HomeMy WebLinkAboutContract 53332-S1T1CSC No. 53332-S1T1
Execution Version
SETTLEMENT AND TERMINATION AGREEMENT
This Settlement and Termination Agreement (the "Agreement"), 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),
together with all amendments, appendices, change orders, and other agreements pertaining in any
way to the matters described therein (collectively, the "Contract"), which generally governs the
construction, operation and maintenance of a biosolids facility (the "Drying Facility") that is
downstream of the City's Village Creek Water Reclamation Facility ("VCWRF");
WHEREAS, Synagro has alleged that it is entitled to excess costs recovery under the
Contract due to Uncontrollable Circumstances, Non -Compliant Feedstock and trash, fiber and grit
reaching the Drying Facility from the VCWRF, among other material problems alleged most
recently in its letters of October 2024;
WHEREAS, Synagro sent the City an invoice for excess costs on October 31, 2024, for the
amount of $5,909,430, covering the period from August 1, 2023 to September 30, 2024, and, if
settlement did not occur, Synagro was prepared to invoice the City for the additional sum of
$1,716,591 for actual excess costs incurred from the period of October through December, 2024,
rendering Synagro's total claim for past excess costs at $7,626,021;
WHEREAS, the City replied to Synagro's October 2024 letters with claims of its own
including poor management operations at the facility;
WHEREAS, the Parties participated in mediation with Brian Carroll in the City of Fort
Worth on January 29, 2025, to address Synagro's outstanding invoice and allegations of continued
alleged harm to the drying facility due to the quality of the Feedstock;
WHEREAS, the Parties resolved during mediation to terminate the Contract by mutual
consent, subject to a single lump sum payment being made by the City to Synagro for past excess
costs and the terms and conditions set forth herein; and
WHEREAS this Agreement makes no findings, assertions or admissions that the City or
Synagro is not in compliance with the Contract.
NOW, THEREFORE, 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 recitations 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.
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
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Execution Version
2. Effective Date. This Agreement is effective on the day it is signed by the City (the
"Effective Date"). The City shall have obtained all necessary approvals, including City Council
approval, prior to execution of this Agreement.
3. No Admission of Liabilitv. This Agreement shall not be construed as an admission
of any wrongdoing or liability of any Party, and each Party expressly denies any fact or allegation
made against it by the other Party. This Agreement is entered into for settlement and to avoid the
time and expense of litigation.
4. Contract Termination. By the mutual agreement of the Parties, the Contract is
terminated immediately upon execution of this Agreement, and the Contract shall no longer be of
any force or effect, except that the Contract shall provide information to inform each Party of its
respective obligation to follow standard operating procedures to maintain the "status quo" during
the Transition Period (as defined below).
5. Non -Disparagement. The Parties will not disparage each other and agree to make
a mutually agreeable public statement about the facts and circumstances of this Agreement only
upon request.
6. Compensation for Past Actual Costs Invoiced. The City shall make a one time
payment to Synagro of $2,400,000 to fully satisfy and resolve all outstanding claims of the Parties.
Such payment shall be made on or before April 30, 2025, without exception offset or delay. The
City shall make such payment in a timely manner without offset, reduction or delay.
7. Andritz Warrantv Work. Andritz Separation Technologies, Inc. ("Andritz"), a
third -party equipment provider, is presently undertaking warranty work at the Drying Facility, as
further described in Exhibit A hereto (the "Andritz Warranty Work"). Synagro will cause
Andritz to complete the Andritz Warranty Work, even if such work occurs after the Turnover Date.
8. Transition Period. From the Effective Date until 11:59 pm on Friday, April 4, 2025
(April 5, 2025 being the "Turnover Date"), there shall be a transition period (the "Transition
Period"). During the Transition Period the Parties shall maintain the "status quo' in every respect
by reference to the conditions present on the Effective Date, including with respect to (a) the
quality and quantity of Feedstock, (b) the operation of the drying facility, and (c) the City
obligation to pay Synagro the service fee for services rendered during the Transition Period, except
that Synagro agrees not to invoice the City for Excess Costs during the Transition Period so long
as the City maintains the status quo from the Effective Date through the Turnover Date. Synagro
shall not undertake any site work on and after the Turnover Date. If any site work required under
this Agreement is incomplete as of the Turnover Date, Synagro will (a) ensure delivery of any
permanent equipment (i.e., excluding rolling stock or temporary equipment required for
installation) as soon as reasonably practical and (b) reimburse the City for all documented costs of
such installation.
9. Transition Activities. During the Transition Period, Synagro shall cooperate in
good faith with the City with respect to each of the following activities:
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Execution Version
(a) Synagro shall continue to operate the Drying Facility in a commercially reasonable
manner and maintain the status quo at the Drying Facility;
(b) The City shall make available for training City personnel and Synagro shall provide
training for City personnel on software, systems and equipment used to operate the drying facility,
including providing access to documents and records.
