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HomeMy WebLinkAboutCC March 1, 1983 ~ 01 ANDOVER REGULAR CITY COUNCIL MEETING-MARCH 1, 1983 AGENDA 1. Call to Order - 7:30 P.M. 2. Resident Forum 3. Agenda Approval 4. Discussion Items a. AgPreserve Eligibility/L. Malamen b. Agpreserve Rezoning/L. Malamen c. Lot Split/B. Young d. Sanitary Landfill e. Barton-Aschman Contract 5. Non-Discussion Items a. b. 6. Reports of Commissions, Committees, Staff 7. Approval of Minutes 8. Approval of Claims 9. Adjournment CITY 01 ANDOVER MEMORANDUM TO: MAYOR AND COUNCIL ¡, COPIES TO: ATTORNEY. STAFF d¡¿ tr:r2t\ ¡ ì FROM: CITY CLERK/A. ,. Dr~I'~' / ~.-o'; DATE: FEBRUARY 25, 1983 REFERENCE: AGENDA INFORMATION - MARCH 1, 1983 I t em No. 3 - Agenda Approval Please add Item No. 4e(Barton-Aschman Gontract). Item No. 4a - AgPreserve Eligibility/L. Malamen Mrs. Malamen has requested AgPreserve designation for approximately 75 acres of her property in the south half of Section 21. The Planning and Zoning Commission has reviewed the request and is recommending approval. For resolution, please see Item No. 4b. Item No. 4b - AgPreserve Rezoning/L. Malamen See attached recommendation for Planning and Zoning to approve the request for the rezoning from Mrs. Malamen. A resolution will be prepared including declaring eligibility and approving rezoning of the property to AgPreserve. Item No. 4c - Lot Split/B.Young Mr. & Mrs. Young are requesting approval to split a lot consisting of approximately one acre from the existing approximate 13~ acre parcel. There have been some questions as to whether the road right-of-way can be included in the requirement of 39,000 square feet per on-site sewage system in the MUSA. Ordinance No. 10 requires the 39,000 square feet of "land area"; there is no definition for "land area" in either Ordinance No. 8 or Ordinance 10, however No. 8 does have a definition for "lot area" which does not include the right-of-way. Then if we were to look at the R-4 requirement for lots without public sewer, we find that it simply says there cannot be a septic system more often than 39,000 square feet. In view of this being simply a matter of interpretation, it would be my recommendation that the split be approved for two reasons, i . e. , 1 ) this is a metes and bounds parcel for which the City has always included the right-of-way in the total are a, and 2)a precedent has been set in numerous other lot splits approved by the Council. A resolution will be prepared including the above and Planning and Zoning Commission reasons for recommendation. - Agenda Information March 1, 1983 Page 2 Item No. 4d - Sanitary Landfill Enclosed is a resolution adopted by Anoka County, relating to the Hazardous Waste Pit. Our Hazardous Waste Committee met on Tuesday evening and unanimously voted to support this resolution. It probably would be advantageous for the Council to adopt a similar resolution. Also enclosed is a letter from Anoka County. This letter is in response to our request demanding scheduling for termination and cleaning up of the landfill. Item No. 4e - Barton/Aschman Contract Enclosed i s a letter from Bill Short, indicating the need for additional meetings with the Planning Commission/Council, etc. I have also enclosed a copy of the original Contract. It appears some extra meetings will be needed, however, based on the original proposal, the $500 per meeting charge seems somewhat excessive. Item No. 5a - Item No. 5b - Item No. 6 - Reports of Commissions, Committees, Staff No information has been received to-date, so I would assume there wi 11 be no reports. Item No. 7 - Approval of Minutes February 15, 1983 ~ 01 ANDOVER REGULAR CITY COUNCIL MEETING - MARCH 1, 1983 MINUTES The Regular Bi-Monthly Meeting of the Andover City Council was called to order by Mayor Jerry Windschitl on March 1, 1983, 7:30 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Anoka, Minnesota. Councilmen present: Elling, Knight, Lachinski, Orttel Councilmen absent: None Also present: City Attorney, William G. Hawkins; City Engineer, James Schrantz; Planning and Zoning Chairperson, d'Arcy Bosell; others RESIDENT FORUM Bob Palmer, 2540 140th Avenue· - asked about the dog ordinance in effect right now. He caught a dog this weekend and called to have it taken away but was told nothing could be done unless it was an emergency situation. Council discussion was that to their knowledge there has been no change in the policy. The Clerk is ill and will not be present this evening, and Mr. Palmer was told she will look into it as soon as she returns to work. AGENDA APPROVAL The Mayor suggested the following additions to the Agenda: Item 3a, County Commissioner, Natalie Haas, and Item 5f, Senior Citizen Center. MOTION by Elling, Seconded by Lachinski, that we approve the Agenda as amended. Motion carried unanimously. MOTION by Knight, Seconded by Lachinski, that we suspend the rules. Motion carried unanlmously. COUNTY COMMISSIONER - NATALIE HAAS County Commissioner Natalie Haas addressed the Council, updating them on the County's activities concerning the landfill in Andover. She stated several weeks ago she and Councilman Elling attended a meeting with MPCA, and it was a disappointment to hear that even if the Superfund should pass at the State level, the possibility of getting anything to move on the Andover landfill was two years down the line. She is serving at the County level on a long-term planning committee looking at financing, bonding, refinancing, etc. It occurred to her that because the County has four landfills and one transfer station operating within its boundaries that some dollars ought to be included for hazardous waste in the short-term and long-range planning. She has asked Senator Gene Merriam to consider an amendment to the State Superfund bill that would allow city, county, and township governments to recoup dollars that they might spend on cleaning up hazardous waste from the State Superfund should it become a reality. It is her understanding that amendment was introduced last Thursday and should have been introduced at the