View Agenda for this meeting

 TUESDAY, APRIL 23, 2002 AT 7:00 PM

Mayor Clark called the meeting to order at 7:07 PM.


ROLL CALL: Mayor Clark, Mayor Pro Tem Bononi, Council Members Capello, Csordas, DeRoche, Landry, Lorenzo

CM-02-04-102 Moved by Lorenzo, seconded by Capello; CARRIED UNANIMOUSLY:

To approve the agenda as presented.

Vote on CM-02-04-102 Yeas: Clark, Bononi, Capello, Csordas, DeRoche, Landry,


Nays: None



Award Engineering Services Contract for the 2002 Neighborhood Roadway Rehabilitation Program to JCK & Associates in the amount of $116,740.

CM-02-04-103 Moved by Capello, seconded by Csordas, MOTION CARRIED:

To approve awarding the Engineering Services Contract for the 2002

Neighborhood Roadway Rehabilitation Program to JCK & Associates in the amount of $116,740.

Member Lorenzo would not support the motion and found it disappointing, as she knew the importance of this service to the community. She felt the RFP process was flawed and didn’t provide an equal playing field and therefore lacked integrity and credibility. She also had concerns regarding the proposed bidder because of other circumstances in the past with regard to various costs and other issues. The RFP needs to be refined and revised and the resources and personnel are available to do the job.

Mayor Pro Tem Bononi stated she would not support the motion because, unless there are real extenuating circumstances, she believed it was a great mistake to tolerate poor performance. It costs us in dollars, in the confidence of our citizenry and is not the professional thing to do. She was surprised that the bidding procedure didn’t include putting bidders who do not perform adequately or cost us dollars on a temporary holding pattern until there is proof they have changed their performance ways. We are talking about the accountability of our administration and every Council Member to the citizens. She would be looking forward to changes in administrative policy not only to bidders but qualifications of bidders, process by which they are chosen and evaluated and the process by which we let bids. From the standpoint of poor performance, on the basis of the last job overseen by this proposed bidder, that alone would knock them out of the ballpark. The work needs to get done and we have to start somewhere.

Member Csordas commented he would support the recommendation because of his level of confidence in the administration and employees brought on to do the job. He felt the bid process followed a logical process but certainly could be tightened up and that would come eventually as staff builds and becomes more familiar with the City. He asked if there were any protests from the competing bidders.

Mr. Helwig responded that he had heard from a representative of Finkbeiner who said they were disappointed they were not getting the recommendation on the award. They were the low bidder at $105,480 but they had not included staking and other elements and the staff felt that precluded them from the award. Member Csordas asked Ms. McClain if she was comfortable with the process and the decision. She stated she was. He said she was close to being accountable for these decisions and the success of the development and he asked how comfortable she was with that? She was aware there were changes that needed to be made and had contacted comparable cities and Farmington Hills had an extremely general RFP because they wanted to get a lot of different bidders. She had received RFP’s from other cities that are much more detailed and they would use those to help refine our RFP process. With that and with quality reviews, she could be very comfortable with the process. He asked if this job would get done, by this firm, on budget and on time? She believed they could do both.

Member Capello noted at the last meeting there had been a question about putting this back out to bid and allowing Finkbeiner to submit a proposal including all the items they missed. He assumed that for the $10,000 difference between Finkbeiner and JCK that when Finkbeiner added in everything that should have been there in the first place, their bid would well exceed JCK’s bid of $116,000. Then Council would be forced to determine whether to go with the low bid or with a bid that was $20,000 or $30,000 higher. To save time, he was comfortable with JCK’s qualifications and that was why he made the motion to award the bid to them.

