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Council approves engineering amendment for Tom Street lift station but removes contingency funding
Summary
The Vermillion City Council approved additional engineering fees for the Tom Street lift station project tied to construction delays, but removed a proposed $15,000 contingency. The contractor is more than a year behind schedule and the project has accumulated sizable liquidated damages.
The Vermillion City Council voted Monday to approve additional engineering work for the Tom Street lift station project but removed a $15,000 contingency from the amendment after council concern over lengthy construction delays.
Staff background: City staff said Banner Associates was contracted in February 2022 to design a new Tom Street lift station for an engineering fee of $112,200. In May 2023 a construction contract was awarded to H & W Contracting for $1,553,066.45 with a substantial completion date of June 1, 2024. Staff reported the project is currently 494 days beyond its scheduled completion and that liquidated damages (LDs) being tracked total $666,900 as of the meeting.
Amendments requested: An earlier contract amendment approved March 3, 2025 increased Banner’s contract by $26,762.30, bringing the engineering total to $138,962.30. Banner proposed a second amendment with four items tied to ongoing construction administration and observation: construction administration ($15,684), construction observation ($9,176), remaining effort/closeout tasks ($19,500) and a contingency ($15,000). Staff recommended approval of the second amendment in the full amount.
Council action: After sustained concern from council members about the project’s duration and accountability, Councilor Toller moved to approve the three specific expense items for construction administration, observation and remaining effort but to remove the $15,000 contingency; Councilor Lieber seconded. The motion carried. Councilors stressed they expect Banner and staff to press the contractor to finish work; the council also discussed the difficulty of forcing a contractor to perform and noted LDs as the primary contractual remedy.
What the votes mean: The council’s approval funds the additional engineering close-out and oversight work Banner must perform to finish the project but denies the additional contingency fund Banner had requested. Staff said the accumulated liquidated damages may offset some of the city’s additional outlays and that the amendment’s purpose is to close out the work left undone because of construction delays.
Costs paid to date and next steps: Staff reported $138,931.05 in engineering fees already paid and approximately $714,323 paid for construction to date; a construction pay request of $21,599.69 was included on the meeting consent agenda. Banner and staff indicated the contractor planned to resume final connection work immediately and that additional close-out work would follow; staff said they would continue to monitor LDs and contractor performance.
