CITY COUNCIL AGENDA REPORT. Honorable Mayor and City Council Members. direction on the parameters for negotiating the purchase of 301 Potter Street.

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1 City of RE NG CITY COUNCIL AGENDA REPORT TO: FROM: Agenda Item No.: Honorable Mayor and City Council Members Shawn Blaney Deputy Public Works Director 8- K Meeting Date: December 12, 2016 ACTION REQUESTED: Motion to Accept Contract with Luhman' s Construction Company in the amount of $ 26, 217 for the demolition of the building at 301 Potter Street. ATTACHMENTS: Contract with Luhman' s Construction Company. BACKGROUND: During a closed session on April 25, 2016, City Council gave staff direction on the parameters for negotiating the purchase of 301 Potter Street. During a second closed session on May 23, 2016, Staff discussed with City Council the results of the negotiations. At that time, Council gave staff direction as how to complete the negotiations and bring back a purchase agreement on the property listed above. On June 21St the Planning Commission reviewed and made a motion that the purchase of the property at 301 Potter is consistent with the City of Red Wing' s Comprehensive Plan. On August 8, 2016, the City Council accepted a revised Purchase Agreement with an addendum for property located at 301 Potter Street. DISCUSSION: The City of Red Wing closed on the property at 301 Potter Street on October 31, It has always been staff's intent to raze the building to accommodate a larger parking area for city vehicles utilizing the city' s maintenance facility. It is planned to create a 10' wide buffer with vegetation on both the Third Street side and the Potter Street side of the new parking lot in coordination with utility work needed for the river crossing bridge project. FUNDING: 2016 Capital Outlay. 8- K Page I 1

2 ONGOING OPERATION AND MAINTENANCE COSTS: N/ A ALTERNATIVES: 1.) Motion to Accept Contract with Luhman' s Construction Company in the amount of 26, 217 for the demolition of the building at 301 Potter street. 2.) Do not Accept Contract for the demolition of the building at 301 Potter Street and direct staff as to how to proceed. RECOMMENDATION: Accept Contract with Luhman' s Construction Company for the demolition of the building at 301 Potter Street. 8- K Page 12

3 Ciryof RE NG Contract For Local Improvement 1. Parties. This Contract is made this 12th day of December, 2016, between the City of Red Wing, Public Works Department, 229 Tyler Rd. N, Red Wing, Minnesota, hereinafter, the City), and Luhman' s Construction Company of Red Wing of Welch Shortcut Rd, Welch, MN ( hereinafter, the Contractor). 2. Project. The Contractor agrees to furnish all materials, tools, equipment, and labor necessary in the Demolition of the 301 Potter Street Building ( hereinafter, the Project) all in strict conformity with Exhibit A, which sets forth the Project' s specifications. Exhibit A is attached and incorporated into this Contract. 3. Inspection and Approval. All of the Contractor's work and labor shall be subject to the inspection and approval of the City' s Authorized Representative designated by the City to supervise the work. If any materials or labor are rejected by the City's Authorized Representative as defective or unsuitable, then the materials shall be removed and replaced with other approved materials and the labor shall be done to the satisfaction and approval of the City' s Authorized Representative at the Contractor' s sole cost and expense. 4. Effective Date. Until this Contract has been fully executed with all signatures obtained, this Contract shall not be valid or effective, and there shall be no liability upon the City for payment. The Contractor shall not commence work until the City's Authorized Representative has provided the Contractor with a written notice to proceed. 5. Commencement. The Contractor shall proceed diligently and agrees to complete the Project to the satisfaction and approval of the City's Authorized Representative on or before March 31, If the Contractor fails to complete the Project by said date, unless excused by written consent of the City, the City shall have the right to deduct from any money due or which may become due to the Contractor, the amount of One -Hundred dollars ($ 100) per day between the time stipulated for the completion and the actual date of completion. If no monies are due to the Contractor, the City shall have the right to recover such sum as liquidated damages. The Contractor agrees to notify the City in writing of any cause of delay of the Project within 24 hours after such cause of delay arises. If the Contractor fails to complete the Project by the time hereinafter specified, the City may immediately, or at any time thereafter, proceed to complete the Project at the Contractor's expense. If the Contractor gives written notice of a delay over which the Contractor has no control, the City Authorized Representative may at its discretion, extend the completion date, and in such case the Contractor shall become liable for liquidated damages only after the extended completion date. City of Red Wing

