HomeMy WebLinkAbout#03 - Well 5 Grant AgreementSTAFF REPORT
DATE: July 2, 2019
CONSENT
ITEM #:
AGENDA ITEM: MPCA Grant for Well #5
TO: Mayor and City Council
SUBMITTED BY: Kristina Handt, City Administrator
BACKGROUND:
As mentioned previously this spring, the state (MPCA and DNR) have agreed to use some 3M settlement
funds to aid in building a new well and sealing well #1 following the discovery of PFAS in well #1 which
exceeds the Health Based Value (HBV) for four quarters. The state required the city to complete a
feasibility study of options and it was found that a new well was the preferred option.
Staff has been working with the state on a grant agreement since this spring. A copy is included in your
packet. Simultaneously, surveying work related to a test well in Tana Ridge Park has been occurring.
Those costs will be covered by the grant since costs incurred beginning February 20, 2019 are eligible.
ISSUE BEFORE COUNCIL:
Should the Council approve the Grant Agreement with the MPCA for Well #5?
PROPOSAL:
The grant will cover 90% of the costs associated with the project since well #5 will have a larger pumping
capacity than well #1. The project includes not only a new well in Tana Ridge Park but also watermain
along 50th St between Lily Ave and Lake Elmo Ave and the sealing of well #1.
The agreement has been reviewed by the city attorney and engineer. We will need to make sure the
prevailing wage requirements and insurance coverages are met by contractors but there are no other areas
of concern.
FISCAL IMPACT:
The grant provides for a reimbursement of up to $2.5 million. The city’s 10% contribution will be funded
by the water fund.
OPTIONS:
1) Approve the Well #5 Grant Agreement with MPCA
2) Do not approve the Well #5 Grant Agreement with MPCA
RECOMMENDATION:
If removed from the consent agenda:
Motion to approve the Well #5 Grant Agreement with MPCA
Grant Agreement
State of Minnesota
Doc Type: Contract/Grant Reference
SWIFT Contract: 155932
PO No: 3000023886
Agency Interest ID #: 90810
Activity ID #: PRO20190001
This grant agreement is between the State of Minnesota, acting through its Commissioner of the
Minnesota Pollution Control Agency, 520 Lafayette Road North, St. Paul, MN 55155-4194 (“MPCA” or
“State”) and the City of Lake Elmo, a Minnesota municipal corporation, 3880 Laverne Avenue North,
Lake Elmo, MN 55042 (“Grantee or “LGU”)
Recitals
1. Under Minn. Stat. § 116.03, Subd.2, the State is empowered to enter into this grant agreement.
2. The State will reimburse the Grantee for costs associated with the new water supply well (Well
Number 5), as provided by Minn. Stat. § 115B.20, subd. 2(6), which provides authority for the MPCA
to reimburse political subdivisions for environmental response actions that are related to
emergency situations caused by releases of hazardous substances.
3. The Grantee will comply with required grants management policies and procedures set forth
through Minn.Stat.§16B.97, Subd. 4 (a) (1).
4. The Grantee represents that it is duly qualified and agrees to perform all services described in this
grant agreement to the satisfaction of the State. Pursuant to Minn.Stat.§16B.98, Subd.1, the
Grantee agrees to minimize administrative costs as a condition of this grant.
Grant Agreement
1. Term of Grant Agreement
1.1 Effective date: June 14, 2019, or the date the State obtains all required signatures under Minn.
Stat.§16B.98, Subd. 5, whichever is later. Per Minn.Stat.§16B.98 Subd. 7, no payments will be
made to the Grantee until this grant agreement is fully executed.
1.2 Expiration date: June 30, 2022, or until all obligations have been satisfactorily fulfilled,
whichever occurs first.
1.3 Survival of Terms. The following clauses set forth in this grant agreement survive the expiration
or cancellation of this grant agreement: Liability; State Audits; Government Data Practices and
Intellectual Property Rights; Publicity and Endorsement; Governing Law, Jurisdiction, and Venue;
and Data Disclosure.
