Taking Advantage of the Hail

Anonymous

Background

The city of Riverbend, a small city with a population of 15,000, was hit by a storm that brought softball sized hail stones and damaged essentially every roof in town. Immediately after the storm, a new construction business was established by a recent high school graduate that aimed to provide services for the residents in getting their homes fixed called Riverbend Construction. In the months that passed from the storm, many homeowners have not had any repairs made after signing a contract with Riverbend Construction, and those that have had work completed, were not happy with it, going so far as to call the City Inspector and make complaints. The City has also had some issues with the new construction company, in that over 50 permits had been issued but payment for the permits and inspections have not been received, even after sending invoices.

The Ethical Dilemma

In the immediate aftermath of the storm, Riverbend’s Building Code and Inspection Department recommended that homeowners do their due diligence in ensuring that anyone looking to hire a roof repair contractor ensure that company can provide examples of previous work completed, and that they don’t sign a contract with anyone until speaking with their insurance agent first.

Riverbend’s Mayor is the grandfather of the owner of the newly formed Riverbend Construction company, and the Building Inspector has notified the Mayor of the outstanding debt that is owed for the issued permits, as well as submitted a detailed list of the phone calls, emails, and conversations that they’ve had with residents making complaints about either not having work done, or having it done incorrectly.

In this notification to the mayor, the Building Inspector recommended the City to make an announcement to the public that Riverbend Construction is not a recommended contractor for residents to utilize to make repairs moving forward, and inform them of the many complaints residents have had, and that the City is currently owed a great deal of money for issuing the permits and completing the necessary inspections of the poor work that has been done to date.

The City’s Mayor must decide whether to proceed with the action in making this public notification. The official recommendation for its residents to not utilize Riverbend Construction would undoubtedly negatively affect his grandson’s business ventures, but would have the potential for Riverbend citizens to know they cannot trust that contractor, and allow them to hire a company that instead is reputable and can help them move forward from the catastrophe.

The key ethical dilemma is an example of a conflict of interest but the focus is going to be on the mayor’s decision in looking through the lens of him being able to prioritize the Human Skill from Katz’s (1955) 3-Skill Approach and taking a utilitarian approach of maximizing overall well-being.

Decision-Making Process

Riverbend’s Mayor chooses to hold separate meetings regarding this matter with both the Building Inspector, and then his grandson. These were both held as official meetings, at City Hall, and he invited the City Clerk and City Attorney to sit in on each meeting. During the meeting he asks the Building Inspector about the permitting process and if his grandson was aware of the permitting and inspection requirements the City enforces, he additionally asked what is typically done in these situations of a contractor not obtaining a permit or getting an inspection, to which he learned that fines are typically imposed and they do have a short list of contractors that they do not recommend for some types of work, such as an electrician and one contractor that primarily builds decks.

During the meeting with his grandson, things were quite a bit different, as his grandson was agitated and yelled consistently about how people aren’t curing him any breaks with all the work he has taken on, and that he doesn’t have a secretary to help with all of the paperwork that needs to be done with making payments and dealing with the many insurance agencies for the differing homeowners. When asked if he was made aware about the permitting and inspection process, and that the permit fees need to be paid in a timely manner, he detailed that he has been having to utilize funds received from jobs that have been completed to pay for the materials and labor for work currently being done.

The Decision

After thorough deliberation with the City Clerk and Attorney, the Mayor decides to hold a joint meeting with the three of them but also include the Building Inspector and his grandson. During the meeting he provided a detailed explanation of the expectations the City has regarding this matter, in that the fees for the permits need to be paid in 10 days, and that moving forward no permits will be issued unless they can be paid for on the spot. If the fees are not paid for and things do not improve regarding the work being done, then he states the company will be placed on the list of contractors that are not recommended to utilize.

Outcomes

• Short-Term: Work will likely continue to be done by the contractor in the meantime, and all involved have a sense that the City will not receive payment for the permits and inspections. It's possible that more homeowners will enter into a contract with the company and limit their ability to choose a contractor that can actually complete the work.
• Long-Term: Because of the large number of residents that have entered into a contractual agreement with this contractor, and the likelihood they will be able to resolve their serious business issues, the City may have to develop a task force to help homeowners find solutions to remove themselves from their contracts. The housing stock will also likely see deterioration occur at a quicker pace if homes don’t get repaired in a timely manner, leading to blight and additional dilapidated properties, causing a strain on local development and investment.

License

This case study is licensed CC BY 4.0.