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08-089-62SpMtg 191 AUGUST 8, 1962 A special m~ettng was held in the Council Chambers at 8:00 With Mayo~ Walte~ Diet-. in the C~ir, City Manager ~bert ~. City Attorney ~o~ ~oss A~s ~ Co~c~en A1 C. Avery, ~o~ge Talbot, ~,, 6eo~6e V. Wa~en ~d Olive~ W.. Weo~d, $r. bei~ sent. ~. George Russell ~d ~. F~ Os~een of Russell and were a~o p~esent. An ope~nE pray~ was delivered by Ci~ Clerk Wort~ng. Mayor ~etz calle~ the meeting to or,er statl~ that m~ been called pursuant to Section 20 of the City of De~ay Beach ter fo~ the pu~ose of ~tscussion with Russell ~d Axon relative thel~ c0nt~act with ~e City pe~taini~ to the Sewe~ ~tfall ~yst~m and that no othe~ business shoul~ acme before the Co~cll. Ma~o~ Dietz said there w~ ~ to be a meeting off the ~th FiScal Agents to dtscus~ sd~tl~nal fi~e~ng ~equire~ fo~ SZ,~OO;G~,O0 ce~tl~icates unde~ P%an O. w~h ~e Co~Cil approve4, Ssi4 mee$inE was Sche4uled fo~ 1.00 P,M. Monday Au~S~ 13th ~d City Clerk Wo~thl~ was to s~-notify the Fiscal Agents. ~e Enginee~s a~ee4 to have e ~epresentative present at that time also. ~ere was discUSSiOn concernins 6onsideration of the proposed Budget for 1962-63 ~d ~o~ Dietz lnst~cted the City Clerk to pre- pare notices for a Special Meetl~ for 1:00 P,M. Sat~day, August ll~h fo~ the Sole pu~o.se ~ f'0~ 'nb other purpose than to work on said budget. Co~ePning:.th~ ContraCt ~th:,~ssell. ~d Axcn'pe~t~ininE .to the '~We~' Ou.tfal~!'~tem, ~yor Dl~$:m~ked ~e Co~cll~ iD ~ere W~e ~y ~qu~'stlons~.~an~ ~a.t ~roced~e' theF ~i~ed to follow : :. ~.~:- Weoda~d seated, that ~he~e was a need f~ Clarification as to · he cha~ges ~e'.City is t~ incur, and that ~e o~y doc~ent that he Bas Is the S~tembe~ ~9, ~9~9 lette~ f~om Russell and Axon, which on page ~ gets into ~e..he~t of '~e matte~ Mayor Di'etz 'asked i~-Sec'tion 1 of the Contract had pice. ted, ~d City ~le~k Wo~thlng d'~ed h~ that It had been. com- pleted and that ~ssell. ~d,~A.xon"hmS' been paid fo~ s~e in' the ~o~t of $~,'ooo.oo. Mayor Dietz asked if this conceded ~e Sludge. P~ant o~ the Outfa~S~tem, ~. M~. Geo~.~s~e~l ~ai8 that' .that ¢~nt~ao~; call. ~o~t as ~. Wo~th~g.. had d~.elat~f~as apP~ov.~d'. ~y ~.~pe~' ~autho~- i.~es and that. ~e~m~a~hm$:~e~$i.O~ ~'~'lete~; ,~e~ that 'the additional r~po~m~.'~t w.e~e ~'~d?a¢'n~eoSt-'b~oahs'e ~ey .had them fo~ the. o~tg~n~:~,~e~:~;~': ~-:.~: .. ~' :~: ':' ' .~ Mayo~ Dietz ~s'l~'~ ~A~e~:~'e~ a~i~t~e~al rep-o~ts' that were ~:~ed, .~d I 'r~fer :to:; ~e TM m~pL' i,~: which. 60~' of the sewage produced aily.was to be. trowed: uhde.~:'~s 'mu '0utfall pl~t, is that ~rt ~. ~ssell ~wered ~at t~ was ~ additional service at no cost/by r'eq. ue~t:;'.. ~at' l~':w~s~.~a~.~l.i~ha~y report an~ WouId no~al- '.~:['.~me:.under ~a 'Sec'tlon"I"of~',u,~O4~,.:..but that lt. Was outside- ~ cDntraot, w~th. t~. Oi't2:i"a~:'w~.' actually 'come' ~e~ additional e~i~i~ services ~d ~a't there .was a p~ase, in ~ssell ~d Axon Booklet,. fo~:.additio~l '~in~er~'service, 'sa~d booklet' bei~ a part: Ug~.~e C'.ont~act with', t~~ ~yor. ~et.z a~ed.'"~hess Pt~s. tha~ we dm~w ~, these prelim, na~ plans, ~ch were d~a~ up for the p~esent outfall system w~ch is ~o tre~t'-80~ of"'~the s~wa~d~d daily in ~ay; ~s ,~a~ been · . ~. ~.. ;'~'~ ~"~ ] .... ~. Russell replied t~t, ~e has been no chamge for that. Mayor Dietz stated thmt Section 2 of the Contract is now to be considered, and as to the Sludge part of the Contract, asked if that had bee~ paid to Russell and Axon to which }~r~ Russell answered that it'had-"~fo~" the contract drawings an~ S~meCifications,._ Mayo~ Dietz fU~e~ ~tat~ ~S~o~f~'a~ as the Sludge Pl~t is concerned, that .i~ the en~ of y6~ ~Oon~a~t .~elative to .the .S'1udge. Plant~ You have been pai~ fb~ that?~'~ ~. ~us'-se11'answ~e~."~o~.ide~ you ~o not construct .those plus, that~ s toe,eot'." Mayo~ Dietz said that at this time now they' Were really starting f~om sc'~atth on ~ Outfall S~stem un~e~ Section ~ of a contmact and City Attoeney Ad~ sai~ that the City is also a~king fo~ appmopriate cmedit of payments that have~ already, been made. Mayo~ Dietz said that Would be beOu~t up later~ ~yor Dle.tz f~thee state~ that i.n the F. E. S. booklet· it ~ays that .any Job. o~er ~1,000,000.00 is' subject ~o negotia.tion between the ~lnee~s ~ the o~ers, an~ ~k~ if ~y- thing had been' done on that. with the .~inee~s. ~. Russell s. tated that had been done at the time of execution of the Contract, that that w~ the PurPose of 'the contract, to ~eD~ement the negotiation. Russe11"f~the~ oo~ented "~P' to ~1,000,O00.00 we have ,no discretion as to the ~nim~ ~ees we may Ch~ge, Beyond tha$ we do. We exemcise that ~isc~etion ~en,und~ ~e .teP~ of. ou~ 0ont~act we chaPge a fee less than 4% .oveP'$1',O00,O00.O0. ~is was the negotiation. ~e ne- gotiatio~s 'aPe entered into' at the ~lme of the-.execution of the engi- heaping contmact." Mayo~ Dfetz asked "Would I understand then 'that the ~ount of money that was Paid .you .fo,'the money ~at.-would have been spent fop the Sludge Pl~t is now disassoci'ated f~om ~his and ~e project is only a 2~ ~llion dollaP pmoJect and not a 3 ~11ion ~ollam 9mc. Jack? ~f a Job over ~1,000,000.00 ls subject to negotiati~n, is ~e not a $3.,000~000~00 'Job~ t~is'0Utfell System, dP Is it a ~3,000,000.00 less ~hat~waS'p~l~ on~ %he S'ludge-P~lant?. The.