The budget for asbestos abatement, demolition, and disposal of the old Parmly Billings Library project was $441,000. Actual costs totaled $1,481,699, with the difference being paid from Library unobligated reserves. The increased costs resulted from the Montana Department of Environmental Quality's disapproval of the original demolition plan, which relied upon on-site disposal, and its determination that debris piles on site contained regulated asbestos containing materials, requiring special handling and disposal of all debris. The City entered into mediation with Will Bruder + Partner, O2 Architects, Northern Industrial Hygiene, Jackson Contractor Group, LM Excavating, and Vertex, to resolve City claims of $727,558 and claims by the other parties totaling approximately $1,000,000. Two rounds of mediation, each lasting two days, have produced a settlement of $175,000 for the City, as described in more detail below and in the attached overview.

City Council may:

• Approve, or;
• Disapprove

the mediated settlement.

Approval of the mediated settlement will result in the City receiving a $150,000 payment and the City will retain $25,000 from its final payment to Jackson Contractor Group, for a total of $175,000. As a condition of the settlement, the City will enter into a mutual release of claims against any of the other parties to the settlement arising out the demolition of the Parmly Billings Library, including the remaining balance of $522,558 of City claims.

The Library's goal when the new Library building project began was to complete the project with:
1) an operating reserve, representing 25% of its annual budget (estimated at $845,933 for FY16),
2) a reserve for accrued sick and vacation leave (estimated at $81,000 for FY16), and
3) a new $100,000 building maintenance reserve.
The Library projects all of these reserves will be funded, with an unobligated reserve of $350,760, at the end of FY16; the mediated settlement will increase the projected unobligated reserve to $525,760.
 

Staff recommends approval of the mediated settlement.