During a Sept. 19 special City Commission meeting, commissioners voted unanimously to approve a settlement agreement with Core and Main related to issues with the first phase of the water treatment plan filter improvement project.
Under the settlement, Core and Main will give the city a $200,000 credit against future purchases, divided into three equal annual credits; and the city will pay $143,433 of an outstanding invoice to Core and Main.
“The settlement agreement shall include language to prevent Core and Main from ‘price gouging’ its charges under the annual credit,” according to the motion approved by commissioners.
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In early 2019, the city public works department began planning a major overhaul of the water treatment plant filtration system, including replacing many major components of all the plant’s filters.
The project was planned to be done in phases from 2019 through 2021.
Filters at the water treatment plant have been under investigation for the last decade, according to city staff in 2019.
In 2010, staff noticed a decline in filter performance and AE2S performed a filter media evaluation as an first step in identifying potential contributing factors. The evaluation found that the filter media had degraded and the city should consider replacement, according to a 2019 staff report.
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In 2012, the city hired AE2S to complete a filtration process evaluation, which “concluded that to improve filter performance, replacement of the entire depth of the filter media in conjunction with new under drains, and an air back wash system, was needed,” according to a 2019 staff report.
Those reports were the basis for drafting the agreement and scope work that commissioners first approved in early 2019.
The first phase was planned to be completed during the winter and early spring of 2020 and would replace all six filters on the west side of the plant filter building. During that phase, the functioning filters on the east side of the building would handle water demand, according to the city.
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Taking six filters offline would significantly reduce the plant’s capacity so it was important to finish that phase before the beginning of May 2020 to avoid any risk of city water demand, which spikes in the summer, exceeding capacity.
Because of that time crunch, the city advertised for bids on the valves and actuators for the project in September 2019.
Core and Main was awarded the contract in early October 2019 and based on their bid, the parts should have been available by early February 2020. In December 2019, the city awarded a contract to Sletten Construction for the project.
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By late December 2019, it became clear Core and Main wouldn’t be able to deliver the valves and actuators in time to have them installed and the project completed before the summer’s peak demand.
As a result, the city and Sletten modified the project to rehabilitate two filters at a time. That eliminated the concern of being able to meet water demand, but lengthened the project and increased cost by $222,000, according to the city.
A second delay happened in May 2020 when the vales and actuators for those first two filter rehabilitations arrived three weeks later than expected, creating downtime for Sletten’s crew, adding another $47,200 to the project cost.
“There was some substance to the argument that the second delay was caused by global supply and transportation disruptions. The valves and actuator’s had to be specially manufactured in Europe,” according to David Dennis, city attorney.
Core and Main did deliver all the parts ordered for the first phase, which was completed in 2021. The remainder of the project was completed earlier this year, according to the city.
In April 2021, Paul Skubinna, former public works director, told commissioners that if the city had canceled or not rescheduled the project, the city wouldn’t have been able to meet demand for water the previous summer and lost about $330,000 in revenue, or worst case scenario the city would have had to spend $2.5 million daily to purchase water to meet demand in the community.
“This was a substantial change order, but it was the least of the evils that we were facing,” Skubinna said during an April 2021 meeting.
The city considered litigation over the delays and costs, but that could have cost more than $100,000, so the city agreed to the $200,000 credit to settle its $269,000 claim, Dennis said.
The city’s water treatment plant frequently purchases parts and other materials through Core and Main so there’s no concern regarding the city’s ability to use the credit, he said.
