The city of North Bend has settled a dispute with Skyward Construction Inc. after the company failed to finish building the new city hall on time, forcing city employees to work in the building during construction, and impeding council meetings last year.

Ridgefield-based Skyward Construction was awarded a $6.7 million contract to build the new city hall in June 2018.

The company underbid other competitors by around a half-million dollars, said North Bend Community Development Director David Miller. Under state law, the city was obligated to accept Skyward’s bid.

Right from the start, Skyward began changing some contractors listed on its bid list. The company didn’t have much supervision and began to fall behind on the construction timeline. The new city hall was supposed to be finished by the end of June 2019. The company asked for an extension into July, but after that, the company stopped asking for extensions, even as work dragged on.

It wasn’t until December 2019, six months later, that the building was completed.

During this time, Miller said, city employees had to work in the building as the previous city hall had been sold. City staff moved into the building at the end of June 2019.

Construction noise was a nuisance to employees. And the wooden sound paneling in the council chambers wasn’t installed for months after a late-placed order, making it difficult for audience members to hear what council members were saying during meetings.

“It was embarrassing you know,” Miller said. “We made it work, but repeating conversations is the kind of thing that you don’t want to do.”

One wall was buckling and had to be replaced by the city, and tile flooring wasn’t cleaned properly. The city spent more than $100,000 on architectural work. At times, the city had to rely on the architect working directly with contractors, instead of through Skyward, Miller said.

“We just got to the point where we said some of that stuff we’ll just do ourself,” he said.

When city hall was finally completed, the city was holding some $345,000 still, as part of the original contract to be paid to Skyward Construction. But because of the headache and expenses incurred, the city decided to contest providing the full amount.

A mediation between the city and Skyward was held on Sept. 2. The resulting agreement awarded Skyward $220,000 of the funds, and gave the rest to the city to cover its expenses.

But aside from these problems, Miller said he’s happy with the rest of the city hall project. Even with the problems, the city ended up saving money on the bid.

“I’m very glad that we have it behind us. I’m glad that we have it finished. It’s a wonderful facility,” he said.

Skyward Construction had not returned a request for comment by the time of publication.