4 6. Compensation In consideration of the covenants and agreements stated in this Contract, the City agrees to pay the Contractor an amount not to exceed Twenty Six Thousand Two Hundred Seventeen Dollars and No cents ($ 26, ), subject to the additions and deductions as provided for in the Plans and Specifications, which are set forth in Exhibit A, and other paragraphs herein and to make payments on account of the Contract as provided for in the specifications Contractor Payments. The City shall pay the Contractor monthly on the basis of invoices submitted by the Contractor, provided ( 1) the sum of payments made by the City shall remain in proportion to the amount of work completed by the Contractor and 2) the total payment for any phase shall not exceed the fee for that phase as enumerated in the Schedule of Values and incorporated into this Contract Retainage. If the Contractor properly performs the work, the City Council shall, from month to month, before completion of the work, pay Contractor 95 percent of the amount already earned under the Contract, upon the estimate of the City' s Authorized Representative. When the work is 95 percent or more completed, upon the recommendation of the City' s Authorized Representative, such portions of the retained price shall be released as the City Authorized Representative determines need not be retained to protect the interest of the City in the satisfactory completion of the Contract. The balance shall be retained by the City until the final performance and completion of this Contract by the Contractor to the satisfaction, approval, and acceptance of the City Authorized Representative including provision by the Contractor of the certified Minn. Dept. of Revenue Form IC -134 as proof of the Contractor' s compliance with applicable state income tax -withholding laws. Failure to pay any amount due and payable under the terms of this Contract within 30 days of a monthly estimate or within 90 days after the final estimate of the amount earned shall obligate the City to pay to the Contractor simple interest on the past due amount at an annual rate equal to the monthly index of long-term United States Government bond yields for the month prior to the month in which this obligation is incurred, plus an additional 1 percent per annum. Interest shall not be payable with respect to any amount which the City may legally withhold as a result of breach of contract or other contractual claim or if the delay is caused by the Contractor. 7. Replacement. The Contractor shall replace at the Contractor' s expense any loss or damage to the Project, however caused, which occurs during the construction thereof or prior to the final delivery to and acceptance of the Project by the City. Any payment made to the Contractor, shall not be construed as operating to relieve the Contractor from responsibility for the construction and delivery of the Project. 8. Prompt Payment by Contractor. The Contractor agrees to pay all laborers employed and all subcontractors furnishing material to the Contractor in the performance of this Contract. In accordance with Minnesota Statutes section , subdivision 4a, the Contractor shall pay to each subcontractor, within ( 10) calendar days of the Contractor' s receipt of payment from the City, the amount due for undisputed services provided by the subcontractor. If the Contractor does not make said payment to any subcontractor within the specified time, the Contractor shall pay interest to the subcontractor in the amount of one and one- half ( 1. 5) percent per month, or any part of the month, on any undisputed amount not paid on time to the subcontractor, unless otherwise provided in Minnesota Statutes section , subdivision 4a. City of Red Wing

