HomeMy WebLinkAbout2. Closed Session : Sunrise Builders LitigationTo:Mayor McMenomy
Councilmembers:
From: Stephan Ji
RE: Armory Center
There are three
consideration.
1) The matter of the
J. Thomas Mott on
his decision later
for your review.
forward. The ju,
Knutsen Constructi
Klassen
Staats
Willcox
WiAoerm
il-
roject
tems of importance on this project for your
contested contract award was heard before Judge
September 16 at 9:00 a.m.. The judge returned
that day and a copy of that decision is enclosed
The order was quite conclusive and straight
lge did rule that the restraining order that
on had requested was denied.
Knutsen Construction may, of course, appeal the matter but the
MSABC and the Attorney Generals office think that is unlikely
because of the "black and white" clearness in Judge Motts order.
In discussion with Terry Palmer of the MSABC he indicated that they
feel it is resoly d and they are moving full steam ahead.
2) The second issue is of lesser consequences but will take some
procedural work to take care of. The situation is this. The
amount of debt emit stated in the Tax Increment Financing
Modification that the Port Authority and the City Council approved
was too low. When the bond counsel drafted the document there was
an apparent misunderstanding of how the financing would be
undertaken for the acquisition for the relocation of the businesses
along Highway #3. Because the funds for that relocation would come
from excess tax in rement it was thought that those costs would not
have to be included in the debt issued. When adding those costs
and administrative, legal, engineering and debt issuance costs the
amount exceeds the $2,500,000. listed in the document and reaches
a level noted in all of the presentation material presented at the
special --meeting last monday evening of $3,080,000.
In order to correc
of the debt for th
community center,
public hearing anc
on the modificati(
that the dollar an
and the notices s
already drafted tY:
to set the new hei
t this and in order to proceed with the issuance
arena, the relocation work and a portion of the
as proposed it will be necessary to hold another
go thru the same process we did in the last week
)n of the plan. This process is quite simple in
ount in the modification will have to be changed
int out and the hearing held. Bond counsel has
e required notices and is waiting for the council
Lring date.
As we are meeting c
matter on the agenc
have had the resolL
showing the hearing
other necessary app
The planning Commi;
award the bids for
to award the bids c
be a problem.
,n monday on other matters I have placed this
a so that the new hearing date can be set. I
tion, calling for the public hearing, drafted
to be held on October 22. This will allow the
rovals to take place by the Port Authority and
sion before the hearing and will allow us to
the bonds that same evening. We had expected
n October 20th. A delay of 2 days should not
I apologize for this problem. I should have had this clarified and
corrected prior to the hearing on Tuesday but did not catch the
error until yesterday.
The information that was presented to the general public on how the
project will be financed and the costs as presented at public
meeting on Monday evening were correct. Just the amount that will
be financed through the debt issued by the Port Authority, as
indicated in the Modification document was in error.
2)Thirdly, and on a
have supplied inf
issuance informatic
indicated that the
bonds that the Por
possibility of thi:
In other words offe
city a portion of t
1/2 point discount,
the city about $20
have asked the com
that we will know
public sale of the
ahead in preparatic
much more positive note, I have been asked and
rmation to Koch Industries regarding debt
n on the project. Koch representatives have
ompany may be interested in the purchase of the
t Authority would issue. They indicated the
purchase being at a "less than market rate".
ring the city a discount on the bonds saving the
heir annual debt payment cost. In looking at a
which is what has been discussed, it could save
0,000 over the life of the debt structure. I
any to respond to me before September 29th so
what their intentions are before we call for
bonds. In the meantime Springstead is moving
n of the bond documents for a public sale.
, SEP -16-1992 16:23 FROM
STATE OF MINNESOTA
COUNTY OF RAMSEY
KNUTSEN CONSTRUCTION
-VS-
STATE OF MINNESOTA,
PCL CONSTRUCTION SBR'
The above -captioned matter can
questing the Court to issue a Te
from awarding a construction v
to Intervenor PCI, Construction
feadant State of Minnesota was
counsel, David L. Lillehaug.
Based upon argument of
by issues the following
DIST COURT TO 92971235 P.02
F 1 L t O
C:ou" AdMW*aW
SEP 16 1992
J• F. GOCKOWSKI DISTRICT COURT
SECOND JUDICIAL DISTRICT
FILE #Ci -92-11039
ANY;
ANT.
ES, INC., -
NT ICOR IIITERVBNTION.
before this Court on September -16th, 1992, on Plaintiff's motion re-
porary Restraining Order, restraining Defendant State of Minnesota
tract for a National Guard facility to be built in Rosemount, Minnesota
ervices, Inc.. Plaintiff was.represented by counsel, B. C. Hart. De-
:presemted by counsel, Julio R. Barton. Intervenor was represented by
all submissions to the court file, and the record herein, the Court here-
ORDER:- ,..
Plaintiff's Motion for a Temporary Restraining Order is hereby denied.
The attached memorandum is
DATED 9/16/92
incorporated into and-madaapart of this Order.
WOO!
