HomeMy WebLinkAboutContract 53332-SA1CSC No. 53332-SAl
SETTLEMENT AGREEMENT
This Settlement Agreement ("AgreemenY') is entered into by and between Synagro of
Texas-CDR. Inc. ("Synagro"), and the City of Fort Worth, Texas (the "City"). Synagro and the
City may be individually referred to as the "Party" or collectively referred to as the "Parties."
Terms used herein but not defined herein shall have the meaning ascribed to them in the Contract
(defined below).
WHEREAS, the Parties entered into City Contract No. 53332 (City Project No. 101961)
(the "Contract") governing the construction and operation of a biosolids facility (the "Synagro
Facility") that is downstream of the City's Village Creek Water Reclamation Facility
("VCWRF") as well as interim and back-up services utilizing pre-e�usting facilities;
WHEREAS, during the period of Synagro operations a dispute arose between the Parties
regarding iwo material issues: (1) the volumes for which the City would pay for Synagro to dredge
or excavate the ponds of biosolids left by a prior solid facility opera.tors as well as for those
accumulated between the Commencement Date to the startup of dryer operafions (April 1, 2020 —
July 1, 2022) of the Contract (the "Preezisting Solids"); and (2) alleged increased operations cost
incurred by Synagro as a result of alleged non-performance at the VCWRF during the period of
Synagro dryer operations or after July 1, 2022 (the "Synagro Dryer Operations Period");
WHEREAS, the Parties mediated these disputes on August 30, 2023 with Brian Carroll,
Esquire, iT1 Fort Worth, Texas, (the "Mediation"); and
WHEREAS, during Mediation Synagro raised the issue of heavy metals, specifically
molybdenum, within the ponds; and
WHEREAS, the parties reached terms of settlement, which are reflected in this Agreement;
WHEREAS, the Parties intend for this Agreement to resolve their dispute regarding the
terms ofpayment for removal and disposal of accumulated biosolids from the north pond, the south
pond and the overflow pond, each adjacent to the Synagro Facility (the "Ponds"), of Preexisting
Solids and biosolids deposited in the Ponds during the above said interim operations and during
the dryer opera.tions, as well as their dispute over alleged increased opera.tions cost to Synagro for
the period July 1, 2022 through July 31, 2023, as a result of alleged non-performance at the
VCWRF;
WHEREAS, the City expressly does not intend to, and does not, make any agreement to
amend, alter, change or modify the VCWRF or its operations under this A�eement;
WHEREAS, this Agreement makes no findings, assertions or admissions that the VCWRF
operations are not in compliance with the Contract; and
WHEREAS, except for the terms of agreement relating to the removal of the Preexisting
Solids from the Ponds, which the parties intend will take place after executing this Agreement, the
Parties intend for this Agreement to be backwards-looking for the period up to and including July
31, 2023.
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Page 1 of 6
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
NOW, T'I�REFORE, in consideration of the promises and obligations set forth in this
Agreement, the Parties agree as follows:
1. Recitals. The Parties each hereby approve the recita.tions set forth in the preamble
of this Agreement and agree that said recitations are true and correct in all respects, and form part
of this Agreement to the same extent as all other provisions.
2. Ef�ective Date. This Agreement is effective on the day it is signed by the City (the
"Effective Date"). The City agrees to promptly place this matter on the City Council schedule for
approval.
3. No Admission of Liabilitv. This Agreement shal] not be construed as an admission
of any wrongdoing or liability of any Pariy, and each Party expressly denies any fact or allegation
made against it by the other Party. This A�eement is entered into for settlement and to avoid the
time and expense of litigation.
4. Contract Amendment/Entire Agreement. Except as expressly supplemented,
modified or altered by this Agreement, the Contract remains in full force and effect in every
respect. For the specific matters addressed in this Agreement, this Agreement embodies the entire
agreement and understanding between the Parties and supersedes all prior agreements, offers of
compromise or understandings (including the "Mediation Term Sheet" exchanged by email by
the Parties' counsel at the time of the mediation and the letters exchanged by the Parties in the
process of attempting to resolve this dispute). Notwithstanding the foregoing, except as expressly
modified or disclaimed in this Agreement, the Contract shall apply to the performance of each
Party's obligations under this Agreement.
5. Removal of Biosolids from the Ponds. Under the Contract, Synagro has the
obligation to remove the Preexisting Solids from the Ponds, as well as any new solids introduced
to the Ponds during Synagro operations. The Parties agree to the following terms with respect to
completing this work.
(a) Prior to November 1, 2023, the City completed sampling and testing
(including receiving and providing to Synagro the test results when same are received) of the Ponds
to determine appropriateness of the materials in the Ponds for land appIication.
(b) Synagro shall commence biosolids removal from the any of the Ponds
(• Removal' ) on or before January 2, 2024 (the "Cleanout Commencement Date"). Synagro
shall use due care to not damage the ponds' structural clay liners during the Removal process.
