1l. Securities in Lieu of Retainage Agreement i
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CITY OF
\\I CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900 Acuon by City i 1 n;
F.ndorsd
' MEMORANDUM6``' "'"--°-'--°
TO: Don Ashworth, City Manager � ���
Fiat. iL'JTn is'��. 17
FROM: Gary Warren, City Engineer
DATE: February 18 , 1988 -2-/2-4/4"i"
SUBJ: Accept Securities in Lieu of Retainage Agreement,
Shafer Construction
File No. 86-11
State statutes allow for contractors to substitute a securities
agreement in place of the usual five to ten percent retainage
on construction projects. In larger contracts such as our down-
town improvement project, the retainage can become quite large
' and the contractors were being penalized by not having access to
this money to gain interest .
As a result, Shafer Contracting has prepared the attached
Agreement for Deposit Securities which has been reviewed by our
attorneys and found to be consistent with state statutes. The
current retainage for the downtown construction project is
approximately $85,726 . Attached to the securities agreement is a
confirmation notice of a $100 , 000 U.S. Treasury Bill which Shafer
has deposited with the First Wisconsin Bank of Grantsburg,
Wisconsin.
We find this agreement and security acceptable and in conformance
with state statutes on this matter. We therefore recommended
that the City Council approve this agreement and authorize its
execution. In so doing, the contractor' s retainage will be
reduced to zero with the next pay estimate.
Attachments: 1 . Letter from Shafer Contracting dated
February 5 , 1988
2 . Agreement for Deposit of Securities dated
February 5 , 1988
3 . Treasury Bill Confirmation
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SHAFER, MINNESOTA 55074
February 5, 1988 1988
Bennett, Ringrose, Wolsfeld, Jarvis,
Gardner, Inc.
700 Third Street South -
Minneapolis, Minnesota 55415
Re: City of Chanhassen
Project 86-11
Attn: Mr. Gary Ehret
Gentlemen: '
I'm enclosing the agreements for the securities in lieu of retainage and
documents and showing the $100,000 U.S. Treasury bill which is the security. '
Please return one fully executed copy.
I
Yours very truly,
SHAFER CONTRACTING CO. , INC. i
By: \ �\�.J. 1 • -��
- -4 ,--
George W. Mattson
GWM:11
Encl. '
cc: Mr. Timothy Berg CITY OF CHANHASSEN
Grannis, Grannis, Farrell & Knutson MEMO
161 North Concord Exchange �W]�5 ((55 ��'►f/
So. St. Paul, Minnesota 55075
FEB
1988
ENGINEERING DEPT.
IIAGREEMENT FOR DEPOSIT OF SECURITIES
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THIS AGREEMENT, dated as of the S day of E.s�A=-Y , 19 Sr , among the CITY
' OF CHANHASSEN ("CITY") , SHAFER CONTRACTING CO. , INC. , Shafer, Minnesota 55074
("CONTRACTOR") and FIRST WISCONSIN - GRANTSBURG, Grantsburg, Wisconsin 54840
("BANK") .
' It is agreed that: --
1 . The CONTRACTOR may from time to time during the term of this AGREEMENT
deposit with BANK certificates representing ownership of securities consisting
of the following:
a. Bills, certificates, notes or bonds of the United States;
b. Other obligations of the United States or its agencies;
' c. Obligations of any corporation owned wholly by the Federal govern-
ment;
' d. Indebtedness of the Federal National Mortgage Association;
or
' e. Other bonds or securities approved by the Treasurer of the State
of Minnesota pursuant of Minn. Stat. 15.73, as the same from
time to time be amended.
Such certificates shall be in the name of CONTRACTOR and endorsed to the BANK
or shall be in the name of the BANK. Neither the certificates nor the securities
represented thereby shall be subject to any restrictions on transfer.
' 2. Upon receipt of any such certificates, the BANK shall deliver to the CITY
and to the CONTRACTOR a receipt signed by the BANK, setting forth the number and
' type of securities represented by such certificates and certifying the market
value thereof as of the date of deposit.
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3. The BANK shall act as custodian, hold such certificates for safekeeping
and dispose of such certificates only in accordance herewith.
4. During the term of this AGREEMENT, all interest or dividends on the '
securities represented by the certificate then held by the BANK hereunder
shall be paid to the CONTRACTOR upon receipt thereof by the BANK.
5. During the term of this AGREEMENT, CONTRACTOR may submit a request, as
set forth in Exhibit A, certifying the market value of all pledged securities
as of the date of the CONTRACTOR'S Pay Request, to be an alternate retainage '
with respect to any contract between the CITY and the CONTRACTOR requiring
withholding of a retainage. In the event the retainage(s) required pursuant
to such contract exceed the current market value of securities pledged hereto,
the CONTRACTOR shall deposit additional securities pursuant to this AGREEMENT
or the CITY will retain sufficient cash retainage as a part of the partial '
payment.
