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COMMUNIW PRIDE <br />1953 - 2003 <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX (651) 766 -4048 <br />www.ci.litt1e- canada.maus <br />MEMORANDUM <br />TO: Mayor Fahey & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: May 23, 2003 <br />RE: Great Western Litigation Disposition <br />A121 DR <br />Michael I. Fahey <br />CO(NCIL. <br />Jim LaVatle <br />inIatt Anderson <br />Rick Montour <br />Bill Blesener <br />ADA[rxj STRATOR <br />Joel 1t. Hanson <br />Attached is correspondence received from the League of Minnesota Cities Insurance Trust (LMCIT) relative to <br />Great Western's claim against the City. As you will recall, Great Western was awarded the contract for the <br />reconstruction of two lift stations in 2001. At the end of the job, they chose to ignore certain contractual <br />obligations. They also took us to Conciliation Court to recover amounts they felt were due them even though the <br />contract did not allow them and no previous notice of their claims had been made pursuant to the contract. <br />The award from Conciliation Court ignored the contract entirely and we submitted a claim to LMCIT to appeal <br />this decision. They agreed to defend us given the implications this type of case could potentially have on all <br />Minnesota cities. After extensive efforts on our part, we have finally received a ruling that staff feels is equitable <br />in terms of contractual obligations. We own Great Western $1,801.94 for work they performed. (A check has <br />been cut and forwarded to LMCIT for remittance.) This is significantly less that what Great Western was <br />claiming and even less than the amount we had agreed to pay them in 2001 after our initial settlement discussions. <br />The only downside to this matter is we did incur some additional costs to complete Great Western's work that <br />Judge Finley did not allow us to recover. We also expended about $900 for a sewer backup claim caused by <br />Great Western's electrical subcontractor to reimburse the impacted homeowner. <br />While the time and effort expended to achieve this result is not economically justifiable, the outcome from the <br />standpoint of principle was necessary. I want to commend LMCIT, Kevin Newman of Howard R. Green and our <br />Public Works staff for their efforts in obtaining this outcome. <br />c: Jack Hennen, LMCIT <br />