Loading...
05/26/1970 - 00018759� � THE MINUTES OF THE SPECIAL WORKSHOP COUNCIL NlEETING OE MAY 26, 1970 Mayor Kirkham called the Special Council Workshop Meeting of the City Council to oxder at 6:00 P.M. ROLL CALL: MEMBERS PRESENT: Harris, Breider, Kirkham MEMBERS ABSENT: Liebl, Sheridan REPORT BY CITY ATTORNEY REGARDSNG CHIES MANDAMUS SUIT, The City Attorney reported that he had checked with Virgil Herrick, the former City Attorney, and he said that Mr. Chies has been brouqht to Municipal Court three times, the last time he was ordered to clean up his property or qo to aail, He cleaned up the property by pushing the debris onto the City right of way. He said that in his opinion the City did not have any legal right to withhold the balance of the condemnation award due Nir. Chies. He reported that he has talked to the Finance Director and they feel that the best way to handle the $3,250 due for the clean up is through assessment. If the assessment is appealed in Court, it can be fought. The Chies mattex is in court the 29th of May. � MOTION by Councilman Harris to proceed with trying to recover the outstanding $3,250 from Mr. Chies through assessment, as outlined by the City Attorney. Seconded by Councilman Breider. Upon a voice vote, all voting aye, Mayor Kirkham declared the motion carried. Councilman Harris commented that he hoped that the Courts will not let him go, without puttinq up the fence. He has been a.n violation of �he Crty Ordinances, and there is a principal involved here. D.M. NOYE5 CONSTRUCTION COMPANY: (WATER AND SEWER PROSECT #93 (�� � The City Attorney reported that it is his conclusion that the suppliers cannot sue the City, as long as there is a bonding company. The State Statutes set out an exclusive procedure for Municipalities to follow. In his opinion, the suppliers for the pro�ect may try to sue for payment, but he felt that the Court would not uphold the suit. He felt that the City would be on very risky ground interfering with the Noyes contractural agreement, and that they must be treated like any other construction company, without regard to the bonding company's unstable financial condita.on. He felt that the Council should take the position of concurring with the Consulting �ngineer and pay for the work that is completed Councilman Harris said that he was concerned about the bonding company going � broke. The Ca.ty Attorney said that there was not too much to fear in the suppliers suing the City, but Noyes would be in a position to sue the Ci�ty for breach oP contract i£ the payments were not made. Mayor Kirkham asked if there was any more recent report on the standing of the bonding company, and the City Attorney replied no. The checks are still being made out to the Noyes company in con- �� SFECSAL COUNCIL ME�TING OF MAY 26, 1970 PAGE 2 7unction with the bonding company He thought that the bonding company may be � making payments on other o1d claims, rather than on the Fridley site. He said that Mr. Noyes does not ob7ect to this method of payment. He pointed out that Noyes would be personally liable if they detsa.lt. Councilman Harris asked if there had been any work done the past week. Mr. Comstock, Consulting Engineer said yes, they have been testing as they said they would at the last Council Meeting. Out of some 20,000 feet of lines, 9,464 feet have been tested, and there have been some areas located that need repairs. He felt that about i of the lines passed the testing. The manholes have been finished and the inverts axe now all right. He £elt that there should still be some adjustments retained, as there is still some repairing to do. He indicated the Council could make a payment of an estimate £or $20,100.74 which is the most that could be paid based on work completed. Mayor Kirkham asked Mr Comstock, if this was another contractor, would some money be held back and Mr. Comstock replied yes. Mr. Comstock said that normally there is a two or three week interval between the completed work and the time the estimate is submitted to the Council for payment. Councilman Harris commented that the last two or three �obs have taken a lot of time of the Consulting Engineers, which brings up the question of whether the lowest bidder, is rcally low. The constant supervision and inspections by the Consulting Engineers cost money too. Mr. Noyes handed out a financial analysis since May to the members of the � Council, which showed the status of the job. He said that it should be close to final. There was a$121,000 net loss on the project. He asked how the project is to be financed to get it completed. He said that he needed