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Mr. Lonnie Brokke December 9,2003 Page 3 The liability of the Defendants in the class action settlement is centered on the damage being done to the metal decking by the phenolic foam roof insulation. Under the Class Action Settlement Agreement, the Defendants are liable for 100% of the remediation of the metal decking, but not to exceed the unit prices establishedby the low bid which was submitted for settlement purposes. In the case of the Roseville Ice Arena, the low bid submitted set the unit prices as $0.82 for the deck coating, $3.95 for deck overlay, and $5.85 for deck removal and replacement. PhenCon has projected that the City will receive approximately $50,080 for the actual costs incurred with deck remediation. However, this is only an estimate based upon initial inspection; the final amount paid out may be greater or less depending on the actual condition of the metal decking and the actual costs charged by the contractor selected by the City. Also included in the settlement is an amount to pay for the costs of application of a two- part epoxy paint. This amount, currently estimated at $10,806, would be paid directly to Sigma Coatings for the paint used in the project. Because the City will need to remove the roof of the Ice Arena prematurely in order to replace and repair the metal decking, the Defendants are also liable under the Class Action Settlement Agreement for the cost of replacing the roof, up to its useful life, based upon the value of the current roof as determined by the low bid obtained by PhenCon. The recognized low bid for the roof (and thus for settlement purposes, the value of the current roo� was $194,056.00. � The roof of the Ice Arena has a remaining life of approximately33%, thus the depreciated amount that would be paid to the City toward roof replacement would b e $63,841.09. The final piece of the settlement compensation is interior protection at the rate of $0.25 per square foot for areas without ceilings or where the roof deck is replaced. The area without ceilings in the Ice Arena is estimated at 88%, thus the City would be compensated approximately $7,150 for interior protection. Again, this amount is intended to be for actual costs incurred and may be more or less depending on actual circumstances. At first glance, the City's actual direct compensation appears to be around $125,000.2 However, as part of the Class Action Settlement Agreement, a set percentage of 12.5% is deducted from all amounts paid out of the Settlement Fund to a building owner for Class Action Lawsuit Legal fees. For the City of Roseville, this is estimatedto be $15,634. Thus, the City's estimated direct compensation would be approximately $109,500. t This amount differs slightly from the low "base bid" of $196,606 provided to the City by PhenCon in its letter of July 23, 2003. Jim Edwards, Claim Administrator at PhenCon, explained that low bid reported to the City and the low bid reported to the Phenolic Claims Office differ because the low bidder had included the costs of a 10 year warranty, which was subsequently removed froxx�. the bid amount prior to its submittal to the Claims Off'�ce. � This amount does not include the $5,000 that is paid directly to PhenCon from the Settlement Fund for proj ect design or the $10,806.25 paid directlyto Sigma Coatings for the paint.