HomeMy WebLinkAbout2006-06-21 STAFF REPORTS 5A ,?ALMS,,
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City Council Staff Report
DATE: June 21, 2006 New Business
SUBJECT: Approval of Wastewater Services Agreement with Veolia
FROM: David H. Ready, City Manager
BY: Assistant City Manager— Administrative Services
SUMMARY
The City's current agreement with Veolia (formerly US Filter) for the operations and
management of the City's Wastewater Treatment Plant expires on June 30, 2006. Staff
has been negotiating with Veolia over the past several months and has reached an
understanding on a new wastewater services agreement. This agreement covers all the
same areas as the existing agreement, including the operations and maintenance of the
treatment plant, collection system, pump stations, and down and under system, as well
as a number of new programs and other service enhancements. The term of the
proposed agreement is for seven (7) years with a five (5) year extension. The new base
contract cost is $2,421,123 per year which is approximately $130,515 or 5.4% more
than the existing base contract cost. This action would approve an amended and
restated Wastewater Services Agreement with Veolia Water North America-West for an
initial term of seven (7) years.
RECOMMENDATION:
1. Adopt a Minute Order approving, in a form acceptable to the City Attorney, an
Amended and Restated Wastewater Services Agreement with Veolia Water
North America-West, LLC. (formerly US Filter Operating Services Incorporated)
for the operations and maintenance of the City's Wastewater Treatment Plant
and related collection system.
2. Authorize the City Manager to execute all documents necessary to effectuate this
action.
STAFF ANALYSIS:
In 1999, the City entered into an agreement with US Filter to operate and manage the
City's Wastewater Treatment Plant and sewage collection system. The term of this
agreement was for a five (5) year term expiring on June 30, 2005. This agreement was
subsequently extended several times last year to enable the City to complete the Item No. 5 .A.
City Council Staff Report
June 21, 2006 -- Page 2
Wastewater Services Agreement with Veolia
planned sale of the Wastewater Treatment Plant to the Desert Water Agency. The most
recent extension, which was granted on November 2, 2005, was for a seven (7) month
term expiring June 30, 2006. Since the sale of the Wastewater Treatment Plant did not
occur as originally planned, staff has been negotiating with the current plant operator,
Veolia Water North America-West (Veolia), on a new sewer services agreement.
The proposed agreement represents many months of weekly meetings with Veolia and
the City's negotiating team. The proposed agreement includes the original scope of
services that was negotiated in 1999, as well as several new programs and a number of
innovative community initiatives.
Regulatory Compliance
Under the proposed agreement, Veolia will continue to operate and maintain the
treatment plant, collection system, pump stations, and down and under system as they
have done successfully over the past six years. In addition, Veolia will, as part of the
new agreement, implement a number of new programs to ensure compliance with
recently adopted state and regional water quality regulations. These regulations can be
broadly organized into three different programs:
• Fats, Oil and Grease (FOG)/Commercial User Pollution Control Program
• Stormwater Quality Program
Sewer System Management Plan (SSMP)
These programs require significant administrative program development work, as well
as special expertise and equipment. Veolia expects to hire four additional employees to
perform the work related to these three programs. The estimated not-to-exceed cost to
implement all three programs in the first year of the agreement is $311,177. Thereafter,
the program costs will be slightly increased to $378,026 per year. Alternatively, if these
programs were not implemented by Veolia, the City would have to hire personnel or
contract out for these services in order to comply with state and regional water quality
regulations.
Street Sweeping Services
Veolia has agreed to administer the City's street sweeping program under the proposed
agreement. They plan to retain the same contractor the City currently uses and will
offer regular, scheduled cleaning and additional cleanings at the City's request. In
addition, the City will receive complimentary street sweeping services for up to five (5)
identified community events per year. These events include the various parades and
other special events held within the community. By transferring street sweeping
services to Veolia as part of the proposed agreement, the City can shift the financial
responsibility for these services from CSA 152, which was establish to fund the
maintenance and operation of the City's drainage system, to the Wastewater Treatment
City Council Staff Report
June 21, 2006 -- Page 3
Wastewater Services Agreement with Veolia
Fund. Ultimately, this will save the General Fund approximately $100,000 a year as
drainage and other related projects that have been paid for out of the General Fund due
to the lack of available funds in CSA 152 can now be funded. In addition, by placing
street sweeping under Veolia, staff will be relieved of an ongoing administrative task
and be able to focus on other issue and/or projects.
Service Enhancements
Some of the service enhancements that Veolia will provide under the proposed
agreement include annual inspection and cleaning of over 360 stormwater catch basins
that could interfere with the flow of stormwater or create nuisance conditions. The City
currently maintains these catch basins and tries to clean them once every several
years, but due to the number of catch basins and lack of available resources many of
these catch basins go unchecked for years or until they become a problem. Veolia will
also provide, at their cost, all necessary chemicals to maintain the City's pool. Since
Veolia buys chemicals in bulk they receive substantial discounts. As a result, the City
should see a significant reduction in what it currently pays for chemicals.
Capital Improvements
The proposed agreement includes a number of short-term capital improvements to the
wastewater treatment plant and collection system. These projects were identified by
City staff and Veolia and represent a total capital investment in excess of $5.1 Million
Dollars over the next two years. Veolia has agreed to perform these improvements and
has provided not-to-exceed pricing as part of the proposed agreement. To ensure that
the City is getting the best possible price, the proposed agreement incorporates a new
pricing principle known as "Open Book/Closed Book". Under this pricing principle, the
City can review Veolia's construction costs up front, negotiate the best possible price
with them and lock in a firm price for the project. This not only enables the City to know
what it is paying for before it commits to a project, but it provides price protection by
allowing the City to lock in a price. If costs go up, Veolia assumes all the risk.
Furthermore, if the City is unable to reach agreement with Veolia on a price for a
particular project, it can bid the project itself. This gives the City an additional layer of
price protection. Veolia will also provide construction management services on all
capital projects. This will save the City an estimated $100,000 over the initial term of
the agreement.
Thee long-term capital improvements will be identified through a master planning process
which includes the preparation of two separate studies. Veolia will contribute $50,000
to the City for the first study to hire an independent consultant to prepare a capital
facilities improvement program for the wastewater treatment plant. Staff is currently
soliciting pricing to prepare this program. It is anticipated that it will take 3 to 4 months
to complete this program once a consultant has been selected. The second study is
more involved and will be performed by Veolia over an 18-month period. This study,
which is now mandatory under newly adopted state regulations, will focus on the
collection system by analyzing the current capacity deficiencies in the existing collection
system and the deficiencies due to growth to the year 2025. A computerized flow model
City Council Staff Report
June 21, 2006 -- Page 4
Wastewater Services Agreement with Veolia
will be created to simulate flow conditions throughout the system to identify where future
system improvements are needed. Although the final scope and price has not been
fully determined, Veolia has provided a not-to-exceed price of $363,639 as part of the
proposed agreement. All long-term capital improvements will be subject to the same
"Open Book/Closed Book" pricing principle.
Community Initiatives
Staff was able to negotiate a number of innovative community initiatives as part of the
proposed agreement. These initiatives include the following:
• A Community Garden. Veolia will construct, at no cost to the City, a community
garden adjacent to the Wastewater Treatment Plant. This garden, which will
consist of individual plots, will provide interested residents an opportunity to
garden. Veolia will also provide $25,000 in seed-money and $10,000 a year in
funding assistance to a community based organization to develop program
guidelines and to provide ongoing administration of the garden.
• Low-Flush Toilet Replacement Program. Veolia will provide up to $10,000 a
year in funding support for a low-flush toilet replacement program. Under this
program, qualifying homeowners will be able to receive a voucher to purchase a
low-flush toilet through a local home improvement store. Similar programs have
been implemented in numerous cities and have proven successful in reducing
water consumption.
• Grease Trap Subsidy Program. One of the biggest obstacles in implementing a
Fats, Oils and Grease (FOG) Ordinance is getting restaurants to replace their
failing grease traps. Veolia has agreed to advance the City $300,000 to fund a
grease trap subsidy program. This program will provide qualifying restaurants a
matching grant of up to 50% of the replacement cost for a new grease
interceptor.
Off the Grid
The Wastewater Treatment Plant uses both natural gas and electricity to operate
various pumps and other equipment related to the treatment process. In light of recent
price increases in natural gas and electricity, energy costs at the Wastewater Treatment
Plant are now exceeding $300,000 a year. Staff has been working with Veolia over the
last couple of years to implement alternative energy sources to reduce power
consumption and save money. To further this effort, Veolia has agreed to perform a
study of alternate energy sources to determine the most cost-effective and efficient
means of achieving energy independence. Veolia will prepare this study at no cost to
the City within six months. In addition to preparing this study, Veolia has agreed to a
power consumption cap that provides incentives to reduce consumption and a financial
penalty if they should exceed the consumption cap.
City Council Staff Report
June 21, 2006 -- Page 5
Wastewater Services Agreement with Veolia
Term
The term of the proposed agreement is for seven (7) years with a five (5) year
extension. At the end of year 7, the City can conduct a performance review of Veolia's
operation and maintenance of the wastewater treatment plant to determine whether
they should be granted a term extension. This performance review may consist of any
or all of the following: (1) a review of Veolia's services to determine material compliance
with the terms and conditions of the agreement; (2) a physical inspection of the plant;
(3) a legal review; and (4) a financial review of Veolia's costs for operations and
maintenance of the plant. If, following the performance review, no deficiencies are
identified and Veolia is in material compliance with all other terms and conditions of the
agreement, the term of the agreement would be automatically extended for an
additional five (5) years. If, however, Veolia is not in compliance with a material
provision of the agreement and/or a deficiency is found during the performance review,
they would not be eligible for an extension and the City could, after providing proper
notice and an opportunity to cure, terminate the agreement.
The City continues to retain the right to sell the wastewater treatment plant and may
unilaterally terminate the agreement by providing thirty (30) days written notice to Veolia
and by holding a public hearing to allow them to present oral and written testimony and
to respond to any and all issues respecting the termination.
Price
The new base contract cost, which includes the operations and maintenance of the
treatment plant, collection system, pump stations, and down and under system, is
$2,421,123 per year. This is approximately $130,515, or 5.4%, more than the existing
base contract cost. The regulatory programs and other service enhancements included
in the proposed agreement add an additional $699,426 to the fixed price for a total
contract cost of$3,120,549.
This price is subject to annual CPI adjustments or mutually agreed upon changes in
scope. Under the existing agreement, the fee that is paid to Veolia is adjusted by the
annual change in CPI. The proposed agreement allows for a CPI adjustment, less
energy costs, each year. These adjustments are capped at a rolling three-year average
of 8%. If the CPI exceeds the three-year average, Veolia would not be entitled to an
automatic adjustment, but would have to substantiate their costs and formally request
an adjustment from the City Council. This provision provides a level of cost
containment by giving the City the ability to review Veolia's cost before granting
additional CPI adjustments.
Veolia is also making a significant investment in this agreement by providing
approximately $1,000,000 in direct cash, design and construction management services
and consulting services to the City over the term of the agreement.
City Council Staff Report
June 21, 2006 -- Page 6
Wastewater Services Agreement with Veolia
Subcommittee Review
Staff met with the City Council's Wastewater Treatment Plant Subcommittee (Oden and
Pougnet) in May and presented the proposed agreement. The Subcommittee was
generally pleased with the terms that had been negotiated and is recommending that
the City Council approve the proposed agreement with Veolia.
The City's wastewater consultant, Bill Hunt of TRC Solutions, has also reviewed the
proposed agreement and believes that it provides the City a high level of service at a
reasonable cost. Mr. Hunt is a certified wastewater treatment plant operator and
currently oversees the City of Rialto's wastewater treatment plant. In addition to his
advisory services to the City, Mr. Hunt has been instrumental in negotiating with Veolia
over the list of short-term capital improvements and finds both the scope of work and
costs to be acceptable.
Summary
A wastewater treatment plant is one of a community's greatest assets, but it can also be
its biggest liability due to the multitude of environmental issues surrounding its
Operations. The proposed agreement with Veolia provides continuity of service at a
fixed price with a recognized leader in wastewater treatment operations. This ensures
uninterrupted service, as well as regulatory compliance with all state and regional water
quality requirements. More importantly, this agreement affords the City "peace of mind"
by shifting all the responsibility for maintenance and operations of the wastewater plant
and collection system, as well as the associated environmental liability directly to Veolia.
The: City and Veolia have had a good relationship over the years. This agreement is
reflective of that relationship and incorporates a number of enhanced services and other
initiatives that will benefit the community over the term of the agreement. Staff believes
that it is in the public's best interest to continue a relationship with Veolia to operate the
City's wastewater treatment plant and recommends that the City Council approve the
proposed agreement.
FISCAL IMPACT:
There are sufficient funds in the Wastewater Treatment Plant fund to cover the ongoing
costs associated with this agreement.
^a
Tro, L. Butzla s istant City Manager David H. Ready, fvlaager
Attachments:
1. Minute Order
2. Draft Amended and Restated Wastewater Services Agreement
MINUTE ORDER NO.
APPROVING, IN A FORM ACCEPTABLE TO THE CITY
ATTORNEY, AN AMENDED AND RESTATED
WASTEWATER SERVICES AGREEMENT WITH VEOLIA
WATER NORTH AMERICA-WEST, LLC. (FORMERLY US
FILTER OPERATING SERVICES INCORPORATED) FOR
THE OPERATIONS AND MAINTENANCE OF THE CITY'S
WASTEWATER TREATMENT PLANT AND RELATED
COLLECTION SYSTEM
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this
Minute Order approving, in a form acceptable to the City Attorney, an amended and
restated wastewater services agreement with Veolia Water North America-West, LLC.
(formerly US Filter Operating Services Incorporated for the operations and maintenance
of the City's Wastewater Treatment Plant and related collection system was adopted by
the City Council of the City of Palm Springs, California, in a meeting thereof held on the
21 st day of June, 2006.
James Thompson, City Clerk
The proposed amended and restated wastewater
services agreement with Veolia Water North
America-West, LLC (formerly US Filter Operating
Services Incorporated) is on file in the Office of
the City Clerk for review.
AMENDED AND RESTATED
WASTEWATER
SERVICES AGREEMENT
(O&M)
between
VEOLIA WATER NORTH AMERICA-WEST, LLC
and
CITY OF PALM SPRINGS, CALIFORNIA
dated
as of
June , 2006
320994_13.DOC �
TABLE OF CONTENTS
ARTICLE I AMENDMENT AND RESTATEMENT; DEFINITIONS AND
INTERPRETATION.......................................................................................2
Section 1.1 Amendment and Restatement.........................................................................2
Section 1.2 Definitions.........................................................................................................2
Section 1.3 Interpretation...................................................................................................8
Section 1.4 Index and Headings .........................................................................................9
Section1.5 Payment Dates..................................................................................................9
ARTICLE II CONDITIONS PRECEDENT........................................................................9
Section 2.1 Condition to Effective Date.............................................................................9
ARTICLE III OWNERSHIP OF TREATMENT FACILITY, SEWAGE
COLLECTION SYSTEM AND DOWN AND UNDER SYSTEM;
EASEMENTS AND LEASE; ACCESS; NATURE OF AGREEMENT....9
Section 3.1 Ownership of Treatment Facility, Sewage Collection System and
Down and Under System.................................................................................9
Section 3.2 Access; Necessary Property ..........................................................................10
Section3.3 City Access......................................................................................................12
Section 3.4 Relationship of Parties...................................................................................13
ARTICLE IV TERM..............................................................................................................13
:Section 4.1 Term................................................................................................................13
Section 4.2 Term Extension Performance Review .........................................................13
Section 4.3 Return of Treatment Facility at Completed Term.....................................15
Section 4.4 Final Repot Evaluation................................................................................15
Section 4.5 Exit Inventories..............................................................................................16
ARTICLE V VEOLIA SCOPE OF SERVICES AND CITY RESPONSIBILITIES.....16
320994_13.DOC
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Section 5.1 Employees.......................................................................................................16
Section5.2 Veolia Scope of Services ................................................................................17
Section 5.3 Capital Projects..............................................................................................24
Section5.4 Maintenance Work........................................................................................28
Section 5.5 Industrial Waste, Waste Discharge Requirements for Sanitary
Sewers; Stormwater Monitoring.................................... .............................30
Section 5.6 City Responsibilities.......................................................................................31
Section 5.7 Use of Treatment Facility.............................................................................32
Section 5.8 Standard of Services and Performance Guarantee....................................33
(Section 5.9 Limitations on Performance Guarantee......................................................33
ARTICLE VI OVERSIGHT BY CITY................................................................................35
Section6.1 Meetings..........................................................................................................35
(Section 6.2 Reports............................................................................................................35
Section 6.3 Right to Access, Inspection............................................................................35
Section 6.4 Deficiencies .....................................................................................................35
Section 6.5 Annual Inspection..........................................................................................35
Section 6.6 Review of Financial Information..................................................................36
ARTICLE VII COMPENSATION AND FEES....................................................................36
Section7.1 Fees..................................................................................................................36
Section 7.2 Annual Fee Adjustments...............................................................................38
Section7.3 Payments.........................................................................................................40
Section 7.4 Adjustment to Fees and Additional Compensation for Certain
Items................................................................................................................40
Section 7.5 Cost Plus Items...............................................................................................42
ARTICLE VIII CONFIDENTIAL INFORMATION............................................................42
Section 8.1 Confidential and Proprietary Information..................................................42
320994 l3.DOC -H-
Section 8.2 Disclosure of Confidential Information.......................................................42
Section 8.3 Requests for Confidential Information........................................................43
Section 8.4 Third Party Compliance................................................................................43
ARTICLE IX REPRESENTATIONS AND WARRANTIES............................................43
Section 9.1 Veolia Representations..................................................................................43
Section9.2 City Representations......................................................................................44
Section 9.3 Opportunity to Inspect; Acceptance As Is...................................................46
ARTICLE X LIABILITY AND INDEMNITY; DEFENSE OF CONTRACT...............46
Section 10.1 Veolia Indemnity and Limitations................................................................46
Section 10.2 City Indemnity and Limitations...................................................................47
Section 10.3 Procedures for Indemnification....................................................................48
Section10.4 Litigation.........................................................................................................49
Section10.5 Survival...........................................................................................................49
ARTICLE XI INSURANCE; RISK OF LOSS....................................................................49
Section 11.1 Required Insurance.......................................................................................49
Section 11.2 Certificates of Insurance; Forms of Insurance; Sufficiency of
Insureror Surety............................................................................................50
Section 11.3 City Required Insurance...............................................................................50
Section 11.4 Risk of Loss; Casualty, Damage and Destruction.......................................51
ARTICLE XII UNCONTROLLABLE CIRCUMSTANCES, DEFAULT,
ENFORCEMENT AND TERMINATION..................................................52
Section 12.1 Time of Essence..............................................................................................52
Section 12.2 Uncontrollable Circumstance.......................................................................52
Section 12.3 Obligations In Event of Uncontrollable Circumstances.............................52
:Section 12.4 Events of Default............................................................................................52
Section 12.5 Notice and Opportunity to Cure...................................................................53
320994 13 DOC -iii-
Section 12.6 Dispute Resolution Process ...........................................................................53
Section 12.7 Pre-Arbitration Resolution...........................................................................54
Section 12.8 Arbitrator Decision; Binding Effect.............................................................54
Section 12.9 Costs of Arbitration.......................................................................................55
Section 12.10 Events Justifying Termination......................................................................55
Section 12.11 Consequences of Termination By Either Party...........................................56
Section12.12 Waiver.............................................................................................................57
Section 12.13 Governing Law; Venue..................................................................................57
ARTICLE XIII IDENTITY OF REPRESENTATIVES; ASSIGNMENT..........................58
Section13.1 Representative of Veolia................................................................................58
Section13.2 Contract Officer.............................................................................................58
Section13.3 City Sale..........................................................................................................58
Section 13.4 Veolia Assignment..........................................................................................58
ARTICLE XIV ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS..............59
Section14.1 Notices.............................................................................................................59
Section 14.2 Covenant Against Discrimination ................................................................60
Section 14.3 Further Responsibilities of Parties...............................................................60
Section14.4 Severability.....................................................................................................60
Section 14.5 Integration; Amendment...............................................................................61
Section 14.6 Non-liability of City Officers and Employees..............................................61
Section 14.7 Conflict of Interest.........................................................................................61
Section 14.8 Successors and Assigns..................................................................................61
Section 14.9 Execution of Counterparts............................................................................61
320994 13.DOC
This AMENDED AND RESTATED WASTEWATER SERVICES AGREEMENT
(O&M) ("Agreement") is made as of this day of June, 2006, by and between
Veolia Water North America-West,LLC, a Delaware limited liability company("Veolia),
successor-in-interest under the Original Agreement to U.S. Filter Operating Services, Inc., a
Delaware corporation("Filter"), and the City of Palm Springs, California ("City"). This
Agreement is made in reference to the following recitals.
WHEREAS,
1. City owns and is currently operating a publicly owned wastewater
Treatment Facility as defined herein(the"Treatment Facility"), a sewage collection system(the
"Sewage Collection System") and a down and under system(the "Down and Under System").
2. Pursuant to a request for proposal issued by the City in November 1998
pursuant to California Government Code Section 5956.1 et. seq. and Chapter 3.12 of the Palm
Springs Municipal Code, the City and Filter entered into that certain Wastewater Services
Agreement No. 4123, dated as of July 30, 1999 (the"Original Agreement"), for the provision
by Filter to City of certain operations and maintenance services related to the Treatment Facility,
Sewage Collection System and Down and Under System, as those terns are defined in, and
pursuant to the terns of, the Original Agreement.
