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August 17, 2013

Dispute over sand getting costly

TRAVERSE CITY — A dispute over how much sand was needed to repair city roads could cost Traverse City up to $25,000 in legal fees to resolve a half-million dollar dispute with Elmer’s Crane and Dozer over summer road projects.

The city commission authorized city attorney Lauren Trible-Laught to hire specialized outside legal assistance in an arbitration hearing to resolve the contract dispute. Mayor Michael Estes said the city doesn’t have a firm number, but at one point Elmer’s requested about $500,000 over the $836,000 contract to replace sewer and water lines and reconstruct roads at the base of Old Mission Peninsula.

“Initially, it was a little over $100,000 ... so the numbers have really jumped all over the page,” Estes said. “It’s a substantial amount of money and sand.”

Elmer’s officials contend soil conditions were not as advertised in the request for bids; city officials disagree, and note that soil borings done by the city were available to Elmer’s. Both sides agree additional work was needed and the city authorized work to complete the project. The dispute arises over the price of the extra work.

The contract was bid on a unit-price basis, City Manager Jered Ottenwess said, so each task has a price attached to it. But soil conditions altered how the tasks were performed, and the city and contractor don’t appear to agree on either the amount of additional work or the costs that should be included in it.

Ottenwess declined to provide the exact contested amounts.

“It depends on who you ask and how you calculate the costs involved,” he said. “It’s a pretty wide difference. The city believes it’s the smaller amount.”

The city commission will discuss the issue Monday in closed session when it meets at 7 p.m. in the Governmental Center. Ottenwess said at that time he expects to release a public statement with details that he said will better define the situation for the public.

“Arbitration is very similar to litigation and I don’t want to make comments that would jeopardize the city’s ability to arbitrate a resolution,” Ottenwess said.

Elmer’s spokeswoman Tanya Wildfong said in a prepared release the company has a good working relationship with the city. She said there were unforeseen conditions and arbitration is the process stipulated in the contract to effectively resolve those conditions and financial issues.

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