From Council to Courtroom: Lock Haven Resolves Wastewater Plant Dispute with $5.6M Settlement
By Emily Wright
LOCK HAVEN— At the final Lock Haven City Council meeting for 2024 held on Monday, December 16, Mayor Joel Long introduced Resolution No. 2024-34 regarding a mediated settlement agreement in the case of the City of Lock Haven v. Larson Design Group Inc.
City Manager Greg Wilson explained that in 2018, the city commenced a lawsuit against Larson Design Group in the Clinton County Court of Common Pleas. The parties have now entered into a Memorandum Of Understanding and Settlement Agreement that will resolve, settle, and conclude with absolute finality all claims and matters between the parties.
“This resolution authorizes the mayor and city manager to execute a full and final release and settlement agreement consistent with the terms of the settlement Memorandum Of Understanding, with the amount of $5,585,000 due to the city from the defendants,” Wilson reported during Monday night’s meeting.
To provide context, the City of Lock Haven initially filed the lawsuit in March 2018 for $13 million against Larson Design Group Inc. and O’Brien & Gere Engineers, Inc., the design firms responsible for designing the city’s $32 million wastewater treatment plant, which began operations in 2014.
The city alleged that there were significant shortcomings in the upgrades and construction of the wastewater treatment plant, which were attributed to design failures by Larson Design Group Inc., O’Brien & Gere Engineers, and Layne Christensen Company. The city also claimed that due to inadequate design, the plant had not functioned properly since its inception.
Initially budgeted at $22.5 million, costs soared to $32 million. The city accused Larson of failing to conduct necessary due diligence, using a “bait and switch” tactic by not involving the promised expert, Dr. Sami Nasr, and neglecting proper training and inspection services. Some of the issues that were identified included inadequate data collection, equipment malfunctions, and improperly wired backup generators.
After a year passed with unsuccessful mediation, the city filed the complaint with a request for a jury trial to address the plant’s persistent operational, maintenance, and compliance challenges that impact city taxpayers. The firms faced several charges, a few of which included professional negligence, breach of contract, and fraudulent misrepresentation.
On a motion made by council member Steve Stevenson, which was seconded by council member Barbara Masorti and carried unanimously, the resolution to adopt the settlement amount of $5,585,000 passed.
