Agenda Item Title:
Authorize Mayor and Finance Officer to sign proposed Release and Indemnity Agreement for Certain Phases of Big Sky Subdivision.
Origination Meeting Date:
Agenda Item Summary:
The parties have reached a proposed settlement for certain phases of Big Sky Subdivision that are part of the City’s lawsuit against Doyle Estes over deficiencies with the public improvements constructed as part of this subdivision. The proposed settlement resolves any claims the City has regarding Phases 5-9 plus Phase 10 and the Big Sky Business Park. The City has filed suit on Phases 5-9, but does not have any claims related to phase 10 or Big Sky Business Park. The settlement would also resolve any claims against Dream Design for Phase 4. The City’s remaining claims related to Phases 1-4 would remain. The defendants propose to pay the City $250,000 to resolve the allegations related to the phases identified above. The City currently has expended approximately $228,000 to remedy the problems with these phases. There is approximately another $49,000 in work that remains to be done. If the City were successful at trial, it would also be entitled to interest on the amount of the judgment. The defendants dispute liability and also that all of the amounts expended by the City are recoverable damages. If this goes to trial there is no guarantee the City will recover any of the costs it has currently incurred.
Funding Source & Fiscal Impact (if applicable):
Origination Recommendation Action:
Origination Recommendation Notes:
Staff recommends approval of the proposed agreement. The draft agreement that is attached may have some revisions to the language prior to Monday night, but the substance of the agreement will not change.
City Council Options:
If you approve, the City will dismiss its claims for the phases identified above and the defendants’ will make a payment to the City of $250,000. The parties will continue to work on resolving the claims related to the other phases and if the parties are unable to do so the case will proceed to trial in January of 2017. If you reject the settlement offer the entire case will go to trial in January of 2017.