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HomeMy WebLinkAboutContract 39660 (2)cITY SECRETARY CONTRACT No. SETTLEMENT AGREEMENT This SETTLEMENT AGREEMENT ("Agreement") is entered into as of the 6Lday of December, 2009, between the City of Fort Worth, a home rule municipal corporation of Tarrant County, Texas, acting herein by and through its City Manager, Dale A. Fisseler ("City"), and Allied Waste Systems, Inc., d/b/a Trinity Waste Services, a Delaware corporation duly authorized to do business in the State of Texas, whose address is 1212 Harrison Avenue, Arlington, Texas 76011, acting herein by and through its duly authorized representative ("Lessee"), WITNESSETH: �IIEIIEREAS, the City and Lessee have heretofore entered into that certain AGREEMENT TO LEASE AND OPERATE SOUTHEAST LANDFILL known as City Secretary Contract No. 28336 (the "Original Lease") dated January 28, 2003, for the lease of the City's Southeast Landfill, pursuant to the terms of that certain RFP 02-0087 issued by the City; WHEREAS, the Original Lease has heretofore been amended by that certain FIRST AMENDMENT TO THE AGREEMENT TO LEASE AND OPERATE SOUTHEAST LANDFILL BY AND BETWEEN THE CITY OF FORT WORTH, TEXAS, AS LESSOR, AND ALLIED WASTE SYSTEMS, INC., d/b/a TRINITY WASTE SERVICES, AS LESSEE, known as City Secretary Contract Number C-21011 ("First Amendment"), entered into by the City and Lessee as of September 28, 2005; WHEREAS, the Original Lease as amended by the First Amendment is herein called the "Existing Lease," to which reference is here made for all purposes and as fully as if set forth in full herein; WHEREAS, disputes have arisen between Lessee and the City in connection with the Existing Lease, and Lessee has sued the City in Cause No. 153-231908-08, Allied Waste Systems, Inc., d/b/a Trinity Waste Services v. City of Fort Worth, in the District Court of Tarrant County, Texas, 153rd Judicial District (the "Lawsuit"), seeking damages, a judgment compelling specific performance of the Existing Lease, and a declaratory judgment as more fully set forth in Plaintiff's First Amended Original Petition and Request for Declaratory Judgment ("Plaintiff's Petition") filed by Lessee in the Lawsuit, to which reference is here made for all purposes and as fully as if it were set forth herein in full; WHEREAS, Lessee and the City (herein sometimes called "Parties" or a "Party") have agreed to settle their disputes and dismiss the Lawsuit in accordance with the terms and provisions of this Agreement; and WHEREAS, terms defined in the Existing Lease or Plaintiff's Petition shall have the meaning therein stated when used in this Agreement unless otherwise stated herein or d...�c�axed..b the context. OFFICIAL RECORD CITY SECRETARY FT. NORTH, TX �5857647. i -1- NOW, THEREFORE, for and in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the City and Lessee hereby agree as follows: A. Amendment of Existinr Lease: The Parties have agreed and do agree to amend the Existing Lease in certain respects by entering in to a SECOND AMENDMENT TO THE AGREEMENT TO LEASE AND OPERATE SOUTHEAST LANDFILL BY AND BETWEEN THE CITY OF FORT WORTH, TEXAS, AS LESSOR, AND ALLIED WASTE SYSTEMS, INC., DB/A TRINITY WASTE SERVICES, AS LESSEE ("Second Amendment"), in the form attached to and incorporated in this Agreement as Exhibit A, which is being executed and delivered by the City and Lessee incident to execution and delivery of this Agreement. B. Dismissal of Lawsuit: The Parties agree that the Lawsuit will be dismissed. To effect such dismissal, the Parties agree that their attorneys will promptly file an Joint Motion for Entry of Agreed Final Judgment in the Lawsuit in the form of Exhibit B attached to and incorporated in this Agreement and will seek entry of an Agreed Final Judgment in the Lawsuit in the form attached to such Joint Motion for Entry of Agreed Final Judgment. C. Release and Waiver by Lessee: In consideration for the agreements of the City set forth herein and in the Second Amendment, Lessee hereby agrees as follows: 1. Lessee, on behalf of itself and its related entities, including, but not limited to, Republic Services, Inc. and its subsidiaries, hereby fully and finally RELEASES the City from all claims for damages, prejudgment interest and postjudgment interest, and costs of court asserted in the Plaintiff's Petition or which could be asserted or to which Plaintiff could be entitled based on the alleged Events of Default or actions or omissions of the City alleged in the Plaintiff's Petition to have occurred at any time or times prior to the date of this Agreement. Without limiting the foregoing, Lessee expressly agrees that the City has no obligation to pay the sum of $662,619.00 that the City has heretofore deducted from City Disposal Payments under the Existing Lease to offset Lessee's application of a credit in that amount against Variable Rent under the Existing Lease based on Lessee's claim of a Carryforward Credit as more fully described in the Plaintiff's Petition. Lessee further WAIVES and RELEASES any right to apply a credit for any Carryforward Credit against Variable Rent payable or hereafter becoming payable under the Existing Lease, as amended by the Second Amendment. 2. Lessee hereby WANES each and all of the Events of Default by the City under or in connection with the Existing Lease that are alleged in the Plaintiff's Petition to have occurred at any time prior to the date of this Agreement. 3. Lessee hereby WAIVES any right to terminate the Existing Lease by reason of any of the Events of Default by the City under or in connection with the Existing Lease that are alleged in the Plaintiff's Petition to have occurred at any time prior to the date of this Agreement; and Lessee and the City acknowledge, agree and stipulate that the Existing Lease, as amended by the Second Amendment, is hereby ratified and confirmed and declared to be in full force and effect in accordance with the terms and provisions thereof. 