2. Grantee’s Duties
The Grantee, who is not a state employee, will submit invoices to the State for reimbursement for
expenditures related to Well Number 5 and the sealing of Well Number 1. Eligible reimbursement
costs may include sealing of Well Number 1, construction, engineering and oversight costs
associated with the project, as outlined in section 4.1.c.
3. Time
The Grantee must comply with all the time requirements described in this grant agreement. In the
performance of this grant agreement, time is of the essence.
4. Consideration and Payment
4.1 Consideration.
The State will pay for all services performed by the Grantee under this grant agreement as
follows:
(a) Compensation
The Grantee will be paid according to approved reimbursement invoices relating to the
sealing of Well Number 1 and construction costs for Well Number 5. Costs will be
reimbursed for expenses incurred starting February 20, 2019.
(b) Travel Expenses
Reimbursement for travel and subsistence expenses actually and necessarily incurred by
the Grantee as a result of this grant agreement will not exceed $0; provided that the
Grantee will be reimbursed for travel and subsistence expenses in the same manner and in
no greater amount than provided in the current "Commissioner’s Plan” promulgated by the
Commissioner of Minnesota Management and Budget (MMB). The Grantee will not be
reimbursed for travel and subsistence expenses incurred outside Minnesota unless it has
received the State’s prior written approval for out of state travel. Minnesota will be
considered the home state for determining whether travel is out of state.
(c) Total Obligation of the Grantee
The total obligation of the Grantee for costs associated with the sealing of Well Number 1
and the construction of Well Number 5 will be 10 percent of all phases of the Well Number
5 project costs. The Grantee completed a project evaluation regarding Perfluorachemicals
(PFC) impacts to Well Number 1 in January 2019 which outlined potential actions in
response to the well advisory issued by the Minnesota Department of Health. The
Grantee’s percentage obligation is based on the difference in capacity of Well Number 1
and the expected capacity of the new Well Number 5. Well Number 1, a 500 gallons per
minute (gpm) well, was removed from service due to Perfluoroalkyl substances (PFAS)
concentrations exceeding the MDH’s HBV. Well Number 5, a 1,250 gpm well, will
accommodate both the loss in water capacity of Well Number 1 and future growth of the
Grantee. The percentage obligation was calculated based on preliminary engineer’s
estimates for the following items necessary to accommodate the increased capacity at Well
Number 5:
1. Differences in the diameters of the well open hole and casings;
2. Additional grout required for the casings;
3. Increased pump, motor, and column sizes;
4. Larger chemical feed and chemical storages systems;
5. Differences in generator, electrical, controls, VFD, and power
requirements/installation/programming;
6. Larger process and site piping requirements; and
7. Engineering, administrative, and construction contingency costs.
The total project costs will be determined following the bidding phases of all portions of
the project as the project may be bid in multiple phases. Total project costs are defined as
all engineering, administrative, bidding, and construction costs associated with the agreed
scope detailed above.
(d) Total Obligation of State
The total obligation of the State for all compensation and reimbursements to the Grantee
under this grant agreement will not exceed $2,500,000.00 (Two Million Five Hundred
Thousand Dollars) without prior approval from the State. The State’s obligations are for only
those portions of the project that are required to bring a new well into service to
supplement the Grantee’s water supply with a clean source of drinking water and the
sealing of Well Number1. If the Grantee includes other appurtenances into the project that
are not necessary for this objective, the Grantee shall be obligated to pay 100 percent of
those additional costs. Those costs should be kept separate or identified as alternate bids
from the base bid project. The base bid project is to seal Well Number 1 and construct Well
Number 5 in accordance with state, federal, and local regulations.
4.2 Payment
(a) Invoices
All invoices must be submitted at full cost with the Grantee requesting reimbursement for
90 percent of the total cost for each invoice submitted. The State will promptly pay the
Grantee after the Grantee presents an itemized invoice for the reimbursement expenditures
actually performed and the State's Authorized Representative accepts the invoiced services.
Invoices must be submitted timely and according to the following schedule: Monthly or at
least quarterly.
