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Eagle Point Bluff Scaling_Tree Removal Settlement AgreementTHE CTTY OF Dubuque __~ DUB E ~ar~ 1 1 Masterpiece on the Mississippi 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Eagle Point Bluff Scaling and Tree Removal -Settlement Agreement between the City and Royal Oaks Development Corporation DATE: August 12, 2008 In May 2005, the City Council approved the selection of Kleinfelder, Inc., an engineering firm from Bellevue, Washington to conduct a study of the Eagle Point Bluff, in response to concerns over the instability of the bluff following construction activities by Royal Oaks Development. Kleinfelder, Inc. completed the study in October 2005. Kleinfelder, Inc. made several recommendations to stabilize the bluff based on the eventual use of the property below the bluff depending on whether the use is commercial, residential or undeveloped. Kleinfelder, Inc. also recommended scaling the loose rocks and removing trees from the brow of the bluff regardless of the eventual use of the property below the bluff. The rock scaling and tree removal was completed by Hi-Tech Rockfall Construction and was inspected by Kleinfelder, Inc. The total cost of the project was $70,907.06 As directed by City Council, Royal Oaks Development was requested to reimburse the City. Royal Oaks has agreed to reimburse the City for the rock scaling and tree removal, including the engineering cost associated with the work. A proposed Settlement Agreement is attached. In return for the reimbursement payment, the City will release Royal Oaks from any further claims related to damage to the bluff. The Settlement Agreement also recites the requirement for an engineering study for any future proposed development of the Royal Oaks site. City Attorney Barry Lindahl recommends acceptance of the $70,907.06 payment and approval of the Settlement Agreement. I concur with the recommendation and respectfully request Mayor and City Council approval. / ~ . Michael .Van Milligen MCVM/Iw Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager THE CITY OF DUB E Masterpiece on the Mississippi BARRY LINDAHL CITY ATTORNEY To: Jeanne Schneider City Clerk DATE: August 11, 2008 MEMORANDUM ~i~ RE: Eagle Point Bluff Scaling and Tree Removal -Settlement Agreement between the City and Royal Oaks Development Corporation Attached for the August 18, 2008 agenda are duplicate originals of the Settlement Agreement executed by A.J. Spiegel on behalf of Royal Oaks Development Corporation. I would appreciate it if you would please return a fully executed original to me once it is approved by the City Council. Thank you. THE CITY OF DUB E Masterpiece on the BARRY LIND CITY ATTOR MEMORANDUM To: Michael C. Van Milligen City Manager DATE: August 11, 2008 RE: Eagle Point Bluff Scaling and Tree Removal -Settlement Agreement between the City and Royal Oaks Development Corporation In May 2005, the City Council approved the selection of Kleinfelder, Inc., an engineering firm from Bellevue, Washington to conduct a study of the Eagle Point Bluff, in response to concerns over the instability of the bluff following construction activities by Royal Oaks Development. Kleinfelder, Inc. completed the study in October 2005. Kleinfelder, Inc. made several recommendations to stabilize the bluff based on the eventual use of the property below the bluff depending on whether the use is commercial, residential, or undeveloped. Kleinfelder, Inc. also recommended scaling the loose rocks and removing trees from the brow of the bluff regardless of the eventual use of the property below the bluff. In response to the Kleinfelder, Inc. report the City Council amended the City of Dubuque Code of Ordinances requiring an engineering study for proposed bluff construction. Prior to any further development of the Royal Oaks property, City of Dubuque Code of Ordinances Section 11-57 will require that the building permit indicate whether the construction is on bluff land or land adjacent to a bluff. If the construction is on bluff land or land adjacent to a bluff, prior to the issuance of a permit, the Building Official may require the developer to fund an engineering study or studies, to determine whether the bluff land, land adjacent to a bluff, or adjacent bluff is sufficiently stable to allow for the construction or use. If the Building Official determines, based upon the engineering