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HomeMy WebLinkAbout1988-02-15 Council minutesCOMPLETE DESCRIPTION OF COUNCIL ACTIVITIES February 15, 1988 Iowa City Council, special mtg., 5:00 p.m. at the Civic Center. Mayor McDonald presiding. Councilmembers present: Ambrisco, Courtney, Dickson, Horowitz, Larson, McDonald, Strait. Absent: None. Staffinembers present: Atkins, Helling, Timmins, Karr. Council minutes tape recorded on Tape 88-C14, Side 2, 707-646. Moved by Ambrisco, seconded by Strait, that the rule requiring ordinances to be considered and voted on for passage at two Council meetings prior to the meeting at which it is to be finally passed be suspended, the second consideration and vote be waived, and that ORD. 88- 3364, Bk. 29, p. 6, TO REZONE LOTS 20, 21, 50-54 BAILEY AND BECK'S ADDITION AND THE FORMER HOWARD STREET RIGHT-OF-WAY, PROPERTY ON HIGHWAY 1 WEST FORMERLY OWNED BY THE IOWA DEPARTMENT OF TRANSPORTATION, FROM RS -8 AND P TO CI -1 (IOWA CITY LANDSCAPING COMPANY), be voted on for final passage at this time. Affirmative roll call vote unanimous, 7/0, all Councilmembers present. The Mayor declared the motion carried. Moved by Ambrisco, seconded by Strait, that the ordinance befinally adopted at this time. Affirmative roll call vote unanimous, 7/0, all Councilmembers present. The Mayor declared the ordinance adopted. Moved by Ambrisco, seconded by Dickson, that the rule requiring ordinances to be considered and voted on for passage at two Council meetings prior to the meeting at which it is to be finally passed be suspended, the second consideration and vote be waived and that ORD. 88- 3365, Bk. 29, p. 7, TO REZONE PROPERTY LOCATED AT 808 SOUTH DUBUQUE STREET FROM CI -1 TO P (JOHNSON COUNTY AMBULANCE), be voted on for final passage at this time. Affirmative roll call vote unanimous, 7/0, all Council - members present. The Mayor declared the motion carried. Moved by Ambrisco, seconded by Dickson, that the ordinance be finally adopted at this time. Affirmative roll call vote unanimous, 7/0, all Councilmembers present. The Mayor declared the ordinance adopted. Moved by Strait, seconded by Ambrisco, to adjourn 5:08 p.m. The Mayor declared the motion carried, 7/0, all Councilmembers present. J 6DONAL, �MAYO MAXIAN K. NAM, LlTY CLERK Informal Council Discussion February 15, 1988 Informal Council Discussion: February 15, 1988, at 5:10 p.m. in the Council Chambers in the Civic Center. Mayor John McDonald presiding. Council Present: McDonald, Ambrisco, Strait, Courtney, Larson, Horowitz, Dickson. Staff Present: Atkins, Melling, Timmins, Karr, Smith, Schmadeke. Others Present: Robert Bening, Terry Krause, Leslie Forestier, represen- tatives of Metcalf & Eddy Tape-recording: Reel 88-13, Side 1, 408 -End, Side 2, 1 -End; Reel 88-15, Side 1, 1 -End, Side 2, 726-467. McDonald stated Mr. Robert Bening, President of Metcalf & Eddy, asked for the opportunity to meet with Councilmembers to discuss the status of the proposed wastewater treatment facilities. Bening introduced Terry Krause, Metcalf & Eddy Vice -President, and Leslie Forestier, Metcalf & Eddy Administrative Assistant. Benning said Metcalf & Eddy has designed over 400 wastewater treatment plants and has never received technical problems relating to the process design of any of those plants. Bening distributed a hand-out, Status Report and Discussion of Options for Completion of Wastewater Faci i ies mnrnvPman—a.,,—r.. ounce y Robert G. Bening, Metcalf & -Edd Inc. X15 February 1988y Bening read the hand-out and made additional comments as follows: OVERVIEW. Bening said the discussion will include items listed in the overview. Bening noted that he is unaware of any situation where a plant has undertaken a terminated contract at this stage of development. METCALF & EDDY GOAL. Bening said the goal is to be in business to support the client and to deliver the design and construction of high quality, on-time wastewater facility improvements within the budgeted amount that the City has available. Bening said Metcalf & Eddy has many clients faced with situations similar to Iowa City relating to compliance problems. THE SITUATION TODAY. Bening said a number of issues have not been dealt with properly or effectively. Bening stated he would take full responsi- bility for those problems. Courtney clarified Council has not approved termination of the contract. DESIGN STATUS. Bening said there have been lengthy and detailed discus- sions and meetings to review features of the design. Bening said Metcalf & Eddy has looked at the scope and ways to manage the process to maximize the product within the City's budgetary ceiling. IOWA CITY PROGRAM STATEMENT. Bening summarized the status of the design inc u ing major interceptors, relief interceptors, south wastewater treat- ment plant, and north wastewater treatment plant. Bening stated that the N drawings for the major interceptors are 95% complete, the specifications T- 7 INFORMAL COUNCIL DISCUSSION FEBRUARY 15, 1988 PAGE 2 for the interceptors have been outlined and the design