Wright County Board Minutes

APRIL 24, 2007

The Wright County Board met in regular session at 9:00 A.M. with Heeter, Sawatzke, Mattson, Russek and Eichelberg present.

As part of Boy/Girl County Day, students attended a portion of today’s meeting to learn more about County Board proceedings. Board members introduced themselves, the district they represent, and answered questions.

The minutes of 4-17-07 were corrected as follows: Page 10, 2nd paragraph, change all occurrences of “MacNab” to “Macnab” (Sawatzke). Heeter moved to approve the minutes as corrected, seconded by Eichelberg, carried 5-0.

The Agenda was amended as follows: The 10:30 A.M. Closed Session to discuss acquisition of property was corrected to include PID #114500184201 (total of three PID’s) (Sawatzke). Eichelberg moved to approve the Agenda as amended, seconded by Mattson, carried 5-0.

On a motion by Heeter, second by Eichelberg, all voted to approve the Consent Agenda as presented:

A. ADMINISTRATION

1. Performance Appraisals: E. Ross, Hwy.; M. Woodford, P&Z; S. Bjore, M. Flemming, Sheriff; R. Benedict, Surveyor.

2. Approve Memorandum Of Agreement With LELS Step Increase For Seven Deputies.

3. Authorize Voluntary Leave Without Pay Program; May 7, 2007 Through September 21, 2007.

B. ASSESSOR

1. Approve Abatements, PID #155-500-182300, 155-011-000151, & 155-011-000161, City Of Monticello (City Of Monticello).

2. Approve Abatement, PID #114-278-001030, Torgesen Properties LLC (City Of St. Michael).

3. Approve Abatement, PID #118-500-331100, Haeska Family Rev Tr. (City Of Otsego).

4. Approve Abatement, PID #118-190-008030, Strangler Enterprises Inc. (City Of Otsego).

5. Approve Abatement, PID #118-192-003010, Kingman Building Co. (City Of Otsego).

6. Approve Abatement, PID #118-217-000020 – 118-217-000110, Land Funding I LLC (City Of Otsego).

7. Approve Abatement, PID #112-038-000010, City Of Montrose (City Of Montrose).

C. HIGHWAY

1. Approve Maintenance/Construction Agreement With McLeod County For County Road 56.

D. INFORMATION TECHNOLOGY

1. Request To Hire Microcomputer Specialist, Brian Munsterteiger, At Step 4.

E. PARKS

1. Transfer Of Inventory; Authorize Surveyor’s Department To Transfer Ford Ranger Pickup Unit #608 To Parks Department To Replace Parks Unit #612 (Old Sheriff Car). Effective At The Time #608 Is Replaced By Surveyor.

F. SURVEYOR

1. Request To Hire Survey Technician, Chris Anonen, At Step 4 Of 49er’s Salary Schedule.

Bob Hiivala, Auditor/Treasurer, recently received a County Ditch 17 emergency ditch repair request from Troy Lanie of Buffalo. Hiivala spoke with Kerry Saxton, SWCD, who provided the opinion that the repair request involves a private tile. Hiivala pulled the request as it is not a County Ditch repair.

The claims listing was reviewed. On a motion by Eichelberg, second by Mattson, all voted to approve the claims as listed in the abstract subject to audit.

The meeting recessed at 9:25 A.M. and reconvened at 9:26 A.M.

Dave Lindberg, U.S. Fish & Wildlife Service, requested County Board support of a land purchase from Patricia Hanson (Monticello Township) for the following PID’s: #213-000-304400, #213-000-311100, and #213-000-322200. The purchase by the U.S. Fish & Wildlife Service involves 238 acres of land near Pelican Lake. Sawatzke referenced the second page of the material distributed, noting that a small section of property is not included in the purchase. Lindberg explained that a landowner lives on the north side of the road but owns property on the opposite side of the road, allowing access to the Lake. Approval of the purchase would also include authorizing signatures of the Board Chair on a certification for acquisition. Sawatzke moved to support the purchase, seconded by Heeter. It was noted that there is no County funding involved in the purchase. The motion carried unanimously.

