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11-04-1996 - Regular '. . ~ ...., CITY COUNCIL OF EDGEWATER REGULAR MEETING NOVEMBER 4, 1996 7:00 P.M. COMMUNITY CENTER MINUTES CALL TO ORDER: Mayor Hayman called the Regular Meeting to order at 7:00 p.m. in the community Center. ROLL CALL: Mayor Jack Hayman Councilman Danny Hatfield Councilwoman Louise Martin Councilman Michael Hays Councilman David Mitchum City Attorney Krista storey city Manager George McMahon city Clerk Susan Wadsworth Administrative Assistant Lisa Kruckmeyer Police Chief Lawrence Schumaker Present Present Present Present Present Present Present Excused Present Present INVOCATION. PLEDGE OF ALLEGIANCE: Reverend Foley, Edgewater Alliance Church, delivered the invocation. There was a pledge of allegiance to the Flag. APPROVAL OF MINUTES: A. Regular meeting of October 21, 1996 Councilwoman Martin made a motion to approve the October 21, 1996 minutes, second by Councilman Hatfield. The motion CARRIED 5-0. CITIZEN COMMENTS REGARDING AGENDA ITEMS ONLY (Other than public hearings) Robert Pogg, 2925 Yule Tree Drive, spoke about the ditch in front of his house being full of water. Bruce from the Engineering Department came to his house and commented on the grass laying job in front of his house being the worst Bruce had ever seen. Mr. pogg commented on there not being any inspectors on the job while it was being done. He spoke about the water running in front of his house running south when it is supposed to be running north. Mr. pogg asked that his concerns be looked into and taken care of. He feels if the problems aren't taken care of the City is going to be in the same predicament as with S & E. He spoke about how bad the mosquitos are. Mr. pogg questioned a Police Dispatcher getting paid out of the Fire Department budget. Mayor Hayman informed Mr. pogg the City has the 911 service which dispatches emergency response personnel as well as the police personnel. Due to the service requiring a joint force, it is reasonable to expect that the burden of cost to operate that facility should be paid for by the agencies that participate in it. Chief Schumaker informed Mayor Hayman that was exactly the reason. City Manager McMahon explained the Fire and Police budgets are both paid from the General Fund/Public Safety budget. CITY COUNCIL REPORTS Councilman Hatfield had nothing at this time. Councilwoman Martin had nothing at this time. '-' ....., Councilman Hays asked that when they come back to the point in the budget when the City is looking at franchise fees, he would like an opportunity to discuss the cable franchise fees. Councilman Mitchum had nothing at this time. PUBLIC HEARINGS. ORDINANCES AND RESOLUTIONS A. Public hearing regarding proposed settlement of S & E Contractors, Inc. v. city of Edgewater Mayor HaYman discussed the public hearing process and opened the public hearing. City Attorney storey made a staff presentation and presented the background information. Approximately two weeks ago, S & E's surety, American Insurance Company agreed to settle this matter upon paYment by the City in the amount of $350,000. She and City Manager McMahon do not justify the further litigation of this matter. They feel a settlement offer is in the best interests of the City. City Attorney Storey informed Council that John Horan, Construction Litigation Attorney, was present to answer any questions. city Manager McMahon presented the staff recommendation and commented on the source of funding for the settlement of this matter. There were no questions from Council. Edward Keenan, 1905 pine Tree Drive, questioned the total cost of the lawfirm that was hired to settle the suit or move on behalf of the City. Mayor HaYman asked Mr. Keenan to present a list of questions and they will be addressed entirely. Mr. Keenan stated in mediation, he understands the city offered S & E $420,000 and they turned it down, which is a shame. He feels the City hit it lucky getting away this cheap but he can't imagine the legal fees were that cheap. He has an estimate from an attorney who was in that field and he thought it would be over $100,000. The cost is up to $450,000 or $460,000, which is quite considerable. He questioned why the City didn't just pay S & E in the beginning and then they may have continued doing the work. He didn't know if Mr. Spofford would have or not but they were put in the position by the surety company that made it lucky for the City. He wants to know what the total cost of this is going to be including attorney fees paid by the City. They started doing the work and were unable to finish due to financial problems that he understands the City helped create for them. They did want to complete the