- Eigil
,SEP -16-1992 16:23 FROM
The Motion for a Temporary
1). Plaintiff is unliiaely to
363.073 subd.l have not
RAMSEY DIST COURT TO 92971235
MAMORANDDUUM
Restraining Order is denied based Won the following rationale;
P.03
CI -92-1 IQ
09/16/
on the merits of this case. Tile requirements of Minnesota Statute
met by Plaintiff's bid. The statute states that
"No department or ag cy of the state shall accept any bid or proposal for a contract ...
unless the firm or bus ess has an affirmative action pian ... that has been approved b
the commissioner of uman rights. Receipt of a c�ifimte of compliance issued by the
commissioner sha11 si ' that a flim has an affumative action plan that has been ap.
proved by the loner."
Minn.Stat.Ann.Sec.363.073 subd.1 (1992). Plaintiff had
no valid certificate of compliance as of the
date of bid submission. It hac in fact, only applied for said 0artificate on the previous day, and the cer-
tificate was issued to Plaintiff after the bid was submitted. The statutory language is clear. The pre.
Suraption of a valid affirmative- action plan is available only upon the showing of a valid, current cettift-
tate of compliance, in possession at bid submission. Plaintiffs bid is properly rejected on this basis.
Further, Plaintiff did not comply with the clear instruction iu the Invitation to Bid that, should the bid
not list Targeted Group Business subcontractors for at least 5% of the'value of the prime contra
this bid will be rejected". See Affidavit of David L. Lillehaug, p.4, Form Of proposal For Contract
Work, P. 00500-8. Plaintiff listed T.G.B. subcontractors totalling only 1.1 % of the value of the prime
contract. Plaintiffs bid is rl y rejected on this basis also.
2). The public interest in maintaining the integrity of the bidding process for state expenditures, as well
as the public policy choices that have been made by the state Legislature regarding affirmative action,
outweigh, the public interest inthe cost savings of $329,551 `which might be realized by allowing Plain-
tiff to prevail here. The future savings to the state which may be realized thmgh the denial of const
less challenges to its bidding
cedures, as well as the future non -quantifiable savings to the state
K
'SEP -16-1992 16:23 FROM
through implementation of its
savings of $329,551.
3). Plaintiff has failed to
then, even if Plaintiff had
state is greater because of the
4). Plaintiff comes to court
equity, however, when it cow,
affirmative action Compliance
of Plaintiff certified that the
requested that the
certified that Plaintiff had that
RAMSEY DIST COURT TO 92971235 P.04
C1-92-11035
09/1W,
Policies, far exceeds the beat to be realized through a monetary
R showing of Concrete harm that may result if relief is denied here. Far -
a concrete showing of substantial loss of profit, the potential harm to the
Waage that would be done to the integrity of the bidding process,
oing the equitable relief of injunction. Plaintiff may not seek the help of
to court with unclean hands. Plaintiffs bid oettified that it had a valid
in its possession. In fact, it had no such certificate. qn officer
in; its bid were true. That Certification was false. Plaintiff had
of human rights issue such a certificate only the day before the offxoe
and so Plaintiff clearly knew that the statement was false.
5). Plaintiff had an opportunity to request a waiver of the 596 TGB
requirement, The bid form ciearlq
stated that "... any requests for waivers from the T.G: subcontracting requixvments will have to be made
and a roved VTior to the ached led bid o timeAffidavit of David L. Lillehang, p.4, Form
Of Proposal For Contract Work, p. 00500-8. Plaintiff chose to f6rego that option. In the presetwe of
such clear language, Plaintiff m ly not now argue that a waiver should be available after bid submission.
Plaintiff argues that the 5 % figure chosen as the T.G.B. subcontmew requil=ent has been improperly
chosen. Such a collateral attack is not properly before this Court on a Motion for Temporary ba}naa.
tion.
t7. Plaintiff claims that the 5 % figure was not a realistic target for a oonstrtrWon project such as this.
3
Plaintiff further cin = that it;
such should satisfy the statute
over substance. The legislatu
ments, did so in response to a
tors and still meet the T.G.B.
Plaintiff stated that it had con
level. Plaintiff stated that it n
tive mandate, in this can, is f
other than cost used by Plai;
on impermissible criteria. 7
contractor makes subcontm(
ploy a set, minimum percen
Live protection, and thus the
does not overcome the
C1-92-11039
09/16/92
1.I % T.G.B. submission was a good -faith effort at compliance, and as
y and rule requirements. However, this is not merely a matter of form
and the rule-making bodies that have promulgated the T.G.B. require..
seed. Had it been possible to always select the low -bidding subcontrao.
4uirements, there would have been no need for the T.C.B. requirement.
cted 69 T.C.B. subcontractors, but selected only enough to reach a 1.1 %
ode these decisions based upon, among other factors, cost. The legisla-
;t the T.C.B. levels be reached irrespective of cost. Further, the factors
F in rejecting the bulk of the T.G.B. subcontractors may have been based
setting of an arbitrary, unassailable target level insures that, even if a
g decisions based upon impermissible criteria, it will still have to em -
of subcontractors who have been designated as being in need of legisla-
pose of the legislature will have been achieved. Plaintiff's argument
ve goals implicit in such a statutory scheme.
4
L Thomas Matt