study or studies, that the bluff land, land adjacent to a bluff, or adjacent bluff is not sufficiently stable to allow for the construction or use, the Building Official may require as a condition of the issuance of the permit such stabilization or other measures as the engineering study or studies recommend to make the bluff land, land adjacent to a bluff, or adjacent bluff sufficiently stable to allow for the construction or use. Also in response to the Kleinfelder, Inc. report, in May of 2006, the City Council authorized the hiring of Kleinfelder, Inc. to develop bid documents for the rock scaling OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EnnAIL balesq@cityofdubuque.org and tree removal from the brow of the bluff and to inspect the work when it was performed. In August of 2007, the City awarded a contract for the rock scaling and tree removal to Hi-Tech Rockfall Construction, Inc. of Forest Grove, Oregon. The rock scaling and tree removal was completed by Hi-Tech Rockfall Construction, Inc. and was inspected by Kleinfelder, Inc. The total cost of the project was as follows: Hi-Tech Rockfall Construction, Inc. invoice $61,392.50 Kleinfelder, Inc. invoice $9,514.56 Total $70,907.06 Because the work that resulted in the need for the rock scaling and tree removal project was a Royal Oaks Development project, the City Council directed that Royal Oaks Development be requested to reimburse the City for the cost of the rock scaling and tree removal Royal Oaks has agreed to reimburse the City for the rock scaling and tree removal, including the engineering costs associated with the work. A proposed Settlement Agreement is attached. In return for the reimbursement payment, the City will release Royal Oaks from any further claims related to damage to the bluff. The Settlement Agreement also recites the requirement for an engineering study for any future proposed development of the Royal Oaks site. I have also asked Attorney Les Reddick to review the Settlement Agreement. Les has approved the form of the Settlement Agreement. I recommend that the Settlement Agreement by submitted to the City Council for consideration and approval. cc: Cindy Steinhauser, Assistant City Manager Gus Psihoyos, City Engineer Les Reddick, Esq. Stephen J. Juergens, Esq. F:\USERS\tsteckle\Lindahl\Eagle Point Park Rock Face\Mayorcouncil_RoyalOaksSettlementAgreement081808Agenda_081108.doc SETTLEMENT AGREEMENT This Settlement Agreement (hereinafter referred to as "Agreement:") is entered into on this 18th day of August 2008 by and between the CITY OF DUBUQUE, IOWA, an Iowa municipal corporation (hereinafter referred to as "City"), and ROYAL OAKS DEVELOPMENT CORPORATION, an Iowa corporation (hereinafter referred to as "Royal Oaks"). RECITALS A. Royal Oaks is the owner of real property legally described as: "TOLLBRIDGE PLACE, in the City of Dubuque, Iowa, according to the recorded Plat thereof'. The City is the owner of abutting real property legally described as Lot 1 of Lot 1 of Lot 1 of Lot 1 of Lot 1 of Lot 1 of Lot 1 of Mineral Lot 305A, Sec. 7, T89N, R3E. Included in a portion of each property is a limestone (dolomite) bluff known as the "Eagle Point Bluff' ("bluff'). B. The Eagle Point Toll Bridge was constructed around 1901-1902, during which bluff material was quarried and excavated to make room for the bridge approach road and foundation. The bridge was closed in 1982 and a restaurant was constructed and operated at the base of the bluff until 2003. Royal Oaks acquired the property on November 1, 2002. C. A large limestone quarry operated on the adjacent property to the south of the Royal Oaks/City properties from 1874 to the mid-1900's. The bluff was quarried and excavated during this period. D. In connection with a condominium construction project by Royal Oaks, on September 8, 2003 the City issued a blasting permit to Kasbohm Drilling, Inc., an independent subcontractor of Tschiggfrie Excavating, Inc., Royal Oaks' independent excavation contractor. The permit specifically authorized the "knock[ing] loose material from [Royal Oaks' portion of the] Bluff to secure bluff'. E. On September 16, 2003 Tschiggfrie and Kasbohm began excavating the Royal Oaks' portion of the bluff by controlled blasting and mechanical (track hoe) methods. F. Kasbohm Drilling, Inc. performed the controlled blasting commencing in September, 2003. The City Engineer's office periodically