Flushing City Council
Minutes
July 5, 2005
A Special Meeting of the Flushing City Council was called
to order on Tuesday, July 5, 2005
at 4:00 p.m. by Mayor Janice L.
Gensel, followed by the Pledge of Allegiance to the Flag and invocation.
Present: Richard L.
Bade
John C. Gault
Janice
L. Gensel
George
G. Kozan
Richard
Mark
Teresa
K. Salem
Michael
T. Szukhent
Absent: None
Others Present: Dennis J. Bow, City
Manager
Nancy
G. Parks, City Clerk/Treasurer
Edward
G. Henneke, City Attorney
MEETING OPEN TO THE PUBLIC:
No comments.
REPORTS:
City
Hall/Police Station Construction Status – The City Attorney brought the
Council up to date on the status of the negotiations with the Hanover Insurance
Company. The City Manager stated that
many of the previous subcontractors have been paid and that some are waiting to
sign contracts with the new contractor.
Hanover
hired a representative from Chicago
and he came in and gathered information to put together a new bid spec. The contractor that has been selected is
Siwek. Siwek put together a proposal and
Hanover has agreed to pay the
amount over and above what the City has in the bank to complete the
project. Additional costs that the City
has incurred for utility bills, attorney fees, site
clean up and police services, will be paid by Hanover. The City is in dispute with Hanover
over two (2) items: 1) the elevator,
because it was left outside, and alleged over-payment
on the brickwork ($31,425.00), and 2) additional architectural fees
($35,112.87). The architectural fees
include $12,000.00 in future costs to complete the project.
Flushing
City Council
Minutes
July 5,
2005
Page
Two
The attorney stated that Hanover
has exercised option 4.3 under the performance bond. Hanover
has agreed to pay to the City the amount of damages as described in Paragraph 6
in excess of the Balance of the Contract Price incurred by the City resulting
from Direct Building’s
default. The new contractor, Siwek, will
be required to provide their own performance bond. Hanover
is requesting the City sign a release.
The City attorney doesn’t believe that the performance bond requires a
release. The performance bond covers any
latent defects that may result from Direct
Building’s construction. Mr. Henneke also stated that, through
Hanover’s
attorney, they have agreed to make a partial payment on the architect fees that
have accrued; much of the work done was at the request of Hanover. Hanover
has also agreed to pay all subcontractors that were part of the original
contract. The amount in question,
relating to the elevator and brickwork, will be settled through arbitration.
Several Councilpersons questioned
why the City should be liable for even one penny, when the City hired a
contractor who was bonded. Councilperson
Gault feels that the City should pursue this matter in court. Mr. Henneke explained that the City had a
separate contract with THA; the architects did not have a contract with
Direct
Building. Mr. Henneke stated that the City could
contract directly with Siwek and go to court with Hanover.
The City Manager stated that the
City has some options: 1) the City could
contract with Siwek and sue Hanover
for breach of contract, or 2) if this is Hanover’s
last and final offer, the City can wait until the outstanding issues are
resolved.
Councilperson Salem
questioned the problem with the elevator.
The City Manager responded that it is Hanover’s
contention that THA allowed the elevator to stay out in the weather longer than
it should have, thus nullifying the warranty.
There may be absolutely nothing wrong with the elevator. Hanover
claims that THA should have backed the cost of the elevator out of a future
payment. Councilperson Mark stated that
the architect does not control the job site and should not be held responsible.
Mr. Henneke suggested that Council
work to resolve these issues so that the project could move forward and not be
tied up in court. Councilperson Mark
brought up the concern of latent defects and how Hanover and Siwek’s bonding
company could dispute which company is responsible for latent defects. Councilperson Szukhent asked if we could
require Hanover to bond
Siwek. Mr. Henneke responded that, under
this performance bond, the City could not.
Councilperson Szukhent felt that the City should attempt to negotiate
this.
Flushing
City Council
Minutes
July 5,
2005
Page
Three
Agreement
– Motion by Mark, seconded by Bade, to direct the City Attorney to prepare a
counter offer to Hanover’s proposal to include the following: 1) Hanover issue a performance bond to Siwek
to avoid the issue of latent defects, 2) Hanover be responsible for architect
fees, 3) that compensation include the cost of a new elevator or a guarantee
that the elevator is under complete warranty, and 4) that Hanover provide for
all additional attorney fees.
Yea: Bade,
Gault, Kozan, Mark, Salem,
Szukhent, Gensel
Nay: None
Motion Carried.
Adjournment
– Motion by Kozan, seconded by Bade, to adjourn.
Yea: Bade,
Gault, Kozan, Mark, Salem,
Szukhent, Gensel
Nay: None
Motion Carried.
Adjourn: 5:50 p.m.
_____________________________ ______________________________
Janice
L. Gensel, Mayor Nancy G. Parks, City Clerk/Treasurer