HomeMy WebLinkAbout10F - Ryan Contracting CUP
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
JULY 18, 2005
10 F
JANE KANSIER, PLANNING DIRECTOR
CONSIDER APPROVAL OF A REQUEST FOR AUTHORIZATION OF A
SETTLEMENT AGREEMENT AND APPROVAL OF A RESOLUTION
AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE A
DEVELOPMENT AGREEMENT FOR THE RYAN CONTRACTING
CONDITIONAL USE PERMIT
AGENDA ITEM:
DISCUSSION:
I ntrod uction
The purpose of this item is to authorize a settlement agreement in Ryan
Contracting vs. the City of Prior Lake, a lawsuit filed with respect to the
Conditional Use Permit approved by the City in 2001. If the City Council
authorizes the settlement, the City must then enter into a development contract
with Ryan Contracting to cover the work on the excavation site. This
development contract was required as part of the original CUP.
History
In 1999, the City received an application for a Conditional Use Permit from
Ryan Contracting to allow the excavation of sand and gravel on 13 acres of the
McKenna and Kinney properties located north of CSAH 42, and north and east
of McKenna Road. Just before the City Council was to consider this CUP, the
Council received a petition for an EAW for the project. The City Council
ultimately agreed to prepare an EAW. This process was completed in
December, 2000.
On February 20, 2001, the City Council made a negative declaration on the
need for an Environmental Impact Statement. On February 27,2001, the City
Council adopted Resolution 01-19, which approved a CUP subject to 37
conditions (see attachment #1). Fifteen of those conditions needed to be
satisfied before the CUP would become valid. Eight additional conditions
needed to be satisfied before Ryan could begin work. Fourteen additional
conditions needed to be satisfied by Ryan on an on-going basis. In addition,
the CUP could be valid for only one year, and was subject to renewal upon
application. The need for Ryan to seek renewal of the permit after one year
gave the Council the ability to consider the information regarding Ryan's
performance and environmental impacts of the project that would be created
during the first year of operations.
In 2001-02, the SMSC challenged the City's negative declaration on the need
for an Environmental Impact Statement, which included a request that the
Court should either prevent Ryan from mining or impose additional conditions
on its operation, beyond those already required in the CUP. In its first ruling,
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the Court upheld the City's negative declaration, finding that no further
environmental review was necessary, based on the mitigative nature of the
conditions incorporated into the CUP. In 2002, following a trial, the Court
denied the SMSC's request to prevent mining operations, but imposed several
additional conditions on Ryan's operations to mitigate potential environmental
impacts.
A separate City Ordinance authorized the City to cancel Ryan's CUP if Ryan
failed to make substantial use of the premises pursuant to the CUP with in a
one-year period. This provision is similar to provisions in the Building Code
and in Minnesota Statutes. The City tolled the commencement of that one-
year period until the appeal period in the SMSC Litigation expired. After the
litigation and appeal period expired, the one year time period on the CUP
began to run. In January 2004, after staff concluded that Ryan had not
satisfied the preconditions to the validity of the CUP within the one year period
following the litigation, the City cancelled the CUP. Ryan disagreed with the
City's conclusions and procedures, and sued the City. Ryan also contended
that the City lacked statutory authority to impose a one-year term on the CUP
or a requirement that an applicant use a CUP within a one-year period. The
SMSC intervened in that action and aligned itself with the City. In May 2005,
cross-motions for summary judgment were argued, and soon thereafter, a
settlement dialogue began. The SMSC's counsel initially participated in those
settlement discussions, but when the potential for a settlement appeared to be
possible the SMSC dropped out.
Several hours before the City Council was scheduled to consider authorizing
the execution of the draft Settlement Agreement, the City Council received a
copy of a petition requesting the preparation of a revised environmental
assessment worksheet on June 20, 2005. The City received official
notification of its RGU status from the Environmental Quality Board on July 1,
2005.
Current Circumstances
The City Council is scheduled to make a decision on the 2005 EAW petition on
July 18, 2005. Should the Council determine an EAW is not required, the
Council may also wish to authorize the settlement agreement and enter into a
Development Contract. The attached memorandum from John Baker of
Greene Espel, the attorney representing the City in this matter, outlines the
agreement.
