MONTICELLO -- A company hired by Monticello officials to install new city water meters and perform other upgrades to the water system is suing the municipality for breach of contract.
In its suit against the city, Siemens Industries officials are asking for approval to complete the "water line aspect of the contract or, in the alternative, a judgment awarding Siemens damages, including lost profits for the city's breach of contract arising from the city's refusal to allow Siemens to perform the water line aspect of the contract."
The city paid Siemens $7 million as part of a contract last year, which included replacing outdated water lines. Monticello Mayor Zack Tucker said the work was never completed, and the city had multiple problems with the work Siemens was performing in his city.
Additionally, about 4,000 new water meters purchased by Siemens for the city were supposed to be manufactured by a specific company but were instead made by another, the mayor said, adding that many of them were faulty and gave inaccurate readings.
City officials said they were told by Siemens representatives that the reason the agreed-upon meters weren't installed was because they were incompatible with the type of software the company was installing at the city's water-management office.
Tucker and other Monticello officials said they were never told about the change in brands, and the brand used by Siemens was an "inferior product," according to court documents.
In an emailed statement on behalf of Siemens, spokesman Amanda Naiman said the company "has acted in good faith to complete our contracted project with the City of Monticello. We have reached an impasse in our contract dispute, and have filed suit in the U.S. District Court to bring resolution to the matter. We will provide no further comment as we navigate the litigation process."
The meters installed by Siemens have had a failure rate of about 40 percent so far, city officials have said, calling that rate unacceptable. Problems include inaccurate water-usage measurements and customer billing errors.
In addition, the contract included repairing and replacing waterlines beneath the city, but that work has been shoddy and incomplete, Tucker said.
The city and Siemens entered into mediation late last month after city officials asked to be released from the contract to find another company to perform the work, said Monticello attorney Cliff Gibson, who was hired by the city to handle the case.
The mediation -- which city officials also hoped would allow for the return of some of the money it paid to Siemens -- failed. Siemens immediately filed suit against the city.
The Monticello City Council has approved filing a countersuit against Siemens, but as of Wednesday afternoon, it had not been filed.
Gibson said the city erred when it paid Siemens the $7 million before the company completed the job, adding that it happened "out of mass confusion" after then-Mayor Allen Maxwell died. In all, $10 million was allocated for the water project through a bond initiative.
Around Monticello, some residents are concerned that millions of their tax dollars could be in jeopardy while their water system is still in need of repairs.
Rhonda Jenkins said she has been attending City Council meetings to learn the latest about the issue and hopes for a quick resolution.
"We are a small town, and we don't have a lot of money," Jenkins said. "And this money was supposed to be used to upgrade our water system. That's a vital part of our community. I pray for all this to get settled soon."
State Desk on 05/14/2015