has been completed for the south and north wastewater treatment plants. Bening said that soil borings have not been done and recommended that soil borings be included in the bid documents. Bening said that the issues that remain are obtaining easements and the south wastewater treatment plant site location problem. ESTIMATED CONSTRUCTIONCOST. Bening emphasized that the cost estimates are only estimates. Bening reviewed the cost laestimined ate history of &Eddy the project as outlined in the report. Bening exp evaluated wage rate determinates and information based on bidding in Des Moines. ORIGINAL PROGRAM ESTIMATES. Bening stated that the job needs to be struc- tured to meet requirements and completed within the budget. CURRENT CONSTRUCTION PROGRAM ESTIMATES. Bening reviewed baseline esti- mates, cost reduction estimates, and alternative scope cost estimates. Benin bly some Councgilmembersto said there was theeostaestimat ngoissuesas aside. Bening asked OVERALL PROJECT SCHEDULE. Bening note that the critical date for the north plant compliance work is July 1, 1988. Bening stated that he be lieves that if work is started on the wastewater treatment plant, the compliance date will be extended. Bening reviewed the design and con- struction schedule as outlined in the report. Bening stated that it will take an estimated 18 months to construct both wastewater treatment plants. OPTIONS AVAILABLE TO THE CITY. Bening stated that he has never seen a contract suc cessfully terminated for default. ANALYSIS OF OPTIONS A B, C, D AND E. In response to Horowitz, Bening exp a�ned that if there are any errors, omissions or design deficiencies in any of the design documents, Metcalf & Eddy is liable to make good on those documents. In response to Bening, Timmins stated that there is a liability chain. Bening stated that Metcalf & Eddy will not guarantee a construction price. Bening said that in each construction packet there are things that could be set up as options and as additive or deductive bid items. In response to Courtney, Bening said Section 12 provides for a termination of convenience. Timmins said that Section 12 is a simple contract provision that allows either party to terminate on 30 days notice and leaves both parties without any further obligation or recourse against the other party. Timmins explained that the City is currently following a common law procedure where the City is alleging a default and demanding a cure. If the cure is not forthcoming, the City will terminate the con- tract for cause. RECOMMENlf s not any prob/ems ED AinRtheilemphasized anywhere thataarry arrives afr mtechnical shortcomings. w r-7 INFORMAL COUNCIL DISCUSSION FEBRUARY 15, 1988 PAGE 3 PROPOSED PAYMENT SCHEDULE. Bening said all of Metcalf & Eddy's contracts include a provision for condition precedent to payment - client pays us and we will pay the subcontractor within seven days. Bening said Metcalf & Eddy owes local subcontractors approximately $157,000 for work that has been completed. Bening said at the time Metcalf & Eddy delivers docu- ments, Metcalf & Eddy would request payment on the subcontractor balance. Bening stated Metcalf & Eddy is willing to wait for payment of the remain- ing balance until contracts have been successfully awarded. Bening as- sured Councilmembers that they can call him whenever there is a problem and gave a personal commitment to manage solutions. DISCUSSION: Atkins said there appears to be a change in attitude by Metcalf & Eddy. Atkins said the City has never had a major complaint about the design of the wastewater treatment facilities other than the City cannot afford it. Atkins stated that if Council accepts the recommendation presented by Metcalf & Eddy, the City would be approximately $7 million short with respect to capital financing. Atkins said the City had contracted for $800,000 in program management, the City has spent $300,000, and the City is not getting their money's worth from Metcalf & Eddy. Bening replied that there has been too much verbal communication and too little effective interchange in the planning and approval process. Bening stated that there has been a lack of overall project documentation. Bening said that Metcalf & Eddy will work to put discipline back into the system. Timmins stated there has been an admission of mismanagement and that mismanagement has delayed the project and will likely result in DNR fines. Timmins said the City does not feel the project management fee that has been charged has been earned. Timmins reported the DNR is asking for a $10,000 fine up front for delays incurred to date and the City may face other fines. Bening said it is not good to conjecture about something that has not happened. Bening stated that if there is a demonstrable movement by the City in the execution of the wastewater treatment plant, there may well not be problems with the DNR. Larson asked if Metcalf & Eddy intends to change personnel on the project and if there is a delay in the payment schedule. Bening stated that he is willing to insure that