Invoices must be emailed to mpca.ap@state.mn.us, and contain the following
information:
• Name of Grantee
• Grantee’s Project Manager
• Request reimbursement amount
• Grant Amount
• Grant Amount available to date
• Invoice Number
• Invoice Date
• MPCA Project Manager
• SWIFT Contract Number
• Purchase Order Number
• Invoicing Period (actual working period)
Invoices shall be submitted to: mpca.ap@state.mn.us (subject line: Grantee Name and
Invoice Number)
If there is a problem with submitting an invoice electronically, please contact the Accounts
Payable Unit at 651-757-2491.
The Grantee shall submit an invoice for the final payment upon submittal of the final
progress and financial report within 30 (thirty) days of the original or amended end date
of this grant agreement. The State reserves the right to review submitted invoices after 30
(thirty) days and make a determination as to payment.
(b) Unexpended Funds
The Grantee must promptly return to the State any unexpended funds that have not been
accounted for annually in a financial report to the State due at grant closeout.
4.3 Contracting and Bidding Requirements
Per Minn. Stat. §471.345, grantees that are municipalities as defined in Subd. 1 must follow the
law.
(a) For projects that include construction work of $25,000 or more, prevailing wage rules apply
per Minn. Stat. §§177.41 through 177.44. These rules require that the wages of laborers
and workers should be comparable to wages paid for similar work in the community as a
whole.
4.4 Prevailing Wage
Pursuant to Minnesota Statutes 177.41 to 177.44 and corresponding Minnesota Rules
5200.1000 to 5200.1120, this grant agreement is subject to the prevailing wages as established
by the Minnesota Department of Labor and Industry. Specifically, all contractors and
subcontractors must pay all laborers and mechanics the established prevailing wages for work
performed under the grant agreement. Failure to comply with the aforementioned may result in
civil or criminal penalties. Rates are listed in Attachment A.
In compliance with Minn. Stat. § 177.43, subd. 3 and §177.44, subd. 5, the wages of laborers,
workers, and the mechanics on projects financed in whole or part by State Funds should be
comparable to wages paid for similar work in the community as a whole. Project includes
erection, construction, remodeling, or repairing of a public building or other public work
financed in whole or part by State funds.
Any work on real property which uses the skill sets of any trades covered by Labor Code and
Class under prevailing wages is construction and requires prevailing wages. See
http://www.doli.state.mn.us/LS/PrevWage.asp for a list of affected trades.
The Grantee’s contractors shall pay prevailing wages to their employees when conducting
construction activities under this grant agreement.
Applicability. In accordance with Minn. Stat. § 177.43, subd. 7. This does not apply to an
agreement or work under an agreement, under which:
A. the estimated total cost of completing the project is less than $2,500 and only one trade or
occupation is required to complete the work; or
B. the estimated total cost of completing the project is less than $25,000 and more than one
trade or occupation is required to complete it. .
Choose from Commercial, Highway/Heavy, or Residential Wage Rates:
The prevailing wage rate requirements are attached as Attachment A.
Prevailing Wage Payroll Information:
In accordance with Minn. Stat. § 177.30, subd. 4, and § 177.43, subd. 3, the Contractor and
Subcontractor shall furnish to the Contracting Authority and the Project Owner:
• All payrolls, of all workers on the project, a certified payroll report via e-mail as
attachments, a State of Minnesota Prevailing Wage Payroll Report as a Microsoft Excel file
and Statement of Compliance Form as a PDF file to the appropriate e-mail addresses:
prevailingwage.pca@state.mn.us and ownerprevailingwage.pca@state.mn.us
• The Subject line on the contractor’s or subcontractor’s e-mail must give their firm’s name
and the Contract or Purchase Order Number.
• These completed forms must be furnished not more than 14 days after the end of each
pay period.
• The State of Minnesota Prevailing Wage Payroll Report and Statement of Compliance
Form are available on the MMD website at
http://www.mmd.admin.state.mn.us/mn02000.htm. Submit the completed and signed
State of Minnesota Prevailing Wage Payroll Report as a Microsoft Excel file and the
Statement of Compliance Form as a PDF file, no other payroll forms will be accepted to
meet this requirement.
