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,--ARZEN HILLS MEMORANDUM DATE: November 23, 2005 Agenda Item 3.D. TO: Honorable Mayor and City Councilmembers Michelle Wolfe, City Administrator FROM: Dave Scherbel, Building Official - - SUBJECT: City Hall Insurance Payment CC: Jerry Filla, City Attorney Murtuza Siddiqui, Finance Director Background As part of the City's original construction agreement with Rochon Corporation, the City was required to carry the builders risk insurance policy for the contractor. During the construction period, the building suffered severe water damage and Rochon Corporation was required to remove and replace all damaged materials. The total amount of Rochon's original invoice was $37,395.50. Because the City was required to carry the builders risk insurance policy for the new City hall, Rochon submitted the bill to the City for processing. The bill was then forwarded to The League of Minnesota Cities Insurance and Trust for processing and payment. On August 27, 2001 the City received payment from the League of Minnesota Cities in the amount of $25,798.07. On December 10, 2001 the City received a second check for $2,500.00. Both of these checks were affiliated with the aforementioned water damage claim. The amount payable to Rochon Corporation would include the amount of the insurance claim and the City's $5,000.00 insurance deductible, for a grand total of$33,298.07. An explanation of the payments from the League of Minnesota Cities has been included in this packet. This information is a reference for the different claims that have been submitted over the years and a quick synopsis of what has actually been paid at this time. Because of.the on going construction related problems with the City Hall facility, City staff felt that it was in the City's best interest to withhold this payment until directions were given by the City Attorney to release payment to the contractor. Recommendation The City has received a request from our attorney, Jerry Filla, to reimburse Rochon Corporation (City Hall General Contractor) for repair work done to the City Hall building in 2001. City staff is recommending City Council approval for reimbursing the Rochon Corporation $33,298.07 for repair work completed to the Arden Hills City Hall in 2001.