A Building Committee Of The Whole Meeting was held on 4-17-07. At today’s County Board Meeting, Sawatzke made the following correction to the minutes: Page 2, 2nd to last paragraph, line 6, the sentence should read, “Liska stated that this is the first project that he has worked on that has done a “Not to Exceed”.” (Sawatzke) On a motion by Sawatzke, second by Mattson, all voted to approve the minutes as corrected:

SCOPE OF PROJECT AS IT RELATES TO CONSTRUCTION MANAGEMENT CONTRACT.

Russek reconvened the meeting of 4-03-07 at 10:30 A.M. and stated that the purpose of this meeting is to primarily discuss A&P’s Construction Management Fees. Sawatzke stated that at the last meeting, a consensus of the Board’s position was presented. Based on what was discussed during interviews and during the negotiation stage, the Board believes that a “not-to-exceed” flat construction management fee was agreed upon. Sawatzke stated that the Board is interested in hearing if A&P has reevaluated their position. Liska stated that following the 4-03-07 Meeting, A&P did go back to its office to re-evaluate its position. Liska distributed a handout titled “Wright County Jail and Law Enforcement Center Project” dated 4-17-07 which summarizes its position in relation to the construction management services and related fees. Liska stated that on 6-22-06, A&P received the Request for Proposal (RFP) for Construction Management Services related to the Wright County Jail/LEC project. On Page 13, item 9, it stated, “Provide a detailed estimate of your fee structure based on a $30 million construction cost project.” Liska stated that at the time of the Proposal on 7-07-06, A&P answered the request in the following manner, “Our fee structure for your project is 1.87% or $561,369.” Liska stated that in reviewing the proposals submitted by Mortenson and Knutson, Mortenson requested a fee of 2.0% of the construction costs. Mortenson did not identify a specific dollar amount. Knutson provided verbiage of how they would identify their fee. Knutson provided a construction management fee of 1.82% of the construction costs. They based their fee on a construction cost of $30 million since their fee was specifically identified at $546,000. Liska stated that it appears that all three firms submitted their bids based on receiving information that the project was to be a $30 million project. Liska stated that the Contract Agreement dated 8-22-06 states on page 1, “Wright County Jail and Law Enforcement Center. A new $30,000,000 county jail and law enforcement center located on an 89 acre parcel located immediately north of the Wright County Public Works facility.” In the same Agreement, Exhibit “A” states, “13.2 Basic Compensation – AP Midwest, LLC shall be paid a Basic Fee of 1.87% of the “Construction Cost”. Construction Cost is currently estimated at $30,000,000.” Liska stated that he would like the Board to note A&P’s definition of construction costs as stated in Paragraph 5.1.1 of the Agreement, “The Construction Cost shall be the total cost or estimated cost to the owner of all elements for the Project designed or specified by the Architect.” The definition continues in Paragraph 5.1.2., “Construction Cost shall also include the compensation of the Construction Manager and Construction Manager’s consultants.” Liska then referred to the Agreement’s verbiage of Reimbursable Expenses. In Paragraph 13.4.1, “Reimbursable expenses will be invoiced per Exhibit “B” at a Not to Exceed amount of $83,018.00.” The agreement further defines a Reimbursable Cost. Liska stated that the “Not to Exceed” reference that the Board has been concerned about is in relation to “Reimbursable Costs”. Liska referenced Exhibit B by stating that based on the proposals the County received, all construction managers felt that a $30 million project could be completed in an 18 month timeframe. Liska stated that extensive work has been added to the project: two geo-well fields and mining and relocation of material that will be stockpiled for the County’s use in the future. A&P had an early bid package prepared so that the work could be completed prior to proceeding with the work on the building. Liska noted that the geo-well field is blocking most of the construction site and most of the earthwork must be completed prior to construction. Liska stated that according to Paragraph 13.5.1 of the Agreement, “IF THE BASIC SERVICES covered by this Agreement have not been completed within thirty (30) months of the date hereof, August 22, 2006, through no