Minutes of the Regular September 11, 2012 Motley City Council Meeting

SPECIAL MEETING – MOTLEY CITY COUNCIL Continued from April 21, 2014 Motley, MN April 23, 2014

Pursuant to due call and notice thereof, Mayor Nieken called the meeting to order at 6:00 p.m. with the following council members present: Amy Hutchison, Rob Sampson, Steve Johnson & Pat O’Regan. The meeting took place at city hall.

The following persons were present for all or part of the meeting: Attorney Tom Pearson and Dan Hawley, Gammello Qualley Pearson & Mallak; Bruce Brotherton; Dawn Timbs; Tina Snell; John Graupman, Bolton & Menk; County Commissioner Kevin Maurer; Dan Euerle and Dick Hollatz, Di-Mar Construction; Paul Meyer & Terri Smith.

This meeting is continued from April 21, 2014.

John Graupman reminded everyone that PFA would be the preferred way to finance the Water Treatment Facility (WTF) as opposed to conventional bonding. Di-Mar Construction was the low bidder from the bidding process at $3,130,000.00. Second low bid was Rice Lake Construction at $3,174,600.00. The estimated amount for construction of this project is $3.3 million so both companies are under the estimated project costs.

Attorney Paul Meyer, representing Di-Mar, took the position that Di-Mar was the low responsible bidder and should be awarded the project. Dick Hollatz, Di-Mar co-owner, stated he was willing to answer any question although he felt that the affidavit answered most questions. His position was that he didn’t know about the problems that we were having with the Wastewater Treatment Facility. The specs for the equipment were determined by WSN. He went on to say that Di-Mar are contractors not designers and that they had not ever worked with Blue Water Technology before and that the process that was used in Motley is not a process that is used very often in wastewater plants. Di-Mar has been in business since 1999 and Hollatz has built wastewater plants for 41 years. They have successfully built dozens of water treatment plants. Hollatz stated that they never have had issues or been assessed liquidated damages. They are still anxious to work for Motley and feel that they can do a good job on this project. Hollatz will be the project manager and Dan Euerle will be the superintendent of the project as they both were for the WWTF.

O’Regan asked if Hollatz was stating that design flaws, not the constructions were the cause of the WWTF not working efficiently for us. Hollatz answered that he is not a designer and he cannot critique someone’s design. O’Regan asked Brotherton if the problems had anything to do with construction whether it be contractors or subcontractors or are these strictly design problems that we are having. Brotherton stated that there were minor issues in the electrical controls and only one thing that has not been fixed. As far as making it work….he feels Di-Mar built it as it was designed. O’Regan asked Brotherton….has everything been taken care of in a timely manner? Brotherton answered “Yes”. Johnson asked what the one thing was that had not been fixed. Brotherton said the blowers don’t restart after a power outage. Sampson stated that he was trying to determine what the best way to move forward is and he did not personally see any issues that would stop us from moving forward. Sampson continued by saying the problems we are having is something that was spec’d out,

of 3 installed and now does not work quite the way we want it to and that doesn’t have anything to do with Di-Mar. Tonight is looking at the new project and that is where I would like to stay focused. It was pointed out that “up flow filters” are unusual and Blue Water Technologies provided the process equipment that are suppose to treat the water coming in. They were specified in the contract documents. Johnson doesn’t see any major problems with Di-Mar and moving forward with this project but is concerned with the follow up on sub-contractors.

City Attorney Tom Pearson advised that there aren’t sufficient reasons to depart from the low bidder for responsibility or responsive reasons. He didn’t see enough information that would tell him to advise the council to do that. The correct focus would be to move forward on this project. We have an experienced engineer that has worked with this contractor previously. The project stands more on the engineer administering this contract in a way that will make sure we don’t have the same experience with the WTF as we did with the WWTF. O’Regan expressed concerns with moving forward with a contract that the council has not read or seen. Pearson stated that it is a standard contract; he has read it and found that there is nothing in it that is non protective of the city. A contract is as good as the engineer that will administer them. It is less about what the contract terms are in the start than it is about how those terms are handled throughout the project. Graupman addressed supplementary conditions in the contract. Bolton and Menk will assign a full time onsite inspector named Brian Gulden. He has done 7-8 water plants similar to ours and at least half of them have been with Di-Mar as the General Contractor. Graupman voiced that Bolton and Menk accepts the challenge of administering this project. A two (2) year warranty has been built into the contract and they will follow up and get responsiveness to the contractors. Graupman assured the council that Gulden would be there for the entire project. All inspections, unless very specialized inspections, will be done by Gulden.