~credit.,~ as I understand it, is ~em~;%he~lanS~ha~t th$~ had..dma~ ~o~ the Sludge plant.would be useable fop the 0utfall plan and would~t have to be ~ed~a~." RUSs-%ll. St~te~ t~at'th'e~e were no plans of that fo~m, that none of them coUld'be~umed as d~a~, and ;-f~the~ e~lained concerning ~e cPedit. "~e riper .-item you Should.~de~st~d that the $3,000~.000.00 fi~e is a p~oJect cost which includes ad~nlst~a.tive, legal and engineering fees. Oum fees ama not based on that ~ount. 0u~ fees a~e Sased on C'onst~UCtl~n cos~ ~a~em than on pmo.Ject cos$, so in no event ~ou~ our. f$es..b'e based~:on any ~,O00,000.00 fi~e. 0u~ fees · 'are based' 0n. the total oonst~uoti.on ~ts ~ in ~the copulation of these fees we added the p~esent pPog~ w~ch is app~.oxlmate' ~2,~00,000.00 const~uction cost. A $3,000,000.00 pmog~ (~2,~00,000.0~ const~ucti6n.' '~ese aPe~mo~d fig~ee. Even that is ovem s~plifi- caslon' beCaUse- the, C~t~ac~t~ l~a bPoken into two Darts with different f~es fe~ ~ent. and lif~t'~st-atlon and mech,!ca1 desZg~.~ as opposed in essence by contmaot is bmOken in~o. ~aPts.. ~eLc~edit is. by virtue of the fact ~at ou~ contract is based on s sliding scale as the tot~~ 'C0~s'~ucti~o~"ao'~. inc~eaSes ~um percentage fee,.~ E~oss individual"sections' w~eheve~".wa~ ySu w~.t to look at it, d'ecme~ses, lowe~ net percentage fee. ~ad we not added it' tn,' .ou~ ,pe~.centage fee would be ~er." ~. Russell then gave a detailed i11ust~ation of the fe~S and"cmedits', ~ae ~011ows: "Under.. this 9ro~ now thePe ape llf~ :$ta~f6As,'$450,O0'O?00, that.,s ~ln~l-uded In th~' e'st~a~e. '~e fee on a $4~O"~O00.O0.P~oj~ct. In" eeCordenOe with this 'e~e. in the Nack of the 9lens ~And~ sP'ec~flca~i'onS ~a~e"~eD'~esented. h~ a cea. rain,line.., and each line represents 2/10 of 'a De,cent..'..It: w&Utd 'be.:~.;?~. on a ~450,000.00 Job rom lift stations only. ~e lift station and plant Work unde~ the p~PPer con~r~c'~ ~fo~ .1~.f% '8~1~on -:tot:ai"Dl~S'Dmepared.3oA..m 7'mech~ica,1 -des-&gn: To~:~. conetruO.ti:on coat of $7~0,~0.00. ~e (~450,000~'00 that we ama going to~epa~e plus the ~300,000.00 which we haye already DreDged, under the activated making a ,5% credit on that portion and the s~e thing is t~ue on the '198 August' 8, 1962 llnes,where~n we add Sa~$el smd' Interc~u$1, ty construction amounts, ~ ou~ satiated c~tr~t~o~ on ~e ~nes woul~ bsa fi~e of $~,100,000.~ I be~eVe, ~at ~nclu~es all [lines, eve~tB~ bm~ $ ~ch~oal des~. ~e Sutfall'~nclu~es ~avi~ l~nes, ~o~ed eve~i~ e~ept lif.t statio~. If'we we~e to ba~e, forgetting there ever had Seen ~ ActiVate~ Sludge Proart, ~1,000,~0.00 ~e first ~on at ~, t~ ne~'~ ~llion at 3.75%, .the. next ~' ~ .1~ ~lllon at 3.5%, $100~0'~.00 at 3.2~. ~at will ~ve a total. W~ didn~t get a total bUt I ~11 Show 2ou ~ difference." Mayor Dletz: "% ~ve a total-~7~O,O~;O0 on ~e lift statlo~ with a credit ~ ~/10 of a pe~cen~ on 'th· $~50,000.~." ~. Russell: "Now, the total o~ ~argel ~ Intercounty contra~$~ gas in ~e ~t qf app~o~tely $1~0,.000..00. Instead of us~g: $1,000,000.~ at ~% we p~es~ ~a~ $150, 000. 0~ h~ a~eady been. tllized ~d we say $8~0,~.0.00 ~t ~ ~ still ~ ~%1ion at 3.75%," still a ~ million 9t 3"~0% ~d ~%0,000.~0' ~t, 3.25%:; In Other wo~ we h~ve taken t~ $150,~00,00 f~om ~e 4% sa'tago~ ~d Put it in 3.25% which gives yod' 3~ of 1% times. ~e (~150,o00.00 s~vings ~e total diffe~ence~ l~ori~ the origl,nal progr~ or including origin1 p~o~ is :~3,a25.00 savl~s tO the City of De~ay Beach. ~at is ~e ePedit for the pl~ a~ specifications p~epa~e~ ~deP the Activated Sludge ~o~." Mayor Dietz state~ ~at ~is bPings ~em to ~e construction pla~ and contract specificatio~ ~t are going to be pmepared undem Section 2 of the Con,act, ~d asked ~at ~as to be negotiated there. was oo~uted. ~e question amos:e ~eOause of ~ te~ ~ '~e aU'thom- PsOn6 ~esolut~on. It wasn, t e' question, ~t was scme~n6 ~hat we lieve that was a ~esolut~. I lmow ~t was o~ notSficat~on, from ~ich ~s.on a proportional ~as~s of $1,~78.~6. ~ls ~s on a baS~s B~2or Dietz asked of ~e ~neers ~d .the Cocci1 "D2d a' vious ad~st~at~on s~ a contract on beha~ of the City of Beech fo~ a sewe~ contract ~n ~e ~unt of ~6,900,000.00!" ~. ~ussell: "For a co~m'eheneive sewer pro~ cover~n~ the en~l~e O~t~. They w~te~ a pPeli~na~2 e~neem~ stud~ mede fo~ ce~ehensSve sewe~ syatem f~ the ent~e C~t~ of .De~a~ f~om which the~ c~ld select a prosr~ as the~ des$~ed. ~s was ~ ~. Talbot ~ave h~s ~de~s't~ of the set~ ~ follows~ "On 8eptembe~ 30, 1959 the Council at t~ t~ entered $Dto a contract ~o~ a cO~ehensive ~epo~t.'of~ch the2 were .to pay ~,000.O0 afte~ a certaSn n~bem of ~opSes had been f~nished. ~t was corn-, ~. ~ssell~ "~at'$s correct; 'It was a co~ehens'$¥e' ~ it wasn, t ~elated to ~y-~von p~o$~. It waS.to 'c6ver ~he: whole cit~. so 'that the Co~ss~on. coU~d: select ~ pmc~ themef~om. ~. Telbot~ "As I ~ecall the ~epo~t so states, the contract sta~s, that when ~ ~f you ~eceSve ~.e~eer~ cont~act ~ sewe~, whateve~ t~e ~t be, ~at the .Cit~ woul4 Be given c~ed~t of ~,000.00. Am I co~rect~' And':.~n a~it~on there was to be a ~;' Russell. · ~at ~S co~'ect w~th certaSn stipulations contain- on .the old plant is stated this way 'in the event that the f,~mal pro- Ject'scop~ included those areas for which £1nal plans and specifica- tiona.~,are nOw'.On file with"the .City o'f ~el~y' ~%il~t w~s' a, Stipulation aS re'~'ard~ that last credit. ~s.'~egards th~ first credit it says ,also,agrees t.o deduct the cost mol the comprehensive repOrt as paid under 2ection 1, from the total amount dU~ .under this 'seCtio~' which 'will be the total fee when and if you ever build the' total $6,900.