TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 16, 2024
COMMITTEE ON PROCUREMENT
Mr. Brian A Perkovich, Executive Director
Title
Authority to increase purchase order and amend the agreement with the law firm of Neal & Leroy, LLC, to represent the District in acquiring certain property rights in connection with the construction, operation, and maintenance of the Addison Creek Channel Improvements Project (Contract 11-187-3F) in the municipalities of Northlake, Stone Park, Melrose Park, Bellwood, Westchester, and Broadview, Illinois, in an amount of $80,000.00, from an amount of $2,100,000.00, to an amount not to exceed $2,180,000.00, Account 501-50000-612430, Purchase Order 3094927
Body
Dear Sir:
On June 1, 2017, the Board of Commissioners (“Board”) authorized the Director of Procurement and Materials Management to issue a purchase order and enter into an agreement with the law firm of Neal & Leroy, LLC to represent the District in acquiring certain property rights in connection with the construction, operation and maintenance of the Addison Creek Channel Improvements Project (Contract 11-187-3F) (“Project”) in the municipalities of Northlake, Stone Park, Melrose Park, Bellwood, Westchester, and Broadview, Illinois. The designated right-of-way for the project required the District to acquire property interests impacting approximately 175 parcels of land (over 200 PINs), including both residential and commercial properties located across all six municipalities. The needed property interests included a combination of fee simple takings and permanent or temporary easements.
As of May 6, 2024, the attached list of change orders have been approved.
Original Contract Amount $400,000.00
Date of Board Approval 1/24/2019
Cumulative Change Order (5/6/2023) $1,700,000.00
% Change of Original Contract Value 525%
Current Contract Value $2,100,000.00
Requested Increase or Decrease $80,000.00
New Contract Value $2,180,000.00
% Change of Current Contract Value 3.8%
Total % Change of Original Contract Value 545%
The District has completed the right-of-way acquisition within the authorized budget and Project construction is underway. However, one eminent domain case remains pending because the District and the property owner have not yet reached an agreement as to the final compensation for the permanent and temporary easements required. That pending lawsuit is entitled The Metropolitan Water Reclamation District of Greater Chicago v. Prime33 Development LLC, et al., Case No. 20L050009 in the Circuit Court of Cook County, Illinois. The District and the property owner continue to negotiate regarding the final compensation amount, but the appraised values are too far apart for the parties to reach a settlement. In particular, the preliminary just compensation authorized by the Board on February 4, 2021, was $90,000.00, but the property owner is demanding $260,000.00, a difference of $170,000.00. In situations where the parties are this far apart regarding the appraised values, it is in the District’s best interest to continue the discovery process and proceed to trial, where a jury may determine the fair market value for the easements.
The amount requested in this change order is expected to cover the remaining legal services and court costs necessary to complete the discovery process and proceed to trial, if necessary. If the parties reach a settlement before trial, that recommended settlement will be presented to the Board for review and approval. Although this contract was entered into prior to the Board’s policy establishing an hourly fee cap for outside legal services, Neal & Leroy has agreed to accept the hourly rate cap ($250.00) for the remainder of the services to be performed. The current hourly rate for legal services in the contract is $295.00. Neal & Leroy, LLC is a minority-owned and operated firm.
This change order complies with the Illinois Criminal Code because the additional legal assistance necessary to complete this particular lawsuit was not reasonably foreseeable at the time the contract was signed. Under the Illinois Eminent Domain Act, the District must first negotiate in good faith with all property owners before filing a condemnation complaint; as a result, the District cannot predict which cases will ultimately proceed to trial.
It is hereby recommended that the Board of Commissioners authorize the Director of Procurement and Materials Management to execute a change order to increase the purchase order and amend the agreement in an amount of $80,000.00 (3.8% of the current contract value) from an amount of $2,100,000.00, to an amount not to exceed $2,180,000.00.
Funds are available in Account 501-50000-612430 in the amount of $50,000.00 for 2024, and $30,000.00 will be budgeted for 2025. Funds for 2025 expenditures are contingent on the Board of Commissioner’s approval of the District’s budget for that year.
Requested, Susan T. Morakalis, General Counsel, and Catherine A. O’Connor, Director of Engineering, STM:BJD:vp
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for May 16, 2024
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