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HomeMy WebLinkAbout8A, Settlement Payment to James & Julie Rechtiene for Damage to Driveway ~ _HILLS Request for Council Action Prepared By: Greg Hoag Council Meeting Date: August 10, 2009 Approve the full and final settlement between the eity of Arden Hills and James and Julie Rechtiene in the amount of $1750 for damages caused to the driveway at 3327 Dunlap Street. Budgeted Amount: $0 Actual Amount: $1,750.00 Funding Source: Water Utility Recommendation: 1. Approve the full and final settlement agreement between the City of Arden Hills and James and July Rechtiene in the amount of $1750 for damages caused to the driveway at 3327 Dunlap Street. ..............................................................................................."..................................................u................................................................................................................................................................................................u,..........................u.............................~..LO.............................u....u.....................................................................................................................................................................................................................................................................................................................................u.....................u....................................................................................................................................................................... Supportin!! Documents: 1. Memorandum dated August 10,2009 from Public Works Director 2. August 11,2008 City Council Staff Memo and meeting minutes (Attachment A) 3. August 18, 2008 Work Session minutes (Attachment B) 4. August 4, 2009 Letter from City Attorney Jerry Pilla (Attachment C) 5. Revised Settlement and Release Agreement (Attachment D) ~ MEMORANDUM DATE: August 10, 2009 TO: Honorable Mayor and City Council Ron Moorse,City Administrator FROM: Greg Hoag, Public Works Director SUBJECT: Driveway Settlement 3327 Dunlap Street BACKGROUND On November 7, 2007 the Public Works Department repaired a broken water main under the driveway in the city right of way at 3327 Dunlap Street. The property owners notified us that they had just replaced the driveway in the late summer and the contractor had provided the residents with a two year warranty. Due to our digging up and patching a portion of the new driveway to complete the repair of the water main, the driveway contractor informed the residents that the warranty on the driveway was now void. This item was first introduced to the City Council at the regular meeting on August 11, 2008. At that time Council passed a motion to table the item to the next Work Session for further discussion. (Attachment A, staff memo and minutes) The item was discussed at the August 18,2008 Work Session. After discussion it was the consensus of the City Council to direct staff to offer to replace the driveway within the right-of- way or to refer the driveway request to the League of Minnesota Cities. (Attachment B, minutes) After that meeting staff contacted the resident to discuss the City Council offered direction. The residents stated that they would like to continue to explore their options and to not turn the issue over to the League of Minnesota Cities or to complete any repairs. They stated the ball was in their court for the next actions. In December of2008, City Attorney, Jerry Filla spoke with an Attorney representing the residents. At that time they spoke as to some additional options for resolving this issue. These discussions have been back and forth between City Attorney Filla, the resident, and their Attorney. The current proposal from the residents is for the City to pay the residents $1,750 as a full and final settlement. (Attachment C, memo to Greg Hoag from City Attorney Filla) City Attorney Filla is recommending the City accept the revised Settlement and Release Agreement from the residents. (Attachment D) Page 2 ST AFF RECOMMENDATION Approve the full and final settlement between the City of Arden Hills and James and Julie Rechtiene in the amount of$I,750 for damages caused to the driveway at 3327 Dunlap Street. RECOMMENDED COUNCIL ACTION Approve the full and final settlement between the City of Arden Hills and James and Julie Rechtiene in the amount of$I,750 for damages caused to the driveway at 3327 Dunlap Street, and authorize the Mayor and City Administrator to execute the revised agreement. Attachment A Staff Memo and Meeting Minutes from August 11, 2008 August 10, 2009, City Council Meeting rf\ MEMORANDUM DATE: August 11, 2008 TO: Honorable Mayor and City Council Ron Moorse, City Administrator FROM: Greg Haag, Public Works Director SUBJECT: Driveway Repair 3327 Dunlap Street BACKGROUND On November 7, 2007 the Public Works Department repaired a broken water main under the driveway in the city right of way at 3327 Dunlap Street. The property owners notified us that they had just replaced the driveway in the late summer and the contractor had provided the residents with a two year warranty. Due to our digging up and patching a portion of the new driveway to complete the repair of the water main, the driveway contractor informed the residents that the warranty on the driveway was now void. Over the last few months City staff and the City Attorney have been working with the residents on a settlement agreement for the damage caused to the driveway. Attached is the Settlement and Release Agreement for your review. STAFF RECOMMENDATION Approve the Settlement and Release Agreement between the City of Arden Hills and James and Julie Rechtiene in the amount