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. Memo to Michelle Wolfe 3 February 13th City hall arbitration Based on current estimates, the City can expect to spend at a minimum $385,000 to $555,000 for repairs. These repairs are needed regardless of the mediation/arbitration proceedings. At this cost, the City would be settling for minimum repairs with possibly aesthetic and durability concerns. We would not get two layers of building paper or galvanized angles as originally specified. Our goal is a building that does not leak upon normal rainfall. Also the building repairs will be spotty in nature and may lead to color variations in the stone (between old and new).As stated previously, the City can expect to spend around $20,000 in the next mediation. In the last mediation, the City was asked "off the record" if they would consider around $400,000 to settle. But that offer also pre-supposed a payment to Rochon of approximately $95,000 for a net of $305,000. To date the City has spent $123,300.00 on legal and arbitration fees. The City can expect to pay $120,000 to $160,000 for additional legal fees if it goes through the arbitration proceedings. It is very hard to speculate on what the City may be awarded if it goes through arbitration. Our legal counsel feels that whatever we may be awarded will most likely be shared between the Architect, Architectural Alliance, and the general contractor, Rochon. The ratio may be between 60/40 to 75/25, with the general contractor being the first ratio. Our attorney believes that legal fees spent in the past will not be considered in the settlement. Breaking down the City's most current statement of claims dated 2/13/07. (See attached) 1) Insurance costs are related to Five Sons Landscaping. They have since gone out of business and did not have adequate insurance coverage. 2) Landscaping. Again, that company has gone out of business, did not have adequate insurance coverage, and very tough to recover any costs. 3) The mechanical contractor has indicated that they would be willing to settle for a majority of the $29,000, maybe around $21,000. 4) The miscellaneous costs will be difficult to recover and costly to argue each individual point. 5) In terms of professional fees, $42,530.00 is for a bill that the City received from Architectural Alliance. Any amount we recover would most likely go to Architectural Alliance. In addition, while our attorney will try to argue that the legal fees should be included, he admits it generally is not. 6) The $22,593.00 in repairs already completed will most likely not be reimbursed fully. • \\RVNAS 1\AHdata$\Building\City Hall\Arden Hills-3-12-07-CouncilMemo.DOC