6. The BANK shall, upon written instruction executed by the CITY Executive
Director or his authorized representative, endorse and deliver to the CITY or
the CONTRACTOR, as may be specified in such instruction, all certificates
deposited by the CONTRACTOR hereunder. ,
7. The applicable custodial fee shall be paid to the BANK by the CONTRACTOR
as deposits are made.
8. (a) The BANK may endorse and deliver all or some of the certificates
deposited hereunder pursuant to an order of any court of competent jurisdiction.
(b) This AGREEMENT shall automatically terminate upon endorsement and
delivery of all certificates deposited hereunder in accordance with the terms
thereof.
(c) This AGREEMENT may be amended only by and upon a written instrument '
executed by all parties hereto.
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(d) This AGREEMENT shall be binding upon and shall inure to the benefit
of the respective parties, their personal representative, successors and
assigns.
(e) This AGREEMENT shall be construed and the rights hereunder determined
in accordance with the laws of the State of Minnesota.
(f) All deposits, notices, instructions or other communications required
or permitted to be made or delivered hereunder shall be in writing and delivered
' in person or sent by certified or registered mail to the following address or
such other address as the party shall have directed:
To the BANK: First Wisconsin - Grantburg
Grantsburg, Wisconsin 54840
Attn: Mr. Glen Johnson
' To the CITY: City of Chanhassen
' 690 Coulter Drive
Chanhassen, Minnesota 55317
To the CONTRACTOR: Shafer Contracting Co. , Inc.
Shafer, Minnesota 55074
Attn: Mr. George W. Mattson
1
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IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as of the
day and year first above written.
FIRST WISCONSIN - GRANTSBURG '
BANK / '
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. CUSTOMER CONHRMATION
FIRST BANK NATIONAL ASSN
• ' • ' CAPITfiL MKTS & TREASURY GROUP
612-291 -5659, ST PAUL OFFICE
P 0 BOX A-1674
•
_ MINNEAPOLIS, MN 55480
RETAIN THIS COPY FOR _ ' '
PLEASE NOTIFY US IMMEDIATELY IF THIS CONFIRMATION YOUR RECORDS
�, :. IS NOT IN ACCORDANCE WITH YOUR INSTRUCTIONS
'.
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t'r`t.'.-i:,; z,.__ SALE TO YOU AS TRADE DATE
Nr.",".-yi4�., `'YY ar�'� PRINCIPAL
rIC 1 PAL .� ,� REFERENCE f/ .,,c;. ,,,:,,,
02/02/88 02/02/88 635392 ,�',.:"=
' PAR VALUE RATE
1 00,000 .00 1I�Ci9/Di/1 988 I . 51 26389 IYIE;D 2244. BA$15 .95 SETTLEMENT DATE
U S TRE,ISURY B LL ;02/03/88
- DUE 9-1 -88
t'[t :i. 95,512 .64
SAFEKEEPING FEE 8 HO../•'
• CUSIP 912794PZ1
r:4,.-.y.�i',4aR y ' SECURITY NUMBER SALESFERSO� "
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SCON BK OF GRANTSBURG 0014 ce'VITENlegkggY�iN(� '' I El)UNT J~'~
GRANTSBURG WI 54840 WE WILL SAFEKEEP YOUR SECURITY
FIRST BANK ST PAUL-04
CITY OF CHANHASSEN 00
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DUPLICATE CONFIRMATION — INFORMATION ONLY 14. 1 x �,. �� N
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CUSTOMER CONFIRMATION
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RETAIN THIS COPY FOR
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YOUR RECORDS
PLEASE NOTIFY US IMMEDIATELY IF THIS CONFIRMATION
IS NOT IN ACCORDANCE WITH YOUR INSTRUCTIONS. SEE REVERSE SIDE ''''- -- ---.:i.
4:111'.41.1443.;:#1.:
:.,••-•':,.„'"4.4•,;.i:;.,;$.11
'TRADE
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AS AGENT WE HAVE SOLD TO YOU REFERENCE OA ,.,
• -
02/02/88 02/02/88 635392
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PAR vu RATE MATURITY DATE PRICE D BASIS
SETTLEMENT DATE
. 100,000.00 09/01 /1988 96 . 5126389 6 . 22445 5 .95 A., 432/03/88 •
•
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P R 1-11-C IP AL
• DUE 9-1 -88
SAFEKEEPING FEE 8.00 .....--
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SECURITY NUMBER SAUS4C RSUN SK/CUSTOMER CHECKING ACCOUNT OF .
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1A 912794PZ1 236 331621 1002818 ET AMOUNT ''*';'- ''''''''"9'6 ' s 2 ri A 4
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WE WILL SAFEKEEP YOUR SECURITY
- • SHAFER, MN 55074
FIRST BANK ST PAUL-04
CITY OF CHANHASSEN 00
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W E RESERVE THE RIGHT TO CORRECT THIS STATEP,AENT IN CASE OF ERROR. : er'c";'..;V;.i''....::'-,;;.',',..• ' . --
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