at least $25,000 to meet the payroll. He said that he would also like to pay some to his suppliers. He said that if the Council wished to make payment jointly with the suppliers this was agreeable with him. He felt that the normal guidelines did not hold in this case, He said that his suggestion would be for the City to provide the money for completion of the job. Mr. Comstock said that there has been about $118,000 pazd to date, and there is sti11 about $116,000 to be paid. He said that Mr. Noyes believes that there will still be between $5,000 and $10,000 to collect from the bonding company at the completion of the pro�ect. Councilman Harris said that Mr Noyes must realize that the City would be liable for a citizen's law suit if there is a deviation from the contract. Mr. Noyes commented that he did not £eel that the $50,000 should be held back, but obviously Mr. Comstock feels differently. Mr. Comstock said that he was happy with the testing done so far, but now they have started new construction. He said that the simplest method for receiving payment would be to continue testing There was nothing done today. Mr. Jack Weber, of D.M. Noyes Construction Company said that he was unaware that the testing had been stopped and that it would be started again in the morning. Mr. Comstock said that as soon as the testing is done, and the repairs are made, more money will be released. Mr. , Weber asked what 7ustification there is for not paying for work completed last week. Mr. Comstock said that this Saas not mentioned last week, and payments should be handled like any other payment on a pro�ect. SPECIAL WORKSHOP MEETING OF MAY 26, 1970 PAGE 3 � Mayor Kirkham said that the Council is willing to pay only for that portion that is satisfactorily completed. He said that he could not agree to paying anything moxe than the Consult�ng Engineer recommends. Councilman Iiarxis added that the Council wi11 be meeting over the next three weeks, and when the work is completed, there can be a new estimate submitted for payment. � Mr. lJOyes said that at the completion of the project there will be a shortage of about $5,000_ He said that he has liquidated some of his assets to make the payments. MOTIUN by Councilman Harris to authorize payment of $20,1OD 74, �ointly to Noyes and the bonding company, and ask that thexe again be an estunate on the �lgenda next Monday, the procedure to be the same as last week, whereby Noyes is to meet with the Consulting Engineer on Monday before payment. Seconded by Councilman Breider. Upon a voice vote, all voting aye, Mayor Kirkham declared the motion carried. CONSIDERATION OF THE SALE OF MUNICIPAL BONDS: (ROBERT EHLERS): Mr. Rober� Ehlers explained that if the sale is to be June 1, 1970, there would be no chance of a rate change for the City. There must be at least one working day between a rate change and a sale. There is a meeting set up for Thursday in New York at 10 00 A.M. wrth Moody's wha.ch the City L'ngineer and the Finance Director and himself plan on attending. He fclt that there would be less than a 50-50 chance of getting the rate changed, but he felt that it would be worth while trying. He said that the market is the worst it has ever been for tax exempt bonds, but it should improve. If it should get worse, it may mean that the bonds cannot be sold a[. all. Ae said that he recommended postponing the sale of the bonds to the 29th of June. Councilman Harris said that he would agree. He asked what the premise would be for attempting to get a better rating for Fridley, Mr. Ehlers said that Eridley has been improving rapidly, and he felt that Eridley should be within an A rating. There are not many communities having over 50% industrial and commercial enterprises. He said that also many communities are not as far advanced with the sewer and water improvements. Councilman Harris felt that the calculated risk must be taken in sending the City Engineer and Finance Director to New York and postponing the bond sale. Mr. Ehlers fel.t that the personal contact with the analyst would be helpful. MOTIOP7 by Councilman Aazris to postpone the sale of municipal bonds �rom June l, 1970 to June 29, 1970, at 7:30 P.M. Seconded by Councilman Breider. Upon a voice vote, all voting aye, Mayor Kirkham declared the motion carried. AD,7DURNMENT: There bezng no further business, Mayor Kirkham declared the Special Workshop Council Meeting ad�ourned at 6:50 P.M. � Respectfully submitted, � �/� �/� y� �I�C-f' �jC.C�".,l a'✓'�� Juel Mercer Secretary to the City Council n / �tr %j �-� {J� // ii.C�/��� _ 2 1�- �C�-�-� � / Sack 0. Kirkh � J� Mayor �, .> � ;