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02April30spmtgMeridian City Council Special Meeting April 30, 2002 A special meeting of the Meridian City Council was called to order at 6:30 P.M., on Tuesday, April 30, 2002, by Mayor Robert D. Corrie. Members Present: Mayor Robert Corrie, Tammy de Weerd, Keith Bird, Cherie McCandless and William Nary. Others Present: Bill Nichols, Mike Worley, Gary Smith, Brad Watson, Dan Carnahan, Dean Willis and Will Berg. Item 1. Roll-call Attendance: X Tammy de Weerd X Bill Nary X Cherie McCandless X Keith Bird X Mayor Robert Corrie Corrie: Okay. I'm going to open the City Council special meeting tonight, Tuesday, April the 30th, 2002, at 6:30 p.m. in the City Council Chambers and we will start the meeting with the roll-call attendance. Mr. Clerk. Item 2: Adoption of the Agenda: Corrie: Okay. The first item on the Agenda is the adoption of the Agenda and the adoption of the Agenda will be a hearing on the bid protest for White Sewer Trunk Project and possibly the award of a bid for the White Sewer Trunk Project tonight. Council, you have the Agenda in front of you and I will entertain a motion for the adoption of the Agenda. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: I move that we approve the Agenda as noticed. De Weerd: Second. Corrie: Motion has been made and seconded to adopt the Agenda as noted. Any further discussion? Hearing none, all those in favor of the motion say aye. Opposed no? All ayes motion carried. MOTION CARRIED: ALL AYES Item 3: Hearing on Bid Protest for White Sewer Trunk Project: Meridian City Council Special Meeting April 30, 2002 Page 2 Corrie: At this time I would like to ask if you have cell phones, turn them off. Sometimes we forget to say that and then right in the middle of a presentation a phone goes off and we lose contact with the brain, the cell phone and everything goes to pot. I'd appreciate it if you would do that for me. I'm going to have the City Attorney, Mr. Nichols, set -- give the ground rules that I have set for this meeting tonight and we will follow it pretty close, if not right on the button. Mr. Nichols, if you will give us the procedure and then we will go from there. Nichols: Thank you, Mr. Mayor, Members of the Council. If I may start, Mr. Mayor, I'd like to introduce the attorneys for the respective contractors that are here tonight and ask them to introduce their clients. Mr. Trout is seated to our left, Kim Trout, Attorney for Thueson Construction. Mr. Trout, if you would come to the podium, so it will be on the audiotape, and introduce your client, please. Trout: Thank you, Mr. Nichols. Mr. Mayor, Members of the Council, my name is Kim Trout, I'm an Attorney in Boise, Idaho. My client this evening is Thueson Construction, Incorporated. The president of Thueson is here, Lance Thueson, and we are here to indulge you a little bit with our presentation this evening and we thank you very much for your time and thank you tonight. Nichols: Also present, Mr. Mayor and Council, is Jeff Sykes, Attorney for Sommer Construction. Mr. Sykes, if you would, please, come forward and introduce your clients. Sykes: Mr. Mayor, City Council, my name is Jeff Sykes, I'm with the law firm of Muellman and Miller. I'm here today representing Sommer Construction and Mr. Steve Sommer, president of the company. Thank you. Corrie: Okay. Thank you. Nichols: Mr. Mayor, the issue before the Council has to do with the White Sewer Trunk project. The bids were opened on February 27th . The apparent low bidder, according to the total bid, was Thueson Construction, Inc. The second apparent low bidder was Sommer Construction. A bid protest was lodged by Sommer Construction with regard to the Thueson bid and as a result of that that's why we are here this evening to consider whether the Thueson bid was responsive, whether the bid should be awarded to Thueson or whether the bid should be awarded to Sommer. Another alternative that the Council has is the Council does have the ability to reject all bids and direct the Public Works Department to re-bid the project. With regard to the hearing procedures, there are a number of exhibits I submitted on behalf of the city, what I believe to be all of the pertinent exhibits pertaining to the bid by Thueson and by Sommer and related information. That constitutes 15 separate items. Mr. Trout has also submitted on behalf of Thueson Construction a number of items, which are in a folder, including a memorandum with regard to his arguments and some other items. Some of these are Meridian City Council Special Meeting April 30, 2002 Page 3 duplicative of what is in Exhibits 1 through 15, but I would propose that this folder of these items be Exhibit Number 16 to be considered by the Council. I believe the Mayor and Council each received a copy of these. Mr. Sykes on behalf of his clients submitted this afternoon a memorandum by fax consisting of a total of five pages and I would submit that that would be Exhibit Number 17 for the record. I have not heard from any parties with regard to any objections to the exhibits, so unless a party has an objection, I would suggest, Mr. Mayor, that all these documents be accepted into the record for Council's consideration in making its decision. Mr. Trout or Mr. Sykes, do you have any objections to these exhibits? Trout: Not on behalf of Thueson. Nichols: Let the record reflect that both Mr. Sykes and Mr. Trout have indicated they do not have any objections to Exhibits 1 through 17. With regard to the specific procedure, if there are any witnesses that are going to testify, we ask that they be identified and they all stand and raise their right hand and be sworn at the same time, so that we can avoid having to individually swear those witnesses as they come foreword to testify. After the witnesses are sworn there will be a presentation by the city staff, including the city's consulting engineer John Carnahan from Keller and Associates essentially outlining the project and what happened with regard to the bids and identifying the bids and the issues that have come up since. After the city staff presentation is concluded, then Thueson Construction will be allowed up to 30 minutes to present testimony, which can consist of Mr. Trout can ask questions of the city staff or any other witnesses, including his own client. Then after that Sommer Construction has up to 20 minutes, the same thing, Mr. Sykes can inquire of any witness. Then Mr. Thueson -- or, excuse me, Thueson Construction's rebuttal would be 10 minutes. Again, Mr. Trout on behalf of his client can inquire of any witness to clear up anything that may have been raised during the Sommer presentation. Then there will be closing arguments by Mr. Sykes and Mr. Trout up to 10 minutes each. After the closing arguments are done then the Council can deliberate. I would add to this that the Council and Mayor have a right to ask questions at anytime of any witness, generally at the conclusion of a witness's testimony if there is something they'd like cleared up. It's not uncommon for the Council and Mayor to have questions and so as the deciding body, here they reserve the right to ask those questions. Some judges like to ask questions and some don't. Well, these folks like to ask questions. The Council will deliberate, the Council will then make a decision with regard to this project, and I anticipate that they will direct me to prepare written Findings of Fact and Conclusions of Law based upon their decision. That will be the hearing procedure this evening. Mr. Trout and Mr. Sykes, do you have any questions about the proposed procedures? Trout: None, sir. Nichols: Let the record reflect that neither Mr. Sykes nor Mr. Trout have any questions with regard to the proposed procedures. With that, Mr. Mayor, I would ask that all of the witnesses that may testify stand, so that you can swear them all in at once and as the Meridian City Council Special Meeting April 30, 2002 Page 4 witnesses approach, with the exception of staff, we do have a microphone at their table, all of the other witnesses will have to come forward to the podium. Mr. Trout and Mr. Sykes, you will need to come to the podium and be close enough to where your voice is also with regard to any questions are transcribable from the audio tape as well. Corrie: All those that have testimony tonight please stand. Raise your right hand. Is the testimony you're about to give the truth, the whole truth, and nothing but the truth, so help you God? All right. Thank you. Okay. With those procedures in hand we will start with the city first and I invite city staff, first comments. Nichols: Mr. Mayor, Members of the Council, if I may, although it will not be in the technical form of a direct examination. I do have some points to cover that may be the easiest way to get through this portion of it, if it pleases the Mayor and Council. Either Brad or Gary can answer this part of it, perhaps Brad might be more appropriate, but I would ask that you -- Mr. Watson, if you would, please, describe what the White Sewer Trunk project is and what it means for the City of Meridian. Watson: Mr. Nichols, Mayor, and Council Members, as you are probably all aware on Council and hopefully in the audience, this project was initiated two and a half, almost three years ago -- at least budgeted at that time. This project was intended to sewer approximately three square miles of undeveloped area north of Ustick, south of McMillan from Ten Mile Road to Locust Grove Road, generally speaking. It was the next logical -- well, the City Council at that time prioritized our growth areas and the White Trunk area was identified as one of the three top tier priorities at that time, along with the South Slough Extension and the Five Mile Trunk Extension. We have preceded the best we can. As you well know, there have been easement issues for quite awhile and that's where we are now. Nichols: Mr. Watson, in comparison to other city sewer projects, how does this project rank in importance? Watson: Mr. Nichols, Mayor and Council Members, as I mentioned, it was one of the top three priorities. It is one of only two sewer projects that the city has undertook to construct itself. It was ranked equivalent with the South Slough Extension at the time it was prioritized, although South Slough was one year later in terms of the funding, but it is -- it and the South Slough are our two priorities. Nichols: Mr. Watson, are there any pending developments that have been approved that would be waiting on this particular project? Watson: Mr. Nichols, Mayor, and Council Members, I believe there are at least four subdivisions that have received at least one Preliminary Plat approval by City Council and I can list those if you wish. Nichols: If you would, please. Meridian City Council Special Meeting April 30, 2002 Page 5 Watson: Bridgetower Subdivision. I'm not sure that's the proper name. Either Bridgetower or Bridgetower Crossing going upstream Baldwin Park Subdivision then Cedar Springs Subdivision. The fourth is Sundance Subdivision. There are -- there is at least one other application, although it has not, to my knowledge, received Preliminary Plat approval by Planning and Zoning. Perhaps it has. I'm not sure. Nichols: In connection with the city's project, did the city hire a consulting engineer to develop the specifications for this particular project? Watson: Mr. Nichols, three years ago, once funding was in place for this project, we issued a request for proposal and received five, six, seven proposals from engineering firms. After evaluating those proposals, we selected Keller and Associates of Meridian to be our consultant -- or design consultant on this project. Nichols: And the consulting engineer for Keller & Associates that you have worked with most often has been -- Watson: The Project Manager for Keller and Associates is Don Carnahan seated to my left. Nichols: Okay. Mr. Carnahan, if I may ask you some questions. Would you, please, describe to the Council how the bid documents were put together? Carnahan: Mr. Nichols, Mayor and Council, we used what basically is an industry standard for bidding documents prepared by the Engineers Joint Contract Documents Committee. It's comprised of the National Society of Professional Engineers, the American Consulting Engineers Council, the American Society of Civil Engineers, and the Construction Specification Institute. These groups have gone together and prepared guidelines and a basis for bidding documents. We took their recommendations and their basis of bidding documents and prepared the documents that were used to bid this project. Nichols: Mr. Carnahan, when did the city put this project out for bid? Carnahan: Mr. Nichols, Mayor and Council, the project was advertised on February 8, 2002 and the bid opening was on February 27, 2002. Nichols: And what was the cutoff date for the submission of bids do you remember? Carnahan: It was at 3:00 P.M. on February 27th was when we quit accepting bid out bids. Nichols: Were you present at the bid opening? Carnahan: Yes, I was. Meridian City Council Special Meeting April 30, 2002 Page 6 Nichols: Contained in the list of exhibits is -- I believe it's Exhibit Number 1, which is the invitation to bid and bid of Thueson Construction. Could you take out your copy of that for me, please? Carnahan: Yes. I have that. Nichols: Were there any noted irregularities with regard to that specific bid? Carnahan: Yes, there were. Nichols: And would you describe those, please? Carnahan: Yes. On the bidder's proposal, Page 6 there was no corporate seal for Thueson Construction. There was also no corporate seal for the -- well, on that page that's what there was. Also the bid bond was not notarized and did not have the -- the bid bond did not have the notary attached or stamp on that. There also was no notary - - should have had the corporate seal on it also. Nichols: And was there, subsequent to the bid opening, a notary supplied for that bid bond? Carnahan: Yes. There was one supplied afterwards. Nichols: What is the total amount of the Thueson bid? Carnahan: The total amount for Thueson's bid was 994,060.10 dollars. Nichols: Was that the apparent low bid? Carnahan: Yes, that was. Nichols: After the bid opening the city received a bid protest from Sommer Construction and I believe a copy of that is also an exhibit in the record. After the bid protest was received did you do anything further with regard to this potential contract? Carnahan: Yes. I was requested by the city to call and check on the references listed for the apparent low bidder. Nichols: And what were those references? Carnahan: The bidding documents had requested three references and they were -- one was Matt Schultz with the Bear Creek sewer project. Another was Jim Brook of the Treasure Valley Sewer and the third was Kevin Lamar with the Camden Heights project. Nichols: And you kept notes of those telephone conversations you had? Meridian City Council Special Meeting April 30, 2002 Page 7 Carnahan: Yes, I did. Nichols: And I believe, Mayor and Council, those are also included in the exhibits, a memo from Mr. Carnahan. Mr. Carnahan, would you pull out that exhibit that had your notes of those telephone conversations and just describe generally what information you were seeking with regard to that particular reference and what the result was. Carnahan: Yes. I prepared a form with five questions. I called each of the references. I read them each of the questions and summarized the responses as written in each of the three references. In general they all gave favorable references for Thueson Construction. Nichols: Okay and did they indicate who had actually done the work for which they were providing that reference? Carnahan: Yes. In each of the three references when I asked who was the contractor for the project, the response was that it was Precision Pipe was the contractor. Nichols: Mr. Watson, if I may ask, did you ask for any other information from Thueson with regard to this bid protest? Watson: Mr. Nichols, after we received information from Mr. Carnahan on these references, I wrote a letter to Lance Thueson March 19th requesting a notarized statement listing all of the major equipment Thueson Construction intends to use on this project. A copy of a notarized agreement between Thueson Construction, the entity owning any other major equipment that they plan to use on the project, copies of their equipment, the depreciation schedule for the most recent corporate tax return for both Thueson Construction and Precision Pipeline Excavation. Also copies of Thueson Construction, Precision Pipeline Excavation's applications for Public Works Contractor's License. Nichols: With regard to your requested information did you receive all of it? Watson: Mr. Nichols, I received three of the four. The one I didn't receive was a copy of any notarized agreement between Thueson Construction and any entity that owned the major equipment they intended to use on this project. Nichols: But you did receive all the other information you asked for? Watson: Yes, I did. Nichols: Whichever the three of you want to answer this next question, were there any concerns about Thueson Construction's ability to do the work based upon the references? If so, what were those concerns or are those concerns? Meridian City Council Special Meeting April 30, 2002 Page 8 Carnahan: Mr. Nichols, Mayor, and Council, in calling the references they generally gave favorable comments of Precision Pipe's work. This is a fairly large project and they had not done any projects of this size. They had done work that you could classify as similar depth of pipe excavation they have. They have done similar sized pipe excavation and pipe lying. Cumulatively they had not done a project of this size and that was the summary of that, that there was potentially a question of not having had experience on a project of this magnitude. Nichols: Mr. Carnahan, what was the reason for putting the request for references in the bid document? Carnahan: The reason for putting the request for references is to give the owner an opportunity to find out more about the bidder, of the contractor, to ascertain his abilities and any potential problems that may arise. Nichols: Okay. Mr. Carnahan, were there any other -- were there any potential issues in terms of some of these form issues and that with regard to any of the contents of the Sommer Construction bid? Lack of a corporate seal, lack of a notary, any of those sorts of things from the Sommer's bid? Carnahan: Upon reviewing Sommer's bid documents everything appeared to be in order. Nichols: Question for Mr. Watson or Mr. Smith. Do you now have any kind of recommendation to the City Council as to what you believe ought to be done with regard to which entity, if any, should be awarded this contract or whether all of the bids should be rejected and the project re-bid? Smith: Mr. Nichols, Mayor and Council, our consulting engineer has informed us that there are several areas that the pipeline needs to be rerouted due to developer request. We had anticipated trying to handle this through a change order. At this point with the issues that are at hand, the changes that should be made, probably, to the plans, I guess it's our opinion that the project should be re-bid. Nichols: If the project were re-bid how much of a delay would it be before the bids would be opened and you estimate that the project would begin? Smith: Mr. Nichols, Mayor, and Council, I think that our consulting engineer indicated that there is probably a minimum of a week to revise the plans. Then there would be advertising time to get it into the newspaper and the number of times required to advertise, which would probably consume most of three weeks at a minimum. A length of time for the contractor to respond -- the low bidder to respond with bonds and certificates of insurance, etc., as required by the documents, a minimum of probably two weeks again. I would say that we are looking at somewhere between a month – Meridian City Council Special Meeting April 30, 2002 Page 9 somewhere around a month and a half, perhaps, six, seven weeks to turn this thing around. Nichols: Thank you. Mr. Mayor, that's all with regard to my questions. As I indicated before, you're free to ask any questions of staff at this point if you wish. Corrie: Yes. