San Luis Obispo County has agreed to pay $9.95 million to a Los Osos Wastewater Project contractor who filed a law suit demanding payment for uncompensated construction work. The settlement agreement is slated to go before the SLO County Board of Supervisors for final approval on Tuesday.
The County is working with state and federal partners to explore low-interest funding options in an effort to avoid potential rate increases in Los Osos because of the settlement, the county said in a press release. In the end, the residents of Los Osos will be responsible for covering the cost of the settlement.
“We have the best interest of Los Osos residents in mind,” said Wade Horton, SLO County’s chief administrative officer, in a press release. “Trying this case in court would take significant time and money and wouldn’t benefit the people of Los Osos.”
In its lawsuit, ARB alleged that inadequate planning by the county caused its workers to undergo numerous tasks not accounted for in its contract. County officials then refused to compensate ARB for the extra work and instead threatened to withhold payments for contracted duties.
Sewer workers discovered numerous underground facilities and construction interferences including an Indian burial ground, that were not noted in contract documents. After ARB submitted change orders, the county retaliated by threatening to withhold compensation for contractual duties if the firm did not make concessions on its claims, according to the suit.
But, ARB did not concede its demands. The firm filed an official claim, which the county denied, and then sued in 2014 for breach of contract and breach of implied warranty.
Two months later, the county filed a cross complaint saying ARB had failed to follow procedures and inform the county regarding the increased costs.
In March 2013, ARB workers encountered a Chumash burial ground while digging trenches in its construction area. The workers then hand-dug the area to avoid damaging human remains and Chumash artifacts.
ARB likely incurred additional costs, as well, by piping water it removed from trenches to a field in the center of town in order to help replenish the aquifer. The other sewer construction contractor, W.A. Rasic, merely dumped the water it extracted into Morro Bay.
“I hold my supervisor, Bruce Gibson, fully responsible,” said local activist Julie Tacker. “He was warned during construction and did nothing about it.”