ISSUES:
The concept behind the draft Settlement Agreement is that, if Ryan were to
satisfy within a specified period all of the preconditions to Ryan's ability to use
the 2001 CUP set forth in that CUP, the City would reinstitute the 2001 CUP.
However, the City would hold Ryan to the same conditions imposed in the
2001 CUP, plus the conditions imposed by the Court in its 2002 Order. As part
of the draft Settlement Agreement, Ryan would waive its ability to challenge
the legality of the terms of the 2001 CUP and the draft Settlement Agreement,
including the one-year periOd of validity. The draft Settlement Agreement also
created a mechanism for Ryan to report to the City at specified intervals the
status of its efforts to comply with the conditions, and for the City to respond to
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Ryan within a specified period with its reasons for any dissatisfaction with
Ryan's performance.
The proposed development contract is consistent with the provisions of
Resolution #01-19. The contract is similar to the City's standard Development
Contract for a subdivision in that it stipulates the required improvements, the
amount of the letter of credit, the time of performance, the definitions and
remedies for default, and so on.
FINANCIAL
IMPACT:
Authorization of the proposed settlement agreement will eliminate the existing
litigation. Further, approval of the Development Contract will allow the City to
recoup some of the costs of administering this contract.
ALTERNATIVES:
The City Council has the following alternatives:
1. Authorize the execution of the Settlement Agreement and adopt a
resolution approving the Development Contract.
2. Deny the Settlement Agreement and the Development Contract.
3. Defer action and provide staff with specific direction.
RECOMMENDED
MOTION:
The staff recommends Alternative #1. This requires the following motions:
1. A motion and second to authorize the Mayor and City Manager to execute
the Settlement Agreement.
2. A motion and second to adopt a resolution authorizing the Mayor and City
Manager to sign the Development Contract.
Reviewed by:
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16200 Eagle Creek Avenu~~.OLUTION OS-XXX
Prior Lake, MN 55372-1714
RESOLUTION OF THE PRIOR LAKE CITY COUNCIL APPROVING DEVELOPMENT CONTRACT
FOR THE RYAN CONTRACTING CONDITIONAL USE PERMIT AND SETTING FORTH CONDITIONS
TO BE MET PRIOR TO CONSTRUCTION
MOTION BY:
SECOND BY:
WHEREAS: On February 27, 2001, the City Council the conditional use permit for the Ryan
Contracting mining and excavation of the property located north of CSAH 42, and
north and west of McKenna Road, subject to conditions identified by Resolution 01-
19; and
WHEREAS: On July 18, 2005, the City Council approved a settlement agreement in the matter of
Ryan Contracting vs. the City of Prior Lake which reinstates the approval of the CUP;
and
WHEREAS: The City Council has approved the development contract required in Resolution 01-
19.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PRIOR
LAKE, MINNESOTA:
1. The recitals set forth above are incorporated herein as if fully set forth.
2. The CUP for the Ryan Contracting mining and excavation is approved subject to the conditions set
forth in Resolution 01-19.
3. The Mayor and City Manager are hereby authorized to execute the Development Contract on behalf
of the City.
Passed and adopted this 18th day of July, 2005.
YES NO
Haugen Haugen
Fleminq Fleminq
LeMair LeMair
Petersen Petersen
Zieska Zieska
Frank Boyles, City Manager
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www.cityofpriorlake.com
Page 1
Phone 952.447.4230 / Fax 952.447.4245
GREENE ESPEL MEMORANDUM
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
SUITE 1200
200 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402
(612)373-0830 FAX (612)373-0929
TO:
Mayor and Members of the Prior Lake City Council
C:
Prank Boyles, Jane Kansier, Suesan Lea Pace, and Joseph Schmitt
PROM:
John M. Baker, Greene Espel P.L.L.P.
