HomeMy WebLinkAboutResolution 5057
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RESOLUTION NO_...5057
CITY OF MOUNDS VIEW
COUNTY OF RAJ\lISEY
STATE OF MINNESOTA
RESOLUTION AUTHORIZING THE lVIOUNDS VIEW CITY
ATTORNEY TO COMMENCE LEGAL ACTIONS ON BEHALF
OF THE CITY OF MOUNDS VIEW AGAINST NECESSARY
PARTIES TO RECOVER LOSSES INCCRRED AND AVOID
FUTURE LIABILITY AND DAMAGES RESULTING FROI\'I
CERTAIN CONSTRUCTION A.l~D DESIGN DEFECTS CAUSED
BY CONTRACTORS AND ARCHITECTS AT THE BRIDGES
GOLF COURSE IN MOUNDS VIEW
WHEREAS, the City of Mounds View (City) contracted with Williams, Gill & Associates
(WGA) as architects for the Bridges Golf Course (Golf course) to design the Golf Course and
prepare bid specifications for contractors bidding on the construction of the Golf Course~ and
WHEREAS, the City entered into a contract with Veit & Company, Inc_ (Veit) as low bidder
to construct the Golf Course as general contractor supervising numerous subcontractors in the
construction project~ and
WHEREAS, pursuant to state law, the contract between the City and Veit was covered by
Surety Bond MNC 2348 issued by Merchants Bonding Company (Mutual) of Des Moines, IA
(Merchants) in the amount of $1 ,031 ,0 I O~ and
WHEREAS, the City separately contracted with Ebert Construction Company, Inc_ (Eben)
to construct the Golf Course Clubhouse (Clubhouse) under the direction of Runyon-Vogel, Inc_
Architects who designed the Clubhouse; a.nd
WHEREAS, pursuant to state law, the contract between the City and Ebert regarding the
Clubhouse was covered by Surety Bond MNC 2376 in the amount of $159,900 also issued by
Merchants~ and
WHEREAS, City statf have discovered since construction of the Golf Course and Clubhouse
a number of defects in the design and construction of the Golf Course and Clubhouse which have
resulted in losses for damage claims paid by the City and the City's insurance carrier, the League of
Minnesota Cities Insurance Trust, and additional costs incurred by the City in making partial
corrections to these design and construction defects resulting from additional material costs,
additional labor costs and lost revenue from lost golf rounds during the time the golf course was
closed for unexpected daytime watering~ and
\VHEREAS, the City will need to make additional expenditures to correct these defects and
to avoid future liability and damage daims~ and
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WHEREAS, Surety Bond claims in the amount of $409,000 were filed against Merchants
under the Veit and Ebert contracts on October 24 and November 19, 1996, respectively, to recover
existing and future costs on Golf Course and Clubhouse defects; and
WHEREAS, under the tenns of the Surety Bonds, the City must commence legal action under
the bonds within two years of the date offinal payment under the contract in order to preserve the
City's legal rights and remedies; and
WHEREAS, the final payments under the Veit contract was made by the City on December
13, 1994, establishing the date of December 13, 1996 as the final date by which a legal action could
be commenced under the Surety Bond covering the Veit contract; and
WHEREAS, the City Attorney advised the City Council at its work session on December 2,
1996 that it would be in the public interest for the City Council to authorize the City Attorney to
commence legal action against certain parties under the surety bonds, as well as other necessary
parties such as architectural and contractor firms, if necessary, prior to December 13, J 996 to
preserve all of the City's rights and remedies under the Surety Bonds and under the state's statute
of limitations for certain types of breach of contract actions.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council hereby authorizes the
City Attorney to commence all necessary legal actions against the Merchants Bonding Company
(Mutual) under the Surety Bonds covering the Veit and Ebert construction contracts, as well as any
other necessary parties, including general contractors, subcontractors, architectural firms and
manufacturers of certain defective equipment regarding construction and design defects at the Golf
Course.
Adopted this 9th day of December, 1996
ATTEST:
( SEAL)
-Chll~:'~inistrator