HomeMy WebLinkAboutContract 30189 A01h, AM&
CITY SECRETARY 1 k�
CONTRAC-01 NO .
SETTLEMENT AGREEMENT WITH MUTUAL RELEASES
This Settlement Agreement with Mutual Releases (this "Agreement") is entered into by
the undersigned on this 9�q4h_day of June 2004, on the terms and conditions set forth below.
WHEREAS, The City of Fort Worth (the "City") owns an electric generating plant (the
"Plant") located at the Village Creek Waste Water Treatment Plant site;
WHEREAS, Lone Star Energy Services, Inc. ("LSES") and the City entered into the
agreement titled "City of Fort Worth—Village Creek Project, Professional Energy Services
Agreement" dated December 20, 2000 (the "PESA")related to the operation of, and purchase of
commodities for, the Plant;
WHEREAS, LSES and the City entered into the agreement titled "Terms and Conditions
for Supply of Landfill Gas" executed December 11, 2001 (the "LSES/City LFG Agreement")
through which LSES sells biogenic gas generated at the City of Arlington's landfill (the
"Landfill Gas") to the City;
WHEREAS, the City received invoices for Landfill Gas provided under the LSES/City
LFG Agreement from LSES's affiliate, TXU Energy Services Company ("TXU Energy"), and
LSES and TXU Energy will be referred to collectively herein as the "TXU Parties";
WHEREAS, LSES and Renovar, Inc. are parties to the agreement titled "Landfill Gas
Sales Agreement" dated November 19, 2001 (the "Renovar Agreement") through which LSES
contracted with Renovar for the purchase of the Landfill Gas;
WHEREAS, disputes have arisen between the TXU Parties and the City regarding the
parties' rights and obligations under or arising out of the LSES/City LFG Agreement and the
PESA; and
WHEREAS, the parties engaged in good faith in mediation on June 4, 2004, in which
they reached the agreements set forth below.
NOW, THEREFORE, in consideration of the following settlement terms, mutual releases
and other good and valuable consideration, the parties hereby agree as follows:
1. Settlement Options A anu B As soon as practicable, the Director of the Fort Worth
Water Department ("Director") will evaluate and thereafter present to the Fort Worth City
Council (the "Council") a recommendation that the Council approve the terms of this
Agreement, including one of the following two settlement options I.A. or l.B., to be selected at
the sole discretion of the Director:
A. Settlement Option "A"
i. The LSES/City LFG Agreement shall terminate on June 0, 2004.. _
ii. Immediately upon the Effective Date of this Agreement, LSES shall exercise
its right to terminate the Renovar Agreement pursuant t paffgraph 3.3 of chat
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agreement, and shall give the required ninety days' notice of termination to
Renovar. For purposes of this Agreement, "Termination Period" shall mean
the ninety-day termination notice period under the Renovar Contract or any
shorter termination notice period agreed to by Renovar.
M. During the Termination Period, the City shall pay LSES for Landfill Gas
delivered to the Plant at the same price for which LSES obtains such gas from
Renovar pursuant to the Renovar Agreement.
iv. During the Termination Period, the City or its designee shall have the right to
contact Renovar and to freely negotiate with Renovar for the purchase of
Landfill Gas to commence at the end of the Termination Period.
v. On or before October 15, 2004, the City shall pay to LSES the total cash sum
of$1.25 million.
B. Settlement Option `B"
i. The LSES/City LFG Agreement shall terminate on June 30, 2006.
ii. Upon the Effective Date of this Agreement, or immediately thereafter , LSES
shall assign the LSES/City LFG Agreement and the Renovar Agreement
(subject to Renovar's consent to assignment) to the City's designee, Renda
Environmental, Inc. (the "Designee"). The City shall obtain the Designee's
agreement to these assignments.
iii. After the LSES/City LFG Agreement is assigned to the Designee, the City shall
pay all amounts due under the terms of the LSES/City LFG Agreement into an
escrow account jointly controlled by LSES and the Designee until June 30,
2006. The Designee shall retain all amounts required to be paid to Renovar for
the Landfill Gas under the Renovar Agreement. LSES shall retain the
remaining amounts, which amounts the City shall guarantee. The City and the
Designee may amend the assigned LSES/City LFG Agreement, but such
amendment may not alter the obligations of the City and the Designee with
respect to the amounts due to LSES. Each party hereto shall have the right to
examine the books and records of the other parties during normal business hours
and upon five business days prior notice for the purpose of confirming
compliance with the terms and conditions herein.
