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Jun 04, 2023

City being sued by wastewater expansion firm

The City of Fremont is being sued in Dodge County Court by a Michigan-based

The City of Fremont is being sued in Dodge County Court by a Michigan-based construction company, which alleges that the city breached a 2018 contract related to a construction contract for the expansion of the city's Wastewater Treatment Plant.

This 2018 map illustrates where the newly-purchased 40-acre plot of land being used to house industrial lagoons is located in proximity to the Wastewater Treatment Facility.

A view of the Fremont Wastewater Treatment Facility. The Fremont City Council was briefed on the lawsuit during a closed executive session of the council at the end of the May 30 council meeting. The discussion was not on the original council agenda, and was added during the meeting via an announcement made by Mayor Joey Spellerberg.

The City of Fremont is being sued in Dodge County Court by a Michigan-based construction company, which alleges that the city breached a 2018 contract related to a construction contract for the expansion of the city's Wastewater Treatment Plant.

Weiss Construction Co., LLC, of Michigan, is seeking more than $6.5 million in assorted damages in the lawsuit, according to court documents filed in Dodge County Court on May 15. The company was hired in May 2018 to lead an expansion project of the city's wastewater treatment facility in anticipation of the increased wastewater flows into the facility and at the time, new requirements regarding ammonia levels.

The new "lagoons" where wastewater is stored to be treated were completed in 2020, according to a Fremont Tribune article from September 2020. Three new lagoons were designed to take in waste from Lincoln Premium Poultry and WholeStone Farms.

The expansion of the city's wastewater treatment plant was not solely due to the two slaughterhouses, but was also needed, according to the plant's superintendent, Keith Kontor, due to new U.S. Environmental Protection Agency requirements on ammonia limits.

Construction on the lagoons started in May 2018, but was paused after plans for Costco and Lincoln Premium Poultry to bring a processing plant to Fremont became more realized. City officials recognized the need for pretreatment for the industrial areas in town, including WholeStone Farms, and decided to upsize it to fit the new facility. The flooding of spring 2019 and the COVID-19 pandemic also led to hiccups in the project.

Weiss Construction, which also goes by the name Public Works Constructors, had done previous similar projects in the Detroit region.

The Fremont City Council was briefed on the lawsuit during a closed executive session of the council at the end of the May 30 council meeting. The discussion was not on the original council agenda, and was added during the meeting via an announcement made by Mayor Joey Spellerberg.

On May 31, Fremont City Attorney Travis Jacott declined to comment on the lawsuit, noting the litigation was pending.

Attempts to contact the law firm representing Weiss Construction — Woods Aitken LLP, of Lincoln — have been unsuccessful.

The lawsuit stems from an April 2018 contract approved by the Fremont City Council for $14.9 million, of which $10 million was going to be funded by, "industries that flow to the lagoons," stated Troy Schaben, then assistant city administrator for utilities.

"Anaerobic Lagoons and Gas Conditioning System are part of the upgrades to the wastewater treatment plant. Anaerobic Lagoons will help treat high loading effluent and can also be used to equalize wastewater flow," Schaben wrote in a staff report to the city council in 2018. "Gas conditioning system will capture methane from WWTP operations and convert it to natural gas which will be injected in the City's natural gas system. $10 million of the cost will be paid by industries that flow to the lagoons."

As part of the contract agreement, Weiss Construction would work in conjunction with a second company subcontractor chosen by the city to do some of the project's more specific construction elements. That firm — DMT Clear Gas Solutions, LLC. — was expected to do work valued within the overall contract at $2.5 million.

In 2018, Kontor included a letter to the city council during the discussion of the contract bid award in which he expressed concern about the two firms and their being new to the state.

"It should be noted that the contractor, Weiss is new to Nebraska and the major equipment supplier, DMT is emerging in the US marketplace. This could result in additional effort being expended by the City in executing the project and additional Engineering time related to coordination of the work," Kontor wrote. "HDR advises that the City be prepared for potential additional costs to account for modifications; anticipating that change orders may be more aggressively pursued given the bidding prices that were well below estimates and the level of familiarity both HDR and the City have with these two entities."

In the lawsuit from Weiss Construction, attorneys claim that Weiss officials, "did not select" DMT as a partner and that after their company was awarded the project, "DMT could not or would not complete the required scope of work, would not complete the work in a good and workmanlike manner, would not complete the work within budget, and would not complete the work on time."

Attorneys for Weiss claim that officials from the Michigan construction firm repeatedly informed officials at the City of Fremont of the alleged lack of progress and "foregoing failures" of the firm DMT. Those failures, they claim, led to delays to the project progress as well as Weiss doing the work that had been tasked to DMT, "at a great and unanticipated expense" to their firm.

Also detailed in the lawsuit are several pages of claims regarding the impact of the spring 2019 flooding on the project; as well as the, "delays and impact caused by COVID-19." The firm's lawyers also claim city officials directed Weiss to do additional construction on the project which was not covered in the original contract nor the costs of which were ever paid to the company.

The lawsuit cites three claims for relief, with attorneys alleging the City of Fremont breached the contract with the company; that the city benefitted from unjust enrichment; and that the city allegedly violated the Nebraska Construction Prompt Pay Act.

There is no court date set yet for the lawsuit, but attorneys for Weiss Construction state in the lawsuit that they are willing to enter into arbitration with the city in regard to the claims.

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