5 9. Additional Services Written Approval Required. Unless approved by the City Authorized Representative in writing, the Contractor shall make no claim for extra work done or materials furnished that increase the total value of this Contract, nor shall the Contractor do any work or furnish any materials not covered by the plans and specifications of this Contract, which are set forth in Exhibit A. Any such work or materials furnished by the Contractor without written approval, is at the Contractor's own risk and expense Additional Services Compensation. When any extra work or materials is ordered by the City Authorized Representative, the Contractor shall furnish the materials and do such work for the actual cost thereof plus ten percent. The Contractor shall perform any altered plans ordered by the City Authorized Representative; if such alteration reduces the cost of doing such work, the actual amount of such reduction shall be deducted from the contract price for the work Amendments. Any amendment to this Contract that changes the scope, dates or value of this Contract, with the exception of a Change Order, must be in writing, signed by the Contractor, and will not be effective until it has been approved by the City Council Change Order. A Change Order must be approved by the City's Authorized Representative in writing, and requires a written change request by the Contractor. A Change Order may be used for the purposes of transferring budget amounts between line items or minor project adjustments that do not change the contract value, or other contract status activity. All other changes require a formal amendment as stated in paragraph 9. 3 above. 10. Nondiscrimination. The Contractor and any subcontractor, material supplier, or vendor shall not discriminate in the hiring of labor for the performance of any work under this Contract or any subcontract hereunder on the basis of race, creed, color, sex, or national origin; and shall not discriminate against any persons who are citizens of the United States or resident aliens who are qualified and available to perform the work on the Project. The Contractor and any subcontractor, material supplier, or vendor shall not in any manner discriminate against, or intimidate, or prevent the employment of any such person, or on being hired, prevent, or conspire to prevent, the person from performing work under this Contract or any subcontract hereunder on the basis of race, creed, color, sex, or national origin. Any violation of this paragraph shall be a misdemeanor; and this Contract may be canceled or terminated by the City, and all money due, or to become due, may be forfeited, for a second or any subsequent violation of the terms or conditions of this Contract. 11. Indemnification The Contractor agrees to defend, indemnify, and hold the City and its employees, officers, and agents harmless from and against any and all claims, suits, and actions against, and all loss, damage, costs, or expense to the City arising from any infringement or claim of infringement of any letters, patent, or patent rights upon or covering any patented article furnished or installed by the Contractor or its subcontractors under this Contract for the City, of from or by reason of the use by the City of any patented article or articles furnished or installed by the Contractor or its City of Red Wing

6 subcontractors for the City under this Contract The Contractor agrees to defend, indemnify and hold the City and its employees, officers, and agents harmless from all injuries or damages and claims for injuries or damages that may arise by reason of the Contractor's or its employees', agents', or subcontractors' negligence or otherwise wrongful act or omission, including breach of a specific contractual duty, while engaged in the performance of this Contract. The Contractor agrees to take all precautions necessary to protect the public against injury, and to keep danger signals out at night and at such other times and such places as public safety may require. 12. Audits. Under Minnesota Statutes section 16C. 05, subdivision 5, the Contractor' s books, records, documents, and accounting procedures and practices relevant to this Contract are subject to examination by the City and either the legislative auditor or the state auditor, as appropriate, for a minimum of six years from the end of this Contract. 13. Authorized Representatives. The City's Authorized Representative is Shawn Blaney, Public Works Deputy Director, 229 Tyler Road N, Red Wing, MN 55066, , or his/ her successor, and has the responsibility to monitor the Contractor' s performance and the authority to accept the services provided under this Contract. If the services are satisfactory, the City' s Authorized Representative will certify acceptance on each invoice submitted for payment. The Contractor's Authorized Representative is Dan Fox, Vice President, , or his/ her successor. If the Contractor' s Authorized Representative changes at any time during this Contract, the Contractor must immediately notify the City. 14. Insurance. Before commencing work with the City, contractors are required to submit Certificates of Insurance acceptable to the City as evidence of the required insurance coverage requirements. An insurance certificate must be submitted with an effective policy period covering the duration of the project and must remain in effect throughout the project. The Contractor' s policies shall contain a provision that coverage afforded under the policies shall not be cancelled without at least thirty (30) days' advanced written notice to the City. The Contractor' s policy must indicate the cancellation endorsement, which must also be specified on the Certificate of Insurance. The Contractor' s insurance shall be " primary and non- contributory" to any other valid and collectible insurance available to the City with respect to any claim arising out of Contractor' s performance under this Contract. The following types of insurance are required with policy limits as indicated Workers' Compensation Insurance. Except as provided below, Contractor must provide Workers' Compensation Insurance for all its employees and in case any work is subcontracted, the Contractor will require the subcontractor to provide Workers' Compensation Insurance in accordance with the statutory requirements of the State of Minnesota, including Employer' s Liability. Evidence of subcontractor insurance shall be filed with the Contractor. Minimum limits of Worker's Compensation and Employer's Liability are as follows: 500, Injury by Disease per Each Employee 500, Injury by Each Accident City of Red Wing 4

