T’bonne’s permit woes have $77,000 price tag

Drainage improvement around Terrebonne Parish has a high priority matched with a high price tag – but council officials worry about who will ultimately pay the cost.

Coastal Dredging Company, Inc., the contractor hired for the Bayou Terrebonne Flood Control Improvements Project, stopped working as a result of a permitting issue.

“When they started the excavation area. … We found out we had a permit violation, so work had to be stopped and we had to go back to the corps and have the permit modified,” said Greg Bush of Terrebonne’s Public Works.

The U.S. Army Corps of Engineers originally revoked a permit on the land, claiming that part of the land in question, located between La. Highway 24 and Coteau Road, was wetland area.

“Shaw Coastal was tasked to acquire the corps’ permit for this project,” James Geihsler, project engineer for Shaw Coastal, told the council last Monday. “This property is a cow pasture-type of property, and a little piece at the corner was wetlands. The contractor was already on the site digging ditches and creating a levee system, and the corps came in and stopped the work after they issued a permit. So, it comes down to what type of permit was needed.”

Because of the halt on work, Tommy Kilbride, president of Coastal Dredging Company, has asked for an extension of 172 days and $77, 271.57 in additional payment.

But a letter signed by Kilbride from Shaw Coastal’s Project Manager Hilary Thibodeaux states, “By signing this letter and accompanying change order, you agree to remove, fully and completely waive your request for additional costs related to the ‘Additional Cost Associated with C&D’ and ‘Project Suspension Time’ as indicated in your previous correspondence.”

Kilbride explained that “C&D” had to do with original permits revoked by the corps, and the “additional costs” being waived amounted to approximately $200,000, which he originally requested.

“[Coastal Dredging] requested quite a bit of money in May 2010,” Geihsler said. “For all sorts of items that we felt were inappropriate … [Kilbride] agreed to waive his original request for $276,000, and only settle on $77,000.”

According to Kilbride, the $77,000 constitutes the cost of having equipment remaining idle from the time of the initial permit suspension in March, until the new permits were implemented in May. He said the permit was revoked because wetlands delineation was not performed around the area where Coastal Dredging was pumping the dirt out of the bayou.

Geihsler told council the $77,000 negotiation was in the best interest of the parish.

“We had two routes to take, either we shut the project down and re-bid and start up again in the future while we resolve the dispute with the corps, or we could continue with the project and negotiate a reasonable suspension cost with the contractor and then move forward,” Geihsler said. “The second option was chosen in the best interest in the parish in order to maintain and improve drainage.”

But Terrebonne Councilman Johnny Pizzolatto said he had no knowledge or written documentation of the original request for $276,000, which was negotiated down by members of Shaw Coastal and the parish, according to Bush.

Pizzolatto, along with other members of the council said they did not want to see the parish pay for someone else’s mistake.

“You’re paid to get this done and to know what’s out there and get it done right,” Councilman Kevin Voisin told Geihsler. “You didn’t get tasked to do it, you got paid to acquire the permits and handle all of that. You have a great company you’ve done great work in the past in my experience. If it’s the corps, let’s bill the corps for this.”

Councilwoman Teri Cavalier questioned Shaw Coastal’s liability in the mistake, stating that as a professional business, they should have insurance.

“Our people should not be paying for that mistake, your company pays for that mistake, because my company would have to pay for that mistake,” she said.

Also noting the contractor has been doing work on this project in good faith, Parish President Michel Claudet said Coastal Dredging should not be punished.

“[Coastal Dredging] is not at fault, we know that, and whether it’s the corps, the parish, or potentially another party … there should be no reason why this change order is not paid, and we will come back to this council to discuss the resolution of that $77,000 amount,” Claudet said.

Cavalier agreed, stating the contractor has workers that deserve to be paid.

“I have no problem paying someone for what they earned,” she said.

Claudet said the parish requested withholding an equal amount out of the fees paid to Shaw until the issue has been resolved.

“Until such time as the true responsibility is designated for this delay, [Shaw has] been gracious in allowing us to do this. This is something that’s obviously a dispute, and in order to put the change order on the agenda, we asked Shaw to withhold an equal amount. We’re still looking at the corps as to whether or not it was an unavoidable problem,” Claudet said.

In the meantime, the parish council asked Shaw to provide more information regarding the permit violation at the next council meeting.