House level this morning. In addition, she asked the financing and long-range planning committee last Friday to consider setting aside one-half million dollars of County money to look at the cleanup situation in Anoka County and to commit $200,000 of that money to the hazardous waste pit in Andover. The members of the committee concurred. The committee has made the removal of the hazardous waste pit in Andover the number one priority. Commissioner Haas stated it is her understanding if they waited for the State Superfund monies, it could be a year or two of studies, etc., before anything would take place. At the meeting with the MPCA, they stated by the next meeting on March 29 they would be able to provide the first dollar commitment that they feel needs to be put forward to move on with the situation in Andover. Her concern is that those dollars be avail- able and ready to commit to that plan at that time. At the present time the County would be using revenue sharing dollars, which requires going through formal hearings. Regular City Council Meeting March 1, 1983 - Minutes Page 2 (County Commissioner - Natalie Haas, Continued) She anticipated that taking place so that by the time they meet with the PCA those dollars are available. Her idea is to pry loose the Federal Superfund dollars without having to wait for a State Superfund bill. Commissioner Haas also added that the County's legislative delegation left on Sunday for Washington, D.C., carrying dossiers regarding the Andover landfill and the hazardous waste pit. They have meetings set up with Representatives and Senators, primarily with Dave Durenberger's office, Jerry Sikorski's office, and EPA staff and members. In further discussion with the Council, Commissioner Haas stated the remaining $300,000 of the half-million dollars has not been committed, not wanting to ignore the other hazardous waste problem within Andover, or it could be used in other places in the County. She is asking for the dollars with no strings attached regardless of what happens to the State Superfund bill with the idea that they would be used to pry loose funds from the Federal level. The $200,000 is not in the budget at this time, but it can be made available, as they are looking at refinancing the new jail bonds and at the dollars committed to the juvenile detention center which may not be needed at this time. She felt that she would have the necessary support to commit the $200,000 toward the hazardous waste pit in Andover. Mayor Windschitl explained the $200,000 figure is based on 10 percent of the estimate of $2 million to remove the hazardous waste pit, but the most significant thing is that this could get the process moving. Councilman Elling cautioned against allowing the EPA or PCA utilize that money for extensive studies, etc., rather than the actual removal of the hazardous waste. Commissioner Haas noted the PCA staff is satisfied that the studies part of it has been done for this site. They have a good idea of where the barrels are, what is in them, and where they can be disposed of, which gives the City an advantage. Commissioner Haas stated she is going to be introducing a Resolution before the County Board asking for the support of the State Superfund bill, and she asked the Council to consider supporting that resolution, reviewing several aspects of that Resolution. She also explained there are 58 hazardous waste sites in the State of Minnesota, and ten of those have made the Federal EPA list, including both sites in Andover. She thought the Andover sites are 53 on the EPA list, but not all 53 of them are requesting Federal dollars. She stated she met with Congressman Sikorski, and he is very interested in helping. However, those Federal dollars seem to be broken loose, strictly through political moves. Councilman Orttel stated he has also spent some time with Congressman Sikorski, and one of the things talked about was the best solution might be to get the barrels out of the ground into some kind of above-ground temporary storage until a disposal facility is developed in Minnesota, which is felt to be two to three years away. He stated if there were access to some other money plus the use of the City's CDBG funds, there would be enough to get the barrels out of the ground and store them. Councilman Orttel stated that Congressman Sikorski now has an individual working in town whom he invited to next week's Special Council meeting. Discussion was on the temporary or permanent disposal of the hazardous waste barrels, noting any above-ground storage would have to be done in some type of pole building and with Commissioner Haas stating there is a possibility the barrels could be disposed of in the proper manner even at this time. Mayor Windchitl felt once the dollars are approved, there are many avenues that can be pursued. There was further discussion on this item under the Agenda Item 4d, Sanitary Landfill. AgPRESERVE ELIGIBILITY/L. MALAMEN Lorraine Malamen was present. Chairperson Bosell reviewed the Commission's recommenda- tion to approve the Ag Preserve eligibility request. Regular City Council Meeting March 1, 1983 - Minutes Page 3 (Ag Preserve E1igifiility/L. Malamen, Continued) MOTION by Orttel, Seconded by Knight, that we direct the City Clerk to preapre a Resolution making the property owned by Lorraine Ma1amen as requested eligible for Ag Preserve Zone. (See Resolution R013-83) Motion carried unanimously. Ag PRESERVE REZONING/L. MALAMEN MOTION by Orttel, Seconded by Elling, directing the Clerk to prepare a Resolution approving the rezoning to Ag Preserve for thªt. property requested by Lorraine Malamen. (See Resolution R013-83) Motion carried unanimously. LOT SPLIT/B. YOUNG (Because the Mayor is affected by this item, he stepped down to the audience and Acting Mayor Orttel conducted this portion of the meeting.) Chairman Bosell explained the concerns brought up by the Buidling Inspector and City . Engineer on the interpretation of the ordinance as to whetherornot the right of way should be included in determining the property area. Ordinance 