The City of Knoxville has terminated its contract with the company that had been working on the First Creek Drainage Improvement Project.

In a letter to the owner of DH Excavating, LLC, and the Cincinnati Insurance Company, which backs the performance bond on the project, the city indicated that it was declaring DH Excavating to be in default of its agreement with the city to construct the project.

The letter was delivered to the two companies on November 19.

The Cincinnati Insurance Company has hired a consultant to determine what needs to be done to finish the project and will be hiring a new contractor to actually complete the work.

The insurance company is the surety for DH Contracting, which had to have a performance bond as part of its contract with the city. That means the insurance company is obligated to make arrangements to finish the project if DH Contracting was found to be in default.

The First Creek Drainage Improvements Project is part of the city's effort to alleviate flooding along First Creek in North Knoxville. The work includes the construction of two new bridges and the widening of a 1,853-foot-long section of the creek's channel.

The city's letter lists the general grounds for termination including the rate of progress on the project.