1998-11-13 LOC Reduction
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PILOT
LAND DEVELOPMENT COMPANY
November 13, 1998
Mr. Pete Carlson. City Engineer @ SEH
Mr. Dave Lund . City Administrator
5975 Main Avenue NE.
AJ~Ue,~ 55301
~: Final 1998 Letter of Credit Reduction for IUr8ton Cove Addition
Dear Mr. Carlson:
On October 16, we received a reduction to S150,000. Since the date erf our request on September 20il\ we
have completed all work for street subgrade, base pavement and CUX'bs and gutters. No trails will be
paved on Karston Avenue or 64dl Street this year due to small utility consttuction
The work left to oomplcte per the contracts is final lifts, ring and mist. adjustments, trails and monitorins
of erosion control effons. The amounts for those items are $ 18,150.90 and $6,292.20 for the trails and
striping totaling $24,443. The Joint Powers is holding cash escrow for gate valve adjustments of$9,OOO.
Warranty work totals 10% of the constructed project costs, Work completed to date are utilities and
streets worth $327,4.51 for the lot Addition. My proposed surety over the winter months is as follows:
l()(l/o Warranty on Karston & 64th S327,481. 10%.. $32,481
Warranty work if required private infrastru~ @ 5% STBD.; 05%.. $
Work left to complete final lifts & trails
Projed Total security in letters of credit
$18.151 + $6.292-
$24.44~
556,924
We would prdcr to provide the City separate Subdivision Bonds for a portion o1thc work. Especially for
any of the work t~t is not Cily maintained such as the private streets and uttlity services, As a reminder,
only the Karlrton Cove loop road portion has public utilities. About a third of the utility costs are private
and about another third of tile road costs are for private streets. Our performance is a contractual matter
between oW' builder and us and is not implied within the development agreement. Reaching an agreement
on this would lower the warranty and fina11ift costs by 1/3,
Weare proposing to you md the Council that a combina.tion of bonds and letters of credit is appropriate,
based on our track record of perfonnance. If accepted, we could further lower our letter of etedit to
$.25,000 with the difference in a Subdivision bond. We would also like your opinion on whether we can
add an additional beneficiary to the perfomUlnce bond from laTour to Albertville, if this allows the above
bond to occur.
Please schedule this item for the ne"" Council meeting ,md notify Builders Mortgage and me accordingly
upon your agreement with my math above. If you have any questions, please contact me.
Sincerely,
!~
Land Development Director
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13736 Johnson Street NE · Ham Lake, MN 55304 ,757.9816 . Fax: 757-4094
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