082503 EDA AgP
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CITY OF SHOREWOOD
ECONOMIC DEVELOPMENT AUTIIORITYMEETING
MONDAY, AUGUST 25, 2U03
AGENDA
1. CONVENE ECONOMIC DIWELOPMENTAUTHORITY MEE'lING
A. Roll Call
B. Review Agenda
2. APPROVAL OFMINtJTIS
A. BDA Minutes of July 28, 2003 (Att.- Minutes)
3. NEW BUSINESS
A. Approve Pa)"D1eltt of Claims (Att.- Payment of Clain1s)
4. OTHElt BUSINESS
A. Discussion of Deephavea :Resolution .
5. ADJOURN
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
5755 Country Club Road
Shorewood, Minnesota 55331-8926
952.474.3236 FAX: 952.474.0128
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
EDA Commissioners
Craig W. Dawson, Executive Director
August 21, 2003
Summary of Items on August 25 Agenda
After the tremendous amount of business on the agenda ofthe EDA's annual meeting last month, the
business on the August meeting is fairly routine.
3A. Payment of Claims
The EFD Board recommended approval of items listed on the Payment of Claims at its
August 19 meeting. The SLMPD recommendation, for which review by the Coordinating
Committee Chair and Police Chief is sufficient, is expected prior to the EDA meeting Monday
evemng.
4A. City of Deephaven Resolution
In May, the City of Deephaven requested that the Excelsior Fire District Board consider a
different arrangement for bidding and managing construction of the EFD East Station. At that
time, the EDA responded to the EFD Board that it would continue to follow the contractual
arrangement it had with Kraus-Anderson Construction Company. On August 18, the City of
Deephaven adopted a resolution renewing this request. At the August 19 EFD Board
meeting, there was not sufficient support to forward this request to the EDA. This agenda
item is informational; no EDA Board action is necessary, although commissioners may wish
to discuss the matter.
Weare still working out exact dates regarding the bidding period and dates to award/assign contracts
for the EFD East Station. Tentatively, plan for an EDA meeting at 6:45 p.m. Monday, October 6, to
award and assign construction contracts.
CITY OF SHOREWOOD
ECONOMIC DEVELOPMENT AUTHORITY MEETING
MONDAY, JULY 28, 2003
5755 COUNTRY CLUB ROAD
COUNCIL CHAMBERS
TIME: Immediately following
Regular Council Meeting
MINUTES
DRAfT
1.
CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING
President Love called the meeting to order at 11: 17 P.M.
A.
Roll Call
Present:
President Love; Commissioners Garfunkel, Lizee, Turgeon, and; and Executive Director
Dawson; Assistant Executive Director Nielsen; Assistant Treasurer Burton; and Engineer
Brown
Absent:
Commissioner Zerby
B.
Review Agenda
President Love reviewed the Agenda and without objection from the Board, moved forward with the
meeting.
2. APPROVAL OF MINUTES
A. EDA Minutes of June 23, 2003
Lizee moved, Turgeon seconded, Approving the EDA Meeting Minutes of June 23, 2003. Motion
passed 4/0.
3. CONSENT
A. Treasurer's Report
B. Approve Payment of Claims
Garfunkel moved, Turgeon seconded, Approving the items listed in the Consent Agenda. Motion
approved 4/0.
4. NEW BUSINESS
A. Selection of Officers
Executive Director Dawson reviewed the current Board of Officers for the Commission, and noted the
Board needed to select the positions of Vice President and Treasurer. All current Boardmembers agreed
to retain their current Board positions for another year. The Board noted the outstanding efforts of the
current Vice President and Treasurer during the past year, and thanked them for those efforts.
#-211
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING MINUTES
July 28, 2003
Page 2 of2
5. OTHER BUSINESS
There were no items presented for other business this evening.
6. ADJOURN
Turgeon moved, Garfunkel seconded, Adjourning the Economic Development Authority Meeting
of July 28, 2003, at 11:21 P.M. Motion passed 4/0.