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Mr. Carnahan, is it the practice on a bid document, as you state in here, that there should be a corporate seal and everything be in place? Is it not -- is it a practice to eliminate those bids when you open it up and see that they are not done right to the spec document? Carnahan: Councilman Bird, the bidding documents are, I believe, quite clear, in what is required. The corporate seal and the surety notary, I believe, was clear, and is something that should have been completed and that based on the contract document language is a basis to reject bids as outlined in the documents. Bird: Then that bid should have been rejected immediately, because it did not conform am I not right? Carnahan: My experience when we open bids, we check that they are -- have included their bid bond, the addendums are acknowledged and that they have signed the bid. Then we read the amounts out loud and then we check for the -- review them and scrutinize them more closely after we have read those out loud. Bird: You don't look for the corporate seal or anything like that or the notary on the bid bond? Because basically if the bid bond is not notarized at that point it is not legal, it's not a bid bond. I mean you can come back later and get it notarized and then it's legal, but if it doesn't show up like that -- and having bid in some -- and lost a job because I didn't have a corporate seal on the deal. I know that usually they don't even read your bid, they take a look, and you're out. Watson: Councilman Bird, if I may? Bird: Yes. Watson: I'm the one that actually opened the bids and read them aloud. In the six years I have been here, we put together a bid check summary. We check for four to six major items, depending on what's required within the bidding documents. I have never done a detailed review at the bid opening. I check for those major things. If the addendums have been acknowledged, acknowledged whether it's signed, whether the Meridian City Council Special Meeting April 30, 2002 Page 10 bid schedule is completely filled out, bid security, of course. If there is mechanical, plumbing, or electrical work, they need to fill those out and name their subs. That wasn't required on this project, although we did have a subcontractor's list for them to fill out. We didn't have the mechanical, electrical, HVAC. I guess what I'm saying in short is I'm the one that opened them. As Don said, we check those major things, we take them back, and we go through them very, very carefully. This protest was filed before we ever even opened them up to check them and that was kind of the sequence of events. Bird: Now this protest was filed before you opened the bids? Watson: Before we closely reviewed the bids. Bird: Okay but normally when you look at their signatures and if it's a corporation, you look for a seal, don't you? It should be stamped right there by it. Watson: I certainly will in the future, but in the past, I have looked at the signature page to see if there are any blank spots. The corporate seal doesn't have a spot all its own. Bird: No, it just -- Watson: It's just where ever. So that's what I'm visually looking at as I'm thumbing through these is just to make sure the blanks have something in them. Bird: And what do you do with the bid bond, do you look at -- through it thoroughly and - Watson: I look at it and make sure there is a power of attorney attached to it. Bird: But whether it's notarized or not, you don't -- Watson: Quite honestly, I do not remember if all of them had a notary statement on them. I know this one did now. Bird: I believe we have to have a notary statement on it or they are not a legitimate bid bond. On every one I have had to get, it's always like that. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: I just want to be clear from what Mr. Smith said. It is the recommendation of the Public Works Department now that there is some redesign of this project that can't be done through change orders. It's your opinion now it needs to be redesigned to a degree and that's the reason for -- your recommendation was to reject all bids and redo it. Is that correct? Meridian City Council Special Meeting April 30, 2002 Page 11 Smith: Councilman Nary, Mayor, and Council, we felt that it would make a cleaner project if the redesign could be done, because there is a significant amount of it to do and it would eliminate confusion on change orders. I don't believe that we -- that it couldn't be done without a change order, but it's going to take -- as I understand from Mr. Carnahan, it's going to take some rerouting, drawings of some sewer lines due to some developers' requests along the line. Nary: Thank you. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Mr. Smith, when did these easements come -- the changes become noticeable that you felt that we needed to -- couldn't do them by change order? Was it after the bid that the easements changed or stuff like that or was it before the bid? When did these easements change so much -- was it after February 27th that we feel that we needed to have new drawings? Smith: I'm not sure, Mr. Bird. I think Don Carnahan probably should be able to answer that as the design engineer. Bird: Okay. Carnahan: Councilman Bird, when we bid the project, advertised it February 8th , we had all the developers -- the alignment requests incorporated into the drawings at that time. Since it's been over two months since then, the developers -- some of them have refined their designs -- some of them are as simple as adjusting manhole rim elevations, others -- I know in Cedar Springs they had to change their sewer alignment based on I think ACHD comments on their Preliminary Plat. Then there is one development for Brighton Corporation that has since then -- is preparing a Preliminary Plat and has a whole new alignment to now put sewer through their lot layout and that has all occurred since we prepared these original drawings. Bird: Okay. De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I need to get a better understanding of this process. When you open the bids you can declare non-responsive at that time, but you don't look at all the criteria. I do understand that. What I didn't understand is when you said the protest was filed before you knew that these informalities that the city had the right to waive if it so Meridian City Council Special Meeting April 30, 2002 Page 12 desired was even caught by staff. Are these bids, then, public documents that these other companies come in and also evaluate? How does that work? Watson: Council Member de Weerd, Mayor and Council, the bids were opened at 3:00 I think on Wednesday afternoon. I went back, had other things -- other fires to put out, had a meeting in the morning. I came back to my office. I understand from Mr. Carnahan that Mr. Sommer had stopped by that morning. By the time, I was back to my office close to noon Mr. Sommer had already stopped by the Public Works Department and verbally indicated that he was considering a request -- or a protest based on some things that he outlined to me. I had not gone through them by the time Mr. Sommer had brought these to my attention. I think perhaps he had, Don, at his office. That's all I was saying. De Weerd: Okay but how do they know about the irregular -- or the things that were not complied with? They have, then, access to the bid documents to review them themselves? Carnahan: Council Member de Weerd, yes, after the bid opening I took the bids back to our office where we go through the unit bid prices and check that they multiply and are totaled correctly. I received a call from Mr. Sommer that morning after the bidding and he requested to come and review the apparent low bidder's documents. He did subsequently after that came over to my office, sat down with me and he reviewed the bid documents of Thueson Construction. He discovered some of the bid discrepancies there. De Weerd: Okay. My other question was, was there an experience requirement? Carnahan: Council Member de Weerd, in the bidding documents we do ask that the bidder provide three references of similar projects of size and nature. De Weerd: Is that not a requirement also of licensing? Isn't that why you ask for a particular license? Carnahan: That is also -- yes, they have to have a Public Works License and have the bonding ability for this project. I am not fully aware exactly what it takes for them to get their license and bonding. De Weerd: I imagine that the advertising time would probably be immediate, since I see the paper is here, so maybe that can help the time line if we get to that point. Corrie: Any other questions? Bird: Mr. Mayor? Corrie: Mr. Bird. Meridian City Council Special Meeting April 30, 2002 Page 13 Bird: I have a follow-up to Gary or Brad. If this goes out for re-bid we are probably looking at two months before it's bid, a week to redraw the plans with the changes, getting the advertisement out and stuff. That throws -- at best throws this trunk line being ready next -- about a year from now, am I not right? Watson: Councilman Bird, Mayor, and Council Members, I think the time line Gary outlined, best case, bids could be received about a month from now and another two week period for Council to award, paperwork, contract signing and all that. The one thing that hasn't been brought up is there evidently -- and Gary is much more aware of this problem than I am. There is evidently a pipe shortage, we don't know what the time line if it is awarded right now. The contract period for this is 160 days. About six months so we would probably be looking at early spring. Bird: If you don't have two foot of snow or 19 inches of rain. De Weerd: Mr. Mayor, I guess I have one more question. Corrie: Mrs. de Weerd. De Weerd: Since some of these issues were not in your top six criteria that you look specifically at when you open bids, have we ever had an instance where some of these were found, but given time to correct? Because we do have the right to waive any informalities that don't involve price, time, or changes in the work. Have we allowed a time frame for people to do what needs to be done or have they been immediately considered non-responsive? Watson: Council Member de Weerd, Mayor and Council Members, I will let -- I don't remember ever doing that to anything that affected the bid itself or the enforceability of the bid. The short answer is, no, I don't recall anything like that. Gary, do you? Smith: Council Member de Weerd, Mayor and Council, I don't recall a non-responsive bid. It's been a long time, but I just don't recall anything that we have not read or that the -- where the contractor has come back in and added something after the fact that was omitted. De Weerd: I'm through. Corrie: Anyone else? Okay. I guess -- Bird: Can I -- Corrie: Sure. Bird: This is for Mr. Carnahan. On your changes, how far -- how far to the east would the pipeline go before you would get into your first realignment? Meridian City Council Special Meeting April 30, 2002 Page 14 Carnahan: Councilman Bird, Mayor, and Council, the Bridgetower project does not require any change in alignment, but they have requested to adjust some of the manhole grades. The first change in alignment would occur at the Cedar Springs Subdivision. Bird: Which is about three quarters of a mile? Carnahan: Which is -- you'd make it through the first mile and a half. Bird: Mile and a half. That's right. Carnahan: Yes. Bird: Okay. It would not be too hard to have a change order with these alignments now that you have got it all in place. Carnahan: Councilman Bird, they are not real significant -- well, they are significant changes, but they are not insurmountable as far as the pipe depth should be similar. There may be a few more manholes, and we do have unit prices for those items. Bird: But the grade shouldn't change that much, should it? I mean you basically got the grade, whether they are 30 feet to the north or 30 feet to the south. Carnahan: Correct. The invert on the pipe shall remain similar. Bird: Okay. Thank you. Corrie: Any others? Okay. I believe, Mr. Nichols, we can start with Mr. Trout and his -- Nichols: Yes. Mr. Mayor, Mr. Trout, and I don't know how you wish to proceed, Mr. Trout, whether you have got other witnesses, or whether you want to ask questions of staff. If you want to ask the staff questions first you can come forward to the podium so your voice is on the tape. Trout: What I'd like to do, Mr. Mayor, Mr. Nichols, and Members of the Council, is I'd like to ask staff a few questions, and then proceed with a very short opening identifying what Thueson's position is in this matter. Then I'm going to have Deon Connell make a short statement. We also have some additional documents that we'd like to introduce into the record with some letters of recommendation presented to Thueson with respect to their work quality and performance. With your permission, Mr. Mayor, that's how I would like to proceed if I could. Corrie: Okay. Meridian City Council Special Meeting April 30, 2002 Page 15 Trout: First I'd like to ask Mr. Carnahan a number of questions, if I might. Sir, in the preparation of the bid documents that -- the questions with respect to experience are the ones associated with Item Number 7 correct? It's the question that says provide a reference to similar projects performed. Carnahan: Mr. Trout, are you referring to Exhibit Number 7? Trout: No. It's Exhibit Number 1, which is the Thueson bid and, in particular, it is the question, which is asked for the bidder to respond to. Carnahan: Mr. Trout, I see that Number 7, it says references for at least three similar type and size projects completed. Trout: And it would be a fair statement, wouldn't it, sir, that your concern there is that the personnel who are going to perform the work have done similar work, so that you can expect good quality performance on this kind of project correct? Carnahan: Well, we ask this reference for the bidding -- the contractors bidding the project. Trout: Okay but what's the real concern? Isn't it that you want to know that there are qualified personnel that will perform the work that's required by this project? Carnahan: Mr. Trout, that is -- we are concerned that we have quality personnel and materials on the job site. Trout: All right, sir. Is it a fair statement that the personnel are the key to any bidder's ability to do the work, wouldn't that be fair? Carnahan: That is one of the important factors. Trout: All right, sir. With respect to this particular project in a follow up to Council Member de Weerd's question to you, you did not have a specific requirement of so many thousand feet or so many dollars of construction for a qualification that would preclude any bidder from performing the work correct? Carnahan: No, we did not. Trout: Okay. In terms of following up on the references, as I read your notes, you got good quality or excellent responses for the work performance associated with this correct? Carnahan: Yes. From the three references listed. Trout: Okay and there is nothing in this bid specification that precludes the general contractor from renting equipment for performing the work, is there? Meridian City Council Special Meeting April 30, 2002 Page 16 Carnahan: No, there is not. Trout: And there is nothing in state law that precludes a general contractor from hiring equipment to perform work? Carnahan: I'm not aware of any law of such. Trout: Okay and, of course, there was nothing that precluded in this bid specification this contractor from putting anyone they wanted to on the payroll to perform the work correct? Carnahan: Correct. Trout: Okay. So, for example, if Thueson held the appropriate license -- which it does correct? Carnahan: Yes. Trout: And it's met the financial qualifications for the Public Work Contractors License Board, then they could hire anybody they wanted to do the work and they would be responsible for that correct? Carnahan: By responsible I'm not sure -- what do you mean by that? Trout: They would be the party who was financially responsible to the city for the performance of the work. Carnahan: Yes. Trout: And you found no deficiencies of any kind in Thueson's financial responsibility qualifications; correct? Carnahan: They do hold the appropriate license. I did not do any financial analysis of their corporation. Trout: Okay. Thank you, sir. Mr. Watson, may I ask you a couple of questions? Watson: Sure. Trout: Thank you very much. When you opened the bids, the bid from Thueson was completely filled out, was it not? There were no blanks? Watson: At the time it appeared that was true. Yes. Trout: Okay and all of the signatures that were required were, in fact, in place correct? Meridian City Council Special Meeting April 30, 2002 Page 17 Watson: Yes. Trout: All right, sir. You, at the time of the bid opening did not observe any invalidity or missing parts of the bid of any kind correct? Watson: At that time I did not observe any irregularities. Trout: Okay. In effect, Thueson's bid promised to the city to perform the work that you requested to be performed for this project; correct, sir? Watson: That's my interpretation. Trout: All right, sir. Watson: Whether that's legally binding I do not know. Trout: Okay but that's why you didn't look at the bid and immediately declare it non- responsive and not to be considered by the city right, sir? Watson: Mr. Trout, I error on the side of reading them all, rather than the other side. Trout: Okay but you didn't find any obvious deficiency on the face of it, it was filled out completely, submitted to you, and signed correct? Watson: Correct. Trout: Okay, sir. Thank you very much. Now with respect to the issues related to the potential for changing this, Mr. Smith, if I might ask -- the proposed changes that you're talking about would not exceed the original engineer's estimate for this project, would they, sir? Smith: Mr. Trout, I'm not aware of what the cost would be. Trout: Okay but this is a unit price contract? Smith: That's correct. Trout: And it could be changed by change order based on those unit prices correct? Smith: Yes. There is a -- I believe Mr. Carnahan told me there is a limitation as to how much change could occur but yes, to a point. Trout: Okay and, in fact, when this proposal was put out for bid there were actually two alternative alignments that the bidders had to consider and be prepared to do the work on; is that correct? Meridian City Council Special Meeting April 30, 2002 Page 18 Smith: Yes. Trout: Okay. Smith: For one mile. Trout: Okay. Thank you, sir. That's all I have -- questions I have, Mr. Mayor, Members of the Council. Our presentation this evening is really quite simple. The reason I stood to be sworn as a witness is so that -- one of the document that I submitted to you, which is Number 9 in the list of documents I provided. It's a set of Findings of Fact and Conclusions of Law from a case that I had the good fortune of litigating, could be explained to you if you have any questions. That's from a case involving the Idaho Department of Transportation and the two bidders on that project, one of which was Bannock Construction and one of which was Nelson Construction. The reason I presented that to you is for responding to the technical argument that has been made by Sommer on this matter that if the bid bond is not notarized that it is an irregularity that cannot be waived by the city. We have a District Court decision from Judge D. Duff McKee -- he is now senior status, but still active on the bench, in which Judge McKee found that an irregularity in the bid bond that did not change. As Councilwoman de Weerd stated, the effectiveness of the