New London ― The city has negotiated a proposed settlement with an insurance carrier to cover at least $430,000 in cost overruns at the new recreation center.

The City Council is scheduled to meet in executive session on Monday, a year after it first convened behind closed doors to discuss the issue, so members can learn about the settlement, Mayor Michael Passero said on Friday.

Passero declined to provide a precise settlement figure until the council is briefed, but said an insurance company involved in the project would be reimbursing the city for the money it spent to cover the extra costs involved in permitting issues during the early stages of the project.

Change order documents from the Downes Construction Company, which is overseeing the $40 million construction project on the Fort Trumbull peninsula, list several instances of unplanned spending due to the failure of a subcontracted engineer to obtain a state flood management certificate along with storm water and wastewater discharge permits.

The extra costs are described by Downes as being the result of “design miscoordination.” The permitting issues delayed the start of the project by six months, with crews finally breaking ground in July of 2023.

A Nov. 10, 2023 change order noted several instances of additional project spending because of state Department of Energy and Environmental Protection permit delays, including nearly $194,000 in labor, materials, tools and equipment needed to deal with winter conditions at the site.

That money paid for ground heaters and additives to enable concrete to be poured in low temperatures, as well as for insulating blankets and fuel.

Another $6,600 was needed to re-clear overgrown areas of the site that grew back during the permit approval period.

Project site subcontractor Giordano requested $29,433 for new labor, material, tool and equipment costs related to foundation excavation work.

“This work was not originally anticipated to occur during the winter months,” the change order document states.

A July 24 change order lists another $199,000 worth of extra costs, including $17,660 for labor and material “escalation costs” after concrete work was pushed out several months.

Pasero said, if approved, the settlement will be used to reimburse the city for money it used from a project contingency account to cover cost overruns.

“The discussions (with the insurance company) were not antagonistic; these things happen,” Passero said. “We just needed to agree to a number.”

If the council agrees with the settlement proposal, it will meet again in December to finalize the agreement.

The project’s initial $30 million price tag, approved by the council in 2021, jumped by approximately $10 million as more detailed cost figures emerged, with the gap later filled with a combination of state and federal funding. The city was also awarded a $1.2 million grant through the state’s Brownfield Remediation program for pre-construction site work.

The facility, which will house a two-court gym, fitness center and eight-lane pool, along with office and community space, is scheduled to host an opening ceremony before July 4 and open to guests later that month.

The council will meet at 7 p.m. Monday at City Hall.

j.penney@theday.com