Member Landry said he did not view the bid process as an indictment of the administration. It appeared that an RFP was put out and three responses came back. The administration reviewed them and discovered that one of them did not comport with standard engineering practice or the City’s Design and Construction Standards. Isn’t that what they are supposed to do; find out who’s higher or lower, who comports with standard engineering practice and who comports with the City’s Design and Construction Standards? They appear to have done that in this case. He had heard reasons why Finkbeiner’s bid should be rejected but he had not heard of a reason to reject JCK’s bid other than they are JCK. That is not a substantive reason. They have done a lot of work for the City, they comport, they are the next lowest bidder and he saw no reason to reject them. He would support the motion.

Mayor Clark also supported the motion and agreed with Member Landry’s comments. He didn’t think the process was flawed and he thought the playing field was level. Finkbeiner has been around for over 100 years and certainly knew what a RFP was and how to compete in the bidding process. He thought they had done another project for Novi and if so, then obviously they got the bid on the project and know what our bidding requirements are. If anyone dropped the ball it was at Finkbeiner’s office not here. He saw no reason JCK should not get the bid. At the last meeting he requested information to come back to Council that everyone seemed to be concerned about. Yet, no one mentioned it tonight because they were concerned whether they came in on their portion of the work on this project and whether they came in within budget. The Design Contract price was $25,410 and the invoice was $25,334.50, completed and closed. Construction administration was $88,860 and it invoiced at $86,846.50 so they didn’t go over budget on anything. Some of this Council is upset with JCK because we had to spend a lot of extra money in Village Oaks because the roads in Village Oaks were ignored for 30 years. We want to blame JCK for that and that is totally unfair. He stated he was not always JCK’s biggest fan, but that is totally unfair. They have nothing to do with when roads are repaired or with what type of a program we have in terms of maintenance. They do work that is assigned to them when it is awarded to them and they shouldn’t be held accountable for overruns because we have neglected our neighborhood roads for too many years. If there had been a better maintenance program, perhaps there would not have been overruns. That is not JCK’s fault; they followed the process. There was also a question as to the proprietary ownership of information and that information that should be in the public domain is available at the City and all bidders could have gotten it. The portion that is theirs is theirs. There is no reason they shouldn’t be awarded this contract and he would support the motion

Member Lorenzo referred to Mr. Pearson’s memo, which said that JCK had placed a lot of the historic information on electronic format and asked if that was done at JCK’s expense? Mr. Pearson said it would depend on the nature of the data. As a general rule if the City had paid to go to electronic format the City would have every right to that. The reference in the memo was to plats and so forth that were done on paper and paid for on paper. If JCK digitized them since then, it was for their own purposes, of their own volition and at their own cost.

Roll call vote on CM-02-04-103 Yeas: Clark, Capello, Csordas, DeRoche, Landry

Nays: Bononi, Lorenzo

2. Enter Executive Session in the Council annex for the purpose of discussing pending litigation.

CM-02-04-104 Moved by Lorenzo, seconded by Capello; CARRIED UNANIMOUSLY:

To enter into Executive Session in the Council annex for the purpose of discussing pending litigation.

Roll call vote on CM-02-04-104 Yeas: Bononi, Capello, Csordas, DeRoche, Landry,

Lorenzo, Clark

Nays: None

Council entered Executive Session at 7:30 p.m.

Council rose from Executive Session at 10:17 p.m.

Mayor Clark called the Special Meeting of Council back to order at 10:18 p.m.

Mayor Clark commented they had just met in Executive Session to discuss pending litigation. The Sandstone litigation was discussed, which is the largest problem or concern this City has had in its history. Over 15 months ago the negotiating team consisting of Mayor Clark, Mr. Fisher and Mr. Helwig began negotiations with representatives of Sandstone to bring this matter to a conclusion. With the support of City Council, numerous meetings were conducted to achieve that goal.

Arbitration is scheduled on April 30th between the City and its insurance carriers to determine what insurance proceeds may be available to assist in the resolution of this matter. Also, we

have been notified that on July 9th the Court of Appeals intends to hear oral argument in this case and after June 25th no motions would be accepted by the Court of Appeals relative to this matter.

