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Contractor sues Apollo for $117,000 in payment and interest charges

| Wednesday, March 27, 2013, 1:31 a.m.

The construction company that separated Apollo's sewage system is suing the borough for almost $117,000.

In a complaint filed in Armstrong County Court, Sippel Development Co. claims the borough breached its contract by not paying the company nearly $67,000 in interest on two payments it billed in December 2011 and not paying $50,000 in February 2012.

Sippel, of Franklin Park, Allegheny County had been the lowest of seven bidders on the roughly $7 million project to separate the borough's combined stormwater and sanitary sewage system. The project was largely paid for with a state grant.

Work started in September 2009 and was substantially finished in November 2010. Restoration and warranty work continued until last November, according to Rich Craft, the borough's engineer, with Olsen and Associates of Butler.

The company's attorney, James D. Miller of Babst Calland Clements and Zomnir in Pittsburgh, declined to comment on the complaint Tuesday.

Sippel Office Manager Jessica Krysinski said company President Douglas Sippel was out of town and unavailable for comment. She also declined comment.

The borough has not filed a response to the company's complaint, according to the court.

Apollo Council President David Heffernan said he thinks the dispute is a misunderstanding.

“I'm a little disappointed it has come to this,” he said.

In the complaint, Sippel cites a provision of its contract with the borough requiring that money not paid when due would bear interest at an annual rate of 6 percent.

The company claims the borough did not make two payments on time, accruing about $66,700 in interest.

The company billed the borough in December 2011 for the interest, which the borough has refused to pay, according to the complaint.

“One of the two they submitted to us four different times and there was an error on it, so we sent it back,” Heffernan said. “I think there's some confusion. Our engineer has the evidence that shows we were never really late on a (payment) unless it was a bona fide reason. That's where we stand on it.”

The borough has also failed to pay $50,000 requested in February 2012, the complaint states.

Craft said the borough has withheld that money until Sippel certifies that it has paid all of its employees, suppliers and subcontractors on the project. He said the company has not responded to the borough's numerous requests for that certification, which date to November 2011.

Craft said anyone who has not been paid should have come forward by now.

“The contract still requires that certification,” Craft said. “We don't know why he's not providing it.”

Heffernan said the borough used between $2,000 and $3,000 out of the $50,000 to make repairs Sippel would not return to perform. He said the borough was willing to not deduct that amount and pay the entire $50,000 to Sippel to settle everything.

While Sippel's initial bid for the project was about $6.4 million, cost overruns boosted the final cost to about $6.9 million, Heffernan said.

“We had a gentleman's agreement that $6.9 million was the end of this project,” Heffernan said. “To me, (Sippel) is not holding to his word.”

Brian C. Rittmeyer is a staff writer for Trib Total Media. He can be reached at 724-226-4701 or brittmeyer@tribweb.com.

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