3. On or about May 16, 2001, City and Filter entered into that certain
Amendment No. 1 to Agreement No. 4123, for the provision of certain capital project
administration parameters all related to the improvement of the Treatment Facility. City slid
Veolia entered into Amendment No. 2, Amendment No. 3, Amendment No. 4, Arnendinent No.
5 and Amendment No. 6 to the Original Agreement on June 29, 2005, July 20, 2005, September
7, 2005, October 5, 2005 and November 2, 2005, respectively.
4. On February 2, 2004, Filter officially became known as Veolia Water
North America Operating Services, Inc. ("Veolia Water NA"). Through an inter-company
reorganization and set of inter-company assignments, Veolia has acquired and succeeded to the
right, title and interest in and to the Original Agreement. Veolia is the wholly owned-subsidiary
and West Coast operating arm of Veolia Water North America Operating Services, LLC
("Veolia Water NA LLC"), which was formerly latown as Veolia Water NA.
5. The City and Veolia have met to evaluate the effectiveness of, and the
parties' compliance with, the Original Agreement and, as a result, have concluded that Veolia is
performing under the Original Agreement as originally envisioned and that the services provided
under the Original Agreement are achieving the objectives of the City's 1998 procurement, as
articulated in the Original Agreement.
6. Because of the success of the parties' existing relationship under the
Original Agreement, the City and Veolia desire to enter into an extension of the Original
Agreement pursuant to a full amendment and restatement of the Original Agreement.
7. This Agreement is being entered into pursuant to both of California
Government Code Section 5956.1 et. sea. and Chapter 3.12 of the Palm Springs Municipal Code.
320994_I3.DOC
I
Each of the foregoing laws is the independent authority for the City to enter into this Agreement
and procure the services with respect to the Treatment Facility, the Sewage Collection System
and the Down and Under System as described herein.
Agreement
NOW, THEREFORE, in exchange of the mutual promises contained herein and for
other good and valuable consideration, and intending to be legally bound, the Parties to this
Agreement agree as follows:
ARTICLE I.
AMENDMENT AND RESTATEMENT, DEFINITIONS AND INTERPRETATION
Section 1.1 Amendment and Restatement. This Agreement amends and restates the Original
Agreement in its entirety.
Section 1.2 Definitions. For purposes of this Agreement, the following terns and phrases
shall have the meaning set forth in this Section unless the circumstances clearly indicate
otherwise:
"Abnormal Substances" means substances or materials that are not identified in the Influent
Specifications, or were not reasonably anticipated by Veolia as being in the Influent based upon
the past five(5) Regional Water Quality Control Board annual reports.
"Additional Monitoring Requirements" has the meaning set forth in Section 5.2(b).
"Affiliate"means any corporation, limited liability company,partnership or other entity which
directly or indirectly owns at least 50% of Veolia's outstanding shares, is owned 50%by, or is
under common control with Veolia.
"Agreed Capital Proiec "has the meaning set forth in Section 5.3(a .
"AAmement"means this Amended and Restated Wastewater Services Agreement.
"Applicable Law"means any law, rule, code, regulation, consent decree, consent order, consent
agreement, permit, determination or order of, or Governmental Approval issued by, any
Govermnental Agency having jurisdiction applicable to any activities associated with the testing,
acceptance, operation, maintenance, repair, replacement or modification of any part of the
Treatment Facility, the Sewage Collection System and/or the Down and Under System or any
other obligations of the parties under this Agreement.
"Arbitration Notice"has the meaning set forth in Section 12.8.
"Bankruptcy Code"means the United States Bankruptcy Reform Act of 1978, as amended, l I
U.S.C. §101 etseq.
"Battery Limits" means the point of delivery for Influent, which shall be to the headworks of
the Treatment Facility,just prior to the bar screen.
320994 13.DOC -2-
"Billing Period" means a monthly period commencing on the first day of each calendar month
and continuing through and until the first day of the next calendar month, except (1) the first
Billing Period shall begin on the Commencement Date and shall continue to the last day of the
month in which the Connnencement Date occurs; (2) the last Billing Period shall end on the last
day of the Tenn of this Agreement; and (3) as otherwise mutually agreed to by Veolia and the
City.
"Billing Statement" has the meaning set forth in Section 7.3(a).
°Blosolids" means organic sewage solids product,produced by wastewater treatment processes
that: can be beneficially recycled (land applied).
"Business Day"means any day other than a Saturday, Sunday or a day on which commercial
banking institutions are authorized or required by law, regulation or executive order to be closed
in the State.
"Capital Improvement Plan" has the meaning set forth in Section 5.3-W.
"Capital Proiect" means any of an Agreed Capital Project, a Desirable Capital Project and a
Necessary Capital Project.
"Capital Project Adjustments"has the meaning set forth in Section 5.3(e).
"Capital Proiect Contractor"has the meaning set forth in Section 5.3(e).
"Change of Law"means any of the following events occurring after the Contract Date:
(i) the adoption,modification or repeal, or official change in
interpretation, of any Applicable Law by any entity with jurisdiction over the City, the
Treatment Facility, the Sewage Collection System and/or the Down and Under System,
or modification or imposition of any material condition,restriction or limitation in any
Governmental Approval granted by any Governmental Agency, and
(ii) which imposes limitations, additional costs or burdens with respect
to the construction, operation, repair, maintenance and replacement of the Treatment
Facility, the Sewage Collection System and/or the Down and Under System or the
parties' other obligations under this Agreement.
"Cbiange Percentage"has the meaning set forth in Section 7.2(b).
"City"means the City of Palm Springs, California.
"City Council"has the meaning set forth in Recitals.
"City Employees and Agents"has the meaning set forth in Section 8.2.
"City Indemnified Party" has the meaning set forth in Section 10.1(a).
"Compensation"means the compensation payable to Veolia under Article VII.
320994 13 DOC -3-
"Commencement Date"means September 1, 1999.
"Confidential Information"has the meaning set forth in Section 81.
"Contract Date"means July 30, 1999. The amendment and restatement of the Agreement is as
of July 1, 2006.
"Contract Officer" means the City Manager or his designee (provided that Veolia must be
notified in writing by the City Manager of any designation before such designation will be
effective).
"Corporate Guarantee" shall mean the parent guarantee from Veolia Water North America
Operating Services, LLC, a Delaware limited liability company, in the form attached hereto as
Schedule P, which Corporate Guarantee shall replace in its entirety, and render no longer valid,
all prior guarantees provided by or on behalf of Filter or Veolia under or in connection with this
Agreement.
"Corrective Maintenance and Repairs" means those non-routinehnon-repetitive activities
required for operationat continuity, safety, and performance, reasonably necessary to respond to
or avert failure of the equipment or the Treatment Facility, or a component thereof, including
replacement of any piece of equipment.
"CPI"has the meaning set forth in Section 7.2(a).
"Deficien y'has the meaning set forth in Section 6.4.
"Desirable Capital Project"has the meaning set forth in Section 5.3(a).
"Domestic Sewa2 "means solid or liquid waste and wastewater from humans or household
operations that is discharged to or otherwise enters a treatment works.
"Down and Under System"has the meaning set forth in the Recitals and Section 5.4(e).
"Effluent" means all wastewater leaving the Treatment Facility.
"Effluent Specifications"means the effluent quality specifications set forth in Schedule M.
"Environmental Condition"means the presence of any Regulated Substance on, in, under or at
the Treatment Facility, the Treatment Facility Site, the Sewage Collection System, the Down and
Under System, the real property covered by the Sewage Collection System and/or the real
property covered by the Down and Under System, including but not limited to, the presence in
surface water, groundwater, soils or subsurface strata, or the migration of such a Regulated
Substance from or to the Treatment Facility, the Treatment Facility Site, the Sewage Collection
System, the real property covered by the Sewage Collection System and/or the real property
covered by the Down and Under System.
"Environmental Law"mews any Applicable Law relating to (i) the protection of public health,
safely, natural resources or the environment; (ii)the manufacturing, handling, generation,
320994 13.DOC -4-
storage, treatment, processing, transportation, release, discharge, emission or disposal of
Regulated Substances; (iii) Envirommental Conditions; or (iv) the protection of human health and
safety. "Environmental Laws" include, without limitation, the Comprehensive Enviromnental
Response, Compensation and Liability Act (42 U.S.C. §9601 et seg.), the Hazardous Materials
Transportation Act (49 U.S.C. §§ 1801 et sep.), the Resource Conservation and Recovery Act
(42 U.S.C. §§ 6901 et seg.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 etsea.),
the Clean Air Act(42 U.S.C. §§ 7401 et sea.), the Toxic Substances Control Act (15 U.S.C. §§
2601 et seg.), the Oil Pollution Act (33 U.S.C. §§ 2701 et se .), the Emergency Planning and
Cormnunity Right-to-Know Act (42 U.S.C. §§ 11001 et sect.), the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et sea.); the Safe Drinking Water Act (42 U.S.C. §300f et se .);
and regulations adopted pursuant thereto; and counterpart state and local laws, and regulations
adopted thereto, including the Porter-Cologne Water Quality Control Act (Cal. Wat. Code
§ 13020 et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health &
Safety Code § 25249.5 et sea.), the Hazardous Substance Account Act(Cal. Health & Safety
Code § 25300 et seg.), California Integrated Waste Management Act of 1989 (Cal. Public
Resources Code § 40000 et seg.), Cal. Health & Safety Code § 39000 et se ., 14 Cal. Code of
Regulations § 18010 et seq., 23 Cal. Code of Regulations § 2510 et seq. and the Hazardous
Waste Control Act (Cal. Health & Safety Code § 25100 et seq. .
"EPA"means the United States Environmental Protection Agency.
"Event of Default"has the meaning set forth in Section 12.4.
"Excused Party"has the meaning set forth in Section 12.3.
"Extra Street Sweeping Services" has the meaning set forth in Section 5.2(w).
"Existing Monitoring Requirements" has the meaning set forth in Section 5.2(b).
"Exit Evaluation"has the meaning set forth in Section 4.4(a).
"gpd" means gallons per day.
"Garden"has the meaning set forth in Section 5.2(v).
"Governmental Agency" means any legislative, executive,judicial, or administrative
department,board, commission, court, agency or other instrumentality of the Federal, State or
local government.
"Governmental Approval" means any pennit, license, approval, authorization, consent or other
authorization which is required under Applicable Law for the operation and maintenance of the
Treatment Facility, the Sewage Collection System aid/or the Down and Under System, or for the
performance of any of the obligations under this Agreement.
"Influent"means all waste and wastewater flow entering the Treatment Facility at the Point of
Delivery, including Domestic Sewage, commercial and industrial wastewater, Septage, and
leaebate.
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"Influent Specifications"means the quantity and quality specifications for Influent set forth in
Schedule N.
"Lien"means any mortgage, pledge, security interest, lien, encumbrance, lease, disposition of
title or other charge of any kind.
"Losses"means any losses, claims, suits, actions, demands, charges, expenses, costs (including
costs of defense, settlement and reasonable attorney's fees and costs), liabilities, obligations,
fines and penalties.
"Maintenance Work"has the meaning set forth in Section 5.4(a).
"Material Adverse Effect"means (i) a material adverse effect upon the properties, assets, credit
rating, or financial condition of the City, taken as a whole; (ii) a material adverse effect on the
ability of City to perform its obligations set forth in this Agreement; or(iii) any material event or
circumstance which questions the validity or enforceability of this Agreement.
"MIPP"means the municipal/industrial wastewater pretreatment program described in Section
5.5 a .
"Necessary Capital Proiect"has the meaning set forth in Section 5.3(a).
"New Vehicles"has the meaning set forth in Section 5.6(d).
"Non-Specification Influent"means any Influent received at the Treatment Facility that does
not meet the Influent Specifications.
"O&M Annual Capital Recovery"has the meaning set forth in Section 7.1.
"O&M Fee"has the meaning set forth in Section 7.1.
"O&M Fixed Component"has the meaning set forth in Section 7.1.
"Performance Guarantee"has the meaning set forth in Recital 2.
"Plant Manager" shall be the person designated at Section 14.3.
"Performance Guarantee"has the meaning set forth in Section 5.8(b).
"Point of Delivery"means the point at which Influent is delivered to the Treatment Facility, as
identified in the Battery Limits definition herein.
"Pre-Approved Capital Projects"has the meaning set forth in Section 5.3(i).
"Preventive and Predictive Maintenance"means routine and/or repetitive activities required
by the equipment or facility manufacturer to maintain the reasonably expected service life of the
equipment and Treatment Facility and components thereof.
320994 I3.DOC -6-
"Preventive and Predictive Maintenance Program" means the program for Preventive and
Predictive Maintenance described in Schedule F.
"Prime Rate"means Prime Rate published from time-to-time by the Bank of America NT&SA
(or such other lending institution acceptable to Veolia) for short-term loans to industrial
borrowers having the highest credit rating.
"Prudent Industry Practices"means those methods, techniques, standards and practices which,
at the time they are employed and in light of the circumstances known or believed to exist at the
time, are generally accepted high professional standards reasonably applicable in the wastewater
treatment industry as practiced in the United States, provided such practices meet or exceed
practices to which the City has heretofore conformed. The guidelines for the determination of
Prudent hldustry Practices shall be the published guidelines set forth in the Manual of Practice
Volume 11 —Operations of Wastewater Treatment Plants, as published by the Water
Environment Federation.
"QA/OC Program"means a quality assurance/quality control program for sampling and
analyses, meeting the standards set forth in Schedule S.
"Reclaimed Water"means wastewater that is reclaimed after treatment of Influent, and is
suitable for use in certain agricultural, industrial or irrigation uses in accordance with Applicable
Law.
"Regulated Substance" means any pollutant, contaminant, hazardous substance, hazardous
material, toxic substance, toxic pollutant, solid waste, municipal waste, industrial waste, or
hazardous waste, petroleum or petroleum-derived substance, asbestos, or polychlorinated
biphenyls, that is defined as such in, is subject to regulation under, or may form the basis for any
requirement for investigation or remediation under, any Environmental Law.
"Release"means any release, spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, dispersal, leaching, or migration of any Regulated Substance into the environment
(including arnbient air, surface or ground water, and surface or subsurface strata), including the
movement of any Regulated Substance in or through the air, soil, surface water or groundwater,
or property.
"RollingStock"has the meaning set forth in Section 5.6(c) and is more particularly described on
Schedule U attached hereto.
"Sanitary Sewer Master Plan"means a plan developed by Veolia with respect to the Sewage
Collection System containing the information described in Schedule DD.
"Septage"means the liquid or solid material removed from a septic tank, cesspool, portable
toilet, Type III marine sanitation device, or similar treatment works that receives only Domestic
Sewage or other waste fully compatible with the treatment processes and receiving facilities at
the Treatment Facility. Septage does not include cormnereial or industrial wastewater
incompatible with the treatment processes or receiving facilities at the Treatment Facility.
"Services" has the meaning set forth in Section 5.2.
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"Service Area" means the area served by the Sewage Collection System.
"Sewage Collection System"has the meaning set forth in the Recitals and Section 5.4(d).
"Significant Industrial User"means any"significant industrial user" as defined in 40 C.F.R.
§403.3, as amended from time to time.
"Specification Influent"means Influent meeting the quantity and quality Influent
Specifications set forth in Schedule N.
"Standard Methods"means STANDARD METHODS FOR THE EXAMINATION OF WATER AND
WASTEWATER (19t1i Edition, 1995 and 1996 Supplement) published by the American Public
Health Association.
"State"means the State of California, and its departments,boards, commissions and agencies.
"Term"means the teen of this Agreement, as defined in Section 4.1.
"Term Extension Performance Review"has the meaning set forth in Section 4.2(a).
"Treatment Facility"has the meaning in the Recitals and is more particularly described in
Schedule A hereto.
"Treatment Facility Site" means the real property on which the Treatment Facility is or shall be
located, as more particularly described in Schedule B, plus all improvements, fixtures, equipment
and machinery thereon.
"UCC"means the Uniform Commercial Code as enacted by the State.
"Uncontrollable Circumstance"means an act, event, or condition beyond the reasonable
control of a party(or the patty's subcontractors) which materially affects the ability of that party
to perform any obligation under this Agreement (except payment obligations), and which shall
be a Change of Law, condemnation, earthquake, flood, or other natural disaster, act of God, war,
or civil insurrection.
"Veolia"means Veolia Water North America-West, LLC, a Delaware limited liability company.
"Veolia Indemnified Party"has the meaning set forth in Section 10.2(a).
"W:DR Permit" means the Waste Discharge Requirements Permit No. 7A330115012 (Order 93-
071), issued by the CRWQCB (Colorado River Basin Region), pursuant to 33 U.S.C. §1342 and
California Water Code § 13260 et sea.
Section 1.3 Interpretation. Any teens in the singular shall also be interpreted to include the
plural, and any terns in the plural shall also include the singular. "Including" or"include" shall
mean "including, without limitation." The teens of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
320994 13.DOC -8-
party by reason of the authorship of this Agreement or any other rule of construction which
might otherwise apply.
Section 1.4 Index and Headinas. The index and headings are inserted in this Agreement for
convenience and reference, and shall not affect the interpretation of this Agreement.
Section 1.5 Payment Dates. If the date on which any payment is to be made pursuant to this
Agreement is not a Business Day, the payment shall be payable on the next succeeding Business
Day.
ARTICLE II.
CONDITIONS PRECEDENT
Section 2.1 Condition to Effective Date. The conditions to the effective date of this
Agreement shall be delivery by(i) the City to Veolia of a certified record of the public
proceedings of the legislative body of the City approving the execution and delivery of this
Agreement; and (ii)Veolia to the City of the Corporate Guarantee from the Corporate Guarantor
in the form attached hereto as Schedule P. The delivery by Veolia of the Corporate Guarantee
shall replace in its entirety, and render no longer valid, all prior guarantees provided by or on
behalf of Filter or Veolia under or in connection with this Agreement.
Section 2.2 Additional Deliveries
In addition to the Corporate Guarantee, within thirty (30) days after the request of
the City, Veolia shall deliver to City:
(a) Copies of certificates of insurance required pursuant to Section 11.2
hereof for the insurance coverage required by Section 11.1;
(b) Certificates of incumbency for the officers of Veolia executing this
Agreement;
(c) Reasonable substantiation that a Veolia representative holds, directly or
through its representatives or subcontractors, a wastewater license for the State; and
(d) Any other documents reasonably required by City or to fulfill City's
obligations under this Agreement, or reasonably requested by City and not otherwise addressed
under this Agreement.
ARTICLE III.
OWNERSHIP OF TREATMENT FACILITY, SEWAGE COLLECTION SYSTEM AND
_DOWN AND UNDER SYSTEM; EASEMENTS AND LEASE; ACCESS; NATURE OF
AGREEMENT
Section 3.1 Ownership of Treatment Facility, Sewage Collection System and Down and
Under System. City and Veolia hereby acknowledge that as of the Contract Date, City is the
sole owner of the Treatment Facility,the Treatment Facility Site, the Sewage Collection System,
the Down and Under System, owns or controls the real property covered by the Sewage
Collection System and the real property covered by the Down and Under System and retains the
320994 13 DOC -9-
right of possession thereof Veolia's access and possession rights shall be derivative from the
City. Throughout the Term of this Agreement, the Treatment Facility, the Treatment Facility
Site, the Sewage Collection System, the Down and Under System, the real property covered by
the Sewage Collection System and the real property covered by the Down and Under System
shall be owned by the City.
Section 3.2 Access; Necessary Property.
(a) Treatment Facility Access. The City shall provide, afford and grant to
Veolia access to and the right to use the Treatment Facility and the Treatment Facility Site in
order to perform its obligations under this Agreement. Notwithstanding anything herein to the
contrary, City shall retain the right of possession and Veolia's rights shall be derivative from the
City.
(b) Sewage Collection System and Down and Under System Access. The City
shall provide, afford and grant to Veolia access to and the right to use the Sewage Collection
System and the Down and Under System in order to perform its obligations under this
Agreement, including the rights to:
(i) install,repair, maintain, and replace pump stations, pipes, meters,
valves, and other facilities or equipment necessary, desirable or convenient to convey and deliver
Influent to the Treatment Facility;
(ii) open and excavate City streets, easements or rights-of-way, as
necessary, to obtain access to the Sewage Collection System and/or the Down and Under System
for purposes of installation, repair, maintenance,removal or replacement of any portion of the
Sewage Collection System and/or the Down and Under System; and
(iii) temporarily store equipment, construction materials, or excavated
materials within the real property covered by the Sewage Collection Systern and/or the Down
and Under System for purposes of performing the work described in clauses (i) and ii .
(c) Limitation on Sewage Collection System and Down and Under System
Access. The City shall provide, afford and grant to Veolia access to and the right to use the
Sewage Collection System and the Down and Under System within City property, easements or
rights-of-way, including the right to temporarily store equipment, construction materials or
excavated materials thereon, as necessary to perform its obligations under this Agreement,
provided that Veolia complies with the following requirements:
(i) Veolia shall provide ten(10) days notice to the Contract Officer of
any required repair, installation,maintenance or replacement of equipment within or upon the
Down and Under System or Sewage Collection System, which notice shall (A) generally
describe the work to be undertaken; (B) to the extent reasonably possible, specifically identify
the location of the proposed work; and (C) estimate the period of time that Veolia anticipates the
proposed work will take to complete, provided however, that notice which is shorter than ten
(10) days, but is as long as reasonably possible, shall be allowed in circumstances constituting an
emergency, as set forth at Section 5.2(i ;
320994 13.DOC -10-
(ii) Veolia shall coordinate with the City Engineer regarding traffic
control at or around the area of the proposed work and shall comply with City and State
standards on safety and traffic control, including but not limited to the barricades and traffic
control standards under the State Manual of Traffic Controls for Construction and Maintenance
Work Zones; and
(iii) Veolia shall minimize disruption to City or private property,
casements or rights-of way from the proposed work or temporary storage of equipment or
construction or excavated materials thereon during such time.