The prevailing wage payroll information forms that are submitted shall be maintained by the
contracting agency for a minimum of three years after final payment has been made on the
project. All of the data provided on the Prevailing Wage Payroll Information Form will be public
data, which is available to anyone upon request.
Refer vendor questions regarding the Prevailing Wage Laws to the Department of Labor and
Industry at 651-284-5091 or visit the website for Labor Standards Section, Prevailing Wage
http://www.doli.state.mn.us/LS/PrevWage.asp
All construction work needs an IC-134 form submitted by the Contractor before payment can be
made. The Contractor can find a copy of the IC-134 online at the Minnesota Department of
Revenue website at http://www.taxes.state.mn.us/forms/ic134.pdf.
5. Conditions of Payment
All services provided by the Grantee under this grant agreement must be performed to the State’s
satisfaction, as determined at the sole discretion of the State’s Authorized Representative and in
accordance with all applicable federal, state, and local laws, ordinances, rules, and regulations. The
Grantee will not receive payment for work found by the State to be unsatisfactory or performed in
violation of federal, state, or local law.
6. Authorized Representative
The State's Authorized Representative is Gary Krueger, MPCA, 520 Lafayette Road North, St. Paul,
MN 55155, 651-757-2509, gary.krueger@state.mn.us, or his successor, and has the authority to
accept the services provided under this grant agreement. If the services are satisfactory, the State's
Authorized Representative will certify acceptance on each invoice submitted for payment.
The State’s Project Manager is Elizabeth Kaufenberg, MPCA, 520 Lafayette Road North, St. Paul, MN
55155, 651-757-2481, Elizabeth.kaufenberg@state.mn.us, or her successor, and the responsibility to
monitor the Grantee’s performance and receive invoices from the Grantee.
The Grantee’s Authorized Representative is Kristina Handt, City of Lake Elmo, 3880 Laverne Avenue
North, Lake Elmo, MN 55042, 651-747-3905, khandt@lakeelmo.org. If the Grantee’s Authorized
Representative changes at any time during this grant agreement, the Grantee must immediately
notify the State.
7. Assignment Amendments, Waiver, and Grant Agreement Complete
7.1 Assignment
The Grantee shall neither assign nor transfer any rights or obligations under this grant
agreement without the prior written consent of the State, approved by the same parties who
executed and approved this grant agreement, or their successors in office.
7.2 Amendments
Any amendments to this grant agreement must be in writing and will not be effective until it has
been executed and approved by the same parties who executed and approved the original grant
contract, or their successors in office.
7.3 Change Orders
If the State's Project Manager or the Grantee’s Authorized Representative identifies a change
needed in the workplan and/or budget, either party may initiate a Change Order using the
Change Order Form provided by the MPCA. Change Orders may not delay or jeopardize the
success of the Project, alter the overall scope of the Project, increase or decrease the overall
amount of the grant agreement, or cause an extension of the term of this grant agreement.
Major changes require an Amendment to this grant agreement rather than a Change Order.
The Change Order Form must be approved and signed by the State's Project Manager and the
Grantee’s Authorized Representative in advance of doing the work. Documented changes will
then become an integral and enforceable part of the grant agreement. The MPCA has the sole
discretion on the determination of whether a requested change is a Change Order or an
Amendment to this grant agreement. The state reserves the right to refuse any Change Order
requests.
7.4 Waiver
If the State fails to enforce any provision of this grant agreement, that failure does not waive the
provision or the State’s right to enforce it.
7.5 Grant Contract Complete
This grant agreement contains all negotiations and agreements between the State and the
Grantee. No other understanding regarding this grant agreement, whether written or oral, may
be used to bind either party.
8. Liability
The Grantee must indemnify, save, and hold the State, its agents, and employees harmless from any
claims or causes of action, including attorney’s fees incurred by the State, arising from the
performance of this grant agreement by the Grantee or the Grantee’s agents or employees. This
clause will not be construed to bar any legal remedies the Grantee may have for the State's failure
to fulfill its obligations under this grant agreement.