contract or the price, terms, or proposal, could, in fact, be waived by the city. Judge McKee further went on to find that it, in fact, should have been waived by the Idaho Department of Transportation consistent with their responsibility to award the work to the low responsive bidder on the project. That's why I included that in the documentation, so that should you have any questions about that case or the situation related to that case I would be prepared to answer those for you. Our position is really very simple. Thueson Construction is a Licensed Public Works Contractor. It's got the appropriate license to do the work on this project, and there is no prohibition of any kind on how Thueson may choose to do it. It could rent all of the equipment necessary for the project or it could rent one dollar's worth of equipment to do this project. That would be appropriate, because it's financially responsible to you guys to do this project correctly. Secondarily, with respect to the notary clause, I think the law is clear that that's an irregularity that can be waived and consistent with your counsel's memorandum to you, which I believe is also part of the documents. There is nothing in the law that prevents you from waiving that irregularity consistent with your responsibility to spend taxpayer dollars wisely and at the lowest possible cost for the city. I think the evidence that you have before you right now demonstrates that this work could, in fact, be done by way of change order. I know you're all intimately familiar with the time delays that have been associated with this project and how important it is to the developers to get this project completed in a timely fashion. As we sit here today, Thueson stands ready, willing, and able to do so. I urge you to make your determination in this matter not based on the technicality of a corporate seal, which is nothing, more than a stamp, when a signature is valid. I urge you to not make your determination based on the lack of a notary clause when no one is contesting that validity of the signature associated with the bond. I urge you, if you're going to allow this process to stand, to do it based on demonstrated facts that Thueson Construction Meridian City Council Special Meeting April 30, 2002 Page 19 or the personnel that are going to be on Thueson's payroll performing this work, have a failed project, have a bad project, have a record of some kind that shows that they are not qualified to do the work. I think based on what you heard from Mr. Carnahan this evening, that you're going to not have those facts presented to you. I have reviewed the Sommer protest letter quite carefully and I didn't see any reference to any single project by Mr. Sommer in which Thueson had failed, had a bid -- or a bond claim, had a breech of contract claim or had anything but a record of success. I believe that's what this city is looking for, a record of success upon which they can rely to have this project performed and I submit to you that the personnel that are going to perform this project are experienced. Two of the key personnel, the project managers I have identified to you in your memorandum, used to be key personnel for Mr. Sommer. They are skilled, talented people and they have the ability to do this work for you at 143,000 dollars less than Sommer Construction. That's why we put it out for bid, so that you get quality workmanship at the lowest possible cost. The challenge that I would place on the table tonight is to have evidence presented to you by Sommer, which I think carries the burden of proof on the bid protest, that Thueson has a project of failed performance and I don't believe you're going to have any facts presented to you that support that allegation. With that said and with that hopefully being the standard by which you will make your decision this evening, I'd like to introduce to you Deon Connell, who is going to be the Project Manager for Thueson. He is the gentleman who prepared this bid -- speak to you a bit about Thueson, its business plan, its experience and the personnel who will do this work for you. Thank you. If you'd like to ask me questions before I sit I would be happy to respond to them in that fashion. De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I guess I do have one. In listing the references, they appear to be under Precision Pipe as jobs. Can you explain why that was listed as their references when they weren't the primary or should it have been doing business under or what was the exact relationship there? Trout: I'm going to let Mr. Connell speak to that directly, but I can tell you that the references were listed because what you're concerned about and what Mr. Connell believed was at issue was the personnel who were going to perform the work. These are sister companies and from time to time for various projects Precision Pipe personnel are put on Thueson's payroll. That's the way they do business. There is a business reason for doing this. They have the equipment on the Precision Pipe side, they have the equipment for the project on that side, and they rent that equipment from one company to another. There is a legitimate business reason for them to do that and it's because Precision Pipe carries all of that equipment on their side of the listing is the only reason why they don't have the Public Works License that's of the size necessary to bid this project themselves. In other words, there is a debt-to-equity ratio that the Public Works Contract Licensing Board looks at before they will give you a financial responsibility license at a certain level. There is a legitimate business reason for them Meridian City Council Special Meeting April 30, 2002 Page 20 to do business this way. Many contracting companies do it in that fashion. When Mr. Connell filled this out what he thought the city wanted to know was what are the qualifications of the personnel who are going to perform this work. Have they put this size of PVC sewer pipe into the ground at the depths required in a fashion that's exemplary, so that you could understand the quality of the personnel that were going to perform the work and that's the way he took the question. The reference says, you know, projects. Projects aren't performed by, you know, pieces of paper that says I'm Corporation A or Corporation B, they are performed by people and that's what he wanted you to understand you were going to get was quality performance by quality personnel. De Weerd: I guess when I read the instruction to bidders on Page 5, 14.3, it says in evaluating bids owner will consider the qualifications of the bidders, whether or not the bids comply with the prescribed requirements and such alternative -- or alternates. I guess that's why those references, in my opinion, would have referred to work that they specifically have done, so -- Trout: Well, it does and he took it as work that would be done by the personnel on Thueson's payroll for this project. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Mr. Trout, to go farther on these references, now were they -- were the contracts with Thueson or were they with Precision Pipe? Trout: The contracts were with Precision Pipe as a -- Bird: That's what I mean. None of these contracts on this 1.9 million at a certain area or anything was ever under Thueson. Trout: No, sir, because Thueson wasn't in existence at the time the contracts were performed. Bird: Okay. Then as a bidder -- and I will save this for Mr. Connell, too, but as a bidder you normally read the specs and the bid form pretty regularly? Trout: Yes. Bird: And if you look at 7.3 -- and I'm not doubting one bit that they are not capable of doing it, they don't have to own equipment, you rent it all the time, but if you look at that, it says corporate seal must be affixed. Must. And if you don't have it affixed you don't have a legitimate bid in my book. Trout: I understand, Mr. Bird. Meridian City Council Special Meeting April 30, 2002 Page 21 Bird: I'm not an attorney, so -- Trout: I understand that. It's an issue that, frankly, I have litigated three times in this state, all at the district court level, and it is the kind of irregularity that has nothing to do with what's of interest concern to you people in terms of getting your project done. It doesn't affect the price, it doesn't affect the legal enforceability of the contract submitted to you, and it doesn't affect the ability to perform, or the financial responsibility of the bidder. Bird: I don't disagree with that, but by the same token it's not fair for seven people to turn in a bid with their stamp on it and the other person to -- when the bid form says -- it's just like you can go through the specs. If it says this and you bid something else, they come back and get you. Trout: Sir, I understand and I can certainly appreciate your prior experience. The only thing I can say in response to that is from a legal standpoint the courts have said consistently that that's the kind of immaterial, irregularity that's waivable and should be waived, because -- or waived. Because the principal responsibility of the corporate municipal entity is to determine whether or not the bidder is capable of performing the work for the price that they have asked for. That's the whole idea behind the Public Works bidding concept. It recognizes the reality that everybody in the world isn't perfect and if you have something that's not material, it gave no one an advantage, okay, in terms of what's really at issue in the project -- in other words, it doesn't give Thueson the ability to change its price. It doesn't give Thueson the ability to change anything that's important to this community, all it does is say that they failed to put a stamp on a piece of paper and certainly if this Council wants to reject the bid on that basis and say we are going to do it strictly, you have the right to do so. You have the right to do so at a cost of 143,000 dollars to the taxpayer. I believe that's what the law recognizes, gives you the ability to waive an immaterial -- I mean a stamp on a piece of paper doesn't really mean anything. It was signed, the signature was valid, you have a valid and binding contract, and that's why I think the law recognizes that. Thank you, sir. Be happy to answer any further questions. Otherwise, I'd like to have Mr. Connell speak just a moment about their project qualifications. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Mr. Trout, if this is better for Mr. Connell, please, tell me, but I'm not a construction person, I'm just a lawyer. You have got to indulge me here, but I look at this issue here and I guess I'll give you a hypothetical, because I guess as lawyers that's kind of what we do. If I want to get a big hole dug, I'm going to put it out to bid, and the Kim Trout Hole Digging Company is going to come bid on that project for me -- Trout: Yes, sir. Meridian City Council Special Meeting April 30, 2002 Page 22 Nary: -- like in this situation, what you're telling me is -- what I'm really concerned about is who is going to dig that hole. If Fred and Charlie are the best hole diggers around and you are going to hire Fred and Charlie to dig that hole, I'm going to have -- I'm trusting you to do that. Well, in this situation when that was asked of your client's, tell us who else has done this work for you, I have no doubt in looking at the material that we have that Precision Pipeline does a very fine job and also have no doubt that your client Thueson Construction is very fine company. Nothing in here tells me that Fred and Charlie are digging this hole. That Precision Pipeline is the one doing it, because when they ask for the bidders and the subs, they list Thueson Construction as the sub doing the majority of this work. Yet, what -- everything that's subsequent to this is really Precision Pipeline and the people that you're saying did the work on Bear Creek and did the work somewhere else. Something doesn't jive here in my mind. Trout: Mr. Nary, I think that's a fair question, but what we have is a circumstance where Thueson can hire anybody they want to, but they are not going to hire Precision Pipe. What they are going to do, very specifically, is take the qualified experienced personnel from Precision Pipe, they will be on Thueson's payroll, and they will rent the equipment from Precision Pipe. They could just as easily have said the same thing in the response that you're pointing to and have already gone out and contracted with Mr. Sommer to do the work or they could have -- they could hired Mr. Sommer's personnel, which they have done over the years, to form their own personnel, and rented the equipment from A to Z Rentals. Yet, what the form simply asks for is who is going to be responsible for performing the work and that's Thueson's responsibility to you under their public works license and by way of contract. Nary: But when we ask here on the list of subcontractors, the concrete work -- and I can't read this -- the name very clearly. Okay. Now it's not going to tell me whom those people are that are actually laying the concrete, but it tells me which company is going to do it. Trout: Correct. Nary: Okay and it asks for the fencing, it says Anvil Fence Company, it's not telling me who are the people standing out there putting the holes in the ground and putting the fence up, it's telling me Anvil Fence Company is standing behind this fence and guaranteeing it. Well, you're telling me Thueson Construction is doing the pipe work, 73.5 percent of it, what you're telling me is they are doing it with all the personnel that performed this work for a different company at a different time that don't work for Thueson Construction all the time. Trout: No but that's part of their business plan. Nary: I understand that, but if I read this, I wouldn't know that. I don't know that Fred and Charlie are digging this hole for me, because all it tells me is you're doing it. Meridian City Council Special Meeting April 30, 2002 Page 23 Trout: Okay but you did ask the question that said who is digging the hole and what's the quality of their workmanship and that's precisely what Deon Connell said to you. Here are the holes we have dug and here is the quality of the workmanship. Nary: But he's saying -- but he didn't say which ones they had done, he's saying the people I will bring back to this project that you're asking for are the people that did this work somewhere else. Trout: That's correct. Nary: But they don't work for me. They only work for me tomorrow if you give me this contract. Trout: But they do work for them and they do work for them from time to time on various projects. We could have given you a list -- and, in fact, Mr. Watson asked for and received a list of a number of other projects in which the same personnel performed work. As a result that information was delivered and had the bid form requested every one of the projects on which these people had done the work for Thueson, Precision, Sommer or anybody else, we would have provided that information. That's not what the bid form requested. In other words, I could be a brand new contractor, Kim Trout's Hole Diggers, okay? I could be in existence one day, with the proper Public Works License, and I could -- Nary: Okay. Trout: With the proper Public Works License and I could have at the time that I prepared this bid a whole variety of people, Mr. Smith, Mr. Watson, Mr. Carnahan, lined up to do this work for me. If you wanted to know my experience, it would be based on the people I would employ and those are the people I would employ. I would tell you about their experience, so you could understand what the quality of the workmanship I bring to this project is. That's what you're asking for in this bid form. Nary: No. I think what I'm asking for -- I guess I'm asking for the references and you tell me Kim Trout's Hole Diggers dug these holes at Bear Creek. When I call Bear Creek and they said, well, no, it really wasn't, it was those guys over there, who are now going to come work for him, that's a little misleading to me. I guess it's a little confusing. Trout: Well, I think the question is a little misleading and confusing. It says reference for at least three similar type and size projects completed. It doesn't -- Nary: For this contractor. Trout: It doesn't say that. Nary: Whose name is at the top of the form. Meridian City Council Special Meeting April 30, 2002 Page 24 Bird: Thueson Construction, that's who bid it. Nary: That identifies this company. Trout: Okay but -- Nary: It doesn't mean by people in the whole world. Trout: Mr. Nary, I'm going to respectfully disagree for the following reason -- here is why. We both know, because we are trained lawyers, that a corporation is nothing more than a piece of paper. It's an artificial entity created by the state and what we are really concerned about, if we are really concerned about it, is the people who run the company and perform the work and those people can be anybody. Wouldn't you agree, sir? Nary: I would agree, but the bond goes to the company and the question was to the company and that's the problem I'm having. The question was put to your client tell us what references -- your references. When you fill out a job application and you list references, you don't list the references for somebody else, you list the references for you. Trout: As a corporation or an individual? Nary: Well, then, there is no explanation here until after this issue has arisen that Thueson Construction has raised that, really, we are not going to do this work. These folks that work for Precision are going to come work for us and all this stuff keeps popping up since then. None of that is in here until this issue was raised. Trout: None of it was requested. Nary: But it was requested. Trout: All right, sir. I'm not going to split hairs with you, Mr. Nary. I understand your point. I guess the real question is -- we can argue over the fineries, okay? An investigation was done by Mr. Carnahan as to the quality of work that would be brought to this project. It's either good enough for you or it's not. Again, I would ask the city to make a decision based upon not what's supposition by Mr. Sommer, but based on fact. Okay? The fact is that the people that are going to perform this work have an excellent, if not outstanding, track record and that's what Thueson brings to this project. If the city has a set of facts or if Mr. Sommer can present a set of facts that says the track record of the people that are going to perform this work is not exemplary, have them stand up, give you those facts, and make your decision based on that. Otherwise, I think you have a low, competent, qualified contractor who is financially responsible, provided you with a bond, and has met the qualifications of the state for the performance of the work. Meridian City Council Special Meeting April 30, 2002 Page 25 I would urge you not to spend 143,000 dollars that you don't need to spend. If I could ask Mr. Connell to stand up and make a few remarks. Corrie: One question I'd like to ask if I might, Mr. Trout. Trout: Certainly. Corrie: Based upon the -- the licenses that are given, Precision Pipe couldn't bid this is that correct? Trout: No, sir, they could not. Corrie: They could not, but Trout can -- Trout: No. Thueson can. Corrie: Thueson. I'm sorry. Trout: Thueson can. They hold the requisite financial qualification and the reason Precision doesn't is a business reason. They have made a conscious business decision to carry all of the equipment that the companies jointly operate on Precision's side and as a result, there is debt associated with that. I mean this is just a simple fact. There is. As a result, they can't meet the technical debt-to-equity requirement required by the public works license board. I can tell you -- and I will represent to and it is a fact that Precision has exactly the same bonding capabilities as Thueson. They can bond a project this size and they can perform the work of a project this size. They simply can't because of a balance sheet problem that they make a conscious decision on, to obtain the Public Works License, because they don't have the correct debt-to-equity ratio. Does that answer your question? Corrie: Yes. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: I have got one more question. On the applicant's -- you're going on with all these people that are coming over. On the applicant's statement for experience for his Public Works License, there are only two people listed. None of these people that we got references here was listed as part of this company under this application. I have no doubt that you can hire anybody you want to do it. At that point when this bid was there, even though they are married as the two businesses, Precision and Thueson, these gentlemen that are coming over here was not under the payroll of Thueson at that same time -- I mean I don't know what their separate of corporation is or anything, but they were not on Thueson's payroll, I take it, at that time. Then when we asked -- you Meridian City Council Special Meeting April 30, 2002 Page 26 know, when the bid form says, you know, require the bidders and if the bidder is Thueson and I go back to Mr. Nary, we are getting all these references for Precision, so -- I don't know. Trout: All I can say, sir, is this Thueson's application was submitted and I would presume thoroughly reviewed by a body just like yours, the Public Works License Board -- Bird: That's right. Trout: -- and the Public Works License Board said you qualify, we will grant you a license to do the work that you say you can and have done. I'm assuming the Public Works License Board did its work correctly and they did so based on the application submitted and, again, I don't know that that is issue is before you today. In other words, there was nothing in your invitation for bid that said did the Public Works License Board do something incorrectly in issuing the license to Thueson, so -- Bird: I'm not questioning that, I'm just questioning -- you're giving us all these people that's got all the experience from Precision that were not employees at the time of this bid for Thueson. Trout: Well -- De Weerd: And I understand, you go hire -- you know, every job you pick up you have got to go hire people. Trout: Yes, sir. I think that's a reality in the world of contracting. Bird: I'm not going to argue that. Trout: In any event, be happy to answer any other questions. Corrie: Okay. Trout: Thank you very kindly. Mr. Connell. I'd rather do this, Mr. Nichols, if you don't mind and, Mr. Mayor, if you don't mind, rather than do this in question and answer form in order to speed this a bit I'd just like to have Mr. Connell make a statement and make his presentation to you. Connell: Mr. Mayor, Members of the City Council, just a couple quick things. I guess -- Corrie: Give us your name. Connell: Oh. Deon Connell, 940 North Latitude in Meridian. I'm here this evening representing Thueson Construction, Incorporated, of Nampa. A quick scope of the Meridian City Council Special Meeting April 30, 2002 Page 27 work. I think you're all pretty familiar with what is entailed in this project, being a trunk line, but it's a little more in detail than that, so we can just reference back to some of our team members' qualifications in this type work. The project is approximately three feet - - or three miles long, 24 inch to 12 inch PVC sewer pipe, ranging anywhere between 14 feet and 20 feet -- 21 feet deep. There will be groundwater encountered. The alignment of the project, as you all well know, is out through farm ground, there are several different property owners. Part of our business decision when we -- Thueson Construction actually was formed back in 1988, was recently incorporated in August of 2001. Mr. Thueson, sole proprietor of Thueson Construction, has involvement in several different entities, some that he has in the past sold his interest out of, some that he still has interest in, such as Precision Pipeline and Thueson Construction. As our team with Thueson Construction, we really focused on surrounding ourselves, being our team members, with very qualified -- I don't have enough time to go through the list of projects similar and even greatly exceeding these projects that our team members have qualifications doing. Myself, like I said, I would be the project manager, have been project manager over several projects for Thueson Construction in the past three years. I am the estimator, have been the project manager and estimator for the past 10 years in the underground utility construction industry, with probably the largest underground utility contractor in this valley until I decided to go and start Precision Pipeline, being Mr. Thueson and I. Anyway, two of the key people that would be on this project -- because we had planned on accelerating the schedule, beating the schedule, not going the six months as the documents requested, we were going to put at least two crews on this project, which required two superintendents or two foremen, whichever you'd like to call them. One would be a gentleman by the name of Bill Smith. Bill Smith has over 30 years experience in underground utility business, was employed at one time by Mr. Sommer a few years ago on a deep 22 foot -- 22 foot deep, 30 inch PVC trunk line in the City of Nampa, which I believe, talking with the City of Nampa, went above and beyond what they thought should be performed. The project went very well and that's only one project. Mr. Smith has done several -- he did the largest Boise sewer interceptor for the City of Boise back in 1990. Approximately five miles of 72 inch concrete pipe, anywhere from 20 feet through 35 feet deep along the Boise River, which included two river crossings, which, as we all know, are very difficult, met the schedule ahead of schedule, under budget. I could go on to list several -- several projects for Mr. Smith in the last 30 years that are very similar in length and exceeded by a lot. Another key employee would be the other superintendent, his name is Jay Tom. Mr. Tom has had experience in the underground utility industry also for 20 years, has completed numerous projects in this valley, one of which was for Mr. Sommer. He installed approximately 2,000 lineal feet of trunk line down in Eagle that provided Banbury Meadows Subdivision. I believe the project started out near 30 feet deep. My records show that I believe it was 24 inch PVC. Mr. Tom completed a little over 2,000 feet of that project. Groundwater was included, approximately 4,000 gallons a minute of groundwater. That's a lot of water. This project is nowhere near that, of course. And he has done -- also he did a project called Camden Heights and that is a 30 inch trunk line that was just completed here five months ago in the City of Nampa, 30 inch PVC sewer line in bad ground conditions, unlike what we have here, we have pit run ground conditions. Over there we had basically quicksand. We were pumping approximately Meridian City Council Special Meeting April 30, 2002 Page 28 2,000 gallons a minute on that project. We did approximately 2,400 feet of 30 inch PVC in a little over a week and a half, ranged from 16 feet deep to 24 feet deep. Then, again, like I say, that was for the City of Nampa. I believe in one of the exhibits you have -- you have two letters of recommendation from the City of Nampa. I guess in closing just like to say the people that will be doing this project, if awarded to Thueson Construction, have exemplary records, they will be on the payroll of Thueson Construction, as some of them have been already, beyond this project in earlier times, including myself. We have a lot of experience on our team and what we do we do very well. That's all I have to say. Any questions? Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Is it Connell or Connell? Connell: Connell. Bird: Connell. Okay. Mr. Connell, I take it that you probably bid and project manager for both Thueson and Precision? Connell: Yes. Thueson we actually have two estimators on projects that we -- Bird: And you manage Precision Pipeline or do you have another manager or are you - - Connell: Yes. I'm the operating manager of Precision. Bird: I take it that you probably do a lot of the bidding -- Public Works bidding for Thueson or Precision Pipe? Connell: Yes, I do. Bird: Whichever one is bidding at that time? Is it policy not to put a corporate seal on your bid? Connell: On this particular bid, Mr. Bird, Thueson Construction, as I said earlier, was incorporated in August. Their corporate seal was actually on order, as stated in a document afterwards when Mr. Watson had requested. We had sent and said that the particular corporate seal was on order. In the past, we wrote on the document that it was on order and that has been acceptable. On this particular bid, we did not do that. Bird: Would you consider if you were second bidder and the low bidder did not have his papers in his bid form in proper order, that he should be awarded it? Connell: Because of lack of a corporate seal? Meridian City Council Special Meeting April 30, 2002 Page 29 Bird: Well, for lack of not meeting the specifications as specified in the bid forms. Connell: I believe I would question it, yes. Bird: Okay. Thank you. Corrie: Any other questions? Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Mr. Connell, I think Mr. Trout said you were the person that filled out the bid documents. Connell: That's correct. Nary: Okay. What was your belief on 8.0, the general information required bidder -- this is on Page 7 -- when it was asking for references? Connell: Basically the experience of the person that was going to do the project. We never at any time were deceiving. Everybody -- I deal with Mr. Sommer, I have been to lunch with Mr. Sommer several times, and Mr. Watson knows me personally. As Precision Pipeline at no time were we ever trying to be deceiving. I mean I dropped the bid off for Thueson Construction, people knowing that I am involved in Precision Pipelines, but their reference was stated through the experience of the personnel to complete the project being on the payroll of Thueson Construction. Nary: Mr. Connell, I guess I thought I heard earlier that they weren't at that time on the payroll of Thueson Construction. Connell: They are on the -- I mean there is -- depending on which project we have people on Thueson's payroll at any given time, including myself. Nary: So if on the 28th of February you and Mr. Smith and -- I forgot the other gentleman's name -- Connell: Mr. Tom. Nary: Mr. Tom -- had a falling out and they weren't going to be the project managers on this project -- and I don't -- I have never intended to infer at all that you were being deceptive. I guess it's not very accurate. If you had some falling out with these folks, they weren't on your payroll, they walk away, you're wanting us to rely totally on those Meridian City Council Special Meeting April 30, 2002 Page 30 personnel, that's the reason we should sustain this bid, how would you be able to get this project -- Connell: Those -- Mr. Nary, those two gentlemen are only two people that I have taken the time to list in our numerable -- we have 38 employees with Precision Pipeline. Thueson Construction has about 20, I believe. Between both of our companies, we have several other people. I would never bid a project solely on relying on one or two people ever. Our company's experienced. Our team has numerous employees that are qualified to do this project. Nary: I guess I will ask you the same thing that Mr. Bird asked you. If you were the second bidder and the references that were listed by the low bidder were projects that their company didn't perform, but other people they were going to hire were going to perform, would you have a problem with that? Connell: I think I would question it, as Mr. Sommer did. Nary: Thank you. Corrie: Any other questions? Bird: I have none. Corrie: Okay. Thank you. Corrie: Do you have anything else -- I mean we have gone over our 30 minutes -- actually we are 45 minutes -- 50 minutes, but give or take, we'll give you a chance -- you will have a chance for rebuttal. Trout: Mr. Thueson would like to make a short statement and then we will reserve the rest of our time. Nichols: Mr. Mayor? Corrie: Yes. Nichols: If I may, Mr. Trout, you referenced some additional exhibits. Did you want to present those now? Trout: I do, indeed. What I have is a series of documents -- and I will just read these into the record for you and then I will present it to you, Mr. Mayor. We have letters of reference from Christopher Smith, who is the vice-president of Layton Construction. Thueson is currently performing more than a million dollars work on the Boise airport project as a subcontractor with Layton Construction. It's sewer and other related work similar in nature to this. We have a letter from Mr. Jim Brooks, Development Services Meridian City Council Special Meeting April 30, 2002 Page 31 Coordinator for the City of Nampa and Dan Henry, City of Nampa, with respect to the projects done by Thueson for the City of Nampa. We have a letter of reference from Ramon Yorgason, president of Capital Development Corporation, one of the entities that will, in effect, connect to this project. We have a letter of reference from K. Joe Whittle, Jr., of Whittle Construction Company, a letter of reference from Pam Larkin of the City of Nampa, and a letter of reference from Steward Hartley of Washington Mutual Bank with respect to their financial qualifications. I present those as additional documents for the record for you, sir. May I approach Mr. Nichols? Nichols: Mr. Trout, if you will give those to the clerk, that's his -- Mr. Mayor, just an additional item of clarification. In Mr. Trout's presentation he referred to an Exhibit 9, which is contained in this folder and since we called this Exhibit 16, we should probably -- the record should reflect that would be Exhibit 16-9, so that we make sure that we are correct on that. Thueson: Mr. Mayor and Council Members -- Corrie: Name and address, please. Thueson: My name is Lance Thueson. My address is 1835 Southside Boulevard, Nampa, Idaho. I'm honored to be standing before you for a few minutes this evening. I'm very proud of the team that we have, the success that we have had, and the experience over these last several years. We -- I am the president of Thueson Construction, Inc., and also majority owner of Precision Pipe and that may be some of the reasons for the clarification that Mr. Nary -- I guess what keeps running through my mind. One thing that really concerns me -- and Mr. Bird has hit upon it several times this evening, is that if this was a non-responsive bid, they acknowledge that and they reviewed it the following day. Then why -- I believe it was close to a week, week and a half later, why did the city staff request, then, financial statements, depreciation schedules, Public Works License, et cetera, and so it -- and a non-responsive bid. If it didn't have the criteria, then it should have been dismissed at that time, it should have been over with. They should have handed us the bid back and it was over with. Well, why a week and a half later do they request several documents and have us submit that information. I think, as our attorney has represented here tonight, that we are responsible. We have got a very good team, very professional employees. Mr. Trout just gave you a letter and I'd like to just read that quickly to give you an idea of whom we are. To Whom It May Concern -- this is actually from the Layton Construction Company out of Salt Lake City. Thueson Construction, Incorporated has asked that we provide them letter of recommendation regarding our relationship and their performance at the Boise International Airport. We have completed many multi-million dollar contracts throughout the intermountain states and have worked with many trade contractors in the process. Approximately a year ago Layton Construction was awarded the Boise International Airport. Thueson Construction, Incorporated, was a major team player during the bidding process and was instrumental in helping win the airport project. Thueson Construction, Incorporated, has entered into a contract for over 1.5 million dollars of work at the airport project. This contract included mass Meridian City Council Special Meeting April 30, 2002 Page 32 excavation, structural excavation, and site utility. The mass excavation consisted of 68,000 cubic yards of material that Thueson Construction was able to remove in under two months. Their performance and professionalism has been outstanding and has been instrumental in us giving them an additional change order for a new work site at 350,000. Because of their efforts to complete their contract in a timely and professional manner, we feel confident in recommending Thueson Construction, Incorporated. Of course, if you have any questions -- and it's vice-president Chris Smith with Layton Construction. Over the years, I have -- I guess not to pat myself on the back, but have entered into many business ventures and have bought, sold and created. Precision Pipe is a corporation that we started in 1999, have been in the construction business for many, many years. In fact, I hired Mr. Sommer and his professional company to come in and do some work when -- on the same project that I was doing. They did probably 20 percent of it and I did 80 percent of it, on a development project that I was doing. I have no qualms with Sommer Construction. They are a very professional company in the valley but, likewise, we are. We have never had a bond filed on, we have never had a bankruptcy, and we have never had a job that wasn't completed. To my knowledge, we don't have any bad marks on our record. We stand ready and willing to serve the City of Meridian and have this on our resume to show the Council members and the citizens of this community that we can and will perform this work and save a lot of dollars in the process and I would close with that. Any questions I would certainly answer them. Corrie: Questions from Council? Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: I'd just like to state that the letter of recommendations are very good and we are not questioning the ability -- or I'm not questioning the ability of you guys to do this job. I'm questioning the process and the -- what it is -- what is fair for seven, why isn't it fair for one more. That's all I'm questioning. Nobody here, I don't think, has doubted you couldn't do the work or capable of doing the work. Thueson: And I appreciate those comments and I know that this Council as a body here can waive those irregularities. The purpose of a notary -- and correct me if I'm wrong -- is to go record a document. A signed document is legal and binding, but you cannot record it unless it's notarized. We didn't have any intent here to notarize the document. A witnessed and a signed document are just as valid as a notarized. Notarized is another way of saying it's witnessed but the contract is binding and the bid bond was binding. That was really not our error, that was the error of our bonding company and she wrote a letter -- I think you have it in your exhibits, she came in and stamped and she was very apologetic to us. The corporate seal is a true fact. I did not have it at the time we submitted the bid. I do have it now and we just bid one on Friday at 2:00 with Quantum Consulting down at Eighth Street Market. My seal is on it and -- Meridian City Council Special Meeting April 30, 2002 Page 33 Bird: Mr. Thueson, let me ask you a question -- let ask you a question. As I understand a bid bond, a bid bond just assures the owner that you can be bonded, that -- when they sign a five percent bid bond, that bonding company, whether it's Traveler's Surety or who it is, says, yes, we will bond these people for the amount that they have bid. Thueson: Correct. Bird: Okay. Now -- and is it -- is that bid bond legal if it is not notarized? Thueson: Yes. Bird: It is? Thueson: Yes. It is and if also -- a bid bond is what I would forfeit if I pulled my bid. Bird: You're right. Thueson: But I do not intend pulling my bid and if you want to claim on it, if I did, you would receive the five percent. Bird: After the fact but I have always been told -- and I could be wrong -- and there are plenty of lawyers around here to tell me -- I have always been told they have to be notarized. What -- if it were notarized and it's legal, say you come in at 500,000, the next bid is 1.2 million, and you say, no, no, no, I'm not -- I pull my bid and that bid bond - - we have no way of getting that back if that isn't a legal bid bond. You tell me it is without being notarized. I have been told by my insurance agent that that has to be notarized. Thueson: You can certainly visit with our underwriter, but it is valid. Bird: Okay. That's -- Thueson: If we -- if we had wanted to come into this bid opening and you open the bids and we withdraw, say there is a disparity. Say we were 500,000 and they were a million two, we go, whoa, what did we forget and we withdraw, you would end up with the bid bond. Bird: We would end up with five percent, yes. Okay. Thueson: And then after that then you have a performance bond, then you have -- Bird: But the bid bond guarantees that you can get that from that surety. Thueson: That we are not going to pull our bid and if we do you stand to gain that. Meridian City Council Special Meeting April 30, 2002 Page 34 Bird: Okay. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Mr. Thueson, I want to echo what Mr. Bird said. I don't think this issue that we are -- I don't think we are here tonight because of the concern about the quality of the work that your company or the second bidder can perform. I don't think -- I guess I don't see anything in here that that's the issue before us and I don't certainly have an issue regarding that. I do want to ask you the same thing we asked Mr. Connell, is that if you were the second bidder and some of these irregularities exist regarding the seal, regarding the notarization, regarding the references and those type of things, what would your feeling be? Thueson: I do not think it's fair to call it non-responsive or a protest. We are the one here, I feel, that we are trying to defend our position and we are not. We have a property interest in this bond -- in this bid. We are the low bidder. We don't feel that we have the burden to prove. I don't think you can find anybody -- and as was mentioned -- that can prove that we have a bad track record. You asked the question, Mr. Nary, what if we hired some key personnel -- and we mentioned two of them, Mr. Smith and Mr. Tom. If we hired them and put all of trust and our faith in them and they left us. Well, what guarantee is there that Mr. Sommer isn't going to have the same boat? It's not -- it's not who you put all your faith in, I guess, and all your trust, anybody can have the boat rocked. The financial obligation here is that TCI is going to stand behind this bid, complete the work, and accomplish it as stated. We have very professional people. I have employed them. I did a Nampa airport project just a few months ago and we employed Precision Pipe employees, which I am majority owner of it, it is a business decision, and they performed the work. Nary: And just as a final comment, Mr. Thueson, you know, understand for us to make a decision to waive that -- which is, essentially, what Mr. Trout, the bottom line, is asking, to waive -- whatever irregularities that there may exist, very minor things -- give me just a minute -- that we have to have a standard in which to do that. Otherwise, every bid we will have a meeting like this. Thueson: That's right and that's what you're creating if you overturn this. Your standard needs to be that if it's not responsive, it doesn't have the seal, and if it doesn't have the notary, then it needs to be turned around and rejected the very next day. That did not happen here. Your city staff required or asked of and we supplied additional information. It went beyond that point. Nary: But we can fix that. We can -- Thueson: You can waive the -- Meridian City Council Special Meeting April 30, 2002 Page 35 Nary: No. We can go the other way. We can fix that, reject it now, and direct the staff not to ever put us in this boat again and do it the next day. We can do that but what I'm saying is that I don't want to waive this without a good reason that we can be comfortable with, at least for me, so that we don't have this every time that someone can miss some of these things that may be minor. Every time someone is going to protest and say, well, let's waive it again let's keep -- Thueson: That's exactly what's going to happen if you turn this bid over. Every time you have a bid -- anytime there is any differential, they are going to be back in here, they are going to be protesting. They are going to have another meeting just like this that you have tonight. Every time. That does not change the substance of the bid. Everything is in place and everything is there. Do you agree? Nary: No. I guess that's what we are going to decide here later. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Mr. Thueson, I have to agree with you, that -- you know, yes, we didn't, but when you put out -- when you put out a set of specifications and expecting all to be -- like I said before, seven of them come in the deal -- you know. If you wrote down there on the bottom seal not here, missing, or don't have the seal yet, then I could accept that. Thueson: And I can provide you where we have submitted a bid prior to this job where we wrote ordered on it. We did not -- we were getting this together we did that not write ordered on it, but I can assure you that we have it now and I can assure you that we wrote ordered on it on previous -- Bird: Let me ask you a question. You're working for Layton Construction? Thueson: Correct. Bird: I don't know whether you're under the Pipe Precision or under Thueson. Thueson: It's under Thueson Construction. Bird: Thueson Construction. Now that was Public Works? Thueson: Correct. Bird: Was your form filled out 100 percent? Thueson: You know I ought to go back and look. Meridian City Council Special Meeting April 30, 2002 Page 36 Bird: You better go back and look. Thueson: But we are doing the work. Bird: Because I can tell you that Layton would -- I'm sure if it wasn't right, it would be going. Thueson: It must be accurate, then. Bird: Yes. Corrie: Okay. Anything else? Thank you. Give you a chance -- last chance here. All right. I guess Mr. Sykes? Jeff? De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I'm sorry, but could we take a five-minute break before we get started into this - Corrie: Okay. I'm sorry. De Weerd: I'm sorry, but -- Corrie: Let's have a recess for five minutes, and then we will be back here at 25 after 8:00. RECONVENED AT 8:25 P.M. Corrie: All right. I will reopen the meeting from the recess and, Jeff you're on. Sykes: Thank you, Mr. Mayor, Council Members. I appreciate the time to address you regarding this issue that's before you this evening. I think all of the facts, basically, have been reiterated here tonight and I think you folks know what is going on and what's happened. I think it's been pretty well explained. I have a couple of questions for the staff, just to follow up on a couple of things and make sure I'm actually clear on what happened. Before I do that I'd like just to make a couple of comments to the Council and then after that I would ask that Mr. Sommer be sworn and allowed to make a brief statement to the Council, especially considering the staff's recommendation that has been made about re-bidding the entire project. I think he can shed some light on the ability of his company to proceed with this project and to proceed with changes under a change order, that would be entirely feasible given the nature of this contract, the type of contract we have here. Frankly, the problems with re-bidding the whole project at this time, because I think you will be looking at a date to far exceed what Meridian City Council Special Meeting April 30, 2002 Page 37 you're looking at simply to resolve this dispute here, go forward and issue change orders to complete the project. This, as I think has been addressed, is not a contest between Thueson and Sommer. I think both are reputable people. The real question here is the competitive bidding process. This is the City of Meridian's process of how it handles bids. What information is it going to require? What information does it mandate that the bidding contractors provide so we can evaluate the bids and have a fair, open process or, actually, a sealed process which insures that the city is getting the best price and the highest quality contractor. The State of Idaho has enacted laws to make that happen. It requires the cities and the government entities to set up information they want and to require all bids to provide that information. Frankly, if the bidders do not provide that information and then turn in a bid they are not satisfied with, it provides that bidder with an opportunity to remove the bid and claim that they shouldn't have to honor that contract. That's the reason you have these requirements. That's the reason you ask for notary acknowledgments on bid bonds. There is a reason you ask for all of these things. All of other the -- the contractors, and especially the second low bidder in this instance, Sommer, supplied you with all of the information. If Sommer can do it so could Thueson. The second question I'm going to try to answer for you that has been raised and that is why spend 143,000 dollars more of the city's money. I believe it's because this process requires it and, second, I think that that's a fair price for this project. If you look at all the other bids that were submitted. I think at the end of the day when you look at the evidence that's presented of why experiences on Thueson's part were listed for Precision Pipe is because they don't really have the experiences. If they had their own experiences to list, I'm assuming that they would have been put down in the application to begin with. What you get for a lower bid is potentially a bidder that may not be highest quality bidder for the right price. You also get Thueson who has the opportunity to have an unfair competitive advantage over all of the other bidders and that's what the process -- that's the process that needs to be protected. Bidders shouldn't be able to come in, provide only a portion of the information, provide references for another company that is not bidding, and then explain it all away later and today here it looks just fine. I can see that, I can see the arguments made by Mr. Thueson. What's the problem? We are going to honor our bid. What the problem? We have the experiences. What's the problem? We didn't realize we weren't supposed to put down references from another company that isn't the company that's bidding. The problem is if the next time we do this, it creates an out for the bidder. What if Thueson did want out? They may have an avenue to do it. That's the problem. If I may, could I address the staff with a couple questions? Corrie: Okay. Sykes: Mr. Carnahan? Is that correct? Carnahan: Yes. Sykes: I had a couple of quick questions. You called and checked on the references provided by Thueson correct? Meridian City Council Special Meeting April 30, 2002 Page 38 Carnahan: Yes, I did. Sykes: And you said in your opening statements that those references had no problem with the quality of Thueson's work and I was curious about that statement, because you testified later that Thueson actually didn't do that work, it was Precision Pipe. Carnahan: Yes. I misspoke in my initial statement that it was Precision Pipe. Sykes: So the recommendations provided -- or the references provided by Thueson were for Precision Pipe? Carnahan: Yes. As I indicated before, I asked each of the references who had done the -- performed the work and they had responded Precision Pipe. Sykes: And it was a glowing recommendation for Precision Pipe, but they weren't glowing recommendations for the bidding contractor on this project; correct? Carnahan: Correct. Sykes: If the city were to enter into a contract with the low bidder -- or the apparent low bidder, it would be with Thueson correct? Carnahan: Yes. Sykes: It wouldn't be with Precision Pipe. Carnahan: Correct. Sykes: There would be no contractual relationship mandating Precision Pipe to do anything. Carnahan: Correct. Sykes: As I understand it, Precision Pipe has a Class C Public Works License? Carnahan: I believe that's correct. I can look if you want. Sykes: I'll represent to you I think that was already talked about. That allows a bidder with that type of contract with that license to bid projects up to 75,000 dollars? Carnahan: I believe it's 100,000. Sykes: 100,000 dollars? This project that was bid is close to a million dollar project? Carnahan: Yes. Meridian City Council Special Meeting April 30, 2002 Page 39 Sykes: Was there any explanation given by Thueson why it didn't put down any references of projects it had done? Carnahan: I'm not aware of any. Sykes: Was there any concerns raised about the ability of Sommer Construction to do this work? Carnahan: I am not aware of any concerns. Sykes: And Sommer Construction has a triple A Public License correct? Carnahan: Yes. Sykes: That allows them to bid jobs over three million dollars? Carnahan: I believe up to three million. Sykes: Up to three million? Well within this job correct? Carnahan: Yes. Sykes: Did you check the references for Sommer Construction? Carnahan: I have not. Sykes: Any indication that Sommer Construction put down references for a different company other than Sommer Construction? Carnahan: No. Sykes: There was one answer -- I'm not sure who answered the question. It was that when you open the bid you look for an acknowledgment. I can't remember who answered then. Mr. Watson, was that you? Watson: Mr. Sykes, I think the reference was to an acknowledgment of the addendum that had been issued. Sykes: And is the acknowledgment -- is that a notarized statement? Watson: No. It's -- Sykes: It's just an acknowledgment -- a signed acknowledgment? Watson: Normally it's simply initialed and I think dated. Meridian City Council Special Meeting April 30, 2002 Page 40 Sykes: What is the purpose of looking for that acknowledgment? Watson: To insure that the plan holders have received the changes made through addendum issued. Sykes: And does that have any other significance to you that they -- well, that they understand the bid package, right, and that they understand they are to be bound by that addendum that they are acknowledging correct? Watson: That's my understanding. They acknowledge that changes have been made to the plan, either scope, price -- well, scope, technical specifications, time, and that their bid conforms with that. Sykes: The bid bond that's supplied by the City Meridian also has an acknowledgment, does it not? Watson: Mr. Sykes, I didn't prepare these bidding documents. As I recall, the bid bond it has a -- well, in parenthesis it says seal and notaries acknowledgment of surety. Sykes: Right. What would -- I'm going to ask a hypothetical question, if I may. If a bid were submitted without any references at all, what would you do with it? Watson: Mr. Sykes, we'd probably go through the same process we've gone through on this one, which is check everything, list the deficiencies in that bid and any others that may show up in any other bids. I guess the first inclination would be to reject it, all the other bidding documents. I'm not sure, say, that we can reject a bid based on lack of those, but we would be very concerned and we would end up having to meet with the contractor. I'm sure the city attorney's office. Sykes: Does it cause you any concern that the references given by Thueson Construction were actually for Precision Pipe, a contractor with only a Class C license? Watson: We certainly noticed it and noted it when we evaluated the bids and knew that we needed to do some further investigation. Sykes: Thank you. Council Members, Mayor, I think based upon the questions that I have at least presented and the other questions that have been set forth in the hearing here today, it becomes relatively clear to me that the competitive bidding process was not followed in this case. There has been some discussion and talk about whether the irregularities can be waived. I think the analysis isn't so much can they be waived, we have first got to decide whether they are material, because the material deficiencies can't be waived. Then immaterial deficiencies may be waived, but need not be waived. The Council has full liberty under Idaho to consider all of the facts and circumstances concerning that bid, that contractor's ability to perform, misstatements that are provided Meridian City Council Special Meeting April 30, 2002 Page 41 on the application and to make a sound, reasoned decision that the bid is not responsive or that the bidder and/or the bid is not a responsible bidder. This bid should be rejected. In this case, the city requested at least three things, a bid bond that was notarized, a corporate seal for the company that is bidding, and the experiences of that company that was providing the bid. Those three things are missing from the Thueson's bid. I would submit to you that those are not immaterial, that those missing items give to Thueson a competitive advantage over all of the other bidders and does not create a level, fair playing field for the people bidding on public works projects in the City of Meridian. It may be unfair, it may seem draconian to just toss out the bid, but that's the way it works. Those are the rules. These contractors are all playing by the same rules. A sports analogy, you may have the best run back in the football game from the kickoff, but if you put one toe on that white line when you run it back, the touchdown it does not count. It may have been beautiful, it may have been perfect, but it was deficient. That's what we have here, a deficient bid that should rightly be rejected based upon the sound legal conclusions that can be set forth by this body, and I believe this is set forth by this body's attorney also. The one question I kind of asked was why didn't Thueson put down its own experiences? I truly believe because it doesn't really have the experiences to put down on the application. If we look at the Public Works applications submitted by Thueson, we find that Thueson Construction was only incorporated in August of 2001. It's only been in existence eight months. How much experience could it possibly have? I think -- I think it would have been detrimental to that bid had Thueson wrote in the experience we have none. It would have been detrimental to Thueson's bid to write we have only worked on one job or two jobs or jobs that aren't of the same size and caliber. I think it would have been detrimental to Thueson's bid if it had written the experiences we are putting down here are for another company that is a sister company, but it's another company. It may seem like an artificial distinction to talk about companies, but, in effect, it is a real distinction. McDonald's is not Burger King. They could be owned by the same person, but they are not the same companies. The city's recourse is against Thueson Construction, not against Precision Pipe. The city would be contracting with Thueson Construction and I think the city should demand of Thueson Construction that it follow the appropriate instructions when submitting a bid. I think that the City Council should demand of all bidders in the future that it follow the instructions that the city sets forth. That's how you draw the line, that's how you avoid these issues from coming up. You set the standard and the standard is set within the instructions. I read rule -- or at least Instruction 14.3 of the instructions and it seems to