CR2002-193 Change Order - Lake St Bridge
CITY OF
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HOPKiNS
. December 12, 2002 Council Report 2002-193
Approve Construction Change Order - Lake Street Bridge Reconstruction Project,
Project No. 99-03
Proposed Action.
Staff recommends adoption of the following motion: Move that Council approve
additional construction costs in the amount of $19,451.10 for construction work and
settlement of claims bV Lunda Construction Co. and its subcontractors on the Lake
Street Bridqe reconstruction project
Overview.
Lunda Construction Co. has requested additional compensation on this project due to:
project delays, additional general contractor mark-up on subcontractor work and for
otherwise unpaid construction work. The request totaled $62,303.33. The City incurred
additional engineering costs of $7,000 due to the sanitary sewer force main break. City
staff met with Lunda Construction Co. personnel and has negotiated a settlement
amount of $19,451.10. It should be pointed out that $4,451.10 of the additional cost
was undisputed by the City and represents additional construction costs for driveway
work, additional rebar and Lunda Const work on wood piling removal. City staff
. requests that City Council approve the Lunda Construction Co. change order.
Primary Issues to Consider.
. Cost Justification: Lunda Construction had asked for compensation totaling more
than $58,000 for extra sewage pumping costs, extended office overhead expense,
and general contractor mark up of 15% vs. 5%. The negotiated settlement pays only
for the office overhead expense and avoids arbitration that the City Attorney has
estimated could cost the city more than $10,000 in arbitration fees plus any
arbitrator's settlement amount.
Supportinq information.
. De~eter 4, 2~l1\ity Attorney letter
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Steven J. Stadler, Public Works Director
Financial Impact: $ 19,451.10 Budgeted: Y IN N Source: Utility + PIR funds
Related Documents (CIP, ERP, etc.):
Notes:
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MILLER, STEINER & CURTISS, P.A.
. ATTORNEYS AT LA W
400 WELLS FARGO BANK BUILDING
1011 FIRST STREET SOUTH
HOPKINS, MN 55343
JERRE A. MILLER
JEREMY S. STErNER '"
WYNN CURTISS (952) 938-7635
KIRSTEN A. HOLSETH FAX (952) 938-7670
.Real Property Law Specialist, certified
by the Minnesota State Bar Association
Writer's Direct Dial No. 952-938-6219
December 4, 2002
Mr. Christian Fox
Corporate Counsel
Lunda Construction VIA FACSIMILE AND
620 Gebhardt Road FIRST CLASS MAIL
Black River Falls, WI 54615
Re: City of Hopkins Lake Street Bridge Project
. Dear Mr. Fox:
This letter will confirm the settlement negotiated at our meeting on November 26 of Lunda's three claims
against the City of Hopkins as described in my letter to you dated August 13, 2002. Lunda Construction
Company has agreed to accept the sum of $15,000 in full and final settlement of those three claims. Steve
Stadler and I agreed to recommend to the Hopkins City Council that it approve this settlement and authorize
payment of $15,000 to Lunda in satisfaction of the three claims outlined in my August 13 letter. As we
discussed at our November 26 meeting, final settlement of Lunda's claims can only be approved by the
Hopkins City Council. It is my understanding Steve Stadler will arrange to have this item placed on the
agenda for the December 17 City Council meeting. Assuming it is approved, we should be able to process
final payment shortly after the 17th.
At the November 26 meeting, we also discussed four or five other, relatively minor, changes and
adjustments to the final contract price. I would suggest that you have Dennis Behnke follow up to confirm
these items with Bob Moore andlor Steve Stadler so that they can be processed and approved for payment
at the same time as the $15,000 settlement payment, assuming that payment is approved by the City Council.
Please notify me immediately if I have misstated the agreement negotiated at our November 26 meeting.
Yours very truly,
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lSSldrs
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cc: Mr. Steven Stadler, City of Hopkins, Director of Public Works wlo ene. !/
Hopcivil\Fox.ltr