Trending
A city clerical error has two bidders claiming rights to a floodway salvaged structure, with the Minot City Council caught in the middle.
The council heard at its meeting on Monday, Aug. 17, from the two parties who bid on a structure the city offered for sale after acquiring it in an acquisition for the flood protection project. Sealed bids were opened Aug. 4 for the house at 804 1st Ave. SW.
Two bids were received by the deadline and in proper form. However, one was opened and read publicly during the bid opening while the second bid sat in the City Clerk's internal mailbox, where Utility Billing staff placed it upon receiving it. The city clerk was unaware of the existence of the bid, which should have been instead directed to the consultant handling the bidding. The bid envelope was discovered in the mailbox the next day after the bidder called to inquire about the bid results. The envelope was opened and the bid was higher, but by then, the first bidder was preparing to complete the purchase.
The staff decided to reject all bids and start over. It sought the council's confirmation of that decision.
Council member Scott Samuelson said the city also erred in opening the second bid outside the bid opening process. He said state law allows for the bidder to challenge the bid award in the situation that occurred.
"It's still going to come back to this body to decide what to do with it. And right now, there is no fair way to do it," he said. "I don't know what else we do other than rebid. It's a shame for everybody involved."
"Our handling of this gets at whether we can be trusted to run bid processes," council member Mike Blessum said. "I don't believe there was any intentional wrongdoing anywhere in this. There are mistakes that can be made in processes, and we had one occur."
The issue now is sealed bids have been exposed, leaving no good way to simply start over, Blessum said.
City Finance Director David Lakefield said the city notified its insurer about the incident. Before there can be insurance coverage, though, there must be a finding that the city is liable for damages, which the parties would have to prove, he said.
Brady Nelson, who originally had been told he won the right to purchase the house as the only bidder, accused the city of backdating paperwork to change the narrative. The paperwork says bids were denied but that isn't what happened at the bid opening, he said.
"Our bid was accepted," he said. "So, what is going to be the timeline for your bidding process after you accept the bid. From here on out, in the future, if at the bid opening you guys say that we accept the bid, how long are you giving yourself then to go back and deny it? Is it a week? A month? Two years?"
The other bidder, David Pitner, argued that his higher bid remains valid.
"It was opened, so I feel it was accepted in the process," he said. "There's the law and there's the process and there's also doing the right thing."
Relisting the property puts him at a disadvantage to the lower bidder, he said.
"And the City of Minot stands to make more money off the property. I've looked into the state law, too, and if it's deemed a good bid by the governing body, accept the bid," Pitner said.
Asked to weigh in, City Manager Tom Joyce also called it unfortunate, but rebidding is the only option.
The council voted 5-1, with John MacMartin dissenting, to readvertise the structure and take new bids. The council also voted 6-0 to approve Blessum's motion to request an Attorney General's opinion on whether state law applies and was properly interpreted.
"I'm asking partly on behalf of one of the parties but also for my own satisfaction - that there isn’t something that we missed along the way in the way that we did this," Blessum said. "Because I believe we have two parties that have been harmed, and we’ve got no other way to even say anything other than 'sorry.'"