say that you have to put your experiences down, that you don't put experiences of another company down. If it were an individual, would it be okay to put the experiences of another individual? I don't think so. The same rule applies to a company. Companies need to put down what that company has done. If Precision Pipe wanted to bid this job it should have qualified for the appropriate public license and bid this job under its own name. We would not be standing here today if that were the case. The issue of the notary on the bid bond I don't think so insignificant as it's been made out to be. After the fact, after this bid was open, after that mistake was brought to everyone's attention, Mr. Thueson and his company came back in and had it -- had it notarized? If it was so immaterial, if it was so meaningless, if it had no significance whatsoever, why come back? Why notarize it at all? It makes no sense to Meridian City Council Special Meeting April 30, 2002 Page 42 me. It obviously had some significance to somebody to go to the effort to try to correct that error after the fact. The problem is that's not the way this process works. Failing to list the appropriate experiences is also a material failure. I don't see how that can be looked at in any other way. I don't see how Sommer Construction would get away with listing experiences for Morrison-Knudsen or listing experiencing -- Thueson's experiences or listing Precision Pipe's experiences. There simply is no difference. Sommer could go hire Precision Pipe's employees and use them also. Does that make it okay to list the experiences of Precision Pipe? I don't think so. I don't think that's right. At the beginning of this -- and I'm going to end here quickly, I said I'm going to try to address this question of why spend 143,000 dollars more. I think it's because the process deserves it and mandates it. I think it if you look at the other bids that were submitted by other contractors that provided the appropriate information, their bids are significantly higher, but the number three bid is only 20,000 higher than Sommer Construction Company bid. The next higher bid is only 40,000 above that. You have three contractors who have impeccable qualifications who have somehow are all grouped together in an area that this job is probably about a 1.14 million dollar job. The bid before you seems so low that you -- and bid by a company that doesn't have the experiences -- it could just be that you're looking at issues the down road if that bid is awarded for that price. You can't be pennywise and pound-foolish I think the saying goes. More appropriate, I think you have to protect the process for the City of Meridian. Before I end, I'm going ask to Mr. Sommer to step to the microphone, be sworn, and make a few comments to the Commissioners and the Mayor about the re-bid issue that's been raised here tonight, if I may. Any questions I could answer for the Council? Corrie: If you like, yes. We could wait until he's done and then have you come back up and answer questions. Sykes: Yes. I think that would be best. Corrie: Mr. Sommer? Sykes: I'll just follow the same procedure that was used by Mr. Trout, allow Mr. Sommer just to address you in a narrative, rather than a question-answer type. Corrie: Were you not sworn in when the rest of them and stood up and -- Sommer: I apologize, I didn't. I didn't intend to speak. Corrie: Okay. If you will raise your right hand. Is the testimony you're about to give the truth, the whole truth, and nothing but the truth, so help you God? Sommer: Yes. Corrie: Your name and address, please. Sommer: Steve Sommer. 1207 North Robinson, Nampa. Meridian City Council Special Meeting April 30, 2002 Page 43 Corrie: Okay. Sommer: The issue was raised of the re-bidding process. It's my understanding that it's an alignment issue with some of the subdivisions that are going in out there. As someone said earlier, this project pretty well is out through open fields that are going to be developed. As a pipe contractor I think these guys would agree with that. I think they hit at it already, if we are going out through an open field we don't much care if we go this way or this way, you know. I don't think a realignment is a big issue. What happens, usually, is when you put in an additional turn, bends, or something and it will require a manhole. This is a unit price contract. You're going to have to take manholes out at will. On a 1.1 million dollar job, I don't see the possibility that we are going to get to the 20 or 25 percent limit that is put on change orders, which only allows either party to renegotiate. It doesn't mean you can't go on it just gives either one the opportunity to renegotiate. I think this is a minor issue if it's strictly an alignment issue. Corrie: Okay. Thank you. Sykes: Any questions for Mr. Sommer? Corrie: Any questions? Bird: I have none. Corrie: Okay. Mr. Sykes. Questions? Sykes: Got any questions for me? Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Mr. Sykes, maybe I heard you wrong, but at the beginning part of your statement you had said that if we allowed this -- and I'm paraphrasing. If we allowed these discrepancies to stand that are in the bid by Thueson Construction it would allow them an out at some point in the future if we allowed that type of practice. What did you mean by that? Sykes: Well, it -- and I don't think it's really about Thueson as we stand here today, because the man has stood here before you and gave you his word that he was going to perform the contract. What it does is it tells to all the bidders in the future that we can write in mistakes into our bid, we can leave things out, omissions, not put the right information in. For example, you may have a situation where the bid -- the project really costs a million dollars to do, the bid comes in at 700,000, and you have got a 300,000- dollar difference. That contractor may say, whoa, I'm not leaving that much money on Meridian City Council Special Meeting April 30, 2002 Page 44 the table. I can't do that job I'm going to take a beating. I want out, but the City of Meridian has just let itself have a built-in argument of why that bid should be withdrawn, because there are mistakes in the bid. You should never have considered it in the first place. I'm not addressing the situation here today necessarily, but I am addressing situations that could arise in the future. That's why you call for instructions, that's why you ask the bidders to provide the appropriate information and when they don't you throw it out immediately and you just never even consider it. Nary: Okay. I guess I still don't follow you, Mr. Sykes. Why is that any different today no matter what we do? Certainly any bidder can always do that and always claim -- and that's why there is a bid bond and that's why there is other assurances of their bids, but I mean not sure why anything we do tonight has anything to change that scenario you said -- Sykes: Because it's a sealed bid and if I could explain this appropriately, it's -- all of the contractors put the bid under seal and nobody knows what anybody else is bidding. You may take a run at it. You may take that real aggressive edge on it and put the mistakes in, knowing -- see, what it does is it allows to either, A, put in a low bid that could turn out to be way too low and give you an out on that. Or if gives you the ability to put in a bid that's much closer, knowing that you may be able to get out if need be or if the mistakes are there, which gives you that out, the City Council may correct them for you and award you the contract so it kind of gives you that ability to go either/or. Nary: But wouldn't the risk be the other way? Using your example, it's a million dollar project. I'm the bidder, I bid 700,000 dollars, but I forget to notarize my bond, but the bonding company will stand behind it. Well, I'm still going to lose my bond or I'm going to be held to that 700,000-dollar contract. I'm going to eat 300,000 dollars and I'm stuck. What advantage -- possible competitive advantage have I gained by goofing around with it trying to underbid everybody? That doesn't make any sense to me at all. Sykes: It gives you the competitive advantage when you have a very close bid -- I mean come in relatively close. You -- and I guess I'm just not explaining this the way I want to, but it gives you the ability to -- what you're not supposed to be able to do is pull your bid. The bid goes into the city, the city has a right to rely upon that bid and accept it. Nary: Or you lose your bond. Sykes: Well, yes, but if your bond is defective, you might not lose anything. Nary: And you get nothing. Sykes: The city gets nothing. Nary: No. We get the other bidders. Meridian City Council Special Meeting April 30, 2002 Page 45 Sykes: Sure. Sure. Nary: You get a bond, you’ll get nothing, and we go to the next bidder. Sykes: Yes, but you could have 1.1 million dollar job and 700,00 that you're really entitled to, so you have lost 400,000 dollars in there somewhere. Nary: Well, I guess I don't want to belabor that point. The right price, you said that -- what I noticed in Sommer Construction -- and there is a fairly big gap. I guess I will ask the staff when that opportunity comes back again, because there is a big gap between what was the engineer's estimate -- I'm looking at the city's Exhibit 3. The engineer estimate was almost 1.5 million dollars for this project. Sykes: Right. Nary: But there is about a 100,000 dollar gap between Owyhee Construction, which was Number 3, and Brown Construction, which was Number 4. Sykes: Very true. Nary: So that's 120,000 dollars between your client and Brown. I mean it sounds like it's pretty varied here. They are not -- I don't think there is any way to determine the right price. Sykes: That's true. Nary: Based on the list. Sykes: That's true but I would submit that there is at least three that are right there who have a known reputation in this valley as being solid contractors. Nary: Three being your clients and then Owyhee and Brown? Sykes: Yes. Nary: Even though there is 120,000 dollars difference, you think that's an insignificant - - Sykes: I believe -- I believe the difference between -- and I may be mistaken here, but - - Nary: Well, I'm looking right at it. 1.139 is Sommer, 1.161 is Owyhee, and then 1.258. Sykes: That's correct. Meridian City Council Special Meeting April 30, 2002 Page 46 Nary: I'm a lawyer, not a mathematician, but that seems about 120,000 dollars to me. That doesn't seem as significant to me. Now, again, I don't build these projects, but that doesn't seem like a small amount of money, especially when it's the taxpayers' money. Sykes: That's true. Nary: One of the things that Mr. Thueson said, which I guess I'm having a hard time from what you said -- you know, he does have a license. The state has recognized that he has the ability to assure completion of a project up to three million dollars and I recognize your client has a license that's the next level up. I recognize that but the state has assured -- has at least licensed him that they are assured and comfortable that he has the financial capability to meet those requirements up to three million dollars. What does it matter to us, as long as he's the one standing behind it and he has a bond for it? We can explain these other issues about the seal, the stamp, and all these other little things that are fairly minor. What difference does it make to the city on those issues if we can explain them and we can save our taxpayers 140,000 dollars? Sykes: I guess I just have to beg to differ with you on the things being minor. I'm not sure that they are necessarily minor. Nary: Well, we can consider them minor. Sykes: You could. You could make a finding that they are minor. That's absolutely true. If you do and you want to waive them, I guess I can't prevent you from doing it. I mean that's your absolute right to do that and to make that determination as the governing body of this city. My answer to you is I do not believe they are minor and I do believe that the process will have been, by waiving these five, which I frankly think you cannot waive notarizing the bond, and bid bond. I do not think you can waive the fact that the -- that the experiences placed down were not of the company bidding. I don't think you can waive those. If you could waive those and you have made the decision to waive those, I still think you will have injured the process. You will have injured it to such a degree that this city will lose credibility to all the next projects coming down the line for the bidders. You will not get bids that meet your requirements, because those bidders will know that you will correct their errors for them and you end up with this situation. I think you should demand the bidders provide us all of the necessary information that we ask for, provide it honestly and truthfully, so we can honestly evaluate your bid with all of the other bidders there. That's something to the other bidders as well. Nary: Didn't you say, though, Mr. Sykes, that on some of these things, like the ones we are here about tonight, that the bidder has the opportunity to explain those issues and we get to weigh those issues on whether or not it's material, whether or not it's significant, whether or not it's legal? Isn’t that right? Didn't you say that? Sykes: I think that -- let me qualify that, if I didn't qualify it. There are two issues that are raised when you're dealing with bids. One is it responsive. Two, is the bidder Meridian City Council Special Meeting April 30, 2002 Page 47 responsible. If it is not a responsive bid, it's not a responsive bid, and it gets tossed out. If the bidder is going to be deemed not responsible, that is when you weigh the circumstances. When I say here and what I have tried to convey to this body is that the failure to put down references and the projects that Thueson Construction has done is a material failure that would deem -- would make appropriate the termination that Thueson is not a responsible bidder. Nary: But wouldn't that only be true, Mr. Sykes, after explanation if we felt that this contractor was being deceptive, rather than, as Mr. Thueson has explained, these are the folks that are going to do the work? This is how our business is operated, this the way we have done things, these are the projects that we have worked on, we have an exemplary bid, -- we have an exemplary recommendation that we have always done these properly. We have a license and a range that says we can complete these. So after explanation -- if it was deceptive clearly, that would -- if it deceptive that would make sense, but after explanation do you have anything to dispute that Mr. Thueson was being deceptive or do you think he's being honest in saying this is how we do our business. When I put that down that was us. Sykes: No. It may have been a mistake and I'm not going to say it was being deceptive. I think that's an issue that you really don't know at this point. I do not think the question has ever really been answered to does Thueson really have any experience in this type of a project. I think the recommendations and the references here omitted that. There have been some things that are close, but not really, that close and nobody has really called these references as we sit here. Nary: But didn't you say, Mr. Sykes, that if they listed no references, that certainly wouldn't -- that may have been a question, but we wouldn't have -- that wouldn't automatically disqualify their bid right? Sykes: I would submit if they didn't list references and the city asked for references that is a material failure, they be deemed not responsive and you throw it out. Nary: If they said they didn't have any. They didn't have references. Does that mean they are non-responsive? They have responded. Sykes: That's true. Nary: They said we don't have any. Sykes: That's true. Nary: That doesn't make it fatal or non-responsive, therefore, we could still be concerned about them being able to perform the job, but it wouldn't be fatal, would it? Sykes: In my opinion it would be. Meridian City Council Special Meeting April 30, 2002 Page 48 Nary: Okay. Sykes: In my opinion it is fatal to do that. I guess if you have no experience in doing it and you say you have no experiences, I would venture that the city should weigh that very heavily, but -- Nary: And I only have one more comment, Mr. Sykes, and I will let somebody else have the floor. The -- you know, you used this analogy about, you know, a football player that -- and I'm not a big sports analogy person anyway, but, you know. If you step on the line even a tiny little bit it doesn't count, but you have to remember we have to weigh this as a judgment call and so it's a 140,000 judgment call of our taxpayers money -- Sykes: Absolutely. Nary: -- that we have to weigh, so it isn't quite so cut and dried like stepping on a line and you lose. Sykes: I would submit to preserve the integrity of this process it is. That's what I would submit to the Council. Nary: Thank you. Sykes: Any other questions? De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I guess I just want to understand when you suggest that by not having a corporate seal and not having the bid bond notarized how they gain this competitive advantage. Sykes: Okay. What it does is it allows you to submit -- and, obviously, I am not articulating this very well, because the way the process works is the city takes a sealed bid from all of the contractors. The contractor, when it submits that bid, is supposed to be bound to that number that's given to you. For example, if the contractor provided you a bid with 700,000, they are supposed to be bound to that. Okay and so the competitive bidding process tried to get people to find that place where this project really ought to be. They don't have too much money into it, but they don't have too little. It gives somebody the ability who knows that they can pull their bid out, that ability to try to make it just a little bit lower if there is some sort of defect in it. When they put in a sealed bid and it becomes -- and it is just a little bit lower, they bid it, because they knew -- they knew that the city would fix it at the end of the day if anybody raised a problem. That is a competitive advantage to Thueson in this case. Thueson knew when he was putting in that bid -- whether he knew it or not it was a fact that when he Meridian City Council Special Meeting April 30, 2002 Page 49 put in the bid that if his bid was way too low and he wanted to pull it, if he wanted to say -- the city says I want to collect on that bond, his surety could say it wasn't notarized. Sorry, you go to court and you have a fight. He can, by knowing there is no consequence to the action by making some sort of error, try to bid it just a little bit lower. Many of them, in fact, do bid it just a little bit lower based upon that ability -- based upon that ability to know that it can be corrected, they win the bid because you are, in fact, correcting their bid. It gives somebody the ability to try to bid just a little bit closer. It puts them in better position than all of the other bidders who have legitimate bid bonds, where there is no question that later on the city won't be able to collect. For example, if we took this project all back and Thueson did want to pull his bid, there may be an issue that you can't collect on that bond. The surety may raise an issue that it wasn't notarized. They may raise the issue. If you want to force that bid -- force them to honor that bid, there is no corporate seal, and try to get around on that issue -- and I don't know what the Supreme Court is going to do. The Supreme Court may agree with them. I will tell you one thing, that Sommer can't make that argument, because they actually put the corporate seal on. Sommer can't make the argument that the bid bond is defective. Its surety can't, because it's actually notarized. Thueson got to do things in the course of bidding that