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Home My WebLink About13.A.2. Settlement Agreement with the Bonding Company of the Countryside Development J 3. fJ.,l !I CITY OF SHAKOPEE Memorandum TO: Mayor & City Council Mark McNeill, City Administrator FROM: Bruce Loney, Public Works Director SUBJECT: Approval of Settlement Agreement between the Bonding Company of the Countryside Development and the City of Shakopee DATE: February 3, 2010 INTRODUCTION: Attached to this memo is a Release and Assignment of a performance bond against Tollefson Development, Inc. to the City of Shakopee for the Countryside Development. The City Council is to review and consider accepting the settlement agreement between the bonding company and the City of Shakopee. BACKGROUND: The City of Shakopee approved a plat named Countryside in 2005. Staff has been working with the developer, and Ultimately with the bonding company, to complete the public work improvements associated with this development. City staff has compiled a list of items that still remain to be completed for the City to accept the development. The writer of this memo has worked with Jeremy Sentman, who is the Vice President of Engineering with Surety Holdings Group, who is representing the bond company associated with completing developments. Through several negotiations, Mr. Sentman's company has agreed to give the City of Shakopee a payment in the amount of $68,250.00 by Bond Safeguard Insurance Company to the City of Shakopee, and in exchange the City of Shakopee would release the performance bonding obligations associated with this development. Staff has prepared the cost estimate and is comfortable that this includes all remaining public work on the development and that the amount of this settlement is sufficient to cover all costs the City may incur. Staff is requesting from the City Council to approve a motion authorizing the appropriate City officials to sign the Release and Assignment Agreement between Bond Safeguard Insurance Company and the City of Shakopee. The City Attorney's office has reviewed this Release and Assignment Agreement and is comfortable with approving this agreement. ALTERNATIVES: 1. Approve a motion authorizing the appropriate City officials to sign the Release and Assignment Agreement between Bond Safeguard Company and the City of Shakopee. 2. Do not authorize the appropriate City officials to sign the agreement. 3. Table for additional information. RECOMMENDATION: Staff recommends Alternative No.1, in order for the improvements to be completed in which many of the improvements would be done by staff or a contractor hired by staff to complete the work associated with the Countryside Development. It should be noted that most of the work done last year was done with bituminous paving and replacement ofthe concrete curb and adjustment to manholes and gate valves. ACTION REOUESTED: Approve a motion authorizing the appropriate City officials to sign the Release and Assignment Agreement between Bond Safeguard Company and the City of Shakopee. ~~. Public Works Director ENGR/2010-PROlECTS/2010-COUNCl.lCOUNTRYSIDE-RELEASE-ASSIGNMENT -AGREEMENT Bruce Loney From: Jeremy Sentman Ueremy@suretyholding.coml Sent: Thursday, January 21, 2010 4:34 PM To: Bruce Loney Cc: jstrommen@kennedy-graven.com; cindy@bondsafeguard.com; 'Kim Marsilio' Subject: RE: Countryside Cost-est.xlsx: SETTLEMENT OFFER: Tollefson Countryside: City of Shakopee, MN: Bond No 5022494 Attachments: Countryside Cost-est.pdf Bruce, This e-mail is written for settlement purposes only. As we discussed yesterday on the phone and after consultation with our legal department and claims staff, Bond Safeguard agrees to pay to the City of Shakopee (or whomever you designate, e.g. Public Works, Engineering, etc...) the sum of Sixty-Eight Thousand Two Hundred and Fifty Dollars ($68,250.00) in accordance with your attached proposal in exchange for a full release of all payment and performance claims under Bond Number 5022494. If this is acceptable to you and the City, please respond affirmatively to this e-mail. I will then have our Claims Department in Nashville (Cindy and Kim who I have copied on this e-mail) send you and Jim a release for your review, approval and execution. Once executed, a check will be sent to your attention in exchange for the original bond. Cindy and Kim will follow up with the appropriate details and instructions. Please review and let me know. Thank you for your assistance in resolving this claim. It has been a pleasure working with you and your staff. Please call with any questions. Jeremy Jeremy T. Sentman, PE PLS CFM Vice President of Engineering Surety Holdings Group 900 South Frontage Road Suite 250 Wood ridge, IL 60517 (630) 495-9380 main (630) 487-2230 direct (630) 495-9272 fax Please be advised, that at all times, Lexon Insurance Company and Bond Safeguard Insurance Company are acting under a full reservation of all rights and defenses secured to it under the terms and conditions of its bonds and all applicable laws, rules and regulations. PLEASE NOTE OUR NEW MAILING ADDRESS ..