fault of the Construction Manager, extension of the Construction Manager’s services beyond that time shall be compensated as provided in Section 12.3.3.” Paragraph 12.3.3 states, “If and to the extent that the time initially established in Section 13.5.1 of this Agreement is exceeded or extended through no fault of the Construction Manager, compensation for any services rendered during the additional period of time shall be computed in the manner set forth in Section 13.2.1.” Liska stated at the meeting on 4-03-07, progress was not made on the agenda item which was to update the Board on the extended scope of the project and the affiliated fee for A&P’s services. With the proposed construction costs now being 40,566,419, A&P will be receiving an increase in its construction management fees of $197,592 for additional compensation. A&P will also be looking for additional funding for the Field Engineer who will be utilized to process the information on site. Liska explained that at the 3-13-07 Board Meeting, A&P presented the DD Estimate in conjunction with KKE Architects. Prior to the meeting, A&P realized that the scope of the work was increasing substantially from what was included in the contract for $30,000,000. In preparation for the Board Meeting, Liska stated that he spoke with Captain Gary Torfin. A&P was prepared to discuss the information at the DD Estimate Presentation. On the day of the meeting, it was recommended that A&P not address the increase in construction management fees at that time. Liska stated that when he spoke with Torfin the following day, Torfin stated that the fee discussion should be brought to the Committee of the Whole on 4-03-07. Liska explained that based on Torfin’s recommendation the fee information was brought forth to the Board on 4-03-07. Russek stated that he doesn’t understand how the scope of the project has increased when in fact the project size has decreased. Russek stated that the scope of the work is less and yet the costs have increased. He stated that he doesn’t understand how A&P is doing more work. Russek stated that it is his understanding that the construction costs have escalated and yet A&P is attempting to justify that they have to do more work. Liska stated that in order to provide insight as to A&P’s position his staff has reviewed a lot of the meeting minutes that were available, including media minutes, which all indicated that this project was to be a $30 million project. The sources were fairly consistent. Liska explained that if one were to use the average cost per square foot to construct a jail and law enforcement center, which is $231, and divide it by $30,000,000, the project would have been a 129,870 square foot facility. Liska stated that no where in the minutes or documents that A&P reviewed was it ever indicated that the County specifically wanted a 129,870 square foot building. Taking the current construction costs of $40,500,000 and dividing it by $231/sq.ft. equals a 175,325 square foot facility, which is the size that is currently being planned. If made aware, Liska stated that it would have been A&P’s due diligence to inform the County that a 175,325 square foot building cannot be built for $30 million. However, A&P did not have any information on the estimated square footage of the facility other than that the project was to be a $30 million project. Heeter stated that she recalls that the timeframe was the largest concern during the interview and negotiation discussions. During the discussions for the “Not To Exceed”, the concern was whether the project could be completed within an 18 month timeframe. Liska stated that he did not attend all of the jail meetings; however his recollection was that both square footage and the project dollar amount were issues of major concern. However, something happened that took the project from $30 million to $40.5 million and typically the scope of a project increases with the increase of construction costs. Sawatzke asked Liska if he was surprised that A&P and the County are having this disagreement. Liska stated yes. Sawatzke stated that A&P has revised the budget at least 3 times, and not once has A&P increased its fee at the presentations. Sawatzke stated that Liska did not change the fee in its budget estimate presentations because he knew all along that a “Not to Exceed” contract was agreed upon. Sawatzke asked Liska if it is standard in his industry to not have “Not to Exceed” contracts. Liska stated that this is the first project that he has worked on that has