8, Section vv, states the lot line of a county public right of way line shall be the lot line for applying the ordinance. Section rr talks about how to determine the area of a lot. Therefore, the Engineer and Building Inspector interpreted it that the lot line on the east side of the property begins at the right-of-way line, which then makes that parcel less than the 39,OOO square feet required. Ordinance 40B states the resulting lot needs to meet the platted lot requirements. Ordinance 10 states if the lot is not served by sanitary sewer, it needs to be 39,000 square feet in lot area. But the City Clerk has recommended in the Agenda material that it be granted because of the precedence set in the past. Attorney Hawkins stated under Ordinance 10 it is clear that the lot line is defined as the outside edge of the right of way, and the right of way is not included. ~- fortunately that hasn't been followed in the past. He explained there is a discrepancy in this issue because under Ordinance 10, the right of way is included for metes and bounds subdivisions, but this is dealing under Ordinance 8, where right of way is excluded. Acting Mayor Orttel didn't recall any cases in the past where the issue existed for the split of an unsewered parcel in the urban area, so he didn't understand the issue of precedence. Usually the lots are either 2~ acres of have been sewered. And right of way is always included in 2~-acre metes and bounds lot splits. Mr. Schrantz felt the real issue is the concern for sewer problems. However, in this case the sewer stub is approximately 200 to 500 feet away from the parcel; and he felt if there would be a problem, sewer could be brought to that property quite easily. Mayor Windschitl - stated this was checked into before the surveying and other work was done. He thought every lot split done by metes and bounds subdivisions included the road. The zoning for this area is 13,000 square feet. The 39,OOO-square-foot is the sewer requirement. The Clerk's comment is it requires 39,OOO square feet of land area, but there is no definition for land area in Ordinances 8 or 10. Acting Mayor Ortte1 stated the sewer ordinance states a buildàble~lotrequires 39,000 square feet of buildable area, unless the Council wishes to consider the fact that this is very close to the sanitary sewer facilities. Mayor Windschitl - explained what is attempting.to be done is to get a logical setup so that when sewer goes by the lot could be subdivided into two lots that meet all the requirements of the platting ordinance at that point in time. He noted the property is high and dry. He explained the Youngs own both parcels at this time, but he has a purchase agreement on the larger parcel. He is also the property owner of the adjacent property. He stated he wishes this had been researched before the meeting, having thought the problem had gone away at the Planning Commission level. Regular City Council Meeting March 1, 1983 - Minutes Page 4 (Lot Split/B. Young, Continued) Chairman Bosell stated the language that talks about buildable area refers to unsewered areas outside the MUSA areas. The amendment to Ordinance 10 talks about land area within the MUSA and simply states that it needs to be 39,OOO square feet of land area. Acting Mayor Orttel stated Ordinance 8 says 39,000 square feet or every third lot. In looking at the overall parcel, there is no doubt there is room for many times more than three lots and that this would only be one. Until sewer came in, it would be one house on 15 acres. He didn't think there was any doubt that there would be room for another sewer system in the event the first one fails. Mr. Young - stated the sewer system for the existing home is the old two-tank system. Englneer Schrantz stated the way it is drawn, it is the logical splitting of the parcel so the land is not wasted for further subdivision when sanitary sewer goes past the property. He personally didn't have any problems with it as far as the sewer is concerned, thinking it is a matter of interpretation of the ordinance. Councilman Lachinski felt he could go along with the lot split based on the intent that the ordinance requires 39,OOO square feet or build on every third lot. The City does not have to allow another lot split next door. Plus there cannot be another one for three years. And if it is platted, the problem disappears and City sewer would be there. Council discussion was that it would not be appropriate to be including right of way when determining R-4 lots, but that it has been included in metes and bounds lot splits of 2~ acres of more and could create a problem if that inclusion was no longer allowed in the rural areas. Acting Mayor Orttel stated with the control the Council has, the only reasonable future subdivision that would be allowed would be no smaller than one- acre lots, and he didn't know how feasible that would be with the sewer 500 feet away. Chairman Bosell felt this request should be approved because it is so close to the sanitary sewer and it is very likely it will be served with sewer within the next year or two. But she also agreed this needs to be clarified as to how right of way applies. Attorney Hawkins explained under Ordinance 8, one can develop on 39,OOO square feet as one lot; or under the R-4 zoning, one can build on every third lot. This would meet the requirement of Ordinance 8 because there would be the ability to come up with three 13,OOO-square-foot lots even if the right of way is excluded. Ordinance 10 says that are as lacking sanitary sewer must have 39,000 square feet of land area and have a frontage of at least 165 feet, but it doesn't say anything about excluding the right of way in calculating that land area. So he felt the ordinances do allow this lot split request. This would meet the requirements of Drdinance 8 because it is at least 13,OOD square feet excluding the right of way. And it has always been the City's practice to include the right of way in metes and bounds divisions. Councilman Lachinski asked if a subdivision came in within the urban area but