The Modesto Irrigation District has filed a lawsuit against Modesto in an effort to settle a dispute over which one them has to pay roughly $9 million in additional costs associated with the delayed and botched expansion of the district's regional water treatment plant.
The litigation is the latest in a series of legal actions over the project, in which MID was sued by Kansas-based engineering firm Black & Veatch, the project designer and construction manager, and other construction firms.
MID and Modesto, which filed their own legal actions against Black & Veatch and the other parties, prevailed by recently collecting $14.9 million along with other financial concessions.
The expansion was expected to take about two years and be completed in 2009 at a cost of about $62.9 million. The completion date now is projected to be mid-2015 at an estimated cost of $107.5 million.
MID and Modesto entered into an agreement in 2005 for the irrigation district to more than double the capacity of its Modesto Regional Water Treatment Plant at Modesto Reservoir from 30 million gallons of drinking water per day to 66 million gallons.
The agreement calls for Modesto to pay for the expansion while MID would continue to own and operate the plant. MID would sell Modesto the drinking water at its cost to produce it.
"MID receives no net revenue or profit for this," MID spokeswoman Melissa Williams said in an email.
The lawsuit was filed Aug. 6 in Stanislaus County Superior Court. MID is asking a judge to settle the disputes between it and Modesto. According to the lawsuit, the two are at odds over:
Which one is required to pay for cost overruns and other project costs.
Whether MID is required to pay Modesto's legal costs associated with the legal action against Black & Veatch and the other contractors.
Whether Modesto's legal costs are reasonable.
MID's position is that Modesto is responsible for these costs based on the agreement between the city and irrigation district.
Williams said in her email that MID filed the lawsuit in order to resolve the disputes in a timely, cost-effective manner. She added that more delays will increase the project's cost.
"If the city decides to delay the full capacity completion," she wrote, "we estimate at this time that the projected $9 million shortfall will double to $18 million."
Modesto Mayor Garrad Marsh said he believes MID filed the lawsuit because the legal deadline to do so was about to expire and it wanted to preserve its legal rights. "I think we are working together to find a solution," he said.
In September 2010, citing more than 100 deficiencies in the work, such as defects with plant's membrane filter basins, MID dismissed Black & Veatch and hired consultants to further investigate the problems.
Bee staff writer Kevin Valine can be reached at email@example.com or (209) 578-2316.