2. Additional Settlement Terms In addition, under either option I.A. or 1.13 above
and upon the Effective Date of this Agreement, the City and LSES also agree as follows:
A. The PESA shall terminate on June 30, 2004.
B. The TXU Parties shall transfer ownership to the City of.alLequip aV h r
personalty that is owned by the TXU Parties, that the T�U Parties have q ri t
to transfer or assign, that is located at the Plant, and that is required to run,the
Plant. Notwithstanding the foregoing, this obligation to transfer ownership does
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not apply to computer software licenses that the TXU Parties have no legal right
to sell or transfer(the "Restricted Software"). In particular, TXU and LSES
have represented to the City that neither of the TXU Parties nor their affiliates
have the legal right to sell or transfer the Restricted Software to the City.
However, the TXU Parties hereby represent that they will provide the City with
information that should aid the City in its attempt to purchase the Restricted
Software for a cost of approximately$15,000. Moreover, because certain
customized computer code that the TXU Parties have developed for use with the
Restricted Software, and which they may lawfully transfer, is essential to the
continued safe and efficient operation of the Plant, the TXU Parties agree that
such customized computer code will be included in the items transferred to the
City pursuant to this Agreement.
C. LSES expressly grants its written consent, pursuant to paragraph 7.b. of the
PESA, to allow the City to "offer employment to or employ any person"
employed by the TXU Parties. Accordingly, the PESA will no longer impose
any restriction on the City's ability to solicit, either as contractors,
subcontractors or employees of the City, any former or current employee of
either of the TXU Parties or their affiliates.
3. Mutual Release of Claims
A. LSES, on behalf of itself and each of its successors and assigns, does hereby fully
and unconditionally RELEASE AND FOREVER DISCHARGE the City and all
of the City's Related Parties (as defined herein) for and from any and all Claims
(as defined herein) of any kind or character whatsoever arising out of or relating
to the PESA, the LSES/City LFG Agreement and the Renovar Agreement. LSES,
on behalf of itself and each of its successors and assigns, hereby covenants not to
sue the City or any of the City's Related Parties for any Claim released herein.
B. TXU Energy, on behalf of itself and each of its successors and assigns, does
hereby fully and unconditionally RELEASE AND FOREVER DISCHARGE the
City and all of the City's Related Parties (as defined herein) for and from any and
all Claims (as defined herein) of any kind or character whatsoever arising out of
or relating to the PESA, the LSES/City LFG Agreement and the Renovar
Agreement. TXU Energy, on behalf of itself and each of its successors and
assigns, hereby covenants not to sue the City or any of the City's Related Parties
for any Claim released herein.
C. The City, on behalf of itself and each of its successors and assigns, does hereby
fully and unconditionally RELEASE AND FOREVER DISCHARGE LSES, all
of LSES's Related Parties, TXU Energy, and all of TXU Energy's Related Parties
(as defined herein) for and from any and all Claims (as defined herein) of any
kind or character whatsoever arising out of or relating to the PESA, the
LSES/City LFG Agreement and the Renovar Agreement. The City_,,.Qn.be if of
itself and each of its successors and assigns, hereby fovenants not to sue 4SES,
any of LSES's Related Parties, TXU Energy, or any of TXU Energy's R lated
Parties for any Claim released herein. u °'
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D. For purposes of this Section III of this Agreement, the following terms have the
following meanings:
i. "Claim" or"Claims" shall mean any and all manner of claims of any kind or
nature whatsoever whether now known or hereafter discovered, whether
suspected or unsuspected, whether foreseen or unforeseen, whether asserted or
could have been asserted, that a releasing party hereunder had, has or may ever
have for or because of or as a result of any act, omission, communication,
transaction, occurrence, representation,promise, damage, violation of any
statute or law, breach of any contract, commission of any tort, or any other
matter whatsoever or thing done, omitted or suffered to be done. The term
"Claim" or"Claims" includes, BUT IS NOT LIMITED TO, any and all claims,
demands, lawsuits, debts, accounts, covenants, suits, agreements, actions, cross-
actions, rights of recovery, liabilities, obligations, losses, dues, costs, expenses,
remedies, accounts, bonds, contracts, offsets, damages and causes of action of
any nature, whether in contract or in tort, at common law, or in equity, whether
or not based upon fraud or misrepresentation, whether or not based upon any
breach of duty or strict liability, whether or not arising or by virtue of any
judicial decision, federal or state statute or regulation or otherwise, for past,
present and future injuries, property or economic damage, and for all other
losses and damages of any kind, including, BUT NOT LIMITED TO, the
following: all actual damages; all exemplary, punitive and statutory damages;
all penalties of any kind; damage to business reputation; lost profits or good
will; consequential damages; and pre judgment and post judgment interest,
costs and attorneys' fees. However, notwithstanding any other provision of
this Agreement, the term"Claim" or"Claims" does not include any claim
arising out of a party's breach of any covenant, warranty, representation
or obligation arising under this Agreement or any claim arising out of a
party's breach of any covenant, warranty, representation or obligation
arising after the effective date of this Agreement under the LSES/City LFG
Agreement or the PESA as modified by this Agreement.