monitored and observed the blasting performed by Kasbohm on the bluff. In addition, Kasbohm provided daily blasting reports to the City for its review. G. The City's Fire Department required an increase in the planned and previously City-approved turning radius of the driveway in front of the proposed condominium building. This, in turn, required moving Royal Oaks' proposed building farther to the west and closer to the Royal Oaks' west property line/City's east property line. H. On October 7, 2003 the City issued an Amended Permit permitting "removal of rock from property to a distance of 5' west of east line of City Park property" measured horizontally to accommodate the relocation of the building as required by the City. I. Some small rocks fell from the bluff on October 22, 2003. J. The controlled blasting by Kasbohm was completed on November 19, 2003. K. On January 8, 2004 the City issued Royal Oaks a permit to remove rock from the City-owned bluff area west of the Royal Oaks' property to eliminate the potential danger from falling rock. L. On January 8 and January 9, 2004 Royal Oaks' independent contractor, Jim Schroeder Construction, Incorporated, utilized a wrecking ball to remove loose rock and potential hazards caused by winter freeze/thaw conditions from the City- owned portion of the bluff. The City Engineer's office periodically monitored and observed the wrecking ball usage by Jim Schroeder Construction, Incorporated. M. Additional, large rocks fell from the bluff on February 28, 2004. N. Royal Oaks, voluntarily and at its expense, retained an independent contractor McGhie & Betts Environmental Services, Inc. of Rochester, Minnesota to conduct an investigation to evaluate the rock removal and the rock falls, to inspect and evaluate the current condition of the bluff, and to make recommendations to stabilize the rock face, if necessary. McGhie & Betts issued its "Rock Face Investigation report on May 12, 2004. The McGhie & Betts Report concluded (a) that the February 28, 2004 rock failure occurred "along a natural joint face" during the "spring freeze/thaw cycle"; (b) that "the earlier excavation and slope failure exposed six other rock wedge slabs" which "could fail in a fashion similar to the earlier [February 28, 2004] landslide"; and (c) that one of these rock slabs "currently supports the dilapidated concrete step that formerly provided access to the bluff face from Eagle Point Park". The McGhie & Betts Report ultimately concluded that sections of the bluff were unstable and that additional rock removal was required. O. Royal Oaks provided a complete copy of the McGhie & Betts Roclc Face Investigation Report to the City on May 20, 2004 and requested advices from 2 the City "as to the procedure to be followed to .obtain permission from the City to remove the unstable rock from the City-owned bluff area". P. Photographs of the bluff taken in September, 2003 and prior to excavation by Royal Oaks clearly evidence the fractured nature of the bluff. In general, rock bluffs in the Dubuque area are near vertical in nature. Minor erosion and weathering is prevalent and occasional rock falls are commonplace. Rock falls occurred at the former quarry site south of the Royal Oaks/City properties. All or portions of the pre-existing and naturally precarious rock on the City-owned portion of the bluff could eventually have fallen as a result of natural forces, even without any blasting or wrecking ball usage on the bluff. Q. In litigation filed in Iowa District Court, Dubuque County by individuals challenging the City's re-zoning of the Royal Oaks' property, Judge Lawrence Fautsch issued an Order on June 4, 2004 finding that the City-owned portion of the bluff "was dangerous even before the [Royal Oaks' condominium] project began" and the City "merely allowed an adjoining property owner [Royal Oaks] to excavate material from the City-owned real estate that was dangerous even before the project began, at no cost to the City". These findings were based upon evidence provided to the Court by the City and Royal Oaks. R. Following receipt of the McGhie & Betts report from Royal Oaks, the City issued a "Request for Proposals for Eagle Point Bluff Study". The McGhie & Betts report was attached to the Request for Proposals. S. Thereafter, the City retained as its own consulting engineers Kleinfelder, Inc. of Bellevue, Washington to conduct the Eagle