(c) On or before the Effective Date, Synagro shall have provided the City with a list of
open subcontracts for the City to identify which contracts are being assigned to the City (if
assignment is allowed). Synagro shall use good faith efforts to coordinate with subcontractors on
the assignment of the subcontracts chosen by the City prior to the Turnover Date.
(d) Synagro will assist the City with its assignment of, or another method of changing
the name on, any applicable permits required to operate the Drying Facility.
(e) Synagro shall:
(i) turn over all books and records, warranties, plans and reports in its possession
regarding the Project to the extent permitted by any applicable third party,
including Archer Western and Andritz subcontracts from the original design and
build to the extent permitted by Archer Western and Andritz, respectively;
(ii) provide regulatory documents and testing results;
(iii) provide information about interaction between Drying Facility operations and
permit obligations;
(iv) provide MAXIMO data and installation; and
(v) assist with remote SCADA access.
(f) Synagro shall remove its equipment and vehicles from the Drying Facility on or
before the Turnover Date.
(g) The City is, and since March 14, 2025, has been permitted to make job offers to
Synagro's on -site personnel provided the effective date of employment is on or after the Turnover
Date.
(h) Synagro shall take other reasonable actions upon reasonable request of the City to
facilitate an orderly transition of the Drying Facility to the City.
(i) As of the Effective Date, Synagro is in material compliance with the applicable air
permit for the Drying Facility.
10. General Mutual Release. Upon the Effective Date, the Parties agree to a general
mutual release, as follows:
(a) The City of Fort Worth, Texas, for itself, and its affiliates, elected officials, directors,
employees, agents, attorneys, successors, and assigns (collectively, the "Fort Worth Releasors")
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hereby forever releases, relieves and discharges Synagro and its affiliates, officers, directors,
employees, agents, attorneys, successors and assigns (collectively, the "Synagro Releasees") of
and from any and all claims, demands, actions, causes of action, suits, debts, sums of money,
controversies, damages, obligations, and liabilities of every kind and nature whatsoever, whether
known or unknown, suspected or unsuspected, that the Fort Worth Releasors can, shall, or may
have against the Synagro Releasees by reason of, arising out of, or which may hereafter be claimed
to arise out of or relate to the Contract from the beginning of time to the Effective Date of this
Agreement; provided, however, that the above release does not apply to (i) claims by the Parties
to enforce the terms of this Agreement; (ii) claims, counterclaims, arguments, positions or other
defenses relating in any way to a claim for indemnification made under Section 11 ("Indemnity")
of this Agreement; and (iii) the existing indemnification claim of the City in Terry Burks v. City
of Fort Worth, Azure Water Services, LLC and Synagro of Texas -CDR, Inc., Cause No. 096-
355602-24 in the District Court for Tarrant County, Texas (the "Existing Indemnification
Claim").
(b) Synagro, for itself, and its affiliates, officers, directors, employees, agents, attorneys,
successors, and assigns (collectively, the "Synagro Releasors") hereby forever releases, relieves
and discharges the City of Fort Worth, Texas, and its affiliates, elected officials, directors,
employees, agents, attorneys, successors, and assigns (collectively, the "Fort Worth Releasees")
of and from any and all claims, demands, actions, causes of action, suits, debts, sums of money,
controversies, damages, obligations, and liabilities of every kind and nature whatsoever, whether
known or unknown, suspected or unsuspected, that the Synagro Releasors can, shall, or may have
against the Fort Worth Releasees by reason of, arising out of, or which may hereafter be claimed
to arise out of or relate to the Contract from the beginning of time to the Effective Date of this
Agreement; provided, however, that the above release does not apply to (i) claims by the Parties
to enforce the terms of this Agreement; and (ii) claims, counterclaims, arguments, positions or
other defenses relating in any way to a claim for indemnification made under Section 11
("Indemnity") of this Agreement or the Existing Indemnification Claim.
11. Indemnity. Section 16.2 of the Contract shall survive termination; provided
however that (i) the indemnity of Section 16.2 is limited to third -party claims, which does not
include claims of the Fort Worth Releasors or their contractors or subcontractors of any tier; and
further provided that (ii) in response to an indemnity assertion by the City, Synagro reserves, does
not waive, and may assert any claim or defense available to it under the original Contract or
otherwise (including, for example, that a different clause of the Contract (e.g. force majeure) would
limit or prevent the indemnity claim).
12. Dispute Resolution. If a dispute arises after the Effective Date 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 mediator) or another
mediator of the parties' choosing.