ii. "Related Parties" shall mean each and every successor, assign, officer, director,
shareholder,partner, agent,representative, consultant, attorney, and employee
of a given party. With regard to the City, the term "Related Parties" shall also
include each and every elected official of the City.
4. Miscellaneous
A. The Parties agree that they will cooperate in the review and execution of any
further documents that may be necessary to effectuate the terms of this
Agreement.
B. The parties agree that the act of entering into this Agreement shall not be
interpreted as an admission of any fault or responsibility by any-paity with resec
to the claims released herein. The purpose of this Agreement is the compromise,
settlement, and release of disputed claims and is intended to Lavoidhe
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inconvenience and expense of potential litigation and its associated uncertainty.
The parties expressly deny any liability to the other.
C. All parties to this Agreement stipulate that they, and/or their legal counsel,
participated in the drafting of this Agreement. Accordingly, the rule of
construction that any ambiguities will be construed against the drafting party shall
have no application to this Agreement.
D. The parties acknowledge that they understand the terms and provisions of the
Agreement. The parties further acknowledge that the Agreement, along with the
LSES/City LFG Agreement and the PESA as modified by this Agreement,
contain the entire agreement between them, and supersedes any and all prior
agreements, arrangements, or understandings between them or their counsel
relating to the subject matter herein. This Agreement shall not be amended,
supplemented, or otherwise modified, except by further written agreement of the
parties. Neither party has been influenced to enter into this Agreement in reliance
upon any statements or representations, oral or written, not otherwise contained
herein by any party hereto or by any other person or entity.
E. The parties warrant and guarantee that they have not made, and will not make,
any assignment of any claim, cause or right of action, or any right of any kind
whatsoever, embodied in any of the Claims that are released herein, and that no
other person or entity of any kind, other than the parties to this Agreement and
their respective legal counsel had or has any interest in any of the Claims which
are released herein.
F. It is expressly understood and agreed that the terms of this Agreement are
contractual and not mere recitals.
G. All of the terms of this Agreement shall be binding upon, shall inure to the benefit
of, and shall be severally enforceable by and against each party to this Agreement,
as to each entity individually, and as to such party's respective successors, assigns,
employees, partners, elected officials, shareholders, affiliates, parents, and
subsidiaries.
H. The TXU Parties both represent and warrant to the City that the person executing
this Agreement on each of their behalf have all necessary power and actual
authority to enter into this Agreement and that neither the execution and delivery
of this Agreement nor the performance of any of its terms will violate either of the
TXU Parties' organizational documents or any other agreement to which either
TXU Party is a party. Furthermore, the signatories below each represent and
warrant that they have the requisite authority to execute this Agreement in the
capacity shown and to thereby bind the respective party for whom they sign.
