The City Council voted last week to accept an offer from First Western Corp. to settle a suit it had filed against the city for breach of contract.

The Nevada corporation had filed a $1.3 million lawsuit against the city on behalf of JONCO Associates Inc., claiming the city had refused to pay for work rendered by JONCO during the fall of 1984.But according to City Recorder Kay Driggs, JONCO declared bankruptcy before completing the proj-ect and failed to pay subcontractors who worked for the company. Funds owed to JONCO were used by Pleasant Grove to pay subcontractors.

First Western had maintained the city shouldn't have released funds owed to JONCO to the subcontractors. But First Western proposed last week that its suit and a countersuit filed by Pleasant Grove both be dropped.

"For the first time in city administration, we're not being sued by anybody," joked Mayor David Holdaway after the council accepted the settlement.

In other business, the council voted to accept an offer of $54,048 from the Bureau of Reclamation for damages to city property that occurred during construction of the Jordan-elle and Alpine Reach aqueducts.

Also, the council agreed to ask the Utah Transit Authority board of directors to hold a public hearing in northern Utah County to explore public interest in bringing bus service to the area.