9. State Audits
Under Minn. Stat. § 16B.98, Subd.8, the Grantee’s books, records, documents, and accounting
procedures and practices of the Grantee or other party relevant to this grant agreement or
transaction are subject to examination by the State and/or the State Auditor or Legislative Auditor,
as appropriate, for a minimum of six years from the end of this grant agreement, receipt and
approval of all final reports, or the required period of time to satisfy all state and program retention
requirements, whichever is later.
10. Government Data Practices and Intellectual Property Rights
10.1 Government data practices. The Grantee and State must comply with the Minnesota
Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by the
State under this grant agreement, and as it applies to all data created, collected, received,
stored, used, maintained, or disseminated by the Grantee under this grant agreement. The
civil remedies of Minn. Stat. § 13.08 apply to the release of the data referred to in this clause
by either the Grantee or the State. If the Grantee receives a request to release the data
referred to in this Clause, the Grantee must immediately notify the State. The State will give
the Grantee instructions concerning the release of the data to the requesting party before the
data is released. The Grantee’s response to the request shall comply with applicable law.
10.2 Intellectual Property Rights
(a) Intellectual property rights. The State owns all rights, title and interest in all of the
intellectual property rights, including copyrights, patents, trade secrets, trademarks, and
service marks in the Works and Documents created and paid for under this grant
agreement. Works means all inventions, improvements, discoveries (whether or not
patentable), databases, computer programs, reports, notes, studies, photographs,
negatives, designs, drawings specifications, materials, tapes, and disks conceived, reduced
to practice, created or originated by the Grantee, its employees, agents, and
subcontractors, either individually or jointly with others in the performance of this grant
agreement. Works includes “Documents.” Documents are the originals of any databases,
computer programs, reports, notes studies, photographs, negatives, designs, drawings,
specifications, materials, tapes, disks, or other materials, whether in tangible or electronic
forms, prepared by the Grantee, its employees, agents, or subcontractors, in the
performance of this grant agreement. The Documents shall be the exclusive property of
the State and all such Documents must be immediately returned to the State by the
Grantee, at the Grantee’s expense, upon the written request of the State, or upon
completion, termination, or cancellation of this grant agreement. To the extent possible,
those Works eligible for copyright protection under the United States’ Copyright Act will
be deemed to be “works made for hire.” The Grantee assigns all right, title, and interest it
may have in the Works and the Documents to the State. The Grantee must, at the request
of the State, execute all papers and perform all other acts necessary to transfer or record
the State’s ownership interest in the Works and Documents.
(b) Obligations.
(1) Notification. Whenever any invention, improvement, or discovery (whether or not
patentable) is made or conceived for the first time or actually or constructively
reduced to practice by the Grantee, including its employees and subcontractors, in the
performance of this grant agreement, the Grantee shall immediately give the State’s
Authorized Representative written notice thereof, and must promptly furnish the
Authorized Representative with complete information and/or disclosure therein.
(2) Representation. The Grantee must perform all acts, and take all steps necessary to
ensure that all intellectual property rights in the Works and Documents are the sole
property of the State, and that neither Grantee nor its employees, agents, or
subcontractors retain any interest in and to the Works and Documents. The Grantee
represents and warrants that the Works and Documents do not and will not infringe
upon any intellectual property rights of other persons or entities. Notwithstanding
Clause Liability, the Grantee shall indemnify, defend, to the extent permitted by the
Attorney General, and hold harmless the State, at the Grantee’s expense, from any
action or claim brought against the State to the extent that it is based on a claim that
all or part of the Works or Documents infringe upon the intellectual property rights of
others. The Grantee will be responsible for payment of any and all such claims,
demands, obligations, liabilities, costs, and damages, including, but not limited to,
attorney fees. If such a claim or action arises or in Grantee’s or the State’s opinion is
likely to arise, the Grantee must, at the State’s discretion, either procure for the State
the right or license to use the intellectual property rights at issue or replace or modify
the allegedly infringing Works or Documents as necessary and appropriate to obviate
the infringement claim. This remedy of the State will be in addition to and not
exclusive of other remedies provided by law.
