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Home My WebLink About5H - Street Construction Contract for the Coves, Villas and Bluffs of Northwood MeadowsPR ° 4 jam? ~~ ti ~~ ~ ~' ` -~~~ 4646 Dakota Street S.E. v ~ x 1 Prior Lake, MN 55372-1714 - - -- -- '= z ~I,- -- ~~, ~ ' ~,~NNESO ~' CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 8, 2009 AGENDA #: 5H PREPARED BY: LARRY POPPLER, ASSISTANT CITY ENGINEER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AWARDING THE CITY'S STANDARDIZED CONSTRUCTION CONTRACT FOR STREET CONSTRUCTION FOR THE COVES, VILLAS, AND BLUFFS OF NORTHWOOD MEADOWS DISCUSSION: Introduction This agenda item asks the City Council to award a contract to complete the Developer Installed Improvements, mainly the final wear course of asphalt for the Coves, Villas and Bluffs of Northwood Meadows. History On September 5, 2006, the City Council approved the Development Contact for the Coves of Northwood Meadows, Villas of Northwood Meadows, and the Bluffs of Northwood Meadows. Construction in each of these developments, with the exception of final paving (wear course) and individual lot landscaping, was completed in the fall of 2006. Each of the projects has a separate Developer. On June 27, 2007, the City wrote a letter to the Developers of the Northwood Meadows project(s) indicating the City's desire for them to wait on the installation of the final .wear course until 2008 due to the roadway settlements on Hawk Ridge Road. In 2008 the remaining work was not completed. Each of the projects is in default. The City has provided the Developers of the Villas and the Coves notice of its intent to drawn on their Letters of Credit if the street improvements and landscaping are not completed; and, the City has obtained $36,000 from the Bluffs to assure the improvements are completed. Bluffs of Northwood Meadows One of the remedies available to the City in the event of a default under a Development Contract is to freeze the issuance of building permits until the default is cured. The street improvements on Hawk Ridge Road have not been completed and the Developer is in default. On, June 15, 2009 the City Council approved an agreement with the Developer of the Bluffs. Rather than freezing building permits completely, the agreement sets out the terms and conditions under which the City will release lots from the freeze and issue building permits. the plat. One of the conditions was that the Developer escrow $36,000 with the City for the completion of the street improvements on Hawk Ridge Road. This $36,000 escrow has been received by the City and is available to use to pay to complete the street improvements. Villas of Northwood Meadows On March 11, 2009, the City notified the Developer that if the remaining work on these developments was not completed by June 15th, 2009, the City would utilize mechanisms outlined in the Development Contract to complete the remaining improvements. Th~"`~'rf~~'P~'~1m~'~assed with no work completed on this Phone 952.447.9800 /Fax 952.447.4245 R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows Award Agenda.doc project. On June 23, the City mailed notice to the Developer that it was in Default of the Development Contract for failing to complete the remaining improvements according to the terms, conditions and limitations of the Development Contract for the Villas of Northwood Meadows. In this case, the Developer failed to complete the improvements according to the "Time of Performance" provisions of the Development Contract. The letter granted an extension to allow until July 30 to complete the improvements or the City will draw on the Letter of Credit. The Developer contends that the delay in the completion of the work is due to a workmanship issue with the original Contractor. The Developer maintains that the original contractor is responsible for the correction of deficient work on the project and has delayed authorizing a separate contractor to complete the remaining work until they have come to some resolution with the original contractor. However, it has been two years since the work has been completed and it may be unlikely that the original contractor will rectify the workmanship issues. However, from the City's perspective, the work must be completed regardless of a dispute between the Developer and his Contractor. Coves of Northwood Meadows In 2008, the Developer for the Coves of Northwood Meadows completed their punch list work except for the final lift of asphalt. On March 13, 2009, the City notified the Developer that if the remaining work on these developments was not completed by June 15, 2009, the City would utilize mechanisms outlined in the Development Contract to complete the remaining improvements. The June 15 deadline passed with no work completed on this project. On June 23, the City mailed notice to Developer, that it was in Default of the Development Contract for failing to complete the remaining improvements according to the terms, conditions and limitations of the Development Contract for the Coves of Northwood Meadows. In this case, the Developer failed to complete the improvements according to the "Time of Performance" provisions of the Development Contract. The letter provided an extension to complete the improvements or the City will draw on the Letter of Credit. The Developers of the Coves and Villas decided that it would be to their advantage if they combined the street work that needs to completed in their individual projects with the Bluffs and bid the projects together hoping to get a better bid price. The Developer of the Coves agreed to take responsibility for soliciting bids for the work. On June 18, 2009 bids were received to complete the work for each of the projects (Coves, Villas, and Bluffs of Northwood Meadows). Because the Contractor provided bids for the work on the three projects together, the Contractor has not started the work on the Coves of Northwood Meadows. Current Circumstances The City has $36,000, in escrow, to complete the street improvements in the Bluffs of Northwood Meadow. The Developers of the Coves and Villas have asked the City to delay drawing on their Letters of Credit to allow them an opportunity to contract for the street improvements