Council approves design amendment for Thomas Street lift station; city tracking $361,800 in liquidated damages

The Vermillion City Council on March 3 approved a $26,762.30 amendment to the city's engineering agreement with Banner Associates for the Thomas Street lift station replacement, bringing the engineering contract total to $138,962.30.

Shane (presenter) told the council the city entered the original Banner agreement in 2022 for $112,200. Design work was delayed after the city requested modifications to lower the lift station to serve sewer growth in the Jack Powell addition; H & W Contracting received the construction award after bidding but did not begin work. As of Feb. 4, 2025, the city had tracked $361,800 in liquidated damages on the construction contract because the substantial-completion date of June 1, 2024, was not met.

Shane said the Banner amendment covers two items: $7,066.50 for design modifications requested by the city and $14,695.80 for additional work resulting from the contractor delay. He said staff anticipates that the liquidated damages assessed against H & W will cover the additional Banner costs related to the delay, while the design modification cost will be paid from the city budget. The 2025 budget did not previously include funds for the design modifications because the project had been expected to be completed in 2024.

When asked to explain liquidated damages, Shane said: "When a project does not meet its substantial completion, there are penalties to the contractor for not finishing the project in that time frame. ... So any maintenance, anything that happened to the existing lift station to keep it operating up until this point, those are costs that we didn't think we were gonna get." City legal counsel (Daryl) explained recovery depends on contract language but said offsets are a common approach while the city resolves claims with the contractor.

Council approved the amendment by motion.