7 500, Disease Aggregate Limit. If Minnesota Statutes section exempts the Contractor from Workers' Compensation Insurance or if the Contractor has no employees in the State of Minnesota, the Contractor must provide a written statement, signed by the authorized signer of the Contract, stating the qualifying exemption that excludes the Contractor from Minnesota Workers' Compensation requirements. If during the course of the Contract, the Contractor becomes subject to the Workers' Compensation Insurance requirements, the Contractor must comply with the Workers' Compensation Insurance requirements included herein and provide the City with a certificate of insurance Automobile Liability Insurance. The Contractor shall maintain Automobile Liability Insurance to cover liability arising out of the ownership, operation, use or maintenance of all owned, hired and non -owned automobiles, and in case any work is subcontracted, the Contractor will require the subcontractor to maintain Automobile Liability Insurance. Evidence of subcontractor insurance shall be filed with the Contractor. The minimum limit of liability required is $ 1, 000,000 Per Occurrence Combined Single Limit ( Bodily Injury and Property Damage) Commercial General Liability Insurance. The Contractor shall maintain Commercial General Liability Insurance protecting it from claims of damages for bodily injury, including sickness or disease, death, and for care and loss of services as well as from claims for property damage, including loss of use which may arise from operations under the Contract whether the operations are by the Contractor or by a subcontractor or by anyone directly or indirectly employed by the Contractor under the Contract. The City must be named as an Additional Insured. The Contractor agrees that the additional insured coverage will extend to claims arising out of the Contractor' s ongoing operations for the City. Minimum limits of liability for this project are as follows: 1, 000, Per Each Occurrence * 2, 000, Annual General Aggregate 2, 000, Annual Aggregate applying to Products/ Completed Operations Additional Coverages: Premises and Operations Bodily Injury and Property Damage and Personal & Advertising Injury Note: A combination of general liability and umbrella liability per occurrence would meet this requirement.) If the Contractor provides an umbrella/ excess policy, the City shall be endorsed an as additional insured on that policy in addition to the underlying Commercial General Liability policy. A statement shall be included on the Certificate of Insurance such as " Umbrella liability follows form to underlying coverage including Additional Insured provisions." Pollution Liability Insurance. The contractor shall maintain pollution liability insurance with a minimum of $ 100, 000 per occurrence. City of Red Wing

8 14. 5 The City reserves the right to immediately terminate the Contract if the Contractor is not in compliance with the insurance requirements and retains all rights to pursue any legal remedies against the Contractor. All insurance policies must be open to inspection by the City, and copies of policies must be submitted to the City' s Authorized Representative upon written request. 15. Warranty. The Contractor guarantees and agrees to maintain the stability of all work done for a period of a year after the date of final payment. The Contractor agrees to perform fully all other guarantees as set forth in the specifications. 16. Debarment by State, its Departments, Commissions, Agencies or Political Subdivisions. Contractor certifies that neither it nor its principles is presently debarred or suspended by the State of Minnesota, or any of its departments, commissions, agencies, or political subdivisions. Contractor' s certification is a material representation upon which the contract award was based. Contractor shall provide immediate written notice to the City' s Authorized Representative if at any time it learns that this certification was erroneous when submitted or becomes erroneous by reason of changed circumstances. 17. Use of Project. It is agreed and understood by the parties hereto that the use of the Contractor' s work and any portion of the Project at any time by the City for any purposes shall not be construed to be or operate as an acceptance by the City of the work to be done by the Contractor under this Contract. 18. No Waiver of Immunities. Nothing in this Contract shall be construed to waive any immunities or limitations to which the City is entitled under Minnesota Statutes Chapter 466 or otherwise. 19. Severability. In the event one or more of the provisions contained in this Contract shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and any other application thereof shall not in any way be affected or impaired thereby. 20. Entire Agreement. This Contract, including any attached exhibits, constitutes the entire, final and exclusive agreement between the parties with regard to the subject matter hereof, and supersedes all prior written or oral understandings, representations and agreements by or between the parties relating thereto. 21. Minnesota Law. This Contract shall be governed by Minnesota Law. City of Red Wing