O’Regan spoke of the fact that the filters for the WWTF had been manufactured wrong and the contract for that project did not protect us. He asked “Are we covered? Standard contract doesn’t tell me that we are covered.” Pearson said “Yes you are. These contracts are generally written to see that the city is protected through the engineer. I can’t speak to the prior problem or to an engineer that wasn’t administering the contract.”

O’Regan expressed concerns about the lack of response by the general contractor to the problems that we were experiencing with the WWTF. “I am not sure who dropped the ball. I don’t remember seeing anyone from the company until we started this new project. I heard month after month that there was no response.” Hollatz reminded everyone that they had been paid complete in late 2011. He would see the problems at the WWTF as more warranty issues and not punch list items. Issues brought to him were minor issues; they were never in the loop for the warranty issues. Brotherton clarified that some of the things weren’t discovered until Di-Mar was long gone. Wires were found that weren’t connected; we keep finding small things. Smith stated that she was hearing different opinions on who was responsible for the subcontractors and she felt it would be helpful if it was clarified. Hollatz confirmed that the General Contractor is responsible for subcontractors.

The chain of communication for the WTF will be as follows: City Staff should contact Graupman or Gulden from Bolton & Menk; Bolton & Menk should contact Di-Mar and Di-Mar will contact the subcontractors. Occasionally engineering staff will contact the subcontractors but not without D-Mar’s knowledge. Hollatz suggested that communication for this project should perhaps be a little more formal. Minutes of the special April 23, 2014 Motley City Council Meeting

O’Regan was not comfortable that it is being alleged that part of the problems from the WWTF were the fault of WSN and they were not present at this meeting to get the whole picture of what went wrong and why. Sampson stated that he did not think the finger was being pointed at WSN. He thinks the point being made is that we must keep everyone in contact and informed. He stressed that we need to trust the people that are working for us and the council needs to make sure they are doing their jobs as well. O’Regan acknowledged that there will always be problems with projects but in his mind it was clearly stated that the problems were the design.

Sampson moved, with a second by Johnson, to award the contract for the 2014 Water Treatment Facility to Di-Mar Construction Co. as the low responsible bidder. Discussion: O’Regan was not comfortable awarding the bid to anyone with so many unanswered questions. Sampson confirmed that this contract does not include the new well and asked if the type of water we get will affect the kind of plant we need. Graupman answered that our current well is the worst case scenario and future wells of better quality water will make treating it much more easily. The borings we did showed marginally better water but nothing substantial. The ratio changes but all had levels hard to treat. Nieken asked if we do not award tonight do we have to start over. Smith answered that the bids were good for 60 days and they would expire tomorrow (April 24th). O’Regan stated he would be more comfortable rebidding. Johnson stated that he believes that we can see where the problems were and he has no problem moving forward. Nieken asked how much it would delay the project to rebid. Graupman answered that it would be a minimum of 6 weeks and ultimately you may be sitting in a similar position. Pearson agreed that a re-bid would not change the possibility of ending up with the same situation or bidders. Upon roll call vote Sampson, Nieken, Hutchison and Johnson voted aye, O’Regan nay. The mayor declared the motion carried.

Sampson thanked everyone for coming out

Graupman welcomed any staff and/or council members to attend the monthly construction meetings if interested.

Sampson moved, with second by Hutchison to adjourn the meeting. The meeting was duly adjourned at 6:55 p.m.

Terri Smith Clerk Treasurer