a team will be in place that everyone can work with. Bening said that he will deliver the work for a guaranteed maximum price. Timmins asked if there could be a contract addendum setting a new payment schedule and a new course of action. Larson stated the City Council would be hard pressed to not follow the City Manager's recommenda- tion. McDonald stated that Council sets policy but does rely on staff expertise. Strait suggested receiving input from City staff and Dick Gibson. In response to Dickson, Schmadeke stated that he has not had problems with the design except for the cost overruns. Atkins stated the basic issue is that the City has a financing plan in place, a rate struc- ture has been developed and now there is a $7 million cost overrun. Atkins stated that he no longer has confidence in Metcalf & Eddy. Atkins emphasized that the City does not have $36 million to spend on the waste- water treatment project. a INFORMAL COUNCIL DISCUSSION FEBRUARY 15, 1988 PAGE 4 Courtney inquired about initial guarantees of local personnel to oversee the project. Atkins related examples of problems involving the receipt of a Metcalf & Eddy bill for $800,000 of new cost and the changing of design figures for the south wastewater treatment plant after they were presented to the DNR. Ambrisco reviewed the City's use of a blue ribbon committee, key finance staff and a presentation to Moody's. Ambrisco asked what the City should have done differently. Bening stated that work was not done well by all parties involved. Bening asked the City to put one person in charge of the project who can make decisions. Courtney said the City Manager was hired to be in charge. Bening and Councilmembers discussed construction cost estimations. In response to Courtney, Bening said if Iowa City retained a new engineering firm, the other firm would need to review the entire project to insure it is technically correct. Courtney asked if Metcalf & Eddy would assign a local representative. Bening said he would assign Bob Severance to the project. Courtney raised concerns regarding the recommendation to reduce the size of pipes to be installed in the east side of Iowa City. Bening said alternatives should be studied where there is substantial future capacity in the design. In response to Strait, Bening said there is a lot of future capacity in some of the sewers and interceptors and the City should consider if 20 year, 50 year or greater design is needed. Schmadeke stated pipe depth needs to be considered and a 50 year or 100 year minimum should be looked at. Bening said it would be better for the City to lay out the interceptor system to allow use of gravity. Strait asked what Metcalf & Eddy is prepared to do for the City. Bening said he will assign Terry Krause to oversee the project, place Bob Severance in Iowa City to work on the project, and give the name of their Des Moines client to allow Iowa City to do reference checks on Metcalf & Eddy personnel. Dickson asked if Metcalf & Eddy is willing to pay DNR fines incurred by Iowa City. Bening said Metcalf & Eddy is unwilling to commit to paying fines. In response to Timmins, Bening said Metcalf & Eddy will not ask for any future design fees over and above what is re- flected in the current contract. Timmins asked about future project management fees. Bening said that fees are outlined in the hand-out and include a pro rata amount of the project management fee. Bening stated that one of the contractual commitments is to obtain the permit from the DNR. In response to Timmins, Atkins explained the City has spent $340,000 in project management fees and approximately $500,000 has not been paid. Atkins emphasized the City budgeted $30 million for the project and the current proposed cost is $36 million. In response to Courtney, Atkins stated that there appears to be reductions with respect to the original intent of the project as well as in neighborhood sewer design. Bening recommended bidding the north and south wastewater treatment plants as designed but include alternatives. Bening explained the $36 million is based on some reduction in the pipe sizing but still with substantial future capacity. Bening emphasized the cost figures are only estimates. In response to Courtney, Bening stated that Metcalf & Eddy is involved in projects that are user fee financed. Horowitz said that the contract should be followed point -by -point and an addendum to the contract is needed. _-% Y P INFORMAL COUNCIL DISCUSSION FEBRUARY 15, 1988 PAGE 5 Atkins stated that nothing should be done until a contract addendum is prepared, the contract addendum should remove the City from the construc- tion management responsibilities, and the money that the City has not spent to date should remain the City's. McDonald stated that the Council will hold discussion shortly. Timnins stated that he would be able to present a contract addendum within two weeks. Council directed Timmins to prepare the contract addendum. McDonald thanked Mr. Bening for his presentation. The meeting adjourned at 7:10 p.m.