I. This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original. �z, ,
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5. Governing Law;Jurisdiction and Venue. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,AS IT APPLIES TO
CONTRACTS PERFORMED WITHIN THE STATE OF TEXAS AND WITHOUT REGARD TO ANY CHOICE OF
LAW RULES OR PRINCIPLES TO THE CONTRARY. THE PARTIES ACKNOWLEDGE THAT THIS
AGREEMENT IS PERFORMABLE IN TARRANT COUNTY,TEXAS AND HEREBY SUBMIT TO THE
JURISDICTION OF THE COURTS OF THAT COUNTY,AND HEREBY AGREE THAT ANY SUCH COURT
SHALL BE A PROPER FORUM FOR THE DETERMINATION OF ANY DISPUTE ARISING HEREUNDER
6. Effective Date Subject to Fort Worth City Council Approval. The parties understand
and agree that this Agreement will become binding only upon approval by the Fort Worth City
Council of either settlement option LA or LB above. Upon approval by the Fort Worth City
Council,the terms of the approved option"A"or`B"under paragraph 1 above, and all other
terms under paragraphs 2 through 6 of this Agreement shall become immediately binding. The
"Effective Date"of this Agreement shall be the date of City Council approv
LONE STAR ENE GY SERVICES,INC.
By:
(Print 1
Name): eow,— 3",./
Title:
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TXU ENERGY S VICES COMPANY
By: /
(Print
Name): lam!/l^J Abltd
Title:
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RENDA ENVIRONMENTAL,INC.
By:
(Print �y `�
Name): es ex !i
Title:
omum WON
em AcUR Y
yea By:
ark Ot
City Secretary Assistan City Manager
APPROVED AS TO FORM AND C— P.0}S 1
L LI Y: 1
Contract Authorization
Adlk
A T ST: CI O ORT WORTH
ark
Ott
City Secretary Assistan City Manager
APPROVED AS TO FORM AND �� 2
L LI Y: J
Contract Authorizatioa
Gary Steinberger, Assistant City Attorney
Date �
85539.000075 DALLAS 115419v1
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ASSIGNMENT, CONVEYANCE AND BILL OF SALE
This Assignment, Conveyance and Bill of Sale ("Assignment") is made effective as of
June_, 2004, (the "Effective Date") between Lone Star Energy Services, Inc., TXU Energy
Services Company("Grantor"), and the City of Fort Worth ("Grantee").
Grantor desires to sell to Grantee, and Grantee desires to purchase from Grantor, the
personal property described in Exhibit A attached hereto and made a part hereof(the "Assets").
NOW THEREFORE, for one dollar($1.00) and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by the parties, Grantor and Grantee
agree as follows:
1. Grantor hereby GRANTS, BARGAINS, SELLS, TRANSFERS and ASSIGNS the
Assets, as that term is defined below, unto Grantee.
2. Grantor is assigning and conveying the Assets, and Grantee is accepting and purchasing
them, AS-IS, AND WHERE-IS, WITH ALL FAULTS. Grantor EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING, WITHOUT
LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILTY AND FITNESS
FOR A PARTICULAR PURPOSE.
3. Each party agrees to execute and deliver to the other all such other and additional
instruments, notices and other documents, and to do all such other and further acts and
things as may be necessary, to more fully and effectively grant, convey and assign to
Grantee the rights, titles and interests conveyed hereby or intended so to be
4. This Assignment shall be binding upon and shall inure to the benefit of the respective
successors and assignees of the parties.
TO HAVE AND TO HOLD the Assets, to the Grantee and the Grantee's heirs, personal
representatives, successors and assigns forever.
IN WITNESS WHEREOF, by the execution hereof the undersigned certifies and
confirms that he is duly authorized to sign this instrument on the behalf of the party identified as
that party's act and deed.
GRANTOR _ GRANT /
By: By:
Name: Nam
Title: Title:
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Afth, ..�
Assignment, Conveyance and Bill of Sale (continued) Page 2
EXHIBIT "A"
TO
ASSIGNMENT, CONVEYANCE AND BILL OF SALE
All equipment and other personalty(i) that is owned by Lone Star Energy Services, Inc. and/or
TXU Energy Services Company(the "TXU Parties"), (ii) that the TXU Parties have the right to
transfer or assign, (iii) that is located at the City of Fort Worth's Village Creek Waste Water
Treatment Plant, and(iv) that is required to run the Plant. Notwithstanding the foregoing, this
does not include any computer software licenses that the TXU Parties have no legal right to sell
or transfer.
