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• Memo to Michelle Wolfe 4 February 13th City hall arbitration 7) In a likely scenario for arbitration, the City will most likely not be awarded costs for a complete tear off and repair of$1,813,413.00. Any amount that we receive will most likely be divided between the Architect and Contractor. 8) There is a good chance for some of the costs for special inspections and investigation to be recovered, but probably not in full, and also likely shared between Contractor and Architect. Without considering# 7, (the City's claim of$1,813,415.00 for entire replacement of the exterior stone), the City has a poor chance of recovering almost $240,000, of the remaining $380,717 in items 1 — 8. This leaves $140,717, minus the $69,296 already owed Rochon from the original contract. Leaving the City $71,421, plus what ever the City is awarded for the actual repairs left to do. The City has included a complete tear off of the exterior of the building at a cost of $1,813,415.00. Rochon has provided estimates for repair work ranging from $655,453 to $358,496. Our legal counsel feels that an arbitration award of around one million would be a very best case scenario, with an award around $800,000 more likely as our top figure. Again, that • amount most likely will be divided between the Architect and Contractor. If that division were 75/25, the City would receive $600,000, and still facing an uphill court battle to get the remainder ($200,000) from Architectural Alliance. That division may also be 60/40 with $480,000 going to the City and the remainder to acquire from the Architect. Summary Staff believes that an award for total replacement cost to be highly unlikely. An award for repair of the buildins known to be defective is y. The City has received quotes from our contractors from $988,800 to $571,782. Rochon has provided quotes from $655,453 to $358,496. Based upon these estimates, a top figure award around $600,000 seems most likely. With a 75/25 split, the City would receive $450,000, and an uphill court battle with the Architect for the remainder of the $150,000. Add to that figure the $71,421 (best estimate for the remainder of the statement of claims)brings a total of$521,421 the City would receive. If the City were to go thru arbitration, it can expect to spend approximately $140,000 with no guarantee on award amounts. Based upon the figures above, realizing that no award amounts are guaranteed, it seems reasonable for the City to look at a mediation figure of somewhere around$400,000 net. • Council Action Requested \\RVNAS1\AHdata$\Building\City Ha11\Arden Hills-3-12-07-CouncilMemo.DOC