~000.00 pro. gram. I' was reading direct from the Contract dated Septer~b'er 30, '.1959." Mayor Dietz stated that his question had not been answered and self, by way of contract., ~oP your services i'or a se p total amount of $6,900,000.007" MrS. Russell: "As authorized." " . ~ . Ma~or Diet~: "~at doeS' that mea~.:, aa authorized. That me~ns if we got~ $3,000,000.00 and. then we sal~ we don't want Russel'l and A'Xon~-we want' another~ Company, ~e are' free~' to ........ " Mr. Russell: "You would lis:Ye to terminate o,~r contract'." ,.~6,900,000. Mayor Dietz: "~hat' would that be? A termination 'o~ ~ or a termination on what has taken pi'ac~.. ~p to date." }ir. Russell: "It would be e terrmination under the terms of the c ontr ac t." · Mayor Dietz asked City Attorney Adams what that would be and Attorney Adams said that it calls for mutual' termination, release of claims ~4~ld q~t~d ~'a'll Sections' herein. Cohtained constitute' the com- ple~:e.: Contrag't .and'~'~re~ severable 'o~:ly by.:l'~r~, tual Contract'. and stated -tlhat'~he feit this ~as going beyond the "Pbiht' .that is' necessary at : this ;tiros. '-Mayor Di'etZ said bhat it Was ne"ce'~sar2 to him not partic- dIamly'right' now but~was thinking of four~'years from 'now. That the City has'made an 'adjustment' with Russell a~d Axon in a' matter of C'r~dit of ~ 2.GO which'was figured' on the' basis, 'that' was a credit against 'th~.AT'5% of the $~2~.,855~O0,..and~.'tbe. c'r~.~ n~unbrator anti $6,900,000. OO .as the den..0..m!~.a~0r, L.~xme. s.~l~°_~°~.~ ~wn~C~o · Eav'~ e credit of-the City when 'they pale ausseli anc axon s. ~,u~. bill the c~ity paid ~19','000.00 odd.~ FUrther that' that. ,:~'bill means to him that in a portioning a $4,000.00 charg~ and using ~6,9OO.00 that the City of ~raY' ~each has committed to ~' contract', of ..$6,900,000.00 · ~nd if that w~s not th~ case, he would~ like' t'o h~ve it in writing from Russell and Axon. Mr.-'Osteen stated that it was in writing, in the contract and ,~n~atned as' follows:~ ,,For.'jl4:iOO0.O0 Russell and Axon preps_red a com- '~.~Sive ~ine'er~ng repor~ c.OV'ering t~e~.~tire, city of. D.elray ~eaC~ in' ~h'~ cos:t estimates were made and preliminary ceslgns macs for both an Outfall System and a Sewags Treatment Plant which would ultimately serve the entire City. Now, when and if the-entire, pro- gram ~as' built; wi~igh :co~.ld ngt" "t~k'e .plade' in: any bna program, the · "b'otal cost was"'esttmated~"~o~be: ~6'~900',"000-.00.. I~ this Bection 2 it state'd that we' Will proceed with final plans and 'spect~l~a'tions on a "scoPe' d;ec ided UPOn "b~ :the 'o~ne~~. '~'Whe'n ~ '~do .~inali'''~s a?d spe.cif- ications, the proportionate share of tha~='tro~al progr~' thc= was cluded in the preliminary report is credited against your plLans and sPecificAtion~ f~e,. N:og, you ar"e going t6 Say thiS; ~hat the Council ha~ noW Au~hori~"~d ?Ruslell- ~nd AEo~ un'er ~the '$.3,000, O~0 ~ O0 p~o'gr am to p~epare "~ians ~and 'specificationS;' are ~s. commit~ed tO go~ on with yo= ~0.$~, ?~0,ooo. oo?". : . ~M~yor; 'Dietz'~ "That is my -ques-tion.," 195 August 8, 1962 .Mayor Dietz: "That applies only to the $4,000.00?" Mr. Osteen: "That's ri.~ht, but you are free to terminate us under the terms of the contract." ]~ayor Dietz: "If that applies only to the ~4,000.00 my question is answered." Mr. Russell stated that there was another point, but that it wac minor, and e~plained "The advantage or the additio~a~ credit that would get aside from the amount which would be remaining of the $4,000.00 would be the fact that under the project cost~ for lift tgems, etc. on the next program, if and when you have a next program, we will be in the 4% bracket instead of in the 4.2%, we would have~ slid out to the minimum fee. We are already at the minimum fee on the lines so t~at everything would be in the 3.25~bracket, whereas if you were to start with a new engineer they wou~ hawe to start at zero agaim and their fees would be more." Mayor Dietz: "For the record, I understand that-Russell and ~xon have said .that the ~ ~6,900,000.00 applies only to the apportion- ment of a $4,000.00 fee and if it only-applies there, I have no further concern." Mayor Dletz then stated that this. is .an official meeting and anything that is said ia official because an official contract is being~ discussed~ ~r. Russell explained and gave an exarmPle of why this would have to be a proportion.~t$ credit., and that ~he Councilmen. at the time the Cofltract was: madei~ndersto~d it. ~r. O'~teen explained that when a program' of this nature is' enter- ed into it is mo~e or less standard that ~consulting engineers be retained. That is set up in the bond ordinance for the pro. tection of the bO~d~hel~ers~ and tha~ is' the~eason that these contract's are written as continuing contracts, but they do contain a severance clause so that at the end of a program the services of a~ cpnSultlng engineer can be tsr~ui~ated~" ~an~d '~an0the? engineer, employed, w~th no penalty. Mayor Dietz stated that it c$~ld' conceivably be that the City could cceaplete the $3~00'0~000.O0 program and then a lapse of time and a change would' take place in Delray, and he didn't want Delray Beach to have a continuing liability to the Engineers or the Engi- neers a continuimg program against the City. Mr. Russell