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URBANA — Nearly a year after being awarded $2.9 million in a lawsuit over construction issues on Windsor Road, the city of Urbana may have to give up some of those funds.
In October 2023, a Champaign County jury ordered Stark Excavation of Bloomington to pay the city this amount so that the funds could be used to repair a stretch of Windsor between Race Street and Philo Road, which had been built by the company in 2014.
Cracks appeared in the new section of road not long after it opened to traffic in 2015. City officials alleged that Stark had failed to comply with the contract specifications, while the contractor’s counsel argued that the issues were caused by problems with the road design.
Human resources and finance director Elizabeth Hannan said that the city is in talks with the Illinois Department of Transportation and the Federal Highway Administration about whether part of the funds awarded to the city should be returned to the FHWA since the project was partially funded by federal dollars.
City administrator Carol Mitten said that about $2.25 million in federal funding was provided for the project — which had a total cost of about $4.5 million, she estimated — and IDOT is requesting that the city refund approximately $500,000 to the FHWA.
“There was $250,000 for engineering, which they do not dispute,” she said. “Of the $2,000,000 for construction, IDOT (on behalf of FHWA) is disputing a portion of the pay item for pavement.”
“While this issue is being resolved, IDOT has limited the City’s ability to use MFT (Motor Fuel Tax) funds for some new projects that have not already been allocated by the State,” Hannan wrote in a memo to the city council.
However, if the council approves a loan of up to $2 million from the retained risk fund, it would allow the city to pay invoices while staff work with IDOT and the FHWA to resolve the issue, she said.
The Urbana City Council will discuss the proposal at its Committee of the Whole meeting, which is set for 7 p.m. Tuesday due to the holiday Monday.
If the council is supportive, the item will be placed on the agenda for a vote at the next regular meeting.
“As the memo says, we dispute that any of that money should be returned to FHWA, but we need time to work through that conversation,” Mitten said. “Hence the need for the interfund loan.”
According to Hannan, the retained risk fund contains reserves for workers compensation and liability claims.
Once IDOT lifts its restrictions, the MFT fund will be used to repay the retained risk fund. Additionally, no interest will be charged if the loan is fully repaid by June 30, 2025, city officials said.
However, while this solves a short-term issue, Hannan’s report indicated that there may be more problems to address down the line.
“The City received an award that would offset anticipated increased maintenance costs for this section of Windsor Road over several decades, but would not make the City whole,” she said. “If the City is required to return a portion of the funds to the Federal Government, it is possible that other priorities may have to be shifted in the future to provide the higher level of maintenance that will be required for this section of road.”
