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AGENDA ITEM REVIEW FORM |
6.A.
Special City Council Meeting
- Meeting Date:
- 11/09/2021
- Department Head:
- Kay Macuil
- Submitted By:
- Kay Macuil, City Attorney, Attorney's Office
Action Requested:
Motion
ITEM:
Discussion and possible action on any and all matters regarding the transfer of contingency funds due to Advanced Call Center Technologies (ACCT) breach of the lease agreement, code violations, roof warranty issue, and un-permitted alterations of the leased space. (Kay Marion Macuil, City Attorney)
SUMMARY:
The City's Building Official and Fire Inspector have been working with ACCT to bring the un-permitted alterations of city-leased space at the Price Center into compliance with safety codes, remedy its breach of the city's lease and reverse its roof warranty violation, among other things.
Due to the complexity of the un-permitted alterations, the city has needed to bring in the engineering expertise of John Sternitzke. He knows the building well because he was the city's engineer for the 2018-2019 roof construction project and the 2007 building improvements project.
Due to the diverse legal issues involving construction, commercial, and real property law, an outside counsel is key to resolving this matter.
Although we cannot know the actual costs in advance because the number of hours ultimately needed from the engineer and outside counsel is unknown. However, based on the outside counsel's years of experience, he estimated if there is no arbitration or litigation required there will be a future estimated cost of: $20,000.00 for legal and $5,000.00 to $10,000.00 for expert engineering review.
He said if it moves into arbitration or litigation, then the costs will easily go to $150,000.00 with costs, expert reports, deposition testimony, arbiter fees, court fees, etc. If the case moves to arbitration or litigation, staff will return for further authorization. So for now, staff is requesting $30,000.00 of contingency funds be transferred for this unexpected expense.
Due to the complexity of the un-permitted alterations, the city has needed to bring in the engineering expertise of John Sternitzke. He knows the building well because he was the city's engineer for the 2018-2019 roof construction project and the 2007 building improvements project.
Due to the diverse legal issues involving construction, commercial, and real property law, an outside counsel is key to resolving this matter.
Although we cannot know the actual costs in advance because the number of hours ultimately needed from the engineer and outside counsel is unknown. However, based on the outside counsel's years of experience, he estimated if there is no arbitration or litigation required there will be a future estimated cost of: $20,000.00 for legal and $5,000.00 to $10,000.00 for expert engineering review.
He said if it moves into arbitration or litigation, then the costs will easily go to $150,000.00 with costs, expert reports, deposition testimony, arbiter fees, court fees, etc. If the case moves to arbitration or litigation, staff will return for further authorization. So for now, staff is requesting $30,000.00 of contingency funds be transferred for this unexpected expense.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE THE BUDGET TRANSFER FROM COUNCIL CONTINGENCIES IN THE AMOUNT OF $20,000.00 TO CITY ATTORNEY LEGAL SERVICES AND $10,000.00 TO CITY ATTORNEY PROFESSIONAL SERVICES GENERAL LEDGER ACCOUNTS FOR USE IN RESOLVING THE ISSUES WITH ACCT AS PRESENTED.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- Yes
- CITY/STATE/FEDERAL FUNDS:
- City
- TOTAL:
- $30,000.00
- BUDGETED AMOUNT:
- NO
- AVAILABLE AMOUNT TO TRANSFER:
- $30,000.00
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- Contingency 100-110-81-000 $142,760
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
$13,000.00 was budgeted for legal services in the City Attorney's budget, however, $249.00 remains due to these expenses and other expenses unrelated to this matter.