Point Bluff study. Kleinfelder issued its "Phase I -Rock Slope Investigation Report" on October 3, 2005. The Kleinfelder Report concluded (a) that "because of the fractured nature of the [Eagle Point bluff] rock mass, it is suspected that minor rockfall occurred at the bluff (prior to the 2003 excavation)" and that photographs taken prior to the 2003 excavation show "the fractured nature of the bluff even prior to the 2003 excavation"; (b) that it "could not establish if the blasting of 2003 lead to overbreak and instability of the bluff'; (c) that "the blasting was in general accordance with the accepted standard procedures and guidelines for blasting set forth by the FHWA [Federal Highway Administration] and the International Society of Explosive Engineers (ISEE)"; (d) "the use of a wrecking ball to remove loose rock inay have exacerbated the stability of the rock slope because of the disturbance created by striking the wall"; and (e) that the 2003 excavation of the bluff by Royal Oalcs' contractors in 2003 and 2004 created an "oversteeping of the bluff'. Royal Oaks disputes contentions (d) and (e). Royal Oaks further contends that under Iowa law it has not liable to the City for the negligence or fault, if any, of its independent contractors, including, but not limited to, Tschiggfrie, Kasbohm, Schroeder, and McGhie & Betts citing Kragel v. Wal-Mart Stores, Inc., 537 N.W.2d 699, 702 (Iowa 1995), and LaFleur v. LaFleur, 452 N.W.2d 406, 408 (Iowa 1990). The Kleinfelder Report ultimately recommended 3 various options to stabilize the bluff, including controlled blasting, scaling loose rocks and removing trees from the bluff, rock bolts, horizontal drains, and wire mesh protection. Kleinfelder's estimated stabilization costs ranged from $80,000 to $250,000, depending upon future development on the Royal Oaks' property. T. Prior to any further development of the bluff, City of Dubuque Code of Ordinances Section 11-57 will require that the building permit shall indicate whether the construction is on bluff land or land adjacent to a bluff. If the construction is on bluff land or land adjacent to a bluff, prior to the issuance of a permit, the Building Official may require the developer to fund an engineering study or studies, to determine whether the bluff land, land adjacent to a bluff, or adjacent bluff is sufficiently stable to allow for the construction or use. If the Building Official determines, based upon the engineering study or studies, that the bluff land, land adjacent to a bluff, or adjacent bluff is not sufficiently stable to allow for the construction or use, the Building Official may require as a condition of the issuance of the permit such stabilization or other measures as the engineering study or studies recommend to make the bluff land, land adjacent to a bluff, or adjacent bluff sufficiently stable to allow for the construction or use. U. In May, 2006 the City retained Kleinfelder to develop competitive bid documents for the rock scaling and tree removal from the brow of the bluff recommended by Kleinfelder and to inspect the work when completed. V. In August, 2007 the City accepted a competitive bid from Hi-Tech Rockfall Construction, Inc. of Forest Grove, Oregon for the rock scaling and tree removal recommended by Kleinfelder. Hi-Tech completed the rock scaling and tree removal and its work was inspected and found to be satisfactory by Kleinfelder. W. On December 5, 2007 the City Manager by letter requested that Royal Oaks reimburse it fora $9,514.56 invoice the City paid to Kleinfelder and for a $67,392.50 invoice the City paid to Hi-Tech. THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree upon the following mutual terms and conditions: 1. Payment by Royal Oaks. Royal Oaks will pay to City the sum of $70,907.06. 