Memorandum

City of Lawrence

Utilities Department

 

TO:              David L. Corliss, City Manager

                        Cynthia Wagner, Assistant City Manager

                        Diane Stoddard, Assistant City Manager

FROM:            Philip Ciesielski, Assistant Director of Utilities

CC:                  Dave Wagner, Director of Utilities

                        Toni Wheeler, City Attorney

                        Charles Soules, Director of Public Works

Mike Lawless, Deputy Director of Utilities

                        Beth Krishtalka, Assistant to Director

DATE:             January 6, 2014

RE:                  Agenda Item – Execute Settlement Agreement and Mutual Release with Schmidtlein Excavating for Project UT0922CS Airport Area Sanitary Sewer Improvements

 

Please include the following item on the City Commission agenda for consideration at the January 14, 2014 meeting:

 

Authorize the City Manager to Execute a Settlement Agreement and Mutual Release with Schmidtlein Excavating, Inc. for Project UT0922CS Airport Area Sanitary Sewer Improvements.

 

Project Background 

The City of Lawrence Airport is located north of US Route 24/40 about one-half mile east of 3rd Street.  It is a valuable asset to the City, currently accommodating over 32,000 operations annually and generating over $9 million dollars in local revenue for the economy. The airport is approximately 500 acres, has two runways, a terminal, 36 t-hangars, and several small on-site aviation services and hangars used by local businesses and individuals. The airport is an “island” of City property, located about a mile north of the City border.

 

Airport facilities had no City sanitary sewer services, utilizing septic systems instead. At the time the project was initiated there was an immediate need for additional sewer facilities at the airport. At least one septic system was failing, and a number of business inquiries had occurred for locations at the airport suggesting that the airport has more demand for business space than can be accommodated by existing water and sewer service.

 

Project Description

The project consisted of the construction of a gravity sanitary sewer collections system on the airport property to a septage holding tank at HWY 24 with necessary telemetry and odor control to serve the existing Airport Terminal Building and hangar facility as well as a level of development projects (see project map 1). The facilities are designed for future expansion with the construction of a forcemain to existing gravity lines in North Lawrence and the conversion of the septage holding well to a lift station. The project was designed by BG Consultants with geotechnical subconsultant services provided by PSI.

 

Project History

Following a competitive bidding process, the City awarded the bid for the project to Schmidtlein Excavating, Inc. (Schmidtlein), in the amount of $411,033.70.

 

Schmidtlein entered into the construction contract as awarded and the work was to be complete within 80 working days from the Notice to Proceed. Notice to Proceed was issued as of May 4, 2011 and construction activities commenced at the site on May 13, 2011. As of July 11, 2011 Schmidtlein had constructed 2,070 linear feet of gravity sewer and 8 manholes from the Airport Terminal and hangar area toward the location of the holding tank. See the attached map 2. At this point Schmidtlein initiated work on the 26 foot deep holding tank.

 

In July, 2011 Schmidtlein encountered more water in the installation of the holding tank than it claims to have anticipated at the time it submitted its bid.  As a result, Schmidtlein requested a Change Order in the amount of $184,200.00 proposing to add to the existing dewatering system. Staff and the design engineer, BG Consultants, requested supporting documentation detailing the basis for the additional work claim, the expected quantity of groundwater to be pumped and the detailed design of the proposed additional dewatering system. The requested supporting information was not provided for the Change Order request, and it was not approved. Additional proposals to add to, or modify, the dewatering system were received over the next 18 months which were not approved by the City.

 

After further review and study, it was determined that relocating the holding tank to an alternate location would be the most efficient manner to complete the project.  The relocation of the holding tank was not detrimental to the future operation of the system; however, it did require the construction of additional driveway, electrical and water services and modifications to existing manhole structures. Department of Utilities Staff reviewed the proposal to relocate the holding tank and the associated costs. These additional costs were approved by the City Commission on May 21, 2013 as Change Order No.1 in the amount of $24,777.55.  

 

During the course of installation of the holding tank at the new location the tank was installed and subsequently settled so that the holding tank leaned approximately 15 inches out of plumb. Monitoring of the holding tank has not indicated any additional settlement since installation and the installation of future pumping equipment to be installed can be modified to accommodate the leaning. In an effort to settle all claims related to the project and to avoid costly litigation, the City Attorney’s office recommends the Commission consider and approve the attached settlement agreement.  Under the proposed settlement agreement, Schmidtlein will be compensated $435,811.25 for the work.  This sum is $24,777.55 over the original bid amount. 

 

Project Status

The work was completed per Change Order No.1 and a Final Application for Payment was submitted on November 5, 2013.

 

Toni Wheeler, City Attorney, and outside legal counsel Sherman Botts with Lathorp & Gage, negotiated the attached settlement of the claim for extra work related to the unsuccessful dewatering at the original site and recommend the City enter into the Agreement.

 

Project Funding

Funding for the original contract amount is from Public Works general obligation bonds for economic development. Funding for the proposed Change Order is from the Department of Utilities non-bonded construction fund.

 

Action Request.

Authorize the City Manager to Execute a Settlement Agreement and Mutual Release with Schmidtlein Excavating, Inc. for Project UT0922CS Airport Area Sanitary Sewer Improvements.