it was not practical to run sewer there at this time, how large would the City require the lots to be. Or could it be platted to the R-4 size and build on every third lot. He felt that problem needs to be solved. Councilman Elling had no problem with this request because there is adequate space to handle the on-site septic system. Counci lman Knight stated he had no problem with the request. The general consensus was the Planning Commission should review this item, especially what the requirment will be for sub- divisions in the urban service areas where sanitary sewer doesn't exist. Chairman Bosell stated they will be discussing this item at tomorrow evening's special meeting. MOTION by Lachinski, Seconded by Elling, that we approve a Lot Split as per the Lot Spl1t Ordinance for Beatrice Young as requested, and to make the lot split contingent upon $100 park dedication fee which applies to the single smaller lot only. (See Resolution R014-83) DISCUSS ION: Councilman Elling recommended an amendment be added Regular City Council Meeting March 1, 1983 - Minutes Page 5 (Lot Split/B. Young, Continued) to the motion noting the Attorney's opinion that the request meets the ordinance requirements. Councilman Lachinski stated he didn't feel it complies to Ordinance 10. The reason he is in favor of it is because it is so close to the City sewer that it is a mute point. He also felt it would open the door for allowing the inclusion of right of way in determing lot sizes in the urban area in those areas where sanitary sewer is not eminent. The discussion continued applying the right-of-way issue and the intent of the ordinance in various instances, noting the policy has been to include right of way for metes and bounds divisions and to exclude right of way for lots in plats. VOTE ON MOTION: YES-Knight, Lachinski, Orttel; NO-Elling due to the lack of the amendment; NOT VOTING-Windschitl. Motion carried. (Mayor Windschitl conducted the remainder of the meeting.) Recess at 9:03; reconvene at 9:20 p.m. SANITARY LANDFILL MOTION by Elling, Seconded by Knight, that the Andover City Council support the Resolution submitted by Commissioner Haas tonight relating to the Anoka County support for the establishment of a State Superfund to address landfill environmental problems. (See Resolution R015-83) Motion carried unanimously. Mayor Windschitl reported on the meeting of the Hazardous Waste Committee on February 22. They passed a motion supporting the motion that Commissioner Haas made on the funding. At their next meeting they will try to do some organizing· and forming subcommittees. One of the things they will try to work on is a contingency- plan for municipal water. They are trying to recruit more people, especially those with some background in chemicals to help interpret the reports. He asked the Engineer to provide the Council with the map of the underground water levels, noting the effect that could occur because of an approximately 20-foot drop from the landfill site to the Rum River. There was a suggestion that the Hazardous Waste Committee be provided the funds to obtain information from other cities that have had similiar problems and have dealt with this matter, such as New Brighton .and St. Louis Park. No formal action was taken. Commissioner Haas understood that the County reports of the types of chemicals in the hazardous waste pit were sent to the City. Council stated they had not seen the reports. She stated that she would see that the City gets those reports. Councilman Elling stated last Tuesday he testified before the Environmental Subcommittee of the Senate for the State Superfund bill and stated the City of Andover was arguing just to see the bill passed. Lyle Bradley was also there to testify. Discussion was whether or not to hold the special meeting next Tuesday. It was felt that in light of the activitiesoTI the County level relating to the landfill at this time, that the meeting with the Attorney would not be necessary but instead wait to see the progress made by the County. It was felt, though, that the special meeting should still be held to bring the residents up to date, plus the representative from Congressman Sikorski's office has been invited to attend. It was suggested the Council could also discuss what should be done for the contingency plan for municipal water to provide the Hazardous Waste Committee with some direction in this matter. Commissioner Haas hoped the Council and the County would be working together on this, proceeding on the assumption that the primary concern at the monent is the removal of the hazardous waste pit. She stated it is her intent to have a plan developed for the removal of the hazardous waste and the money allocated on the County level as the number Regular City Council Meeting March 1, 1983 - Minutes Page 6 (Sanitary Landfill, Continued) one priority, thinking itwould be easier to get the necessary funding if the plan is already in order. Mayor Windschitl agreed the pit is the City's first concern. But the City has a secondary concern with the physical termination of the landfill as well and does not want to ignore the problem of the entire landfill itself. In discussing the long-term problem of ground water pollution, Commissioner Haas stated she personally saw the removal of the contents from the hazardous waste pit as a place to begin. Afterwards, she foresaw continous contact with the PCA and EPA for a final solution of the problem. She stated she has not heard any response from Mr. Roth on this matter, and the question of his reopening the landfill has never been discussed by the County Board. She personally does not favor the relicensing at this time. She has also asked that the bonding requirements for landfill licenses be addressed, though the County Board has not yet discussed it. ANDOVER VOLUNTEER FIRE DEPARTMENT REPORT Fire Chief Frank Stone explained a gentleman in the City has an old antique fire truck he wishes to donate to the Fire Department to possibly be used as a parade unit. It is a 1946 or 1949, runs, has a 2,OOO-gallon tank