N. Belle Vernon settles sewer suit
NORTH BELLE VERNON - Borough council Tuesday accepted a settlement in a lawsuit filed nearly five years ago against a company hired to design a stormwater and wastewater system separation project.
Representing council, attorney David Strassburger, of Pittsburgh-based Strassburger, McKenna, Gutnick & Gefsky, said the borough will receive $271,500 in connection with litigation between the borough, project engineer McTish, Kunkel and Associates, of Allentown, and contractor W.G. Tomko, of Finleyville.
Council voted 5-0 at a special meeting Tuesday to accept the settlement.
Councilmen R.J. Sokol and John Ross were absent.
In July 2002, council hired Allentown-based McTish, Kunkel to design and supervise a $5.7 million project to install sewer lines and convert the system in place to handle stormwater.
Council eventually replaced McTish, Kunkel with Chester Engineers, of Moon Township, claiming that the original engineer failed to correct poor soil conditions that contributed to multiple service line breaks and made the system unusable with 30 percent of it incomplete.
That resulted in a McTish, Kunkel lawsuit against the borough on Oct. 20, 2004.
When council countersued, McTish denied responsibility and indicated Tomko should be held accountable.
"We alleged in the complaint that McTish's design was improper, but there are no admissions in connection with this lawsuit and McTish has expressly denied any liability," Strassburger said. "McTish contended that it was Tomko's failure to follow the specs that caused the problem."
The litigation led to delays in the completion of the system.
Council had to obtain $2.5 million in interim financing from National City Bank to complete construction, which was finished late last summer.
The board used a $3.3 million, low-interest loan from the federal Rural Utilities Service to repay National City.
However, closing on the Rural Utilities Service loan took longer than expected, creating more than $60,000 in unanticipated interest payments to National City.
The cost for the project reached $9 million.
In the settlement, McTish's insurance carrier, CNA Insurance, agreed to pay $475,000 to the borough.
Tomko contributed $17,500.
In turn, council will pay McTish $42,500 as a final payment for work completed on the project.
Strassburger's firm will receive $178,500.
The attorney said council demanded $1.3 million in its countersuit.
"It's very rare that you get everything that you ask for," Strassburger said. "It's absolutely a reasonable settlement ... Everybody is glad to put it behind them."
Strassburger said council should receive the money by month's end.
Council President Dennis Simboli said part of the money will pay for final conversions in the stormwater and wastewater systems.
"Three chambers have to be switched over to separate the lines completely ... so (storm)water goes into river and sewage goes into the plant," he said.
Borough public works employees will separate one of the chambers. The borough will seek bids for separation of the other two, Simboli said.
That will not occur until all customers are tapped into the system.
Council recently cited 21 of about 100 customers who have not complied with a borough ordinance requiring them to obtain permits and connect their homes to the system.
Seven areas, or watersheds, are involved in the project, with a total of 1,000 customers.
The customers had until June 30 to connect or provide proof the work will be completed.
Those already cited were from Watershed 1.
Simboli said council will move on to other watersheds and issue citations to property owners that have not tapped in.
Simboli said that after the work is complete, he hopes council will use leftover settlement money to reduce the monthly service rate - now set at $34.
"The sooner the residents cooperate with the borough and tap in, the sooner we can switch this over and move on to another page," he said.
Simboli said the end of the lawsuit will ease the financial burden on the borough.
He said council had budgeted $50,000 a year for the last five years for legal fees related to the case.
"Council is very happy," Simboli said. "Council has been very involved in this. We think that everybody is walking away like they should."
McTish, Kunkel President Matthew McTish was not available for comment.