said that the only liability the City has is t~& p~operly terminate Russell and ~xon under the contract, and ~theY would have that at any 'time, and that would only be for what ha~s been done up to the present time. N~. Russell ~explained as followS: "We have gone through the credit on t~ne ~eport. The further credit as delineated by Mt. Talbot is a credit for plans prepared under~a loan made by what is now known as the Housl~ng^and Homepi~ance~Agency. The loan, I believe, was in the amount of ~24,500~00 ~We agreed to give the City credit in the amount of two-thirds of that'amount, or 016,333.33 making a total credit ~foP~ldPlans'and the~ep0rt ~f $17,811.53. If you e~e~ do ~he $6,9~0,000~O0 ~there Will have been a total $20,000.00 credit,-it,s $4,000;00 plus $16~000~O0/":The~differe~C~ in 'the figures is because of proportional credit. This gives a fee. through this computation in the~amomnt of $~5,8~%.O0'based'on-estimated monstruction cost. Whether or not'tHe City .owes ~to the Housing an~ ~Home Financi~ Agency $2~500.'00 is ~not~ a~matter for:your consulting E~gineer to ~ecide or particularly have an'oPinion. ~HoWever, we feel that i2 ~a~ iltem on our ~mvOice 'appears in 2our offi~$al records, which they have a right to review any rime'you construct sewers, thatyou wll! au~o- matically be required tO pay ~h~:i'total amo~t, because~y0u either pay nothing or the total amount. Soby virtue of having accepted this credit of around $i6~000.~00, delineated as being for those old~ plans, you automatic~ally .... PUt.~he.Cit~ in'a position of paying to the Government,. in Our opinion,, .,~;500.00.. . . .'Ye "felt that it migh't be.;~b. your advantage not tO deXiaeate.what'the o~edit was for but Just'~o delineate ~' tbtal"amou~tl ~ha't eove~s'~th~, ered~'point,u -. :" !:" ,'.')[. · 8-8-6a August 8, t96a Mayor.'Die~z asked.the"CitY Attorney and the'City Clerk"In view of the fact that it may be, if Atlanta so eleots,.that we are to. pay this'$..24,500.O0, and since the.'Engineersare going to give us a cred- it of$16,333.33, what must we do no~ in' the Bond Ordinance so as to be sure so if we do have to pay this that it doesn't have to come out of general funds, but comes, out of the. bond.f~nd" Attorney Adams inforraed the Mayor that that would be taken care of by.thePiscal'Agents, as~in order to validate the bondsyou have to show.that, there'is..enoughmoney. . }~.RussellsSatedthat-"-the Bond Ordinance would stipulate what is proper expenditures of these funds, one be fora. engineering fees, further that 'this .$24,500,00 is. and was an engineering fee, therefore,. ' is a proper expenditure of the proceeds of Revenue'Certificates , Mayor DietZ'asked that~the Oity ~Clerk~make such notation in order that it will be made known to the Fiscal Agents. Mr. Russell stated~tha~ there was.enough money'in the contingency estimate to take-~Careof.~$hah, because~i~ is~a ~ontingency~item~ and -since~ there was no~wa~ of~knewin~'what ~tXanta, s~decision is going to be~,-enoughmone~had to~be~inclu~e~ln t~a~coS~estlmates of the en- tire project in the event the Governmen~ said that the City had to pay said amount. Following further comments and discussion regarding the possible repayment~ of the $P/~,5~O0, ~Nayor Dietz stated that he wanted the Press to fully unders~tand ~h~t hadfbeen discussed and that it was not an obligation of the City/-whlsh in.~any~waywould be re- flected in Taxes, but would be taken care of from the bond fund if it did have to be ,epaid, and had nothing to do with the General Funds of the~ity 0f.'Delray Beach, ~ ' Regarding the cormp~$ati~n of the. fees, Mr. Russell commented as follo~si"'."The estimatedfees are actually .acCording to the terms of thec0ntract~ based on an.unknown factor at 'this time. The.unknown fab%oryis, the conitruction cost. You haven, t taken bids yet." Mayor Dietz asked "Is it not true that the engineering fees are -apercentage and that they are applied to the final accepted bids t~at" a~e.made'by .the~ Contractors? I'm aSk£~g' this ques~i0n 'because Something.'~has been Said'around'this office about cost-plus. There is iMr.tUssell stated that there Was a cost-plus item in Section 2 COhO&ming ToP0graphioSurveys. Mayor~Die'tz stated that his questions were all asked on the pr~esupposition that we are drawingplans and will receive bids, and these bids will be 'for the complete ~system that w!li t-ak~, care of 80% of the sewage, that £s'dailY produced in.the. City .of Delray..,Beach, and if his .questions refer to anything else he will so modify them. Mr. Russell read from-the Cont'rac~t 'a fee-equal to the fee stip- ulated, the owner shal!pay the engineers a fee equal to .the fee stipulated in the'.f011oWing schedule which is based upon and in s~rict a~cordance with the schedule Of basi.c minimum engineering fees reconmiended'by-the F10~id~"Eng~neering Society latestp~blioation which is .attaChed.he, t0 and made a Russell.then mead £mom the. F. E. 'Services inCluded,,and Section'~. dr. page6,' 'Engineering Services no~"inClUde~,.ln~S~hed~le hr,Fees. ,a~o stated that ~t~ese items are ~0~ l~lUded in 'the..schedule of,-minim~ fega but are 'heoeasary. for tbs p~rformance of~ the ~0rk ,andl must ~'p&rformed either' by Russell ~nd ~XOn or' by.aCg~edited gr.odps or b~ the City.. ~ , Mayor Dietz Called particular attention to Section 4.3-on pages ~ &'6'Of,the P..E.S. B~oklet,,and gave an illustration Of something ~hat 'had..happened inPOr~n0severalyears agO. ~. Russell stated 'that perhSps aa. A~result~f~that incident, one of the provisions of '~H%~¥ p~e~htp~ggr'am themg~S~that the Consulting Engineers. are.re- quired andarg~paido~ ~UoS'~Zp1~s basis 'to prOVide'resident s~per- vision of the construction program when it commaences. 