Engineering overruns exceed damages against contractor

Although it wasn’t labeled as an effort to spend city dollars locally, that’s what happened as the Jefferson city council on Tuesday considered a pay estimate and a request for additional pay from the city engineer.

“It’s been an interesting construction year to say the least,” city engineer John Milligan said to begin the discussion of pay for Scharnweber Water Conditioning Inc for that company’s work on the sewer extension to Wild Rose Casino.

The city council first approved a change order for Scharnweber for a decrease of $29,528. Milligan explained that amount reflected liquidated damages for the 82 days Scharnweber went past the end of the contract. Milligan said there is another $6,800 in cost of pumping waste from the casino when it opened ahead of the sewer extension being complete. He is discussing with Scharnweber whether that amount should be added to the damages.

Milligan said the project is substantially complete and recommended paying Scharnweber $63,804 to bring payment to 95 percent of the total. With payments approved in June, July and October, the total paid to Scharnweber with the November payment is $634,847. If the city eventually pays the final 5 percent, the total for the project will be $668,260. Scharnweber’s bid for the project last spring was $697,789.

Milligan also submitted for the council’s approval an invoice for $26,498 for additional engineering services related to the project. He had last July asked for an additional $43,000 for the same project. He explained in July that the contract the city approved a year earlier with Milligan’s company (MHF Engineering) for $153,000 was based on an estimate of costs made before the contractor for the project was hired. Scharnweber’s lack of experience had required him to do more “babysitting” than expected.

The council approved the summer pay increase by a split vote, with council members Lisa Jaskey and Larry Teeples voting against it, and council members Gary Von Ahsen, Harry Ahrenholtz and Shannon Black voting for it. The reason for the dissenting votes was uncertainty about where the extra $43,000 would come from.

Milligan pointed out at the Nov. 10 meeting that the request for additional pay was less than the amount withheld as damages, and his request was approved by a 4-0 vote. (Jaskey was absent from the meeting.)

With the two added invoices, engineering costs on the project total $222,998, an overrun of $69,498, while Scharnweber has been pegged for $29,528 in damages. If Scharnweber ends up paying the $6,800 for pumping, the shortage would be $36,328.


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