Chesterton Tribune

Town utility settles lawsuit against Duneland Group over sewer plant expansion

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The Chesterton Utility has settled its lawsuit against The Duneland Group (DG), the Utility’s former contracted engineering consultant and the designer of the wastewater treatment plant expansion.

In April 2005, the Indianapolis firm of Drewry, Simmons Vornehm LLP, a specialist in industrial law, filed that lawsuit against DG on behalf of the Utility and the Town of Chesterton. In the lawsuit the Utility and the town asserted claims, relating to the design of the expansion, for breach of contract, negligence, and breach of warranty of the adequacy of the plans and specifications.

At its meeting Monday night, the Utility Service Board voted 5-0 to approve and sign a “Mutual Settlement and Release Agreement.” That agreement must also be approved and signed by the Town Council.

The Chesterton Tribune obtained a copy of the agreement after filing a formal public records request this morning with the Office of Clerk-Treasurer Gayle Polakowski. Under the terms of that agreement, DG will pay the Town of Chesterton $275,000, within 14 days of receiving the approved and signed document, “as full settlement and resolution of all disputes, claims, costs, and expenses arising out of or relating in any way to the litigation.”

The agreement is explicitly clear on one point: by signing the document no party is admitting liability of any kind. “It is expressly understood and agreed that the payment and acceptance of the above-stated settlement payment, and the releases as hereinbefore described, are not admissions of liability by any party hereto,” the agreement states.

Associate Town Attorney Chuck Parkinson told the Service Board on Monday that Drewry, Simmons Vornehm recommended approval of the agreement for a couple of reasons. For one thing, he said, under the terms of DG’s insurance policy the cost of legal defense was coming off the face value of the policy. For another thing, Parkinson said, the final $275,000 figure represents an amount “over and above the policy’s limits.”

Member Scot McCord expressed his gratitude to both Parkinson’s firm, Harris Welsh & Lukmann, and to Drewry, Simmons Vornehm, for their work. “Nice job,” he said.

The lawsuit against DG was originally filed in response to allegations made by the general contractor retained by the Utility to expand the wastewater treatment plant, Bowen Engineering Corporation of Crown Point, that DG’s design and engineering of the expansion were flawed, causing numerous delays and forcing the re-design of a portion of the project and remedial work on site.

In the end the expansion cost $4,793,544.52, or $585,544.52 more than the original contract price of $4,208,000, an overrun of nearly 14 percent. Included in that $585,544.52 figure was a payment which the Town Council, in December 2005, authorized the Utility to make to Bowen, to resolve the latter’s claim for $1,202,404.92, “primarily for costs and damages allegedly arising out of design errors, omissions of, and constructive changes caused by the original project engineer, Duneland Group.”


In other business, the Service Board agreed by consensus to ask Superintendent Steve Yagelski and Town Engineer Mark O’Dell to submit a list of pressing projects in need of prioritization. Members made that request after Yagelski informed them that the Porter County Highway Department has asked to re-locate a form main currently buried beneath the concrete of the bridge over Coffee Creek on Indian Boundary Road. “That’ll be a $50,000 project,” O’Dell said, at a minimum. More to the point, it will require a fair amount of drawing-board time, and to clear some space for it O’Dell was interested in knowing whether the Service Board would be comfortable in postponing one more time the separation of the sanitary and stormwater system beneath South Calumet Road in the Downtown. The new main installed last winter, to replace a collapsed line, appears to be working well, O’Dell said, while the need to separate the sanitary and stormwater sewers is perhaps less pressing than some other projects.

Yagelski and O’Dell agreed to submit a project list at the next meeting, Dec. 17.

Re: Dickinson Road Lift Station

Meanwhile, members voted 5-0 to recommend to the Town Council the purchase of a quarter acre of property, at the southeast corner of East Porter Ave. and Dickinson Road, for a price not to exceed $43,250, the average of two appraisals of the land in question.

That property will be needed for the upgrade of the Dickinson Road lift station, which the Lake Erie Land Company is obligated to perform at its own expense. But the land on which the lift station is located—and the land on which it will be expanded—must be owned by the Utility itself.

New Hire

Members also voted 5-0 to permit Yagelski to increase the number of authorized wastewater treatment plant operators from two to three and to advertise to fill the newly created position.

Yagelski asked for that authorization to get a new operator in place and trained in advance of the likely retirement in the next few years of a senior operator.

Re: Sludge Conveyor

And members voted 5-0 to authorize the purchase and installation, at a cost not to exceed $20,000, of a new screw conveyor system to move pressed bio-solids to a truck or a storage area.

The current Serpentix conveyor system is in need of $38,000 worth of repairs, Yagelski said, and the new screw system would be cheaper to buy and install. And, he added, it would do the job better.

October in Review

In October Chesterton used 46.18 percent of its 3,794,400 gallons per day (gpd) allotment at the wastewater treatment plant; Porter, 60.93 percent of its 725,000 gpd allotment; the Indian Boundary Conservancy District, 64.50 percent of its 81,000 gpd allotment; and the plant as a whole, 48.83 percent of its capacity. There were no bypasses recorded last month. In October the Utility ran a deficit of $181,666 and in the year-to-date is running a deficit of $234,511.


Posted 11/20/2007