|Prescott proposes settlement of claim|
PRESCOTT – In an effort to avoid costly litigation, the City of Prescott is considering a $303,594 settlement payment to A. Miner Contracting, Inc. for the recent airport runway improvement project.
The Prescott City Council will consider the settlement agreement at its voting session at 3 p.m. Tuesday, at Prescott City Hall, 201 S. Cortez St.
The settlement pertains to the project the city undertook in spring 2012 to relocate a portion of the airport runway to improve safety.
The bulk of the money for the project came from grants from the Federal Aviation Administration (FAA).
City Manager Craig McConnell explained that the FAA was responsible to cover 95 percent of the cost of the project, while the Arizona Department of Transportation‘s Aeronautical Division covered 2.5 percent, and the city was responsible for the remaining 2.5 percent.
McConnell said that breakdown also would apply to most of the settlement costs.
“The final reconciliation has been sent to both the Arizona Department of Transportation Aeronautical Division and the FAA,” McConnell said. “We have written approval of all expenses except for a minor amount of settlement of one of the claims.”
In addition to the city’s 2.5-percent obligation, the agreement requires Prescott to pay $5,394, McConnell said, which would not be reimbursable.
Settling the claim is preferable to expensive litigation, according to the city.
The memo stated, “If liquidated damages are assessed, the city will not retain this amount since the city’s project financial participation is only 2.5 percent. However, if the contractor’s claim is litigated, the associated costs would be borne solely by the city.”
The memo added: “Accordingly, it is in the best interests of the city to seek a reasonable settlement.”
The city initially awarded the contract to A. Miner for $7.9 million. The final contract amount will be about $8.2 million, according to the city memo.
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