with tandums. One of the fire fighters stated he would store the vehicle. After discussion it was felt that if the Department would like the vehicle, it should be donated to the City, not to the fire fighters, and it would probably be required to be insured for liability. Councilman Orttel agreed to investigate the insurance aspect. Chief Stone stated he would pursue this matter further with the fire fighters. Chief Stone asked if he would be allowed to use a form to issue violation, warning, and complaint orders. He would use this in instances such as a chimney fire where the fire would be such that he would condemn the chimney. It is simply an ordinance violation, a warning tag, and no fines are involved. Council noted it is a question of who has the authority to issue those orders, but generally had no problem with the Chief doing so if he has that authority. Chief Stone also reported the wiverdoftthe fire fighters have formed a ladies auxiliary, with Wanda Schreiner acting a5pres en until the constitution and by-laws are approved. He asked if those by-laws need Council approval. Ms. Schreiner presented copies of those by-laws to the Council. Attorney Hawkins advised that the Council does not need to approve those by-laws. Chief Stone also introduced Linda Nordstrom, who is in charge of the Mother's Day pancake breakfast. Ms. Nordstrom asked for Council approval for the use of the fire station for that pancake breakfast, which will be put on by the fire fighters with the proceeds then being donated to the ladies auxiliary to start them out. It is also felt that by holding this at the fire station, it will be good public relations. They will be working closely with the Lions Club in this project. Mayor Windschitl felt if tickets are going to be sold, it should disclose where the proceeds are going. MOTION by Ortte1, Seconded by Lachinski, that we authorize the use of the Fire Station for the Andover Fire Fighters on Sunday, May 8, for a pancake breakfast. Motion carried unanimously. Mayor Windschitl then called a Special Closed Meeting for the discussion of the Senior Citizens Center. 10:00 p.m. The Regular Meeting resumed at 11:15 p.m. BARTON-ASCHMAN CONTRACT Chairman Bosell felt the meeting with the consultant on lot sizes was over and above what the contract calls for. Council noted that the original contract calls for the billing for extra meetings to be on a time and material basis, not at $500 a meeting as suggested in Mr. Short's letter to the Council. Mayor Windschit1 asked if there is Regular City Council Meeting March 1, 1983 - Minutes Page 7 (Barton-Aschman Contract, Continued) going to be more meetings required than what was agreed to in the initial contract. Chairman Bosell stated the recommendation for more meetings is at her direction, not from Barton-Aschman. Because there are three new, inexperienced, Commissioners, she anticipates additional time will be needed in redrafting the ordinances. Because she knows the Council does not like surpirses at the end of a project, she asked Barton-Aschman to deal with the issue at this time. She felt that two additional meetings will be required. Mayor Windschitl stated if there are additional meetings, the City should be willing to pay for them at some reasonable rate, but not agreeing that $500 a meeting is a reasonable rate. Councilman Elling noted there is a wide range in hourly rates in the contract for Senior Associate, that being from $35 to $55 an hour; and he felt that should be tied down to a specific rate. Council generally agreed to authorize up to $1000 for the Planning Commission to hold additional meetings with Barton-Aschman at time and material costs per meeting, those meetings to be held at the Chairman's discretion. Council also asked that Barton- Aschman provide a progress report to date of costs, work completed, etc. MOTION by Orttel, Seconded by Lachinski, that we authorize the Planning Commission Cha1rman to incur up to an additional $1,000 in expenses for meetings to complete the rewriting of our ordinances to comply with the Comprehensive Plan. DISCUSSION: After discussion it was agreed the progress report should be received prior to taking any action to authorize additional funds. Councilmen Lachinski and Orttel WITHDREW the Second and the Motion It was also generally agreed that the Council and Planning Commission should hold a special joint meeting on Tuesday, March 29 to discuss the draft and some of the philosophies involved in the rewriting of Ordinances 8 and 10. Chairman Bosell stated she would see to it the Council gets copies of the draft done by Barton-Aschman. APPROVAL OF CLAIMS MOTION by Elling, Seconded by Lachinski, that we approve the Claims of Checks Number 6284 through 6321 with the exception of Check Number 6289, not approving that claim until we get the first status report, for a grand total of $15,780.40. Motion carried unan imous ly. APPROVAL OF MINUTES February 9, 1983, Special Meeting: Page 2, Shows 35x134 feet. Should be 85x134 feet February 15, Regular Meeting and February 15, Special Closed Meeting: Correct as written. MOTION by Elling, Seconded by Knight, that we approve the Council Minutes from February 9, 15, and Special Meeting of the 15th as,corrected. Motion carried unanimously. MOTION by Elling, Seconded by Knight, to adjourn. Motion carried unanimously. Meeting adjourned at 11:53 p.m. Respectfully submitted, , r, '\ /,w"/ L ' , , :\ -<'. --- \ \ \(J,~ C l ":'\' U,-<- Marcella A. Peach Recording Secretary ~ 01 ANDOVER SPECIAL CLOSED MEETING - ANDOVER CITY COUNCIL/CITY ATTORNEY MARCH 1, 1983 MINUTES A portion of the Regular Bi-Monthly Meeting of the Andover City Council was closed to the public and called to order by Mayor Jerry Windschitl on March 1, 1983, 10:00 p.m" at the Andover City Hall, 1685 Crosstown Boulevard NW, Anoka, Minnesota, to discuss legal matters relating to the Senior Citizen Center with the City Attorney. Councilmen present: Elling, Knight, Lachinski, Orttel Councilmen absent: None Also present: City Attorney, William G. Hawkins; BRA Engineer, Brad Lemberg, City