City asks water plant contractor to come to the table
August 6, 2002
The city of Havre has taken the first step to start litigation with Williams Brothers Construction if the Havre water treatment plant upgrade stays behind schedule.
"We'll be sending them a letter today," Mayor Bob Rice said.
Rice called a closed-door executive session of the City Council Monday night to discuss the possibility of litigation. Williams Brothers has 10 days to respond to the letter, which requests that the company meet with the city and the bonding company.
The bonding company will have to determine whether Williams Brothers has substantially defaulted on the contract and whether it can still complete the contract, or whether the city should start assessing penalties or even take over the project, Rice said today.
Williams Brothers was originally scheduled to complete an upgrade to the water plant, costing about $6.7 million, by Oct. 31 of last year. The upgrade will increase the plant's production by 50 percent.
When the work wasn't completed, the city and Williams Brothers agreed Nov. 17 to amend the contract. The amendment included extending the completion date, with substantial completion scheduled for July 31, and final completion set for Oct. 31.
Water treatment plant superintendent Jeff Jensen said Monday that testing of the new section, which was scheduled for this week, will be delayed at least a week.
Rice said he is certain that once negotiations begin, the project can still move forward and be completed on time. The city is not interested in suing or taking over the project except as a last resort, he said.
"We're hopefull it's going to work out," he said. "I'm sure that one way or the other we'll be in the October time frame."
Representatives of Williams Brothers could not be reached for comment today.
In a meeting of the council's water and sewer committee before Monday night's executive session, committee members and city officials discussed the possibility of raising water and sewer rates to pay for future projects. Those include work on the wastewater treatment plant and infrastructure work when the Montana Department of Transportation starts rebuilding First Street in 2006.
Public works director Dave Peterson said he would prefer to increase rates in stages. If the city waits until the projects are due, Havre sewer and water users could be looking at a 20 to 25 percent rate increase.
"We're looking at something smaller," he said.
The city will need to work on the wastewater plant to meet increasingly stiff regulations, Peterson said. Equipment in the plant, some of which is about 50 years old, will also need to be replaced, he said.
City Clerk Lowell Swenson said that because of the size of the projects that are needed, the city will have to borrow money to pay for them. The city has to have water rates high enough to make payments on any loans it takes out, and increasing the rates ahead of time also allows the city to build cash reserves that can be applied to the projects, reducing the amount it needs to borrow, he said.
Peterson said since projects are under way or will be needed for both the water treatment and wastewater treatment plants, both rates should be looked at.
"To me, it's logical to look at raising both," he said.
Emily Mayer Lossing, chairwoman of the water and sewer committee, asked Swenson to bring estimates of raising the sewer rates to the next meeting of the committee, set for 7:30 p.m. Monday in City Hall.
Havre landlord Cameron Worstell said after the meeting that he understands that sometimes rates have to be raised, but that should be a last resort.
"I think they ought to look at other options now," he said.