RESPECTFULLY SUBMITTED,
Sally Keefe,
Recording Secretary
Woody Love, President
ATTEST:
Craig W. Dawson, Executive Director
Shorewood Economic Development Authority
Check Approval List for 8/25/03 Meeting
Check # Vendor Name Description Check Date Invoice #
1065
1065
1066
1066
1067
1067
1068
1068
1069
1069
1069
1069
1070
1070
1070
1071
1071
1072
1072
1073
1073
KRAUS-ANDERSON CON W.FIRE - PV#10 8/26/2003 4904-10
KRAUS-ANDERSON CON POLICE - PV#10 8/26/2003 4904-10A
TOTAL FOR KRAUS-ANDERSON CONSTR CO
LARKIN, HOFFMAN, DAL W.FIRE-LEGAL SVCS JUL 8/26/2003 439658
LARKIN, HOFFMAN, DAL POLICE - LEGAL SVCS JU 8/26/2003 439658A
TOTAL FOR LARKIN, HOFFMAN, DALY...
MINNETONKA PLUMBIN W.FIRE -PV#10
MINNETONKA PLUMBIN POLlCE-PV#10
TOTAL FOR MINNETONKA PLUMBING
NORTHLAND SECURITIE W.FIRE-BOND ISSUANCE
NORTHLAND SECURITIE POLICE-BOND ISSUANCE
TOTAL FOR NORTHLAND SECURITIES
STRUCTURAL DESIGN A W.FIRE-PROF SVCS JUN 8/26/2003 14176
STRUCTURAL DESIGN A POLICE-PROF SVCS JUN 8/26/2003 14176A
STRUCTURAL DESIGN A W.FIRE - PROF SVCS JUL 8/26/2003 14227
STRUCTURAL DESIGN A POLlCE- PROF SVCS JUL 8/26/2003 14227A
TOTAL FOR STRUCTURAL DESIGN ASSOC INC
W.FIRE - PROF SVCS JUL 8/26/2003 8045
POLICE - PROF SVCS JU 8/26/2003 8045A
E. FIRE - PROF SVCS JUL 8/26/2003 8045B
TOTAL FOR TSP ONE, INC.
WEATHER PROOF SYST W.FIRE - PV#10
WEATHER PROOF SYST POLlCE-PV#10
TOTAL FOR WEATHER PROOF SYSTEMS
WSB AND ASSOCIATES POLICE-PROF SVCS JUN
WSB AND ASSOCIATES W.FIRE - PROF SVCS JU
TOTAL FOR WSB AND ASSOCIATES
W.FtRE - JULY ELECTRIC
POLlCE-JUL Y ELECTRIC
TOTAL FOR XCEL ENERGY
TSP ONE, INC.
TSP ONE, INC.
TSP ONE, INC.
XCEL ENERGY
XCEL ENERGY
TOTAL CHECKS
8/26/2003 4904-10
8/26/2003 4904-10A
8/26/2003 209
8/26/2003 209A
8/26/2003 4904-10
8/26/2003 4904-10A
8/26/2003 01074-711
8/26/2003 0174-711-
8/26/2003 1477-818-
8/26/2003 1477-818-
Amount
$196,549.50
$215,343.90
$411,893.40
$37.50
$37.50
$75.00
$50,319.32
$55,130.68
$105,450.00
$309.84
$316.10
$625.94
$623.60
$623.60
$1,027.26
$1,027.26
$3,301.72
$3,820.10
$3,976.02
$3,664.93
$11,461.05
$12,325.18
$13,503.42
$25,828.60
$324.00
$324.00
$648.00
$213.33
$222.03
$435.36
$559,719.07
:#3A
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
5755 Country Club Road
Shorewood, Minnesota 55331-8926
952.474.3236 FAX: 952.474.0128
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
EDA Commissioners
Craig W. Dawson, Executive Director ~
August 21, 2003
City of Deephaven Resolution re: East Fire Station
Background: In May, the City of Deephaven raised questions about the EDA and Excelsior Fire
District (EFD) using the general contractor/construction management service (GC/CM) approach for
the construction of the EFD East Fire Station. For several reasons, it believed that the project cost
would be more expensive than the more traditional approach of general contractors bidding on and
managing the construction.
In response, the EDA noted that the many advantages in the GC/CM approach, and that it provided
competitive costs and quality assurance (see attached memorandum). These advantages would
accrue to all member cities, and their residents and businesses, in the EFD. The EDA general counsel
also advised that there would be difficulties in altering the contractual arrangement between the EDA
and Kraus-Anderson Construction Company. On May 27, the EDA commissioners affirmed that the
arrangement with Kraus-Anderson would be maintained for construction of the EFD East Fire
Station.