Engineer, James Schrantz; and Planning and Zoning Chair- person, d'Arcy Bosell Mayor Windschitl told Mr. Lemberg that the Council is having difficulty with the amount of the engineering costs to date on this project. Attorney Hawkins stated the offer approved February 15 was made to the other party. He explained the proposal to the Council at the last meeting, talking about the engineering costs, attorney fees, and liquidated damages to May 15. At that time there was a question about the amount of the additional engineering bills, indicating the $5,000 did not cover the additional amount that had been billed. But there was some question as to whether or not that included extra time as a result of the default and why there was so much engineering fees over and above the original contract amount. He spoke with Mr. Lemberg about this two or three times before bringing it to the Council. Mr. Lemberg was advised of the settlement agreement and subsequently informed him the settlement was not reasonable and that it wouldn't even begin to cover the engineering fees. Attorney Hawkins stated he is not in disagreement with what the BRA attorney has written in a letter, as obviously the bonding company is responsible for all additional costs as a result of the default. The problem at that last meeting was whether or not the amount that Mr. Lemberg had indicated as additional charges was,in fact reasonable. At that meeting it was decided to accept the $5,000 liquidated damages and conclude this matter. He has conveyed that settlement to the other side; however, the agreement is not signed. He explained the negotiations that took place in reaching the $5,000 compromise, noting he started with $10,000 and the other side started at $2,000. Their alternative was to compromise at $5,000 or have the City go out for bids and complete the job. Attorney Hawkins felt that both the bonding company and the Council had a question as to whether or not the engineering fees to date on this project are reasonab le. Mr. Lemberg handed a packet of material to the Council containing documentation of time and costs spent in:the project, a summary of correspondence with the contractor and some of the pertinent correspondence. Mr. Lemberg then explained some of the many problems they had with the contractor on this job, which in turn caused additional time on the project. He also explained this same contractor bid a job in Afton and had good recommendations. Plus the contractor had an SBA loan and SBA bond on this project, which meant he was a qualified bidder. Mr. Lemberg explained the time delays by the contractor and the problems with the footings, explaining when the footings were redone at the decision of the contractor, they were placed in different locations and the drawings had to then be redone and reviewed to coincide with the footings. He went on to state that the shop drawings were reviewed and rejected because there was something wrong each time. He stated many things were submitted by All State that were not in a form that could be judged whether or not it was the proper material. The engineering time spent was also in the many calls, letters, etc., to the contractor and the bonding company reminding them of the completion date, a requirement of the government. Special Closed Meeting March 1, 1983 - Minutes Page 2 Mr. Lemberg stated they feel the City is entitled to liquidated damages because the City has no use of the garage, they have no use of the warming house, the tower has been taken down, and the lights have been shut off to the skating rink. He referred to the pages of actual hours spent from the date of contract to January 30, 1983, comparing those hours to what would normally be spent in such a project. Normally a job of this nature would be about $2,344. The additional hours because of the many problems with the contractor was $4,882, for a total of $7,226. He explained there were many times when the contractor would call to have an inspector out to pour footings at a specific time; when the inspector arrived, nothing was being done. However, now a new contractor will take over the job who is using new suppliers.arrd all the shop drawings will have to be reviewed again to be sure they are meeting the specifications. Mayor Windschitl felt the 35 hours shown .for inspection was staggering considering only the footings have been poured on the project thus far. Mr. Lemberg again explained there were many many times when they were called out by the contractor but then never showed up. He is saying that is a damage to the City, and it should be covered by the bonding company. Councilman Lachinski stated maybe if this information and documentation had been available at the time the Council was making the decision, it wouldn't have been so difficult to make the decision. Mr. Lemberg stated there may have been a misunderstand- ing, but he told Mr. Hawkins over the phone that in addition to the billing, to protect the City they recommend getting at least $7,500 in addition thereto. He had originally planned to be at the last meeting but was told he did not have to be. He went on to explain he and the City officials met with the bonding company representatives and those of Marcus Company, and Marcus stated they did not want their own bonding company but wanted the one now covering the project to stay on it to be sure everything is covered. He stated he told the bonding company at that time that they would not go along with passing it on to another contractor.. Councilman Lachinski stated it is the Council's understanding when the Attorney asked for a dollar figure from the engineering firm, only a rough estimate was given but none of the documentation and backup material that has been provided this evening was given. Mr. Lemberg stated this information is still good because the agreement has not yet been signed and the Council can change its mind. Mr. Hawkins stated ethically the settlement has been agreed to and should be adhered to; however, legally it has not yet been signed. Mr. Hawkins again explained how