(d) Excavation and Restoration. hi the event that, in order to perform its
obligations under Sections 5.4(d)-(e), Veolia requires access that necessitates excavation in any
City street or right-of-way, Veolia shall be entitled to such access and the right to excavate such
street or right-of-way. In no event shall City have any liability to Veolia or any other person for
personal injury, property damage, or any other Losses arising out of, or related to, the entry and
excavation by Veolia and/or Veolia's employees or agents upon City streets or rights-of-way,
Sewage Collection System, the Down and Under System, the real property covered by the
Sewage Collection System or the real property covered by the Down and Under System; and
Section 10.1 shall apply to any liability arising thereunder. Following such excavation, Veolia
shall restore the street and/or right-of-way in compliance with applicable City codes.
(e) Cooperation Regarding Additional Leases, Easements. Licenses or Rights-
of-Way.
(i) City shall grant, without charge to Veolia, such access in, along, or
across any property owned or controlled by City as is necessary, required or desirable for the
operation and maintenance of the Treatment Facility, the Sewage Collection System and/or the
Down and Under System, provided that Veolia shall not restrict or interfere with City's use of
the property which is burdened by such facilities. At no cost to Veolia, City shall attempt
acquisition of any additional real property, leases, easements, licenses, rights-of-way, or other
property interests within the City's jurisdiction that are necessary, required or desirable for the
operation and maintenance of the Treatment Facility, the Sewage Collection System, the Down
and Under System and/or any reclaimed water system in accordance with the terms of this
Agreement; provided, however, that before attempting such acquisition, City must have the legal
capacity to do so and sufficient funding, in the opinion of the City Council, available for such
pmi ose.
(ii) City shall attempt to acquire such real property interests from the
current owners thereof by negotiated purchase; provided, however, that nothing in this
Agreement shall obligate City to pay more than the amount City determines to be the fair market
value of the real property interests as determined by an appraisal obtained by the City nor to
agree to any other non-standard terns or conditions except as may be acceptable to City in its
sole discretion.
(iii) If, after and despite its best efforts to do so, City is unable to
acquire the property interests or any portion thereof by negotiated purchase, City shall conduct
the necessary analysis in order-to determine in its sole discretion whether to attempt to acquire
32099,I 13.DOC -11-
the real property interests by exercise of its power of eminent domain. City, at its cost, shall
have the right to obtain a bona fide appraisal from an appraiser satisfactory to the City. City has
informed Veolia that, in connection with condemnation proceedings, a hearing is held to adopt a
Resolution of Necessity. City cam7ot legally commit itself to condemnation of a particular real
property interest until after this hearing is held and testimony given at the hearing has been
considered. Accordingly, Veolia understands that City is not obligated by this Agreement to
actually acquire real property interests, and the members of the City Council are free to exercise
their discretion in any mariner they see fit in the event the City considers condemnation. Nothing
in this Agreement shall be deemed a prejudgment, or connnitment with respect to condemmation
or a guarantee that such condemnation will be undertaken. In the event City exercises its power
of eminent domain to acquire real property interests, City shall, subject to delays outside City's
control, exercise reasonable diligence to complete the acquisition of the real property interests as
soon as practicable after the commencement of eminent domain proceedings. If City elects not
to condemn a particular real property interest, City shall not have any liability to Veolia
notwithstanding the effect of such election on the Treatment Facility, the Sewage Collection
System and the Down and Under System (provided, however, that the foregoing shall not modify
or limit the provisions of Section 3.2(e)(iv)).
(iv) In no event shall Veolia be obligated to procure, or expend funds
in connection with procuring, additional real property, leases, easements, licenses, rights-of-way
or other property interests and, if such items are necessary or required for the operation and
maintenance of the Treatment Facility, the Sewage Collection System and/or the Down and
Under System as required under this Agreement, Veolia shall not be liable for any inability to
perform its obligations under this Agreement that results from the absence or lack of
procurement of such items. In no event shall City be liable, nor shall Veolia have a cause of
action against City, for failing to acquire such additional-real property, leases, easements,
licenses, rights-of-way or other property interests.
Section 3.3 City Access
(a) City shall retain at all times during the Tenn possession and the right to
enter the Treatment Facility, Treatment Facility Site, the Sewage Collection System, the Down
and Under System, the real property covered by the Sewage Collection System and the real
property covered by the Down and Under System for any reason, including but not limited to,
inspection, monitoring, and observation of the operation of the Treatment Facility, the Sewage
Collection System and the Down and Under System and Veolia's performance of the terms of
this Agreement. In connection with such entry, the City and all City Employees and Agents shall
observe all health and safety rules established by Veolia and Applicable Law.
(b) In no event shall Veolia have any liability to the City or any other person
for personal injury, property damage, or any other Losses arising out of, or related to, the entry
by City and/or the City Employees or Agents upon the Treatment Facility, the Treatment Facility
Site, the Sewage Collection System, the Down and Under System, the real property covered by
the Sewage Collection System or the real property covered by the Down and Under System; and
Section 10.2 shall apply to any liability arising thereunder.
320994 13.DOC -12-
Section 3.4 Relationship of Parties. Neither the City nor any of its employees shall have any
control over the manner, mode or means by which Veolia, its agents or employees, perform the
services required herein, except as otherwise set forth herein. City shall have no voice in the
selection, discharge, supervision or control of Veolia's employees, servants, representatives or
agents, or in fixing their number, compensation or hours of service. Veolia shall perform all
services required herein as an independent contractor of City and shall remain at all times as to
City a wholly independent contractor with only such obligations as are consistent with that role.
Except as expressly set forth in this Agreement, Veolia shall not at any time or in any manner
represent that it or any of its agents or employees are agents or employees of City. City shall not
in any way or for any propose become or be deemed to be a partner of Veolia in its business or
otherwise or a joint venturer or a member of any joint enterprise with Veolia. In no event shall
Veolia have any obligation arising out of any City employment contract, collective bargaining
agreement or other agreement relating to any City employees.
ARTICLE IV.
TERM
Section 4.1 Term. Subject to the other provisions of this Agreement, the initial tern of this
Agreement (the "Term") commenced on September 1, 1999 and, as amended and restated, ends
on]tune 30, 2013. The Term shall be extended from June 30, 2013 to June 30, 2018 on the same
terms and conditions set forth in this Agreement provided that the conditions set forth in Section
4.2 have been satisfied.
Section 4.2 Term Extension Performance Review.
(a) Scope. No later than December 31, 2012 and no earlier than September
30,2012, the City may, in its discretion and at the City's sole expense, retain an independent
technical consultant to conduct a performance review of Veolia's operation and maintenance of
the Treatment Facility(the "Term Extension Performance Review"). The independent
technical consultant retained by the City shall be a nationally recognized expert in the
assessment, operations and maintenance of wastewater treatment facilities comparable to the
Treatment Facility, shall not be then working for on behalf of the City(and shall not have
provided work for or on behalf of the City for the prior 12 months) and otherwise shall be
reasonably acceptable to Veolia. The determination of whether a Tenn Extension Performance
Review shall be made is in the sole and absolute discretion of the City. Although a Tenn
Extension Performance Review may be conducted prior to the determination that an Event of
Default has occurred or the termination of this Agreement, the City may proceed under this
Agreement's provisions for breach without conducting such Term Extension Performance
Review. Moreover, at any point during the Tenn Extension Performance Review process, the
City may elect to terminate the Tenn Extension Perfonmance Review by giving Veolia notice in
writing of said election.
(b) The Tenn Extension Performance Review may consist of any or all of the
following elements:
1. Technical Review. A review of Veolia's services to determine material
compliance with the terns and conditions of this Agreement, including any
320994 13.DOC -13-
requirements to apply new technologies; maintain records and comply with
Change in Law (subject to the terms of this Agreement).
2. Facility Review. A review of all relevant reports, operation and
maintenance records required by Applicable Law, this Agreement or any
Governmental Approval, together with discharge and monitoring requirements;
conduct a condition assessment of all facilities; interview key personnel to obtain
information concerning the operations and maintenance of facility to determine
material compliance with the terns and conditions of this Agreement.
3. Legal Review. A review of Veolia's performance to assure that it is in full
compliance with the provisions of this Agreement and all other Applicable Law
(subject to the terns and conditions of this Agreement).
4. Financial Review. A financial review shall consist of a review of Veolia's
financial records as they relate to operations and maintenance costs at the
Treatment Facility to confirm that such records are being maintained in a manner
consistent with generally accepted accounting principles (GAAP). The City
acknowledges and agrees that such financial information shall be considered
proprietary and confidential. hi no event shall the City be entitled to distribute
Veolia's financial records to the public or at a City Council meeting. If, in
Veolia's judgment, a risk of dissemination of such records exists, pursuant to any
public records act or freedom of infonnation act request received by the City or
otherwise, (i) the City shall cooperate with Veolia to ensure and maintain the
confidentiality of the information; (ii) Veolia shall be entitled to redact
proprietary, sensitive, confidential and trade secret information; (iii)the
independent technical consultant shall view such financial records in Veolia's
offices; (iv) neither the City nor the independent technical consultant shall be
entitled to take possession of such infonnation or make or retain copies of such
information; and(v) the process and procedures for handling and addressing the
request for such records shall be as set forth in Section 8.3.
(c) The City's independent technical consultant shall diligently conduct the
Tenn Extension Performance Review and shall provide a report of the inspection and review
simultaneously to the City and Veolia within thirty (30) days. The City and Veolia shall both be
entitled to be present during any inspections and interviews.
(d) If there would be significant public interest, as reasonably determined by
the City, the City may request that findings of the Tenn Extension Performance Review be
provided to the City Council at a public meeting. The City may cause notice of the meeting to be
given by publication in a newspaper of general circulation at least ten (10) days before the
meeting, and shall give Veolia at least thirty(30) days' written notice of such meeting. Veolia
may submit comments or complaints during or before the City Council meeting, either orally or
in writing. To the extent practicable, Veolia shall be present at and participate in the public
meeting. The public meeting may include all components of Term Extension Perfonnance
Review as described herein. The City Council may use all relevant information produced at the
public meeting and shall approve a report concerning Veolia's performance and adopt findings
320994 13 DOC - l4-
by resolution. As a result of findings in the Tenn Extension Performance Review report, City
may declare Veolia tentatively ineligible for the extension of the Tern to June 30, 2018, as
provided in Section 4.1.
(e) Upon any such declaration of ineligibility for the extension of the Tenn to
June 30, 2018 and subject to Veolia's rights hereunder to dispute the independent technical
consultant's report and such declaration, Veolia may undertake such corrective actions as are
necessary to cure the deficiencies noted in the independent technical consultant's report prior to
the expiration of the Tenn and request that a second Tenn Extension Performance Review be
undertaken by the independent technical consultant at Veolia's sole cost. In such event, the
independent technical consultant shall complete the second Tenn Extension Performance Review
and report its findings to the City and Veolia within thirty(30) days. If the second Term
Extension Performance Review finds that Veolia has rectified the deficiencies identified in the
original Term Extension Performance Review report in all material respects, Veolia shall be
entitled to the extension of the Tenn to June 30, 2018.
(f) The process for Tenn Extension Performance Review provided for in this
Section 4.2 shall not be in lieu of the notice, cure and default process under this Agreement and
both City and Veolia shall retain all rights and remedies under Article XII. Any finding by the
outside consultant retained to perform the Tenn Extension Performance Review shall not
constitute notice of default or breach under this Agreement to Veolia and the City shall be
required to provide Veolia such notices as are required under Article XII.
(g) The findings by the independent tecrical consultant shall be subject to
dispute resolution under this Agreement. If the Term would otherwise expire during the
pendency of the dispute resolution process, the Tenn shall be extended until the completion
thereof.
(h) If a Tenn Extension Performance Review finds that Veolia is in material
corripliance with the terms and conditions of this Agreement and provided that Veolia has not
waived its rights to extend the Term in writing, the Tenn shall be extended to June 30, 2018 with
no further action of the City or Veolia required. In such case, all provisions of this Agreement
shall continue with full force and effect.
Section 4.3 Return of Treatment Facility at Completed Term. At the end of the Term
(including any extension thereof) and following payment by the City to Veolia of all amounts
owing to Veolia wider this Agreement, Veolia shall, at the City's written request, quitclaim,
without representation or warranty, its interests, if any, in the Treatment Facility, the Treatment
Facility Site, the Sewage Collection System and the Down and Under System to the City at no
charge to the City free and clear of any Liens relating to any financing, construction or
operations by Veolia, except for those Liens authorized or contemplated by this Agreement or
otherwise approved by the City.
Section 4.4 Final Report Evaluation.
(a) Scope. No later than six (6) months and no earlier than nine (9) months
prior to expiration of the Term, Veolia shall conduct an exit evaluation (the "Exit Evaluation")
to determine that: (1) all maintenance, repair and replacements required by this Agreement have
320994 13.DOC -15-
been completed; (2) all management systems, records, and infonnation are maintained in
accordance with this Agreement; (3) the Treatment Facility is operating in material compliance
with the Performance Guarantee, and(4) all buildings, grounds, equipment and vehicles are in
good operating condition, except for ordinary wear and tear.
(b) Preventive and Predictive Maintenance Review. The Exit Evaluation shall
include a review of preventive and predictive maintenance evaluations for the period twelve (12)
months prior to the end of the Tenn. Such evaluations shall be conducted in accordance with the
preventive and predictive maintenance procedures and program adopted pursuant to Section 5.4.
Provided that this Agreement has been in effect for at least three (3) years, Veolia shall be
responsible for correcting, improving,repairing or replacing any component of the Treatment
Facility which is found by the predictive maintenance evaluation to be predicted to require
correction, improvement, repair or replacement before the end of the Tenn, unless the need for
such correction, improvement, repair or replacement is necessitated by an Uncontrollable
Circumstance or failure by the City to perform City's obligations under this Agreement.
Section 4.5 Exit Inventories. An inventory of parts, tools, equipment, vehicles, chemicals,
and other major consumable supplies will be performed by the City, at City's cost, with Veolia's
cooperation, within one month prior to the expiration of the Tenn. If the inventories are
materially less than the inventory as of the Commencement Date, Veolia shall either replace such
items or shall provide payment to the City, based on Wolin's actual costs for such items.
ARTICLE V.
VEOLIA SCOPE OF SERVICES AND CITY RESPONSIBILITIES
Section 5.1 Employees . Veolia shall staff the Treatment Facility with qualified personnel
who meet the certification requirements of the State, as delineated in the staffing plan set forth in
Schedule D. In connection with Veolia's staffing of certain of the services described in Schedule
Z Veolia will have one additional employee for approximately five years. Such employee's
salary shall be spread out over the entire Tenn of the Agreement, excluding the five (5) year
extension of the Tenn. If this Agreement is terminated for any reason prior to June 30, 2013, the
City shall pay to Veolia an amount determined pursuant to the following formula:
($7,000 X Full months of Tenn since July 1, 2006 that have elapsed but not to exceed 60)
—(($5,000.00 X(Full months of Term since July 1, 2006 that have elapsed but not to
exceed 84)) =Amount payable to Veolia
For purposes of illustration only, the following is an example of the foregoing formula:
This Agreement is terminated on July 1, 2010;
Full Months of Tenn Elapsed=48
($7,000 x 48)—(5,000.00 X(48)) =$96,000
$96,000 would be payable by Veolia to the City pursuant to Section 12.11.
320994 13 A)OC -16-
Section 5.2 Veolia Scope of Services. Effective on the Commencement Date and for the
Term of this Agreement, and subject to the terns and conditions of this Agreement, Veolia shall
perform the following engineering and related services (collectively, the "Services"):
(a) Operation Generall-Transition Services. Veolia shall operate and maintain
the Treatment Facility by performing the services set forth in Schedule C.
(b) Monitorin¢. Veolia shall perform all sampling, testing, and laboratory
analyses of influent and effluent required by the WDR Permit, including a QA/QC Program, as
set Forth in Schedule E (the "Existing Monitoring Requirements"). If, as the result of any
Change of Law, any additional sampling, testing or analyses is required with respect to the
operation of the Treatment Facility(the "Additional Monitoring Requirements"), Veolia shall
perform the Additional Monitoring Requirements, subject to an adjustment in the Compensation
as provided in Section 6.1(c).
(c) WDR Pen-nit Reports. Veolia shall prepare and certify all discharge
monitoring reports required under the WDR Permit and any applicable WDR regulations, and
shall submit such reports to the appropriate Governmental Agencies, with a copy provided to the
City.
(d) Biosolids Services. Veolia shall provide the services relating to management
of Biosolids set forth in Schedule I. Veolia will reasonably assist the City in applying for,
acquiring and maintaining all Governmental Approvals required for the disposal or beneficial use
of such Biosolids. The City and Veolia shall select the locations or facilities for the disposal or
beneficial use of the Biosolids; and as agent for the City, Veolia will deliver the Biosolids for
disposal or beneficial use at those facilities and locations selected by the City and Veolia. Veolia
will pay the cost of hauling and transporting to and disposing of the Biosolids at the selected
facility, with reimbursement by the City for the cost of hauling and transporting the Biosolids
aud the disposal costs in excess of$22.76 per wet ton on a cost plus ten percent(10%)basis.
Subj ect to the limitations set forth in Section 10.1(e), should City and Veolia act reasonably, then
each party shall share equally in any liability for Losses related to or arising from the Biosolids
transported, delivered and disposed of pursuant to this Section during the Tenn of this
Agreement. Subject to the limitations set forth in Section 10.l(c), should one party fail to act
reasonably, then that parry shall be solely responsible for liability arising from such losses. The
provisions of this Section 5.2(d) shall survive the termination of this Agreement.
(e) Solid and Other Wastes. The City and Veolia shall mutually select the
facilities used for the beneficial use, treatment or disposal of solid and other wastes (other than
Effluent), including grit and screenings, produced or generated by the Treatment Facility and for
the hauling, transportation and disposal thereof in accordance with Applicable Law. Veolia will
pay the cost of hauling and transporting to and the disposal of the solid and other wastes to the
selected facility, with reimbursement for the cost thereof plus ten percent (10%)basis. Veolia
will reasonably assist the City in(i) identifying potential beneficial use, treatment and disposal
facilities, (ii) developing a prograin to produce and dispose of Class A Biosolids; and (iii)
applying for and acquiring any necessary Governmental Approvals for such beneficial use,
treatment or disposal. Veolia will deliver all such solid and other wastes to the beneficial use,
treatment and disposal facilities selected by the City. Subject to the limitations set forth in
320994 13.DOC -17-
Section 10.1(c), should City and Veolia act reasonably then each party shall share equally in any
liability for Losses related to or arising from the solid or other wastes transported, delivered and
disposed of pursuant to this Section during the Term of this Agreement. Subject to the
limitations set forth in Section 10.1(c), should one party fail to act reasonably, then that party
shall be solely responsible for liability arising from such losses. If the selection of the solid
waste treatment or disposal site results in a Class "A" rating for the Treatment Facility's bio-
solids and generates revenue, City and Veolia will share equally in the cumulative annual net
revenues (taking into account all costs associated with developing Class "A"bio-solids at the
Treatment Facility). The provisions of this Section 5.2(e) shall survive the termination of this _
Agreement.
(f) Supplies. Veolia shall purchase all chemicals, fuels, parts and supplies
required to perform the Services. Veolia will maintain inventories of such materials, parts and
supplies as specified in Section 4.5.
(g) hntentionally Omitted.
(h) Cooperation Regarding Warranties.
(i) Veolia shall enforce and maintain the existing equipment
warranties and guarantees that are identified on Schedule K attached hereto. Any costs of
prosecuting or participating in litigation to enforce any such equipment warranty or guarantee
shall be borne by Veolia.
(ii) With respect to all new equipment purchased and installed by
Veolia, Veolia shall guarantee all equipment warranties issued by equipment manufacturers on
all new equipment and Veolia shall be responsible for enforcing all equipment warranties and
guarantees. In no event shall the Veolia guarantee be any greater or more expansive, or extend
beyond the period of, the warranty provided by the manufacturer of any such equipment.
(i) Hot Line. Veolia shall maintain a 24-hour telephone number where customers
can report any emergencies or service problems.
6) Response to Problems and Emergencies, Veolia shall respond promptly to
normal problems and emergencies (within one (1)hour after notice if reasonably possible)
relating to the Treatment Facility, the Sewage Collection System and/or the Down and Under
System, and shall rectify such problems as expeditiously as is reasonably practicable. Subject to
Section 3.2(c) as to excavation of City streets or right-of-way, Veolia shall be permitted to
undertake such actions as are necessary in connection with such emergency. Veolia shall notify
the City within a reasonable period of time following any work undertaken in response to an
emergency.