197 Amgust 8, 1962 Thore was further disc.ussion as to how the Engineers fees wets computed and what the total fee would be. Mm. Russell stated "The amount of fee for the.~survgy is estl~ mated, as all of this had had to be estimated, at ~16,181.25 out of a total fee of $116,-000.00 plus." Mayor Dietz: "What you are saying there is that it is infini, tesimalin fact-that the fee, nevertheless, while it includes that~ s only $~6,000~ 00 to that ~.you would ggt .}he. ~ngi~mer ! ~ .fee? o the only par= of the c.Os~PAus that is xn oec~mon~wOuAo, as estimated, be a maximum of $16,000.00." Mm. Russell said that was correct, and commented further. "Th~ is based on some very exact costs. We anticipate, and have alread~ done a lot of work on it. We are doing the surveys of .this city aerial methods." Mayor Dietz: "Then for .all practical purposes, eliminating $16,000.00, it is true that the Engineers fee is a percentage of tbs accepted bids and if the bids are .not changed, that will be the Mr. Russell: ".That is correct, sir. I don't like to be tach, nical, but since we are goin6 to go into detail I want to make sure everybody, understands it." Mayor Dietz asked "Now will you tell us what the engineers suggest the fee on a percentage basis, will be eliminating this $1g,O~0.OO .thatt.s~the resu!$.pf'~a cost-plus.~ Hr Russell: "May I explain my proposition which doesn,t exactly fit.that quest$on? The computed fee .assta~ed including-the surveys is' $1i6,060.00 .plus, m$.nus$.3,225.00, minus a credit of $17,811.53, giving a total ~ee of $95';800..00 plus, based on o~r estimate. May I take that back to our original percentage which is estimated all through this program which has been4%of theconstruction cost which would be about $100,000.00. Here are th~ figureS~ estimated construc- tion cost which would be about $100,000.00. Here are the figures, estimated construction cost.~-Lift Stations, $450,000.00 and that fee would be 4.2%, and i explained ear~ier why that would be ~.2 as op- posed to 4.7 and that amounts to $18,900.00. That's all the mecha~ nical design involved in the program. On the iines, the first $850,000.00 a$'.4%, .that'figure would be $34,000.00. The next half a million, or"$500,000.OOat 3.75%, that figure Would be $18,750.00. The n~xt $500,000.00 at 3.50%, that figure would be $17,500.00..The next $250,000.00, whigh gives a total, of $2,100,900.00 at 3.25%, that figure would be' $8'~125.00~. The surveys at $16,181.25, are a total of $113,456.25. The credit'for the F.W.&. Plans in the amount of $16,333.00, a credl~ for our report in the amount of $1478.20 are a total credit of $17,811.53, or a total fee, ~educting the credit from the original amount computed (~95,794.72 b~$ed on our:estimates~'' This is a beginning." Mayor Dietz asked what the City gets for $95,800.00. Mr, Russell replied "You receive seven eompl'ete Sets of the project contract drawings.and specificationa.~ You further receive our attendance at the bid te$ting,..oU~, tabulation end enalysis of !the-constructionbids, ou~:,recommendation ~of awarOS, our contract with the contractors.to enable you to get competitive bids and ~ncoura~e competitive bids, and we.'will receive the approval of the: State Board of Health'on our COntract drawings and'specifications, and 'you receive a complete set of plans,'.sealed by the head of the Bureau of'Sanitarian of the State Board of Health for your files. Assis. tance in advemtislng~ and you also receive our attendance at neces.sary..conferenc'es .with the Fiscal Agents and with the Board. of Health.'~ Concerning opening Of bids, Hr. Russell commented: "We Would like to do the awards this way. We would'like to s-tart Construction Bid taking' in the morning. WewOUl~ like ;to receive all bids, check them'all for regUla~ity after receiv- ing them. TUrn over a copy of the bids and 'the bonds to the City Clerk for.your files: a~ take the additional two copies to our office with ample time~ something in the order of a couple of weeks, and check and tabulate them. Make an ~analysis and a written recommenda, tion to the Oommission, meet with the Commission and then they would 8~8-62 AugmSt 8, 1962 make the award. Th'a't. is the P~.ocedure tha't ~e'wouXd prefer."' After agreement f~om other-Councilmen, Mayor Dietz informed': M~. Ru'ssell, that that procedure would be followed. ~tr. Russell stated "We have com~uted a fee in the amount of ~95,794.72 based on estimated of construction costs. That is under Section 2, NoW comes our .proposal.;' This fee is 'due when the approval of the final plans and specifications by .the 'State Board of Health is obtained, 'and adjusted when bids are taken. Our payment is not referred to the bond m0~ey, it is a proper expenditure." M~.. Russell continued "There are three factors facing the City. One, es mentioned before, is the question of the loan from the H.H.F.A. which if deducted a's: a credit by us to yod we feel wOuld"Jeopardize any chance you' may have 'of not 'having to pay this money to the govern- ment. The second one is the fact