V
85539.000075 DALLAS 1153560
,Tune 24,2004
TXU EQUIPMENT, SPARE PARTS, SUPPLIES,AND OFFICE FURNITURE
Computer and networking systems:
• Two laptop PC's in which one includes a keyboard,monitor,mouse, and docking station. (Leased)
• One Cisco 804 router.
• One Snap server shared hard drive.
Computer software and licenses:
• Licenses for all of the Microsoft Office Suite software.
• Licenses for Lotus Notes applications.
• IRD Odyssey vibration analysis software and hard key.
• AB RSLogix 5 and RSLogix 500 programming software
Office furniture and supplies:
• One refrigerator
• One Microwave
• One engraving machine and associated equipment.(Cutter and bevel machine)
• One oscillating fan
• One cordless telephone
• Dust pan, mop and mop bucket.
Office/administration:
• PO logs and log books
• Vendor supply invoices and catalogs.
• TXU personnel safety hand books, employee hand books
Tools and materials:
• One pull out drawer parts bin(storage for nuts/bolts and electrical terminals)
• Tap and die set
• Common hand tools.(Combination wrenches,socket sets,hammers, impact gun tubing
benders....)
• One Gang box,with all electrical tools and parts. (Wiring,benders,terminal blocks,saws, drill
motors...)
• One 5kv Megger
• One vacuum pump
• Three Square D power monitors
• One Chessell recorder
• One IRD Data Pack vibration data collector. (Leased)
• One Honeywell Smart Communicator
• One Rosemont HART Communicator
• One Transmation signal generator and field calibrator.
• One Vibralign laser alignment tool.
• One electrical knockout set.
• One PLC SLC 505 trainer and associated I/O cards
• One hand held methane gas monitor. (Leased)
• Lockout/Tag out materials. (Locks,chains,tags)
• Hard hats,rubber gloves, flash suits
• Chain hoists,come-a-longs,slings,shackles,eyebolts
• Hoffman enclosures,Panduit Wireway,wire and cabling.
• Conduit,condulets,and misc. conduit fittings.
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24-Jun-04
Solar Turbine Parts
Item Part Number. Vendor Quanity
VFD 1012992-3 Solar 1
Valve ball 186232-400 Solar 1
Repair Kit Valve 991837c1 Solar 1
Actuator,Air 186232-19 Solar 1
Repair Kit Act. 991838C1 Solar 1
Control Valve Gas 1012696-15 Solar 1
Psi Switch 190497-6 Solar 1
Ign.Cable 120710-1 Solar 1
Vibr.Transmitter 1021096-6 Solar 1
Vibr.Transmitter 1021096-5 Solar 1
Accel.Sensor 1043010-1 Solar 1
Accel.Sensor 1021103-11 Solar 1
Switch 186214-25 Solar 1
Psi Switch 190299-3 Solar 1
Psi.Switch 190298-14 Solar 1
Temp. Probe 964192c1 Solar 1
Speed Sensor 190430-1 Solar 1
Spark Plug 903316c1 Solar 2
Velc.Transmitter 1021098-3 Solar 1
Starting Motor 1018488-5 Solar 1
Fusses
Item Part Number Vendor Quani
250 VAC 10 Amp OT10 Nat.Fuse 1 box(10)
250 VAC 35 Amp OT35 Nat.Fuse 1 box(10)
250 VAC 60 Amp OT60 Nat.Fuse 1 box(10)
250 VAC 30 Amp OT30 Nat.Fuse 1 box(10)
Shawmut fuse atmr1/2 Nat.Fuse 1 box(10)
Shawmut fuse tr6/10r Nat.Fuse 1 box(10)
Shawmut fuse tr3-2/10r Nat.Fuse 1 box(10)
Shawmut fuse atmr2 Nat.Fuse 1 box(10)
Shawmut fuse a4j3 Nat.Fuse 1 box(10)
Shawmut fuse ajt-20 Nat.Fuse 1 box(10)
fuse 1043265-3 solar 1 box(10)
fuse 1043265-4 solar 1 box(10)
fuse 1043265-5 solar 1 box(10)
fuse 1043265-6 solar 1 box(10)
fuse 1043265-7 solar 1 box(10)
Lamps
Item Part Number Vendor Quani
lamp 1020943 solar 1
lamp 1020944 solar 1
lamp 1021202 solar 1
lamp 1032976 solar 2
lamp 1033416 solar 4
lamp 908700c2 solar 8
filters
Item Part Number Vendor Quani
Air Filter p191033 Donaldson 16
Air Filter P191107 Donaldson 16
Air Filter 8007884R91 solar 1
Oil Filter 190181-1 solar 1
Oil Filter 186212-100 solar 1
Fuel Filter 00-020776 peco 1
Fuel Filter 00-020777 peco 1
Fuel Filter 23098 eades 1