(3) License. The State hereby grants a limited, no-fee, noncommercial license to the
Grantee to enable the Grantee’s employees engaged in research and scholarly
pursuits to make, have made, reproduce, modify, distribute, perform, and otherwise
use the Works, including Documents, for research activities or to publish in scholarly
or professional journals, provided that any existing or future intellectual property
rights in the Works or Documents (including patents, licenses, trade or service marks,
trade secrets, or copyrights) are not prejudiced or infringed upon, that the Minnesota
Data Practices Act is complied with, and that individual rights to privacy are not
violated. The Grantee shall indemnify and hold harmless the State for any claim or
action based on the Grantee’s use of the Works or Documents under the provisions of
Section 10.2(b)(2) of this grant agreement. Said license is subject to the State’s
publicity and acknowledgement requirements set forth in this grant agreement. The
Grantee may reproduce and retain a copy of the Documents for research and
academic use. The Grantee is responsible for security of the Grantee’s copy of the
Documents. A copy of any articles, materials or documents produced by the Grantee’s
employees, in any form, using or derived from the subject matter of this license, shall
be promptly delivered without cost to the State.
11. Workers’ Compensation
The Grantee certifies that it is in compliance with Minn. Stat. §176.181, Subd. 2, pertaining to
workers’ compensation insurance coverage. The Grantee’s employees and agents will not be
considered State employees. Any claims that may arise under the Minnesota Workers’
Compensation Act on behalf of these employees and any claims made by any third party as a
consequence of any act or omission on the part of these employees are in no way the State’s
obligation or responsibility.
12. Publicity and Endorsement
12.1 Publicity. Any publicity regarding the subject matter of this grant agreement must identify the
State as the sponsoring agency. For purposes of this provision, publicity includes notices,
informational pamphlets, press releases, research, reports, signs, and similar public notices
prepared by or for the Grantee individually or jointly with others, or any subcontractors, with
respect to the program, publications, or services provided resulting from this grant agreement.
All projects primarily funded by state grant appropriations must publicly credit the State of
Minnesota, including on the Grantee’s website when practicable.
12.2 Endorsement. The Grantee must not claim that the State endorses its products or services.
13. Governing Law, Jurisdiction, and Venue
Minnesota law, without regard to its choice-of-law provisions, governs this grant agreement. Venue
for all legal proceedings out of this grant agreement, or its breach, must be in the appropriate state
or federal court with competent jurisdiction in Ramsey County, Minnesota.
14. Termination
14.1 Termination by the State
The State or Grantee may immediately terminate this grant contract with or without cause,
upon 30 days’ written notice to the Grantee. Upon termination, the Grantee will be entitled to
payment, determined on a pro rata basis, for services satisfactorily performed.
14.2 Termination for Cause
The State may immediately terminate this grant agreement if the State finds that there has been
a failure by the Grantee to comply with the provisions of this grant agreement, that reasonable
progress has not been made by the Grantee or that the purposes for which the funds were
granted have not been or will not be fulfilled by the Grantee. The State may take action to
protect the interests of the State of Minnesota, including the refusal to disburse additional
funds and requiring the return of all or part of the funds already disbursed.
14.3 Termination for Insufficient Funding
The State may immediately terminate this grant agreement if:
(a) It does not obtain funding from the Minnesota Legislature
(b) Or, if funding cannot be continued at a level sufficient to allow for the payment of the
services covered here. Termination must be by written or fax notice to the Grantee. The
State is not obligated to pay for any services that are provided after notice and effective
date of termination. However, the Grantee will be entitled to payment, determined on a
pro rata basis, for services satisfactorily performed to the extent that funds are
available. The State will not be assessed any penalty if the grant agreement is
terminated because of the decision of the Minnesota Legislature, or other funding
source, not to appropriate funds. The State must provide the Grantee notice of the lack
of funding within a reasonable time of the State’s receiving that notice.
15. Data Disclosure
Under Minn. Stat. § 270C.65, Subd. 3, and other applicable law, the Grantee consents to disclosure
of its social security number, federal employer tax identification number, and/or Minnesota tax
identification number, already provided to the State, to federal and state tax agencies and state
personnel involved in the payment of state obligations. These identification numbers may be used
in the enforcement of federal and state tax laws which could result in action requiring the Grantee
to file state tax returns and pay delinquent state tax liabilities, if any.
