Scott County water district terminates contract, no substantial delay expected

BENTON, Mo. -- Public Water Supply District of Scott County No. 4 has terminated the contract with the company hired to lay the water district's pipes.

The water district awarded the contract to install its water distribution system to Municipal Construction Inc. of Goodrich, Mich., in 2009.

"Several months ago, the contractor ceased substantial performance under the contract, and the district notified Municipal of its default under that contract, which Municipal failed to cure, or develop a plan to cure, in accordance with the contract," said Jim Hux, attorney for the water district. "As a result, the district, regrettably, had to notify Municipal Construction Inc. and its bonding company that it was terminating Municipal Construction Inc.'s contract."

The water district's board of directors voted May 20 to notify Municipal that it was terminating the contract, according to Phil Lyon, president of the water district's board of directors.

Because the contract included a performance bond, water district officials have also notified the bonding company of Municipal's default and the contract termination.

"It's their responsibility to see that the job is completed. They'll probably bid it out, but for them it's not required," Lyon said.

The bonding company is currently investigating the district's claim and is exploring options for completing the contract, according to Hux. Hux said water district officials expect work to continue in the near future, and that "there will be no substantial delay in the scheduled completion of the contract."

Contractors for the district's elevated storage tank and water treatment plant are nearing completion on their work but Hux said there were issues with Municipal's performance under its contract.

"The district was informed by the Missouri Department of Labor that a dispute had arisen between the Department of Labor and Municipal Construction Inc., which we have been informed by the [Department of Labor] relates to the payment of prevailing wages and the payment of overtime pay," Hux said. "As a result of that dispute, the [Department of Labor] has asserted a claim against Municipal for certain wages and statutory penalties. We have also been advised that criminal charges were filed against certain principals of the company."

According to the Scott County Prosecuting Attorney's office, two of the company's officials are scheduled to appear before Scott T. Horman, associate judge for the Circuit Court Division 5, at 1 p.m. Wednesday.

Norman Bass, the company's president, is charged with five felony counts of forgery and six Missouri Prevailing Wage law violations.

The project superintendent for Municipal Construction, Thomas LaCosse, 61, of Southlake, Texas, is facing six misdemeanor counts of violating the Missouri Prevailing Wage laws.

Regarding complaints from area residents and public officials about damage done by Municipal Construction to yards and roads, "we've been working with our lender to take care of as many of those as possible," Lyon said. "We've cleared up a lot of them and as we get new issues we try to care of them."

Now that the bonding company is involved, "we have to work with them in resolving those," he said.