DATE:
July 13, 2005
RE:
Request for authorization of Settlement Agreement and Development Agreement (if
Council denies EA W Petition)
Our Pile No: 2043-261
Mayor and Members of the City Council:
Requested Action: Ifthe Council denies the Shakopee Mdewakanton Sioux Community's
Petition for an Environmental Assessment Worksheet, we recommend that the Council adopt a
motion providing as follows:
1. The Council authorizes Mayor Haugen to execute a Settlement Agreement with Ryan
Contracting Co., following the execution ofthat agreement on behalf of Ryan Contracting Co.; and
2. The Council further authorizes Mayor Haugen to execute a Development Agreement
with Ryan Contracting Co., following execution of that agreement on behalf of Ryan Contracting Co.
Background: The SMSC's Petition for an Environmental Assessment Worksheet was filed
several hours before the Council's last meeting, on June 20 2005. Until that Petition was filed, we
anticipated presenting a request to the Council at the June 20 meeting for authorization to execute a
settlement agreement between the City and Ryan Contracting. Because of the Petition, we have
deferred making this request until after the Council has an opportunity to decide whether to grant or
deny the Petition.
A copy of the draft Settlement Agreement is included with your agenda materials. If the
Council reaches this item, which should only occur ifthe Council denies the EA W petition, and then
authorizes execution of the Settlement Agreement, we anticipate that Ryan will sign it in the form
that has been submitted to you.
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Progress has been made in negotiating a development agreement with Ryan. It is possible that
by the July 18 meeting, we will have resolved all differences relating to the terms of that agreement
as well. If those differences have been resolved by the meeting, we would request the Council to
also authorize execution of the Development Agreement. If those differences remain unresolved at
the time of the July 18 meeting, we will then provide a recommendation to the Council on how it
might proceed.
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SETTLEMENT AGREEMENT
AND RELEASE
Ryan Contracting Company ("Ryan"), and the City of Prior Lake ("the City"), hereby
agree and covenant as follows:
1. The parties to this Agreement wish to avoid the time, expense, inconvenience and
uncertainties of litigation. Accordingly, without any of the parties admitting any
liability or admitting the validity of any claim, counterclaim, cause of action, or
defense asserted in this action, the parties wish to resolve and settle all disputes,
claims, counterclaims, cause of actions, and defenses arising from the events that
were the subject matter of the lawsuit described in Paragraph 2 of this Agreement.
2. The parties to this Agreement desire to dismiss with prejudice the lawsuit entitled
"Ryan Contracting Company v. the City of Prior Lake and the Shakopee
Mdewakanton Sioux Community," Case No. 2004-05618, in the Scott County
District Court of Minnesota ("the Action").
THEREFORE, in consideration of the foregoing, and the mutual covenants and
conditions contained in this Agreement, the parties agree as follows:
A. This Agreement is entered into in good faith for the purpose of settling completely those
disputes of the parties to this Agreement with regard to the matters involved in the Action.
B. The parties agree that the City will rescind the cancellation of the Conditional Use Permit
after Ryan completes the preconditions listed in paragraph C of this Agreement. After the City
rescinds the cancellation, the Conditional Use Permit Resolution 01-19 ("CUP") (attached as
Exhibit A) is valid and may be recorded by Ryan. Prior to the commencement of mining
activities, the resolution approving the CUP must be recorded on all affected properties and
proof of such recording presented to the Planning Department. The one-year term set forth in
Section V of the CUP will begin running when the CUP is recorded.
C. If, , Ryan completes the following items before November 30, 2005, and City staff
reviews and approves them, the City will rescind the cancellation of the CUP:
1) The landscape plan must be revised to indicate a one for one replacement of
trees removed (42 caliper inches) as part of the reclamation and staging plan.
The plan must also indicate that plantings are to be installed upon completion
of each phase.
2) The landscape plan must be revised to include landscaping of 1 tree per 10
lineal feet of berm as per item 7 on Recapitulation of CUP Application
submitted by Ryan Contracting, and to include an additional 10 perimeter trees
as shown on the proposed landscape plan.
3) The plans must be revised to identify a 24' wide paved driveway from the
public street to the parking lot, a paved parking lot, and a paved fueling pad.
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4) The parking area must be buffered by screening with additional plantings.
This is to be shown on a revised landscaping plan.
5) Drainage and storm water rate calculations and plans for engineered drainage
and storm water controls must be submitted to the City for review and
approval.