16. Subcontracting (if applicable)
If the Grantee decides to fulfill its obligations and duties under this grant agreement through a
subcontractor, to be paid for by funds received under this grant agreement, the Grantee shall not
execute an agreement with the subcontractor or otherwise enter into a binding agreement until it
has first received written approval from the MPCA's Authorized Representative. All subcontracts
shall reference this grant agreement and require the subcontractor to comply with all of the terms
and conditions of this grant agreement. The Grantee shall be responsible for the satisfactory and
timely completion of all work required under any subcontract and the Grantee shall be responsible
for payment of all subcontracts. The Grantee shall pay all subcontractors, less any retainage, within
10 calendar days of receipt of payment to the Grantee by the State for undisputed services provided
by the subcontractor and must pay interest at the rate of one and one-half percent per month or
any part of a month to the subcontractor on any undisputed amount not paid on time to the
subcontractor.
The Grantee must follow its policies and procedures for obtaining subcontractors and/or policies
and procedures per Minn. Stat. § 471.345 as applicable.
17. Insurance requirements
Below are the minimum insurance limits required by the State of Minnesota for any entity that is
not a state Agency or Local Government Unit (LGU) unless otherwise noted (**).
17.1 The Grantee shall not commence work under the Agreement until they (or subcontractor)
have submitted acceptable evidence of insurance and the State of Minnesota has approved
such insurance. LGU or subcontractor shall maintain such insurance in force and effect
throughout the term of this grant agreement. A certificate of insurance is acceptable
evidence.
17.2 Subcontractor is required to maintain and furnish satisfactory evidence of the following
insurance policies:
(a) Workers' Compensation Insurance. Subcontractor must provide Workers' Compensation
insurance for all of its employees and, in case any work is subcontracted, LGU will require
any subcontractors to provide Workers' Compensation insurance in accordance with the
statutory requirements of the State of Minnesota, including Coverage B, Employer's
Liability. Insurance minimum amounts are as follows:
$100,000 -- Bodily Injury by Disease per employee
$500,000 -- Bodily Injury by Disease aggregate
$100,000 -- Bodily Injury by Accident
If Minn. Stat. § 176. 041 exempts subcontractor from Workers' Compensation insurance
or if the subcontractor has no employees in the State of Minnesota, subcontractor must
provide a written statement, signed by an authorized representative, indicating the
qualifying exemption that excludes LGU from the Minnesota Workers' Compensation
requirements.
If during the course of the grant agreement the subcontractor becomes eligible for
Worker's Compensation, the subcontractor must comply with the Workers' Compensation
Insurance requirements herein and provide the State of Minnesota with a certificate of
insurance.
(b) Commercial General Liability Insurance. Subcontractor is required to maintain insurance
protecting it from claims for damages for bodily injury, including sickness or disease, death,
and for care and loss of services as well as from claims for property damage, including loss
of use which may arise from operations under this grant agreement and in any case work is
subcontracted the LGU will require its subcontractors to provide Commercial General
Liability. Insurance minimum amounts are as follows:
$2,000,000 -- per occurrence
$2,000,000 -- annual aggregate
$2,000,000 -- annual aggregate -- Products/Completed Operations
**For LGUs, the coverage shall be maintained in conformance with the Tort Claims limits
set forth in Minn. Stat. ch. 466, with limits not less than $500,000 per claimant and
$1,500,000 per occurrence for bodily injury and property damage.
The following coverages shall be included:
Premises and Operations Bodily Injury and Property Damage
Personal and Advertising Injury
Blanket Contractual Liability
Products and Completed Operations Liability
The State of Minnesota shall be named as an Additional Insured
(c) Commercial Automobile Liability Insurance. Subcontractor is required to maintain
insurance protecting the Grantee from claims for damages for bodily injury as well as
from claims for property damage resulting from the ownership, operation, maintenance
or use of all owned, hired, and non-owned autos which may arise from operations under
this grant agreement, and in case any work is subcontracted the LGU will require its
subcontractors to provide Commercial Automobile Liability. Insurance minimum
amounts are as follows:
$2,000,000 -- per occurrence Combined Single limit for Bodily Injury and Property
Damage
**For LGUs, the coverage shall be maintained in conformance with the Tort Claims limits
set forth in Minn. Stat. Ch. 466, with limits not less than $500,000 per claimant and
$1,500,000 per occurrence for bodily injury and property damage.