(k) Emergency Preparedness Plan. Veolia shall prepare and revise, as necessary,
an Emergency Preparedness Plan consistent with the requirements of Applicable Law,
establishing procedures for managing emergencies or abnormal conditions affecting the
Treatment Facility, the Sewage Collection System or the Down and Under System, and for
maintaining and restoring wastewater treatment services as rapidly as reasonably possible
following an emergency or abnormal condition. The Emergency Preparedness Plan shall be
320994 13.DOC -18-
subject to City approval (such approval not to be unreasonably withheld) and provide for
appropriate interaction and coordination with City departments including, but not limited to, fire,
police, and public works, the office of emergency management, agencies of the County, and
other respective jurisdictions.
(1) OSHA Compliance Program. Veolia shall be responsible for adopting and
implementing an Occupational Safety and Health Act("OSHA") compliance program for all
personnel employed by Veolia who will be involved with the operation and maintenance of the
Treatment Facility,the Sewage Collection System and the Down and Under System. The OSHA
program shall be subject to City approval (such approval not to be unreasonably withheld and
will include regularly scheduled safety training sessions for all plait personnel, standard
operating procedures for chemical handling, confined space entry and emergency response, and
the care and use of proper safety equipment. All personnel involved in the operation and
maintenance of the Treatment Facility, the Sewage Collection System and the Down and Under
System shall receive the complete training program and have an annual refresher course as
required by OSHA.
(m)Odor Control. Veolia shall be responsible for using its best efforts to reduce
odors from the Treahnent Facility in order to prevent, to the maximum extent practicable, off-site
odors and complaints and to comply with Applicable Law. Veolia shall implement a
housekeeping schedule and work plan for the system to maintain clean facilities. Veolia shall
provide residuals management within the Treatment Facility. Veolia shall provide ongoing
reviews of the odor conditions of the systems' components. As part of its services, Veolia shall
be responsible for all reasonable steps consistent with Prudent Industry Practices for reducing
odors and addressing odor complaints.
(n) Seeurit . Veolia shall provide for and maintain security and safety for the
Treatment Facility in compliance with Applicable Law. Fences shall be maintained in order and
with structural integrity. Gates, access points, and doors shall be kept locked when not in use,
and structures shall be reasonably protected from unauthorized entry. Subject to the limitations
set forth in Section 5.2(v) and Section 101(c), Veolia shall be responsible for all damages to the
Treatment Facility and losses related to any theft, vandalism or unlawful or unauthorized entry
up the Treatment Facility or Treatment Facility Site.
(o) No Title. hi performing the Services under this Agreement, at no time shall
Veolia be deemed to take title to any Influent, Effluent, wastewater, Biosolids, Septage or other
wastes, liquids, solids or byproducts treated, processed, generated, discharged or produced at the
Treatment Facility or flowing through the Sewage Collection System or the Down and Under
System. All of such items shall remain, and at all times shall be, the sole property of the City.
Although Veolia shall have no title or ownership of any of the foregoing items, Veolia shall have
certain liability with respect thereto, as provided in Sections 5.20)4e).
(p) Care of Work. Veolia shall adopt reasonable methods during the life of this
Agreement to furnish continuous protection to the work, and the equipment, materials, papers,
documents, plans, studies aid/or other components thereof to prevent losses or damages.
320994 13.DOC -19-
(q) Ownership of Documents. Except for Confidential Information, all drawings,
specifications, reports, records, documents, and other materials prepared by Veolia, its
employees, subcontractors and agents in the performance of this Agreement shall be the property
of City and shall be delivered to City upon the written request of the Contract Officer or upon the
termination of this Agreement, and Veolia shall have no claim for further employment or
additional compensation as a result of the exercise by City of its full rights of ownership of the
documents and materials hereunder. Any use of such completed documents for other projects
and/or use of uncompleted documents without specific written authorization by Veolia will be at
the City's sole risk and without liability to Veolia, and the City shall indemnify, defend and hold
Veolia harmless for all damages resulting thereffom. Veolia may retain copies of such
documents for its own use. Veolia shall have an unrestricted right to use the concepts embodied
therein. All subcontractors shall provide for assignment to City of any documents or materials
prepared by them, and in the event Veolia fails to secure such assignment, Veolia shall
indemnify City for all damages resulting therefrom.
(r) Governmental Approvals. Veolia shall prepare all applications and supporting
information required for the renewal and maintenance of all existing Governmental Approvals
required under Applicable Laws for the operation and maintenance of the Treatment Facility, the
Sewage Collection System and the Down and Under System and shall assist the City in the
processing and procurement thereof. Except for those Govenunental Approvals which must be
held by Veolia pursuant to Applicable Law, City shall execute and submit all such Governmental
Approval applications, and shall obtain and retain all Governmental Approvals in the name of
City. Veolia and City shall be co-pennittees on any Governmental Approvals to the extent
required by Applicable Law. Veolia shall apply for and obtain any Governmental Approvals
which Veolia is required by law to hold directly as a contractor providing the Services set forth
in this Agreement.
(s) Community Service. Veolia acknowledges and agrees that it is important for
the City to have its operators and vendors be good corporate citizens and active in the City's
community. Veolia supports the City's policies and agrees to have an active community
relations and support program within the City and to work with the City to determine areas in
which Veolia may undertake such community relations and support.
(t) Energy Management Study.
(i) On or before December 31, 2006, Veolia shall prepare and deliver
to the City an energy management study for the Treatment Facility and operations thereon. The
study shall assess current usage at the Treatment Facility and potential and cost-effective
methods for reducing electricity consumption. Upon delivery of the study, Veolia and the City
shall meet and confer in order to develop an energy conservation plan and incentive/disincentive
program with respect to the Treatment Facility and operations thereon. Such plan may include
installation ofmicroturbines, solar energy systems or other approaches and equipment that may
cost-effectively reduce consumption while not degrading operations or increasing either party's
risk or liability. The parties' intention is to develop a program that will provide incentives to
Veollia to reduce electricity consumption at the Treatment Facility and disincentives for
excessive consumption. Features of the prograrn contemplate setting a baseline cap on electricity
consumption which will take into account, among other things,past usage, anticipated Capital
320994 13 DOC -20-
Projects, the physical condition of the Treatment Facility, flow levels and loadings, Applicable
Law, safety, security and the nature of Veolia's Services. The baseline cap is anticipated to
decrease at an agreed upon level over the Term of this Agreement. If and to the extent that
Veolia is able to utilize less electricity than the baseline cap, it would be entitled to an agreed
upon amount of additional Compensation proportional to the decrease in usage. If and to the
extent that Veolia utilizes more electricity than the baseline cap in the performance of its
Services, Veolia will pay the actual cost of such additional increment of electricity(with no
mark-up) without any change in the O&M Fee (which amount shall be reflected as a credit on a
Billing Statement in the month it occurs). The baseline cap shall, in addition to an anticipated
general decrease over time, be subject to adjustment as a result of Uncontrollable Circumstances,
Non-Specification Influent, flow and loadings of the Influent, Capital Projects and modifications
to the Treatment Facility and Change in Law (including changes in any Governmental Approval,
including the WDR Permit).
(ii) If, after 12 months after the completion of the energy management
study, the City and Veolia are unable to agree upon an energy conservation plan and
incentive/disincentive program with respect to the Treatment Facility and operations thereon,
Veolia shall enter into an operating lease, at its cost, for microturbines and shall cause the
equipment to be installed at the Treatment Facility. Except as provided herein, the equipment
shall at all times remain Veolia's property and the City shall have no ownership interest or right
therein. At the expiration of the term of the microturbine equipment lease, as the same may be
extended, or if this Agreement is terminated for any reason prior to the expiration of the
microturbine equipment lease, Veolia shall be entitled to remove some or all of the microturbine
equipment from the Treatment Facility Site; provided, however, that, upon the mutual agreement
of Veolia and the City, Veolia may assign the microturbine equipment lease to the City,
including any rights to purchase the equipment. If the microturbine equipment lease is assigned
to the City, the City shall, at its sole expense,expressly assume all obligations under the lease in
writing and shall indemnify, defend and hold the Veolia hndemnifed Parties harmless from and
against all Losses arising out of the lease or the equipment, including, without limitation, as a
result of any purchase by the City thereof. All indemnity and defense obligations under this
Section 5.2 t shall survive the expiration or termination of this Agreement.
(u) Pool Chemicals. Veolia shall provide the pool chemicals set forth on
Schedule CC, as directed by the City. City shall pay Veolia for the cost of such chemicals on a
pass-through basis without profit or mark-up. Notwithstanding the foregoing supply of
chemicals, the City acknowledges and agrees that(i) Veolia is only acting as a supplier of
chemicals to the City for the City's use in its municipal pools and for such other activities
determined by the City, in its sole discretion; (ii) Veolia is not involved with any pool
management activities, including dosing or use of the chemicals or the management, security,
safety, staffing, supervision or any other aspect of pool operation, maintenance or care, all of
which items shall remain solely the responsibility of the City; and(iii) the chemicals supplied by
Veolia are at the direction of the City and Veolia has not prepared the list of requested chemicals
or recommended any particular products. City releases, waives, discharges and acquits the
Veolia Indemnified Parties, and shall defend, indemnify and hold harmless the Veolia
Inderar ifed Parties, from and against all Losses that arise out, result from or are related to the
provision of such chemicals and/or the City's pools, including, without limitation, the operation,
maintenance, supervision, management, staffing, safety and security thereof and any property
320994 13 DOC -21 -
damage,personal injury or death arising at the City's pools. This Section 5.2(u) shall survive the
expiration or termination of this Agreement.
(v) Public Garden. At the direction of the City, Veolia shall provide (1) access to
a mutually agreed upon designated area of the Treatment Facility Site for use by the public as a
public planting garden (the "Garden"); (2) up to $25,000 on a one-time basis in funding,
services or materials to create the Garden in a manner that minimizes interference with
operations of the Treatment Facility; and (iii) on June 30 of each year during the Tenn,
commencing June 30, 2007, an amount equal to $10,000 to help pay for the City's administration
of the Garden. The City agrees that (i) the area of the Treatment Facility Site used for the
Garden cannot have any involvement with operations or maintenance of the Treatment Facility
or the provision of services by Veolia under this Agreement; (ii) except for providing access to
the Garden and the financial support described herein, Veolia shall not have any involvement or
responsibility for the Garden, its use, management, security, upkeep, operation, safety, staffing,
supervision or any other aspect thereof; (iii) access to the Treatment Facility Site by members of
the public shall be at the sole risk and expense of such members of the public and the City. City
releases,waives, discharges and acquits the Veolia Indemnified Parties, and shall defend,
indemnify and hold harmless the Veolia Indemnified Parties, from and against all Losses that
arise out, result from or are related to the Garden, including, without limitation, (x) the use
thereof by the public, (y) the operation, maintenance, staffing, safety, management, supervision
and security thereof and (z) any property damage, personal injury or death arising at the Garden;
provided, however, that the foregoing shall not apply for Losses to the extent caused by the gross
negligence or willful misconduct of Veolia. To the extent that any act, omission, negligence,
willful misconduct or trespass by a member of the public visiting the Garden has an adverse
effect on operations of the Treatment Facility, including the cost thereof, Veolia shall be entitled
to additional Compensation and shall have no responsibility or liability for Losses arising out of
such impacts. This Section 5.2(v) shall survive the expiration or termination of this Agreement
(w)Street Sweeping. Veolia shall provide certain street sweeping services as set
forth on Schedule X. City acknowledges and consents to Veolia's provision of street sweeping
services through a subcontractor, which subcontractor shall initially be CleanStreet. City
acknowledges that the O&M Fixed Component includes the cost of providing the street
sweeping services described in the subcontract with CleanStreet in Appendix A thereof, but does
not include any additional services thereunder, including those described and contemplated by
Appendix B thereof("Extra Street Sweeping Services"). To the extent that City wishes Veolia
to undertake Extra Street Sweeping Services, Veolia shall be entitled to additional Compensation
in the amount of the additional costs incurred by Veolia to perform such services plus 15%. The
O&M Fixed Component also does not contemplate performance of the street sweeping services
by Veolia or by an entity other than CleanStreet. To the extent that CleanStreet is unable or
unwilling to perform such street sweeping services or the subcontract has expired or been
terminated for any reason (including default), Veolia shall replace CleanStreet with either its
own forces or, pursuant to Section 7.5, another subcontractor and Veolia shall be entitled to
additional Compensation in the amount of any additional costs incurred by Veolia in performing
street sweeping services under this Agreement plus 15%.
320994 13 DOC -22-
(x) Grease Trap Subsidy Prograin.
(i) If the City passes a grease trap ordinance and subsidy program,
Veolia shall assist the City in administering the program through partial funding of the subsidy
program. Veolia's contributions to the grease trap subsidy program shall be comprised of an
advance of a$300,000 payment to the City to help fund the program within thirty(30) days after
the]later of(i)the effective date of this Agreement; or(ii) the City passes a grease trap ordinance,
which payment is subject to reimbursement by the City. To the extent that the costs of the grease
trap subsidy program exceed Veolia's $300,000 contribution, the City shall be solely obligated to
fund the same and make all further payments to individuals and businesses and Veolia shall have
no responsibility therefor. Veolia shall have no responsibility to inspect installed grease traps or
monitor their ongoing performance.
(ii) City may reimburse Veolia in full for its $300,000 contribution, in
its discretion, within 180 days after Veolia's delivery thereof. Alternatively, City may elect to
reimburse Veolia through payment of its O&M Fee over the Tenn of this Agreement, as
extended. If the City elects to reimburse Veolia over time, an amount equal to $3,482.33 shall be
added to the monthly O&M Fee commencing 180 days after Veolia's delivery of its $300,000
contribution. In addition to such monthly reimbursement, if this Agreement is terminated for
any reason prior to June 30, 2018, the City shall pay to Veolia an amount determined pursuant to
the i.`ollowing formula:
($396,986— ($3,482.33 X Full months of Term since December 1, 2006 that have
elapsed) =Amount payable to Veolia
For purposes of illustration only, the following is an example of the foregoing formula:
This Agreement is terminated on September 1, 2010;
Full Months of Term Elapsed= 45$396,986—($3,482.33 X 45) = $240,281.15
$240,281.15 would be payable by Veolia to the City pursuant to Section 12.11.
(y) Low Flow Toilet Program. Veolia shall contribute up to $10,000 per contract
year(July I-June 30) in vouchers towards the City's low flow toilet program. Once an
individual or business verifies it is a resident of the City, Veolia shall issue a voucher to the
individual or business in an amount of$100 for use by such individual or business to purchase a
low-flow toilet. Veolia shall not be obligated to confirm or verify that such individual or
business has utilized such voucher or installed a low-flow toilet or take any other action other
than providing the voucher. If the cost of vouchers in any given contract year exceed $10,000,
Veolia shall have no further responsibility for vouchers for that year.
(z) Sanitary Sewer Master Plan. Subject to any Uncontrollable Circumstances, on
or before October 1, 2006, Veolia shall deliver to City a revised scope of work and fixed price to
complete a Sanitary Sewer Master Plan consistent with Schedule DD. Provided that the revised
scope of work is not materially different than the scope of work set forth on Schedule DD, the
maximum cost of the Sanitary Sewer Master Plan shall not exceed $363,639. If the City and
Veolia are unable to agree on the revised scope of work or a final price, the open issues shall be
resolved according to the procedures set forth in Sections 12.6-12.9.
320994 13.DOC -23-
(aa) Household Hazardous Waste Drop-Off Center. The City intends to open,
and either itself or through others, operate and administer a household hazardous waste drop-off
center at the Treatment Facility Site at a location mutually agreeable to City and Veolia. Veolia
shall have no responsibility, liability or obligations with respect to this portion of the Treatment
Facility Site or the operations of the household hazardous waste drop-off facility; provided,
however, that the City may, in the future, request that Veolia or its Affiliate undertake certain
services with respect to the household hazardous waste drop-off facility. Provision of such
services by Veolia or its Affiliate, if at all, shall be subject to the mutual written agreement of the
parties.
Section 5.3 Capital Projects
(a) Defined. Capital Projects shall include a permanent physical expansion,
addition or improvement to the Treatment Facility, the Sewage Collection System and/or the
Down and Under System, including the replacement of existing equipment or facilities with new
or additional equipment or facilities as a result of old age, obsolescence or breakdown of such
equipment or facility, which are (i) mutually agreed upon by the City and Veolia("Agreed
Capital Projects"); (ii) which are either directly as a result of a Change in Law or in order for
the Treatment Facility to produce Effluent meeting the Effluent Specifications and result from
(A) a Change of Law, (B) an Uncontrollable Circumstance, (C) actual or anticipated changes in
Influent volumes and demands on the Treatment Facility, the Sewage Collection System and/or
the Down and Under System, or(D) repeated occurrences of Influent in volurnes or
concentrations that exceeds the Influent Specifications or that contains Abnormal Substances or
Regulated Substances ("Needed Capital Projects"); or (iii) improve the efficiency, performance
or reliability of the Treatment Facility, the Sewage Collection System and/or the Down and
Under System("Desirable Capital Projects"). A Capital Project shall not include any
Maintenance Work, as defined at Section 5.4 below. Capital Projects identified in the Capital
Improvement Plan agreed to by the City shall be considered Needed Capital Projects.
(b) Approval of Capital Projects. Unless mutually agreed to by the parties or
set forth in Section 5.3(i) and Section 5.3(k), Veolia shall in no event be obligated or responsible
for instituting, implementing or otherwise undertaking any Capital Projects with respect to the
Treatment Facility, the Sewage Collection System or the Down and Under System. Veolia shall
provide City with notice pursuant to Section 5.3(e) of a Capital Project that is a Needed Capital
Project or a Desirable Capital Project. City shall have the sole discretion as to whether to
approve the Capital Project, unless the Capital Project is required due to a Change of Law in
which case City shall be required to approve and pay for the Capital Project. With approval of
City, Veolia may proceed with an Agreed Capital Project, Needed Capital Project or Desirable
Capital Project subject to the cost and other provisions provided below.
(c) Costs. The City shall be responsible for the cost of any Capital Project
approved hereunder. If the City is not required to approve the Capital Project and City declines
to proceed with such Capital Project,but is willing to permit Veolia to install such Capital
Project at Veolia's expense, then Veolia, at Veolia.'s election, and expense, may undertake such
Capital Project and realize the benefit of the enhanced efficiency resulting therefrom. Any
dispute regarding the City's obligation to approve and pay for a Capital Project shall be resolved
320994 13.DOC -24-
according to the procedures set forth in Sections 12.6-12.9. All Capital Projects shall be City's
sole property and shall remain City's sole property after termination of this Agreement.
(d) Suspension of Performance Guarantee. If City decides not to undertake a
Needed Capital Project, Veolia shall not have any liability for(i) Losses that arise out of the
City's decision not to undertake such Needed Capital Project, or(ii) its inability to meet its
Performance Guarantee (the foregoing,however, shall not release Veolia from its obligations to
use its commercially reasonable efforts to perform its obligations under this Agreement). With
respect to any Capital Project that is not a Needed Capital Project, if the City elects not to
proceed with such Capital Project, such election shall not release Veolia from complying with
the Performance Guarantee or performing its other obligations under this Agreement.
(e) Notice. Except with respect to the Pre-Approved Capital Projects, Veolia
shall provide to City notice of any Necessary Capital Project or Desirable Capital Project.
Veolia's notice shall state the category of Capital Project, as set forth at Section 5.3(a) above and
whether the basis forthe Capital Project is as a result of a Change of Law, an Uncontrollable
Circumstance, an actual or anticipated change in Influent volumes and demands on the
Treatment Facility, the Sewage Collection System and/or the Down and Under System, repeated
occurrences of Influent in volumes or concentrations that exceeds the Influent Specifications or
to improve the efficiency, performance or reliability of the Treatment Facility, the Sewage
Collection System and/or the Down and Under System. Veolia shall further provide City with a
budget itemizing the anticipated costs of performing the Capital Project.
(f) Procurement Process. Except to the extent provided in this Section 5.3,
the City and Veolia acknowledge that the City is not obligated to utilize Veolia's services in
connection with any Capital Project, including those in the Capital Improvement Plan. The City
agrees not to solicit or retain any Person other than Veolia to design, construct,manage or
supervise any Capital Project without inviting Veolia to make a first proposal to do so and
negotiating the terms of that proposal with Veolia as specified herein(which proposal may include a
two-step process, which includes a fixed price for completing 30%design for the Capital Project and
the subsequent submission of such 30% design and a fixed price to complete the design and
constriction of the Capital Project). Should the City determine, or be required under the teams of this
Agreement,to proceed with a Capital Project,it shall request Veolia in writing to make a written
proposal,which shall include: (i)the cost of Veolia's services to design, constrict, equip,manage
and supervise that Capital Project(and if a 30%design is contemplated or required due to the nature
offhe Capital Project,the cost of furnishing such 30%design), (ii) a schedule for the performance of
the work, (iii) any other amendment to this Agreement necessary for the implementation of that
proposal, and (iv)the period of time,which shall not be less than sixty(60)days, during which the
City may accept the submittal of Veolia's proposal. Veolia shall notify the City within ten(10)
business days of its intention to submit a proposal. If Veolia indicates that it will not provide a
proposal,the City shall be free to immediately seek a Capital Project Contractor to perform the
Capital Project. If Veolia indicates that it will provide a proposal,Veolia shall do so within the later
of(i)thirty(30) days after receipt of City's request for a proposal(or, if the nature of the Capital
Project is such that thirty(30) days is insufficient time for Veolia to adequately prepare a proposal,
the thirty(30) day period shall be extended to sixty(60)days)or(ii)sixty(60) after receipt of such
further information from the City which Veolia reasonably requests within fifteen(15)days after its
receipt of City's request for a proposal. Within sixty(60)days after receipt of Veolia's proposal,
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City shall inform Veolia, in writing, of its determination to accept the proposal or fuuher negotiate
the terms of the proposal. Failure of the City to respond during such sixty(60)day period after
Veolia submits its proposal shall be deemed City's rejection thereof and election to negotiate the
tenns of the proposal further with Veolia. If the City timely accepts Veolia's proposal, the City
and Veolia shall be bound to that proposal and to the remaining provisions of this Agreement. If the
City elects to further negotiate the terms of the proposal,the parties shall negotiate in good faith in an
attempt to reach agreement with that proposal for a period of not less than sixty(60) days. If the
parties are unable to reach agreement within such negotiation period, the City may proceed with a
Capital Project using a Capital Project Contractor for that purpose. Any agreement for a Capital
Project shall address price, schedule,insurance requirements, and any other matters mutually agreed
upon by the parties. City and Veolia agree that the mark-up and profit associated with any Capital
Project shall be in the range of 12.5%to 16% and shall be determined by mutual agreement and shall
take into account the nature, schedule and complexity of the Capital Project,the level of equipment,
materials, labor and machinery involved in the Capital Project and the amount of work undertaken by
Veedia's own forces as compared to subcontractors. Nothing contained herein shall obligate the City
to agree with Veolia's proposal during any negotiations; provide d, however, that the foregoing shall
not modify the parties'obligation to negotiate in good faith.
