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ARDEN HILLS CITY COUNCIL WORK SESSION-JULY 22, 2009 13 City Administrator Moorse explained that he followed up with both Jerry Fila and Steve Bubul on the reimbursable expenses, particularly the escrow account. He spoke with them each separately and their recommendation was to take the disputed amount and place it in an escrow account. From there they suggested the City work through the process with RLLD to resolve most of the disputes, with mediation to follow. Mayor Harpstead asked if this item needed Council action. City Administrator Moorse stated this was not necessary but noted an escrow agreement could be brought to Council at their next meeting for review. Councilmember Holmes questioned if the PDA mandated the disputed funds be placed in an escrow account. City Administrator Moorse explained that the PDA did not mandate the escrow account and that this was the strong recommendation of counsel. He indicated if the dispute were to reach mediation the City would want to keep the attorneys involved in the situation. Councilmember Holmes requested that a staff report accompany the escrow agreement explaining the pros and cons to the Council. Further discussion ensued regarding the payment of the undisputed amounts to RLLD. Mayor Harpstead felt it was appropriate for the City to pay out the amounts that were not in dispute as this was the nature of the agreement between the two parties. Councilmember Holmes did not agree as this gave the City some leverage in dealing with RLLD on the rest of the expenses. Mayor Harpstead asked for the sense of Council at this time. It was the consensus of the Council (3-2) to proceed with an escrow account. Councilmember Holmes questioned if the PDA required the City to return the earnest money, when it was in dispute. Staff would be following up with the Council after speaking with the attorney.