1.50
• High school breakfast: $1.75
• Reduced price breakfast: $0.30
• Elementary lunch: $2.50
• Middle school lunch: $3.25 to $3.35
• High school lunch: $3.40 to $3.50
• Reduced price lunch: $0.40
• Half-pint of milk: $0.45