Wichita quietly waived up to $5 million in late fees for water plant delays

The Wichita City Council waived up to $5 million in late fees the city could be charging Wichita Water Partners for delays at the city’s $574 million water plant, an Eagle investigation has found.

And city staff didn’t tell the public or council members about the late-fee contract change when it was approved.

The Wichita Water Works plant is the largest capital project in the city’s history. The council awarded Wichita Water Partners, a joint venture between Burns & McDonnell and Alberici, a design-build contract for the plant in 2019 after former Mayor Jeff Longwell steered the contract to them. The project is more than a year behind schedule and is expected to take another year to complete, leaving Wichita to depend on an aging plant with significant deficiencies.

Late fees for the delays were waived by the council when it approved a change order for the contract on Sept. 17, 2024. That came to light when The Eagle researched contract changes that led the EPA to incorrectly list Wichita’s water plant project as complete in a 2024 annual report.

The plant is not expected to be operational until 2027 because of a design flaw in the plant’s clarifiers.

Under the original contract, late fees would have started accruing as early as Sept. 18, 2024, at $5,000 a day for the first 90 days, $7,500 a day for days 91-180, $10,000 a day for days 181-270 and escalated to $31,316 a day for the remainder of a one-year period. Late fees were capped at $5 million.

The original contract said late fees would be charged for any delays after the agreed upon date of “Substantial Completion,” which was Sept. 17, 2024.

But Wichita Water Partners had fallen behind on the project, in part because of limited water available for testing from Cheney Lake during the drought. When it became obvious the contractors wouldn’t finish on time, the City Council voted to move the goal posts. The council declared on Sept. 17, 2024, that Wichita Water Partners had reached substantial completion, even though they hadn’t under the original terms of the agreement.

To do so, the city changed the definition of substantial completion in the contract, deleting the language that required the plant be “utilized for the purposes for which it is intended.” It redefined it to mean the work that had been completed as of that day.

Under the new terms, the plant would not be “ready for its intended use” until “Final Completion” on April 1, 2025. That deadline came and went without further council action and without a completed water plant. The contract has yet to be amended to set a new deadline.

The contract as it stands says the city and Wichita Water Partners agree that liquidated damages are the “sole and exclusive remedy for delay.” The late fees for delays after the city granted substantial completion are $0 a day, according to the contract.

Water rates have continued to climb to pay for the project, and the City Council recently voted to increase water and sewer rates an additional 23% over the next three years.

City Hall declined to answer questions for this story but suggested, without providing specifics, that the city “retains remedies to address its damages.”

“The City is focused on ensuring the successful completion and operation of the Water Treatment Plant,” Megan Lovely, city spokesperson, said in a written statement. “The contract and project documents are complex and interrelated. Through them the City retains remedies to address its damages. Due to the continuing discussion between the parties about operational and contractual matters, it is premature to comment at this time.”

City Council members respond about water plant late fees

Mayor Lily Wu expressed concerns about the process in response to questions from The Eagle and said she has asked new City Manager Dennis Marstall to figure out what recourse the city has at this point.

“If this is true, it’s very upsetting,” Wu said in a statement responding to a summary of The Eagle’s findings and questions. “The Council and public should’ve been made aware of it. Lack of transparency at the City has been a problem for many years and I hope that’s a thing of the past with our new City Manager.”

The decision was motivated, at least in part, to free up funds so that contractors could be paid for their work up to that point, city officials said at the time.

Council member JV Johnston, the only council member to vote against the change order in 2024, said he agrees the council should have been made aware of the change to late fees.

“So, we weren’t really advised — I’m not good at reading contracts, to be honest with you — that we were going to waive $5 million in late fees,” Johnston said. “It should have been in our write-up. We should have been told, there’s no doubt.”

Johnston, a first-term council member, said he has tried to become more informed on the water plant project since taking office in 2024 and recently sat in on a meeting between city staff and Wichita Water Partners where he pressed for the city to be compensated for staffing costs, depreciation and hiring a consultant to double-check root causes of failures with the plant’s clarifiers.

“It’s going to take a while,” Johnston said. “I don’t see it being less than a year. . . . And during that meeting, I said, ‘We should be made whole when the final payment is made.’ And they (Wichita Water Partners) kind of reluctantly agreed that that will be quote unquote ‘considered.’

“So I’m going to hold fast that we need to be made whole on that,” Johnston said. “It’s not a good situation. I am convinced they are committed to making it right.”

Council member Mike Hoheisel said he did not know he was voting to waive future late charges when he voted for the change order in 2024. He said he and the rest of the council didn’t think it would be necessary.

“At the time, we thought it was just a minor delay,” Hoheisel said. “We didn’t know it was the full-on issues at the plant that we’re seeing right now. It was little fixes. That’s the way it was presented: this was a delay to kind of give them a little bit of slack to finish this up.”

He said he believed he was voting to push back the final completion date to April 1, 2025, while awarding Wichita Water Partners an additional $5.8 million for more aggressive performance testing requested by the city that could only be accomplished after a drought-related delay.

But Hoheisel said he has since been assured by Gary Janzen, director of Wichita Public Works & Utilities, that Wichita Water Partners and city officials have been in talks about recouping any losses or damages the delays have cost the city. He said he wants any agreement in writing and presented to the council for a vote.

“I think this council has been pretty clear that the days of handshake deals are over at City Hall,” Hoheisel said.

Wichita certified to EPA that water plant was ‘substantially complete’

Late fees weren’t the only part of the project affected by the Sept. 17, 2024 vote.

The move also allowed the city to certify to the EPA that the water plant had been “inspected by authorized representatives of Owner, Contractor, and Engineer, and found to be substantially complete.” The certificate of substantial completion kickstarted a series of consequences.

The city no longer had to file quarterly construction reports with the EPA detailing progress on the project, allowing the latest delays to go unreported to the EPA. The lack of clarity led the federal agency to inaccurately and prematurely celebrate that Wichita water “customers now have a brand-new water treatment plant that is providing reliable delivery of 120 million gallons of water per day” in a 2024 annual report that has since been corrected.

Certifying substantial completion to the EPA also officially started the clock on repaying the $280 million loan, which reaches final maturity 35 years after substantial completion, according to the city’s WIFIA credit agreement with the EPA.

This story was originally published January 15, 2026 at 4:33 AM.