(g) Capital Projects Undertaken By Other Than Veolia. If the City
engages any contractor other than Veolia(which City has the right to do in City's sole discretion
subject to the terns of Section 5.3(f))to construct any Capital Project (a "Capital Project
Contractor"), the following shall apply:
(i) Prior to undertaking or allowing the Capital Project Contractor to
undertake such Capital Project, the City or such Capital Project Contractor shall submit to Veolia
plans, specifications, design drawings and warranty information for such Capital Project for
review and approval by Veolia, which approval shall not be unreasonably withheld. Veolia shall
notify City and the Capital Project Contractor of its approval or disapproval within thirty(30)
days after the submission of all of such items. Veolia shall specify in reasonable detail the
reasons for its disapproval, and what changes would be necessary to obtain its approval. This
process shall continue until such time as the plans, specifications, design drawings and warranty
for the Capital Project is approved by Veolia, unless City determines that Veolia is unreasonably
withholding its approval, in which case the City may award the contract and make the necessary
adjustments under clause ii below;
(ii) Within thirty(30) days following submission of the items
described in clause i above, Veolia shall submit to the City(a) a proposed adjustment to the
Performance Guarantee; (b) a listing of the anticipated design life of the equipment and facilities
being installed under the Capital Project; and (c) a proposed adjustment to the O&M Fee to
reflect any increased or decreased costs of operation, maintenance, repair and replacement
associated with implernentation of the Capital Project (collectively, the "Capital Project
Adjustments"). The City shall review and approve such proposed Capital Project Adjustments
within thirty(30) days after submission thereof, and such approval shall not be unreasonably
withheld. Any disputes regarding approval of any Capital Project Adjustments shall be resolved
according to the procedures set forth in Sections 12.6-12.9;
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(iii) Veolia shall have the right to review and inspect the work of the
Capital Project Contractor and to direct, on the City's behalf(and subject to the City's approval),
the Capital Project Contractor to make such changes and/or correct such deficiencies in its work
as Veolia determines to be necessary to preserve the safety, efficiency, operating capacity and
integrity, compliance with Applicable Law and reliability of the Treatment Facility, the Sewage
Collection System and/or the Down and Under System;
(iv) Following the completion of the Capital Project, Veolia and City
shall inspect and review the Capital Project and either accept the same as completed or require
that the Capital Project Contractor modify or change the Capital Project and/or correct
deficiencies in its work. This process will continue until Veolia and City have accepted the
Capital Project as completed; and
(v) Provided that Veolia and City have accepted the Capital Project as
completed and that Veolia and City have agreed to the Capital Project Adjustments, such Capital
Project shall be considered part of the Treatment Facility, the Sewage Collection System and/or
the Down and Under System and, thereafter, Veolia shall operate and maintain such Capital
Project in accordance with the other provisions of this Agreement.
(h) Capital Project Adjustments. Within thirty(30) days following
completion of a Capital Project undertaken by Veolia, Veolia shall submit to City the proposed
Capital Project Adjustments. The City shall review and approve such proposed Capital Project
Adjustments within thirty(30) days after submission thereof, and such approval shall not be
unreasonably withheld. Any disputes regarding approval of any Capital Project Adjustments
shall be resolved according to the procedures set forth in Sections 12.6-12.9.
(i) Pre-Approved Capital Projects. The City intends to undertake and have
Veolia perform certain Capital Projects described on Schedule AA (the"Pre-Approved Capital
Projects"). Subject to any Uncontrollable Circumstances, on or before November 1, 2006,
Veolia shall deliver to City a 30% design, a revised scope of work to complete design and
construction and a fixed price to complete the Pre-Approved Capital Projects consistent with
Schedule AA. The cost of the 30% design for each Pre-Approved Capital Project shall be as set
forth on Schedule AA and the applicable amount corresponding to a Pre-Approved Capital
Project shall be payable on a monthly basis, based on progress, within thirty(30) days after
delivery of an invoice therefor. Provided that the revised scope of work is not materially
different than the scope of work set forth on Schedule AA and the City does not request changes
in design, the maximum cost of the Pre-Approved Capital Projects shall not exceed the amount
set forth in Schedule AA as the"not to exceed amount". if there are changes to the design or the
scope of work or if there is a material delay in implementation of the Pre-Approved Capital
Projects, the maximiml cost of the Pre-Approved Capital Projects shall increase to address such
changes,modifications and/or delay. City and Veolia agree that the mark-up and profit associated
with any Pre-Approved Capital Project shall be in the range of 12.5%to 16% and shall be
determined by mutual agreement and shall take into account the nature, schedule and complexity of
the Pre-Approved Capital Project,the level of equipment,materials, labor and machinery involved in
the Pre-Approved Capital Project and the amount of work undertaken by Veolia's own forces as
compared to subcontractors. If the City and Veolia are unable to agree on the revised scope of
work, any design changes, a final price or any other tern or condition related to the Pre-
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Approved Capital Projects, the open issues shall be shall be resolved according to the procedures
set forth in Sections 12.6-12.9. The funding of the Pre-Approved Capital Projects shall be the
sole responsibility of the City. Veolia shall invoice the City monthly and shall be paid by the
City within thirty(30) days following delivery of such invoice on a percentage complete basis.
Capital Project Adjustments, if any, shall be handled as set forth in Section 5.3(hl above.
(j) Treatment Facility Capital hnprovement Plan. On or before December 31,
2007, City shall prepare and deliver to Veolia a long-tern capital improvement plan(the
"Capital Improvement Plan") with respect to the Treatment Facility. Because of the value of
the Capital Improvement Plan to Veolia in the performance of its Services, Veolia shall
contribute a one-time payment toward the City's costs of undertaking the plan in an amount
equal to $50,000. Veolia shall pay such amount on or before thirty (30) days after written
request from the City following the City's award of, and issuance of a notice to proceed under,
the contract to perform the Capital Improvement Plan. Veolia will work with the City to help
define the detailed scope of work for the Capital Improvement Plan.
(k) Implementation of Capital Projects Identified in Capital hnprovement
Plan. The implementation and completion of the Capital Projects identified in the Capital
Improvement Plan shall occur in the priorities set forth therein subject to approval and finding
by the City. The funding of the Capital Projects identified in the Capital Improvement Plan shall
be the sole responsibility of the City. With respect to each Capital Project identified in the
Capital Improvement Plan that is undertaken by Veolia, Veolia shall invoice the City monthly
and shall be paid by the City within thirty(30) days following delivery of such invoice on a
percentage complete basis. Capital Project Adjustments, if any, shall be handled as set forth in
Section 5.3(h) above.
Section 5.4 Maintenance Work.
(a) Defined. Maintenance Work shall include any repair or replacement of
the equipment or facilities at the Treatment Facility, the Sewage Collection System and/or the
Down and Under System which is necessary to maintain such facilities in good working
condition and operating at the same or significantly the same influent volume capacities as of the
Commencement Date. Maintenance Work shall not include any Capital Projects, as defined at
Section 5.3 above.
(b) Preventive and Predictive Maintenance. Veolia shall perform all
Preventive and Predictive Maintenance for the Treatment Facility and main pump station in
accordance with the computerized Preventive and Predictive Maintenance Program described in
Schedule F. Veolia will maintain records of such Preventive and Predictive Maintenance as set
forth in Schedule F. The City shall have the right to inspect and to copy at City's cost such
records during normal business hours. Veolia shall provide the City with reports of such
Preventive and Predictive Maintenance activities as set forth in Schedule G. Veolia and City
shall meet upon the request of either party to review such maintenance activities and Veolia shall
consider any comment, input or change by City which would promote the life and serviceability
of the equipment or facility. City shall have the right to inspect the Treatment Plant consistent
with Section 6.3 herein, and require Veolia to make any modifications to the Preventive and
Predictive Maintenance Program that the parties deem reasonably necessary. Any dispute
320994 13.DOC -28-
regarding changes to the Preventive and Predictive Maintenance Program shall be resolved
according to the procedures set forth in Sections 12.6-12.9.
(c) Corrective Maintenance and Repairs. Veolia shall perform Corrective
Maintenance and Repair of the Treatment Facility and the main pump station equipment. Veolia
shall submit reports of such Corrective Maintenance and Repairs to the City as provided in
Schedule O. City shall have the right to inspect the Treatment Plant consistent with Section 6.3
herein, and require Veolia to make Corrective Maintenance and Repairs that the parties deem
reasonably necessary. Any dispute regarding the necessity of Corrective Maintenance and
Repairs shall be resolved according to the procedures set forth in Sections 12.6-12.9.
(d) Sewage Collection System. Veolia shall provide inspection, and those
routine operation and maintenance services listed in Schedule J as to those sewers, interceptors,
pump stations and facilities depicted on the City of Palm Springs Master Plan of Sewers dated
1974, prepared by Philip Abrams Consulting Engineers, Inc., and as depicted and updated with
Sewer Atlas Maps of the City of Palm Springs (the "Sewage Collection System"), which
obligations shall be subject to Section 5.4(f). Except as set forth in Schedule J, City shall be
solely responsible for the inspection, operation, maintenance, repair and capital improvement and
replacement of the Sewage Collection System and of all other sewers, storm sewers, sewer
mains, interceptors,pump stations, and related facilities and equipment up to the Point of
Delivery. Veolia shall have no responsibilities or obligations with respect to or arising from
lateral sewer lines, which connect individual residences, commercial or industrial properties to
the sewer mains, or any sewer lines not owned by the City.
(e) Down and Under Sy stern. Veotia shall provide inspection, and those
routine operation and maintenance services listed in Schedule O as to those sewers, interceptors,
pump stations and facilities specifically identified in Schedule L (the"Down and Under
System"), which obligations shall be subject to Section 5.4(fl below. On or before December
31, 2009, Veolia shall provide the City with a report on the manpower utilized in connection
with the performance of Veolia's services with respect to the Down and Under System during
the period from the date of this Agreement through June 30, 2009.
(f) Limitations on Down and Under System and Sewage Collection System
Expenditures.
(i) In connection with the perfonnance of its obligations with respect
to the Down and Under and Sewage Collection System under Sections 5.40)�(e), Veolia shall
only be obligated to expend or incur costs and charges equal to $30,000 per year(July 1-June 30)
during the Tenn of this Agreement, which amount shall not include wages or salary paid to
Veolia staff used to perform the obligations thereunder. Once Veolia has expended or incurred
costs or charges equal to $30,000 in a year in connection with such obligations, the City will be
responsible for all additional costs and charges during such year and shall pay Veolia promptly
upon submission of a reasonably detailed statement supporting such costs and the annual
expenditures verifying the charges against the $30,000 amnial amount. Veolia shall be entitled
to include such items on its next Billing Statement after expended or incurred. Veolia shall
provide the City with evidence substantiating each of the costs for which Veolia seeks payment.
In no event, however, shall (1) City be responsible for reimbursing Veolia for any expenditure
320994 13.DOC -29-
until such time as Veolia has exhausted its $30,000 expenditure limit required herein; (2)Veolia
allocate any portion of Treatment Facility employee salaries or overhead toward the $30,000
expenditure limit; and (3) Veolia allocate the costs of any routine maintenance or cleaning of the
Sewage Collection System and the Down and Under System toward the $30,000 expenditure
limit (and the parties agree that routine maintenance shall include all work that does not require
excavation or restoration of City property or a City street or right of way or replacement of a
piece of equipment or a facility). If, in a given year, the $30,000 expenditure limit is not
reached, then the arnoumt by which $30,000 exceeds the amounts expended in such year shall be
added to the $30,000 available for the succeeding year and this provision shall apply for such
increased amount; provided, however, that nothing contained herein shall require Veolia to ever
expend more than $30,000 per year in the aggregate over the Tenn. Veolia shall, on a quarterly
basis or upon the request of the City, provide updates on the amounts expended under this
Section and applied toward the annual $30,000 expenditure limit.
(ii) In addition to the amounts described in Section 5.4(f)(i), Veolia
shall, during the Term on a one-time basis, perform up to $80,000 during the Tenn in additional
services with respect to the Sewage Collection System and the Down and Under System under
Sections 5.4(d)-(e); provided, however, that the$80,000, which is a carryover of funds from
Veolia's obligations under the Original Agreement, shall be decreased by any amounts expended
prior to the effective date of this Agreement. Such amount shall be available until expended and
shall not include wages or salary paid to Veolia staff used to perform the obligations thereunder.
Until expended, Veolia shall, on a quarterly basis or upon the request of the City, provide
updates on the amounts expended under this Section and applied toward the one-time
expenditure limit described in this Section.
Section 5.5 Industrial Waste: Waste Disehar2e Requirements for Sanitary Sewers;
Sto.rmwater Monitoring.
(a) If required by Applicable Law, the City shall adopt,maintain and enforce
a municipal/industrial pretreatment program for the Service Area, meeting all applicable
requirements of 40 C.F.R. Part 403, all required pen-nits, and any other Applicable Law (the
"MIPP"). City shall promptly amend the MIPP to incorporate any additional or modified
requirements imposed under Applicable Law. As part of the MIPP, the City shall require and
enforce industrial discharge permits for each Significant Industrial User as required by
Applicable Law and the City shall collect such fees and charges as are necessary to fund the
MIPP.
(b) At the request of the City, and as agent for the City, Veolia shall conduct
monitoring of industrial users as required under the MIPP, and shall assist the City in
administering the MIPP. At all times, City shall retain sole responsibility for adoption and
enforcement of the MIPP. If a MIPP is adopted by the City, Veolia's Compensation shall be
increased as set forth in Section 7.4.
(c) Before the City approves (1) the connection of any person who may
constitute a Significant Industrial User to the Sewage Collection System; or(2) a change in the
quantity, characteristics, or concentrations of wastewaters discharged by any Significant
Industrial User, City shall submit to Veolia all pertinent data(including quantities and expected
320994 13.DOC -30-
concentrations) concerning the proposed wastewater from the Significant Industrial User; and
shall confer with Veolia regarding the review and approval of such proposed action (provided
that City shall have sole decisiomnaking authority to approve, disapprove, or conditionally
approve any such proposed action). If Veolia should fail to respond to any notice of application
for comnection within thirty(30) days after receipt of such notice, City shall be free to take such
action as it deems appropriate. The City shall not knowingly approve any such connection or
change if the wastewater to be discharged would violate the MIPP or result in Non-Specification
Influent.
(d) Veolia shall provide the services set forth on Schedule Z with respect to
the waste discharge requirements for sanitary sewers under development by the State Water
Resources Control Board.
(e) Veolia shall provide the services set forth on Schedule Z with respect to
storawater monitoring.
Section 5.6 City Responsibilities. The City shall have the following responsibilities and
perform the following obligations:
(a) Potable Water. City shall provide access to potable water to the Treatment
Facility, at the Battery Limits, at no cost to Veolia; provided, however, that Veolia shall, at its
cost,pay for its water usage at the Treatment Facility.
(b) Taxes. City shall pay all property, possessory interest, use, franchise, and
other taxes, fees or similar charges associated with the operation and maintenance of the
Treatment Facility, the Sewage Collection System and the Down and Under System, other than
federal and state taxes imposed on Veolia's income under this Agreement. Any increased taxes,
fees, or charges of any kind imposed by the City on Veolia shall cause an equivalent adjushnent
to the Compensation.
(c) Existing Rolling Stock. The City shall lease to Veolia for$1 per year, and
allow Veolia the use of, all rolling stock, equipment and machinery located at the Treatment
Facility Site,including, without limitation, the rolling stock identified on Schedule U attached
hereto (the "Rolling Stock"), in connection with the performance of Veolia's obligations under
this Agreement. The parties shall inspect and document the condition of the Rolling Stock,
equipment and machinery, and without charge to City, Veolia shall keep all such Rolling Stock,
equipment and machinery in the same condition and repair as existed as of June 2006, and return
then to City in such condition, reasonable wear-and tear excepted. Veolia shall regularly submit
copies of all maintenance records prior to termination of this Agreement. City and Veolia shall
mutually inspect all such equipment which shall be included in the Exit Evaluation under Section
4_4 and governed thereby.
(d) New Rolling Stock. The City, at its cost and through its normal
purchasing procedures, shall acquire and allow Veolia the exclusive use of all rolling stock
identified on Schedule Y ("New Vehicles") on the earlier of(i)the date set forth on Schedule Y
or(ii) when notified by Veolia that an existing vehicle set forth on Schedule U is no longer in
useable condition. City shall maintain and keep all New Vehicles in the good condition and
320994 13 DOC -31-
repair. At the end of the Tern, including any extension thereof, Veolia shall have no farther
right in or to the New Vehicles, including any right to use.
(e) Electricity and Gas. City shall arrange for, provide and pay for all
electricity and gas usage at the Treatment Facility and in connection with the Treatment Facility
and the Sewage Collection System.
(f) Other Responsibilities. City shall perform all other functions and retain all
responsibilities and obligations related to the Treatment Facility, the Sewage Collection System
and the Down and Under System not expressly assumed by Veolia under this Agreement,
provided that Veolia shall comply with the Performance Guarantee in accordance with this
Agreement.
Section 5.7 Use of Treatment Facility.
(a) General. The Treatment Facility shall be used solely for the treatment of
(1) Influent collected within the City; (2) sewage and industrial wastewaters collected by another
municipality pursuant to an internunicipal agreement approved pursuant to Section 5.7(b); (3)
Septage approved for acceptance in accordance with Section 5.7(c); and (4) such other purposes
as specifically described in this Agreement. At no time shall Veolia use or knowingly permit the
use of the Treatment Facility for any purposes other than those contemplated by this Agreement.
In no event shall Veolia be obligated to use the Treatment Facility for any purpose other than as
set forth in this Section 5.7(a).
(b) Intenmunicipal Agreements. The City shall not enter into any new
agreements to accept Influent from, or deliver Effluent to, any other municipality without
consultation with and the approval of Veolia. Such approval by Veolia shall not be unreasonably
withheld, provided that (1) the Treatment Facility has adequate hydraulic and treatment capacity
to treat and/or deliver the additional wastewater; (2) the additional municipality agrees to adopt
and enforce sewer maintenance, industrial wastewater pretreatment, and user fee collection
programs meeting the requirements imposed on City as specified in Section 5.5; (3) the
municipality's Influent shall be Specification Influent; (4) the acceptance of such Influent will
not cause operations at the Treatment Facility to exceed the Treatment Facility's permitted
capacity; (5) the infrastructure to deliver the Effluent to the municipality is already in place or
will be put into place at the cost of a party other than Veolia; and (6) the City and Veolia agree
upon any applicable changes to the Performance Guarantee and the Compensation.
(c) Septage. Veolia and the City agree to allow licensed septic tank pumping
contractors to deliver Septage to the Treatment Facility at delivery points approved by Veolia,
provided that(1) the Septage is free from Regulated Substances or other Abnonnal Substances
that cannot be heated or removed by current Treatment Facility processes; and (2) the total
quantity of Septage does not exceed an arnount determined by Veolia that may be treated within
the design capacity of the Treatment Facility. Veolia shall charge such contractors fees that are
no greater than those fees specified in Schedule R, as mutually amended from time to time,
which fees have been directed, approved and authorized by the City. Veolia shall have no
ratenraking authority with respect to Septage fees. All gross revenues arising out of the
treatment of Septage under this Section shall be shared equally by the City and Veolia. Veolia
320994 13 DOC -32-
shall reflect the City's share of any gross revenues under this Section as a one-time credit on its
Billing Statement for each month in which the City is entitled to any gross revenues. Veolia
shall, on a monthly basis, provide City with a statement of(x)month to date and year to date
gallons of Septage treated, (y) the monthly and annual gross revenues generated by Septage fees;
and (z)the monthly and annual gross revenues, if any, available and payable to the City under
this Section.
Section 5.8 Standard of Services and Performance Guarantee. On and after the
Commencement Date, and except as excused by an Uncontrollable Circumstance:
(a) Practices. Veolia shall perform the Services using suitable materials and
in accordance with Prudent Industry Practice.
(b) Performance Guarantee. Veolia shall, at amininum, operate and maintain
the Treatment Facility to treat Specification Influent in order to produce Effluent meeting the
Effluent Specifications in Schedule M(the"Performance Guarantee"). It is the intent of the
patties,however, in entering into this Agreement that Veolia shall use its best efforts to produce
Effluent from the Treatment Facility which contains lower quantities or concentrations of
Regulated Substances than the maximum levels allowable under the Effluent Specifications at
Schedule M.
