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HomeMy WebLinkAbout~Master - Tax liability settlement for Power Plant Cooling Tower Replacement Project RESOLUTION NO. 17445 RESOLUTION ACCEPTING TAX LIABILITY SETTLEMENT AND AUTHORIZING PAYMENT FOR POWER PLANT COOLING TOWER REPLACEMENT FOR THE CITY OF AMES WHEREAS, on March 24, 2015, the City Council awarded a contract to demolish the Power Plant's old Units 7 and 8 cooling towers and to erect new fiberglass towers to EvapTech, Inc., of Lenexa, Kansas, for this project at a contracted cost of$2,810,000; and, WHEREAS, there was a total of six change orders to this contract which increased the overall cost to $2,919,338.15; and, WHEREAS, on November 11, 2016, the City Council accepted this project as complete at a total cost of$2,919,338.15; and, WHEREAS, as part of the closeout process, EvapTech was required to provide proof that it had paid all the applicable sales taxes for this project, and this proof is one of the requirements that must be met before the retainage can be released; and, WHEREAS, unfortunately, there was confusion between EvapTech and City staff regarding the handling of the sales tax payment, and, as a result, the retainage has still not been released; and, WHEREAS, after six months of discussion on this matter, EvapTech proposed to the City a settlement for the outstanding tax liability whereby the parties would equally split the sales tax liability, and, WHEREAS, City staff evaluated the proposed settlement, and determined it to be reasonable and in the City's best interest; and, WHEREAS, there is currently $87,640.76 in project retainage being held, which is equal to the total sales tax liability for the project; and, WHEREAS, the following steps must occur for this settlement to take effect: 1) EvapTech will provide a written agreement that it will pay the outstanding sales tax of$87,640.76 to the State of Iowa and provide proof of the transaction to the City (Completed); 2) the settlement will be presented for City Council approval on July 11, 2017; 3) upon approval by the City Council, the City Clerk's office will issue a resolution documenting the action taken, and a copy of the resolution will be provided to EvapTech electronically; 4) upon receipt of the City's resolution, EvapTech will pay the State of Iowa the full tax liability of$87,640.76 and provide the City with proof of payment; and, 5) upon receipt of the proof of payment to the State, the City will release the remaining $87,640.76 in project retainage being held, and in addition, the City will issue a check for $43,820.38 to Evaptech within 10 days of proof of payment for 50%of the tax liability. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the tax liability settlement proposed by EvapTech, Inc., of Lenexa, Kansas, is hereby accepted, and authorization to issue a payment of $43,820.38 to EvapTech, Inc., after its obligations under the agreement have been fulfilled is hereby approved. ADOPTED THIS 11 t" day of July, 2017. Diane R Voss, City Clerk Ann . amp ell, ayor Introduced by: Gartin Seconded by: Corrieri Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin,Nelson, Orazem Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 11 rn day of July, 2017.