Deephaven Resolution of August 18: At this Council meeting, Deephaven formalized its request
that the EDA abandon the GC/CM approach and use the "general contractor at risk concept" for the
construction of the EFD East Station.
EFD Action on August 19: Under the terms ofthe sublease between Deephaven and the EFD, it is
the EFD's responsibility to work with the EDA for construction of the East station. At its Board
meeting on August 19, a motion to endorse the Deephaven resolution and forward it to the EDA
failed on a 2-2 vote (Greenwood representative Doug Hill was absent).
Result: Matters are essentially where they stood in late May. There is no valid formal request for
the EDA to consider an alternative method of bidding and managing the construction of the EFD East
Station.
EDA Action: No EDA action is necessary. Staffwill send a response to the City of Deep haven and
EFD, acknowledging the Deephaven resolution and restating the EDA's position to maintain the
GC/CM arrangement for the EFD East Station.
#4A
RESOLUTION NO. 31-03
A RESOLUTION REQUESTING A BROADENING OF THE BIDDING
REQUIREMENTS FOR THE CONSTRUCTION OF THE EAST SIDE STATION
WHEREAS, the Deephaven City Council recognizes that it is in the best interest of the Excelsior Fire
District and the citizens they represent to obtain the most competitive bids possible for the construction of
the East Side Fire Station; and,
WHEREAS, the Deephaven City Council is concerned that the proposed bidding process for the East
Side Fire Station may not result in obtaining the most competitive bids due to the reluctance of general
contractors to bid on this project knowing that Kraus Anderson is currently serving in that capacity.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF DEEPHA VEN
THAT:
The Shorewood Economic Development Authority hereby directs TSP to issue Requests
for Proposals that would invite any and all qualified general contractors to submit a complete
stipulated sum proposal directly to the Excelsior Fire District for the purpose of constructing the
East Side Fire Station under the general contractor at risk concept.
Adopted by the Council ofthe City of Deephaven this 18th day of August, 2003.
Tom L. Anderson, Mayor
Attest:
Sandra Langley, City Clerk
SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY
5755 Country Club Road
Shorewood, Minnesota 55331-8926
952.474.3236 FAX: 952.474.0128
MEMORANDUM
TO: Excelsior Fire District Board
FROM: Craig W. Dawson, Executive Director
DATE: May 16, 2003
SUBJECT: Delivery Date of Facilities;
Contract Provisions with Kraus-Anderson Construction Company
Completion and Scope of Facilities:
At its April meeting, the Board requested information whether, in the various agreements for the
public safety projects, there was a date specified that the EDA complete and deliver the public safety
facilities.
Each of the Lease-Purchase Agreements-between the EDA and the City of Shorewood for Police,
and for Fire, as well as between the EDA and the City of Deephaven for Fire-contain the identical
language:
Section 3.2. Acquisition and Construction of Facilities; Payment of Cost.
. . . (b) The Authority shall cause the Improvements to be completed and the
remainder of the Facilities to be acquired with all reasonable dispatch. ...
Each of these leases has a sublease to EFD or SLMPD, and thus these organizations are appointed
agents for the purpose of construction of the Improvements.
In resolutions adopted by each ofthe city councils in June 2002, all agreed to the scope ofthe
proposed fire facilities, and that the costs not exceed $5,060,000 for the West Station and $2,060,000
for the East Station. By their resolutions in August 2002, each of the five city councils approved the
agreements needed to construct the facilities.
Both the EFD Board and SLMPD Coordinating Committee have indicated their desire to terminate
their leases with the City of Excelsior as soon as reasonable possible, in order to eliminate their rent
obligations.
Additionally, the EFD joint powers agreement calls for the construction of the new or renovated
facility(s) to be underway by June 30, 2004 (Sec. 11.2.(2)).
