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09-21-11 Special MeetingSOUTH TAHOE PUBLIC UTILITY DISTRICT Richard Solbrig, General Manager Paul Sciuto, Assistant General Manager Dale Rise, President Chris Cefalu, Director BOARD MEMBERS Mary Lou Mosbacher, Vice President James R. Jones, Director Eric W. Schafer, Director SPECIAL MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT SEPTEMBER 21, 2011 MINUTES BOARD OF DIRECTORS: President Rise, Directors Cefalu, Schafer, Jones (via teleconference). Director Mosbacher was absent. STAFF: Solbrig, Sharp, Sciuto, Hughes, Brown, Curtis, C. Stanley, Hoggatt, Hammond, Attorney Kvistad GUESTS: Harold Hutson/Harold Hutson Construction, Claude Gunsch, John Runnels ROLL CALL ITEMS FOR BOARD ACTION President Rise opened the public hearing at 10:30 a.m. Staff requested that the contract with Harold Hutson Construc- tion (HHC), the contractor for the asphalt patching services project contract, be terminated due to substandard perfor- mance and failure to adhere to the contract specifications. The Board heard and considered all evidence presented by staff and HHC, including reasons why staff desired to terminate the contract, and objections from HHC. The following complaints against HHC's inability to conform to project specifications were discussed in detail by the Board, staff, and HHC: PUBLIC HEARING: ASPHALT PATCHING SERVICES PROJECT SPECIAL BOARD MEETING MINUTES - SEPTEMBER 21, 2011 PAGE - 2 • Inspections indicated patches did not meet specifications for asphalt mix design and/or asphalt thickness and /or compaction level; • Not all patch installations were not saw cut; • Open patches were left overnight and during weekends; • Failure to provide OSHA required safety equipment for working traffic flow situations (reflective vests and hard hats); • Considered to be a non-responsive bidder for failure to correct discrepancies and provide a schedule for repairs; • A verbal threat to quit work was received; • Non-compliance with requirement that patching be completed within 10 days of receipt of a work order; • Lack of performance in accordance with the contract. As a result of the above, it is the opinion of staff and legal counsel that HHC is currently considered to be in default under the terms of the contract. Mr. Hutson expressed his desire to continue work on the project and offered to provide a two-year extended warranty on his work. He expressed his desire to come back next year to bid this type of project, and work something out. The evidentiary portion of this Special Board Meeting was closed. Since Mr. Hutson previously threatened litigation, the Board adjourned to closed session to discuss evidence presented. 11:30 - 11:55 A.M. PUBLIC HEARING: ASPHALT PATCHING SERVICES PROJECT (continued) ADJOURNMENT TO CLOSED SESSION AND RECONVENE TO OPEN SESSION ACTION / REPORT ON ITEMS DISCUSSED DURING CLOSED SESSION The Board indicated willingness to authorize payment to HHC in the approximate amount of $14,000 as owed. The Board in turn will request the extended warranty as offered by HHC, and require that all patches be fog sealed at HHC's expense as he previously agreed to. A letter would be written in conjunction with staff and legal counsel extending the warranty as offered, and HHC would be required to sign release of claims that he has been paid in full for all work completed. HHC concurred with the terms as outlined. Attorney Kvistad stated the contract was not terminated; however, the District is not obligated to provide any further work past September 2. The scope of the release will indicate all work has Pursuant to Government Code Section54956.9(b)(1) Conference with Counsel - Pending Litigation (One Case SPECIAL BOARD MEETING MINUTES - SEPTEMBER 21, 2011 PAGE - 3 been completed under the contract through September 2, and the project has ended. HHC will be allowed to bid on future work with the District. Staff reported a partial payment will be made upon execution of the release and after fog sealing is completed. The remaining payment has been included with the October 6 Payment of Claims, and will be sent the following day. HHC received a 20 -day, $2,500 preliminary lien from Tahoe Asphalt. Staff will verify HHC reimbursed Tahoe Asphalt and Ahern Rental for outstanding expenditures. Dual checks will be issued to ensure they are paid. HHC agreed to the terms as outlined. Moved Schafer / Second Rise / Mosbacher Absent / Passed to authorize upon completion of fog sealing of all the patches that have been done by HHC, and upon reaching agreement to pay the preliminary lien that has been filed, that the District release a check in the approximate amount of $5,000 currently being held, and authorize the check in the approximate amount of $9,000 to stay on the warrant list for approval at the October 6 Board meeting. HHC will complete fog sealing as soon as possible, and HHC will provide the District with an extended warranty as offered for patches HHC completed for a two year period. Legal counsel will draw up a release of claims that is agreeable to both sides and be signed before release of money. Due to the actions taken above, the District does not have a contractor under contract to perform the asphalt patching services. If the District cannot immediately enter into a contract for completion of the asphalt patching services before winter temperatures prevent the asphalt patches from properly curing, and unsafe road conditions will pose a clear and imminent danger for the upcoming winter. It is necessary to take immediate action to prevent or mitigate the loss or impairment of health, property and essential services and is therefore an emergency pursuant to Public Contact Code 1102. Staff further requested the Board find that this emergency will not permit a delay resulting from a competitive solicitation for bids, and that immediate action directly related to the emergency, including repair of the non -conforming patches and completion of the remaining patching services are necessary to respond to the emergency, and shall be made without giving notice for bids to let contracts. Specifically, there is not time before the onset of winter weather to solicit PUBLIC HEARING: ASPHALT PATCHING SERVICES PROJECT (continued) ASPHALT PATCHING SERVICES CONTRACT/201 1 GRIZZLY MOUNTAIN BOOSTER STATION PROJECT SPECIAL BOARD MEETING MINUTES - SEPTEMBER 21, 2011 PAGE - 4 bids; award a contract and complete the review of necessary contract submittals in order to enter into a contract and complete the work prior to winter. The District presently has Thomas Haen Company, Inc. (Haen) under contract for the 2011 Grizzly Mountain Booster Station Project. Haen has indicated it is willing to undertake the patching, both repairs to nonconforming patches and uncompleted patching services. Staff requested the Board approve a Change Order to Haen's contract for the asphalt patching services. Moved Rise / Second Schafer / Mosbacher Absent / Passed to determine an emergency exists pursuant to Section 1102 of the Public Contract Code. Moved Rise / Second Schafer / Mosbacher Absent / Passed to determine substantial evidence has been presented to authorize an exception be made to Section 22050 of the Public Contract Code that this emergency will not permit a delay resulting from a competitive solicitation for bids and that this action is necessary to respond to the emergency. Moved Schafer / Second Cefalu / Mosbacher Absent / Passed to approve Change Order No. 1 to 2011 Grizzly Mountain Booster Station Project contract, to Thomas Haen Company, Inc., in the amount of $40,000 for the asphalt patching services. 12:10 P.M. ASPHALT PATCHING SERVICES CONTRACT/201 1 GRIZZLY MOUNTAIN BOOSTER STATION PROJECT (continued) ADJOURNMENT Dale Rise, Board President South Tahoe Public Utility District ATTEST..<�z� Kathy Shar. Jerk of the Board South Tah.e Public Utility District DATE: 1' ` 1- 2 v i' BOARD OF DIRECTORS SPECIAL MEETING GUEST SIGN -IN SHEET IN ACCORDANCE WITH THE BROWN ACT: COMPLETION OF THIS INFORMATION IS VOLUNTARY, NOT MANDATORY, AND IS NOT A PRECONDITION FOR ATTENDANCE.