6) The plans must be revised to eliminate the permanent above-ground fuel
storage area.
7) Utility plans indicating electrical line locations must be submitted, if there is to
be electrical equipment on the site.
8) The plans must be revised to identify a monitoring well at the northwest comer
of the site. The exact number, location, depth, and specification are to be
based on recommendations from a certified independent consultant approved
by the City Engineer.
9) The applicant and property owners must enter into a Developer's Agreement
with the City. The Developers Agreement includes provisions dealing with
right of entry and indemnification. Treatment of the required Irrevocable
Letter of Credit is also detailed within the Agreement.
10) An Irrevocable Letter of Credit, on a form prepared by the City and approved
by the City Attorney, is to be submitted prior to the recording of the resolution.
(a) The amount of the LOC is for $420,500 (approximately 125% of the
following costs) and ensures the following:
(i) McKenna Road maintenance ($100,000);
(ii) Paved driveway and parking area ($37,200);
(iii) Landscaping costs ($11,687.50);
(iv) Dust control ($5,000);
(v) Reclamation (final site restoration, grading)($75,000);
(vi) Monitoring of the wetland and ground water (monitoring
well)($7,500);
(vii) Any environmental contamination, including groundwater
pollution, wetland diminution or destruction ($100,000)
(viii) Any fees incurred by the City in the enforcement of the
Conditional Use Permit.
(b) If the City must draw upon the Irrevocable Letter Of Credit, the
applicant shall be responsible for bringing the irrevocable letter of
credit back to $420,500 within 15 days of any draw down.
11) The applicant is responsible to pay the City for all related costs per City Code
Section 1109.902. These costs will include, but are not limited to, fees
incurred by the City for the preparation and recording of the Developer's
Agreement, inspection costs, attorney's fees, and retaining of consultants.
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These costs do not include any costs related to the litigation regarding the CUP
in 2001 - 2002 or in 2004 - 2005.
12) Prior to beginning work, the required PCA permits must be obtained, and
copies provided to the City.
13) The required Watershed permits must be obtained, and copies provided to the
City prior to beginning work.
14) An Assent Form, as required by ordinance, is to be signed by the applicant and
all property owners.
15) A wetland delineation report must be prepared and submitted to the City to
determine if jurisdictional wetlands are present on the site, and is to include, if
necessary, wetland replacement or mitigation plans. The monitoring well is to
be installed at the site. Baseline water quality analysis of the DNR protected
wetland is to be completed and results submitted to the City as prepared by an
independent laboratory approved by the City. Testing parameters and
frequencies are identified in N (e)6 and 7 in the CUP.
16) The operation of the pit cannot result in drainage or other degradation of the
DNR protected wetland. Ryan Contracting is to submit to the City for review
and approval a work plan to evaluate the potential effect of the proposed
mining operation on the DNR protected wetland and any other jurisdictional
wetlands on the site. The work is to evaluate potential impact from the mining
below the perched elevation of the wetland or by reducing the catchment basin
size of the wetland. At the completion of the work, a report is to be submitted
to the City that summarizes the findings and provides a wetland replacement or
mitigation plan, if needed.
17) Proposed traffic signs require approval from the City Engineer and must meet
MN Uniform Traffic Control Devices standards. Signs must be installed prior
to beginning work. In addition to those proposed, "Trucks Hauling" signs
must be placed on McKenna Road south to CSAH 42.
18) A secured gate and 6' high perimeter fence is to be installed prior to beginning
work. The property must be signed as private property.
19) The driveway from the public street to the parking lot, the parking lot and the
refueling pad must be hard surfaced (paved) and installed prior to beginning
work.
20) The parking area and parking lot screening must be completed.
21) Prior to beginning work on the site, the City will inspect McKenna Road and
document its current condition. Once work has commenced, the City staff will
inspect the road on an ongoing basis. Repairs required as a result of this use
must be completed no later than October 31 st.
D. Ryan must complete the preconditions listed in paragraph C of this Agreement before
November 30,2005.
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1. From July 15,2005 until November 30,2005, Ryan will provide to the City
written reports by the 15th of each month updating the City regarding the status of its
completion of the preconditions.
