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[Closed meeting]
MINNESOTA STATUTES CHAPTER 13.05 CLOSED MEETINGS FOR THE PURPOSE OF THE DRAINAGE AUTHORITY.CAN I HAVE A MOTION TO GO INTO CLOSED SESSION AT THIS POINT? I'LL SO MOVE THAT. MADAM CHAIR, DO WE HAVE A SECOND? THANK YOU. ALL THOSE IN FAVOR? ALL RIGHT. ROLL CALL, SARAH.
SO LET'S GET THE DOORS SHUT AND THE RECORDING STOPPED AND THE EXTRA BODIES OUT OF THE ROOM.
[Open Meeting]
ALL RIGHT, WE ARE BACK IN OPEN MEETING.COMMISSIONER KOLARS, DRANTTEL, MORROW AND HACK.
SO WE'LL BE BACK IN OPEN SESSION HERE IN JUST A MINUTE.
WE ARE BACK IN OPEN SESSION FOR THE DRAINAGE AUTHORITY FOR DECEMBER 30TH, 2022.
UM, DISCUSSION WILL ENSUE REGARDING 86 A AND MEDIATION.
SO, ATTORNEY JUSTIN, WOULD YOU TAKE IT? TAKE IT AWAY.
WE'RE HERE TODAY TO TALK ABOUT THE CONTRACT WITH LAMETTI FOR 86 A AND AS THE COMMISSIONERS KNOW, LAMETTI HAD MADE VARIOUS CLAIMS THAT HAVE HAD COMPLETED THE PROJECT AND WAS ENTITLED TO FINAL PAYMENT.
THE COUNTY HAD SEVERAL PROBLEMS WITH MAKING FINAL PAYMENT AND SOME OF THE WORK WHICH HAD NOT BEEN COMPLETED CORRECTLY, EVEN UP TO THIS POINT, AS WAS ALLOWED UNDER THE CONTRACT LAMETTI HAD REQUESTED MEDIATION AND WE ENGAGED IN MEDIATION ON DECEMBER 19TH.
AS WE WENT INTO MEDIATION, LAMETTI WAS SAYING THAT THEY WERE ENTITLED TO $654,000 AND CHANGE, 200,000 OF WHICH WAS BASED ON THE ACTUAL CONTRACT AND THE ADDITIONAL $454,000 FOR ADDITIONAL WORK THEY PERFORMED BEYOND THE CONTRACT WE WERE CLAIMING IN MEDIATION.
THEIR FAILURE TO REMOVE A TEMPORARY DAM ENTIRELY, WHICH THEY HAD MADE, AND ONE OF THE DISCHARGE PIPES BEING AT THE WRONG ELEVATION, LIKELY BECAUSE IT HAD SETTLED AT THE END OF MEDIATION IN THE 19TH, THE COUNTY AND LAMETTI WERE STILL HUNDREDS OF THOUSANDS OF DOLLARS APART AND ATTEMPTING SETTLEMENT, AND THE MEDIATOR INDICATED TO BOTH SIDES THAT THE NEXT DAY HE WOULD MAKE A PROPOSAL FOR BOTH SIDES TO EITHER ACCEPT OR REJECT BASED ON HIS UNDERSTANDING OF WHAT WE HAD TALKED ABOUT AND JUST AS IMPORTANTLY, WHAT EITHER SIDE MIGHT ACCEPT.
SO HE MADE A PROPOSAL THAT WE ARE DISCUSSING TODAY, AND THAT ESSENTIALLY WAS THAT THE COUNTY PAID $230,000 TO LAMETTI, WHICH ESSENTIALLY WOULD BE THE CONTRACT PRICE PLUS $30,000.
THE PAYMENT WOULD BE MADE IN THE NORMAL COURSE OF BUSINESS, WHICH WOULD MEAN A PART OF IT WOULD BE MADE ON APPROVAL OF THEIR MOST RECENT PAY APPLICATIONS, THE REMAINDER TO BE MADE AFTER FINAL ACCEPTANCE OF THE PROJECT.
