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Public Works Director Olson stressed if this change order is not authorized tonight it cannot be guaranteed that the contractors that are currently on the site will hold the quoted prices. Assistant City Administrator Nelson indicated staff reviewed the amounts of the original contracts for each ofthese contractors, and the change order is below the 25% threshold. Chairperson Strommen clarified that staff needs the change order approved tonight with the email received from RTC, LLC as their good faith that RTC, LLC will enter into this agreement with the City, as this payment authorization is currently not included in the master agreement or the first amendment. City Attorney Goodrich advised legal staff states this email is not sufficient to bind RTC, LLC to payment. However, Council could make the decision that these improvements are important enough to the City to proceed with the change order. Cheryl Badinger, 3D/I provided an update on the Municipal Center costs. She reported based on the estimated cost of the streetscape improvements there would be $217,000 remaining in the contingency account. Public Works Director Olson indicated there is a component of the streetscape being done behind the parking ramp as well. There are funds in the budgets available to move forward, and staff realizes the need to continue to pursue reimbursement by R TC, LLC. The total amount authorized should be at a not-to-exceed amount of $215,928. Motion by Councilmember Elvig, seconded by Councilmember Jeffrey, to recommend that the City Council proceed with the approval of a change order for a not-to-exceed amount of $215,928 for the streetscape improvements adjacent to the new Municipal Center, with the basis of the commitment of the letter from RTC, LLC, and to direct the City Attorney to obtain a subsequent signed agreement that further protects the City in the costs. Further discussion: City Attorney Goodrich advised staff discovered today during the discussion on the letter of credit that it may be necessary to declare R TC, LLC as in default on the letter of credit in order to get it updated beyond September 17, 2006. Staff would like authorization from the Council to proceed with this. Councilmember Elvig expressed concern in declaring default on the letter of credit in order to complete a procedural requirement. Finance Officer Lund suggested she be given direction to get the letter of credit extended. Motion carried. Voting Yes: Chairperson Strommen, Councilmembers Elvig and Jeffrey. Voting No: None. City Attorney Goodrich suggested the following motion regarding the extension of the letter of credit. Finance Committee / August 8, 2006 Page 4 of7