(c) Upon the expiration of twenty-four (24) months after the Cleanout
Commencement Date (which the Parties expect to be January 2, 2026, so long as the Cleanout
Commencement Date is not delayed) (the "Completion Date"), the Parties agree and deem that
all biosolids remaining in the south and overflow ponds (as depicted on Exhibit A) after the
Completion Date shall be assumed to have entered the Ponds during the Synagro Dryer Operations
Period (which commenced July 1, 2022), which biosolids must be removed by Synagro under the
terms of the Contract at no cost to the City.
Page 2 of 6
51320561.2
(d) For the twenty-four (24) month period between the Cleanout
Commencement Date and Completion Date (the "Removal Period"), for the purpose of
calculating the Preexisting Solids removal price, the Parties agree that the monthly volume of
biosolids added to the Ponds commencing August 1, 2023 shall be fixed at 200 dry tons per
calendar month (which is based on average historica.l conditions and is incorporated into the price
terms below). The Parties also agree to the volume of dry tons that entered the Ponds during the
period July 1, 2022 to July 31, 2023, and, for the purpose of calculating the Preexisting Solids
removal price, this tonnage shall be credited as 102.5 dry tons per calendar month during the
Removal Period. Collectively, "Credited Dry Tons" shall equal 302.5 dry tons per calendar
month, which is sum of the 200 plus 102.5 dry tons per calendar month and assumes that the
monthly 200 dry ton credit for the period of August 1, 2023 to December 1, 2023 is incorporated
as a one-time lump sum credit applied to the December 2023 time period.
(e) For dry tons removed during the Removal Period, the payment term shall
be as follows:
i. For the south pond depicted on E�chibit A, attached hereto and
incorporated herein for all purposes, the removed materials shall be sent to a municipal solid waste
landfill and the City shall pay Synagro for removal of material from the pond using the following
price term:
(1) $396.50 per dry ton removed each calendar month (based on
certified truck scale weight tickets) less the Credited Dry Tons (of 302.5); plus
(2) The actual tipping fee for municipal solid waste landfill
disposal for all tons (including the Credited Dry Tons) during the Removal Period. The City may
pay this fee directly or ask Synagro to bill it as a pass-through and the City may negotiate this price
directly with the landfills. Synagro shall have the discretion to select landfills for any material that
is required to be landfilled. Synagro shall notify the City of landfills it may use at least thirty (30)
days before using such landfill for disposal.
ii. Synagro agrees to land apply the materials from the overflow pond
depicted on Exhibit A at the rate of $396.50 per dry ton in accordance with the Contract terms.
(t) For the north pond depicted on Exhibit A, Synagro agrees to,
compliant with regulatory standards, land apply the removed materials at the rate of $396.50 per
dry ton in accordance with the Contract terms, provided that any reasonable additional costs for
land application beyond direct land application (including sampling, testing, blending and
processing) of pond material be pre-approved by the City if Synagro intends to seek additional
City contribution. Approval of such additional costs may require Fort Worth City Council action.
Any material from the north pond that cannot be land applied compliant within regulatory
standards will be landfilled in the same manner and with the same cost allocation as materials from
the south pond.
6. Pavmen� In addition to any amounts payable under Section 5(e) ofthis Agreement,
the City shall pay Synagro $1,858,157.65 on or before the fifth (Sth) business day after the
Effective Date of this Agreement. Payment shall be made by direct deposit to Synagro' account
Page 3 of 6
513205612
using the existing payment mechanism. $1,000,000 shall constitute a one-time settlement payment
for which no invoice or other demand shall be issued. $858,157.65 shall constitute payment of
outstanding Synagro invoices for Class AB services between July 1, 2022 and July 30, 2023, which
Synagro has already invoiced.
7. Release. In consideration of the covenants conta.ined herein and the payment of
money, Synagro forever and unconditionally releases, dischazges and agrees to hold harmless the
City, and all its directors, employees, administrators, elected officials, representatives, attorneys,
insurers and assignees (the "City Releasees"), from any and a11 claims, complaints, administrative
charges, causes of action, damages, compensatory damages, exemplary, special or punitive
damages or attorneys' fees or costs arising out of Synagro's claim for additional costs actually
incuned by Synagro during the period of July 1, 2022 to July 31, 2023 as a result of alleged
Contract non-performance by the City and its VCWRF (the "Synagro Released Claims"). The
Synagro Released Claims expressly do not include (i) any claim brought to enforce the terms of
this Agreement, and (ii) any claim of Synagro relating to a cost incurred on or after August 1, 2023
(which, for the sake of clazity, shall be governed by the Contract and Synagro reserves all rights).
