5.5 ERMUSR 03-10-2020UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Troy Adams, P.E. –General Manager
MEETING DATE: AGENDA ITEM NUMBER:
March 10, 2020 5.5
SUBJECT:
AuburnStreet Water Tower ReconditioningProject Update
ACTION REQUESTED:
None
BACKGROUND:
At the September 11, 2018 commission meeting, the commission awarded the contract for the
Auburn Street Water Tower Reconditioning Project to Classic Protective Coatings, Inc. A
contract agreement between Elk River Municipal Utilities and Classic Protective Coatings, Inc.
was entered into and executed on January 16, 2019. As part of that agreement it was agreed
upon that the work for the project would start on or before July 26, 2019, with a completion
deadline of on or before October 11, 2019.
Even after ERMU’s project manager communicated with the contractor on numerous occasions
concern that their late start would put their ability to complete the project by the contractual
deadline at risk, the contractor assured ERMU that they would be able to complete the project
on time. The contractor was unable to finish by the October 11 deadline and meet the
contractual obligations. And because of temperature requirements for paint curing, the project
had to be shut down for the season. This created water system operational challenges because
this tower needed to remain empty and out of operation until the project is completed in
spring. This resulted in changes for winter operation, requiring ERMU to use the Johnson Street
Water Tower, which is typically emptied due to freezing issues. Operating the Johnson Street
Water Tower for the winter necessitated the installation of a mixer to prevent freezing, an
expense incurred by ERMU because of the failure of Classic Protective Coatings to meet the
Auburn Street Water Tower project deadline.
The contract for the Auburn Street Water Tower project includes daily financial penalty
provisions for not meeting the contractual deadline. ERMU’s project manager communicated
with Classic Protective Coatings that ERMU would exercise the liquidated damages provisions in
the contract. Classic Protective Coatings’ attorney has since communicated with ERMU that
their client disagrees and doesn’t believe that they should be held accountable for any
liquidated damages. ERMU has not released any payment to Classic Protective Coatings to date.
DISCUSSION:
Attorney Beck will provide a verbal update at the meeting.
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