EFD Board
May 16, 2003
Page Two
A2reement with Kraus-Anderson Construction Company:
In June 2002, the staffs of the EDA, EFD, and SLMPD interviewed three of the five firms which
responded to a Request for Proposals (RFP) for general contractor construction management services
for the public safety facilities. In August 2002, the EDA, EFD, and SLMPD agreed with the
selection of Kraus-Anderson Construction Company to provide these services. Following their
approvals, the Agreement was forwarded to the five city councils for their approvals as well.
At the time ofthe agreement, it was possible that both West and East facilities would be under
construction at the same time, and there would be better continuity and project management by
having one firm perform on behalf of the Owner. The EFD and SLMPD Boards were also vitally
concerned that a firm be engaged that it was confident would have capabilities to differentiate
accurately the costs attributable to the Fire and Police sides of the ::!:$1 0 million in construction for
the combined projects.
The terms ofa GC/CM arrangement are detailed in "AIA Document A13I, Standard Form of
Agreement between Owner and Construction Manager where the Construction Manager is also THE
CONSTRUCTOR; and where the Basis of Payment is the Cost of the Work Plus a Fee and there is no
Guarantee of Cost (1994 Edition)". This is the form used in the EDA agreement with Kraus
Anderson. In general terms the service provider (e.g., Kraus-Anderson)
. assists and solicits bids from all trades and disciplines in compliance with Minnesota's
competitive public bidding law
. administers and coordinates the means and methods of construction by and among the various
trades and subcontractors
. is charged with oversight and administration of the work and its compliance with plans and
specifications
. is responsible for scheduling contract administration, and delivery of the finished product
The subcontractors are guarantors of the work performed; the GC/CM will act on behalf of the
Owner during the warranty periods.
Under the GC/CM arrangement, especially in the public bid environment required by Minnesota law,
the Owner should benefit by having the lowest responsible bid for each of the trades and disciplines
required for the project. In a general contractor approach, the price paid by the Owner would depend
upon the team of subcontractors assembled by the general contractor.
The experience of the five cities, and particularly that of Shorewood as responsible agency, with the
construction of the Southshore Senior Community Center was a recent object lesson. The
performance by the general contractor was very problematic; there were issues with quality and
warranties, cost overruns, poor construction, and late delivery of the facility. The City of Shorewood
spent inordinate amounts of time and money addressing these issues throughout and well after
construction. There was also strain among the five cities participating in the cost of this facility.
EFD Board
May 16, 2003
Page Three
In light of this experience, it is very important to the Shorewood EDA, the Owner whose only
available funds come from the bond proceeds for these projects, that a competent and reputable firm
be engaged on its behalf. The EFD and SLMPD governing boards have agreed.
EDA General Counsel Opinion: At the May 14 EFD work session, questions were posed (1)
whether a general contractor could bid on the East Fire Station, and (2) whether a bid could be
awarded for the "general conditions" work on the project.
(1) Consistent with the practice in the bid packages for the West facility, anyone may submit a
bid for any combination of bid divisions - including all of them - and the EDA may award
combined bids that have less cost than the respective bids on individual divisions.
(2) The contract awarded to Kraus-Anderson was done on a competitive basis. In its proposal,
and subsequently in its contract, Kraus-Anderson's prices for general conditions are public
information. Allowing other parties to bid on general conditions, with Kraus-Anderson's
prices already public, would constitute a violation of Minnesota's competitive contract law.
(3) The EDA may request that Kraus-Anderson amend its Agreement to remove general
conditions services and costs for the East Fire Station project. Kraus-Anderson is under no
obligation to do so.
The EDA general counsel advises that the EDA is in its best legal position to continue the Agreement
with Kraus-Anderson and to proceed consistent with the plans agreed to by all parties last summer.
Under the policies and procedures approved and recently amended by the EFO, SLMPO, and EOA,
"Roles. Responsibilities. and Communications
5) The EFO and SLMPO governing boards will provide direction and must authorize
work (e.g., agreements, awarding contracts, changes orders) to be accomplished by the
EOA prior to EOA action on such matters.
6) The EOA will notify the EFO and SLMPO governing boards of matters that may
adversely affect the position ofthe EOA as owners of the facilities."
Changing the current arrangement with Kraus-Anderson Construction Company and the Agreement
between it and the EOA would adversely affect the position of the EOA as owner of the EFD East
Facility.
C: Shorewood EOA Commissioners
Tim Keane, EOA General Counsel