1. Streetscape` City of Kalispell Public Works Department
Post Office Box 1997, Kalispell, Montana 59903-1997 - Telephone (406)758-7720, Fax (406)758-7831
REPORT TO: Mayor and City Council
FROM: James C. Hansz, P.E., Director of Public Works
SUBJECT: Streetscape Project Review
MEETING DATE: Work Session, January 6, 2003
BACKGROUND: Councilman Olson recently asked for a review of the Downtown Streetscape Project
to determine whether the project construction should be halted. Included in Councilman Olson's request
were non-specific references to problems either confronted or created by the current construction effort.
Aside from the typical problems that required on -site re -engineering to solve hidden conditions revealed
during construction and the inconvenience to adjacent businesses during the work, Public Works is, at this
point, unaware of any condition or consequence of construction not anticipated during the design and
review process leading up to award of the construction contract. When work was stopped for the winter,
in November, the contract was about 30% complete. Approximately 45% of the hardscape was done with
four out of five blocks of First Avenue East completed. One block remains along with four blocks on First
Avenue West. Approximately 20% of the street furniture is installed, but none of the planters and none of
the street trees are installed. A temporary island has been installed at First Avenue East and First Street
East to identify the transition from the older four -lane roadway to the new three -lane section. The
permanent transition will take place at First and Center when First Avenue East is completed next spring.
In order to measure the effectiveness of the project to date, it may be useful to review the three
basic goals set out for this project at its inception nearly three years ago. These goals were to improve
pedestrian safety, calm traffic and enhance the appearance of the downtown. In this context, and with
only 30% of the work done, it is clear that a full measure of the project's effectiveness cannot be taken
until it is completed. However, a look at the completed sections of roadway does show that dedicated left
turn lanes and shorter crossing distances are allowing pedestrians to cross streets more easily and with
greater safety. The general flow of traffic appears unaffected after the change to three lanes and the pace
of traffic is uniform and predictable without the weaving and lane changing that were common with the
four -lane configuration. It appears that the desired safety and traffic calming affects of the project are
beginning to show and will likely further improve with the completion of work. With respect to
appearance, this is highly subjective and open to personal interpretation and preferences. The appearance
of the finished project going forward is identical to the design proposal outlined for the public and City
January 6, 2003 Streetscape Project Reviewl,doc
Council prior to contract award. There have been no changes in this regard. Some people will like it and
some will not.
With respect to the proposal to interrupt the contracted work, the City Attorney has offered his
opinion that this would likely be extremely costly for the City in both legal and monetary terms. He has
said:
"The legal implications of discontinuing the Streetscape Program cannot be understated. While it
is certainly possible to bring the project to a halt at this point, the costs would be remarkable.
First, the City is bound by its contract with Montana Lines, the general contractor on the project. The
contractor has acted in reliance on this agreement and if the City decides now to discontinue with the
project, the contractor will suffer significant damages. Unless there is a liquidated damages clause in the
contract, the most common remedy the courts provide for this type of breach is to award the contractor
damages in the amount of the profits it would have realized had the project been brought to completion.
Therefore, if the contractor had a ten percent profit built into its bid, the City could expect to pay the
contractor its ten percent, less what profit has already been paid out.
Second, and more significantly, the monies the City is using on this project are TIF funds, which the
Council will recall, had to be expended prior to the sunsetting of the fund. Therefore a discontinuance of
the Streetscape project is essentially a rescission of the expenditure of the bulk of those funds. Certainly
such rescission and failure to use those funds will trigger the requirement to return the greater part of the
monies to the County and School District and the loss, therefore, of the use of those funds by the City."
In connection with the City Attorney's opinion regarding monetary costs, the City would
also bear the cost of materials in storage purchased for specifically for this project. These
materials include streetlights, street furniture, traffic signals, and other items such as
street trees, which were specially ordered for this project but left in place at the nursery
until they are planted in the spring. Not counting the trees, these materials amount to
about $200,000.00.
Finally, the Public Works Department has virtually no experience in breaking contracts,
particularly where the general contractor is performing as required by the contract. We
would prefer not to gain this experience at the expense of the Kalispell taxpayer.
RECOMMENDATION: Stay the course and withhold judgment on the Streetscape Project until it is
completed.
]ame�/o. Hansz, P.F.
Director of Public Works /
January 6, 2003 Streetscape Project Review l.doc
Chris A. Kukulski
City Manager
Report compiled January 2, 2003