Fuel Filter Gask. 6038PSO eades 1
Air Filter 32012957 I/R 2
Oil/gas Filter inr-z-880-a-cc10-v sophtech 1
relays
Item Part Number Vendor Quanity
24 vdc relay 1013634 solar 2
24 vdc relay 1016767 solar 1
24 vdc relay 1025930 solar 5
24 vdc relay 1038032 solar 1
24 vdc relay 49955-1 solar 1
24 vdc relay 701724c1 solar 1
Multi-lin 735-5-5-lo-485 ge 1
Multi-lin 489- 5-to-a20 ge 1
Power meter m-t20-c-a ge 1
closing coil 0282a7015- 004 ge 1
trip coil 0282x7340- 004 ge 1
Electronics
Item Part Number. Vendor Quanit
Voltage Regulator SSR 125-12 NF Basler 1
Sync. relay bet-25 mlfa6p n5r6f Basler 1
PF controller scp 250/g/60 Basler 1
PLC-540c 1785140c-15 warren 1
flex I/o 1794-obl6p warren 1
flex I/o 1794-ob8ep warren 1
flex I/o 1794-ibl6 warren 1
flex I/o 1794-1 b 1 OxOb6 warren 1
flex I/o 1794-1 rt8 warren 1
flex I/o 1794-of41 warren 1
flex I/o 1794-ie8 warren 1
flex I/o 1794-ij2 warren 1
power supply 1771-p5e warren 1
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/29/2004
DATE: Tuesday, June 29, 2004
LOG NAME: 60RENDA REFERENCE NO.: C-20131
SUBJECT:
Authorize Settlement Agreement with Lone Star Energy Services and Exercise the Second Five
Year Renewal Option to the Solids Dewatering, Processing and Disposal Contract with Renda
Environmental, Inc. for the Village Creek Wastewater Treatment Plant with Amendments
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute the settlement agreement with Lone Star Gas Energy Services
Company/TXU Energy Services Company.
2. Authorize the City Manager to execute the second five-year renewal to the Solids Dewatering,
Processing and Disposal Contract with Renda Environmental, Inc. (City Secretary Contract No. 20283), with
adjusted quantities to reflect actual daily solids production and an annual CPI calculation; and
3. Authorize the City Manager to execute an amendment to City Secretary Contract No. 20283 to include:
a. The operation and maintenance of the Village Creek Wastewater Treatment Plant (VCWWTP) five
MW turbine generators; and
b. The terms for the purchase of supplemental gas as an additional fuel source for the VCWWTP
turbine generators, consistent with the terms of the settlement agreement.
DISCUSSION:
On December 12, 2000 (M&C C-18397), the City Council authorized the execution of a long-term contract
with Lone Star Gas Energy Services, Inc., for the operations and maintenance of the two-five Megawatt
(MW) turbine generators at the Village Creek Wastewater Treatment Plant. This contract was terminated
effective December 31, 2003. Two temporary letter agreements have allowed continued operation until
June 30, 2004. Renda Environmental, Inc., formerly known as Oscar Renda Contracting, Inc., has
proposed to operate these turbine generators as part of its contract. The contract amendment will reduce
the current turbine generator operating costs from $77,000 to $60,000 per month.
On January 11, 2001 (M&C C-18877), the City Council authorized the execution of a long-term contract
with Lone Star Energy Services, Inc., a subsidiary of TXU, for the purchase of landfill gas produced at the
Arlington Landfill as an additional fuel source for the VCWWTP Turbine Generators. As part of a mediated
settlement with TXU, this contract will be terminated effective June 30, 2004. Renda Environmental, Inc.,
has proposed to contract with Renovar (Landfill Gas Owner) to supply landfill gas to the City as an
additional fuel for the VCWWTP turbine generators. The proposed contract amendment with Renda
Environmental, Inc. will reduce the current fuel costs from an average of $163,000 per month to a not-to-
exceed cost of$132,500. The May 2004 cost for landfill gas was $173,000.
