Keokuk will pay a construction firm tens of thousands of dollars more than anticipated to officially complete an infrastructure project. The city said that is one of the terms of a settlement reached to avoid a legal battle.
The city hired Shipley Contracting (from Burlington) in 2013 to perform sewer work along Grand Avenue.
The city said it withheld $170,000 in payments to the company because the project was not completed on time and the work cost more than anticipated.
City Administrator Cole O’Donnell, who was not working for the city at that time, said Shipley threatened legal action against the city to recoup the money. He said that’s why the two sides negotiated a settlement.
Per the settlement, the city must pay Shipley the original $170,000 that was withheld plus an extra $80,000.
“If we were to go to court on this, we calculated we would spend at least $80,000, if not more, on depositions, lawyer fees, and so on and so forth with no guarantee of what the settlement would be,” said O’Donnell.
The settlement, which has received approval from the city council, also requires the city to accept the Grand Avenue sewer project as complete. The city said it will pay Shipley using money from the road use tax fund.