the rest of the bidders didn't get to do. That gives them an advantage over all the other bidders. Slight, but it is an advantage and it is an advantage to be able to pull your bid later and have an argument of why that bid should be pulled, where the other bidders, who follow all of your instructions, don't have that luxury, because it's all there, there is no argument built in. De Weerd: So if the city finds that those are immaterial, they really don't have grounds to pull that, would they? Sykes: I still think it's a built-in argument. Mr. Trout is a very creative lawyer. He stood here and had some very creative arguments. If they wanted to pull that bid, Mr. Trout may have some very good arguments as to why the City of Meridian should not be able to hold Thueson to that bid. Those are arguments that I won't be able to make, because my client followed all of your instructions. Mr. Trout will get to make that argument, because his clients didn't follow all the instructions and provide all of the information. I'm not saying the argument will work, it may or it may not, but it's an argument, nonetheless, that Thueson's attorney has and that my client does not have. That's the competitive advantage. That's why you set up a system where everybody does the exact same thing, so nobody can say, hey, you didn't do this. It's -- the rule is if you don't put in any information, you throw it out. You throw out the bid. The real question is, is it material or is it immaterial and do you want to waive it or not. I have submitted and I will continue to submit that these defects in this bid are material and cannot be waived. I would submit that even if you found they were immaterial they should not be waived, because of the damage to the process and to the message that this board will be sending to all bidders in the future. De Weerd: Well, I guess I have another question and I will get to Councilman Nary's scenario. If your client was the lowest bidder and the roles were reversed here, what would be your standing on this? Would these be material or immaterial? Meridian City Council Special Meeting April 30, 2002 Page 50 Sykes: If I was representing Mr. Thueson? De Weerd: Yes. Sykes: I would absolutely be arguing that Mr. Thueson -- the issues raised are immaterial and you should grant the bid. That would be my client. Granted, my client is Mr. Sommer, the second low bidder. I'm a good lawyer, I represent my client zealously, and that's the position I would have to take. That's what they pay me to do. I hope that answers your question. I don't know how to do it any differently. Is it -- I'm here interpreting the law as I see it. I'm here giving arguments for Sommer. I won't fool anyone I want Mr. Sommer to get this project. I do not want -- on behalf of my client to have this project re-bid. I am arguing for the City of Meridian deem the Thueson bid non-responsive, reject it and to award the contract to Sommer Construction. I'm asking for that from this body. Corrie: Any other questions? Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Just a couple of things, Mr. Sykes. Do you have case law or statutory authority that tells us we can't waive those positions as immaterial or is that just your opinion? Sykes: Yes. That is my opinion. I searched -- I provided in my memorandum the cases I could find, which are controller general opinions that deficiencies with bid bonds have been deemed material and have not been waived. Is there any Idaho authority on it? No, there is not. Is there really any state authority on it? No. I think the cases even cited by Mr. Trout don't really address this issue. Yes. It's not an answered question in this state, as many questions seem to be unanswered. Nary: So at least at this juncture it's a discretionary decision on our part on whether it's material or immaterial, responsive or not responsive? Sykes: Yes and I think there is some authority that would go to the proposition that the failure to notarize a bond is deficient and it creates a material deficiency. That is the position I'm taking here tonight. Do I have that case on all fours to help you do that, no, I don't. Nary: Thank you. Sykes: You're welcome. Corrie: Thank you. Before we leave here tonight, we are going to find out. Meridian City Council Special Meeting April 30, 2002 Page 51 Sykes: Thank you. Corrie: Thank you very much. Okay. Mr. Trout, you have 10 minutes to summarize or anything that came up, if you'd like. Trout: With respect to rebuttal we'd like to do two things before we make our closing argument. We'd like call Ramon Yorgason for just a short bit of testimony, if he could be sworn, and then I have one question for Mr. Watson and a short reply. Corrie: Okay. Mr. Nichols is this -- I'm not a lawyer and I'm not a judge, so I want to hear everything so that Council can make a decision. Mr. Yorgason, if you would raise your hand. Is the testimony you're about to give the truth, the whole truth, and nothing but the truth, so help you God? Yorgason: Yes. Corrie: State your name and address, please. Yorgason: Ramon Yorgason, 5000 Fifshire, Boise. My comments will be brief. Mr. Thueson's office called and asked if we could comment on their behalf in regards to doing work with them in the past and we said we would be happy to. Several years ago, they did some trench work for us on a project and they did a wonderful job. We were very happy with the work and so I have no questions with that. I must also say -- and I told Mr. Thueson the same thing, that we have also done a lot of work with Mr. Sommer and they do excellent work. Both contractors, from our point of view, do excellent work. I don't believe that's the issue to be discussed this evening. However, I do have a different issue that I'd like to ask -- or to bring up. A brief issue. The project that we have, Baldwin Park, we started on this project two years ago, started negotiating on buying the ground. We talked with the landowner, the landowner. I talked with staff and members of the Council. We talked with staff and members of the Council, there was hope that this sewer line would be in by the fall of 2000 -- be started by the fall of 2000. October. We scheduled our purchase based on that. It was not an option. We wrote a check. We wrote a check. It was delayed because of very good reasons, unfortunately. It was not the staff's problem, it was just one of those things that happens and then it got delayed, we thought it would be another couple of months - - staff -- poor staff, they were having to put up with my wrath, because I kept calling them and saying what's going on. They'd tell us what's going on, but it's been a year and a half. In that year and a half, I have written interest checks for 257,000 dollars. 257,000 dollars in interest because of this delay. Presently I'm writing checks for 15,000 dollars a month because of this delay. I would plead with you, please don't go through a re-bidding process. Please don't delay this anymore. I know that certain things happen, that's my concern. I just have one project, but there are a lot of projects and when you think of 257,000 for my project and then you multiply that by the other projects, we are talking some serious money. I'm just a little developer, but I have been doing this for 27 years in this valley. I hope to keep doing it, but these liens get real Meridian City Council Special Meeting April 30, 2002 Page 52 expensive. That's my testimony to you that both contractors are good, but it's also my testimony that these delays are very costly and I would ask you and plead with you to -- let's get on with this. Be happy to answer any questions, Mayor or Members of the Council. Corrie: Ramon, I'm constantly reminded that the previous Mayor of Meridian said a million dollars here and a million dollars there adds up to a lot of money, so -- Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: Ramon? Yorgason: Yes. Bird: Was your contract when you had your work done with Thueson or with Precision Pipeline. Yorgason: It was Thueson. Trout: Okay. Thank you. Yorgason: Yes. Corrie: Thank you. Trout: Mayor and Members of the Council, I will go quickly. I'll ask one question of Mr. Watson. Brad, the issue was raised about why the notary clause was provided after the fact on the bond. That was at your request, was it not, sir? Watson: I was educated during this process that a bid bond was not enforceable until the Council made an actual award. Therefore, I was advised that the bid security should be notarized and I contacted either Mr. Thueson or Mr. Connell. Trout: And they provided that notary seal? Watson: Well, they didn't, but the bonding agent did. Trout: All right, sir. Thank you very much. One other question. The bid specifications actually anticipate this process, do they not, sir -- and maybe this is Mr. Carnahan. Section 14.5 of the bid specification says that once the bid has been submitted the city is free to conduct whatever investigation it wants to as to whomever performs the work. The employees -- otherwise, anybody who is performing the work, 14.5 allows for that, doesn't it, sir? It says the owner may conduct such investigations, as the owner deems necessary to assist in the evaluation of any bid and to establish the responsibility, Meridian City Council Special Meeting April 30, 2002 Page 53 qualifications, and financial ability of the bidders. That's precisely what the city did in this period between February 27th and April the 10th and, in fact, tonight isn't that correct, sir? Carnahan: Yes. Corrie: Thank you, sir. Mr. Nary, you, I think, hit the nail right on the head. The city has the discretionary authority to consider these issues immaterial. I have provided you with a case from a sister state in Washington. We don't have a case directly on point, but we have a case close on point in Idaho. The Farmer case I have provided to you has a situation where the bid was unsigned by the bidder. What a more glaring defect. If you want to put things on a scale, in the Farmer case the bid was totally unsigned by the corporate bidder. In this case, it was signed by the corporate bidder and the signature on the bond was clear and valid. The Farmer case totally unsigned. The Washington Supreme Court said that was an immaterial deviation and why? Because of the two-stage standard involved for your exercise of discretion. First of all, was there a variation? The answer is, yes, we acknowledged that. Secondarily was it material? Did it give them an advantage with respect to what's materially at issue in this case and what's materially at issue in this case is the price. Did the lack of a stamp on a piece of paper give them an advantage as to price? I'm going to suggest to you that it didn't. Did it give them an advantage with respect to performance? No. They are not asking to change the time for performance. They haven't waived their responsibility to perform just exactly as they did. What I gave you in my brief is a very simple statement of a law on this issue and that is a bid is responsive if it promises to do what the bidding instructions require. There were no blanks. They promised to do what the instructions require. That's what you're looking for. The question really is where did Thueson get an advantage? I'm going to tell you the statute in this state dismisses Mr. Sykes' argument about being able to withdraw their bid. Period. Title 67 has a specific statute on mistake in bid and it says you must prove and demonstrate you made a material mistake to allow yourself to be withdrawn from the bid. Then it sets out a whole number of conditions that have to be satisfied. That's not even in this ball game, folks. Not even close. The legislature has dealt with it. That issue's out of here. What other material advantage was there? If you can't withdraw the bid without the penalty, either forfeiture of the bond or the inability to re-bid if the project is re-bid, there is no advantage. Just like there was no advantage in the Farmer case where the bid was unsigned. The Washington court looked at and said where is the advantage? There is none. It's immaterial. It's immaterial and so I'm going to suggest to you, Mr. Nary, the answer to your question is you do have the discretion and that discretion needs to be exercised in another fashion. That is in the case I have cited to you it has to be exercised so as not to defeat the object of insuring economy and excluding favoritism. Because the bottom line is this -- here is what the case law says a bid that substantially conforms -- not perfect, we are all human. We all make mistakes. None of us would stand up here or sit in your chair or out in this audience are free from making a mistake. If it substantially conforms, which our bid does, to the call, even though it's not strictly responsive, it can be accepted if the variance cannot have affected the amount of the bid or given the bidder an advantage or benefit that the others didn't have. Well, what's Meridian City Council Special Meeting April 30, 2002 Page 54 material here? Time, price, performance, and financial responsibility. Thueson Construction has met all of those for you and so all I'm asking you to do on behalf of my client. I argue zealously, too, is to do what's in the best interest of your constituents. You can save this community 143,000 dollars that can well be spent someplace else. If you don't save that money, you're doing it because of a stamp on a piece of paper and a notary clause where the signatures are totally valid. I'm going to suggest to you that you guys know your job. I don't have to tell you that, but if I were a constituent, I would want you to save the 143,000, because those errors are immaterial and this process doesn't get harmed. You know, the suggestion has been made to you that you do disrespect to the process and I'm going to suggest to you you're giving respect to the process tonight, you're doing precisely what the Idaho Supreme Court has said you must do. The low bidder has a property interest. You must protect that by giving them notice and an opportunity to be heard fairly by you. You're respecting the process, because that's what it requires and now you can respect the process, in my opinion, if you say these material -- these deviations are immaterial to what's really important to this community, which price, performance, time, and financial responsibility, all of which have been satisfied. Thank you very much. I would be happy to answer any further questions. Corrie: Okay. Thank you. Nichols: Mr. Mayor, if I may ask one more question of Mr. Trout before he sits down. Mr. Trout, the contract has a provision in it that the bid prices are only good for 60 days. Does your client intend to hold your bid price? Trout: Sir, yes, sir. Nichols: Thank you. Trout: Thank you. Corrie: Okay. I want to thank you for you participation here today. It's quite an experience. Now I know why I didn't go to law school. Nary: That's a good thing. Corrie: Took pharmacy instead. All right. Council, any comments? What would you like to do? Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Could I ask a question of staff? I probably should have asked this earlier, but, you know, I did note that there is about a 500,000 dollar difference from what the estimate by the engineer was and what the bid is, somewhere in that ballpark. Have Meridian City Council Special Meeting April 30, 2002 Page 55 you reviewed the bid and do you have any discomfort or any concern as to why there is such a gap between what was estimated at one point and what was actually bid? Carnahan: Councilman Nary, we prepared the engineer's estimate based on previous projects that we have bid recently this year and we used similar year prices. I think part of the reason that we were higher than the -- there is probably several factors. One being this is a -- this is a larger project than normally that we bid out and there is an economy to scale. I think we saw that in the prices and also I understand that there are limited projects out for bid right now and there may be more competition than there have been in other bids. Nary: So you weren't concerned that there is -- that that price is so under what was estimated that there is a concern that that can be completed at that price? Carnahan: I did review Thueson's individual bid prices and with the exception of the price -- lump sum for the testing, that they all just appeared to be generally lower than the other bidders. Nary: Thank you. Corrie: Further discussion? Bird: I have none. Corrie: Okay. That being the case, I will entertain a motion to close the hearing. Nary: So moved. Bird: Second. Corrie: Okay. Motion has been made and seconded to close the hearing. Any further discussion? Hearing none, all those in favor of the notion say aye. Opposed no? All ayes. Motion carried. MOTION CARRIED: ALL AYES Item 4: Award of Bid for White Sewer Trunk Project: Corrie: Discussion? Okay. Hearing no discussion, I will entertain a motion of what you want to do. You have three options. One is to award the contract, I guess -- Mr. Nichols, correct me if I'm wrong -- go ahead and correct me. I haven't said anything, but correct me. Nichols: Mr. Mayor, Members of the Council, far be it from me to ever correct the Mayor and Council. Just a reminder that I think if you -- just to make a point that if you do this by motion, that you make sure that there is discussion after the motion and second, so Meridian City Council Special Meeting April 30, 2002 Page 56 that there is a basis upon which your decision was based. So that there is actual deliberation. I mean this process is a little different -- actually, it's a lot different than most. A jury goes behind the closed door, nobody knows what the judge is thinking, and here, though, your deliberations need to be in the open and you talk about what you think is important and what isn't when you arrive at your discussion. I mean that's the burden and the blessing of the approach, if you will. Just to make sure that in arriving at a decision that there is discussion, so that -- at least I anticipate I will be directed to prepare findings so that I have a basis upon which to do those findings. Most of the facts are pretty well in the record, they are not really disputed so much as to, you know, was there a corporate seal on that bid or not. That's not really the issue. The issue is the interpretation of what's material or what isn't material, whether there was an unfair competitive advantage or not. Those are the kinds of things that we need to have discussion on, so that it's in the record and I have a basis to prepare written findings. Corrie: That's exactly what I would have said. Mr. Nary. Nary: Mr. Nichols, did you want a motion first and then discussion or does it make a difference either way? Nichols: Mr. Nary, Robert's Rules of Order always says discussion follows the motion. However, in my experience if you want to hash it out first before the motion is made, that's good enough for me. Corrie: So the chair will stand for either hashing it out now or making a motion and then hashing it out. De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I guess so we don't have to sit up here with some pregnant silence, I'm going to kick it off. You know, I have a couple of concerns here. One, we like to be consistent with our rules and that way people know what the expectations are. However, if we are going to make a bid non-responsive, we should do it immediately. If it doesn't follow the six criteria and they find that the next day, then it should be determined the next day. That's where I have a problem. It wasn't determined at that time. There was further work and I'm not an attorney, although I sit between two of them, which drives me nuts sometimes, but, you know, it doesn't seem like these are things that are insurmountable or something that -- since it didn't get caught right away and they were non-responsive. Now we have to answer to our taxpayers, because if we never would have known about it, we wouldn't be knowing that we are going to spend that much more money on the project. I also know -- I don't question the outstanding qualifications of either bidder. I have had the privilege of being the general contractor on my house and I know most of your experience. The quality of your work comes from your subcontractors. You know, yes, I take the financial responsibility, but Meridian City Council Special Meeting April 30, 2002 Page 57 their work is what is the quality of what my name is behind or what I live in. That's not an issue to me. I will say that as we go further down in our process, we have to be very clear and we do need to take a closer look at what issues we want to make responsive or not responsive and have those in a very timely manner. I guess I am of the opinion that we need to move forward with this and award the contract to Thueson. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Since all we have really talked tonight is the process, I guess my comment about the process is this is exactly how it's supposed to work. I don't think it's anticipated in the code that once you open the envelope that's the end of the process, because there is other things to happen. You have to determine if it is responsive, you have to determine if everything is filled out properly, that they have responded properly to the bid. If it isn't, there is a bond and that's what we are doing here. At some juncture somebody makes a decision as to whether or not it's responsive or not and awards the bid. If someone doesn't agree with that, they can protest it, which is why we are here. That's how the process is supposed to work. Then we get the benefit that lawyers don't get the benefit of. Mr. Trout and Mr. Sykes are right, they excellently represent their clients. They have to stick with what the rules say. The law gives us the discretion to try to do the right thing, besides just looking at is there a stamp on this paper or a seal on this one. They are trying to do the right thing for the whole process and all we have heard is that both these companies are excellent. There is not a question about their ability and quality to do the job. The fact that the corporate seal wasn't on there, Thueson had the opportunity to explain that. That's what this process is all about. Explain to us why that isn't there. I'm satisfied the explanation was they didn't have one. Probably should have, they do recognize that. Is it fatal to the bid? I'm not sure why it should be. I don't see any advantage that they gained by not having that on there. That's what this process is supposed to determine. The issue of the bond. That's a concern. They explained that. Oversights happen. Those things can happen. That's why we have a process to deal with it. We have a bonding company that will stand by that bond. Again, it's not really an issue. Those no longer exist and it's anticipated as you work through the process that you're going to have these things happen. That's why it's not mean to end on February 27th . I am bothered by most of my questions, you can tell, by the reference issue, because the references weren't to Mr. Thueson's company and himself. Again, he has the opportunity to explain it. That's why we have a process. He explained there was no intent to mislead anybody. There was no intent to deceive anyone. Mr. Sykes and Mr. Sommer agree there was no intent to do that. It wasn't responsive to the question, but is it fatal because after explanation does it answer the question can he perform this job? I think it does. I think it does say he can stand behind this job. He has a license that says he has the ability to stand behind it. He has a bond that says he can stand behind the bid that he's put out for and he has experience, as we have seen from the letters and such that are before us to do this. He's explained all of those things to us and to me he hasn't gained any competitive advantage, other than underbidding the other people. I would prefer in all Meridian City Council Special Meeting April 30, 2002 Page 58 likelihood, if it were a perfect world that it was done and we weren't here, but he's explained it all. That's why we are supposed to be here. We then use our discretion, as Councilwoman de Weerd said, to decide if it has been explained, is it responsive. If it is, then we need to look at it is there any other reason we should exercise our discretion not to award the bid to the lowest bidder and I don't have one. I don't have a reason not to go with the lowest bidder. After all, that's why this process exists. I don't have a reason not to go forward tonight. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: I don't quite agree with the deal. I want -- I'm certainly going to go forward one way or the other. I think that what we are -- and I -- and leaving a seal off or anything doesn’t mean a thing, it gives nobody an advantage on the bidding part of it. It's a process. By not having a process in line we have sent this project to much back that brought us to a three and a half, four hour meeting to make a decision. If we are not going to go by the rules and regulations for everybody, I agree that this should not even -- when the guy that was opening the bid seen that it was not completed right it shouldn't even have been read. It should have been tossed aside as unresponsive. Should have taken care of it right there. We didn't do it that way. My concern is let's just save the taxpayers on all our jobs if we are going to go through this process some money by not having any specs or bid forms or anything that -- we'll just throw it out. If you got a Public Works License that meets it, come do it. I think you're looking at a process that is going to bite you later on down the line, because as we grow we are going to have more and more, larger and bigger Public Works. Maybe we -- maybe we solve this by having construction managers, like on our Police Department that the first thing that -- before the bids are read everything -- the seal was made sure it was there of the corporation, made sure that the bid bond was notarized and everything. I have no doubt that Mr. Thueson's company could do this job and do a very fine job and I'd like to save the taxpayers 143,000 dollars. I think you got to decide are you going to do that process, throw our process -- the bidding process -- our Public Works process out, which we can, or have this every time you have a bid. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: I guess the only comment I would have, Mr. Bird, is the State Statute on the bidding process anticipates those types of discrepancies and that's why the discretion is ours to decide how significant or important it is. It isn't meant to be a hard and fast your one toe on the white line and you're out, because along the way in the process there are steps that you can be out if -- for example, if those references -- if we didn't realize that -- if the seal had been there and the notarization had been there -- say the notarization was false, we could throw it out later. Let's say we know that and we investigate those references. We find out they are false and they are knowingly false, Meridian City Council Special Meeting April 30, 2002 Page 59 we could throw it out later and what would happen, we would have a protest. They would come forward and explain whether it was intentionally deceptive or a mistake. We, again, have the discretion to decide whether it was a mistake. If we felt it was deceptive, he's out. There are safe guards to me still in the code that exist to protect exactly what you're saying. I don't think by recognizing that there is this process to explain it, we accept it or we don't, that we somehow negated the whole bidding process. We have allowed the process to work like it should. He can explain it. We don't have to accept. If we wanted to believe that Mr. Thueson intentionally mislead us on having a corporation to stand behind them, having a bonding company to stand behind this, or having the capability to perform a job, we don't have to accept his bid, we can throw it out. Bird: I have no doubt on that, Bill, but what I'm saying is -- is it -- you go by the rules. Evidently, 99 and 9/10 percent of the Public Works jobs are going by the rules, because we have no Supreme Court rulings or anything else. You have that thing from Washington, which is -- if anybody had a Washington State License, it's a lot different getting a Public Works License there than it is in Idaho. You know, what Washington does is -- you know, Idaho is different. I just -- I think -- and, you know, I think that you got a set of bid rules that says that every player -- and when one player forgets about it or don't do it right, you know, it's the same thing as if Dennis Washington come in with a corporation and give as MK's references. He's a one percent owner of MK, now is that right? I think you got the same rules in this business. It's a very competitive business. Right now, it's very, very competitive, because we have had a slow winter for most people. I like the process, we have got a quality process, of coming back and doing it, but to my knowledge it's the first time I have ever heard of the Public Works -- a public bid being taken before Council and doing something on it. McCandless: Mr. Mayor? Corrie: Mrs. McCandless. McCandless: Recognizing that there will be some change orders in this, I don't believe that these are -- not having the notarized copy or not having the seal, because you didn't have it yet when he wrote a letter to that effect. Is that serious and one of the reasons we are up here and one of the reasons that we were elected is to watch over the city's money. I can't just let 143,000 dollars go by because of two such, in my opinion, very small errors and I'm sure they were errors. So I'm inclined to agree with Tammy and I'm leaning towards awarding the bid to Mr. Thueson's company. De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: I guess I just have one final thing and I agree with Councilman Bird, I'm very much a supporter of process and consistency and the integrity of the process. I -- again, I would maintain if we had done this in a timely basis and declared it as non- Meridian City Council Special Meeting April 30, 2002 Page 60 responsive, that that would be one issue here. We do have expectations and I certainly don't want to open the door for this in future bids, because I agree that we have to have a process that has integrity and consistency and those kinds of things. This gives us the example that we need to tighten up our own internal processes when we open the bids, that we make sure that all the I's are dotted and T's are crossed, just like we expect the bidders to do. We didn't do that this time. This is an exception. I can only see that it's an exception and I don't blame anyone for this. Staff, please, don't feel like I'm pointing a finger. I do hear what you're saying, I just think we need to move forward with this and put some conclusion to it. Bird: Mr. Mayor? Corrie: Mr. Bird. Bird: I don't think -- I have said all long -- all along that, I wouldn't vote for Thueson for this deal. I'm just saying that -- that we have got to get a process -- as we have grown as a city -- we are not 9,000 people anymore, we have got big projects. I don't know. I -- being in the field and stuff, I know how I would feel if I was low and had done my stuff -- like I told you earlier, I did lose a job back in the '70s because I was too lazy to go get a corporate stamp. I have no doubt that Thueson's very capable of doing it. His recommendation from Layton Construction is -- I've done work with Layton and they are class people. If he can work for them, he's very capable. We've got to stay to a process and if every time we do this, have an opening on these big jobs, we are back up here, and I’m not in favor of it. Public Works tells -- the Public Works tells you how to bid the thing and how you do this and how you do that, it's a process, -- I'm not blaming a single person. I do know one thing, I hope two wrongs, -- we don't have another wrong to make a right, because I don't enjoy sitting through these. Council, I don't -- I don't have a problem with Thueson doing it. I'm just telling you that your process has got to be maintained if you are going to have any kind of accountability. You keep messing around with the rules and regulations, pretty soon people are going to move and say we are not bidding in Meridian and, let me tell you, that will happen. Nary: Mr. Mayor? Corrie: Mr. Nary. Nary: Just when I think I don't have anything else to add, but, you know, we did -- there is notice -- there is notice on the invitation to bid that says the City of Meridian reserves the right to waive any informalities. I guess the one thing that we don't really have and didn't really have any evidence to is what in the world does that mean. Now all our assumption and what my assumption is and I think what Mr. Trout argued was this is what that is. These are what those things are things that are fairly minor and don't go to the core of what we are trying to apply, what the project, when it needs to be done. What financial capability does the bidder have to complete the project, you know, the price, you know, what's going to be performed, all of those things. If it is everything else, then I guess we just need to define that clearer that that's what we meant. We Meridian City Council Special Meeting April 30, 2002 Page 61 meant those -- when we said we would waive them, this is what we were talking about is something like that. We would -- if the price wasn't there, we wouldn't waive it. You know if the performance -- if the time to complete the performance isn't there and that's required, we are not going to waive that. Then it's clear to folks, because I do think we have given some notice that maybe isn't very clear. That's why we are here tonight, but we did give some notice saying there are things that we think in this document that are informal enough that if it isn't there we might deal with it. I think that's what these are. These are things that we can deal with and I don't think we hurt our ability on the projects or get other responses or to get people to do these things. I think as we have heard more than once -- and I -- we all can make mistakes and those little things are things that could be considered mistake and oversight, a scrivener error or something like that. The things that really do matter we probably just need to make it clearer in the invitation or something else saying we are not going to waive these, clearly that's not an issue we are going to ever argue over on waiving those and then we probably wouldn't be here as much. I don't think there is not -- I think there is at least notice to people that there are things that we anticipate in here, might be minor, we'll look at them, if it is determined to be minor, we are fine. With that, I guess, I would move that we award the White Drain Sewer Trunk contract to Thueson Construction, an amount not to exceed 994,060.10 dollars, as recommended by the Public Works Department. McCandless: Second. Corrie: Okay. Motion has been made and seconded. Is there any further discussion? Nary: Part of the motion would be that our Counsel prepare Findings of Fact and Conclusions of Law and Decision and Order along with that. Bird: And you're instructing the attorney -- or the Mayor to sign and the Clerk to attest. Nary: Mayor to sign and the Clerk to attest. Bird: Okay De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: We anticipate change orders, so when we say not to exceed -- we will deal with those on an individual basis? Bird: Yes. De Weerd: Okay. Smith: Mr. Mayor? Mr. Mayor? Meridian City Council Special Meeting April 30, 2002 Page 62 Corrie: Mr. Smith. Smith: May I make a comment? Corrie: Yes, sir. Smith: I have been here since 1980 and we have bid multi-million dollar projects. This is the first time that the City Council has sat in judgment. I firmly and truly believe that we do have a good process that we are conscientious, that we are preservers of the money that we are entrusted with. I think that our Public Works Department acts responsibly and I also agree with Councilman Nary that this is a process that is working and is in place to do just exactly, what's being done this evening. I guess I just want to make that as kind of an editorial comment to how your Public Works Department feels and operates toward these projects that we have been constructing for a lot of years. I really, truly, can't remember a situation like this in all those years. Thank you. De Weerd: Mr. Mayor? Corrie: Mrs. de Weerd. De Weerd: And, Gary, I'm sorry you had to make that editorial comment, because it's truly felt -- I think I can speak for all the Council, that we know you go above and beyond and attend to, like an engineer, every detail and that is very appreciated. I think we have all mentioned that this is not directed towards our staff at all, but I think that Councilman Nary and Councilman Bird have mentioned, you know, we have certain criteria and those are the criteria that are important to you. Those must be your top six, and those are the things that we don't -- we do not have any wiggle room on at all and so it's just finding it and making sure as we move forward that we -- our action tonight hasn't opened the door for anymore headaches for you and your staff. Smith: Thank you, Council Member de Weerd. I appreciate your comments and I guess I was making comments -- we have enjoyed the support of the Mayor and Council for a lot of years and we really appreciate that. I mean that's a heart-felt thank you. I want the members of the audience to know that that's how we operate as a public -- as your Public Works Department and thank you very much. Corrie: Okay. Any other comments? It may require a vote, so, Mr. Clerk, if you will do a roll-call vote, please. Roll Call: McCandless, aye; Nary, aye; de Weerd, aye; Bird, aye. Corrie: All ayes. Motion is carried. MOTION CARRIED: ALL AYES Meridian City Council Special Meeting April 30, 2002 Page 63 Corrie: While we are on the record I would like the record to show that the Mayor can only vote in case of a tie, but I want the record to show that the -- there is unity up here of all five of us. I agree with the decision that's voted on tonight. One of the things that we will wait on is the judge's final word before I sign it. That was pretty specific in the instructions, so with that being said I want to thank everybody for being here tonight, both attorneys and the people that have testified. Nice job, so, once again, thank you. With that, I will entertain a motion -- Bird: One question. Corrie: All right. Bird: For Mr. Thueson. How soon can you gear up? Thueson: Tomorrow. Corrie: Well, we have at least a seven-day wait. Bird: Yes. I was going to say we have a little wait. Corrie: All right. Okay. If there is -- De Weerd: Tonight would have been more -- Bird: Yes. For him. Is the pipe all set aside and everything now? De Weerd: Mr. Mayor, I move to adjourn. Bird: Second. Item 5: Public Hearing Date - Budget Nary: Don't we have to take up a budget hearing issue? Bird: I thought you said it. Nary: Don't we have to do that on the record, Mr. Bird? Bird: Mr. Mayor? Corrie: Okay. Mr. Bird. Bird: I would move that we set our Public Hearing for August 22, 2002, for our budget. Meridian City Council Special Meeting April 30, 2002 Page 64 De Weerd: August 22nd ? Corrie: Okay. Anything further? Nary: Second. Corrie: Motion and second. Any further discussion? All those in favor of the motion say aye. I believe there were four ayes there. Then it will be August 22, 2002, Mr. Clerk. MOTION CARRIED: ALL AYES Bird: Mr. Mayor, I move we adjourn. McCandless: Second. Corrie: Motion made and second to adjourn. All in favor say aye. MOTION CARRIED: ALL AYES Corrie: Thank you. MEETING ADJOURNED AT 9:55 P.M. (TAPE ON FILE OF THESE PROCEEDINGS) APPROVED: / / ROBERT D. CORRIE, MAYOR DATE ATTESTED: WILLIAM G. BERG, JR., CITY CLERK