T .» a- fOP'PATTIA PaaP 1 nf'I
On April 5, 1994 (M&C C-14255R), the City Council authorized execution of a Solids Dewatering
Processing and Disposal contract with Oscar Renda Contracting, Inc./Agronomic Management Group, Inc.,
now known as Renda Environmental, Inc., at the VCWWTP. On January 25, 2000 (M&C C-17834), the
City Council authorized the first five-year renewal and two additional five-year renewal options. Throughout
the duration of the contract, the contractor operated without interruption and in full regulatory compliance.
As part of the renewal negotiation, City Staff requested Renda Environmental, Inc., to amend the current
contract and to begin the renewal term on June 30, 2004. This amendment will reduce biosolids average
handling cost of$420,000 per month to an average of$390,000 per month.
Staff recommends the exercise of the second option to renew the Long-Term Solids Dewatering,
Processing and Disposal contract with Renda Environmental, Inc. to include:
1) A five-year, nine month (69 months) agreement at the proposed cost of $134.97/Dry Ton, with an
annual CPI adjustment, not to exceed the current yearly and total contract caps on price increases (3.5%
and 15%, respectively). This amendment will reduce biosolids average handling cost of $420,000 per
month to an average of$390,000 per month.
2) The operation and maintenance of the two-five MW turbine generators and heat recovery system at
the VCWWTP for a cost of $60,000 per month with an annual CPI adjustment, not to exceed the current
yearly and total contract caps on price increases (3.5% and 15%, respectively). The contract amendment
will reduce the current turbine generator operating costs from $77,000 to $60,000 per month.
3) Terms for the purchase of supplemental gas as an additional fuel source for the generators at a cost
not to exceed $132,500 per month with an annual CPI adjustment, not to exceed the current yearly and
total contract caps on price increases (3.5% and 15%, respectively). The contract amendment will reduce
the current fuel costs from an average of$163,000 per month to a not-to-exceed cost of$132,500.
Quantities and costs for the renewal term are estimated in the table below:
Yearly Sludge Annual Annual Costs Annual Costs
Production Sludge Cost Turbine Landfill Gas
Fiscal Year (Dry Tons) with 3% CPI Operations Purchase*** Annual Costs
2003-2004* 10,200 dry tons $1,376,694.00 $180,000.00 $402,276.00 $1,958,970.00
2004-2005 37,000 dry tons $5,031,344.00 $725,400.00 $1,618,689.00 $7,375,433.00
2005-2006 37,740 dry tons $5,285,930.00 $747,162.00 $1,657,317.00 $7,690,409.00
2006-2007 38,495 dry tons $5,553,427.00 $769,577.00 $1,697,103.00 $8,020,107.00
2007-2008 39,265 dry tons $5,834,445.00 $792,664.00 $1,738,083.00 $8,365,192.00
2008-2009 40,050 dry tons $6,129,622.00 $816,444.00 $1,780,292.00 $8,726,358.00
2009-2010** 20.425 dry tons $3.195.843.00 $417.339.00 $906,328.00 $4.519.510.00
TOTAL 223,175 dry tons $32,407,305.00 $4,448,585.00 $9,800,088.00 $46,655,979.00
* 3 Months (July 2004 through September 2004)
**6 Months (October 2009 through March 2010)
*** Estimated annual cost is based on the not-to-exceed monthly cost of$132,500
Renda Environmental, Inc., is in compliance with the City's M/WBE Ordinance by committing to 20%
M/WBE participation. The City's goal on this project is 19%.
Funding for this contract is budgeted on an annual basis. Additionally, the contract has a funding out
clause that provides that the contract will terminate if the City fails to budget for any year of the option
Loaname: 60RENDA Pave 2 nf I
period.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that funds are available in the current operating and capital budgets, as
appropriated of the Water and Sewer Fund and the Sewer Capital Project Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
PS58 539120 070580300120 $180.000.00
PE45 539120 0705002 $1.774.020.00
Submitted for City Manager's Office br. Marc Ott (8476)
Originating Department Head: Dale Fisseler (8207)
Additional Information Contact: Dale Fisseler (8207)
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