Arbitration sought in case between city, contractor, engineer
From Todd Wilkin
Safety and Service Director
City of Hillsboro
Hillsboro Safety Service Director Todd Wilkin announced today that the city was ordered to pay $805,786.04 to PAE & Associates Inc. for additional costs for work related to the expansion of the Waste Water Treatment Plant (WWTP) from 2008 through 2013.
The WWTP expansion project began in 2008 with the city engaging CH2MHill as their engineer and the city relied upon their expertise to help them design the plant expansion and further help secure additional funding for the project.
The necessity of the expansion was mandated by the Environmental Protection Agency (EPA) which indicated our current daily flows exceeded our plants capacity.
It was at this point that the Ohio Rural Community Assistance Program (RCAP) was involved and recommended the City implement new water and sewer rates and proposed a yearly increase to those rates to help pay for the plant expansion.
The project completed in January 2013 after many construction delays and design issues arose at the WWTP. The project ended 262 days behind schedule and due to this delay, the contractor demanded $1,564,120.77 from the City of Hillsboro.
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The City determined that the amount of money being demanded from the contractor was excessive and tried, on multiple occasions, to get the engineer and contractor to agree upon a reduced total sum.
Unfortunately, those meetings proved to be unprofitable and the City was forced to go into arbitration with the contractor (PAE).
The arbitration hearings were held on March 18 and 19, 2014 in Hillsboro, Ohio and the arbitrator was Stephen E. Smith from Louisville, Ky. The City was represented by Fred J. Beery, Hillsboro City Law Director and PAE was represented by Robert E. (Buzz) Portune and Mary E. Lentz of Gottschlich & Portune, LLP of Dayton, Ohio.
On May 16, 2014, the arbitration findings were released and the city was ordered to pay $805,786.04 to PAE & Associates Inc.
The City Administration has since held multiple meetings with the engineer on the project, CH2MHill, to try and negotiate an agreed upon settlement under which CH2MHill would contribute their share to the Arbitrator’s award and further reimburse the City for additional costs arising from the failure of plant components.
Unfortunately, no agreement has been made with CH2MHill and as of December 6, 2014 the City has filed a demand for arbitration.
In our discussions with CH2MHill they are not willing to accept any responsibility for the construction delay and subsequent failures of certain plant components and for the monies awarded to PAE.
Therefore, the City has demanded $1,400,896.76 from CH2MHill.
The City, per the request of Fred Beery, has hired Buzz Portune and Mary Lentz of Gottschlich & Portune, LLP of Dayton, Ohio to represent the City in its claims against CH2MHill.
At this point, no dates have been established for the arbitration and no arbitrator selected.
We apologize for the delay in the release of this information, but due to the ongoing legal nature of this dispute the city was directed to not release any details relating to the negotiations until after the demand for arbitration was filed against CH2MHill.