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Twin Lake area. This area is a long, dead -end road situation that made access very challenging. This project did run the entire summer, as was planned. But, the contractor did an excellent job of maintaining access and making continual progress throughout the job. • Are funds being withheld from the Contractor? State law requires us to promptly pay a contractor for work performed. However, we are allowed to withhold five percent (5 %) of the value of that work. Little Canada routinely does this. In the case of this project, 5% retainage totals $93,117.61. We also estimate the contractor has an additional $300,000 to be collected for work not yet completed as of September 30`11 . • Is the contractor being penalized for his delays? Liquidated damages to the tune of $500 per day can be applied against Tower Asphalt for every day they are beyond the substantial completion date. The City Engineer estimates that $23,000 may be able to be withheld. However, charging the money and collecting it are not the same. Many times a contractor will challenge the imposition of liquidated damages. The City must then prove its damages from a financial standpoint. Depending on how aggressive the contractor is in fighting this matter, a "successful" imposition may yield few dollars by the time the costs associated with collecting them are applied. The City will make its best efforts in imposing and collecting liquidated damages, subject to legal constraints. • Are we entitled to some financial relief due to the delays? In this case, the City Council has indicated this may be possible. While they did not lower the initial assessment due to precedence, they did indicate that to the extent liquidated damages are collected from the contractor, they would apply the net collections (subtracting any out of pocket costs associated with legal or additional engineering fees associated with collection) to the affected property owners on Noel Drive and Carla Lane. Please keep in mind that there is no guarantee that we will have any "net collections" given the issues associated with the imposition of liquidated damages. However, to the extend we are successful, a refund is possible. • What is being done to make sure this doesn't happen again? Given Minnesota Statutes involving competitive bidding and awarding to the "lowest responsible bidder ", we cannot guarantee this will not happen again. However, staff will be reviewing our specifications to tighten them up to provide further protections against this type of occurrence. One change we will make is to give the City some options should the general contractor ignore the responsibility for ensuring access is being maintained throughout a project. Should the general fail to immediately resolve any concerns, the city will be authorized to make any necessary corrections and withhold payment from the contractor to offset our costs. Another change we will require is to designate a primary and alternate contact that can be reached 24 hours a day, seven days 6-