ADDITIONAL TERMS OF THAT WOULD BE THAT BOTH PARTIES WOULD RELEASE KNOWN CLAIMS THAT THEY HAVE AGAINST THE OTHER LAMETTI WOULD NOT MAKE ANY FURTHER CLAIMS FOR PAYMENT, NOR WOULD WE SAY THAT WE DID NOT GET ENOUGH OF AN OFFSET FOR OUR OUR CLAIM DAMAGES. UM, BUT IT WOULD NOT AFFECT WHAT WE CALL LATENT DEFECTS, MEANING ISSUES WE MAY NOT KNOW ABOUT TODAY, THAT WE COULD STILL MAKE CLAIMS BECAUSE THE WARRANTY OF THE WORKMANSHIP AND THE MATERIALS WOULD CONTINUE. IN FACT, THE WARRANTY, THE TWO YEAR WARRANTY UNDER CONTRACT WOULD BEGIN ONLY AFTER FINAL ACCEPTANCE OF THE
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PROJECT. WHICH ACCORDING TO ISG, SHOULD BE ABLE TO HAPPEN BY LATE FEBRUARY OR EARLY MARCH SO THAT THE WARRANTIES WOULD REMAIN IN EFFECT AND BEGIN AT THAT POINT.THEY WOULD PROVIDE CLOSEOUT DOCUMENTS, ASSIGN ALL CONTRACTUAL WARRANTIES FROM THEIR SUPPLIERS, AND THE BOND WOULD REMAIN IN PLACE.
LAMETTI WOULD NOT BE REQUIRED TO PROVIDE ANY FURTHER LABOR OR MATERIALS.
THEIR WORK ON THE PROJECT WOULD BE COMPLETE.
IN LOOKING AT ALL OF THE CLAIMS, THE STRENGTHS OF THE VARIOUS CLAIMS, BOTH OF LAMETTI AND OF THE COUNTY AND THE COST OF LITIGATION.
I MEAN, I DO NOT SEE THIS MATTER GOING TO TRIAL AND VERDICT AND HAVING IT COST LESS THAN $100,000 JUST IN ATTORNEYS FEES AND THE UNCERTAINTY OF LITIGATION.
I MEAN, I CAN LOOK AT THIS AND SAY SOME OF THESE CLAIMS ARE TOTAL CRAP, BUT THAT DOESN'T MEAN A JURY MIGHT NOT AGREE WITH THEM IN PART OR IN THEIR ENTIRETY.
BUT THERE IS ALWAYS A CHANCE THAT THINGS DO NOT GO AS HOPED AT TRIAL.
SO BASED ON THOSE CONCERNS AND THE CONCERNS THAT I BELIEVE IT'S THE AUTHORITY'S OBLIGATION TO GET THE PROJECT COMPLETED AT THE LEAST POSSIBLE EXPENSE TO THE LANDOWNERS THAT THIS SETTLEMENT OR THIS AGREEMENT, TO THIS MEDIATION PROPOSAL IS THE WAY TO DO THAT IN A WAY THAT IS MOST BENEFICIAL TO THE LANDOWNERS.
AND I WOULD RECOMMEND THAT THE AUTHORITY AGREE TO THE MEDIATORS PROPOSAL OF A FINAL CLOSEOUT PRICE OF THE PROJECT TO BE $230,000.
THANK YOU. DOES THE BOARD HAVE ANY QUESTIONS FOR ROGER AT THIS POINT? MADAM CHAIR, THANK YOU FOR THAT UPDATE.
COULD YOU JUST SAY A LITTLE BIT? I LEARNED A GREAT DEAL ABOUT THE MEDIATION PROCESS AND ABOUT THE MEDIATOR AND THE MEDIATORS ROLE.
AND I THINK, ROGER, YOU HAD MENTIONED SOMETHING ABOUT THE MEDIATORS EXPERIENCE.
COULD YOU JUST TALK ABOUT HOW THAT PROCESS WORKED? YES. WHEN WE HAVE WHEN WE AGREED TO MEDIATION, WE HAD AN OPTION AS TO WHO WE WANTED TO MEDIATE THIS CASE.
