HomeMy WebLinkAbout4.f. Terminate Contract 1989-9, Limerick Crossing Watermain Project . �
CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: December 4, 1990
AGENDA ITEM: Contract 1989-9, Contract AGENDA SECTION:
Termination, Limerick Crossing Watermain Prj . Consent
PREPARED BY: Richard Hefti - AGEN���p,� �
City Engineer/Public Works Director r����
ATTACHMENTS: Termination Zetter APP V � BY:
This item consist of having Council authorizing the ermination of
this contract. Also attached is a letter that I propose to send to
the Contractor, Brown & Cris, Inc. , regarding this action.
The reason for initiating the termination action is that it is
extremely doubtful that the developer will be able to fulfill his
financial obligations to pursue the property and post the necessary
financial guarantees required to continue this project. The contract
was awarded the end of September of 1989 but was suspended because of
the developers financial problems, which was due to circumstances
beyond our control.
The options that we have considered are to continue with the project
or terminate the contract. If we continue with the contract we would
be dealing with the underlying property owner and would have to
purchase easements. If the developer does not proceed with this
property and the owner sells it someone else, then the location of the
water line could be a detriment to future development if the future
developers have different plans. Without a development plan to go by
it is difficult to determine the appropriate alignment through this
property. The other option that we are recommending to consider is
one that will terminate the contract. According to the Finance
Department cash on hand report ending October 31, 1990 we have
expended $10,477.95. With the final application and approximate
engineering fees regarding to processing this application we could be
looking at about $11,000 for this project. We will not be able to
recover this money until the project actually goes ahead and the
watermain is installed. At that time we can assess these cost in
addition to the construction cost and re-advertising and re-bidding
cost in the future. Alsa in the future we will not recommend going
out for bids until the final plat has been approved by the City and is
recorded at the County.
RECOMMENDED ACTION: Motion to exercise the Citys right to terminate
Contract 1989-9 with Brown & Cris, Inc. in accordance with Article 15,
General Conditions.
COUNCIL ACTION:
APProved.
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November 26, 1990 REs RC7SEMOUNT, MINNESOTA
LIMERICK CR4SSING
WATERMAIN C4NSTRUCTION
CZTY PRO��CT NO. 201
CITY CONTRACT NO. 1989-9
SEH FILE Nt7: 89269
Mr. Michael DeVine
Brown & Cris, Inc.
19740 Ken;z-ick Avenue
Lakeviile, MN 55044
bear Michae�.:
As xou mey be aware, work on the above referariced pro�ect has
been susgended since September of 1389 due to aircumstances
beyond the control of the City. Specif�,call.y, the Developer of
the Limer3.ck Way Phase IY deveiopment has been unable to fuifill
his financ�.ai obligatioz�s �o the City.
At this po�.nt, �.t appears very doubt�u7. that the Developer wi�.l
be able to fulfil], his financ.�al obl3g�tions to tha City in the
near future. Therefore, the C�.ty a.ntends to exexc�.se its right
to terminate the Coratract in accordance with Article 15 of the
General Con,ditions o� the Contz�act.
�pplicat�.on �or Paymer�t No. 1 was approved by t�:e Rosemaunt City
Councii on February 6, 2990, and consis�e3 of reimbursemen� for
all eypenses incurred on the p=oject {excegt 5�S retainaae} . This
w�s in partial response to your December I., 1°90 Ie�ter and
included costs �.n�urred fo� estimating, bonding, preconstruction
meeting, rneetings wi.th locators, and purchas�.ng. We unders�and
th�t the hourly rates which were used to calcul�te the $I,257
1.isted on the Application for �ayment' No. l inczuded overhead and
prof�t.
Article Z5.4 of the General Conditions of �he Coz�tract states:
" Owner may, without cause and w�ithout pz�e,judice to any
other right or remedy, elect to abandon the work and
terminate the Agreement. �n such case, Contractor sha21 be
paid �or all. work executed and any expense sus�ained p7.us
reasoz�able termination expenses . . . "
- . -_ ___ _ - " � � ._� . _�. . ..._. � _ � ._�_. i__. .. , . .., r
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�R�FT
Mr. Michael DeVine
November 26, 1990
Page #2
We €eei triat your firn� has been fairiy compensated for actual
expenses sustained on the project plus reasonable termin�tion
expenses. Please note that the Contr�ct makes na provisior, �or
payment of lost anticipated overhead. Likewise, there is no
provision for payment �f lost anticipated pro�i�.
we have enc].osed a comQieted Application for Pa�ent Na. 2
( Final } which can be used to re�ease the zemaining 5� retair�age.
Piease s�gn, notarize, and return the application to SEH along
wxth a Consent of Surety from your bond�.ng Company. ._
The City Councii wx�l not offioially terminate �he Con�ract until
at �east seven (7) days after this notice.
Sincerely,
Richard M. Hefti, P.E.
City Engineer/Publ�e Works Director
DFS/cih
£nCipSure
cc: Steve Ji1k, City Admini�trator
Dave Grannis, City Attorney
Dan Bo�;zud, SEH
�acY. Cedarieaf, Trans America Insu�ance Co. of California