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August 23, 2019

8/1/2019 4:28:00 PM
Center City negotiates fire hall contract to close out project

In a special session July 24 the Center City Council, minus Council members Scott Anderson and Donna Higgins, unanimously agreed on final payment for  Structural Buildings of Minnesota on their fire hall bill. The city council negotiated a $5,000 credit to the final invoice and will send a little over $16,000 to the Becker-based company.

There’s been disagreement regarding what’s owed;  so the city was withholding final payment until this could be resolved.  Mayor Mark Wolcott remarked at last week’s meeting with company officers,  that it’s time “to get this done.”  

The main issue is perimeter insulation (an underground barrier) was omitted, but it was itemized in the contract and billed.  The city thought it should have been installed as part of the quoted price, so Center City officials were not making final payment until a credit showed up for this-- or until there was a commitment by the builder to belatedly put the material in.  

This insulation isn’t a code requirement, so when construction inspections took place it wasn’t missed because it is not part of code.  City officials put the insulation in the contract for an energy cost savings.

The city engineer estimated Center City might expect to spend $15,000 to re-excavate and install the insulation after-the-fact, due to having to tear up new apron and sidewalk concrete alongside 100 feet or so of perimeter and then return everything to a finished state.  Plus, it was pointed out the clock is ticking because there’s an asphalt re-surfacing pending for this summer, adjacent to the fire hall.

Structural Buildings spokesperson Troy Engen said the company charges $8 per linear foot for the standard barrier, meaning they’d be willing to credit $800.  Engen explained that he believed somebody involved in the project had “waived” the insulation,  but there was nothing in writing documenting that, and it remained in the contract.

Councilmember Lloyd Vetter, a veteran of the electric trade, commented that $8 is low.

Fire Department project manager Jim Marxer also said the contract called for a company-provided dumpster and porta-potty and these never materialized. He suggested council negotiate a credit for these.

The lack of the insulation barrier wasn’t noticed until just recently, Marxer said, when somebody dug alongside the fire hall addition and noticed no product.

Structural Building official Greg Nelson complained this issue about missing items and seeking credits was coming to his attention awfully late.  He said the communication between the city and his firm was very poor all along,  and the company was anxious about delays on city payments.

Marxer responded how, first the company was originally stating the product was waived -- and now that they should have been made aware of issues sooner.  Marxer disagreed about poor communication, and was prepared to show council his iPhone and the record of e-mails he’d transmitted in an attempt to correspond with the company.

(Under state law if Structural Buildings had intended to put a lien on the unpaid work at the fire hall there’s a 120 day payment grace period which is detailed in the contract. Payment delay was within the four months.  Structural Building’s portion of the site walk through was in April, according to Engen.)

City Attorney Ted Alliegro stated that when the insulation was discovered missing has no bearing-- the fact remains the materials were not provided.

Structural Buildings was submitting a final payment bill for $21,850.  After about 90 minutes of council talking with Nelson and Engen, a motion was made by Councilmember Jill Behnke directing the final payment to be reduced by $5,000 and the city will remit payment of $16,850, contingent on Structural Buildings formally agreeing to the deduction.  

This motion passed 3-0.

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