“My (arbitrator’s) conclusion is that the city and Mr. Wallace have engaged in what I’m going to call a rope-a-dope approach to this case, to this contract, to this litigation without any real effort to provide meaningful factual or legal defenses” (page 28 lines 4-9)
A $1.8 million dollar sewer project turned into a massive loss for taxpayers when the engineer for the city, Kyle Wallace with Shows, Dearmon, and Waites, breached the contract, according to the findings of an arbitrator. (page 17 lines 20-23) The ruling was upheld in Circuit Court. Wallace and his firm are top campaign contributors to Mayor Johnny Dupree.
According to the findings, Kyle Wallace, the city’s agent for the project breached the contract in a number of ways. The arbitrator found the following with regard to Shows, Dearmon, and Waits’ engineer, Kyle Wallace.
- Wallace failed to disclose Creosote contamination at two different job site locations causing delays (page 9 line 25 – page 10 line 1 through 16)
- Wallace failed to disclose an old abandoned sewer line and manhole which delayed the project four weeks to remove.(page 9 line 25 – page 10 lines 1 through 16)
- Wallace failed to show on the engineering plans an old eight inch water line which broke and flooded the excavation on Timothy Lane, resulting in a cave in of the project (page 11 lines 20-25 and page 12 lines 1-12)
- Wallace failed to give direction to the plaintiff to deal with the cave-in issues (Page 17 lines 13-17)
- Wallace failed to respond to request two change work orders submitted by the contractor to correct these situations. (page 18 lines 9-25)
- Wallace failed to identify an old site location of a previous trailer park located in the path of the sewer project, which required a deviation around the trailer park causing additional delays.
- Wallace made multiple inconsistent statements and statements which were not credible.(page 17 lines 6-12), (page 27 lines 10-15)
- Wallace, as the owner’s representative, authorized change work orders without council approval, then held those change work orders “out of convenience” in violation of the contract terms and failed to respond to the contractor’s request for payment. The Arbitrator determined this to be a “breach of contract.” (page 20 lines 4-16), (page 21 lines 6-25), (page 22 lines 1-4), (page 28 lines 11-25), and (page 29 lines 1-2)
“I find Mr. Wallace’s actions on this project to be questionable. I find some of his testimony to lack credibility.”
“They (change orders) were submitted to the engineer but there was no response and it’s not disputed there was no response.”
It was the city who had the responsibility under the contract to
“make the necessary arrangements for easements, rights-of-way, and other such issues before issuing a notice to proceed” and that “the city failed to do so in violation of that section.” 6.3(a)
The arbitrator also determined that the contractor had to
“de-mobilize and re-mobilize five times to meet the changing work conditions, all against a backdrop of a contract where the days were ticking down towards the 350 day limit.” (page 11 line 3-10)
The arbitrator also stated,
“I find that there would not be a reasonable way for a contractor exercising reasonable diligence to become aware of the condition before the project began.” (page 15 lines 1-4)
What is so troubling about these losses is Mayor Dupree has no plans to go after his top political contributors Shows, Dearmon, and Waits’ bond to recover the taxpayer’s losses. No one on city council has pushed the issue.
Concerned citizens can call 601-545-4500 and ask to speak to the mayor. Demand that he go after the bond of the engineering firm to recover our money. Also, citizens can email the council at [email protected] and demand their action.
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Below is the arbitrators report.