HomeMy WebLinkAboutReg 2008-10-06 Item 7B - Settlement Agreement - Union Pacific Railroad vs. City of Tukwila �J;��IILA, tv9 f
Co UNCIL AGENDA SYNOPSIS
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ITEM INFORMATION
I CAS NUMBER. 08-118 I ORIGINAL AGEN.DA DATE: OCTOBER 6, 2008
AGkNU.■ ITkm Tr Authorize the Mayor to enter into a settlement agreement with Union Pacific
Railroad
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Discussion El Motion Resolution I 1 Ordinance 1 Bid Award Li Public Hearing Other
illtg Date Illtg Date 10/06/08 Mtg Date !lltg Date dltg Date 1I 1 Date Altg Date
I SPC )N SOR Council MYlayor Adm Svcs DCD Finance Fire Legal n P&R n Police n PW
SPONSOR'S Authorize the Mayor to enter into a settlement agreement to resolve the matter of Union
SUMMARY Pacific Railroad v. City of Tukwila, in the amount of $125,000,
RI I'.vo,D BY COW Mtg. CA &P Cmte F &S Cmte n Transportation Cmte
1 Utihties Cmte Arts Comm. El Parks Comm. Planning Comm.
DA"I L.
RECOMMENDATIONS:
SPONSOR /ADMAN. Authorize the Mayor to sign the settlement agreement
COM MI1TEE N/A
COST IMPACT FUND SOURCE
EXIThNDI1'URI.. REQUMED AMOUNT BUDGETED APPROPRIATION REQUIRED
$125,000
Fund Source
Comments:
MTG. DATE RECORD OF COUNCIL ACTION
10/6/08
1 MTG. DATE ATTACHMENTS
10/6/08 Informational memorandum dated 9/26/08
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1 y 6200 Southcenter Boulevard Tukwila Washington 98188 Jim Haggerton, Mayor
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INFORMATION I'IEMVIORANDUM
To: Mayor Haggerton and City Council
From: Jim Morrow, Public Works Director
Shelley Kerslake, City Attorney
Date: September 26, 2008
Subject: Settlement Agreement
Union Pacific Railroad v. City of Tukwila
ISSUE:
Authorize the Mayor to sign the settlement agreement with Union Pacific Railroad.
BACKGROUND:
The City entered into an agreement with the Union Pacific Railroad (UP) in 2001 for the construction
of temporary and permanent railroad track relocations. The estimated cost for the work by UP was
agreed to at 8527,225. The agreement required that the City pay all actual costs. Dunng construction,
the City of Tukwila notified UP that the railroad's invoices were overrunning certain categories of
work. At the end of construction in 2003, UP notified Tukwila that their actual costs amounted to
8729,608.44. Tukwila notified UP that until UP justified the additional costs the contract overrun of
8202,383.44 would remain in dispute. In 2005, UP notified Tukwila they were seeking payment for the
8202,383.44 and would elevate the matter if we did not pay immediately. Again, UP was notified that
overrun amount remained in dispute. In 2007, UP filed suit against Tukwila and it was not until
recently in 2008 that UP provided full documentation of their cost overruns.
Public Works staff and Kenyon Disend met with UP and their attorney for a settlement conference.
The tentative settlement amount of 8125,000 was arrived at as being a satisfactory compromise.
ANALYSIS
Since the UP agreement allows UP to recover all actual costs, it would be difficult and expensive for
Tukwila to prove certain costs were not allowed or applicable to this contract. Also, the possibility of
pre judgment interest was brought up and could amount to over 8150,000, with a total claim of over
$350,000. In addition, trial legal fees could add up to over 850,000.
RECOMMENDATION
Authorize the Mayor to sign the settlement agreement with UP for $125,000.00 to settle all claims.
Phone: 206 -433 -1800 e City Hall Fax: 206 433 -1833 www.ci.tukwila.wa.us