(c) Developing Class "A" Bio-Solids. Veolia shall, as an efficiency goal, use
commercially reasonable efforts to develop Class "A"bio-solids at the Treatment Facility. If
Veolia is successful in developing and marketing Class "A"bio-solids from the Treatment
Facility, it will share equally with the City all net profits generated by the sale of such bio-solids.
(d) Change of Law. In an event of a Change of Law, Veolia shall use its best
efforts (subject to Veolia's entitlement to additional Compensation in connection with such
efforts) to comply with the Perfonnance Guarantee. Notwithstanding a Change of Law or any
modification to the Compensation made as a result of such Change of Law, such Change of Law
shall not modify or expand the Performance Guarantee. If such a Change in Law occurs, the
parities shall, within thirty(30) days meet and confer on potential steps that may be taken to
address the Change in Law and its implications to the Treatment Facility, this Agreement, the
performance of Services, Compensation, Capital Projects and any other relevant matters.
Section 5.9 Limitations on Performance Guarantee.
(a) City Compliance. Veolia's obligations under the Performance Guarantee
and elsewhere under this Agreement, shall be conditioned upon (1) the City timely and
completely meeting its obligations under this Agreement; and (2) Veolia receiving Influent that
does not exceed the Influent Specifications, except as otherwise provided in Section 5.9(b)
below.
(b) Influent. Subject to the provisions hereof, City shall be responsible for
delivering Influent at the Point of Delivery within the Influent Specifications; provided, however,
that the foregoing shall not relieve Veolia from its obligations under Schedule J with respect to
the Sewage Collection System. Within 180 days after the Commencement Date, City may adopt
amendments to a sewer ordinance that are reasonably acceptable to Veolia (and Veolia shall
320994 13.DOC -33-
cooperate and assist the City in drafting such ordinance and shall, upon City's request, draft a
report detailing its recommendations). Should the Influent at any time exceed the Influent
Specifications, Veolia shall provide written notice to City of such excess promptly upon the
discovery by Veolia of such excess,but in no event later than three (3) days after the discovery
by Veolia. Veolia shall attempt to identify the potential source(s) of such Non-Specification
Influent and, if able to identify the potential source(s),include it within its notice to City, and if
unable, so state it within the notice. Within the time specified in the sewer ordinance and after
City's receipt of notice from Veolia under this Section 5.9(b), City shall enforce its sewer
ordinance to the extent that the source of the Non-Specification Influent has been identified by
Veolia or by the City, and shall reasonably use its police power in accordance with established
ordinances and procedures to compel the source of the Influent Specifications violation to abate
any such violation. At all times, City shall retain sole responsibility for enforcement of
ordinances hereunder. In the event that City provides Veolia with Influent in volumes or
concentrations that exceed the Influent Specifications, or that contain Abnormal Substances or
Regulated Substances, City shall continue to make all payments required under this Agreement.
City shall also pay Veolia those amounts incurred by Veolia to treat such Non-Specification
Influent,provided (i) the Non-Specification Influent would be the cause of a breach of the
Performance Guarantee if not treated, (ii) such amounts are necessary to successfully treat the
Non-Specification Influent, (iii) the level of expenditure is reasonable in relation to the degree of
improvements of treatment achieved and(iv) the amount is approved by City based upon the
foregoing criteria.
(c) Capital Projects. If the Influent delivered to the Treatment Facility
chronically or persistently exceeds the volumes,or concentrations set forth in the Influent
Specifications or contains Abnormal Substances or Regulated Substances, Veolia shall
recormmend potential Capital Projects that the City may wish to implement to attempt to remedy
the Influent problem. The procedure for implementation of such Capital Projects shall be in
accordance with Section 5.3.
(d) Performance Guarantee Termination. Provided that Veolia is in
compliance with its obligations under Section 5.9(b), in no event shall Veolia be liable for a
breach of its Performance Guarantee or for any Losses or fines or penalties that are levied as a
result of the Non-Specification Influent or Effluent that does not meet the Effluent
Specifications. If City, following the unsuccessful efforts described in this Section 5.9 to remedy
the problems associated with Non-Specification Influent, will be or is incurring Losses, fines, or
penalties, then City may request that Veolia remain liable for the Performance Guarantee
notwithstanding the delivery of Non-Specification Influent. Veolia thereafter, in its sole
discretion,may either(i) continue this Agreement, in which case it shall bear the responsibility
for one-half of such Losses, fines or penalties, or (ii) terminate this Agreement, then or any time
thereafter so long as the problems continue with the Non-Specification Influent.
(e) Disclaimer of UCC Implied Warranties. The Performance Guarantee set
forth in this Section 5.9 is the sole and exclusive guarantee and warranty by Veolia under this
Agreement. VEOLIA DISCLAIMS ALL UNIFORM COMMERCIAL CODE WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
320994 13.DOC -34-
ARTICLE VI.
OVERSIGHT BY CITY
Section 6.1 Meetines. Veolia will meet at least once per quarter with the Contract Officer
and appropriate staff to review and discuss operating and maintenance activities, plans and
priorities for the Treatment Facility, the Sewage Collection System and the Down and Under
System. Veolia shall additionally meet with representatives of the State, EPA, or other
Governmental Agencies, or the City's consulting or staff engineer, as reasonably required.
Section 6.2 Reports. Veolia shall monitor the operation of the Treatment Facility, the
Sewage Collection System and the Down and Under System and shall measure and analyze the
chemical content, physical properties, volume and flow rate of Influent entering the Treatment
Facility and Effluent discharged from the Treatment Facility, in accordance with the Existing
Monitoring Requirements. Such tests shall be conducted in material compliance with Standard
Methods. Veolia shall record such information and transmit it to City in monthly and annual
reports. Veolia shall trnely submit to the appropriate Governmental Agencies all discharge
monitoring reports and other reports required under the WDR Permit or other Applicable Law,
with a copy provided to the City. Veolia shall compile and maintain those records specified in
Schedule G, and shall submit to the City a monthly operation and maintenance report,monthly
complaint log, and annual report as set forth in Schedule G.
Section 6.3 RiEht to Access, Inspection. City shall have the right at any time to initiate and
be present at an inspection of the Treatment Facility, Sewage Collection System and Down and
Under System or to be present at any inspection required hereunder. City shall also be entitled to
review any report prepared by or obtained by Veolia related to the Treatment Facility, Sewage
Collection System and Down and Under System.
Section 6.4 Deficiencies. City shall be entitled to submit notice to Veolia of any deficiency
reasonably suspected by the City to exist at the Treatment Facility, the Sewage Collection
System and the Down and Under System ("Deficiency") if the same is within the scope of
set-vices of this Agreement, Veolia, at its cost, agrees to correct the Deficiency within thirty(30)
days after receipt of the City's notice. If Veolia is unable to complete such correction within
such thirty(30) day period, Veolia shall (i) notify the City in writing with a reasonably detailed
explanation as to the reasons why the Deficiency has not been corrected; (ii) notify the City in
writing of Veolia's proposed course of action and schedule of actions to correct the Deficiency;
(iii) continue its correction efforts diligently in accordance with the schedule described in clause
ii ; and (iv) provide reports to the City based upon the schedule described in clause(iD as to the
progress of such correction, showing that the proposed schedule has been met or establishing any
additional needed dates. If such work is not within the scope of Services provided under this
Agreement, Veolia and the City shall promptly attempt to come to an agreement regarding the
inclusion of such work within the scope of Services and applicable changes in Compensation.
Any dispute regarding the inclusion of such work or any changes to Compensation shall be
resolved according to the procedures set forth in Sections 12.6-12.9.
Section 6.5 Annual Inspection. City may retain a qualified independent entity to conduct an
annul inspection of the Treatment Facility, the Sewage Collection System and the Down and
Under System. City shall submit the results thereof for comment by Veolia and inclusion as part
320994 13.DOC -35-
of Veolia's annual report. Veolia shall have the right to have a representative present at the
arnual inspection.
Section 6.6 Review of Financial Information.
(a) Veolia shall furnish the City, as soon as reasonably possible after the end
of each year of the Tenn, the most recent audited financial statements of the guarantor under the
Corporate Guarantee, if any. Veolia shall also provide the City, if requested by the City, with
unaudited financial statements of Veolia provided the City first agrees to maintain and can
actually maintain such statements in strictest confidence under Applicable Law (and not subject
to third party review under any public records act, freedom of information act or similar statutes
or law) in accordance with a confidentiality agreement to be mutually agreed upon by the parties.
If applicable, Veolia shall also furnish the City with copies of the quarterly and annual reports
and other filings of the guarantor under the Corporate Guarantee filed with the Securities and
Exchange Commission.
(b) Annually at the City's request, Veolia will make available to City at
Veolia's offices in Houston, Texas information supporting the O&M Fee maintained by Veolia
in its ordinary course of business. City will be entitled to review the same at its cost at Veolia's
Houston offices during normal business hours,but shall not be entitled to copy or retain any
documents or files; provided, however, that (i) the City may take notes concerning the items
reviewed (which notes and documents shall be considered confidential and proprietary
documents of Veolia) and(ii) City acknowledges and agrees that its review shall not
automatically modify the O&M Fee during the Tenn of this Agreement, except that the parties
agree that if Veolia has requested an annual adjustment in its O&M Fee pursuant to Section
7.2 d , such information shall be used to assess Veolia's request(but in no event shall this
modify the confidential or proprietary nature of such information).
ARTICLE VII.
COMPENSATION AND FEES
Section 7.1 Fees.
(a) Intentionally Omitted.
(b) O&M Fee. For perfonnance of the Services under this Agreement,
effective on July 1, 2006 through and until the expiration of the Term of this Agreement, the City
shall pay to Veolia a monthly service fee (the"O&M Fee") equal to the sum of(1) 1/12°i of the
O&M Annual Capital Recovery as defined in Section 7.1(b)(i); and (2) 1/121h of the O&M Fixed
Component as defined in Section Tl(b)(ii); during the Billing Period as defined in Section
7.1 b iii . The following formula illustrates the calculation of the O&M Fee:
OACR OFC
OM= 12 1 12
Where:
OM = Monthly O&M Fee
OACR = O&M Annual Capital Recovery
320994 n3.DOC -36-
OFC = O&M Fixed Component
For purposes of illustration only, the following is an example of the foregoing formula
for the month of September 2007 (which shall be the Billing Period):
For the year July 1, 2007 through June 30, 2008, the O&M Amival Capital Recovery is
$240,000 and the O&M Fixed Component is $2,400,000. The calculation, based on such
numbers, would be as follows:
240,000 2,400,000
OM= 12 + 12
OM= $220,000
Consequently, $220,000 would be the O&M Fee for the month of September 2007.
(i) O&M Annual Capital Recovery. The annual capital recovery
charge (the"O&M Annual Capital Recovery") equal to $41,502 per year($3,458.50 per
month)plus the amortized cost over the tern of this Agreement of any Capital Projects that
Veolia finances or pays for as set forth in Section 7.4(a). The components of the O&M Annual
Capital Recovery are as set forth on Schedule EE. The O&M Animal Capital Recovery may be
increased as provided in Section 7.4.
(ii) O&M Fixed Component. The fixed component of the O&M Fee
(the "O&M Fixed Component') (which includes coverage of fixed operation and maintenance
expenses and other fixed costs) shall be $2,774,351 for the period of July 1, 2006 until June 30,
2007 ($231,195.92 per month) and shall thereafter be adjusted on July 1, 2007 and each July 1
thereafter pursuant to Section 7.2. The components of the O&M Fixed Component are as set
forth on Schedule EE. The O&M Fixed Component may be increased as provided in Section
7.4.
(c) Sanitary Sewer Master Plan. The City shall pay to Veolia the amount
detennined pursuant to Section 5.2(z) for the development and completion of the Sanitary Sewer
Master Plan. Veolia shall invoice the City monthly and such amount shall be payable by the City
within thirty(30) days following delivery of such invoice on a percentage complete basis.
(d) 30% Design for Pre-Approved Capital Projects. The City shall pay to
Veolia the applicable amount set forth on Schedule AA corresponding to a Pre-Approved Capital
Project on a monthly basis,based on progress, within thirty (30) days after delivery of an invoice
therefor.
(e) FOG, SSMP and Stornwater Monitoring Start-Up. The City shall pay to
Veolia an amount determined pursuant to Sections 5.5(d)-(e) and Schedule Z for start-up
associated with the services described in Sections 5.5(d)-(e) and Schedule Z: provided, however,
that: such amount shall not exceed$311,117. Veolia shall invoice the City monthly and such
amount shall be payable by the City within thirty(30) days following delivery of such invoice on
a percentage complete basis.
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(I) Credits to Citv. If, under a provision of this Agreement, the City is
entitled to a credit against the O&M Fee for a particular Billing Period, such as for the sum of
any penalties, fines, or other expenses incurred and paid by the City that are the responsibility of
Veolia under the terns of this Agreement or for the City's share of gross Septage revenues under
Section 5.7 c ,the credit shall be reflected on the Billing Statement for that Billing Period. All
credits shall be identified with reasonable detail and supporting back-up information. In Billing
Periods where the City is not entitled to such credit, the Billing Statement shall reflect$0 for
City credits for such Billing Period.
(g) Additional Charges to City. If, under a provision of this Agreement, the
Veolia is entitled to additional Compensation for particular Billing Period beyond that which is
set forth in this Section 7.1, such as for costs incurred in connection with Uncontrollable
Circumstances, the additional Compensation shall be reflected on the Billing Statement for that
Billing Period. All additional Compensation shall be identified with reasonable detail and
supporting back-up information. In Billing Periods where Veolia is not entitled to such
additional Compensation, the Billing Statement shall reflect $0 for additional Compensation such
Billing Period.
Section 7.2 Annual Fee Adjustments.
(a) CPI As Escalator. The annual change in the O&M Fixed Component shall
be determined in accordance with changes in the U.S. Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers Los Angeles-Anaheim-Riverside (all
items less energy on the basis of 1982-84=100), Series ID: CUURA421 SAOLE,
CUUSA421 SAOLE) ("CPI"). If the CPI is discontinued or substantially modified, the parties
shall mutually select another substantially equivalent index for the purpose of price escalation or
deflation.
(b) Calculation of Adjustments. With respect to the O&M Fixed Component,
on or before April 1, 2006, and each April 1 thereafter throughout the Tern (including any
extension of the Tenn to Jule 30, 2018), Veolia shall ascertain, in accordance with Section
L2 a , the percentage by which the CPI has changed over the prior twelve (12)month period of
February 1 to February 1 (the"Change Percentage") and provide such information to City so
that the City may confirm the accuracy of Veolia's calculation. Subject to Section 7.2(c), the
O&M Fixed Component of the O&M Fee will be adjusted as of July 1 of each year for the
succeeding twelve (12)month period by an amount equal to the Change Percentage, based on the
following formulas:
O&M Fixed Component(year 2) =O&M Fixed Component(year 1) x [1 +
Change Percentage]
where the Change Percentage is expressed as a decimal (for example, 5% written
as 0.05)
(c) Limitations of Change Percentage Adjustments. If the Change Percentage
in any one year, when added to the aggregate Change Percentages for the prior two years, is
equal or less than a three-year average of 8%, the O&M Fee will increase by the full amount of
the Change Percentage for that year. If the Change Percentage in any one year, when added to
320994 13 DOC -38-
the Change Percentages for the prior two years, causes the three-year average to exceed 8%, the
O&M Pee will only increase that year by a Change Percentage equal to 8% and any further
adjustment will be subject to Section 7.2(d); provided, however, that only the increment of the
Change Percentage above the amount automatically permitted under this Section 7.2(c) shall be
subject to the Section 7.2(d)process. For purposes of illustration only, the following are
examples of the foregoing formula:
Exam le e 1:
Change Percentage(prior two years) = 3% and 5%
Change Percentage(Yr 1) = 10%
Change Percentage (Yr 2) = 6%
Change Percentage(Yr 3) = 8%
Veolia is entitled to a Change Percentage of 10% in year 1, 6% in year 2 and 8%
in year 3 because the rolling three-year average is 8%.
Example 2:
Change Percentage(prior two years) = 3% and 5%
Change Percentage (Yr 1) = 12%
Change Percentage(Yr 2) = 6%
Change Percentage(Yr 3) = 10%
Veolia is entitled to a Change Percentage of 12% in year 1, 6% in year 2 and 8%
in year 3 because the rolling three-year average is above 8% and the 10% in year 3 is reduced to
8%. Any further adjustment above 8% for year 3 would be subject to Section 7.2(d).
Exarnyle 3:
Change Percentage (prior two years) =3% and 5%
Change Percentage (Yr 1) = 12%
Change Percentage(Yr 2) = 6%
Change Percentage(Yr 3) = 10% (which is reduced to 8%per above)
Change Percentage (Yr. 4) = 12%
As noted above, Veolia is entitled to a Change Percentage of 12% in year 1, 6% in
year 2 and 8% in year 3. In year 4, the Change Percentage would be 10% because year 1 is no
longer relevant, 6% applied in year 2, 8% applied in year 3 and 10%in year 4 would bring the
320994 13 DOC -39-
rolling three-year average to 8% for years 2-4. Any further adjustment above 10% for year 4
would be subject to Section 7.2(d).
(d) Change Percentage Adjustments Above Automatic Adjustments. If, in a
year that Veolia is not entitled to use the full Change Percentage for adjusting the O&M Fee,
Veolia desires to seek the ability to use the full Change Percentage, it may request in writing that
the City approve use of some or all of the increment of the Change Percentage above what is
automatically allowed pursuant to Section 7.2(c). Upon receipt of such request, the parties shall
meet and confer and Veolia shall provide information to the City concerning its expenses,
including escalations thereto. If the parties, acting in good faith and reasonably, are unable to
agree on an additional adjustment, the parties shall resolve the dispute pursuant to Sections 12.6-
12.9. If the City grants Veolia's request(or dispute resolution results in the granting of Veolia's
request), the Change Percentage for that year shall be increased to the amount approved or
determined; provided, however, that for purposes of future calculations of the three-year average,
the Change Percentage shall be in the amount set forth in Section 7.2(c) and shall not take into
account any additional adjustment under Section 7.2(d). To the extent resolution of the process
set forth in this Section 7.2(d) occurs after the annual adjustment date, the adjustment shall be
retroactive to such date.
Section 7.3 Payments.
(a) O&M Fee. Starting in the first month following the Commencement Date,
Veolia shall provide City with a statement (the"Billing Statement") for the Billing Period,
which will reflect the calculation of the O&M Fee and any other amounts of Compensation
payable under this Agreement asset forth in Section 7.1. City shall pay, or cause to be paid, the
O&M Fee and such other Compensation for each Billing Period within thirty (30) days of receipt
of the Billing Statement.
(b) Other Payments. Other amounts payable by the City to Veolia hereunder
shall be paid as set forth in this Agreement or if not otherwise provided, within thirty(30) days
of receipt of a Billing Statement therefor.
(c) hrterest on Overdue Amounts. hiterest shall accrue on all overdue
amounts at the rate of two percent (2%) above the Prime Rate per annum, or the maximum
interest rate permitted by Applicable Law, whichever is less.
Section 7.4 Adiustment to Fees and Additional Compensation for Certain Items.
(a) Capital Projects. The O&M Annual Capital Recovery component of the
O&M Fee set forth in Section 7.1(b)(i) shall be increased to include the full cost of any Capital
Project financed or paid for by Veolia, amortized on a straight-line basis over the remaining
Tern of this Agreement at an interest rate of two percent (2%) above the Prime Rate, or as
otherwise agreed by Veolia and City; and the O&M Fixed Component shall be increased to
reflect any additional operating and maintenance costs associated with the Treatment Facility,
the Sewage Collection System and/or the Down and Under System, as modified by the Capital
Project.
320994 13.DOC -40-
(b) Taxes. If the City or any entity controlled by the City or any other
Govermiiental Agency imposes any additional taxes, fees, host fees, assessments or other
charges on Veolia, other than those taxes, fees, assessments, or other charges that are currently
levied against Veolia or expressly permitted in this Agreement, the O&M Fixed Component of
the O&M Fee shall be increased to reflect such additional obligations by Veolia.
(c) Solids and Other Waste Disposal. City shall pay the amounts referenced
in Section 5.2(e) to Veolia within thirty(30) days following delivery of an invoice therefor.
(d) Biosolids Disposal. City shall pay the amounts referenced in Section
5.2 AI to Veolia within thirty(30) days following delivery of an invoice therefor.
(e) Estimates and Pricing. All estimated fees and costs set forth in this
Agreement or in any schedule hereto, including those for Pre-Approved Capital Projects and
including any"not to exceed amounts", are based upon pricing of labor, materials, equipment,
machinery, subcontractor bids and other relevant elements and items involved in the work as of
the date of this Agreement. Such estimates and not to exceed amounts shall be valid for projects
initiated within a period not to exceed one (1)year(i) with respect to Pre-Approved Capital
Projects, from the date of this Agreement; and (ii) with respect to other Capital Projects, fi-om the
earlier of(x) 30 days after the price is submitted to the City(for a total period of 395 days) or (y)
the issuance date of a notice to proceed with 30% design (or, if a notice to proceed is issued for
something other than 30% design, from the date of issuance for that notice to proceed).
