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UICN settles Blagg Road case

Nye County commissioners are set to approve a $4.5 million settlement agreement with Utilities Inc. of Central Nevada Tuesday to settle the Blagg Road court case.

Portions of Blagg Road collapsed due to sinkholes after heavy rain in December 2010, where UICN had hired a contractor, Spirit Underground, to construct sewer lines to the new federal detention center built by Corrections Corporation of America. UICN lift stations sank during the subsequent flooding. Traffic was detoured around Blagg Road between Basin and Mesquite avenues from December 2010 until repairs were completed in April 2012.

After paying $125,000 to consultants, Nye County finally filed suit in December 2012 naming UICN, CCA, Spirit Underground, construction manager Nigro Construction, engineers WLB Group, Ninyo and Moore Geotechnical Consultants as well as a company hired by Nye County to do quality assurance inspections, Viking Constructions Services Inc. Engineering firm Atkins North America Inc. was also a defendant.

UICN and CCA formed a joint venture in October 2009 to extend 3,700 feet of water and sewer line along portions of Blagg Road and Mesquite Avenue to the detention center. The county lawsuit claimed the defendants were responsible for ensuring soil compactions were performed properly.

Commissioners in August 2011 authorized up to $4 million to repair Blagg Road from the Payment Equal to Taxes received from the Yucca Mountain project, to be recouped in court. UICN ran a video through the lines and reported to the Nevada Division of Environmental Protection 3,000 feet of line may have to be replaced.

Pezonella Associates Inc., the firm hired by the county to investigate the Blagg Road failures, said use of native earth materials as backfill didn’t meet specifications. Inadequate placement and compaction of the trench backfill by the contractor as well as inadequate quality control testing of backfill when water was introduced were all cited as reasons for the sinkholes.

“The sinkholes in the Blagg Road area and related damages were caused by UICN, CCA and the employees or persons under their retention, direction and/or control to perform work on the project including but not limited to their retained contractors,” the county suit states.

District Attorney Brian Kunzi said he was pleased by the settlement offer.

“I am very pleased and relieved we were able to negotiate a settlement as quickly as we did. Our attorneys, Beko and Brent Ryman with Erickson Thorpe and Swainston, did a great job representing us and put us in a position to be able to get this matter resolved. Our total costs for the construction and litigation was approximately $4.2 million. The amount of the settlement covers all of our hard costs and compensates us for future losses we may have, which have been difficult to estimate,” Kunzi said Thursday via email.

“Rarely do negotiations result in such a large and favorable settlement without spending many more years in litigation or without a trial. Great thanks also needs to be extended to Pezzonella and Associates, who performed all the geo-technical analysis and provided expert assistance during the reconstruction process. We would not be in this position but for the cooperation and efforts of Dave Fanning and his public works staff. Our efforts were coordinated and thorough from day one without which we would not have had the ammunition to support our claims,” he said.

Commissioner Butch Borasky said the settlement is a win for taxpayers.

“I never had any doubt in my mind we could collect this money, now that we have it we can put it back where it belongs, the taxpayer doesn’t have to pay anything,” he said. “They won’t have to pay for incompetence by contractors that did a horrible job.”

Fifth District Judge Kimberly Wanker denied a motion for a change of venue by UICN to move the case to Clark County in February 2013. The case went to mediation last October, after parties weren’t able to reach a resolution in a meeting before a judge in March 2013. A special master was appointed in May 2013 for the county’s case and two companion Clark County cases in which UICN sued Spirit Construction and Ninyo and Moore.

“Obviously we’re very pleased to have this resolved at this point, had it continued it wouldn’t have been good for the county, it wouldn’t have been good for us. We’re pleased we were able to cooperate and get it closed,” said UICN spokesman Tom Oakley.

“We think that it’s good that we were insured properly and that our contractor was, not everybody in this whole action was covered properly the way they should have been so we were pleased to get this all behind us,” he said.

The company isn’t admitting fault to anything in the agreement, Oakley said. The cooperation during mediation saves UICN the time and expense of a legal case, he said, allowing UICN to focus on providing safe and reliable water and sewer service.

Oakley said his company wouldn’t have to recover the cost of the settlement through a future rate case.

“The payments going to the county are coming from our insurer,” he said. “The settlement provides a payment to us for damage to our lift stations as well.”

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