City leaders are currently facing a breach of contract lawsuit from local contractor Aero Training & Rental.



The case, filed in May in the Circuit Court of Okaloosa County, stems from a dispute over improvements that were made along Kelly Street.



Aero Training & Rental was hired to mill and resurface the roadway between Beach Drive and Main Street, which also included construction of bicycle lanes, 10-foot-wide shared use pathways and stormwater facilities. City leaders signed a $541,758 contract to complete the work.



A copy of the lawsuit alleges that "after the work was complete, including the punch list, defendant (the city of Destin) terminated the contract and refused to pay plaintiff the remaining balance due." To date, Aero Training & Rental has been paid $379,300.50, leaving $161,001.50 to still be paid, according to the suit.



Based on city documents, project deadlines had been extended past the initial 83-day period due to rain and a request for additional work, with a final completion date of Dec. 27,2012.



The project was still "incomplete" by Jan. 7 and at that point city staff in Destin notified Aero Training & Rental that "the project was subject to the liquidated damages provision of the contract." At this point, the city began to assess the contractor a fee of $250 per day that was effective from Dec. 28 until the project was completed, city documents report.



"On January 14, 2013 having witnessed no activity on the project, the city manager issued a Notice of Default letter to Aero, giving them 15 days to cure the default," according to an agenda report for Monday night's City Council meeting. The project was declared in default January 30.



Aero Training & Rental hired the Fort Walton Beach-based attorneys Anchors, Smith and Grimsley to represent them, as they seek a total sum of $206.526,50, which includes interest payments from the city of Destin.



City leaders currently have an executive session scheduled for Aug. 19 at 5:30 p.m. to discuss the the pending litigation regarding Coral Reef Club. During the following City Council meeting, city leaders will be presented with three different motions that would allow them to enter into a contract to have the work on Kelly Street completed.



Officials in Destin do not discuss pending litigation.