done a “Not to Exceed”. Sawatzke asked Liska if he felt that the project was too risky to enter into a fixed “Not to Exceed” agreement. Liska explained that the County was not willing to pay for a temporary water line, and now the County is paying for that. Sawatzke asked Liska if he ever would consider entering into a “Not to Exceed” contract. Liska stated that in the contract, the “Not to Exceed” applied to reimbursable expenses. David Moda, Senior VP of A&P and the Head of Operations for A&P Minnesota Region, stated that a fixed fee would never be set until the final construction budget has been completed. A&P would never agree to a fixed rate prior to receiving all the project information. At the time of the RFP, the only information provided was the approximate estimated project amount of $30 million. A&P would not fix a fee based on an estimate. Sawatzke stated that at the time of the interview, he asked Liska if he would be willing to do a “Not to Exceed” fee. Liska stated “absolutely”. At the very first meeting, Liska approached the negotiation team and stated that A&P had encountered a calculation error and the bid was a quarter of million dollars under what was originally proposed. An apology was offered and Sawatzke stated that he brought the math error to the Board’s attention and consensus was to keep A&P on even though there was another construction manager that came close in its proposal. The negotiation team sat down again with Liska and he stated that he wasn’t willing to discuss a fixed fee at such an early stage as he wouldn’t be able to control the length of the project. A&P and the team almost came to a standstill in communications. It was at that point when Liska decided to go with a “Not to Exceed”. Sawatzke clarified that it was Liska’s statements during the interview process that caused the Board to select A&P as the Construction Manager for the Jail/LEC. Sawatzke stated that an agreement was reached on a “Not to Exceed” amount on the contract, in every aspect of the contract. The only thing Liska requested was that there would be an “Acts of God” clause. It appears that A&P did not write the contract per what was negotiated. The County was working on the assumption that it was working with a $30 million budget per the basis of A&P’s 1.87% fee. Sawatzke stated that he and Commissioner Heeter made it clear that they did not know if this project will cost $20 million, $30 million or $40 million. Sawatzke stated that the Board wanted a flat fee contract because they did not want the County to be taken unscrupulously. With a flat rate fee, there is no incentive to add extra cost items to the building in order to generate a higher construction management fee. Sawatzke stated that if there is language in the contract that isn’t indicative of what was discussed during the interview and negotiation stages, then A&P did not write the contract as discussed. Liska stated that based on the program compiled by DLR, they indicated that the square footage of the facility was to be 146,000 square feet. Sawatzke stated that earlier in today’s meeting Liska stated that A&P was never told what the square footage of the building was going to be. Sawatzke questioned how Liska couldn’t have been aware of the square footage as the County definitively wanted a 450 bed facility. The scope of the jail has shrunk 25% to 342 beds. Moda questioned the Board as to why they did not verify the wording in the contract based on the dealings during the negotiation process. Moda explained that the words in the contract have not changed since 8-26-06. A&P’s standard process is to create a legal contact for legal review. A&P didn’t ask Heeter, former Commissioner Chair, to sign the contact without reviewing it. Moda stated that A&P did not deceive the County. Heeter stated that the Board trusted A&P and made a mistake in trusting Liska to represent the County’s wishes in a contractual document written by A&P. Heeter stated that she trusted that A&P and the County had a deal. Moda reiterated that A&P is not asking for anything different than what was written in the contract. Moda stated that he can point to three counties that A&P has done work for who would all trust Liska to manage their projects. Sawatzke asked if Moda was located out of the Minneapolis office. Moda stated yes. Sawatzke asked Moda why he had not attended any of the other meetings prior to the 4-03-07 meeting. Sawatzke stated that based on today’s arguments, A&P should have assumed that there weren’t any problems or