AUGUSTA -- An unpleasant surprise has surfaced amid the demolition of the former Augusta Tissue mill -- much more asbestos than expected.

The presence of asbestos is no surprise. Budgeting for the project included funds to hire a subcontractor to get rid of the fire-resistant material, which once was commonly used in building construction and can be hazardous.

But much more asbestos has been found in the riverside site's eight derelict industrial buildings than was previously identified by engineers.

Dismantling of the former mill, previously known as Statler Tissue, is still only in the beginning stages, City Manager William Bridgeo said, and the $25,000 the city had set aside to pay for removal of unanticipated asbestos has already been spent.

While the exact amount of asbestos, and how much it will cost get rid of it, hasn't been determined yet, Bridgeo told city councilors Thursday what has been discovered so far could cost about $61,000 to have professionally removed.

Engineers from Summit Environmental Consultants Inc. went through the former mill, which was seized by the city for nonpayment of taxes, before dismantling started, to see how much asbestos was there.

Bridgeo said "we're not fully understanding why it wasn't identified sooner in the process," and said he has advised Summit the city may seek payment from Summit's insurance policy under "errors and omissions" provisions.

Jim Bouquet, vice president of Summit, confirmed Friday the firm is aware the city intends to file a claim and he has notified Summit's insurance agency.

"We're working diligently with the city and contractor to finalize what's there and minimize the cost for the city," Bouquet said. "We're just trying to work through this with them. We value our relationship with the city."

He said he could not discuss how asbestos could have been missed, since that could be the subject of an insurance claim.

Bridgeo said that, overall, Summit has been good to work with on the massive mill demolition project and said the asbestos issue, at least so far, has not been confrontational.

"I still have confidence in Summit," Bridgeo said. "I think they've done good work for us."

Bridgeo said he approved using the $25,000 set aside to get rid of asbestos so demolition will not be delayed. He noted a delay could cost the city money if the main contractor of the job, Massachusetts-based Costello Dismantling, has to wait for asbestos to be removed.

Costello is doing the job at almost no cost to the city in exchange for salvage rights to materials -- including papermaking and other equipment -- left behind inside the mill.

Costello will demolish and level the site. The city may keep one riverside building on the site intact, however, in hopes it may be able to be redeveloped in the future.

Keith Edwards -- 621-5647

kedwards@centralmaine.com