75857647.1 - 2 - 4. Lessee hereby WANES any right to claim that the TCEQ's promulgation of 30 TAC § 330.331 has made Lessee's compliance with the expansion requirements of the Existing Lease, as amended by the Second Amendment, commercially impractical or has excused Lessee from performing its landfill expansion obligations under the Existing Lease, as amended by the Second Amendment. 5. Lessee hereby WAIVES any right to require the City to negotiate an adjustment to Lessee's rent under the Existing Lease, as amended by the Second Amendment, pursuant to Section 4.04(L) of the Existing Lease by reason of any restriction of access to the Southeast Landfill that has occurred at any time prior to the date of this Agreement or by reason of the City's failure at any time in the past or future to provide a landfill access agreement with the City of Kennedale. D. No Admission of Fault: The Parties agree and stipulate that this Agreement is not intended by them, nor is it to be interpreted in any way, as an admission of any liability, fault, or responsibility whatsoever by either Parry; and each of the Parties expressly denies any such liability, fault or responsibility. WITNESS the execution hereof in multiple counterparts, each of which shall be deemed an original and all of which shall constitute but one agreement, as of the date first set out above. LESSEE: ALLIED WASTE SYSTEMS, INC., d/b/a TRINITY WASTE SERVICES Name: oJ,a.c."�,..5 e�/►'cL. Title: (AT¢.o. �re s,��.-.� CITY: CITY OF FORT WORTH, Dale A. Fisseler, City Manager City Secretary APPROVED AS TO FORM AND LEGALITY: Christa R. City Attorney Contract Authorization OFFlC1AL RECORD CITY SECRETARY 75857647.1 - 3 - FT. WORTH, TX City of Fort Worth, Texas COUNCIL ACTION: Approved on 12/15/2009 DATE: Tuesday, December 15, 2009 REFERENCE NO.: C-24006 LOG NAME: 52SECOND AMENDMENT -REPUBLIC WASTE SERVICES SUBJECT: Authorize the Execution of Amendment No. 2 to the Agreement to Lease and Operate the Southeast Landfill with Allied Waste Systems, Inc., d/b/a Trinity Waste Services, Known as City Secretary Contract No. 28336 and Authorize Settlement and Execution of Related Matters for the Lawsuit Between the City of Fort Worth and Allied Waste Services, Inc., d/b/a Trinity Waste Services, Cause No. 153 231908 08 RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute Amendment No. 2 to the Agreement to Lease and Operate the Southeast Landfill with Allied Waste Systems, Inc., d/b/a Trinity Waste Services, known as City Secretary Contract No. 28336; and 2. Authorize the settlement and execution by the appropriate person of related documents for the lawsuit between the City of Fort Worth and Allied Waste Services, Inc., d/b/a Trinity Waste Services, Cause No. 153 231908 08. DISCUSSION: On November 19, 2002, (M&C C-19358) the City Council authorized the negotiation and execution of an Agreement with Allied Waste Systems, Inc., d/b/a Trinity Waste Services, (Allied Waste) for the lease and operation of the City's Southeast Landfill and to provide disposal services for the City' s municipal solid waste. This Agreement was executed on January 28, 2003. On September 20, 2005, (M&C C-21011) the City Council authorized Amendment No. 1 to the Agreement known as City Secretary Contract No. 32407. Amendment No. 1 made an adjustment to the minimum variable rent schedule in the Lease Agreement so that during the operating years in which Allied Waste sought a landfill amendment and modification to the City's landfill permit Allied Waste would not have a minimum variable rent due. In exchange for this hiatus in the variable rent, Allied Waste would be restricted from bringing in more than 85,000 tons of third party waste per year, lessening the risk to a rapid consumption of the remaining permitted landfill space. Once Allied Waste secured a successful landfill permit amendment and modification from the Texas Commission on Environmental Quality, the minimum annual variable rent would be subject to the escalation clause. The monthly base rent was not affected by this modification. On or about August 13, 2008, Allied Waste filed suit against the City of Fort Worth for alleged breach of contract, Cause No. 153 231908 08. In an effort to settle such dispute both parties have negotiated this Amendment No. 2 to the Agreement. Staff recommends approval of this Amendment No. 2 and settlement only to avoid further time consuming and costly litigation and without any admission of breach as alleged by Allied Waste. Since the lawsuit was filed in the 153rd District Court, Allied Waste, its assets and subsidiaries have been purchased by Republic Waste Services, Ltd. (Republic). The amendment requires Allied Waste to seek approval by the City and execute an assignment of the Agreement to Republic pursuant to the terms of the Agreement. Amendment No. 2 further amends the Agreement by revising the minimum annual variable rent due to the City to be 2.1 million dollars which would escalate by the cost adjustment factor (although never decrease) after 2012. The Amendment also resets the Operating Year to begin January 1 st and end December 31 st of each year. The amendment further amends the amount the City would be paid by Allied Waste for the Non -City Waste Revenue (as defined) and sets a limit on the Maximum City Gate Rate (as defined) for waste brought to the Southeast Landfill by the City. The new terms and conditions as revised by this Amendment No. 2 would be effective January 1, 2010% FISCAL INFORMATION /CERTIFICATION: The Financial Management Services Director certifies that the Environmental Management Department, Solid Waste Division, is responsible for the collection and deposit of funds due to the City. FUND CENTERS: TO Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Originating Department Head: Additional Information Contact: ATTACHMENTS No attachments found. FROM Fund/Account/Centers Fernando Costa (6122) Brian Boerner (8085) Christa Reynolds (8984)