The Ostrander City Council met December 1, with all members present (Stephanie Start, Dan Hellerud, DJ Start, Vernon Thompson, Mayor Pam Kunert, and City Clerk Wendy Brincks). Brian Malm, from the engineering firm of Bolton & Menk, addressed the council regarding the status of the city’s final payment offer to A1 Excavating for the infrastructure project that company did for Ostrander.
Malm stated, “The city made the final payment offer to A1 Excavating for the infrastructure improvement project from last year, and that final payment offer included liquidated damages for failure to complete the project by the final completion date. In accordance with the contract, liquidated damages were in the amount of $96,390, as a deduction of the final payment… A1 counter-offered, basically rejected that final payment offer, and indicated they’d be willing to accept liquidated damages in a lower amount of $15,000.”
Malm went on to explain that in this project’s contract (and in most such projects), if a contractor has not completed the project on time, there is a set amount of damages per day beyond the contract’s expected completion date. Malm said this is beneficial for two reasons; it builds in a clearly stated incentive for the contractor to not drag a project out beyond the target date, and it relieves the city from having to tabulate the specific actual damage amounts caused by the lateness.
Malm went on to say that since the contractor is disputing the contracted damages amount, the city could litigate for the full $96,390, or could agree to A1’s amount, or tabulate the actual damages. He said his firm did the calculations, and found actual damages were $19,170. He stated, “Any number other than those two numbers ($96,390 or $19,170) doesn’t have a basis.”
City Attorney Craig Byram participated in the discussion via phone, voicing agreement with Mr. Malm that the city may be wise to make a counter offer in the amount of actual damages, since anything higher could likely result in mediation or litigation, which would incur costs for the city. Byram added, “Spending a lot of money litigating… is a risky endeavor.” He said judges generally ask to know the actual damages when deciding upon such situations. After discussion, the council voted to make an offer to A1 for that amount of damages.
There was discussion about proposed repairs/upgrades for the city’s wastewater treatment plant. The proposed repairs are estimated to cost $22,500. After discussion, Stephanie Start stated, “Personally, I’d kind of like to wait and see what about insurance, if they cover. And then look back at this.” The council voted to table the issue for now.
The council heard from James Creaghe (Peopleservices) regarding a previous situation in which he said 90,000 gallons of “sludge” (bio-solids) were improperly disposed of. Creaghe stated that, as required, he notified that state of Minnesota about this situation, and is awaiting the state’s decision about what to do regarding this. The council also voted to approve a contract for continuing service with Peopleservices.
The council discussed ways to possibly help local businesses that have suffered due to the pandemic. In particular, the council was asking about way to help the two dining/bar businesses in town, since they’ve been hit hard by the Governor’s orders. After discussion with the city attorney, the council voted to waive the $1,100 annual liquor license fee for those two businesses, and to suspend their water and sewer fees for December and January. When the council meets in February, they will review the issue.
The council considered whether to increase water rates. Wendy Brincks said the city could “freeze” rates at the current levels, but this would slow the growth of funds for future needs. The proposed rate increases would be upping the base rate from $33.31 to $34.64, and increasing the “per usage rate” from $4.54 to $4.72. Dan Hellerud stated his opinion, saying that the increase is very modest, and he compared it to buying a cup of coffee at a convenience store. He said with all of the recent improvements made in the city, he feels this increase is not excessive. The council voted to implement the proposed increases.
Approval of the city’s final budget for 2021 was tabled to a special meeting on December 8 at 6:30 p.m. The city’s council meetings will continue to be held regularly on the first Tuesday of each month at 6:30 p.m., unless there is a conflict on a specific date, such as election day in November.
The next regular meeting will be Tuesday, January 5, at 6:30 p.m., in the community center. The public is welcome at all meetings, other than special closed meetings.
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