of$4,140.00 for damages caused to the driveway at 3327 Dunlap Street. RECOMMENDED COUNCIL ACTION Approve the Settlement and Release Agreement between the City of Arden Hills and James and Julie Rechtiene in the amount of$4,140.00 for damages caused to the driveway at 3327 Dunlap Street, and authorize the Mayor and City Administrator to execute the agreement. ARDEN HILLS CITY COUNCIL - August 11, 2008 6 Assistant City Administrator Simon stated that he did not anticipate that a person would be assisting for a long periods of time. He also stated that several of the Assistant Deputy Clerks will be filing in at the front counter. Assistant City Administrator Simon confirmed that Dorothy McClung was not being compensated for her services this year per her request. Councilmember Grant asked Assistant City Administrator Simon why his name was not on the list. Assistant City Administrator Simon stated that earlier in the year the Council had appointed him by resolution as the Deputy Clerk. MOTION: Councilmember McClung moved and Mayor Harpstead seconded a motion to Approve Resolution 2008-038: A Resolution Appointing Election Judges for the 2008 Primary and General Election. The motion carried unanimously (4-0). B. 3327 Dunlap Street Drivewav Settlement and Release A2reement Councilmember Grant stated that this item had not been brought to the Council previously and the item requires more discussion by the members of the Council. MOTION: Councilmember Grant moved and Councilmember Holden seconded a motion to table item 5B for further discuss at the next available work session. Mayor Harpstead asked City Attorney Filla if there were any time senSItIve _ materials that needed to be decided immediately or if the item could be tabled until a later date. City Attorney Jerry Filla stated that there were no time sensitive materials that needed to be decided and that tabling the item would be acceptable. The motion was called to a vote. The motion carried unanimously (4-0). 6. PUBLIC HEARINGS None. 7. NEW BUSINESS Attachment B Meeting Minutes from August 18, 2008 August 10, 2009, City Council Meeting B. Discussion Regarding the Release and Settlement Agreement for the 3327 Dunlap Street Driveway Public Works Director Hoag presented the City Council with information regarding the property at 3327 Dunlap Street. He explained that last November a watermain broke underneath this property, which had a brand new driveway, complete with two year warranty. The resident was not happy with the replacement patch and asked that the driveway be replaced. Public Works Director Hoag indicated the resident were not satisfied with the suggestion of a saw cut replacement or patch job on the driveway. He noted he spoke with the City attorney on this issue. After much discussion, he is asking that the driveway be completely replaced to appease the resident and to provide her with a warranty. Councilmember Holden asked which account the $4,100 was budgeted from. Public Words Director Hoag noted the funds were budgeted from the Watermain Repair Parts Account and that this amount covered the replacement of the entire driveway. Discussion ensued regarding the replacement of this driveway and how these incidents have been handled in the past. Councilmember Holmes stated she didn't understand why this resident should receive a whole new driveway when other residents have received a patch job. Mayor Harpstead suggested the tail end of the driveway be fixed and made uniform with the City providing a one year warranty on the entire driveway. Councilmember Holmes asked how much it would cost the City to replace the bare minimum, the area within the right-of-way with a saw cat patch. Public Works Director Hoag estimated this expense to be $500-700. Mayor Harpstead indicated that while this is a much lower cost, the expense of defending a lawsuit would be far greater if the resident were not satisfied with the City's response. Councilmember Holden noted she was in favor of the $4,000 expense to replace the driveway. Councilmember Grant stated he was not in favor of paying the resident the $4,000 to have the driveway replaced but that a contract would have to be arranged between the City and her contractor. Mayor Harpstead agreed. Mayor Harpstead asked staff how the Council should proceed. Public Works Director Hoag indicated he feels staff has provided this resident with the best possible services to date and that Council should proceed with caution with this resident. Mayor Harpstead thanked staff for working so patiently with this individual. He questioned if a precedent would be set within the City if Council agreed to pay for the entire driveway. Due to this fact, he suggested again, that the bottom of the driveway be replaced to the best of the City's ability and that a one year warranty be offered on the entire surface. Councilmember Grant suggested the asphalt be repaired where disturbed and that the Council not commit to replacing the entire driveway. Councilmember Holden asked if the repaired bottom could be one entire piece. Public Works Director Hoag indicated the City would replace this as one piece, but that the resident will not be happy with the City employees completing this work and will want her contractor and his bituminous. Mayor Harpstead stated he would be in favor of the resident's contractor completing the repair to avoid future concerns. Councilmember Holmes indicated she was not in favor of this special request because it would set a precedent for future driveway concerns. Councilmember Grant suggested the contractor be contacted to see where his bituminous comes from to allow the City to use the same product to provide uniformity on her driveway. Public Works Director Hoag stated that all disputes in the future will be directed to the insurance