project is the word he got from the company. city Attorney Storey stated she did not have the to date cost. Up until this point they have been paid out of retainage money. out of the $440,000 to date, we still have some outstanding bills but she did not have the exact figure in front of her. John Horan stated he thinks the fees are in the neighborhood of $90,000 to $100,000. He thinks the costs have been somewhere in the neighborhood of $25,000. That is just a ball park estimated figure. Page -2- Council Regular Meeting November 4, 1996 ..... ...., Mr. Horan stated the reason the City didn't pay S & E is because they wanted $2.5 million. They wouldn't accept the $440,000. In going through the documents that S & E produced, what we did discover is that there was correspondence in the records of S & E Contractors from Mr. Keenan indicating that Mr. Keenan wanted S & E Contractors to be paid. As a matter of fact, there was direct correspondence. Was there not Mr. Keenan between you and Mr. Spofford. Mr. Keenan agreed he spoke to him. Mr. Horan stated you actually sent him a fax. Mr. Keenan stated off hand he couldn't answer that. Mr. Horan asked Mr. Keenan if in fact he sent him a letter discussing strategy as to how they could in fact get more money out of the taxpayers of the City of Edgewater. Mr. Keenan stated no, he wanted to see the city get out of this as quickly as possible. Mr. Horan asked if Mr. Keenan would care for that letter to become public record. The letter that was found among George Spofford's records, the man that was trying to get more money out of the City of Edgewater. The man who Mr. Keenan was conspiring with to do something against the City of Edgewater. Mr. Horan asked if Mr. Keenan would like that letter to be put into public record. Mr. Keenan stated you could put it in because he wanted to see it settled because it would be cheaper in the long run instead of paying you people and everyone else. Mr. Horan stated what we did find among the records that S & E produced to us were letters that were offered by Mr. Keenan in which he was joining forces with the contractor relative to the claim that was being brought by the contractor against the city of Edgewater. Mayor Hayman stated he has allowed the dialog to go a little bit longer than it should have. He appreciates counsel trying to address the questions and he is also very interested in the correspondence that was uncovered. He believes it should be made a matter of public record. Judy Lichter, 826 Navigators Way, wondered if there is ever an option besides court regarding shoddy work or work not finished. Is there not some type of regulatory committee or hearing or something other than a court case that can come first. City Manager McMahon explained the City attempted to do that in mediation. S & E's response was they would take no less than $750,000 and we could not accept or recommend that to the city. We felt that was an overburden to the City for the work that needed to be done. The Engineers spent hours of paid time at taxpayers expense dealing directly with the contractor and the people responsible for that. He further commented on additional options. Ms. Lichter asked if S & E Contractors is still practicing. City Manager McMahon stated he did not know. They are indebted to the insurety company in excess of $7 million. Ms. Lichter asked if S & E Contractors is in bankruptcy. City Manager McMahon stated he did not know for certain but he couldn't say without knowledge. Councilman Mitchum elaborated on Mr. Keenan's concerns regarding not giving S & E the opportunity to finish the work. We negotiated several times with S & E to come back in and repair the discrepancies. city Manager McMahon stated we also assessed them for the delay in the project itself. Page -3- Council Regular Meeting November 4, 1996 -- ..."", Mr. Horan stated not only did S & E want $2.5 million, but at the time that we were still trying to get them on to the project, we were surprised that they sued us. They sued us in February 1995 at a time when we thought we were going to negotiate the last aspect of their doing the corrective work. S & E sued the city first, seeking not just the retainage but millions of dollars. That process continued from January 1995 until February 1996. A final meeting was supposed to occur between Mr. Fegley and Mr. Akers at a time when suit was filed. Doris Hill, 112 Lincoln Road, stated she was at the meeting when Mr. Spofford got up and said what he wanted and what they expected. What she got out of that meeting was the City was asking him to put the roads back in better shape than they were before they started the sewers. The problem with the whole thing, was in the