issues with their contract. Sawatzke stated that it seems coincidental that Moda has only attended the meetings where an increase in fees was requested. Moda stated that when Liska was told not to present the updated construction management fee at the DD Estimate Presentation on 3-13-07, it raised a flag. Sawatzke asked Liska why he never questioned the request to not update the Board on the updated Construction Management fee. Liska stated that it was recommended that it not be brought up at the Board Meeting. Heeter asked Liska if he remembers answering “Absolutely” during negotiations in the Board Room when Sawatzke asked him, “Can we get a Not to Exceed deal?” Liska stated that he does remember saying “Absolutely”. Sawatzke stated that he knows that the other construction management firm was willing to work under a flat “Not to Exceed” contract. Moda asked Heeter if she understood that a Construction Manager would never agree to a fixed fee prior to seeing the final construction costs. Heeter stated that she believes that Liska knows that in his heart and in his mind that he did agree to a “Not to Exceed” deal, and that’s why his boss is here today. Heeter stated that it was her mistake for not reading the contract word for word, however the Board trusted A&P to write the contract based on the terms agreed upon during negotiations. Heeter asked if A&P is willing to do the work for $1,287,340 based on their “Total Proposal” amount listed in Exhibit B of the 8-26-06 contract. Moda asked Heeter if the lump sum fee she is requesting is based solely on a $30 million project. He asked Heeter if she is aware that the project has exceeded its original projection partly due to the addition of the geo-well fields and mining of the site. Sawatzke stated that both Tara Martin and Liska came to meetings knowing that the County’s desire was to do some unique advanced technology as it relates to energy, and that A&P had to know that the County was looking at geo-well fields prior to the contract being written. Sawatzke stated that he could research Building Committee of the Wholes minutes to prove that Martin and Liska were present at the meetings where the geo-well fields were discussed. Liska stated that he was aware that the County had an interest in alternative fuel sources. Sawatzke stated that prior to hiring A&P, the County Board made KKE explain their expertise on this. Sawatzke stated that A&P cannot say that they didn’t know going into this that this would be so advanced. Liska stated that this decision was not made when A&P designed the contract. Sawatzke stated that the Board did not formally 100% agree that it was going to add the geo-wells to the project, however A&P knew that the Board was looking at this type of advanced technology if it made economical sense. Liska stated that the physical location of the two well fields is not typical for a project. Normally, one geo-well field is required. This project is unique in that it will require two fields to accommodate the size of the property and the future mining rights. A&P did not fully understand the extent of the mining at contract time. A&P will not be able to have contractors out on site until the well field is taken care of first. The building itself will take 18 months, not including the well fields. Liska stated that he cannot complete the building in 15 months and a well field in 3 months. Mattson asked how much the geo-well field has added financially to the project. Martin stated that the cost, over and above the original cost of the building, is $1.4 million. Sawatzke noted that the County will be able to pay itself back with the energy savings. Mattson proposed as a compromise that the County give A&P a portion of the construction management fee for the additional $1.4 million in extra construction costs due to the geo-well field. Sawatzke stated that the Board should allow time for A&P to reevaluate their position. Moda asked the Board what recourse they will take if A&P does not give the County the answer they want to hear. Sawatzke stated he didn’t know. RECOMMENDATION: Provide a one week deadline of 4-24-07 to allow for A&P to reevaluate their position and inform Richard Norman, County Coordinator, via letter of its decision. If A&P does not respond by 4-24-07, then the assumption will be that the project will be operated under the “Not to Exceed” dollar amount that was agreed upon during Negotiations and quoted in the three Construction Budget presentations. (End of Building Committee Of The Whole Minutes)