13. 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
and no waiver is effective unless in writing and signed by the Party granting the waiver. 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
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Execution Version
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.
14. Severability. 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 finding 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 shall 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.
15. Interpretation. 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." This Agreement is drafted by both parties and shall not
be strictly construed against or in favor of either party.
16. 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 original copies.
Delivery of an executed counterpart's signature page of this Agreement, by facsimile, electronic
mail in portable document format (.pdf), 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.
17. Notices. All notices under this Agreement must be given in writing by an overnight
recognized delivery service and e-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 attorneys at the address below and deemed delivered
when actually received or when there is a refusal to receive.
(This Section Left Blank]
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Execution Version
Notice to Synagro:
Alan Slepian
435 Williams Court, Suite 100
Baltimore, MD 21220
aslepian@synagro.com
With a copy to:
Notice to City:
Thomas K. Prevas
Saul Ewing LLP
1001 Fleet Street, 9th Floor
Baltimore, MD 21202
thomas.prevas@saul.com
Chris Harder, Director
Fort Worth Water Department
100 Fort Worth Trail
Fort Worth, Texas 76102
With a copy to:
Douglas W. Black
Sr. Assistant City Attorney
100 Fort Worth Trail
Fort Worth, TX 76102
And to the City Secretary at the same address.
18. Authority. By affixing the signature below, the undersigned represents that he or
she has authority to bind its respective Party to this Agreement.
(This Section Left Blank]
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Execution Version
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date below.
SYNAGRO OF TEXAS -CDR, INC.
CITY OF FORT WORTH, TEXAS
Signature:
Signature Jesica McEachem (Mar 27, 202517:08 CDT)
Name/Title: Jesica McEachern
Name/Title: Alan Slepian, Secretary
Assistant City Manager
03/29/2025
Date: March 26, 2025
Date: 4.p44Vp4��
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Attest:
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Jannette S. Goodall
City Secretary
Recommended By: AT
ch'r sfOvhelr ffarder
Christopher Harder (Mar 26, 2025 16:19 CDT)
Chris Harder, Director
Water Department
Approved to Form and Legality:
4&4�9c
Douglas Black (Mar 26, 202517:33 CDT)
Douglas W. Black
Sr. Assistant City Attorney
M&C: 25-0281
Date: 03/25/2025
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
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Execution Version
EXHIBIT A
ANDRITZ WARRANTY WORK
Anticipated to be completed before Turnover Date:
Additional cooling tower for increased heat rejection. Each cooling tower dedicated to a
single heat exchanger;
2. Increase flow from and to condenser for increased heat rejection using larger pump and
additional condenser filter;
Additional cooling at Venturi and acid scrubber trays using condenser recirculation water;
and
4. Larger exhaust fan to provide improved pressure control.
Except that the following will be completed after the Turnover Date:
1. Andritz to deliver and replace temporary variable frequency drive (VFD M520.1.1) with a
new 18 pulse VFD.
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 03/25/25 M&C FILE NUMBER: M&C 25-0281
LOG NAME: 12SYNAGROSETTLE-TERMINATEAGREEMENT
SUBJECT
(ALL) Authorize Execution of a Settlement Agreement with Synagro of Texas -CDR, Inc., Terminating the Agreement to Design, Build, Operate and
Manage the Village Creek Biosolids Facility for the Amount of $2,400,000.00
RECOMMENDATION:
It is recommended that the City Council authorize execution of a Settlement Agreement with Synagro of Texas -CDR, Inc. in the amount of
$2,400,000.00 for costs related to terminating City Secretary Contract No. 53332, the Design, Build, Operate and Manage contract for the
Biosolids Facility
DISCUSSION:
On December 10, 2019 (M&C 19-0381) City Council authorized a design -build -operate -maintain contract with Synagro. This contract had an
anticipated ten-year duration. On April 1, 2020, Synagro assumed its duties under the contract and designed, constructed and put into
operation, in July 2022, a drum dryer facility to create pelletized biosolids.
Over the course of the operations, various disputes arose leading to a mutual decision to settle all claims and end the contract.
This Settlement Agreement will compensate Synagro $2,400,000.00 and will formally terminate this contract. The effective date of the termination
is on or after April 1, 2025, subject to the terms of the agreement.
City staff is putting in place personnel and operations and management contracts for the biosolids facility.
Funding is budgeted in the Other Contractual Services account within the Water & Sewer Fund for the purpose of funding this settlement
agreement.
This project is located in COUNCIL DISTRICT 5 but serves all Council Districts.
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.
Submitted for Citv Manaaer's Office bv: Jesica McEachern 5804
Oriainatina Business Unit Head: Leann Guzman 8973
Additional Information Contact:
Expedited
Doug Black 7615