inspections. DRMP was supposed to do the inspections but to save money this City decided to do it in house and when they were finished it was all screwed up and then S & E said this is what you paid for and this is what you've got. If anybody was arrogant that night, it was the City. You brought another attorney in here and you dared Mr. Spofford to do the City and that is what S & E did. Now we are faced with this. She stated as far as she is concerned, there is where the problem lies and she pointed to the Council. Councilman Hays stated the City never asked S & E to do anything but comply with the specs that were written into the bid that S & E bid on and that they by contract agreed to do. All we asked them to do was what they said they were going to do and they didn't do the job. He feels if you sign a contract, you need to do the job you are contracted to do. We did not ask for better, we asked for the specifications of the bid. Mr. Horan stated they did not sue for retainage, they sued for $2.5 million plus retainage. Ms. Hill stated that was after the way they were treated that evening. Councilman Mitchum stated Mr. Spofford stood at the podium and told everybody what he wanted them to hear. It didn't make him right. Mr. Spofford and S & E Contractors didn't do the job no matter what he said here that night. Mayor Hayman stated there is information in the record that he may ask to be disclosed which is correspondence from Mr. Spofford to his superintendents and others that describes his review of the performance of the subcontractors on the work and it was not satisfactory. He encouraged Ms. Hill to examine the facts and information. Not only did S & E fail to perform in accordance with the contract documents and specifications, but they also were very cleverly trying to disguise the issue of their lack of performance with another issue about the specifications for repaving and the conditions of the road before he took possession of them. Ms. Hills feels the problems were with the inspections. When this started out, we were going by DRMP's specifications. They were supposed to do the inspections but the City decided to fire DRMP so they weren't doing the inspections on the work. Why didn't the City's inspectors catch some of this as it was going along? Why did it take until the whole job was finished? Mr. Horan explained if the Council had voted to pay the $440,000, the City still would have been sued for the $2.5 million. Paul Jenkins, Willow Oak Drive, commented on work he witnessed that was done by S & E. Page -4- Council Regular Meeting November 4, 1996 ~ ..., Mr. Horan stated Chapman constructed the road the way they saw it drawn on the drawings. He commented on the means and methods used by S & E Contractors. City Manager McMahon spoke about the hiring of outside inspectors. Robert Pogg, 2925 Yule Tree Drive, feels the mistake has been made. Let's get out of it as cheap as possible. He stated when they were doing work by his house, he never saw any inspectors. He told Council to pay the bill and get this done with. He urged Council to get the inspectors out there for the road paving project. Mr. pogg stated the job is not being done right. Mr. Horan feels if the city doesn't settle now, there is no way, even if you win, to collect the money from the other side. Dick Jones, 1530 Sabal Palm Drive, stated he was pleased when City Manager McMahon told him he was going to hold payment from S & E due to inferior work. He feels the City does not have enough documentation to support the case in court. Mr. Horan stated he would be very confident to take this case to court but it doesn't make economic sense. Mr. Jones commented on another contractor being hired to correct the deficiencies. The money to pay the contractor was taken out of money withheld from S & E. He questioned if that was more or less than the amount withheld from S & E. He was informed it was less. Mayor Hayman referred Mr. Jones to an article in the Observer defining where the money is, where the money went and what is in question. He commented on the extreme costs if they were to continue to deliberate. Councilman Hays briefly spoke about the $103,000 loss. He commented on the original bids that came in and S & E being the lowest bid. As a City we have an obligation to accept the lowest bid, which they did. We got the job done cheaper than the next lowest bid. He feels they made some hard decisions but they were the right decisions. Mr. Horan spoke about the project being done at a really good cost. Councilman Mitchum has every confidence in Mr. Horan that they could win this but we would still have to pay the $300,000 to litigate this. The next question was if they could go against S & E for attorney fees but they have nothing. Mr. Horan clarified that S & E has basically been taken over by the bonding company which is prosecuting claims that S & E has. Ed Keenan, 1905 pine Tree Drive, spoke about a letter to the City Council from S & E not wanting to put down the i" paving because it wouldn't last. City Manager McMahon recommended not putting it down in a letter he recalls seeing. He is amazed it has lasted as long as it has. When the settlement of $440,000 was possible, couldn't there have been a stipulation that there would be no further lawsuits. Mr. Horan stated he sent a letter to Mr. Cummings informing S & E upon completion of the corrective work, the city would then pay the retainage to S & E and we would require them to sign a total and complete release. They would not do that. Councilman Hatfield feels it is time to move on. He feels money has been saved in the long run by forcing the work to be done and corrected. Councilwoman Martin stated when they made their decision regarding S & E, a background check was done and they found nothing informing them that this would happen in the future. Page -5- Council Regular Meeting November 4, 1996 '-' ...., City Manager McMahon commented on DRMP doing the background check and the recommendation was made to go with the low bidder based on their reference check. He feels the decision made was the right decision. S & E is indebted to their insurety company for over $13 million. This City is trying to solve a problem in the most economical way that satisfies the economics of this community. Mayor Hayman closed the public hearing. Councilwoman Martin made a motion to approve payment of $350,000 to S & E Contractors, Inc. to be paid out of the utility System Renewal and Replacement Fund, second by Councilman Hatfield. The motion CARRIED 5-0. city Manager McMahon thanked Mr. Horan for the hard work he has put into this case. B. Res. 96-R-29 Proposed ballot amendment #2 relating to Constitution Revision Commission Mayor Hayman read Res. 96-R-29. city Manager McMahon made a staff presentation and encouraged Council to support this resolution. Councilman Hatfield made a motion to approve Res. 96-R-29, second by Councilman Hays. The motion CARRIED 5-0. CONSENT AGENDA There were no items to be discussed on the Consent Agenda. OTHER BUSINESS A. Appointment of City representative to Volusian Water Alliance Board Councilman Hays made a motion to nominate vice Mayor Martin, second by Councilman Hatfield. The motion CARRIED 5-0. Councilman Hays is already designated as the alternate. B. Request to purchase two pickup trucks for Field Operations and one cargo van for Wastewater through State bid Councilman Hatfield moved for approval, second by Councilman Hays. The motion CARRIED 5-0. This is a budgeted item. C. Request to purchase one pickup truck and one sedan on State contracts for Parks & Recreation Councilman Mitchum moved for approval, second by Councilman Hatfield. The motion CARRIED 5-0. D. Discussion of Department of Community Affairs response to proposed land use map amendment along Hibiscus and Guava Drives Community Development Director Mark Karet made a staff presentation. He commented on the two most significant issues with DCA. There was a discussion regarding the time frame to respond to DCA. Mayor Hayman explained why he would not support the reduction of the PID area north of Park Avenue. Page -6- Council Regular Meeting November 4, 1996 ....,.. .""" Councilman Hatfield asked if there is a way to go to DCA and ask for more time. He expressed concern with rushing through this and getting the appearance that we are shoving something down someone's throat that they may not totally understand. Mr. Karet explained DCA gave the city additional time back when a settlement agreement on the Comp Plan was being negotiated and they will do that if they feel the City is working with them. Mayor Hayman suggested asking for an extension. Mr. Karet stated if that is Council's wishes, he would have that conversation with DCA tomorrow. Councilman Hays asked Mr. Karet if he anticipated a problem with asking for a delay on this. Mr. Karet informed him no, their indication was depending upon the circumstances additional time could be warranted. Councilman Hatfield doesn't want to make rash decisions. Mr. Moore, Edgewater Business Association, feels DCA's biggest concern is the lack of information. They want more support information such as the buffers and designated uses. He feels if the City sends them this information they won't look so much at the undeveloped industrial land that we already have. He suggested before asking for an extension, send a list of proposed permitted uses and proposed buffers