HomeMy WebLinkAboutCC AG PKT 2009-07-13 #OA~EN®~ ~~~~~ ~EP®~~
DATE: July 13, 2009
TO: Honorable Mayor and City Council
THRU: David Carmany, City Manager ,+
FROM: Vincent Mastrosimone, Director of Public Works
SUBJECT: NOTICE OF COMPLETION AN® APPROVE
SETTLEMENT AGREEMENT FOR THE LAMPSON
AVENUE VI/ELL PHASE I PROJECT IVO WT0801
SUMMARY OF REC~UEST:
The City Council is asked to adopt Resolution No. 5892 to formally accept
completion of the Lampson Avenue Well Phase I, Project No WT0801 and to
approve the attached Settlement Agreement and Release of Claims between the
City and Palm Springs Pump, Inc..
EACKGROUN®:
On August 11, 2008, City Council awarded a contract to Palm Springs Pump, Inc.
in the amount of $1,793,000 to construct the Lampson Avenue Well Phase I
Project No WT0801.
The scope of work consisted of drilling the water well, isolation zone testing,
construction, development, testing and monitoring water quality in accordance
with Orange County Environmental Health Agency requirements.
During the course of construction, in a weekend of inactivity, drilling fluids and
dirt particles settled at the bottom of the pilot hole, anchoring in the Contractor's
drilling equipment at 1,145 feet below ground surface. The Contractor attempted
numerous times to free his equipment without success. This resulted in the
abandoning of the initial pilot hole and the need to re-drill a new pilot hole 25'
from the first attempt.
The City claimed and attributed to the Contractor financial losses in the amount
of $152,991.85. These losses were a result of redesign costs, additional
inspection fees and liquidated damages. The Contractor claimed and attributed
to the City financial losses in the amount of $685,930.00. These losses were a
result of lost and damaged equipment. Each Party disputed the other Party's
claim.
Agenda Item Q
Page 2
Negotiations were conducted between the City and the Contractor in an effort to
resolve the financial dispute without having to go to court. The City and the
Contractor were able to settle on an amount that was acceptable to both Parties
in the amount of $45,000 to the City from the Contractor in the form of withheld
retention fees.
Phase I of the project has been completed and the City Engineer has accepted
the project.
FIIVAiVCIAL IMPACT:
The final cost of the Project, including design of Phase I with partial design of
Phase II, inspection, Right-of-Way acquisition, Environmental compliance,
construction, and the credit from the Contractor is $2,280,452.00.
Expenses
AKM (Design, ROW acquisition & on-site inspection) $ 287,037.88
Construction $ 2,030,811.62
Off-site Inspection $ 7,602.50
Credit from Contractor ($ -45 000 001
Total $ 2,280,452.00
In the approved 2007/08 - 2008/09 Budget, Water Capital funds were budgeted
for Project No WT0801 in the amount of $3,500,000. The remaining budgeted
funds shall be returned back to the original source fund.
I~EC®MMEIV®ATI®~l:
It is recommended that the City Council:
1. Adopt Resolution No. 5892 to accept completion of construction and
approve the attached settlement agreement for the Lampson Avenue Well
Phase I, Project No WT0801.
2. Direct the City Clerk, to file a "Notice of Completion" with the Orange
County Clerk-Recorder within ten (10) days from the date of acceptance.
3. Direct staff to release retention funds of $158,081.16 upon expiration of
thirty-five 35 days from the date of filing of the "Notice of Completion".
SU D BY: NOTED AND APPROVED:
~~
Vince Mastrosimone David Carma y
Director of Public Works City Manager
Attachments:
A. Resolution No. 5892 -Declaring Work Completed and Approving Settlement Agreement
B. Notice of Completion
C. Settlement Agreement
RESOLUTION NUMBER 5892
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL
BEACH, CALIFORNIA DECLARING WORK TO BE COMPLETED
PER CONTRACT DOCUMENTS AND AUTHORIZE
SETTLEMENT AGREEMENT FOR THE LAMPSON AVENUE
WELL PHASE 1, PROJECT N0. WT0801
WHEREAS, on August 11, 2008 the City of Seal Beach entered into a contract
with Palm Springs Pump, Inc.; and
WHEREAS, the City Engineer has determined that the work has been
substantially completed in accordance with the contract documents.
WHEREAS, the City has negotiated a settlement and release of claims with
Palm Springs Pump, Inc. in the amount of $45,000 to the City in the form of
retention funds withheld from the Contractor.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH
DOES HEREBY RESOLVE:
Section 1. That the work required to be performed by said Contractor has
been completed.
Section 2. That the total net cost of said work is $2,030,811.62 (-$45,000.00).
Section 3. That the work is hereby accepted and approved.
Section 4. A "Notice of Completion" be filed on behalf of the City in the Office
of the Orange County Recorder within ten (10) days of the date of
this resolution.
Section 5. That the City Manager is directed to execute the Settlement
Agreement.
PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a
meeting hereof held on the 13th day of Julv , 2009 by the following vote:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of the City of Seal Beach, California, do hereby certify
that the foregoing resolution is the original copy of Resolution Number 5892 on
file in the office of the City Clerk, passed, approved, and adopted by the City
Council of the City of Seal Beach, at a regular meeting held on the 13th day
of Julv , 2009.
