Sacramento receives millions in record lawsuit settlement with construction company
Sacramento received the largest settlement in city history, culminating a nearly three-year legal battle about water meters, according to a city news release on Thursday.
Under the settlement, the city will receive $13.4 million. The Sacramento-based Teichert Construction paid $7.5 million and the city’s construction managers, Psomas and TRC Companies, Inc., paid $5.9 million.
The city filed the Sacramento Superior Court lawsuit against Teichert Construction in April 2022 and argued the construction company used improper materials, its work did not meet contract specifications and billing included work and labor not used. Teichert Construction was hired to install about 13,000 water meters to comply with a state law requiring all urban homes and businesses to have metered waters by 2025.
Both the city and the construction company said the water meters function properly and won’t affect bills for property owners. The disagreement centers around the longevity and durability of the installation, with the city saying it will face excessive costs for replacement or repair sooner than intended.
“Sacramentans won’t be deprived of materials and services they paid for,” City Attorney Susana Alcala Wood said in the city news release. “The meters accurately track water use, but the longevity and durability of the infrastructure supporting them remains in question. This settlement protects ratepayers by providing funds to offset replacement and repair costs, which will come sooner than intended.”
In May 2022, Teichert Construction filed a counterclaim alleging the city owed the company more than $2 million.
A tentative settlement was reached last July between both parties. Teichert Construction spokesman Clark Hulbert said the city has agreed to pay the company $2.3 million.
Through an email statement, he said Teichert Construction stands behind the “quality of its work” on the water meter projects.
“Our decision to settle this matter has nothing to do with the merits of the case,” Hulbert wrote. “We elected to settle for a fraction of the city’s claim to avoid the time, costs and distraction of further litigation. This lawsuit has been a complete waste of taxpayer resources.”
The City Attorney’s Office said it is working with residents of the impacted areas — South Land Park, Tradewinds, North Sacramento, Meadowview, Golf Course Terrace and Lemon Hill neighborhoods — to fix the non-compliant installations.
Residents can call 3-1-1 or email 311@cityofsacramento.org if they have any questions or concerns about their water meters.
