A pay dispute between Starkville and the Hattiesburg-based contractor responsible for Carver Drive ditch improvements could result in a legal challenge after the city approved a payment in executive session Tuesday.
Although Precision Construction is asking for about $200,000 from Starkville, aldermen OK’d an $81,474 payment after a 30-minute, closed-door meeting and ordered board attorney Chris Latimer to prepare a letter today outlining the city’s decision to remit pay.
The dispute emerged after the city did not pay its bill in its last two meetings, said company President Nathan Smutzer, placing Starkville at odds with the terms of the two entities’ work contract.
Starkville Chief Administrative Officer Taylor Adams confirmed the city received invoices on Oct. 27 and Monday, and Tuesday’s executive session action dealt with a portion of that balance.
Aldermen and city staff declined to comment further on the matter after Tuesday’s meeting, citing the potential for litigation.
The city declined to release a financial statement outlining the fee dispute and how it calculated the remitted pay after Latimer was unavailable to approve the document for media consumption. It is believed the city will release that statement today.
Delays appear to be the primary facet of the two entities’ financial entanglement. Their contract stated the Carver Drive project “will be substantially completed” on or before 200 days from Feb. 7, the document’s execution date, and ready for final payment on or before Aug. 30.
Smutzer, however, acknowledged the project fell behind and placed the burden on the city’s shoulders.
A liquidated damages clause within the contract outlines Precision Construction’s responsibility to pay the city “$100 for each calendar day that expires for 45” days after the Aug. 30 date and “$1,000 for each calendar day” afterward.
Additionally, a “time of essence” clause was written into the beginning of the contract and states “all time limits for milestones, if any, substantial completion and completion and readiness for final payment as stated in the contract documents are of the essence of the contract.”
It is also believed the city was charged for additional dirt work or supplies that went above estimates.
The contract states that estimated quantities are not guaranteed, “and determinations of actual quantities and classifications are to be made by (Pepper-Wooten and Associates LLC, the Starkville-based project engineer).”
“It was a combination of several things: weather, delays caused by the city and additional work added onto the project,” Smutzer said of the delays.
After learning of the board’s action, Smutzer said he must “sort through the numbers” and that his company and the city must come to a resolution on the matter.
He declined to comment further.
The city’s contract with Precision Construction capped the total project cost at $677,700.
Documents show Starkville paid Precision Construction a total of $531,584.82 for Carver Drive improvements. Tuesday’s remitted pay would bring that total to about $613,058.97.
In May 2012, the prior board of aldermen defeated a resolution authorizing the city to commit $340,995 – in-kind contributions constituted $230,995 of that total – toward a Community Development Block Grant to fund improvements.
The board then authorized City Engineer Edward Kemp one month later to seek Federal Emergency Management Agency approval for a $175,000 channel restoration project. That motion drew criticism from Ward 6 Alderman Roy A. Perkins and Ward 7 Alderman Henry Vaughn, two staunch proponents of a more expensive pipe-and-cover solution.
That decision was split 3-3, and Mayor Parker Wiseman was left to cast the tie-breaking “Yea” vote.
In February 2013, the former board voted 6-1 to rescind the project and then replaced it with a motion to concrete the ditch’s sides and bottom.
Perkins won a strategic political battle as then-sitting aldermen were only months away from the year’s municipal election: He gained a more-elaborate solution as four sitting aldermen who opposed costly proposal would not return to their respective positions.
The incoming board then approved Precision Construction’s low bid in December over others that ranged from $800,000 to $1 million for similar work.
Officials previously said the city itself would only spend $50,000 from its own coffers on the project as a rotating capital improvements loan would cover a majority of the expenses.
The current project drew flak from Ward 4 Alderman Jason Walker since its genesis. Walker, along with a hydrology expert, said it would not solve all of Carver Drive’s drainage issues on a long-term basis.
Also, the creation of a V-shaped, concreted ditch could create safety concerns during flash flooding.
Walker, a landscape architect, asked fellow board members to study alternative solutions before it overwhelmingly approved the plan.
After the December 2013 approval, Perkins called the vote “another great chapter in (Starkville’s) history.”
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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