that these are geared', as has been pointed out several times during this discussion, to construction bids and theref6Pe are in' 'an unl~now~' amount~Which can either go up or down, from these figures. The ~rS~ is that the City has sold some $500,000.00 worth of 'revenUe certificates and has funds available. Those are the three factors on the Cityls viewpoint. From our viewpoin6 it costs us money t'o finance the entire 'cost of this work during the' course of the preparation of the plans and -specifications, so it would be advantageous to our firm to be paid monthly as we go. We are perfectly willing to reflect this advantage to the City, in the manner of a diScount-for .periodical paYments, the discount being in the amount of 5% of the' gross fee. This has 'only to do with the terms of payment under Section 2~ In order not to Jeopardize the City with the Federal G~vernment by virtue of the method by which you pay us, or what you tail it, 'in ordez; that there will be no doubts as to the engineering fees we would propose this Which we would feel is to the advantag6 of the City.'"' ~L~. RuSselI then read their proposed supple- mental agreement which is attach'ed to and'made a part of these minutes. Mayor DletZ stated that he felt the contract work would cost less next April, ,r whene~er the bids are let, than if the bids were taken now'and that it would be foolish to take a fixed fee on the basis of an estimate. FUrther that the Qity would pay Russell and Axon cash as they go and avail i'tself of a 5% 'discount and still not be a fixed fee basis. Mr. Russell stressed again that, in his opinion, the City would be giving up $2J~,500.00, as they would be giving the Oity Credit for the plans 'and that would have to b~e a matte~ Of record, to which Mayor Dietz asked for the City .Attorney,s opinion.."Attorney Adams said that he didn't see how a credit could be concealed, but that he has not had the experience with the Government that RusSell and Axon has. Mayor Dietz stated that he would adhere to the Contract made with Russell and Axon by a previous Council and wouldn't wish to change it unless there were so,ua errors of' some kind, and that he didn't see the need for a change. Mr. Avery expressed 'his opinion as definitely favoring a fixed fee basis. Mayor Dietz further remained the Council that Under the contract they could avail them- selves of a 5% discount .and still not agre.e upon a fixed fee with the engineers. There was lengthy general ~isc~ssi0n concerning whether it would be de~e~mined 'that' the' old Sewer plar~# financed by.the Government had been Used in' any detail' in ~t'lte p.ropoSed'' sewage disposal plains which would 'c~us'e the G~Vernment to' 's'~y that they. WOUld have to be paid for. Mr; RuS~seli'~tAted ~'that 'their fi~m would go ~s far as a 'trip to Ablanta at ~'ei'~ o~ eXPense~' in ~aasis.~ing the ~Oity'"~ this issue. There was also'further general discus~i'on 0oncoming the fixed fee basis to ::RU.SSeI1 .~d' 'AXon. ' Mayor Dletz asked Mr. RUSsell to explain Section III' of the c6n~ract regarding 6~nsulti~g s~rviceS~, and"'further to explain Section 4~'3~ 'o.fj'the Fi.' E~ $. B0~kle~ a~ .~t~o whe~i. 'the City WOUld-'receive any guarantee o~ prOtec~fon Under i~. -8- 8-8-62 August 8, 1962 Mm. Russell cormuented "That is an engineering service. You can- mot start construction without base line and controlling elevation. This we do. This work, as all our work, is proper. The' visiting work periodically as often as necessary, which means controlling the program and to see that the design intent is carried out, reporting to you on.the progress and guarding you against defects and deficien, cies of the work of the contractors, but we do not guarantee the pert fo~mance of such contractors. They guarantee it themselves by a 1005 performance bond. This would mean that for a fee of some 1.~5% we would guarantee 100% of the work. This isn't standard practice. I think if we did that our fees would be a little higher. We do not quarantee the performance by the Contractor." Mayor Dietz: "At this particular point who determines that it calls for a 12" pipe and they put in a 11" pipe. Who determines that that is wrong at this particular point of our contract?" Mr. Russell stated. "We do. We guard you. againist it, we dontt quarantee it. A guarantee implies that we would .stand financially responsible to replace the pzpe. The contractor stands that." Following general comments Mr. Russell continued. "We design a system around a general piece of equipment and then we make certain that.what is installed meets the intent of the design. That is the basic funda- mental purpose. We further control the payments to the contractor~ by monthly and final estimates, so that you do not~ pay him for.more work than he performs-~ Those are the services as specifieally included under general supervision and as differentiated, and rather obviously, under general supervision, in order to guarantee the performance of a contractor, you would have to be there. Yould have to be there more than 100% of the time. You'd have to do it yourself, but we will say that under general supervision of the contract, you could look at the thing on the final inspection and the periodic inspection and deter- mine that it is in general accord with the plans and. specifications. You can check the material lnvoices.