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10/19/2021 04.M. Resolution accepting Change Order No. 7 to City contract 2020-122 with Halme Construction, Inc. for Municipal Solid Waste Project LF2529 • rr 11 i 1.411111&12 i�O enc u nrry 1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.M. For Meeting of: October 19, 2021 ITEM TITLE: Resolution accepting Change Order No. 7 to City contract 2020- 122 with Halme Construction, Inc. for Municipal Solid Waste Project LF2529 SUBMITTED BY: Scott Schafer, Public Works Director Bill Preston, City Engineer- (509) 575-6754 SUMMARY EXPLANATION: Sales tax is typically included in the contractor bid item unit prices on construction projects. Halme Construction, Inc did not include this with their bid price and therefore requested that the City pay approximately$112,000 in sales tax for certain bid items identified in the plans pertaining to the City's Municipal Solid Waste Cleanup project at the former Mill Site. The city engineer denied their request. Halme Construction, Inc. then filed a claim against the City for the sales tax. In addition, Halme Construction, Inc. requested that the City pay approximately$125,000 for additional work they had to do because of compaction issues related to common borrow. The city engineer evaluated the project documentation and denied their request. Halme Construction, Inc. notified the City that they would be filing a claim regarding this issue as well. The city engineer and Halme Construction, Inc. agreed to non-binding mediation in an effort to resolve the dispute. Mediation was successful and Change Order 7 - Claim Resolution, provided a settlement payment of $100,000 for both claims eliminating the need for arbitration. ITEM BUDGETED: Yes STRATEGIC PRIORITY: Economic Development APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Adopt Resolution ATTACHMENTS: Description Upload Date Type 2 D reso 10/8/2021 Cotter Memo D Change Order 7 10/4/2021 Backup Material D Email from Attorneys 10/6/2021 Backup Material 3 RESOLUTION NO. R-2021- A RESOLUTION authorizing Change Order#7 — Claim Resolution with Halme Construction, Inc. for the Bravo Company Blvd. MSW and Wood Debris Removal project LF2529 WHEREAS, Halme Construction, Inc. was selected as the contractor for the Bravo Company Blvd. Municipal Solid Waste and Wood Debris Removal project (LF2529); and WHEREAS, Halme Construction, Inc. filed a claim against the City requesting sales tax on items used in the contract in the amount of $117,305.66 be paid by the City; and WHEREAS, Halme Construction, Inc. was preparing to file another claim against the City for extra work performed due to common borrow compaction issues in the amount of $124,576.08; and WHEREAS, due to a dispute over some of the claims made by Halme Construction, Inc., the City of Yakima suggested non-binding mediation in an effort to work through and settle Halme's claims, and Halme Construction, Inc. accepted mediation as a method to address its claims; and WHEREAS, during mediation, both parties agreed that the payment of $100,000 to Halme Construction, Inc. would forever resolve both the sales tax claim and the potential claim for extra work due to common borrow compaction issues; and WHEREAS, the City Council of the City of Yakima finds that it is in the best interests of the City of Yakima and its residents to proceed with issuing Change Order#7 — Claim Resolution to address the two claims of Halme Construction, Inc. with regards to the wood debris removal project; now, therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized to execute Change Order#7 —Claim Resolution between the City of Yakima and Halme Construction, Inc., attached hereto and incorporated herein by this reference, in the amount of One Hundred Thousand Dollars ($100,000) for City Project No LF2529. ADOPTED BY THE CITY COUNCIL this 19th day of October, 2021. Patricia Byers, Mayor ATTEST: Sonya Clear Tee, City Clerk 4 Y`' Change Order . t < ) City of Yakima Change Order Number_ 7 Bravo Co. Blvd.MSW&Wood Debris Removal Change Order Date_ 9/28/21 Project: (Name) g (Number) LF2529 Contract Number LF 2529 To: (Contractor) Contract Date 10/20/2020 Halme Construction, Inc I 8727 W.Hwy 2#100 Spokane,WA 99224 L J You are directed to make the following changes in this Contract: This Change Order resolves the claim related to Equitable Adjustment for Sales Tax Liabilities, and the request for Equitable Adjustment for Extra Project Work Due to Common Borrow Compaction. The City and Hal me Construction entered formal Mitigation on 9/27/21 regarding the two issues. A settlement was reached providing Halme Construction a$100,000 payment to be administered via a change order. See the CR2A attached for details regarding the settlement. Not valid until signed by both the Approving Authority and Contractor. Signature of the Contractor indicated agreement herewith,including any adjustment on the Contract Sum or Contract Time. The original Contract Sum was $ 13,108,132 Net change by previous Change Orders $ 588,989.53 The Contract Sum prior to this Change Order $ 13,697,121.53 The Contract Sum will be: B Increased 0 Decreased 0 Unchanged by this Change Order $ 100,000 The New Contract Sum including this Change Order will be $ 13,797,121.53 The Contract Time will be: 0 Increased 0 Decreased 0 Unchanged by zero working days The New Contract Time will be N/A working days Contractor Approval Recommended Approval Recommended Construction Supervisor Public Works Director By By By Tide Date Date City Engineer Approved Date City Manager By By Date Date Based m Original to: 0 Contractor Copies to: 0 Region 0 Construction Administrator DOT Form 570-001 EF ❑OSC Accounting 0 City Engineering ReNsed 08/2021 5 Schafer, Scott From: Tyler Waite <twaite@campbell-bissell.com> Sent: Monday, September 27, 2021 4:52 PM To: Bleek, Ryan Cc: 'twakeen@wakeen.net; Preston, Bill Subject: RE: CR 2A You have my electronic approval. It was nice meeting you both today. Tyler S.Waite CB J LAWYERS CAMPBELL & BISSELL I PLLC P. 509.455.7100 F. 509.455.7111 WWW.CAMPBELL-BISSELL.COM The information contained in this email is protected by the attorney-client or attorney work product privilege. If you are not the intended recipient of this email please notify me in a reply email and delete this message.Thank you. From: Bleek, Ryan<Ryan.Bleek@YAKIMAWA.GOV> Sent: Monday, September 27, 2021 4:49 PM To:Tyler Waite<twaite@campbell-bissell.com> Cc: 'twakeen@wakeen.net' <twakeen@wakeen.net>; Preston, Bill <Bill.Preston@yakimawa.gov> Subject: CR 2A Warning-External Sender This message originated outside of CB Lawyers. Use caution when opening links or attachments. Tyler and Teresa, let me know if you have any suggested revisions or if the attached meets your approval. Thanks! Ryan Bleek Senior Assistant City Attorney City of Yakima Legal Department 200 South Third Street 2"d Fl I Yakima WA 98901 P: 509.575.6030 I F: 509.575.6160 ryan.bleek@vakimawa.gov Privileged &Confidential: Covered by the Attorney-Client &Attorney Work Product Privileges