GREG [INAUDIBLE] WAS THE MEDIATOR.
HE HAS PRACTICED CONSTRUCTION LAW FOR, I'LL GUESS, 40 YEARS, BUT CERTAINLY OVER 30 YEARS AND IS RETIRED FROM ACTIVE PRACTICE BUT ACTIVELY PARTICIPATES IN A MEDIATOR IN CONSTRUCTION RELATED ISSUES ONLY.
AND HE THIS WAS ACTUALLY THE SECOND TIME HE LOOKED AT THIS PROJECT.
WE HAD A MEDIATION SOME TEN MONTHS AGO THAT DIDN'T GO ANYWHERE AS WELL.
AND IN HIS PROPOSAL, I THINK HE WEIGHED THE RELATIVE STRENGTHS OF THOSE CLAIMS. AND MEDIATION IS A COMBINATION OF SAYING, OKAY, WHAT IS AN ACCEPTABLE OR COULD BE ACCEPTABLE TO BOTH SIDES BASED ON WHAT THEY FEEL THEY CAN REALLY GET OUT OF IT AND WHAT THE PRACTICAL BENEFITS OF SETTLING ARE. AND HE DIDN'T HAVE A DETAILED EXPLANATION AS TO HOW HE CAME TO THE 230,000.
BUT THAT NUMBER, IN MY OPINION, IS MUCH CLOSER TO THE REAL VALUE OF THE CONTRACT AND THE ADDITIONS TO THAT THAT WERE SHOWN AT MEDIATION THAN WHAT LAMETTI WAS CLAIMING.
AND THAT IN PART IS WHY I'M RECOMMENDING THAT THAT PROPOSAL BE ACCEPTED.
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ANY ADDITIONAL QUESTIONS OF ROGER BEFORE WE BRING IT TO THE DRAINAGE AUTHORITY FOR A VOTE OR I'M GOING TO NEED A MOTION, PUT IT THAT WAY.DO WE HAVE A MOTION TO ACCEPT THE PROPOSAL BY THE MEDIATOR AS PRESENTED? I'LL MOVE IT, MADAM CHAIR.
THANK YOU. DO I HAVE A SECOND? SECOND. ANY FURTHER DISCUSSION? WELL, I THINK, MADAM CHAIR AND YOU AND COMMISSIONER MORROW HAVE MADE IT CLEAR THAT WHAT OUR LEGAL FOLKS ARE SAYING TO US IS THAT AS AN AUTHORITY, DITCH AUTHORITY, WE ARE OBLIGATED TO SETTLE FOR LAND OWNERS AT THIS TIME.
AND HOPEFULLY THIS IS A SETTLEMENT THAT WILL COME TO PASS.
THANK YOU. I DON'T THIS IS A NO WIN SITUATION FOR EVERYBODY.
I THINK THE LAND OWNERS ARE GOING TO SUFFER HERE WE SUFFER.
LAMETTI IS GOING TO SUFFER AND WE NEED TO STOP THIS AT SOME POINT AND MOVE FORWARD.
WE NEED TO BE ABLE TO PUMP WATER OUT THERE WHEN THE TIME COMES.
ANY ADDITIONAL COMMENTS BEFORE WE CALL THE ROLL? SETH DO YOU HAVE ANY COMMENTS? THANK YOU. SARAH, WOULD YOU PLEASE CALL THE ROLL? COMMISSIONER KOLARS.
YES. THE MOTION PASSES AND WE'LL START THE BALL ROLLING TO COMPLETE THE PROJECT.
GET THE FINAL ACCEPTANCE REPORT ROLLING.
WITH THAT, DO WE HAVE ANY FURTHER BUSINESS FOR THE DRAINAGE AUTHORITY? I MOVE, WE ADJOURN.
THANK YOU. DO WE HAVE A SECOND? SECOND. ALL THOSE IN FAVOR? AYE, AYE, AYE. WE'RE ADJOURNED.
* This transcript was compiled from uncorrected Closed Captioning.