The Port of Ridgefield has agreed to pay Dixon Marine Services $450,000 to settle a lawsuit over extra costs the company incurred while dredging Lake River.
Port commissioners approved the settlement agreement on Wednesday at their regular meeting.
Dixon completed the project but with cost overruns.
“The question was, ‘Were those cost overruns in or out of the contract?’ ” Port of Ridgefield CEO Brent Grening said.
Grening said a settlement was worked out through mediation with the company. It will be paid with funds from a state cleanup grant and not from the port’s operating budget.
The contractor claimed the port didn’t meet increased costs for work performed in 2014 on a Lake River “sediment remedy project” connected to the cleanup work of the Pacific Wood Treating site.
Pacific Wood Treating held a 24-acre waterfront property for 30 years but went bankrupt and vacated in 1993. The company had used numerous chemicals to pressure treat railroad ties and telephone poles. It left large quantities of toxins — including arsenic, chromium and pentachlorophenol — in the soil and water.
“They tapped out and they left us with the cleanup to do,” Grening said.
In March, Dixon filed a lawsuit against the Port seeking $2.7 million in damages. In court filings, Dixon claimed heavy rain and ensuing stormwater flows, as well as negligence by the port, changed how Dixon handled water treatment and dredge materials, that, in turn, caused costs to increase.
The company sought a “principal sum” of $1.7 million and damages and costs of $1 million.
Dixon did not respond to requests for comment before press time.