2. Release by City. City agrees to accept the payment provided for in Paragraph 1 herein in full resolution and satisfaction of and hereby irrevocably and unconditionally releases and forever discharges Royal Oaks, its officers, directors, shareholders, employees, representatives, agents, insurers, and contractors, including, but not limited to, A. J. Spiegel, Tschiggfrie Excavating, Inc., Kasbohm Drilling, Inc., Jim Schroeder Construction, Incorporated, McGhie & Betts Environmental Services, 4 Inc., their officers, directors, shareholders, employees, representatives, agents, insurers, and contractors, and all other persons, firms, and corporations (collectively "Releasees"), from any and all liability whatsoever, including all claims, demands, and causes of action of every nature affecting City, which it may have or hereafter ever claim to have by reason of: (a) any and all of City's internal and external past, present, and future engineering costs related to the bluff, including, but not limited. to, amounts paid or owing to Kleinfelder, Inc.; (b) any and all remedial work actually performed on the bluff or recommended by Kleinfelder, Inc. to be performed on the bluff, past, present, and future, including, but not limited to, amounts paid or owing to Hi-Tech Rockfall Construction, Inc.; (c) any and all damage, past, present, and future, caused, claimed to have been caused, or which could be claimed to have been caused, in whole or in part, by Releasees or any of them to the bluff, including, but not limited to, by blasting or mechanical means, including track hoes and/or wrecking balls; or work on the bluff performed prior to the date of this Agreement by Releasees or any of them; (d) any and all damage to the bluff, past, present, and future, reported or identified in the McGhie & Betts Rock Face Investigation report of May 12, 2004, damage to the bluff which could have been reported or identified in said report, and damage to the bluff which could have been prevented by remedial measures recommended in said report; (e) any and all damage to the bluff, past, present, and future, reported or identified in the Kleinfelder, Inc. report of October 3, 2005, damage to the bluff which could have been reported or identified in said report, and damage to the bluff which could have been prevented by remedial measures recommended in said report; and (f) any and all past, present, and future rock falls, rock slides, or land slides on or from the bluff resulting, in whole or in part, from natural forces or causes. 3. Citxs Covenant Not to Sue. In exchange for the payment described in Paragraph 1, City agrees not to bring any lawsuit or claim against any Releasee with respect to any claim, demand, action, or cause of action described in Paragraph 2 herein. 4. Other Agreements by City and Royal Oaks. City and Royal Oaks further hereby agree: 5 (a) that the City's release in Paragraph 2 and covenant not to sue in Paragraph 3 herein covers all damages, whether known or not and which may hereafter appear or develop arising from the City's claims described in Paragraph 2 herein. (b) that the payment described in Paragraph 1 herein is all that the City will receive for its claims described in Paragraph 2 herein and no promise for any other or further consideration has been made by Releasees or anyone. (c) that this Agreement is executed as a compromise settlement of a disputed claim, liability for which is expressly denied by Releasees, and that the City and Royal Oaks agree that neither this Agreement nor their performance hereunder constitutes any admission by any Releasee of any violation of any federal, state, or local law, regulation, common law, breach of any contract or duty, tort, or any other wrongdoing of any type. City acknowledges that Releasees have denied, and continue to deny, that they have any liability to City. (d) that City is executing this Agreement solely in reliance upon its own knowledge, belief, and judgment and not upon any representations made by Releasees or any of them or others in their behalf; and that Royal Oaks is executing this Agreement solely in reliance upon its own knowledge, belief, and judgment and not upon any representations made by City or others in its behalf. 5. Miscellaneous. (a) This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings between the parties or any of them, with respect to the subject matter hereof. (b) This Agreement shall be binding upon and inure to the benefit of and shall be enforceable by and against the parties hereto and their respective successors, assigns, heirs, personal representatives and beneficiaries.. (c) This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa. (d) This Agreement may be signed via counterparts and/or via facsimile signatures, which, when taken together, shall constitute an original, fully executed and binding Agreement. 6 CITY OF DUBUQUE, IOWA By: Roy D. Buol, Mayor ROYAL OAKS DEVELOPMENT CORPORATION By: A.J. Spiegel, President Attest: Jeanne F. Schneider, City Clerk