Following such period, in addition to potential adjustments relating to scope adjustments and as
otherwise provided in this Agreement, such estimates and not to exceed amounts shall be re-
priced to take into account any changes in the cost of labor, materials, equipment, machinery,
subcontractor bids and any other relevant elements and items involved with the work. The
foregoing shall not apply to the O&M Fixed Component.
(f) MIPP. If the City adopts a MIPP pursuant to Section 5.5 and requests
Veolia to perform services in connection therewith, the O&M Fixed Component of the O&M
Fee shall be increased to reflect such additional obligations by Veolia.
(g) Change of Scope. The O&M Fee shall be increased for any substantial
change in the scope of Veolia's services set forth in this Agreement, and/or any substantial
change in the costs of operation and maintenance of the Treatment Facility, the Sewage
Collection System and/or the Down and Under System caused by a Change in Law or
Uncontrollable Circumstances, or if the assumptions set forth on Schedule T prove to be
materially incorrect or untrue. In addition to the foregoing, if the volume of hrfluent entering the
Treatment Facility at the Point of Delivery in a Billing Period ever exceeds all amount in excess
of 9.8 mgd(90% of the 10.9 mgd design capacity) as a monthly average over a period of six (6)
consecutive months, the parties shall meet in good faith to attempt to negotiate an adjustment to
Veolia's Compensation. Veolia shall be entitled to additional Compensation based on such
agreement by the parties if the volume of Influent entering the Treatment Facility at the Point of
Delivery in a Billing Period ever exceeds an amount in excess of 9.8 mgd (90% of the 10.9 mgd
design capacity) as a monthly average over a period of six (6) consecutive months. For any
adjustment sought under this Section, the parties shall first make a good faith attempt to reach an
320994 B.000 -41-
agreement on the applicable adjustment. If the parties are unable to agree on the adjustment,
they shall arbitrate their dispute pursuant to Sections 12.6-12.9.
(h) Other Items Expressly Set Forth in this A gegl ement. Except asset forth
above in this Section 7.4, Compensation may only be adjusted in connection with the events,
conditions or occurrences set forth in Sections 5.2(b), 5.2(dl, 5.2 e , 5�, 5.2 t , 5.1(u),
5.2(wI, 5.2 z , 5_3 (including 5.3 , 5.3 , 5.3 h , 5.3 i , and 5.3 k , 5.5(b), 5.6(b),
5.7(b), 5.8 d , 5.9(b), 6_4, 11.4, Article XII and such other provisions of this Agreement that
expressly state that they may adjust Compensation.
Section 7.5 Cost Plus Items. If Veolia is to be compensated under this Agreement for an
item on a cost-plus basis, City shall have the right to request that Veolia seek competitive bids
for such item or work; provided, however, that(i) Veolia shall not be obligated to follow the
City's bidding process or any other process applicable to public agencies under Applicable Law;
(ii) this paragraph shall only apply to work or items that are subcontracted by Veolia and shall
not apply to Compensation payable to Veolia under this Agreement for work performed by
Veolia's own personnel; (iii)Veolia shall not be obligated to obtain more than two (2)
competitive bids; (iv) competitive bidding on an individual scope of work shall not be required
more frequently than the later of(1) once every three (3) years; or(2) in the case of an individual
scope of work with respect to which a subcontract has been entered into, until the term of that
subcontract has expired; and (v) if, after good faith efforts, Veolia is not able to obtain two (2)
competitive bids, its obligations under this Section 7.5 shall be deemed satisfied.
ARTICLE VIII.
CONFIDENTIAL INFORMATION
Section 8.1 Confidential and Proprietary Information. It is understood that the Public
Records Act(Govermnent Code Sections 6500 et. sec..) generally provides for public disclosure
of records by public agencies unless specific exemptions apply, and that most documents shall be
subject to public disclosure. City acknowledges that Veolia and its Affiliates have valuable
confidential and proprietary information relating to the processing of wastewater and the
production and distribution of reclaimed water; and that disclosure of certain of such information
should be protected if consistent with the Act. The labeling of documents by Veolia as
confidential shall be consistent with the Public Records Act. Veolia shall infonn the City in
writing of any confidential or proprietary information contained in any documents (or portion
thereof) submitted to City by Veolia under this Agreement and Veolia shall, except to the extent
a document in its entirety contains confidential or proprietary information, not merely label all
documentation as confidential or proprietary("Confidential Information").
Section 8.2 Disclosure of Confidential Information. Except for such disclosures as
permitted under Section 8.3, no Confidential Information provided by Veolia shall be disclosed
by City to any other person or entity without the express written consent of Veolia, in its sole
discretion, and no such Confidential Information shall be used by City, it agents or
representatives for any purpose other than such purposes as expressly authorized under this
Agreement. Confidential Information received by City may be disclosed to City's employees,
auditors, accountants, legal counsel, engineering and other consultants, financial advisors, and
insurers (collectively, the "City Employees and Agents"), if and only to the extent that it is
320994 13.DOC -42-
required by law or access to such Confidential Information is necessary in the performance by
such person of their responsibilities with respect to administering or enforcing this Agreement.
Section 8.3 Requests for Confidential Information. In the case of the City's receipt of an
information request under the Public Records Act requesting Confidential Information, the City
shall provide a written notice to Veolia, with a copy of such request, and the City shall allow at
least five(5)business days after Veolia's receipt of such notice for Veolia to respond, during and
before which period the City shall not provide the requested information to the persons
requesting the same, r mess compelled to do so by a court with jurisdiction. If the City
reasonably believes that it is absolutely and finally compelled by law to disclose such
information ("Mandatory Disclosure"), it may do so after the expiration of the foregoing five
(5)business day period, and shall provide prompt written notice to Veolia thereof. If Veolia,
within said five (5)business day period,requests the City to refuse to comply with such request,
and the City has determined that it is not faced with a Mandatory Disclosure obligation (giving
reasonable justification therefor, signed by City's legal counsel), the City will so refuse and
advise the requesting party and Veolia shall bear both parties' reasonable administrative costs
and reasonable attorneys' fees and costs, if any, incurred in connection with the City's attempt to
prevent the release of the requested information. Alternatively, Veolia may, during the five (5)
business day period, or thereafter, authorize the disclosure by the City of the requested
information, or the City may continue to oppose such request, at its option. In no event shall this
provision prevent City from disclosure of any records not labeled as Confidential Information in
compliance with the Public Records Act.
Section 8.4 Third Party Compliance. The party receiving a request will require compliance,
by airy third persons requesting such information, with all statutory and other legal provisions
concerning public access to such information. However, compliance shall be in both the letter
and spirit of the Act and these provisions shall not be used to harass or obstruct a citizens
legitimately seeking public information. The parties shall be entitled to all remedies at law or in
equity to enforce, or seek relief in connection with, these confidentiality obligations.
ARTICILE IX.
REPRESENTATIONS AND WARRANTIES
Section 9.1 Veolia Representations. Veolia represents and warrants to the City that:
(a) Existence and Powers. Veolia is a limited liability company duly
organized,validly existing, and in good standing under the laws of the State of Delaware, and
authorized to do business in the State,with the full legal right, power, and authority to enter into
and perform its obligations under this Agreement, including the authority through itself or its
Affiliates to provide engineering services within the State.
(b) Due Authorization and Binding Obligation. This Agreement has been
duly authorized, executed, and delivered by all necessary action of Veolia, the person executing
this Agreement on behalf of Veolia is authorized to do so, and this Agreement constitutes a legal,
valid, and binding obligation of Veolia, enforceable against Veolia in accordance with its teams,
except to the extent that its enforceability may be limited by bankruptcy, insolvency, or other
similar laws affecting creditor's rights.
320994 13.DOC -43-
(c) No Conflict. The execution and delivery by Veolia of this Agreement, and
the performance by Veolia of its obligations under this Agreement, does not (i) conflict with,
violate, or result in a material breach of law, regulation, corporate charter or bylaw applicable to
Veolia, or (ii) conflict with, violate or result in the material breach of any tens or condition of
any order,judgment, decree, agreement or other instnunent to which Veolia or an Affiliate is a
party, which individually or in the aggregate with all such other conflicts, violations or breaches
could reasonably be expected to have a Material Adverse Effect.
(d) No Liti ag tion. Veolia has no written notice of any action, lawsuit, or
proceeding before any court or Governmental Agency that is pending or threatened, in which au
unfavorable decision could reasonably be expected to have a material adverse effect on Veolia's
execution or delivery of this Agreement, or the enforceability against Veolia of this Agreement
or Veolia's performance of its obligations hereunder.
(e) Veolia's Qualifications. As a material inducement to the City entering into
this Agreement, Veolia represents and warrants that Veolia is a provider of first class work and
services in the wastewater treatment industry that it operates at least 10 other wastewater
facilities in 3 states; and that Veolia is experienced in performing the work and services
contemplated herein. In light of such status and experience, Veolia covenants that it shall follow
Prudent Industry Standards in performing the work and services required hereunder. Veolia
warrants, based upon the information and materials provided to Veolia by the City, that Veolia
(a)has thoroughly investigated and considered the scope of services to be performed, (b) has
carefully considered how the services should be performed and(c) fully understands the
facilities, difficulties and restrictions attending performance of the services under this
Agreement. Veolia warrants that it has the ability and financial resources to undertake the terms
of this Agreement, including the use of California Registered Engineers where, under Applicable
Law, design or other work requires such personnel and State of California licensed treatment
plant operators as required by the State Water Resources Control Board.
(f) Unknown Conditions. If the services involve work upon any site, Veolia
warrants that Veolia has or will investigate the site and is or will be fully acquainted with the
conditions there existing, prior to cormnencement of services hereunder. Should Veolia discover
any latent or unknown conditions, which will materially affect the performance of the services
hereunder, Veolia shall promptly inform the City of such fact and shall not proceed except at
Veolia's risk until written instructions are received from the Contract Officer.
Section 9.2 City Representations. City represents, warrants and, as applicable, covenants to
Veolia that:
(a) Existence and Powers. City is a charter city duly organized, validly
existing, and in good standing under the laws of the State, with the full legal right, power, and
authority to enter into and perform its obligations under this Agreement.
(b) Due Authorization and Binding Obligation. This Agreement has been
duly authorized, executed, and delivered by all necessary action of City, the person executing
this Agreement on behalf of City is authorized to do so, and this Agreement constitutes a binding
obligation of City, enforceable against City in accordance with its tenns, except to the extent that
320994 13.DOC -44-
its enforceability may be limited by bankruptcy, insolvency, or other laws affecting creditor's
rights.
(c) No Conflict. The execution and delivery by City of this Agreement, and
the performance by City of its obligations under this Agreement, does not (i) conflict with,
violate, or result in a material breach of any charter, ordinance or bylaw applicable to City, or (ii)
conflict with, violate or result in the material breach of any term or condition of any order,
judgment, decree, agreement or other instrument to which City is a party; or(iii) contravene or
result in any breach of or creation of any Lien on any property of City under any indenture,
mortgage, loan agreement, lease or other agreement or instrument to which City is a party or by
which City or any of its properties are bound, which individually or in the aggregate with all
such other conflicts, violations or breaches could reasonably be expected to have a Material
Adverse Effect.
(d) No Litigation. City has no written notice of any action, lawsuit, or
proceeding before any court or Governmental Agency which is pending or threatened, in which
an unfavorable decision could reasonably be expected to have a Material Adverse Effect.
(e) No Event of Default. To the best of City's knowledge no condition exists
that constitutes, or with the giving of notice or lapse of time or both would constitute an event of
default by City under any indenture, mortgage, deed of trust, lease, bond issue, conditional sales
contract, loan or credit arrangement or other material agreement or instrument to which City is a
party or by which City or the Treatment Facility, may be bound, which individually or in the
aggregate with all such other events of default could reasonably be expected to have a Material
Adverse Effect.
(f) Title. To the best of City's knowledge City owns fee simple title, without
material encumbrances, to the Treatment Facility, the Treatment Facility Site, the Sewage
Collection System, the Down and Under System. To the best of City's knowledge no title
encumbrance exists which would adversely affect the ability, or increase the costs, of Veolia to
perform its obligations under this Agreement.
(g) Compliance with Applicable Law. Except as identified in Schedule O, to
the best of the City's knowledge, the Treatment Facility, the Sewage Collection System and the
Down and Under System have been and are being operated in compliance with Applicable Law,
and the Treatment Facility has the treatment capacity stated in Schedule A.
(h) Enviromnental Conditions. Except as set forth in Schedule O, to the best
of the City's knowledge, the Treatment Facility, the Treatment Facility Site, the Sewage
Collection System, the Down and Under System, the real property covered by the Sewage
Collection System and the real property covered by the Down and Under system have been, and
continue to be, in compliance with all Environmental Laws and no Enviromnental Conditions
have existed, or do exist thereon.
(i) Records Available. To the best of the City's knowledge, all files and
records have been and are available to Veolia before the Commencement Date for review by
320994 13.DOC -45-
Veolia regarding City's compliance with all laws applicable to its operation and the condition of
the Treatment Facility Site, Sewage Collection System and Down and Under System; and
0) Taxes. As of the Contract Date, all real property, personal property,
documentary, sales or use taxes relating to the Treatment]Facility, the Sewage Collection System
and the Down and Under System which are due and payable have been paid in full, or adequate
provision for payment therefor has been made, by City.
Section 9.3 Opportunity to Inspect; Acceptance "As Is". By executing this Agreement,
Veolia acknowledges that it has reviewed all files and records made available to it by City, or has
elected to not review such files and records, and accepts the conditions and obligations in this
Agreement. Veolia further acknowledges that it has inspected Treatment Facility and is aware
that the Treatment Facility is at least fifty years old and some portions of the Treatment Facility
may be obsolete. Notwithstanding the foregoing, the Treatment Facility is currently producing
Effluent meeting the Effluent Specifications and Veolia accepts, the Treatment Facility, the
Treatment Facility Site, Sewage Collection and Down and Under Systems in an"as-is"
condition.
ARTICLE X.
LIABILITY AND INDEMNITY; DEFENSE OF CONTRACT
Section 10.1 Veolia Indemnity and Limitations.
(a) Veolia Indemnity. Subject to the provisions of Section 10.1(c),Veolia
shall defend, indemnify and hold harmless City, its officers, employees, agents, successors and
assigns (the "City Indemnified Parties") from and against any Losses that arise out of, result
from, or are related to:
(i) the breach of any representation or warranty made by Veolia in
Section 9.1 of this Agreement; and/or
(ii) any negligent or willful acts or omissions by Veolia, its agents,
employees or subcontractors under this Agreement
(b) Veolia Environmental lndemruty Subject to the provisions of Section
10.1(c) and excluding any Losses arising out of or related to the operation by or on behalf of the
City of a household hazardous waste facility at or near the Treatment Facility Site, Veolia shall
defend, indemnify and hold harmless the City Indemnified Parties from and against any Losses
that arise out of, result from, or are related to:
(i) any Environmental Conditions, Releases and/or threatened
Releases of Regulated Substances or violations of Environmental Laws on, in, under, across or at
the Treatment Facility and/or the Treatment Facility Site that did not exist as of the
Commencement Date and which occur during the Term of this Agreement; and/or
(ii) any Environmental Conditions, Releases and/or threatened
Releases of Regulated Substances or violations of Environmental Laws on, in, under, across or at
the real property through which the Sewage Collection System passes and/or the real property
320994 13.DOC -46-
through which the Down and Under System passes, that occur during the Tenn of this
Agreement, in each case, to the extent caused by leaks or breakages in the Sewage Collection
System and/or the Down and Under System.
(c) Limitations on Veolia Indemnification Obligations and Damages.
Veolia's indemnification obligations set forth in this Agreement and Veolia's obligations to pay
damages or incur any cost or expense as a result of an Event of Default by Veolia or otherwise
shall be limited as follows:
(i) Veolia shall have no liability to the extent that Losses that arise out
of,result from, or are related to the negligent or willful actions or omissions of the City
Indemnified Parties;
(ii) Veolia shall have no liability to the extent that Losses that arise out
of,result from, or are related to any default by the City under this Agreement or any item, event
or occurrence with respect to which the City is obligated to indemnify Veolia pursuant to Section
10.2;
(iii) Veolia's liability under Section 10.1 and elsewhere under this
Agreement (whether arising under a breach of contract, damages, tort or strict liability theory, or
any other theory of law or equity) shall not exceed $10,000,000 cumulatively for the duration of
this Agreement(which amount shall be in addition to the proceeds of insurance procured by
Veolia as required by this Agreement); and
(iv) UNDER NO CIRCUMSTANCES SHALL VEOLIA BE LIABLE
FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR OTHER
DAMAGES OTHER THAN ACTUAL, DIRECT DAMAGES, REGARDLESS OF WHETHER
SUCH DAMAGES ARISE UNDER BREACH OF CONTRACT, TORT, STRICT LIABILITY,
OR ANY OTHER THEORY OF LAW OR EQUITY.
Section 10.2 City Indemnity and Limitations.
(a) City Indemnity. Subject to the provisions of Section 10.2(c) and to the
extent permitted by law, City shall defend, indemnify and hold harmless Veolia, its officers,
directors, shareholders, employees, agents, successors and assigns (the"Veolia Indemnified
Parties") from and against any Losses that arise out of, result from, or are related to:
(i) the breach of any representation or warranty made by the City in
Section 9.2 of this Agreement; and/or
(ii) any negligent or willful acts or omissions by the City, its agents,
employees or subcontractors under this Agreement; and/or
(iii) sewage backups and overflows caused by grease and similar
substances if the City fails to pass and enforce a grease trap ordinance in a manner consistent
with prudent municipal practices.
320994 I3.DOC -47-
(b) City Environmental Indemnity Subject to the provisions of Section
10.2 c and to the extent permitted by law, City shall defend, indemnify and hold harmless the
Veolia Indemnified Parties from and against any Losses that arise out of, result from, or are
related to:
(i) any Environmental Conditions Release and/or threatened Release
of Regulated Substances or violations of Environmental Laws on, in, under, across or at the
Treatment Facility and/or the Treatment Facility Site that existed as of the Commencement Date
or occur after the Term of this Agreement; and/or
(ii) except for such Environmental Conditions, violations of
Environmental Laws, Releases and threatened Releases of Regulated Substances covered by
Veolia's inderanification under Section 10.1(b)(ii), any Environmental Conditions, violations of
Enviromnental Laws, Releases and/or threatened Releases of Regulated Substances on, in, under,
across or the real property through which the Sewage Collection System passes and/or the real
property through which the Down and Under System passes, unless a part of Veolia's
Indemnification obligations pursuant to Section 10.1(b)(ii); and/or
(iii) the operation by or on behalf of the City of a household hazardous
waste facility at or near the Treatment Facility Site.
(c) Limitations on City Indemnification Obligations. City's indemnification
obligations set forth in this Agreement shall be limited as follows:
(i) City shall have no liability to the extent that Losses arise out of,
result from, or are related to the negligent or willful actions or omissions of the Veolia
Indemmnified Parties;
(ii) City shall have no liability to the extent that Losses that arise out
of, result from, or are related to any default by Veolia under this Agreement or any item, event or
occurrence with respect to which Veolia is obligated to indemnify City pursuant to Sections
10.1; and
(iii) UNDER NO CIRCUMSTANCES SHALL CITY BE LIABLE
FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR OTHER
DAMAGES OTHER THAN ACTUAL, DIRECT DAMAGES, REGARDLESS OF WHETHER
SUCH DAMAGES ARISE UNDER BREACH OF CONTRACT,TORT, STRICT LIABILITY,
OR ANY OTHER THEORY OF LAW OR EQUITY.
Section 10.3 Procedures for Indemnification. The procedures set forth in this Section 10.3
shall govern any claims for indemnification under Sections 10.1-10.2. The party claiming a right
to indemnification shall promptly give the indemnifying party written notice of the incurring of
any Losses or the assertion of any claim that will likely result in a claim by it for indemnity
pursuant to this Agreement. The notice shall describe with reasonable detail the nature of such
Losses or claim to the extent known, and shall include copies of any written documentation from
the party asserting such claim. The indemnifying party shall have the right to assume the
defense of any such claim. Upon assumption of such defense by the indemnifying party, the
indemnified party may participate in the defense of such claim at the indemnified party's sole
320994 13.DOC -48-
expense. Upon assuming the defense of any claim covered by an indemnity, the indemnifying
party shall keep the indemnified party reasonably informed of the status of such matter. The
indemnifying party shall have the right to compromise and settle any such claim,providing that
the indenmifying party shall make no admission of liability or fault on the part of the
indenmifred party without the indemnified party's written permission.
Section 10.4 Litirration . Except asset forth in this Agreement, with respect to all general
litigation relating to the Treatment Facility, the Sewage Collection System and the Down and
Under System during the Tenn of this Agreement that is within the scope of Veolia's indemnity
obligations under Section 10.1, whether claims are brought by employees of Veolia; contractors
or consultants performing services for Veolia,their agents or employees; by persons entering the
Treatment Facility Site (excluding any claims brought by visitors to the Garden, with respect to
which Veolia shall have no liability or responsibility) subject to this Agreement; or persons
otherwise affected or injured by Veolia's operations hereunder, Veolia shall be solely
responsible for defending such claims, including selection of counsel, determining litigation
strategy and any resolution thereof,paying the cost of defense, and paying any judgment or
settlement resulting therefrom. Notwithstanding the foregoing, Veolia's responsibility hereunder
shall not include defense of claims or payment of judgments relating to (i) contracts entered into
between City and any third parties unless such contracts are assigned to, and assumed in writing
by, 'Veolia and the parties have agreed that Veolia should be responsible therefor after the date of
assumption by Veolia of the obligations under such contracts, and (ii) items with respect to
which the City indemnifies Veolia pursuant to Section 10.2 or elsewhere in this Agreement.
