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Based on this estimate, it appears we are short about $13,300. Please keep in mind that I have not <br />allowed for any contingencies or other work items North Star Estates want to include beyond the <br />initial project scope. <br />Pursuant to Paragraph #5 of the Development Agreement, we are to attempt to negotiate the terms of <br />the contract so that the cost does not exceed the $129,500 amount. Based on our best efforts, it does <br />not appear we can achieve this objective. Therefore, North Star now has the opportunity to suggest <br />modifications to the plans and specifications in an attempt to reduce the project budget without <br />compromising the use of the facility. Another option would be for you to acknowledge that the <br />project is appropriately designed and authorize us to proceed. You would be then responsible for <br />these additional costs as provided for within our agreement. <br />Therefore, I am formally requesting North Star to review the plans and specifications to see if you <br />feel any changes are possible. If not, I would like a written acknowledgement from you that <br />authorizes the City to proceed with the construction of the shelter as designed. The <br />acknowledgement should also reiterate your willingness to reimburse the City for project costs as <br />required pursuant to our agreement. To that end, I am also requesting an additional cash deposit of <br />$13,300 to guarantee compliance with this provision. The City will provide you with detailed and <br />documented project expenses at its conclusion and refund any remaining funds or invoice you for any <br />remaining balance. <br />I must also emphasize that time is of the essence. First, the bids must be acted upon within 60 days <br />of receipt. (August 29, 2004) Another reason is the concern of the County about getting this project <br />completed relative to the CDBG funds. They have been extremely patient with us and I would hate <br />to have further delays jeopardize the availability of the $95,000 of grant funds. Finally, a later award <br />will push back the completion dates and could make site restoration this fall difficult. <br />Please call me with any comments or questions. I hope to hear from you in the next few days in <br />order that we may successfully move this project forward. <br />Sincerely, <br />Joel R. Hanson <br />City Administrator <br />cc: Tom Ludden, NSE <br />Lee Elfering, City Engineer <br />2 <br />