~ You can check the materials." Following general discussion of supervision of the project, Mayor Dietz stated "The point is, according to our contract now, we will use Russell and Axon during construction and that Will cost us a percent and half of what? Of Construction cost? It,s obviously up to this point Russell and Axon has no responsibility other than drawings so it is only to the best advantage to the City of Delray Beach that Russell and Axon be given the resident supervision because ohly in that way can you gear them down to where it's their responsibility, so that would be only good co~maon sense, but that is through, according to the contract, by some agreement that we,ve got to make. We want to ask you now, what does that mean?" I~. 0steen: "It is understood that the services described in Section 4, which is resident supervision that you are talking about, are entirely at the option of the owner. If 'the owner decides to avail itself of these services, it is agreed that the fees to be paid to the engineers for said services would so be negotiated by the parties here- to at a time when the owner ia better able to deeide on the extent of the services that will be required." Mr. Talbot asked if consulting servicas and resident services are two different things', to which Mayor Dietz and George Russell re- plied that they were to'tally different. Concerning cost for resident supe~vielon,- Mr. Russell commented "We will be glad to operate under the .terms of the'minimum fee schedule. Many cities desire not to do so, which calls for cost(cost of my resident engineer) plus 50%. There is a proposition if you want to accept it. Another method is a fixed monthly fee per man, computed on the number of crews operating. I can't tell you how many men at this time. One contractor.may come in and 'put on five crews, another only want to put on two. I can't tell you until such time as I have a con- struction progress schedule established, how many men." PollOwing other corm~ents, Mr. Russell continued. "An example which has been done in this. area, a typical cost per month for a Chief would be $1,000.00 and for an~Lnspector would be $700.00 per month] A'~flat charge .man, which has been Used in another communl%"Y.'in this County is ,~800.00 per month. That is a flat charge, with no.'~xpenses~' nothing added to . -9- 8-8-6~. that. This starts when the contractor, moves on the ]ob .and the number of men will vary as the intonsity of the construction picks up and slacks off." There was lengthy discussion and exa~31es given of the number of men required for resident supervision and the length of time that they would be on the Job, and the cost per month of such supervision, and. it was determined that resident supervision should be in the ,':',,~8, ooo. neighborhood of 00. }'~. Osbeen stated that the cost of resident supervision USually was about ~ of the construction cost, for an adequately inspected' Job. Mayor Dietz then asked what guarantee the City would get from Russell and Axon for.this service, to which 2,~. Russell answered~ fha% they would be responsible to see that the Job was built in accordance .with the pla~s, and specifications, pr~ided that they are allowed to put on the number of resident supervisors that are required. The question wa~ asked of Russell and Axon as to how long the guarantee e,ncerning the sewer system and it~.s installation would stand good, Mr. Russell answered ,,We would ~certainly stand good as long.as any bond .stands good.. A bond stands good one' year.after completion and-final~inspect~on and Dayment.' One-year.from that date the work is gua~auteed against 'all materials~, defec, t~,~workmanship, etc. Beyond 'a year it becomes' a..~ery diffioult.~dete~mination.whether or not the fault lies in the designed construction or the operation." Mayor Dietz: ,My question has to do-with? the fact that a 12" pipe was supposed to be in there and we wound-up with a t1" pipe." Mr.~.Rus~elt: "That would, be our responsibility, because that would be a defect that was apparent. That responsibility would.-be for the duration of Russell and Axon .as a consulting engineering firm, and I might add, the duration of our insurance~company. · Mayor ~Dietz Stated that the. contract further 'States that the City must .get. a ~,aan'.from Russell and' Axon to operate/the system, to which Mr~.RUsselii..Anawered that it sai~ they may get a man from Russell and ~xon. Mayor Dietz asked:' ~'"What is our status now? We have asked the Engineers, ihave we~ not, t° prepare the plags and ~you ar~e in the process of Section 2. Doing everything under Section ~." Mr. Avery.: uMr. Mayor, if it is.proper to take some action at ~his time, one wet or the ether, I move that the Mayor be directed to sign the s~upplemen~al agreement as presented by Rusaetl an~'Axon - subject to the City Attorneys approval that the mo~ey that we have available can~ be. used." Mayor Dietm~ "Aren~ ~: you going too comprehensively? Would it not be better to t~ke it---the question at stake is---nobody is at variance with the 5% but I think we ought to have an expression of opinion from the Counsel in the form of a motion on the basis of whether you want to ehange the previous con~ract to a fixed fee b.asi~ from the basis that it was originally signed.." . 2I~. Avery: "My.