in their respective plats. Seven (7) bids were received on June 18, 2009 by the Developer of the Bluffs to R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows Award Agenda.doc complete the work for all three projects. The low bid was from Bituminous Roadways from Shakopee, Minnesota in the amount of $85,458.00 for the three. Bituminous Roadways was founded in 1946 and runs its business out of several locations. In this case the Shakopee office provided the bid for the work. Bituminous Roadways has worked for developers on previous Prior Lake projects. As the lowest responsible bidder, City Staff recommends that Bituminous Roadways complete the street improvements in the three Northwood Meadows projects. ISSUES: The Developer of the Bluffs is financially insolvent and therefore can't enter into a contract for the remaining work with the lowest bidder, Bituminous Roadways. The City has secured $36,000 from the Developer to pay for the remaining work. The City Council is being asked to authorize a contract, with Bituminous Roadways to complete the improvements to Hawk Ridge Road. The bid for this portion of the project is $29,465.00. The funding will come from the $36,000 the Developer has escrowed with the City for the street improvements. Unused escrow dollars for this project will be utilized for future work associated with this development. The City's contract with Bituminous Roadways also allows the City to include the street improvements in the Villas and the Coves if the Developers of those projects do not independently contract with Bituminous Roadways to have the improvements completed. Villas of Northwood Meadows - If the Developer of the Villas does not contract with Bituminous Roadways to complete the street improvements in the Villas, the City will draw on the Developers Letter of Credit and include the street work in the Villas in the City's contract with Bituminous Roadway. Coves of Northwood Meadows - If the Developer of the Coves does not contract with Bituminous Roadways to complete the street improvements in the Coves, the City will draw on the Developers Letter of Credit and include the improvements in the Coves in the City's contract with Bituminous Roadways. The contract with Bituminous Roadways is set up to include the work of the Coves and Villas of Northwood Meadows as well as the Bluffs of Northwood Meadows. If the Developers enter into a contract with Bituminous Roadways directly, that portion of the Contract will not be paid to the Contractor through the City Contract. FINANCIAL IMPACT: There is no financial impact on the City. The funds to complete the street improvements will come from the $36,000 the Developer of the Bluffs deposited with the City and the proceeds from the Letters of Credit for the Coves and Villas. ALTERNATIVES: The alternatives are as follows: 1. Approve a resolution accepting bids and awarding the City's Standardized Construction Contract for street construction to Bituminous Roadways for the Bluffs of Northwood Meadows and the Coves and Villas of Northwood. 2. Deny this item for a specific reason and provide Staff with direction. 3. Defer this item until a specific date in the future. R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows Award Agenda.doc RECOMMENDED Alternative #1 MOTION: Reviewed by: F ank Boyles, it an er R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows Award Agenda.doc O~ PRIn~, r~ ~ I ~\ ~ ~ 4646 Dakota Street S.E. ti U / ~ x ; Prior Lake, MN 55372-1714 r~ ~ ~ ~.~~ ~'°~~I~'IVES~~~~ ~ RESOLUTION 09-xx A RESOLUTION AWARDING THE CITY'S STANDARDIZED CONSTRUCTION CONTRACT FOR STREET AND UTILITY CONSTRUCTION FOR THE COVES, VILLAS, AND BLUFFS OF NORTHWOOD MEADOWS Motion By: Second By: WHEREAS, The three Developers of the Coves, Villas and Bluffs of Northwood Meadows have failed to complete the Developer Installed Improvements required of them in the respective Development Contracts for each subdivision; and WHEREAS, the Developer Installed Improvements that remain incomplete include mainly bituminous pavement, landscaping, and appurtenant work; and WHEREAS, In an effort to complete the bituminous improvements cost effectively the three Developers agreed to bid and retain one contractor to complete all of the bituminous work in the Coves, Villas and Bluffs of Northwood Meadows; and WHEREAS, to assure the improvements were completed and the property owners who purchased homes in the any of the three subdivisions were protected, the City will utilize Developer's escrows and Letters of Credit to complete the improvements; and WHEREAS, When the project was bid seven bids were received; and WHEREAS, Bituminous Roadways of Shakopee, MN submitted the lowest bid and is a responsible bidder; and WHEREAS, The final wear course of bituminous should be completed before the winter to prevent undue degeneration of the streets. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The bituminous work remaining in the Coves, Villas and Bluffs of Northwood Meadows was competitively bid and Bituminous Roadways of Shakopee, Minnesota is the lowest responsible bidder. 3. The Mayor and City Manager are hereby authorized to enter into the City's Standard Construction Contract with Bituminous Roadways of Shakopee, Minnesota in the amount of $29,465 to complete the work in the Bluffs of Northwood Meadows. 4. Construction costs will be paid using funds from Developer's Letters of Credit and funds escrowed by the Developers pursuant to their respective Development Contracts with the City. 5. The City Manager is authorized to direct that up to an additional $55,993 in work be completed in the Villas and Coves of Northwood Meadows Project by Bituminous Roadways utilizing developer funds in accordance with the Development Contracts in the event the respective Developers fail to complete the required improvements. www. cityofpriorlake. com Phone 952.447.9800 /Fax 952.447.4245 R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows award Resolution - Alternate.doc PASSED AND ADOPTED THIS 8th DAY OF SEPTEMBER 2009. YES NO Hau en Hau en Erickson Erickson Hedber Hedber LeMair LeMair Millar Millar Frank B®yles, City Manager R:\Council\2009 Agenda Reports\09 08 09\Northwood Meadows award Resolution - Alternate.doc