In addition, the following coverages should be included:
Owned, Hired, and Non-owned Automobile
(d) Professional Liability Insurance. This policy will provide coverage for all claims the
Grantee, or its subcontractors, may become legally obligated to pay, resulting from any
actual or alleged negligent act, error, or omission related to LGU's or its subcontractors'
professional services required under this grant agreement.
$2,000,000 -- per claim or event
$2,000,000 -- annual aggregate
**For LGUs, the coverage shall be maintained in conformance with the Tort Claims limits
set forth in Minn. Stat. Ch. 466, with limits not less than $500,000 per claimant and
$1,500,000 per occurrence for bodily injury and property damage.
Any deductible of the subcontractor will be the sole responsibility of the subcontractor
and may not exceed $50,000 without the written approval of the State. If the
subcontractor desires authority from the State to have a deductible in a higher amount,
the subcontractor shall request in writing, specifying the amount of the desired deductible
and providing financial documentation by submitting the most current audited financial
statements or other approved documentation so that the State can ascertain the ability of
the subcontractor to cover the deductible from its own resources.
(e) The retroactive or prior acts date of such coverage shall not be after the effective date of
this Agreement and LGU or subcontractor shall maintain such insurance for a period of at
least three (3) years, following completion of the work. If such insurance is discontinued,
extended reporting period coverage must be obtained by LGU or subcontractor to fulfill
this requirement.
17.3 Additional insurance conditions:
• LGU's or subcontractor's policy(ies) or subcontractor's shall be primary insurance to any
other valid and collectible insurance available to the State of Minnesota with respect to
any claim arising out of the performance under this grant agreement.
• The LGU or subcontractor is responsible for payment of grant agreement-related
insurance premiums and deductibles.
• If LGU or subcontractor is self-insured, a Certificate of Self-Insurance must be attached
• Include legal defense fees in addition to liability policy limits, with the exception of 13.2
(d) above.
• Obtain insurance policies from an insurance company having an "AM BEST" rating of A-
(minus); Financial Size Category (FSC) VII or better and must be authorized to do business
in the State of Minnesota or obtain comparable coverage under a program of self-
insurance.
• An Umbrella or Excess Liability insurance policy may be used to supplement the LGU's or
subcontractor's policy limits to satisfy the full policy limits required by the grant
agreement.
• If LGU or subcontractor receives a cancellation notice from an insurance carrier affording
coverage herein, the Grantee agrees to notify the State of Minnesota within five (5)
business days with a copy of the cancellation notice, unless LGU's or subcontractor's
policy(ies) contain a provision that coverage afforded under the policy(ies) will not be
cancelled without at least thirty (30) days advance written notice to the State of
Minnesota.
17.4 The State reserves the right to immediately terminate this grant agreement if the LGU or
subcontractor is not in compliance with the insurance requirements and retains all rights to
pursue any legal remedies against the LGU. All insurance policies must be open to inspection
by the State, and copies of policies must be submitted to the State's authorized representative
upon written request.
17.5 The Grantee is required to submit a Certificate of Insurance acceptable to the State of
Minnesota as evidence of insurance coverage requirements prior to commencing work under
this grant agreement.
Signatures
Document Signature Details -- External User
Order Ext. User Status Actual Singer Name Title Date/Time
1 VN0000201630_3 Pending KRISTINA HANDT
Document Signature Details -- Internal Users
Order Type Role/User Status Actual
Signer
Name Title Date/Time
1 Role M_FS_WF
_SC_DOC_
SIGNER_0
1
Waiting
2 Role M_FS_WF
_SC_DOC_
SIGNER_0
2
Waiting