2. At any time but no later than November 30, 2005, Ryan may request the City in
writing to meet in order to conduct an inspection and review for the purposes of
determining whether the preconditions listed in paragraph C of this Agreement have been
completed.
a. If Ryan makes such a written request, the City must convene this meeting
within 10 days of the request.
b. Ryan's satisfaction of these preconditions will be deemed sufficient 10
days after the meeting date unless the City notifies Ryan in writing by that date of
which conditions have not been satisfied and lists all ofthe ways in which they
are not satisfied, and the actions Ryan must take to satisfy the conditions from the
City's perspective.
3. Ryan will have the opportunity to request a reinspection for the purposes of
demonstrating that it has cured the deficiencies listed in the City's notice until November
30,2005.
a. If Ryan submits such written request for reinspection to the City by
November 30,2005, the City shall conduct a reinspection within 10 days of the
request.
b. Ryan's satisfaction of these preconditions will be deemed sufficient 10
days after the reinspection date unless the City notifies Ryan in writing by that
date of which conditions have not been satisfied and lists all of the ways in which
they are not satisfied, and the actions Ryan must take to satisfy the conditions
from the City's perspective..
4. Notwithstanding the process and schedule described above, Ryan must cure any
deficiencies identified in the City's notice of deficiencies by November 30, 2005, subject
to subsection 5 below.
5. Without limitation, the deadlines in paragraph D shall be tolled if an injunction is
entered that directly or indirectly prevents activities pursuant to the CUP or completion of
one or more of the paragraph C preconditions. Such tolling shall end upon the vacating
of all such injunctive relief. The deadlines are also tolled by litigation commenced by
one of the parties to this agreement to determine or enforce the rights and obligations of
the parties pursuant to this Agreement, which tolling shall end upon completion of the
litigation. If an action is filed by a third party to challenge this Agreement but no
injunction is entered, the parties agree to meet and confer regarding whether it would be
appropriate to toll the deadlines.
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E. Ryan waives its right to challenge all conditions set forth in this Agreement and the
Conditional Use Permit Resolution 01-19 ("CUP") (attached as Exhibit A), including the one-
year term in Section V of the CUP. This agreement does not in any way impact or prejudice
Ryan's right to apply for a renewal ofthe CUP.
F. Ryan agrees to conduct its mining activities in compliance with the CUP, and further
agrees that it must comply with all conditions imposed by the Court's Order of November 16,
2002 in State of Minnesota by Shakopee Mdewakanton Sioux Community v. City of Prior Lake
and Ryan Contracting Co., File No. C-OI-05286.
G. Prior to the parties' execution of this Agreement, the City will have: (1) reviewed
pursuant to Section N(c)(I)-(8) of the CUP the plan revisions Ryan submitted in December
2004, (2) drafted and submitted to Ryan for its review a Development Agreement for this project
that the City is willing to approve after City staff approves Ryan's plan revisions, and (3)
provided Ryan with a Letter of Credit Form and an Assent Form. The City will review the work
plan Ryan is required to submit pursuant to Section N(d)(2) of the CUP, and provide Ryan with
written feedback about whether the City approves the work plan or the actions that Ryan must
take to obtain the City's approval, within three weeks of its receipt by the City Planning Director.
The City will inspect McKenna Road prior to beginning work on the site and document its
current condition pursuant to Section N(d)(8) of the CUP, and provide Ryan with that written
documentation of the road's current condition, within three weeks of Ryan's execution of a
Development Agreement with the City. The City will inspect the road on an ongoing basis once
work has commenced pursuant to Section N(d)(8) ofthe CUP.
H. The parties agree that the one-year term set forth in Section V of the CUP does not
require Ryan to complete within that one-year period all the cleanup and restoration required by
the CUP or by the Court's Order of November 16,2002. If the City does not renew a CUP for
Ryan's operations, Ryan is allowed 24 months after expiration of the CUP to complete its
removal of any stockpiles.
I. The parties agree that specific performance is an available remedy for any violation of
paragraphs C, D, F, or G ofthis Agreement.