8. Dispute Resolution. If a dispute arises relating to this Agreement, before filing
litigation, the Parties shall make a good faith effort to reconcile the dispute, which may include the
assistance of Brian Carroll, Esquire (the prior mediator).
9. Modification and Waiver. No provision of this Agreement may be amended or
modified unless the amendment or modification is agreed to in writing and signed by the Parties.
No waiver. by any Party of any breach by any other Party of any condition or provision of this
Agreement to be performed by any other Party shall be deemed a waiver of any other provision or
condition, nor shall the failure of or delay by any Party in exercising any right, power, or privilege
Under this Agreement operate as a waiver to preclude any other or further exercise of any right,
power, or privilege.
10. Severabilitv. If any provision of this Agreement is found by a court of competent
jurisdiction to be invalid, illegal, or unenforceable in any respect, or enforceable only if modified,
such findina shall not affect the validity of the remainder of this Agreement, which shall remain
in full force and effect and continue to be binding on the Parties. The Parties further agree that any
such court is expressly authorized to modify any such invalid, illegal, or unenforceable provision
of this Agreement instead of severing the provision from this Agreement in its entirety, whether
by rewriting, deleting, or adding to the offending provision, or by making such other modifications
as it deems warranted to carry out the intent and agreement of the Parties as embodied in this
Agreement to the maximum extent permitted by law. Any such modification shall become a part
of and treated as though originally set forth in this Agreement. If such provision or provisions are
not modified, this Agreement shaIl be construed as if such invalid, illegal, or unenforceable
provisions had not been set forth in it. The Parties expressly agree that this Agreement as so
modified by the court shall be binding on and enforceable against each of them.
11. Interpretaxion. Captions and headings of the sections and paragraphs of this
Agreement are intended solely for convenience and no provision of this Agreement is to be
construed by reference to the caption or heading of any section or paragraph. The word including
shall mean "including but not limited to."
Page 4 of 6
5132056] �
12. Counterparts. The Parties may execute this Agreement in counterparts, each of
which shall be deemed an original, and all of which taken together shall constitute one and the
same instrument. Electronic executed documents shall be deemed and treated as ori�inal copies.
Delivery of an executed counterpart's signature page of this Agreement, by facsimile, electronic
mail in portable document format (.pd fl, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, has the same effect as delivery of an
executed original of this Agreement.
13. Notices. All notices under this Agreement must be given in writing by Certified
Mail at the addresses indicated in this Agreement or any other address designated in writing by
either Party. When providing written notice to the Company, a copy must be provided to the
Company's attomeys at the address below.
Notice to Synagro:
Alan Slepian
435 Williams Court, Suite 100
Middle River, MD 21220
aslepian@synagro.com
With a copy to:
Thomas K. Prevas
Saul Ewing LLP
1001 Fleet Street, 9th Floor
Baltimore, MD 21202
thomas.prevas@saul.com
Notice to City:
Chris Harder, Director
Fort Worth Water Department
200 Texas Street
Fort Worth, Texas 76102
With a copy to:
Douglas W. Black
Sr. Assistant City Attorney
200 Texas Street
Fort Worth, TX 76102
14. Authori . By affixing the signature below, the undersigned represents that he or
she has authority to bind its respective Party to this Ab eement.
Page 5 of 6
5132056L3
IN WITNESS WHEREOF, the Parties have executed this Agreement as ofthe date below.
SYNAGRO OF TEXAS-CDR INC CITY OF FORT WORTH, TEXAS
^
Si�t�lature:
T�o.� SU��r�L.�
b�� S1gI11.Ll1i0 Dana Burehdoff (Nov 4 2023 2 CST)
Name/Title: Dana Burghdoff
Name/Title: (%P ��,y7„-�-�c tt Cv� Assistant City Manager
Date: 1 ! )'f la3
Date:
oU4q
ao�E OR T �Ba
Fo°° °o �t a�
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a°i`a a�o9�v
ava o=a
oaa,�apoa oo*;
a°nn nezp5aa
Attest:
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C
Jannette S. Goodall
City Secretary
Recommended By:
CI��iStonl�e� ffA�der
Christo�r (Nov 14 2023 16:35 CST)
Chris Harder, Director
Water Department
Approved to Form and Legality:
DBlack (Nov 14 2023 16:37 CST)
Douglas W. Black
Sr. Assistant City Attorney
M&C: 23-0883
Date: 10/17/2023
513�56I._
Page 6 of 6
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
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CITY COUNCIL AGENDA
O�cial site of the C�ty of Fort Worth, Texas
FORTWORTH
��
Create New From This M&C
DATE:
CODE:
10/17/2023 REFERENCE
NO..
