Some terms of MID lawsuit over water treatment plant revealed

03/28/2013 3:11 PM

06/26/2013 2:29 PM

Veiled lawsuit settlements over a flawed expansion of Modesto's water treatment plant are coming into focus, though much remains unconfirmed.

The plant's partners — the city of Modesto and the Modesto Irrigation District — extracted $8.5 million from an engineering firm in October, according to documents made public this week. That ended a legal dispute with one of four contractors.

Tuesday, the MID board agreed to settle with the remaining three companies; terms remain under wraps, but calculations suggest the payout could be about $7.4 million. That leaves the partners $7.5 million short of covering the cost to fix the problem, estimated at $23.4 million.

City Council members voted Tuesday on the settlement, but that was done behind closed doors, and City Attorney Susana Alcala Wood said Thursday that she can't reveal the outcome until the agreement is finalized.

The city and the MID disagree about which of them should pay how much of the disputed $7.5 million remainder, but — if the City Council signed off on the settlement Tuesday — have agreed to resume work next month and resolve differences later.

The lawsuit parties kept the initial $8.5 million settlement hidden last year despite The Bee's legal arguments that review of public spending outweighs secret deals. The district now says it couldn't release the details then because the deal wasn't final. Terms were made public this week when the district complied with a California Public Records Act request.

The settlement, with Kansas-based engineering firm Black & Veatch, contains a confidentiality clause requiring that the parties keep mum except if "subject to any legal obligations of disclosure."

Another section prohibits parties from "taking formal action to make public disparaging remarks regarding the parties and-or (their) performance."

This week's settlement involves Western Summit Constructors of Denver, the master contractor; Big B Construction, a concrete subcontractor in Stockton; and Siemens Industry, a global company that supplied a filtering system.

In a Wednesday letter to The Bee, MID project manager Greg Dias suggested that the latest settlement soon could become public, when all parties finish signing off.

Problems included steel plates installed in the wrong places atop masonry block walls, which complicated connections to steel roof pieces, and stability of membrane basins in the filter system.

MID board members this week OK'd a $6 million contract to demolish and replace the basins. Additional valve work and pipe supports will be required later, they said.

The $82 million expansion was, by 2009, to have increased the 40 million gallons of tap water provided daily to Modesto water customers to 60 million, but delays will push completion to mid-2015.

Errors could push the cost to an estimated $105.4 million. The $8.5 million October settlement reduces the $23.4 million overage to $14.9 million. The city and district say they're still fighting over a final gap of $7.5 million, suggesting this week's settlement is worth about $7.4 million.

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or (209) 578-2390.

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