he had contacted Mr. Lemberg asking for this information, his proposal to.the other side, the question on what appeared to be excessive engineering fees at that time, his contact with Mr. Lemberg of the $5,000 settlement proposal, and Mr. Lemberg's inability to provide a breakdown of costs charged to the project at that time. Councilman Lachinski understood that the only other option at that point was to rebid the project. Mr. Lemberg stated that is not correct. The City has the legal force to require the bonding company to complete the job. Attorney Hawkins stated there are three options which the bonding company has, and one of those was to have the City rebid the job. Mr. Lemberg stated they have rebid the job already. Mayor Windschitl stated this is different than what was explained at the last meeting. His question was why the City would want to let the bonding company out of the project, and the opinion at that time was because the City would end up rebidding the project. Mr. Hawkins explained his statement was if an agreement couldn't be reached, the bonding company would just let the City rebid the project and they would be obligated to pay the City up to the $119,OOO of the bond, and the City would have to go through arbitration on the liquidated damages at a latter time. Mr. Lemberg stated the bonding company has . to pay whatever the new bid comes in. Special Closed Meeting March 1, 1983 - Minutes Page 3 Councilman Lachinski stated at that time he was under the impression the City was potentially putting itself in the position where it would not have the funds to cover the project. Mr. Hawkins stated that is not correct and was never the issue. The question was the City would have to go out and start allover again and possibly rebid the project if the negotiations fell through. The bonding company would have to cover the difference between the new contract price and the original contract, which is what the City's damages would be, so there is more than enough money to cover the project. Councilman Lachinski then asked why the City would want to negotiate any settlement with the bonding company at all. Mr. Hawkins stated he would never have come to the City Council with the $5,000 negotiated settlement if he didn't think it would cover the costs. That was the problem. But at that time there was some serious question as to how much the engineers were charging for the additional work and whether or not that should be included in the $5,000. He had stated his fees were going to be $750, and there was speculation as to how much the engineering costs should or would be. Councilman Ortte1 stated the thinking was if the same building was going to be built, a lot of those costs incurred should not have to be duplicated. Mr. Lemberg stated that is true; and the building is supposed to be somewhere in town, though they have not yet been able to locate it. He acknowledged that All State submitted only about one-third of what they were supposed to in the way of shop drawings, and many times they had things that needed to be corrected. Marcus does expect to use the same building if they can find it. In that case there would be no more shop drawings to approve. They have not spent any more time finding the building because it has been turned over to the bonding company. In answer to the question of how much more engineering fees will be on the project. Mr. Lemberg stated if the shop drawings are correct, it shouldn't cost over a couple thousand dollars total to do all the shop drawings and inspections. A lot of the inspections are going to be done by City staff. He stated it is their feeling the City should collect for the damages incurred over the past year, that being at least $6,200. Mayor Windschitl stated there is also the matter of the $lOO-a-day liquidated damages. Mr. Hawkins stated the liquidated damages are set; it's the penalty to cover those costs because a lot of them are intangible and cannot be determined. Mr. Hawkins stated the settlement with the bonding company is for all issues with the exception that they would be responsible to pay all contractors that are unpaid prior to the time the new bonding company and new contractor comes in. And the warranty will extend to any work done prior to that. He talked to Mr. Lemberg about that, and they could think of no other contingencies that could come up. Mayor Windschitl asked if the bonding company has an obligation to pay the difference between the original contract and a new contract, and the City can enforce the $lOO~a- day liquidated damages, the additional attorney fees, and additional engineering fees, why would the City want to settle this now. Mr. Hawkins stated so the City can get the project completed. The maximum liquidated damages the City could collect, assuming the project was done in two months, would be $12,000. The only question he would have is whether or not the engineering and legal fees are included in the liquidated damages. . His understanding is that they were included and the reason for the $100 is to cover ·al1 those costs plus the intangibles. Mr. Lemberg agreed with Mr. Hawkins' assessment of the situation. Mr. Lemberg stated the project has already been rebid and the costs are significantly higher. He disagreed with Mr. Hawkins that the bonding company can make the City rebid the project. He felt the bonding company is obligated to bid the project to pay damages. Mr. Hawkins stated they would have to pay damages, and then the City would end up rebidding the project. But there is always a question on liquidated damages as to Special Closed Meeting March 1, 1983 - Minutes Page 4 weekends, and some things are beyond the control of the contractor. It's the type of issue where the bonding company won't hand over $12,000, but it would end up in arbitration. He tried to get a settlement to cover all the City's costs and get the project going again, and the problem came in because he couldn't get a specific figure from Mr. Lemberg at that time of all additional engineering costs. Councilman Lachinski stated at that