C TYPE:
'��M&C 23-
0883
CONSENT
LOG NAME
PUBLIC
HEARING:
60SYNAGRO
SETTLEMENT
AGREEMENT
NO
SUBJECT: (CD 5) Authorize Execution of a Settlement Agreement with Synagro of Texas-CDR, Inc.,
in the Amount of $1,858,157.65 forAdditional Costs Related to Operation of the Biosolids
Dryer Facility
RECOMMENDATION:
It is recommended that the City Council authorize execution of a Settlement Agreement with Synagro
of Texas-CDR, Inc. in the amount of $1,858,157.65 for additional costs related to the operation of the
Biosolids Dryer Facility.
DISCUSSION:
This Mayor & Council Communication (M&C) will authorize settlement agreement with Synagro of
Texas, CDR, Inc. (Synagro) in the amount of $1,858,157.65 for additional costs related to the
operation of the Village Creek Water Reclamation Facility biosolids dryer facility.
On December 10, 2019 (M&C 19-0381) City Council authorized a design-build-operate-maintain
contract with Synagro. This contract required Synagro to take over the dewatering and land
application process on April 1, 2020 and continue to operate that system until the dryer facility was
designed, constructed and put into operation, which occurred in July 2022.
This Settlement Agreement covers two areas of dispute between the City of Fort Worth and Synagro.
The methodology and basis for additional compensation to Synagro to remove accumulated solids
in the receiving ponds at the dewatering and dryer facility calculated for the time period of April 1,
2020 to June 30, 2022, the period of the dewatering operations, as well as for the solids left by the
previous operator of the facility (deposited prior to April 1, 2020) (Existing Solids);
Synagro's claim for additional compensation to cover increased operating costs, which include
chemical costs, cooling water costs, and dewatering and disposal costs.
In an attempt to resolve these two areas of dispute, parties agreed to mediate the claims. Mediation
occurred on August 30th, 2023.
The contract with Synagro obligates Fort Worth to compensate Synagro for removal and disposal of
Existing Solids in the receiving ponds. The Settlement Agreement describes a methodology
agreeable to both parties whereby Synagro would be compensated at a rate of $396.50 per dry ton
for removal, processing to Class AB standards, and land application of the Existing Solids over a
twenty-four month period beginning on December 1, 2023 through December 1, 2025 (the removal
period). Synagro will not receive any direct compensation for any material removed after December
1, 2025.
The solids receiving ponds are in constant use, and per the contract terms, Fort Worth is not
obligated to compensate Synagro for solids removal after the dryer facility began operation (July 1,
2022). In order to credit Fort Worth for these accumulations (from July 1, 2022 to August 1, 2023, as
well as the solids discharged on an ongoing basis),. a monthly credit of 200 dry tons has been
established recognizing the average monthly discharge of solids to the pond, plus a 102.5 dry ton
credit, beginning on December 1, 2023 and credited monthly for the 24 month removal period, which
recognizes the estimated solids deposited from July 1, 2022 to August 1, 2023.
To ensure the solids can be considered Class AB suitable for land application, Fort Worth agrees to
perform testing of the solids within the receiving ponds in October/November. The date for
commencement of removal activities is December 1, 2023. Should testing results prohibit land
application of some or all of the removed solids, Synagro will be obligated to dispose of material in a
landfill. In those circumstances, Synagro will be compensated at $396.50 per dry ton and the City will
bear the tipping fees costs associated with landfill disposal.
This Settlement Agreement also will compensate Synagro $1,858,157.65 for additional operating
costs from the time when the newly constructed dryer facility went into operation,. July 1, 2022 until
August 1, 2023. Of that total, $1,000,000.00 is associated with dryer operations — including
increased labor, chemical, and cooling water costs. The remaining $858,157.65 of additional costs
are associated with dewatering and land disposal operations that occurred concurrently with dryer
operations during this time period.
Funding is budgeted in the Other Contractual Services account in the Wastewater Biosolids &
Residuals Department within the Water & Sewer Fund.
This project is located in COUNCIL DISTRICT 5.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are available in the operating budget, as previously
appropriated, in the Water and Sewer Fund to support the approval of the above recommendation
and execution of the settlement agreement. Prior to any expenditure being incurred, the Water
Department has the responsibility of verifying the availability of funds.
Fund Department
ID
OM
Fund Department
ID
Account Project
ID
Account Project
ID
Program � Activity
Budget Reference # Amount
Year (Chartfield 2)
Budget Reference # Amount
Year (Chartfield 21
Submitted for City Manager's Office by_
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Program � Activity
Dana Burghdoff (8018)
Chris Harder (5020)
Chris Harder (5020)
60SYNAGRO SETTLEMENTAGREEMENT FID Table (WCF 09.2023).xlsx (CFW Internal)
60SYNAGRO SETTLEMENTAGREEMENT Map.pdf (Public)
60SYNAGRO SETTLEMENTAGREEMENT.docx (CFW Internal)
SAM.pdf (CFW Internal)
Synagro of Texas-CDR Inc Form 1295 Certificate 101111680 pdf (CFW Internal)