HomeMy WebLinkAboutMINUTES - 02282006 - HA.2 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA HAI
TO: BOARD OF COMMISSIONERS
FROM: Rudy Tamayo, Acting Executive Director
DATE: February 28, 2006
SUBJECT: APPROVE HOLD HARMLESS AGREEMENT FOR CLOSE OUT OF THE CENTRAL
COUNTY SHELTER MODERNIZATION PROJECT.
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
I. RECOMMENDED ACTION:
APPROVE Hold Harmless Agreement, which provides for the release to Developers Surety and
Indemnity Company (Developers) of$39,964.04 in contract retention, and AUTHORIZE the Acting
Executive Director or his designee to execute the agreement.
II. FINANCIAL IMPACT:
This project is funded by a Community Development Block Grant (CDBG) administered by the
County. There are no Housing Authority funds involved in the funding of this project. The $39,964.06 in
contract retention to be released to Developers is within the amount budgeted for the project.
III. REASONS FOR RECOMMENDATION/BACKGROUND
A $307,337 construction contract for the modernization of the Central County Homeless Shelter
was awarded by the Housing Authority to Skill Clean, Inc. on August 12, 2003. Skill Clean succeeded in
completing the interior work. However, during the course of construction, it became clear that Skill Clean
would be unable to complete the exterior work and that a number of subcontractors had not been paid
and had filed stop notices. Developers, the bonding company for the contractor, was notified and began
the process of identifying subcontractors owed payment.
To complete the project, the Housing Authority used another contractor to perform the pavement
striping and prepared a deductive change order deleting the remaining exterior work. The project was
accepted as complete by the Board on May 24, 2005. Following deduction of the exterior work and
acceptance of the project, a contract balance of $39,964.04 remained. The contract balance consists of
retention as well as funds withheld to cover stop notices filed on the project. The attached Hold Harmless
Agreement provides for the release of the $39,964.04 to Developers in exchange for Developers
CONTINUED ON ATTACHMENT: X YES SIGNATUR, 90
GC�ri
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD
COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON APPROVED AS RECOMMENDED ✓ O&R
VOTE OF COMMISSIONERS
`/ 1 HEREBY CERTIFY THAT THIS IS A
'�!UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN
AYES: NOES: _ ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
COMMISSIONERS ON THE DATE SHOWN.
ATTESTED _c c�IS 0
JOAN SW ETEN,CLERK OF
THE BOARD OF COMMISSIONERS
AND COUNTY ADMINISTRATOR
BY /L.� DEPUTY
H:\JudyHayes\MSOFFICE\WINWORD\BOARD\BO-Central County Homeless Shelter.doc
February 28, 2006
Page 2 of 2
indemnifying the Housing Authority against any potential claims or litigation by Skill Clean or its
subcontractors. Staff recommends that the Board approve the Hold Harmless Agreement to allow the
project to be closed out and to avoid potential litigation from Developers, which previously filed a claim
with the Board.
IV. CONSEQUENCES OF NEGATIVE ACTION:
Should the Board not approve the Hold Harmless Agreement, the Housing Authority would
continue holding the $39,964.04 but would risk litigation from Developers, which previously filed a claim
with the Board. That would prevent the project from being closed out, and would prevent the grant
funding from being fully expended as budgeted.
h:\judyhayes\msotTice\winword\board\bo-central county homeless shelter.doc
HOLD HARMLESS AGREEMENT
This agreement is entered into on November_V ,2005 between Developers Surety
and Indemnity Company (hereafter "Surety") and the Housing Authority of Contra Costa
County (hereafter "Owner") in view of the following facts:
A. Whereas, Skill Clean, Inc. (hereafter"Contractor")entered into a contract with
Owner on or about August 12, 2003 for the construction of the Central County Homeless
Shelter (hereafter "Project"); and
B. Whereas, Surety provided its payment bond on AIA Form A312 in the penal
sum of $141 ,533.00 (hereafter "Bond") which Bond is attached hereto as Exhibit A. and
C. Whereas, the Owner has accepted the Project as complete and recorded a
Notice of Completion of the Project on May 24, 2005 in the office of the Contra Costa
County Recorder; and
D. WHEREAS, within the time required by law, to wit: on or before June 23.
2005, the following entities filed stop notices with the OWNER in the following amounts.-
K.
mounts:K. S. Kruse Plumbing Co. $ 1,590.53
Global Steel Products $ 8,769.00
Total $10,359.53
E. Whereas, Priority Architectural Graphics filed a stop notice for $1,883.00,
but it was received by the Owner after the date on which stop notices were required to be
filed; and
F. Whereas, in response to the stop notices and with the knowledge that there
were other unpaid suppliers of labor and material on the Project, the Owner has withheld
contract funds otherwise payable to the Contractor in the sum of $39,964.04 (hereafter
"Earned Contract Funds"); and
G. WHEREAS, OWNER claims no entitlement to said funds; and
H. WHEREAS, CONTRACTOR has been advised of the existence of the stop
notices, the other payables and the amounts thereof by SURETY by correspondence of
June 1, 2005; and
(1) WHEREAS, CONTRACTOR has not indicated that it disputes the amount of any
of the stop notices or other payables; and
I. Whereas, the Bond provides in paragraph 8 that all funds earned by the
Contractor ". . . are dedicated to satisfy the obligations of the Contractor and the Surety
under the Bond . . . "; and
J. Whereas, the Owner and Surety desire to implement the terms of paragraph
8-
1 Now Therefore, in consideration for the payment of the Earned Contract
Funds in the sum of$39,964.06 to Surety by Owner, which the Surety shall use to resolve
the above timely stop notice claims, Surety agrees to defend, hold harmless and indemnify
OWNER, as to any and all claims, demands or causes of action which may be asserted
against OWNER, from the following classes of liability:
(a) Any claim, demand or cause of action brought by Contractor, its assignee or its
trustee in bankruptcy, which asserts a right to the Earned Contract Funds arising out of the
Contractor's performance of the contract;
(b) Any action brought by any entity to enforce a stop notice filed against the
Earned Contract Funds pursuant to California Civil Code §3210.
2. Provided however, the foregoing defense, hold harmless and indemnity is
subject to the following condition: (a) the amount of indemnity shall be limited to the penal
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sum of the payment bond issued by the Surety, to wit: $141,533.00; (b) the Owner shall,
as a condition precedent to the obligations undertaken herein by Surety, shall endeavor
to tender any and all claims, demands, and/or litigation and the defense thereof to Surety
within twenty (20) days after receipt thereof and SURETY shall have the right, but not the
obligation, to resolve all such claims and to control and defend all such suits through
counsel of Surety's selection.
3. Surety and Owner agree that this agreement is for the sole benefit of the
Surety and Owner, and does not, nor is it intended to, confer any benefits or rights for or
on behalf of any third party.
Dated: November /U 2005 Developers Surety and Indemnity Company
BY: t
Title:
Dated: � HousingAuthority of Contra Costa Count
Y Y
Title:
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