City Clerk
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
CITY OF SEAL BEACH
Attn: City Clerk
211 - 8th Street
Seal Beach, CA 90740
Space of above this line for Recorder's use.
'`"* No Recording Fee Pursuant to Government Code Section 6103, 27383 "***
Notice pursuant to Civil Code Section 3093, must be filed within 10 days after completion.
Notice is hereby given that:
1. The undersigned is owner or corporate officer of the owner of the interest or estate stated
below in the property hereinafter described:
2. The full name of the owner is: Citv of Seal Beach.
3. The address of the owner is: 211 - 8th Street. Seal Beach, CA 90740.
4. The nature of the interest or estate of the owner is: In Fee. The Citv of Seal Beach.
5. A work of improvement on the property hereinafter is described as substantially completed on
July 2, 2009. The work was Lampson Avenue Well Phase I. Proi. No. WT0801.
6. The name of the contractor, if any, for such improvement was: Palm SprInQS Pump, Inc. The
date of the Contract Award was: August 11.2008.
7. The property on which said work of improvement was completed in the City of Seal Beach,
County of Orange, State of California, and is described as follows: Lampson Avenue Well.
Seal Beach, California 90740.
Date:
Signature of owner or corporate officer of owner
named in paragraph 2 or agent.
VERIFICATION
I, the undersigned, say: the Director of Public Works declarant of the foregoing notice of
completion; have read said notice of completion and know the contents thereof; the same is true
of my own knowledge.
I declare under penalty of perjury the foregoing is true and correct.
Executed on
(Date of Signature)
2009, at Seal Beach, California.
Director of Public Works °
Agreeffient regarding Settlement and release ®f Claims
Cit~,j ref Seal Beach
between P~~.,;~ ~~inrks Department
"' ~ JUN 1 ~ 2009
krCENED '~
City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
Palm Springs Pump, Inc.
83651 Dr. Carreon Boulevard
Indio, CA 92201
Michael Mann, President
This Agreement regarding Settlement and Release of Claims ("the Agreement") is made as of
[~,~ by and between Palm Springs Pump, Inc. ("Contractor"), a California corporation and
the City of Seal Beach ("City'), a California charter city, (collectively, "the Parties'.
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RECgTALS
A. The Parties entered into a public works contract (the "Contract"), dated August 11,
2008 for the construction of Lampson Avenue Well - Phase I (the "Project"). The Contract is
hereby incorporated by this reference as though set forth in full.
B. In September 2008, Contractor halted drilling operations on the pilot hole at
approximately 1,145 feet below ground surface. Shortly thereafter, Contractor attempted to
retrieve its equipment but was unsuccessful. Subsequent efforts to retrieve the equipment and
continue drilling were unsuccessful and the pilot hole was abandoned.
C. Due to the abandonment of the original pilot hole, City selected an alternative well
location. After substantial delay to the Project, Contractor completed the Project at the
alternative location.
D. Each Parry claims certain losses and damages related to and arising from the loss of
the original pilot hole and resulting delay, which losses and damages each Party attributes to the
other Party. The City claims and attributes to Contractor losses and damages in the amount of
$152,991.85; which claim includes $78,750.00 in liquidated damages in accordance with the
terms of the Contract. Contractor claims and attributes to City losses and damages in the amount
of $685,930.00. Each Parry disputes the other Party's claim, which disputed claims are
hereinafter collectively referred to as the "Dispute."
NOW THEREFORE, in consideration of the Parties' performance of the promises,
covenants, and conditions stated herein, the Parties hereto agree as follows.
AGIt1EE1V)L~NT
1.0 Ndutual Releases
1.1. City on behalf of itself and its City Council, Council Members, officers,
employees, agents, representatives, successors, assigns and all persons acting by, through, under,
or in concert with any of them, hereby releases and forever discharges Contractor, its officers,
agents, representatives, partners, shareholders, officers, directors and affiliated corporations,
successors, assigns, and all persons acting by, through, under, or in concert with any of them
from any and all manner of action or actions, cause or causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, losses, costs,
attorneys' fees, or expenses of any kind whatsoever, known or unknown, hidden or concealed,
fixed or contingent (collectively referred to as "City's Claims"), that City now has or had against
Contractor from the beginning of time until the date hereof, asserted in or arising from the
Dispute. The City's release of Contractor froiri the City's Claims is not and shall not be
construed as an admission of fault or liability.
1.2. Contractor on behalf of itself and its officers, agents, representatives, partners,
shareholders, officers, directors and affiliated corporations, successors, assigns, and all persons
acting by, through, under, or in concert with any of them, hereby releases and forever discharges
City, its City Council, Council Members, officers, employees, agents, representatives,
successors, assigns and all persons acting by, through, under, or in concert with any of them,
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from any and all manner of action or actions, cause or causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, leases, promises, liabilities, claims, demands, damages,
losses, costs, attorneys' fees, or expenses of any kind whatsoever; known or unknown, hidden or
concealed, fixed or contingent (collectively referred to as "Contractor's Claims"), that Contractor
now has or had against City from the beginning of time until the date hereof, asserted in or
arising from the Dispute. Contractor's release of City from Contractor's Claims is not and shall
not be construed as an admission of fault or liability.
