Sacramento reaches record settlement over water meters

The City of Sacramento has reached its most significant settlement in the city's history of $13.4 million to settle its three-year lawsuit against Teichert Construction Company and others, according to a news release. 

The lawsuit alleges non-compliant work and fraudulent billing on the Accelerated Water Program. 

The Accelerated Water Program is a state requirement that all homes and businesses have water meters by 2025. 

As part of its $62 million contract with the city, Teichert Construction was hired to install approximately 13,000 water meters in the South Land Park, Tradewinds, North Sacramento, Meadowview, Golf Course Terrace, and Lemon Hill neighborhoods.

City Attorney Susana Alcala Wood said in a press release last week that Sacramento residents won’t be deprived of materials and services they paid for. 

“The meters accurately track water use, but the longevity and durability of the infrastructure supporting them remains in question,” Alcala Wood said. “This settlement protects ratepayers by providing funds to offset replacement and repair costs, which will come sooner than intended.”

The City of Sacramento filed a lawsuit against Teichert Construction in April 2022, stating that the company used improper construction materials and methods that did not meet contract specifications. 

According to the news release, there was a city investigation into Teichert’s work on the Accelerated Water Meter Program where they found the company refused to correct its defective work and honor its warranties. 

The city found an abundance of non-compliant work including not installing special equipment that holds meters in place and using plastic pipes instead of copper. 

Teichert Construction filed a counter suit in May 2022, alleging that the city’s mismanagement was to blame. It also alleged that Teichert was still owed more than $2.4 million under contracts with the city for the program.

A tentative settlement of the counter suit was reached in July of last year where the city agreed to pay Teichert $2.3 million that was owed for work on the water-meter project. 

The city’s settlement has Teichert Construction Company paying $7.5 million and the city’s construction managers, Psomas and TRC Companies, paid $5.9 million. 

Psomas and TRC participated in the settlement based on the city’s claims that the construction companies also contributed to the damages. 

Teichert’s Spokesperson Clark Hulbert said in an email statement that Teichert stands behind the quality of work on the water meter projects.

“The meters are functioning properly and, as the evidence in the litigation has shown, the City’s authorized inspectors were signing off on that work on a daily basis,” Hulbert wrote. “Our decision to settle this matter has nothing to do with the merits of the case. 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.”