· motion is, they presented a supplemental agree- ment which is inclusive with the fixed lea.amount and I womld like to make a mott~ because I so thoroughly feel~, and this is besed on my business experience in this thing, because we have per£ermed this type of puh~!i~ works ~ype of thing, I~feel that~ the fixed fee~is by far bette~ thwart the percentage~which in.effect is a cos~ plus arrangement from the s~andpoint, ef incentive and rising and falling prices and t~ese thin~s,~think it is· fa~ better~buainess so I~ move that we direct the Mayor tO s~g~ ~-the supplemental agreement~as presented to us b.Y -Run,eli and Axon'~" . ' .Mayor Die,z: "But.there are two points in the· supplemental agreement. There ls the 5% d!scoun~ 'which I'm for .and you are going to ma~e me vote against the 5%.disc0unt. ?10- 8-8-62 20i August 8, 1~62 My. Avery= "The supplemental agreement, I think, is ve~ good business." .Mayor Dietz: "I don't care~ but why dontt you make your motion of whether the Council wishes a fixed fee ~basis or the basis that is under the contract. Wouldn't that be the proper thing?" Attorney Adams: "It' mi~t .be simpler that way.. Do you have any objections to that?" Mr. Avery: "I have no objections. I move that the Council accept the Eixed fee offer as presented to us by Russell an~Axon in the amount of $96,000.00. Is that spebific enough?" 1..~.~arren: "Is that what you had in mind." -Mayor Dietz:,"I th~ that is the nature of the first-motion that should be made, to determine whether the Council wants a fixed fee or wants to stay.with the contract.~ The motion was seconded by }~. Warren and upon call of' roll, Mr.-Avery, Mm. Talbot and 15. Warren voted in favor of the motion and Mayor 9ietz and Mr. Wooflard were'opposed. The motion carried. Mayor Dietz: "I think the Council has expressed itself on a fixed fee,' now the motion is in order that the Contract,be amended in accordance with a ~ixed fee. What would be the legal counsel.s advice on that." City At$orney Adams: "I think that is true. You would have to have a suDplemental agreement." Mayor Dietz': "And what motion would you want counsel, to-have a supplementaI agreemsmt to this agreementor September 29th, 1959. I want you to make the motion, to give the wording." City Clerk Wor~hing: "Your honor~ I believe that the City. Attorney should be directed 'to prepare such instrument to provide for that amendment reflecting the action of the Council just ~aken." I,~. ~very: "I so move." The motion was seconded by Mr. Warren and upon call of roll the motion carried unanimously. .M~Rvery: "Can we talk about the 5% discount now?" Mayor Dietz: "No. It,s done. You've got it." City Attorney: "Just a minute now. I don't~hink that.last one covered that Mr. Avery: "l,~. Mayor, I move that ...... " City Attorney: "I want to clear that 5% before I would approve the Contract." Mayor Dietz: "Why not make the motion subject to the Counsel ,approving it. Would it be alrightY" City Clerk Worthing: "In answer to your question. Subject to the approval of youm City Attorney." Mr. Russell: "If it's only the 5% discount I suggest that you've got to go into the basis the monthly payments are computed on and you almost have to go either to this supplemental agreement o~ something specific,' because this spells outs method by which the monthly ments are made and I think this an'inherent part of thiS whole ." Mayor Dietz: "~¢e are voting on something which we haven't had in our hands. We haven't seen. The Engineers have brodght it tonight. None of us have looked at it. It doesn't seem good policy to me .... " City Attorney: "He Just Handed it to me as he walked in." -11- 8-8-62 August 8, 1962 Fir. Russell then reread the supplemental mEreement that had been prepared by Russell and Axon and added ~mat under the terms of this agreement, should the City Attorneyts research disclose that the CiSy may not pay 'monthly payments then the discount is automatically revok- ed and further that this is still in effect and still operative and good.. City Attorney: "There are some problems here." Mr. Avery: "You see there is a place on there for correctness and form for the City Attorney. I like that." City Attorney.: "I think I would rather resubmit it to the Council at the next meeting." Mayor Dietz: "I think there is an agreement and a meeting of minds. It's getting it down into the official dOcumemt and I don~t thirdc that should be rushed thPouEh, I t~ztnk the Attorney should be given ample time to check that and I hope Al.you feel that same way." ~r. Avery: "We want everything legally correct~" MayOr Dietz: "To make a motion on $96,000.00 without the Counsel even having touched the paper, we might ba criticized by the general public and we had better let our counsel go over it, But as the matter stands, we have voted that it will be a fixed fee a~d ~the fixed fee is $96,000.00. It,s a matter of whether we Oa~ take advantage of the 5% or not. That is what Counsel is going to deter- mine," ~ollowing further conversation. Mr. Russell commaented as £o!lows: "The only thing I .would request, that this matter of monthly payments be settled this month so that an September first we can either submit a bill or figure'we are going all the way and forget }he discount." Regarding a resident engineer, it was stated that this would not have ~o be determined unti! later, when the contracts for cons, truction were ~et~ The meeting adjourned at 10:35 P.M. R. D. WORTHING · oi%y Clerk: ''' APPROVED: -12- :,. 8-8-62