State treasurer breaks impasse over LePage’s demand to revisit road construction bonds

State Treasurer Terry Hayes has resolved a standoff with Gov. Paul LePage that imperiled dozens of transportation projects and the jobs they create during Maine’s short construction season.

Hayes and LePage both issued statements Wednesday acknowledging that they had settled their differences on the process that will be used in the future to hire a bond agent – the person who brings state bonds to market.

Hayes said she has agreed to re-issue a request for proposal in July seeking a new bond sales agent. The governor commended Hayes for her action, which will keep the projects put out to bid by the Department of Transportation on track for completion this summer and fall.

“It is absolutely critical the state supports our construction industry, and I appreciate Treasurer Hayes’ cooperation with me to ensure these jobs are not jeopardized,” LePage said in a statement. “This was never a political disagreement; rather it was a procedural one.

“Most importantly, Mainers can now get to work on improving our roads, bridges, and other infrastructure that is so vital to our economy.”

Three weeks ago, Hayes said that the governor ordered the Maine Department of Transportation to not solicit bids for transportation projects, taking the step after he criticized Hayes for writing an RFP that he said favored big law firms from out of state.

Hayes issued the request for proposals to hire the bond agent with stipulations that the winning bidder have experience as a bond agent in other states, a condition she deemed necessary because of the complicated nature of the bond work and the possible exposure to Maine taxpayers if it’s mishandled. Bond agents are considered specialists within the legal industry.

But the governor said those stipulations unnecessarily excluded Maine law firms, and he said he heard from some of them that wanted a chance to bid on the work. In protest, LePage refused to give Hayes the amount of bonds to be sold in June. Without a specific amount, the bonds could not be sold and construction companies could not be awarded contracts.

Portland-based Preti Flaherty was the only other law firm that bid on the request for proposals to act as bond counsel for 2017. The contract was eventually awarded to Locke Lord LLP, a Texas law firm that has functioned as the state’s bond agent since 2004.

Hayes said Locke Lord Boston office was hired to serve as the state’s bond sales agent. Locke Lord’s website says it is an international firm with offices in several major U.S. cities, as well as Hong Kong and London.

Hayes, who has announced that she will run as an independent candidate for governor in 2018, denies that the RFP process favored or excluded any law firm from entering a bid for the $80,000 contract, adding in a telephone interview Wednesday that the bid proposal requirements were standard stock.

“There is nothing new here. This is all a figment of the governor’s imagination,” Hayes said.

Hayes sent a letter to…

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