9 IN WITNESS WHEREOF, the parties have caused this Contract to be signed on their behalf by the proper officers thereunto duly authorized and their corporate seal to be hereto affixed, the day and year first above written. CITY: CITY OF RED WING CONTRACTOR: A LUHMA ys 0ST CTION CO OF RED WING Bv: Dan Bender, Mayor Date: By: Dan Fox, Vice President Date: G2 -S ' ` 6 By: Kay Kuhlmann, Council Administrator Date: By.- y: Kathy Seymour Johnson, City Clerk Date: City of Red Wing

10 Exhibit A: Scope of Services The City of Red Wing has had a Pre -Demolition Inspection conducted of the 301 Potter Street Building. The survey documents materials requiring management/ proper disposal prior to building demolition is accompanying this document as Attachment A. Contractor will be responsible for all abatement listed in the survey. Abatement work must be conducted by a licensed and certified abatement contractor. In addition, the prime contractor will have to provide to the City documentation as to certifications for those doing the abatement work before the contract will be executed The City shall be responsible for obtaining the local demotion permit. Contractors will be responsible for obtaining any other permits for work to be completed No materials shall be salvaged, stored or accumulated in any area adjacent to project. The contractor shall be responsible for all tipping fees associated with the removal and proper disposal of all materials per the Minnesota Pollution Control Agency guidelines. For debris that is to be delivered to a landfill( s), those landfills must be license for this type of debris in accordance with all federal, state and local laws. All loads shall be covered and secured prior to and during transport. Demolition materials shall become the Contractor' s property and shall be removed from the site. The contractor relieves the City of Red Wing from all liability in the disposal of debris. Contractor is encouraged to divert from landfill all construction and demolition (C& D) materials which are reusable or recyclable through City of Red Wing Solid Waste Services. The Contractor shall supply the City with a copy of all landfill and disposal receipts The contractor shall provide all materials, tools, machinery, pedestrian control devices, labor and supervision necessary for the demolition work on the property. Demolition work shall include removal of all foundation materials along with removal of basement floor, capping of water and sewer lines, removal of all debris from the demolition site and backfill area with clean fill and topped with 8 -inches of gravel. All backfill material will be provided by the Contractor at the Contractor' s expense. This parcel shall have all structures, improvements and debris cleared. Work can be performed any day of the week between the hours of 7: 00 AM and 7: 00 PM Conduct demolition operations and remove debris to ensure minimum interference with roads, streets, walks, and other adjacent occupied and used facilities. Do not close or obstruct streets, walks, or other adjacent occupied or used facilities without permission from the City Conduct demolition operations to prevent injury to people and damage to adjacent buildings and facilities to remain. Ensure safe passage of people around demolition area. Use of explosives or burning of demolished materials will not be permitted The successful Responder may mobilize to commence work the week of December 12th, 2016, if all negotiations and contract execution is completed before this time. The final completion date for the above projects must be no later than March 31, Proposals will only be accepted for complete projects. All individual components needed for a complete project shall be included in the proposal price ( e. g. setup, disposal, and clean up). Partial or incomplete Proposals will not be considered. Two or more contractors may combine their services to complete this project, but one proposal for a complete project must be submitted. City of Red Wing 8