time the Council believed the $5,000 was going to adequately cover the engineering fees, believing the engineering bill is too high. Mayor Windschitl stated he still believes the bill is too high. Councilman Lachinski stated the Council should now look at the engineering bill and determine the proper amount to cover expenses. The ethical question was raised, but at the time the decision was being made, the Council did not have all the data available; and the agreement still has not been signed. Mayor Windschitl asked Mr. Lemberg if one of their peers would agree the engineering fees incurred on this project are reasonable. He noted the hours spent on the project were twice the normal amount, and the big disparity is in the inspection time. Mr. Lemberg stated yes. The documentation clearly shows the costs. He stated the in- spection time is basically trips to the City Hall, which amounted to approximately five hours a month. Mayor Windschitl argued the inspection took place in basically two months because prior to November virtually nothing had been done. Mr. Lemberg again stated the contractor asked them to come out many many times and then didn't show up to do the work. Council- man Orttel was curious as to why an engineer from BRA would come out to inspect the footings. Why couldn't the City Building Inspector do it? Mayor Windschitl stated he can understand it happening once, but after that he felt the logical thing would have been to call the City before making the trip out. He felt some judgement should have been made on the part of the engineering firm and not just blindly put in more hours on the project. Mr. Lemberg stated in construction, things don't always work that way. Councilman Lachinski asked Mr. Lemberg if he was in the position of stating a maximum dollar amount to finish this project. Mr. Lemberg stated he didn't know the contractor and didn't think anyone would be able to do that. Councilman Knight stated he found it incredible that a company this inept could continue to operate for four-five-six months and everyone "chase his tail". He felt it should have been brought to someone's attention in the middle of all this. Mr. Lemberg stated it was. What must be remembered is that All State is an SBA contractor with an SBA bond and the government does not allow them to touch the contractor other than writing them letters, which he has documented for the Council. Discussion was that the Council was aware of the problem with the contractor, but they were not aware of the engineering fees accumulating. Mr. Lemberg stated those costs are the responsibility of the bonding company. Discussion was that with only a $5,000 settlement from the bonding company, the City is loosing money plus it is expected it will cost an additional $2,000 for engineering fees before the project is finished, for a total loss to the City for engineering and legal fees of approximately $7,500. There was discussion on speculation of what engineering fees would have been if the contract had been completed on time, where the payment of those extra engineering fees would have come from, and whose responsibility is it to see that the proper grant funds were requested for the project. Mr. Lemberg argued if the project had gone along as it should have, those extra costs would not have been incurred. This type of thing does not happen in a normal contract; it is not a normal situation. He again explained the low bidder must be recommended if he Is. .an SBA contract. Mr. Lemberg also stated the City does have the proper grant funds for the project. The additional costs to the project should not have to be paid by the City because that is the responsibility of the bonding company. Special Closed Meeting March 1, 1983 - Minutes Page 5 Mayor Windschitl asked assuming the Council moved not to sign the settlement, how quickly will the project get moving. Mr. Lemberg stated the contractor has been ready to begin for two weeks and are ready to begin as soon as they get the go ahead from the bonding company. He again reviewed his meeting with City officials and representa- tives of the bonding company and Marcus Construction and that Marcus wanted the bonding company to continue on the project. He stated they cannot back out of the contract. Attorney Hawkins stated he indicated to the other attorney that they had an agreement; however, nothing has been signed and the Council is not legally bound to that agreement. Because of the misunderstanding, he felt there is a basis to change the decision and he would,let the other side know. He agreed with Mr. Lemberg that the City should not pay anything over and above the actual costs and that the bonding company should cover every penny of reasonable expenses incurred as a result of the default of the contractor, which is what he was trying to determine. He had thought the $5,000 was adequate, not having all the engineering fees at that time. If the Council feels the engineering fees are reasonable, he had no problem telling that to the other attorney. Mr. Lemberg recommended the bonding company be made to complete the project, and he read a letter from their attorney rendering the same opinion that the City is entitled to all additional expenses. Council generally felt that a new settlement should be negotiated to recover the additional costs incurred as a result of the default of the contractor and that the bonding company be held responsible for completing the project. Mr. Lemberg agreed to donate his time to attend a meeting to negotiate a settlement. If he cannot be present, he would send someone else from BRA. MOTION by Lachinski, Seconded by Elling, to rescind the prior motion authorizing the Attorney to enter into agreement with the bonding company for the Senior Citizen Center dated February 15, 1983, and authorize representatives from Bonestroo to attend the meeting with the Attorney to negotiate the completion of the settlement. Motion carried unanimously. The Special Closed Meeting was closed at 11:15 p.m. Respectfully submitted, ~~~y~ Marce A. Peach Recording Secretary