Numerous meetings have been held in Executive Session with the Council as a whole to discuss this matter. We are at the point now that we feel it is incumbent to proceed in the light that is in the best interest of this community and hopefully, in fairness, would bring this matter to a final conclusion. To that end, we have prepared a Resolution. He reminded the members of the community that some time ago, approximately in February 2002, an agreement was approved in principle by the City in terms of broad parameters of a settlement but that has not been arrived at yet. After lengthy discussions with Council as a whole, we have arrived at a point where we are ready to adopt a Resolution, which we feel would hopefully lead to a resolution of this matter. He asked Mr. Fisher to read the resolution.






On or about January 21, 1999, a judgment was entered in favor of Sandstone against the City of Novi pursuant to an Opinion and Order of the Oakland County Circuit Court in Civil Action Number 95-501532-CK ("Judgment"); on or about July 8, 1999, the Court amended the Judgment pursuant to an Opinion and Order entered on January 21, 1999 ("Amended Judgment"); on or about July 28, 1999, the City filed its’ Claim of Appeal of the Amended Judgment;

As of the present time, despite the City’s demands to its insurance providers, no insurance proceeds are available to apply to the Amended Judgment;

Although the City is actively litigating in the Michigan Court of Appeals to contest the Amended Judgment, in view of the fact that interest is compounding annually on the Amended Judgment, and considering Sandstone’s demand for an immediate resolution, and recognizing the uncertainties of litigation, the City feels compelled to proceed now with this arrangement for the settlement of the litigation prior to the availability of insurance proceeds;

Risk exists with respect to the positions taken on appeal in this case, and the City wishes to resolve the dispute relative to the Amended Judgment which would contemplate that the appeal would be dismissed, and a methodology for the satisfaction of the compromise resolution and settlement of the Amended Judgment would be provided pursuant to this settlement without the necessity of issuing a so-called judgment assessment bond for the amount of the Amended Judgment, plus accrued interest and costs, that would materially increase the burden of the taxpayers of the City for years into the future.

NOW, THEREFORE, IT IS RESOLVED that the accompanying Agreement for Entry of Consent Judgment, dated April 17, 2002, including all Exhibits ("Settlement") is hereby approved for offer to Plaintiff Sandstone, and, if accepted, the Mayor, City Clerk and City Attorney are authorized to execute the Settlement on behalf of the City, and the City Manager is authorized to implement the Settlement according to its terms.

CM-02-04-105 Moved by Bononi, seconded by Lorenzo; MOTION CARRIED:

To approve resolution approving agreement for entry of Consent Judgment in Oakland County Circuit Court Case #95-50132-CK

Entitled Sandstone Associates Limited Partnership versus City of Novi et al.

Roll call vote on CM-02-04-105 Yeas: Clark, Bononi, Capello, Csordas, DeRoche,

Landry, Lorenzo

Nays: None

Mayor Clark said the settlement offer that had been approved by City Council this evening would be presented to Sandstone by the City Attorney as approved here tonight. No member of Council, administration and/or the City Attorney shall be authorized to further negotiate the terms of the settlement. This agreement shall solely be in the province of the Council itself. On February 23, 2002 the Council had conditionally approved the draft of the agreement with the hope that Sandstone would respond in detail within 45 days. A complete response was not forthcoming. The City Council found a need to be proactive in an attempt to bring this dispute to a conclusion and to remove the risk of a major judgment assessed on the private property of the city of Novi. Additionally, he suggested that a tape of this be saved and arrangements be made immediately with SWOCC to have this rebroadcast over our local cable channel at least twice a day for the next couple of weeks so that citizens would know what was going on. He suggested an appropriate heading such as "Sandstone Litigation Update to citizens of Novi."



There being no further business to come before Council, the meeting was adjourned at 10:30 p.m.

_____________________________ ___________________________

Richard J. Clark, Mayor Maryanne Cornelius, City Clerk


Transcribed by: _________________________

Charlene McLean


Date approved: May 6, 2002