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The city of Lebanon is prepared to move forward with a lawsuit against the engineering firm CH2M Hill and its parent company, the Jacobs Engineering Group.

The city made the decision following an executive session held on Wednesday, March 20 at the Santiam Travel Station. After the executive session, Councilor Rebecca Grizzle made a motion to authorize the suit, if necessary. The motion received unanimous approval from the council.

City officials referred all questions about the action to Portland attorney Kerry Shepherd.

In a phone interview, Shepherd outlined the events which led to Wednesday's decision, but he emphasized that the city is still hoping that mediation will be successful.

Shepherd said that in August of 2018, the city of Lebanon and CH2M Hill agreed to enter into a dispute resolution process. The date of March 22, 2019, was set for a mediation session.

A mediator was selected and representatives on both sides were preparing for the session. But less than a week prior to the date, CH2M Hill called and requested a postponement.

"That was disconcerting," Shepherd said. 

In response to the request for postponement, the city scheduled last week's executive session. 

Shepherd said that after subsequent talks with CH2M Hill, it was agreed that mediation would be completed by the end of August.

"If for any reason it (the city) believes somebody is not acting in good faith, we can terminate it and move forward with the judicial process," Shepherd said.

The basis of the dispute goes back to 2007. At that time, CH2M HIll recommended to the city that it spend over $4 million on a a technology for its wastewater treatment plant.

This technology, called mechanical process, was said to offer many advantages over conventional treatment plants, including reduced capital expenditures and lower ongoing operational costs. The system would produce these results by reducing the amount of solid waste.

The city purchased this technology but has found its performance did not live up to expectations.

"It turns out that mechanical process at the time had not really been validated in the industry. It was more of a science experiment," Shepherd said. "They told us it was a proven, validated technology. Across the country it's been borne out that it's a failed technology."

The cities of Albany and Millersburg filed a lawsuit against CH2M Hill regarding this same technology in late 2017. That suit is still working its way through the system.

Shepherd, an attorney with the firm of Markowitz Herbold, is representing Albany and Millersburg in that suit.

Shepherd declined to state what the city feels is fair compensation in this matter, saying that he does not wish to negotiate in public. 


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