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• 24 STAFF REPORT DATE: September 14, 1998 TO: Michael J. Mornson, City Manager FROM: Kim Moore-Sykes, Management Assistant �V6 ITEM: Schnitzer Site Tentative Settlement Proposal The University of Minnesota and the cities of Minneapolis and St. Paul have tentatively accepted the Schnitzer Site Group's mediated offer of$1 million to settle this case. St. Anthony's share of this settlement amount will be approximately $30,100, plus a pro-rated portion of the mediation costs and related attorney's fees. This amount represents a greatly reduces liability for the City. Originally, St. Anthony's portion of the clean-up costs was estimated to be approximately $97,000 before attorney's fees. As you recall in May, we received an offer to settle from the University and the Cities whereby, St. Anthony would be able to walk away if we broke with the Group and agreed to pay $55,786. If the City had accepted this premature settlement offer, there would have been no assurance of future peace from potential future problems with this site. The language of this agreement concerned the City's attorney and he advised to continue with the Group. Despite the University's enticing offer and the fact that the City of Shoreview ultimately settled with the University and the Cites, the prevailing attitude of the Council was to continue with the Group. While there still remains an opinion among Group members that as a Group we should no be liable for any of the clean-up costs associated with the Schnitzer site, the mediator advised that regardless of the strength of the case we have or think we have, at best there is only about a 15% chance of prevailing in a court of law. He suggested that we would probably pay more in legal costs to prove our point than if the Group settled with the University and the Cities. He also suggested that the $5.3 million demand submitted by the University and the Cities was excessive. During mediation, it was determined that $1.1 million of this demand included costs that were associated with the redevelopment of the site and thereby deemed unrecoverable from the Schnitzer Group. Other costs were negotiated out until both sides agreed upon the $1 million figure. As a Group, we also have to settle with the Minnesota Pollution Control Agency for $67,000 in adminstrat8ive costs they have assessed against the Schnitzer Group. I called Joe Maternowski this morning to find out if he or Mr. Henderson had received a response from the MPCA for this assessment or from the University regarding the settlement agreement. Mr. Maternowski indicated that Mr. Henderson has been trying to contact both agencies today, but has not gotten through to anyone.