Heeter moved to adopt Resolution #07-20 authorizing the Sheriff’s Department to enter in a grant agreement with the MN Department of Public Safety, Office of Traffic Safety, for the project entitled SAFE & SOBER COMMUNITIES for the period 10-01-07 through 9-30-08. The motion was seconded by Eichelberg and carried 5-0 on a roll call vote.

Richard Norman, County Coordinator, suggested that the Board schedule a Building Committee Of The Whole Meeting to discuss the articles of the contract held with the Construction Manager, Adolphson & Peterson (A&P). Heeter moved to schedule a Building Committee Of The Whole Meeting for 5-01-07 at 11:00 A.M., seconded by Mattson, carried 5-0.

The meeting recessed at 9:36 A.M. A closed session was held at 10:30 A.M. to discuss possible property acquisition of PID’s #114500181300, #114500172200, #114500184201. The County Board Meeting reconvened at 11:32 A.M.

Norman referenced the bid opening for the 1st bid package for the Jail/LEC project, scheduled for 5-01-07 at 2:00 P.M. He asked for the Board’s perspective on whether the bid opening should be scheduled as part of the County Board Meeting or whether it would be held as a separate function. Heeter stated that at the 3-13-07 County Board Meeting when she made the motion to schedule the bid opening, her intent was that it would be part of the Board Meeting. She supported having staff take minutes at all meetings involving the Jail/LEC project from this point forward. Norman said that at the bid opening, A&P will open the bids and then request to lay them over for review. A&P’s recommendation for award would follow at the next County Board Meeting. It was the consensus that the bid opening be listed as part of the 5-01-07 County Board Agenda. It was noted that two of the Commissioners may be unable to attend the bid opening.

Bills Approved

ACS Govern. Info. Ser. $4,168.34

American Institutional Supply 230.23

American Probation & Parole 315.00

American Road & Trans. Bldr. 175.00

Ameripride Linen and Apparel 368.58

AMI Imaging Systems Inc. 1,875.88

Ancom Communications Inc. 250.81

Assn. of Metro Cty. Offic 105.00

B & D Plumbing & Heating 515.00

Betmar Languages Inc. 118.00

Boyer Truck Parts 381.42

Burdas Towing 140.58

Business Ware Solutions 817.81

Josephine Carpenter 158.60

Carver Co. Finan. Serv. 2,101.35

Catco Parts Service 430.92

CCP Industries Inc. 148.44

CDW Government Inc. 315.65

Center Point Energy 3,735.62

Centra Sota Lake Region 20,795.89

City Clearwater 204,134.86

Climate Air 3,067.78

CMI Inc. 169.92

Comm. of Transportation 2,863.98

CSD 310.00

Dash Medical Gloves 211.60

E. Central Reg. Juvenile 3,474.00

Economic Dev. Prtnrship 100.00

Kurt Eich 125.00

Dale Engel 900.00

Eng. Design Initiative 1,345.00

First State Tire Recycling 1,132.58

Frontier Precision Inc. 805.46

Gall’s Inc. 159.71

General Pallet Inc. 284.50

Grainger 122.03

Greif Brothers Corporation 1,502.49

Hillyard Floor Care Supply 4,531.99

Integrated Fire & Security 366.27

Intereum Inc. 104.70

Interstate All Battery Center 128.63

Interstate Battery Systems 610.90

Lakedale Telephone Co. 250.62

LaPlant Demo Inc. 852.41

Lawson Products Inc. 550.55

LexisNexis 110.00

M-R Sign Company 4,217.40

Marco 2,317.44

Marco Business Products 1,301.44

Patrick Melvin 295.00

MN CLE Inc 420.00

MN Comm. Corrections 660.00

MN Law Enf. Explorers. 940.00

Morries Buffalo Ford Merc 799.09

Margaret Munson 313.31

Nat’l Business Sys. Inc. 7,191.20

Office Depot 2,600.42

OSI Environmental Inc. 560.00

Performance Office Papers 510.52

Phillips 66 Conoco 76 146.50

Postmaster-Buffalo 1,200.00

Qwest 3,686.88

Royal Tire Inc. 719.43

Russells Sec. Resource Inc. 131.08

Shell Fleet Plus 555.20

St. Cloud Fire Equip. Inc. 1,161.29

St. Cloud Times 735.58

State of MN-Office Enterprise 370.00

Stratus Technol. Ireland. 8,254.80

Tech Depot 1,358.19

Tilsner Carton Co. 958.59

Univ. of Minnesota 255.00

Verizon Wireless 545.12

Viking Safety Products 136.14

C. Walker Trucking 1,320.00

West Payment Center 621.58

Western Container Co. 1,112.34

Wright Co. Hwy. Dept. 35,807.68

Wright Henn. Co-op Elec. 935.13

29 Payments less than $100 1,359.09

Final total $348,858.54

The meeting adjourned at 11:35 A.M

Published in the Herald Journal May 21, 2007.