J. Except only for the representations or obligations of the parties under this Agreement,
Ryan and the City and any and all of their beneficiaries, employees, agents, representatives,
successors, assignees, transferees, joint ventures, attorneys, and insurers, hereby release and
discharge the other, and their past and present officers, directors, partners, elected officials, board
members, employees, agents, representatives, affiliates, divisions, successors, stockholders,
assignees, transferees, joint ventures, attorneys, insurers, and risk pools (including the League of
Minnesota Cities Insurance Trust) from all manner of claims, demands, actions, causes of
actions, suits, debts, dues, sums of money, accounts, bills, covenants, contracts, rights,
obligations, controversies, agreements, promises, and demands whatsoever, whether in law or
equity, they ever had, or now have, or hereafter may have, whether known or unknown, against
each other, involving the matters involved in the Action.
K. All notifications and reports required or provided for under this Agreement shall be made
by fax and U.S. mail to the parties as follows:
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a. Notice to the City of Prior Lake shall be provided to the following two
individuals:
1. Suesan Lea Pace, Halleland Lewis, 220 S. Sixth Street, Suite 600,
Minneapolis, MN 55402, fax no. (612) 338-7858
11. Jane Kansier, Planning Director, City of Prior Lake, 16200 Eagle Creek
Ave., S.E., Prior Lake, MN 55372, fax no. (952) 447-4245.
b. Notice to Ryan Contracting Co. shall be provided to the following 2 individuals:
1. Tom Ryan, Ryan Contracting Co., 8700 - 13th Avenue East, Shakopee,
MN 55379, fax no. (952) 894-3207.
11. Steven J. Weintraut, Siegel, Brill, Greupner, Duffy & Foster, P.A., 1300
Washington Square, 1 00 Washington Avenue South, Minneapolis, MN
55401, fax no. (612) 339-6591.
L. Each party will bear its own costs, expenses and attorney fees that it has incurred in
connection with or arising out ofthe Action.
M. This Agreement shall be binding upon the successors and assigns of the parties, whether
by way of merger, consolidation, operation oflaw, assignment, purchase, or other acquisition.
N. All questions with respect to the construction of this Agreement and the rights and
liabilities of the parties to this Agreement shall be governed by the laws of the State of
Minnesota.
O. This Agreement effects the settlement and release of claims and defenses, which are
denied and contested by the parties, and nothing contained in this Agreement shall be construed
as an admission of liability by either party.
P. Ryan and the City will dismiss with prejudice the Action upon execution of this
Agreement.
Q. Each party represents and warrants that it has not assigned or transferred, or purported to
assign or transfer, any of the claims released pursuant to this Agreement to any other person and
that it is fully entitled to compromise and settle such claims. Each party shall indemnify the
other against all costs, expenses, and judgments, including all attorneys' fees incurred, in the
event that any third party shall assert any ofthe claims released pursuant to this Agreement based
on a purported assignment or transfer of rights by a party to this Agreement.
R. This Agreement and its attachments and addenda represent the entire agreement between
the parties with respect to the subject matter of the Agreement and supersedes all prior and
contemporaneous oral and written agreements and discussions. Each of the parties covenants
that it has not entered into this Agreement as a result of any representation, agreement,
inducement, or coercion, except to the extent specifically provided in this Agreement. Each
party further covenants that the consideration recited in this Agreement is the only consideration
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for entering into this Agreement, and that no promises or representations of other or further
consideration have been made by any person. This Agreement may be amended only by a
written agreement executed by all parties.
S. This Agreement is the result of arms-length negotiations among the parties. All parties
have participated in the negotiations, have had an equal opportunity to participate in the drafting
and revision of this Agreement, and have had the opportunity to review this Agreement with
their counsel. No ambiguity shall be construed against any party based upon a claim that the
party in question drafted the ambiguous language.
T. This Settlement Agreement may be executed by the parties by facsimile and in identical
counterparts, each of which shall constitute an original for all purposes.
WHEREFORE, the parties have executed this Settlement Agreement and Mutual Release
effective as of the date first above written.
RYAN CONTRACTING COMPANY
Dated:
By:
Tom Ryan
President, Ryan Contracting Company
THE CITY OF PRIOR LAKE
Dated:
By:
Its Mayor
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