County Entering Mediation over Wastewater Treatment Plant

Grand Traverse County is entering mediation over a dispute among firms responsible for designing and building a problematic wastewater treatment plant.

Evaluating the plant's effectiveness for the second time was Prein & Newho of Grand Rapids. After another extensive overview of the county's $7.8 million facility, their final report to the Grand Traverse Board of Public Works was delivered with no change to the first diagnosis.

Prein & Newho reconfirmed that former county attorney Michael Houlihan and the local septage treatment plant designer, Gourdie-Fraser Inc., failed to apply professional care when they overestimated the projected septage volume of the facility.

The overall issue at hand is: the plant takes in about half the septic tank waste volume that producers projected, and the operational costs greatly exceed what was forecasted.

“I think it’s becoming increasingly obvious that there was a lack of professional standards followed,” said a Township Supervisor. “I’m hopeful that we can mediate a fair settlement, and I believe we should be able to.”

The facility experienced a partial shut-down a month after opening in 2005. To add to the problems, the plant has estimated to lose roughly $400,000 this year and about $600,000 in 2011.

Prein & Newhof, along with Grand Traverse county officials met with the wastewater treatment plants designer, Gourdie-Fraser Inc. and The Christman Co., the two organizations that engineered and constructed the facility. The meetings come coupled with mediation to resolve the contract disputes originating from the process.

During the meetings, the responsible designers provided new information to the county, and Prein & Newhof revised its report as result, however not its conclusion.

“We still feel it is grossly inaccurate,” President of Gourdie-Fraser, Joe Elliot said of the new report. “We think they are trying to work backwards and build a foundation for a predetermined solution.”

In addition to the disputes, Grand Traverse County and Gourdie-Fraser/Christman have conflicting views of when the facility was complete under the contract as well as if the plant meets specific capacity requirements.

Elliot noted Gourdie-Fraser Inc. would prefer to avoid consulting with a Nashville mediation lawyer and has yet rule out the possibility of a cash settlement.

“Mediation will burn more money and more legal fees, and we would like to bring it to a resolution without doing that,” Elliot said. “A cash settlement is something we will talk about in the next bit, but right now I would say probably not.”

Prein & Newhof questioned certain decisions made by the designer of wastewater treatment plants in several other areas of the facility. However Elliot said the design process involved five local township supervisors who were responsible for oversight, in addition to Grand Traverse county officials and an outside engineer.

“There was a good design process, and it came up with fairly good conclusions,” Elliot commented. “In hindsight, they probably aren’t perfect, but there always are things you can do better when you look back.”

County officials advocate that the preparation, design and construction of the plant were done correctly and the facility’s problems are due to several of compounding issues, such as the economy. The Supervisor for Garfield County claimed that it is time to drop that stance.

“That reasoning is getting pretty thin,” he said. “The collapse established the thing as a failure, and its only gone downhill from there.”

Septage Plant Investigation Proceeds

Traverse City Record-Eagle

TRAVERSE CITY -- A downstate engineering firm will probe questions surrounding design and construction of Grand Traverse County's troubled septage plant, an effort to determine whether its architects committed professional negligence.

The county's Board of Public Works voted 7 to 1 this week to hire Grand Rapids-based engineering firm Prein & Newhof for up to $19,500 to investigate septage plant design firm Gourdie-Fraser Inc. and project manager Michael Houlihan.

The county's septage treatment fund will foot the bill. The decision to tap that account nipped a possible squabble between county and township officials over who should pay for the probe, a fight that could have delayed an investigation for months.

"I didn't think I'd ever see it happen," said BPW chairman Pat Pahl. "Some people didn't want to see the investigation proceed and sometimes I think they used the money issue to try and stop it."

The plant has been beset by problems virtually since it opened in mid-2005. A wall collapsed a month after it opened and spewed thousands of gallons of septage about the plant grounds. But finances pose the biggest worry for local officials.

The $7.8 million plant was overbuilt because septage flow projection numbers submitted by Gourdie-Fraser turned out to be far overblown. The facility is projected to lose up to $2.4 million over the next five years, and some county officials want to institute an annual $40 tax on all septage tank owners to alleviate financial problems.

The BPW in May voted to conduct an investigation, but action stalled until July, when a divided county board agreed to provide $10,000 to help pay for a probe. Costs beyond that amount were to come from Acme, East Bay, Elmwood, Garfield and Peninsula townships.

Monday's BPW vote, however, allows the investigation to proceed even if the county board decides to pull its contribution.

"It's going to move forward regardless of whether the county flip-flops again and takes its $10,000 back," Pahl said.

County Commissioner Larry Inman said he's fine with the BPW decision.

"Let's just get it done. We need to move this thing forward," Inman said.

Prein & Newhof will determine if engineers at Gourdie-Fraser exercised reasonable care when they over-estimated septage flow. It also will review the actions of Houlihan, BPW's former attorney who resigned this year amid calls for the investigation. Other industry leaders may be called upon for professional opinions, including Michigan's leading septage plant construction company HTI Systems.

The engineering firm will investigate if Houlihan properly supervised Gourdie-Fraser's flow estimates and if he used reasonable professional care when he certified in May 2005 that the plant was substantially completed. That act freed Gourdie-Fraser and construction firm The Christman Company from fines of up to $500,000 for failing to complete the project on time.

The probe is expected to take up to 60 days. If the results indicate professional negligence occurred, the next step could involve litigation against Gourdie-Fraser and/or Houlihan.

Garfield Township Supervisor Chuck Korn said some local officials are concerned about suing Houlihan.

"Houlihan ran the Department of Public Works for years," Korn said. "There are people out there who do not want to get involved in any sort of action that would include Mr. Houlihan because they are afraid he is the great and powerful Oz, and if you look behind the curtain he will destroy you. They really are scared of him."