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Motion by Mayor Gamec, seconded by Councilmember Kurak, to recommend that the City Council adopt the resolution authorizing the purchase of replacement manikins and oxygen equipment for the Police and Fire Department utilizing monies from the Equipment Replacement Fund not to exceed a total of $1,400. Motion carried. Voting Yes: Mayor Gamec, and Councilmembers Kurak, Anderson, Hendriksen, and Zimmerman. Voting No: None. Case #4: Ebert Construction/SEH City Attorney Goodrich stated that Ebert Construction was the general contractor on the Fire Station II project. SEH was the architect. In 2001, a mediation hearing was held and settled a claim by Ebert Construction relating to liquidated damages for its delay in completion of the project. In 2002, Ebert again brought claim against the City alleging $16,000 of its contract fee was improperly deducted by the City from its payment. This issue generally relates to the City's change order directing Ebert Construction to not construct the landscaping part of the contract. Upon examining its records, Ebert claims this amount was twice credited to the City. City staff believes Ebert to be wrong. A formal arbitration of the issue is pending and will be heard in late September. SEH has an unpaid bill to the City in the approximate amount of $26,000. The Council instructed staff to attempt to negotiate, a lesser payment to SEH as a result of perceived improper advice relating to the Ebert liquidated damages issue, and now, possible improper record keeping relating to Ebert's pending $16,000 claim. In a settlement effort, SEH has offered to defend and indemnify the City on the pending Ebert claim if the City will pay SEH its $26,000 bill. Staff feels that the offer by SEH is a good offer. Mr. Goodrich stated that as they analyze their claim against SEH they would be hard pressed to prove negligence on the part of SEH. Chief Kapler and he agree with the offer, but they will try and receive some sort of deduction on the bill. Councilmember Hendriksen requested that Mr. Goodrich exercise his best legal mind and make sure that any legal document from SEH is bullet proof and if they end up in court those costs will be born by SEH. City Attorney Goodrich replied that he would and that he would also make sure that Ebert signs off 100 percent that they will have no further claims against the City once SEH resolves the matter. Motion by Mayor Gamec, seconded by Councilmember Hendriksen, to recommend that the City Council accept the SEH offer to indemnify the City on the pending $16,000 Ebert claim including defense costs and reduce the SEH bill, not to exceed $26,000. Motion carried. Voting Yes: Mayor Gamec, and Councilmembers Hendriksen, Anderson, Kurak, and Zimmerman. Voting No: None. Finance Committee/September 11, 2002 Page 6 of 7