and see what they think about it. He asked to have another workshop before a final reply is made. There was further discussion regarding DCA's objections. Mayor Hayman asked if it would be possible to gather the additional information and explain to DCA the two courses of action. Mr. Karet stated he already had that conversation with DCA and they have two primary issues which he discussed earlier. Councilman Hatfield made a motion to go to DCA and explore an extension and to bring this back to Council in an organized form, second by Councilwoman Martin. The motion CARRIED 5-0. GENERAL CITIZEN COMMENTS/CORRESPONDENCE John Moore, 2304 Fern Palm Drive, asked if they do go with an extension on the DCA matter, could they have a workshop. He feels it would work better if the Council sat down with the business people and staff and determine how to make it more compatible. Mayor Hayman feels they need to bring the response together and then if necessary they have a workshop. Mr. Karet agreed to bring this to a meeting of the Edgewater Business Association. Councilman Mitchum asked to have the Economic Development Board invited to that meeting also. Robert Pogg, 2925 Yule Tree Drive, commented on the cracking of the roads and the Engineer saying they already knew it. If all this was known ahead of time, why was this passed knowing the roads would crack. Councilman Mitchum commented on the two different conditions he saw. Cracking is customary due to the surface settling. He was informed the items that were defects will be corrected. City Manager McMahon commented on the soil cement subbase. He read a quote regarding the cracking in the roads. The roads have integrity of lasting 15 to 20 years. Mr. pogg commented on the heavy trucks going up and down the streets. He questioned that being a cause for the roads cracking. City Manager McMahon explained the cracks will not become a pavement separation problem. Page -7- Council Regular Meeting November 4, 1996 ~. ...", Mr. pogg again his property. situation with McMahon agreed commented on the ditch not draining in front of He doesn't want to see the City get into the same this project as the last one. City Manager to take his comments back to the Engineer. City Manager McMahon stated Halifax Paving is one of the best firms he has ever done work with. Richard Jones, 1530 Sabal Palm Drive, spoke about a culvert that was removed from his driveway. City Manager McMahon agreed to follow up with City Engineer Fegley regarding the culvert being replaced. Judith Lichter, 826 Navigators Way, commented on DCA's objection regarding lack of information. She feels it has been the LDRA's intent from the beginning to call this area light industry which already exists. She asked that once everyone expresses their input that it be brought back to LDRA. City Attorney Storey informed Ms. Lichter that is part of the process. Nancy Davis, 1100 S. Riverside Drive, when the Comp Plan was put together, the issue of changing Guava and Hibiscus from B-2 to Light Industry. She wants to know why DCA is asking to include the additional 650 acres allotted by the City on SR 442. That has nothing to do with what the Comp Plan was originally filed for. Mr. Karet explained DCA reviews these items in accordance with various ratios that they have developed for how much industrial land cities of certain population should have. Mayor Hayman further commented on Ms. Davis' concerns. Paul Jenkins, Willow Oak Drive, expressed concern with needing more barricades in Florida Shores marking the ditches. There are people who are actually driving through the ditches. He informed Council of a pond at 21st and Willow that is hidden that needs to be barricaded. Councilman Hays spoke about barricades being knocked down and run over. City Manager McMahon agreed to bring this to city Engineer Fegley's attention. Mr. Jenkins commented on the Comp Plan amendment. OFFICER REPORTS city Attorney Storey had nothing at this time. City Manager McMahon had nothing at this time. Administrative Assistant Lisa Kruckmeyer reminded everyone to vote tomorrow. Councilman Mitchum commented on the bike path and questioned if the people on the bike path have the right-of-way and if the cars are supposed to stop back at the marking before proceeding into traffic. He spoke about the kids he has seen almost get hit. He would like to see some markings that tell the people that they are supposed to stop at the stop sign. Chief Schumaker explained there are signs with a bicycle and ing underneath that could be put up. ADJOURNMENT: Councilman Hays made a motion to adjourn. The meeting adjourned at 9:07 p.m. Minutes submitted by: Lisa Kruckmeyer Page -8- Council Regular Meeting November 4, 1996