MID reaches water plant settlement

jholland@modbee.com and kcarlson@modbee.comOctober 9, 2012 

— An engineering firm involved in a troubled water treatment plant expansion has agreed to a tentative lawsuit settlement that won't cost the city of Modesto or the Modesto Irrigation District anything, Mayor Garrad Marsh said Tuesday night.

He spoke soon after the City Council voted in closed session to settle with Black & Veatch, the Kansas-based firm that designed the expansion of the plant where the MID treats Tuolumne River water for the city. "I am fairly confident we are going to have a reasonable resolution at the water treatment plant," Marsh said.

The MID board voted in closed session earlier in the day for the agreement, which does not apply to three other companies involved in the lawsuit. Details, including the amount Black & Veatch would pay, have not been disclosed.

"I can say that we are satisfied with the settlement," MID board Chairman Tom Van Groningen said.

MID officials have said the design and construction flaws could add as much as $30 million to the $63 million cost. They said they hoped to recover the extra costs through the lawsuit, meaning the city would not have to go through with major water rate hikes. The project was supposed to be done in 2009 but now is likely to take until late 2014 or early 2015, MID spokeswoman Melissa Williams said.

The parties will draft a final settlement for consideration by a judge, likely by year's end, she said.

The district and city remain in settlement talks with the three other companies. One is the main contractor, Western Summit Constructors of Denver. The others are Big B, a concrete subcontractor in Stockton, and Siemens, a global company that supplied a membrane system to be used in treating water.

An MID staff report in July cited problems with the expansion. Among them were steel plates installed in the wrong places atop masonry block walls, which complicated the connections to steel roof pieces. The report noted problems with the stability of six "membrane basins" and with the lower part of an exterior wall.

The MID board voted in August to borrow $8.4 million from reserves to cover some of the extra design, construction and legal costs. Officials said then that an additional $22 million could be needed to deal with other problems.

The initial treatment plant, built in the mid-1990s at Modesto Reservoir, east of Waterford, allowed Modesto to reduce its reliance on wells. The expansion would double the capacity, allowing even more groundwater to be kept in reserve for drought.

As for the confidentiality of the settlement, Williams said by e-mail, "All parties agreed that we wouldn't voluntarily distribute the terms of the settlement. Until the settlement is finalized, we think it is in the best interest of our customers to honor that agreement. The district is pleased to be resolving the claims with Black & Veatch."

Bee staff writer John Holland can be reached at jholland@modbee.com or (209) 578-2385.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.

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