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Milwaukee, Terra close in on settlement

By Sean Ryan

Terra Engineering & Construction Corp. will receive $20,000 from the city of Milwaukee in a proposed settlement of a lawsuit over a botched dam-repair project.

The $20,000 settlement, if approved by the city, would resolve almost four years of legal fights that center around a 1997 to 1998 project to remove a portion of the North Avenue Dam over the Milwaukee River.

According to court documents, the city hired Terra to build a concrete liner on the riverbed and lay down riprap. The project, designed by Camp Dresser & McKee Inc., Cambridge, Mass., was intended to prevent the dam removal from stirring up sediment and polluting the river downstream, according to the documents.

But floods in 1998 ripped out the riprap and disturbed some of the fabric the contractor installed on the river bottom, according to court documents Terra was called back by the city in 2000 to place more riprap, but the city did not pay the contractor for the $731,700 repair project, according to court documents.

The city also did not return to Terra $125,500 in retainage payments on the repair work, according to court documents, and, in February 2006, sued the company and Camp Dresser & McKee in Milwaukee County Circuit Court for breach of contract.

Terra’s insurer, CNA Insurance Co., Chicago, paid the city $200,000 in 2008 to settle the lawsuit. But the two parties still have not resolved a claim Terra and its insurer filed against Milwaukee to recover the retainage on the contract.

Terra claimed the city had no right to keep the money because the problems with the sediment project stemmed from Camp Dresser’s design, not Terra’s construction work, according to court documents.

The $20,000 settlement would resolve the remaining disputes between the city and Terra over the retainage.

Terra CEO Scott Zimmerman, who was unavailable for comment, signed the settlement Dec. 21.

The city’s Judiciary and Legislation Committee is to consider approving the settlement in closed session Monday. The settlement will become official if it is approved by the full Common Council on Jan. 20 and by the mayor.

Milwaukee city attorney Miriam Horwitz said she cannot comment on the case because it will be discussed in closed session by the Common Council.

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