- """",-",,,,," .~ From: Bruce Loney [mailto:BLoney@cLshakopee.mn.usl Sent: Wednesday, January 20, 2010 11:06 AM To: Jeremy Sentman Cc: jstrommen@kennedy-graven.com Subject: FW: Countryside Cost-est.xlsx 1 Jeremy, I have not heard back from you on my proposal. Can you email me a response on this to let us know where we are at with this development? Thanks Bruce Loney Public Works Director work phone no. (952)233-9361 mobile phone no. (612)369-7488 """"-"--"-,-~~""""~"~~ - From: Bruce Loney Sent: Friday, December 18, 2009 3:45 PM To: 'Jeremy Sentman' Cc: Jeff Weyandt; jstrommen@kennedy-graven.com Subject: Countryside Cost-est.xlsx Jeremy, here is our summary of costs that remain for the Countryside project. We did get the asbuilts and a certification letter on the monumentation from MFRA. We still need the PDF's from them but I think they will supply them. I will be on vacation until January 4, 2010 but please review our summary of costs and if you have questions, contact Jeff at 952- 233-9362 who is very familiar with the project and costs. Talk to next year. Bruce Loney Public Works Director office no.: 952-233-9361 mobile no.: 612-369-7488 Please consider the environment before printing this email 2 Countryside Addition Cost Estimate 12/18/09 Unit Quantity Unit Cost Total Cost Mobilization/Traffic Control LS 1 $4,950 $4,950 Type III Barricades EACH 3 $700 $2,100 Crack Sealing LS 1 $14,400 $14,400 Televise Sanitary Sewer LS 1 $8,500 $8,500 Remove Erosion Control Devises LS 1 $6,200 $6,200 Clean Box Culverts LS 1 $950 $950 Adjust Backyard Catch Basins EACH 12 $420 $5,040 Install Marker Signs EACH 28 $110 $3,080 Mow around ponds LS 1 $3,000 $3,000 Remove misc debris LS 1 $1,500 $1,500 Repair Skimmers EACH 2 $125 $250 Regrade Channel Bottom LS 1 $2,500 $2,500 Remove Silt Fence LS 1 $2,500 $2,500 Sweep Streets LS 1 $1,100 $1,100 Address SPUC Issues LS 1 $10,500 $10,500 Replace Sidewalk Panels EACH 8 $210 $1,680 Total $68,250 /" <' ) :3, ~, ~ K~VIS~O RELEASE AND ASSIGNMENT In consideration of the payment of Sixty Eight Thousand Two Hundred Fifty & 00/100 dollars --..- ($68,250.00) by Bond Safeguard Insurance Company ("BSIC"), the undersigned, City of Shakopee (hereinafter "Claimant") releases BSIC (and will return original Bond to BSIC) of all claims of any nature that Claimant has or may have against Tollefson Development, Inc. or BSIC on the performance bond covering the following project: PRINCIPAL: Tollefson Development, Inc. BOND #: 5022494 OBLIGEE: City of Shakopee PROJECT: Development of Raw Land into 437 Residential Lots in Countryside Claimant hereby acknowledges that the aforesaid payment is a :full and complete compromise, settlement, and satisfaction of all claims or liens which the Claimant has or may have, against Tollefson Development, Inc. with regard to the above-referenced Project, and Claimant hereby releases BSIC, its agents, officers, employees, and assigns from all claims, known or unknown, developed or undeveloped, which now exist on the above-referenced Project. Claimant hereby assigns, sells, transfers, and conveys to BSIC all of its rights, title, and interest in any claims against any person or entity arising from the providing of anything of value for the Project for which the bond identified above was issued, and assigns, sells, transfers, and conveys to BSIC any claim that Claimant has, or may have. Claimant agrees to hold harmless and indemnify BSIC and further agrees that nothing in this Release and Assignment shall be construed or intended as a release, waiver, or estoppel of any claim whatsoever that BSIC may have against Claimant. 1 ~ , This Release is limited to the Surety's performance bond obligations and is not a release of the Surety's payment bond obligations under Bond No. 5022494. Subiect to all rie:hts and defenses available to the Surety. the Surety's payment bond obligations shall remain in effect for as long as any of the Principal's subcontractors, suppliers or material providers have a claim under the bond that is not time-barred under Minnesota law. Witness the hand and seal of the undersigned this day of ,2010. CLAIMANT (Print Name): ~;,. By (Sign Name): It's (Title): Sworn to and subscribed before me this _ day of ,2010. Notary Public T:\USER\BLM\FORMS\RELEASE.DOC 2/3/2010 2:00:42 PM 2