company to avoid this type of problem. He suggested this item be sent to the League of Minnesota Cities for resolution. Councilmember Holmes stated she was in favor of treating this request just like every other resident within the City, who doesn't request a full driveway replacement. Mayor Harpstead indicated he was in favor with sending this issue to the League of Minnesota cities as well. It was the consensus of the City Council to direct staff to offer to replace the driveway within the right-of-way or to refer the driveway request to the League of Minnesota Cities. Attachment C August 4,2009 Letter form City Attorney, Jerry Filla August 10, 2009, City Council Meeting Warren E. Peterson Jerome P. Fil1a Daniel Witt Fram Glenn A. Bergman John Michael Miller Michael T. Oberle Steven H. Bruns. Paul W. Fahning. Sonia R. Ortiz Amy K. L Schmidt Ben I. Rust Jonathan R. Cuskey Jared M. Goerlitz P~ERSQ\JI FRAM - BERGMAN Suite 800 55 East Fifth Street St. Paul, MN 55101-) 7 J 8 (651) 291-8955 (651) 228-1753 facsimile www.pfb-pa.com PROFESSIONAL ASSOCIATiON (651}290-6907 ifilla((i)pfb-oa.com August 4, 2009 Greg Haag Public Works Director City of Arden Hills 1245 West Highway 96 Arden Hills, MN 55112 VIA EMAIL Re: 3327 Dunlap Street Proposed Driveway Settlement Our File No.: 10450.08-15 Greg: This correspondence will summarize my conversations and correspondence with Mr. Rechtiene and his attorney: 1. Prior to June 25, 2009J Mr. Rechtiene offered the City two (2) settlement options: a. He would provide a full release of claims in return for $2,000. b. He would provide a full release of claims for $1,700 if a City crew removed the damage area. Essentially, he thought he could save $300 by having the City crew do part of the work. 2. On June 25, 2009,1 stated that we would recommend one of the following counteroffers: a. A full release for $1,200. b. A full release for $900 and the City crew would remove the damaged area. 3. On July 16J 2009, Mr. Rechtiene's attorney said that his client would accept $2,000 for full release of claims. 4. I called Mr. Rechtiene's attorney and, after some discussion, he stated that his client would accept $1,750 for full release of claims. . ALSO ADMITTED IN WISCONSIN Greg Haag August 4, 2009 Page 2 I think that we have gone as far as we can. If this matter is litigated, it will cost the City more than $1,750 whether the case is handled by our office or by the league of Minnesota Cities Insurance Trust. I think $1,750 is the least costly solution and this is what I am recommending. JPF/jmt cc: Ron Moorse F:\users\JessicaVerry\Arden HiJls\Correspondence\Hoag Ltr-5.5. 09.doc Attachment D Revised Settlement and Release Agreement August 10, 2009, City Council Meeting SETTLEMENT AND RELEASE AGREEMENT 1.0 Parties. This Settlement and Release Agreement ( "Agreementll ) IS entered into by and between the City of Arden Hills, a Minnesota statutory city ( "(ityll); and James Rechtiene and Julie Rechtiene (collectively herein "Rechtienes" ). 2.0 Recitals. A. Rechtienes are the owners of the following described real property ( I'Property" ) situated in Arden Hills, Minnesota: Lot I, Block 8, Josephine Hills, Plat No.2 B. In 2007, the Rechtienes hired a contractor to install a new driveway to serve the Property ( "Rechtiene Driveway" ). c. Shortly after the Rechtiene Driveway was installed, the City had to repair a City watermain segment. D. The City watermain segment was located within the unimproved portion of the right-of-way adjacent to the Property and below the Rechtiene Driveway. E. A portion of the Rechtiene Driveway was saw cut, removed and patched by the City after the watermain segment was repaired ( "Project" ). F. The Rechtienes contractor would not warrant the Rechtiene Driveway because the City had removed and patched a section of the Rechtiene Driveway and, in order to obtain the warranty, the Rechtiene Driveway would need to be reinstalled from the improved portion of the City street to the garage. G. The Parties have agreed to resolve this matter pursuant to the terms of this Settlement and Release Agreement. 3.0 Terms and Settlement. NOW THEREFORE, in consideration of the mutual undertakings herein expressed, the Parties agree as follows: A. Upon execution of this Agreement by the Parties, the City shall pay Rechtienes the sum of $1,750 ( "Settlement Amount" ). B. In consideration of the payment of the Settlement Amount, Rechtienes for themselves and their successors and assigns agree to release the City, its employees and contractors from any liability or claims whatsoever, known or unknown, arising out of, or in any way related to the Project. c. This is a Settlement Agreement and not an admission of liability. D. This is a legally binding document and each party has had an opportunity to consult with legal counsel. E. This Agreement may be executed in counterparts by the parties. IN WITNESS THEREOF, the parties have executed this Settlement and Release Agreement on the dates set forth below. CITY OF ARDEN HILLS Dated: By: Stan Harpstead Its: Mayor 2 Dated: By: Ronald Moorse Its: City Administrator STATE OF MINNESOTA ) ) S5. COUNTY OF On this _ day of I 2009[ before met a notary public within and for said county, personally appeared Stan Harpstead, the Mayor of the City of Arden Hills, and Ronald Moorse, the City Administrator of the City of Arden Hills, and they executed the above Settlement and Release Agreement as their own free act and deed. Notary Public 3 Dated: James Rechtiene Dated: Julie Rechtiene STATE OF MINNESOTA ) SSe ) COUNTY OF On this _ day of , 2009, before me, a notary public within and for said county, personally appeared James Rechtiene and Julie Rechtienel husband and wifel and they executed the above Settlement and Release Agreement as their own free act and will. Notary Public 4