1.3. This Agreement does not include, and the Parties retain all rights regarding and
obligations to one another and their respective principals, officers, agents, representatives,
assigns, employees, subcontractors, trustees, heirs, beneficiaries, and successors in interest with
respect to any claims by any third party that are asserted or unasserted, known or unknown,
existing or future, for death or bodily injury to persons or injury to property of any third party.
Such matters are not included in this Agreement and those rights and obligations shall survive as
they would have existed in the absence of this Agreement.
1.4. This Agreement does not include, and the Parties do not dischazge, waive, or
otherwise negate any claims, including those arising from covenants, duties, warranties,
insurance obligations, or rights of indemnity or contribution that may exist in the Contract and
survive completion of the Project and final payment, and which may arise from latent deficiency
(as defined in Code of Civil Procedure § 337.15(b)) in work performed by Contractor at the
Project, to the extent the claim, damage, or cost is caused by the latent deficiency. Any such
obligations and rights remain in full force and effect as they would have existed in the absence of
this Agreement.
2.0 Payment to City
In lieu of payment by Contractor, City shall withhold $45,000 from the final release of
the retention proceeds owed under the Contract. Contractor shall accept the final release of
retention proceeds, less the $45,000 the City shall withhold pursuant to this Section, as full
satisfaction of the City's payment obligation under the Contract and applicable state law to
release the Contract retention proceeds. Nothing in this Section is nor shall be construed as an
admission of fault or liability by Contractor or Ciry. •
3.0 Waiver of Civil Code Section 1542.
3.1. EACH PARTY ACKNOWLEDGES THAT ITS LEGAL COUNSEL HAS
ADVISED IT OF, AND THAT IT IS FAMILIAR WITH, THE PROVISIONS OF
CALIFORNIA CIVIL CODE § 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIlVIS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WffiCH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED ffiS
SETTLEMENT WITH THE DEBTOR."
3.2. Each Party, being awaze of Civil Code Section 1542, hereby expressly waives any
rights it may have thereunder. Each Party acknowledges that it may hereafter discover facts
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other than or in addition to facts it now knows or believes to exist, and it is each Party's intention
nonetheless to forever settle, compromise, and release its respective Claims against the other
Party asserted in or arising from the Dispute. Each Party's waiver of Civil Code Section 1542
shall apply only to the scope of releases specified and defined in Section 1 of this Agreement.
4.0 No Assignment or Transfer of Claims.
Each Party represents and warrants that it ,has neither assigned nor transferred its
respective Claim.
5.0 Entire Agreement
This Agreement contains the entire agreement of the Parties with respect to the Dispute,
and supersedes all prior negotiations, understandings, or agreements as to the Dispute. This
Agreement may only be modified by a writing signed by both Parties.
6A Severability
The invalidity in whole or in part of any provisions of this Agreement shall not void or
affect the validity of the other provisions of this Agreement.
7.0 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
8.0 No Third Party Rights
No thud party shall be deemed to have any rights hereunder against either Party as a
result of this Agreement.
9.0 Multiple Counterparts.
This Agreement maybe executed in multiple counterparts, each of which shall constitute
an original.
10.0 Further IDocuments.
The Parties shall execute and deliver all documents and perform all further acts that may
reasonably be necessary to effectuate the provisions and purpose of this Agreement.
11.0 Successors and Assigns.
This Agreement shall be binding upon any and all of the administrators, executors,
successors, trustors, beneficiaries and assigns of each of the Parties without regard to the time at
which said persons first assumed such status.
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12.0 Advice of Counsel.
Each Party acknowledges that it has been represented in the negotiations for and in the
performance of this Agreement by counsel of its own choice; that it has read this Agreement; that
its has had this Agreement fully explained to it by such counsel or has had such opportunity; and
it is fully aware of the contents of this Agreement and of its legal effect.
13.0 Construction
The Agreement shall not be construed as if drafted by only one Parry, but shall be
construed as if drafted by all Parties.
14.0 Attorneys' Fees
If either Party commences an action against the other Party, either legal, administrative or
otherwise, arising out of or in connection with this Agreement, the prevailing Party in such
litigation shall be entitled to have and recover from the losing Party reasonable attorney's fees
and other costs incurred in connection with such action.
15.0 Corporate Authority
The persons executing this Agreement on behalf of the Parties warrant that they are duly
authorized to execute this Agreement on behalf of said Parties and that by their execution, the
Parties are formally bound to the provision of this Agreement.
IN WITNESS WHEREOF, the Parties hereto, through their respective authorized
representatives have executed this Agreement as of the date and year first above written.
CITY OF SEAL BEACH PALM SPRINGS PUMP, INC.
By: By: ~®
. ~~. Michael ,President
David N. Carmany, City Manager
Attest:
By.
Linda Devine, City Clerk
Approved as to Form:
By:
Quinn Barrow, City Attorney
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