Section 10.5 Survival. The provisions of this Article X shall survive the expiration or
termination of this Agreement.
ARTICLE XI.
INSURANCE; RISK OF LOSS
Section 11.1 Required Insurance. Veolia shall, at its own expense, secure and maintain in
effect during the Tenn of this Agreement the following insurance:
(i) A policy of workers' compensation insurance in such amount as
will fully comply with the laws of the State and which will indemnify, insure and provide legal
defense for both Veolia and City against any loss, claim or damage arising from any injuries or
occupational diseases occurring to any worker employed by or any persons retained by Veolia in
the course of carrying out the work or services contemplated in this Agreement;
(ii) A policy of comprehensive general liability insurance written on a
per occurrence basis. The policy of insurance shall be in an amount not less than either(i) a
combined single limit of$10,000,000 for bodily injury, death and property damage or(ii)bodily
injury limits of$5,000,000 per person, $10,000,000 per occurrence and$2,000,000 products and
completed operations and property damage limits of$1,000,000 per occurrence; and
(iii) A policy of comprehensive automobile replacement and liability
insurance written on a per occurrence basis in an amount not less than either (i)bodily injury
liability limits of$5,000,000 per person and $10,000,000 per occurrence and property damage
liability limits of$500,000 per occurrence and $1,000,000 in the aggregate or(ii) combined
320994 13.DOC -49-
single limit of$2,000,000. Said policy shall include coverage for owned, non-owned, leased and
hired cars.
Section 11.2 Certificates of Insurance; Forms of Insurance; Sufficiency of Insurer or
Surma. Veolia shall provide City certificates evidencing such insurance. In the event that the
insurance coverage specified in Section 11.1 is canceled or cannot be obtained, Veolia will notify
City within thirty(30) days. All of the policies of insurance described in Section 11.1 shall be
primary insurance and shall name the City, its officers, employees and agents as additional
insureds, except that the City shall not be named as an additional insured for the Worker's
Compensation Insurance. The insurer shall waive all rights of subrogation and contribution it
may have against the City, its officers, employees and agents and their respective insurers. All
of said policies of insurance shall provide that said insurance may not be amended or cancelled
without providing thirty(30) days prior written notice by registered mail to the City. In the event
any of said policies of insurance are canceled, Veolia shall, prior to the cancellation date, submit
new evidence of insurance in conformance with Section 11.1 to the Contract Officer. No work
or services under this Agreement shall commence until Veolia has provided the City with
certificates of insurance or appropriate insurance binders evidencing the above insurance
coverages and said certificates of insurance or binders are approved by the City. To the extent
reasonably and commercially available, all certificates shall name the City as additional insured
(providing the appropriate endorsement), be signed by an authorized agent of the insurer, and
shall contain the following "cancellation" notice:
"CANCELLATION: Should any of the above-described policies be
cancelled before the expiration date thereof, the issuing company shall
mail an advance 30-day written notice to the Certificate holder named
herein."
Veolia agrees that the provisions of Section 11.1 shall not be construed as limiting in any way
the extent the other provisions of this Agreement wherein Veolia may be held responsible for the
payment of damages to any persons, including City, or property resulting from Veolia's activities
or the activities of any person or persons for which Veolia is otherwise responsible under the
terms of this Agreement. In the event Veolia subcontracts any portion of the work under this
Agreement, Veolia shall use commmercially reasonable efforts to cause the subcontractor to
maintain the same policies of insurance that Veolia is required to maintain pursuant to Section
11.1. Insurance or bonds required by this Agreement shall be satisfactory only if issued by
companies qualified to do business in California, rated "A" or better in the most recent edition of
Best Rating Guide. the Key Rating Guide or in the Federal Register, and only if they are of a
financial category Class VII or better, unless such requirements are waived by the City Manager
or designee of the City("City Manager") due to unique circumstances.
Section 11.3 _City Required Insurance. Veolia shall, at Veolia's expense, secure and maintain
in effect during the Term of this Agreement, property insurance insuring against loss or damage
to the Treatment Facility, the Treatment Facility Site, the Sewage Collection System and the
Down and Under System. At Veolia's option and within thirty(30) days' notice from City,
Veolia may select either(i) to have City procure the property insurance required hereunder
pursuant to City's procurement procedures, in which case Veolia shall reimburse City for its
actual cost of securing and maintaining the policy or (ii) procure the property insurance required
320994 13.DOC -so-
herewider itself. The policy amount shall be equal to the full replacement value of such items.
Such policy shall insure against all risks of direct physical loss or damage including coverage of
debris removal and the enforcement of any Applicable Laws requiring the upgrading, demolition,
reconstruction or replacement of any portion of the insured items as the result of a covered loss.
Such policy shall also contain an agreed valuation provision in lieu of any coinsurance clause,
waiver of subrogation and inflation guard protection causing an increase in the coverage amount
annually by the Change Percentage. If such coverage has a deductible, such deductible shall be
in an amount reasonably acceptable to Veolia. Veolia shall be named as an additional insured
under such policy and Veolia's personal property shall be covered thereby.
Section 11.4 Risk of Loss, Casualty,Damaee and Destruction. Except as set forth in
Section 5.2(n), with respect to theft and vandalism, the City shall bear the risk of loss, casualty,
damage and destruction relating to the Treatment Facility Site, the Treatment Facility, the
Sewage Collection System and the Down and Under System, and Veolia shall have no liability
or responsibility therefor (unless the provisions of Section 10.1 are applicable to such casualty,
damage or destruction). Upon occurrence of such damage or destruction, the parties shall meet
and attempt to develop a plan for restoration and rebuilding and for treatment of Influent. The
City shall cause the damaged or destroyed items to be rebuilt and/or restored as a Capital Project.
In no event shall Veolia be obligated, unless is otherwise agrees to do so (in its sole discretion),
to undertake the rebuilding or restoration of the damaged or destroyed items. During any period
of damage, destruction,restoration or rebuilding, Veolia shall use industry reasonable efforts to
treat Influent to meet Effluent Specifications, but Veolia shall have no responsibility, liability or
obligations to City in the event that Veolia does not meet the Performance Guarantee. In other
respects, the parties' obligations shall depend on the amount of damage or destruction as follows:
(a) Destruction of Under 40% of Replacement Cost. Should the Treatment
Facility Site, the Treatment Facility, the Sewage Collection System and/or the Down and Under
System be destroyed to the extent of less than forty percent (40%) or less of the then replacement
cost of such facility or infrastructure, Veolia shall, except as set forth in this Agreement, continue
to perform its obligations under this Agreement, but the Compensation shall be subject to
adjustment taking into consideration Veolia's additional costs to perform its obligations
hereunder, if any. Should City and Veolia be unable to agree upon the rebuilding or restoration
for the damaged or destroyed items or the adjustment to the Compensation, the parties shall
resolve such dispute under Sections 12.6-12.9 herein. The rebuilding and restoration shall be
treated as a Capital Project under this Agreement and the provisions related to Capital Projects
shall apply; provided, however, that City shall not be required to perform any Capital Project to
the extent the costs of such Capital Project are not paid through insurance proceeds.
(b) Destruction of Over 40% of Replacement Cost. Should the Treatment
Facility Site, the Treatment Facility, the Sewage Collection System and/or the Down and Under
System be destroyed to the extent of more than forty percent (40%) of the then replacement cost
of such facility or infrastructure and insurance proceeds prove insufficient to cover the
replacement costs of such facility or infrastructure, Veolia, at its option,may terminate this
Agreement. If Veolia, however, does not elect to terminate this Agreement, the provisions of
Section 11.4(a) shall apply.
320994 13.DOC -51-
ARTICLE XII,
UNCONTROLLABLE CIRCUMSTANCES, DEFAULT, ENFORCEMENT AND
TERMINATION
Section 12.1 Time of Essence. Time is of the essence in the performance of this Agreement.
Section 12.2 Uncontrollable Circumstance. Subject to the requirements of Section 12.3,
neither party shall be liable to the other for breach, default or delay in performance of any of its
obligations under this Agreement (except an obligation to make payment when due) in the event
such party is rendered unable, wholly or in part, to carry out its respective obligations as the
result of an Uncontrollable Circumstance. Such party shall be excused from performance only
during the period and to the extent that the affected party, acting with all due diligence and
dispatch, :is prevented from performing by the Uncontrollable Circumstance.
Section 12.3 Obligations In Event of Uncontrollable Circumstances. As a condition for
being relieved of its obligations due to an Uncontrollable Circumstance, the party claiming
excuse from such Uncontrollable Circumstance ("Excused Party") shall (i)promptly give notice
to the other party of the occurrence of such Uncontrollable Circumstance; (ii) notify the other
party of the Excused Party's proposed course of action and schedule of actions to resolve the
Uncontrollable Circumstances; (iii)use its reasonable efforts to eliminate or mitigate the effect
of such Uncontrollable Circumstance in accordance with the schedule described in clause ii ;(
iv)provide reports to the other party based upon the schedule described in clause ii as to the
progress of the Excused Party's actions, showing that the proposed schedule has been met or
establishing any additional needed dates; and(v) promptly give notice to the other party when
such Uncontrollable Circumstance has been eliminated or has ceased to prevent the Excused
Party from fulfilling such obligations. Notwithstanding the foregoing, City shall be entitled to
terminate this Agreement if, despite the best efforts of each party, the Uncontrolled
Circumstance cannot be eliminated, the City has received written notice from a Governmental
Agency regarding a violation of Applicable Law resulting from the failure of Effluent to meet
the :Effluent Specifications and the City will be subject to material Losses, fines and penalties if
the]Performance Guarantee will not be met.
Section 12.4 Events of Default. The following occurrences or failures shall constitute an
event of default under the terns of this Agreement(an "Event of Default"):
(a) Failure, neglect or refusal by either party to make any payment due under
this Agreement as and when such payment is due, which continues for fifteen (15) days after
written notice to the other party;
(b) Failure to keep and perform either party's obligations or covenants under
this Agreement or the breach of any warranty or representation by that party under this
Agreement, which failure or breach continues after the cure period set forth at Section 12.5
below has expired;
(c) Any assignment by a party for the benefit of creditors;
(d) The filing or acquiescence by a party in a petition in any court (whether or
not pursuant to any statute of the United States or of any state) in bankruptcy, reorganization,
320994 13.DOC -52-
composition, extension, arrangement or insolvency proceedings, or make an application in any
such proceedings for, or acquiesce in, the appointment of a trustee or receiver for it or over all or
any portion of its property; and
(e) The filing of any petition filed against a party in any court (whether or not
pursuant to any statute of the United States or of any state) in any bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceedings where: (1) such party shall
thereafter be adjudicated as bankrupt or insolvent, or(2) such petition shall be approved by any
such court, or(3) such proceedings shall not be dismissed, discontinued or vacated within thirty
(30) days after such petition is filed.
Section 12.5 Notice and Opportunity to Cure. With respect to events or occurrences
described in Section 12.4(b), the party that has failed to perform (the "Defaulting Party") shall
be deemed in default under this Agreement if the Defaulting Party has failed to take such actions
and cure such failure within thirty(30) days after the date of receipt of written notice from the
other party to this Agreement (the "Non-Defaulting Party"). However, if such failure cannot be
cured within such thirty(30) day period, the Defaulting Party shall not be deemed to have
commmitted an Event of Default as long as the Defaulting Party does each of the following:
(a) Notifies the Non-Defaulting Party in writing with a reasonable explanation
as to the reasons the asserted Event of Default is not curable within the thirty(30) day period;
(b) Notifies the Non-Defaulting Party of the Defaulting Party's proposed
course of action to cure the Event of Default specifying dates by which specific actions will be
taken;
(c) Promptly commences to cure the Event of Default within the thirty(30)
day period, and, thereafter, diligently proceeds in accordance with the schedule specified
pursuant to clause ;
(d) Makes reports in accordance with the schedule specified in clause as to
the progress of the program of cure, showing how the proposed dates have been met and
establishing any additional needed dates; and
(e) Diligently prosecutes such cure to completion.
Section 12.6 Dispute Resolution Process. Any claim, controversy, or dispute arising out of or
relating to this Agreement shall be resolved exclusively as set forth in Sections 12.6-12.9. The
resolution procedures shall be invoked when either party sends a written notice to the other party
of the occurrence of a claim, controversy or dispute. The notice shall describe the nature of the
dispute and the patty's position with respect to such dispute. The Non-Defaulting Party(or the
aggrieved party in the case of a dispute, claim or controversy that does not constitute a default)
shall have a duty to mitigate any damages to it resulting from such claim, controversy, dispute,
breach or default and shall not be entitled to terminate this Agreement except as provided in
Section 12.10 below. The Non-Defaulting Party(or the aggrieved party in the case of a dispute,
claim or controversy that does not constitute a default) shall request to meet and confer with the
other party to resolve any losses to the Non-Defaulting Party(or the aggrieved party in the case
of a dispute, claim or controversy that does not constitute a default)through an adjustment to the
320994 13.DOC -53-
Compensation, the Performance Guarantee and/or other obligations under this Agreement.
Except as set forth in Section 12.10, if the parties are unable to resolve the dispute, claim,
controversy or default through such means, the sole remedy shall he to arbitrate the dispute
pursuant to Sections 12.7-12.9 herein.
Section 12.7 Pre-Arbitration Resolution. The parties shall expeditiously schedule
consultations or a meeting between technical representatives designated by each party in an
effort to resolve the claim, controversy or dispute informally. If the technical representatives
appointed by each party are unable io resolve the claim, controversy or dispute within thirty(30)
days, the claim, controversy or dispute shall be submitted in writing to management
representatives designated by each party. The designated representative of Veolia shall be at
least a Vice President; and the designated representative of City shall be the City Manager. The
designated management representatives shall attempt to resolve such claim, controversy or
dispute through consultation and negotiation, within thirty(30) days after such submittal (or such
longer period as mutually agreed by the parties). The management representatives may mutually
request the assistance of an independent mediator if they believe that such a mediator would be
of assistance to the efficient resolution of the claim, controversy or dispute. Such mediation
attempts are required, but would be followed by arbitration pursuant to Section 12.8, should the
parties not reach a mutually satisfactory agreement through the actions described in this Section
12.7.
Section 12.8 Arbitrator Decision; Bindina Effect.
(a) If the management representatives cannot resolve the claim, controversy
or dispute as set forth herein, the matter shall be resolved by arbitration. The arbitration shall
take place in Riverside County, California, or at such other location as the parties may agree.
Except as set forth in Section 12.10, upon the occurrence of a claim, controversy or dispute, and
the failure of the parties to resolve such claim, controversy or dispute through the informal
processes described in Sections 12.6-12.7, either party may initiate the arbitration process by
giving written notice to the other party(the "Arbitration Notice") or as set forth in California
Code of Civil Procedure Section 1280 et seq. The arbitrator(s) shall retain independence of all
parties to this Agreement, and neither party shall engage or attempt to engage the services of the
arbitrators for any other purposes without prior written notice to the other party.
(b) Within thirty(30) days of the Arbitration Notice, the parties shall either
agree upon the appointment of a single mutually-approved arbitrator; or if the parties are unable
to agree upon a single arbitrator, each of the parties shall designate an arbitrator, and the
arbitrators so designated by Veolia and City shall, within fifteen (15) additional days, agree upon
a third independent arbitrator. If the arbitrators are unable to agree upon a third arbitrator, the
City or Veolia may petition a court of competent jurisdiction to select such third arbitrator. The
parties shall mutually cooperate to retain the arbitrator(s) upon terns and conditions mutually
satisfactory to the parties as soon as practicable after selection of the arbitrator(s).
(c) For a period of thirty(30) days following the appointment of the
arbitrator(s) (or such longer period as the parties may mutually agree or the arbitrator(s) may
direct), the parties shall have the right to engage in such discovery relevant to the matters in
claim, controversy or dispute as is allowed pursuant to the discovery rules of the California Rules
320994 13.DOC -54-
of Civil Procedure. The parties shall simultaneously and at a time designated by the arbitrators,
submit a brief setting forth each party's position. Following each party's presentation of its case
to the arbitrator(s), each party shall simultaneously and at a time designated by the arbitrators,
submit a brief setting forth each party's final position. The arbitrator(s) shall be authorized to
specifically enforce the terns of this Agreement and shall be authorized and required to select
one of the party's positions, and shall not be entitled to select a position other than that provided
in one of the party's final position briefs.
(d) Except as provided herein, the arbitrators shall decide such disputes
pursuant to the American Arbitration Association commercial arbitration rules in force at the
time of the arbitration. The arbitrator(s) shall be required to make a final determination, not
subject to appeal, within thirty(30) days from the submission of the parties' briefs, and the
part des shall be bound by the terms of such final determination. The determination by the
arbitrator(s) shall be made in writing and shall contain written findings of fact, and may be
specifically enforced by a court of competent jurisdiction.
(e) The party who determines to discontinue any mediation or pre-arbitration
process and proceed to arbitration under this Section 12.8 shall have the burden of proof by a
preponderance of the evidence to prevail with respect to any dispute, claim or controversy, and
should such burden not be met, the other party shall prevail.
(f) By mutual agreement the parties may vary any of the terns of this
Agreement concerning dispute resolution without the need for a formal arrangement so long as
such agreement is in writing and executed by both parties.
Section 12.9 Costs of Arbitration. The fees of the arbitrator(s) shall be paid one-half by
Veolia and one-half by City. Each party shall bear its own attorneys' fees and expenses, unless
the arbitrator(s) shall determine that the nature of the action or defense of the losing party was
fi7volous, in which event the arbitrator(s) shall determine a fair and equitable attorneys' fees and
expenses to be paid by the losing party to the prevailing party.
Section 12.10 Events Justifying Termination.
(a) This Agreement may be terminated in the following circumstances only:
(i) By a Non-Defaulting Party, upon an Event of Default by the
Defaulting Party under Section 12.4(a) (Payment Default);
(ii) By the Non-Defaulting Party, if, following an Event of Default
under Section 12.4(b), (1) the Defaulting Party does not undertake and prosecute cure as required
by Section 12.5, or following an order of specific perfonnance pursuant to an arbitration under
Section 12.8, the Defaulting Party does not undertake and prosecute cure as required by the
arbitration order, and (2) the Event of Default cannot be remedied by an adjustment to the
Compensation, the Performance Guarantee, the obligations of the parties under this Agreement,
or claim against the Corporate Guarantee;
(iii) Automatically, upon the occurrence of an Event of Default set
forth in Sections 12.4(c)-(e)•
320994 13.DOC -55-
(iv) Automatically, if this Agreement is rendered invalid or illegal,in
its entirety, pursuant to a final, non-appealable judgment by a court of competent jurisdiction;
(v) By either party, upon a condemnation or taking of the entire
Treatment Facility by a Governmental Agency other than the City;
(vi) By Veolia, pursuant to Section 5.9 (Non-Specification hifluent);
(vii) Intentionally Omitted
(viii) Intentionally Omitted
(ix) By City, pursuant to Section 12.3 (Uncontrollable Circumstance);
(x) Intentionally Omitted;
(xi) By Veolia,pursuant to Section 11.4 (Risk of Loss; Casualty,
Damage and Destruction);
(xii) Intentionally Omitted; or
(xiii) Upon the mutual agreement of the City and Veolia.
(b) Any unilateral termination by City shall require a hearing and approval by
the City Council. Prior to such termination, the City Council shall hold a public hearing upon 30
day's written notice to Veolia. Veolia shall be given an opportunity to present oral and written
testimony and to respond to any and all issues respecting the termination. The City Council may
continue the hearing from time to time as it sees fit, including to gather additional evidence or to
give Veolia additional time to respond to the termination. The City Council shall render its
decision within fourteen (14) days of the conclusion of said hearing.
Section 12.11 Consequences of Termination By Either Party. Should this Agreement be
terminated pursuant to Section 12.10 above, at expiration of the Tenn or pursuant to any other
section of this Agreement, the following shall apply:
(a) Outstanding Fees and Compensation. Within 30 days after the date on
which this Agreement is terminated, City shall pay to Veolia all amounts described in Section
7_1 and Section 7.4 and any other Compensation under this Agreement that have accrued as of
the date of effective date of the termination, including all outstanding O&M Amival Capital
Recovery amounts for the remaining Tenn of this Agreement.
(b) Unamortized Amounts. Within 30 days after the date on which this
Agreement is terminated, City shall pay to Veolia the amounts described in Section 5.1, Section
51W or Section 7.1(b)(i) or any other unamortized amount payable under this Agreement;
provided, however, that the City shall be entitled to offset fiom such amounts payable under this
Section 12.11(b) any amount that the City is legally entitled to receive from Veolia as damages,
as determined through Sections 12.6-12.9 or pursuant to a final non-appealable judgment issued
by a court of competent jurisdiction.
320994 13 DOC -56-
(c) TemporaryOperation. At the City's request, Veolia shall continue to
operate the Treatment Facility until either(a)the expiration of 180 days following the date of
City's notice of termination, or (b) the date on which a new party is substituted for Veolia as the
Treatment Facility operator, whichever occurs first. During such continued period of Veolia
operations, City shall continue to pay Veolia the Compensation.
(d) Labor and Other Contracts. To the extent assignable and transferable, and
subject to City's written consent which consent may be withheld in City's sole discretion,Veolia
shall assign and transfer to City any labor, maintenance, or supply contracts relating to the
Treatment Facility,the Sewage Collection System and the Down and Under System that have
beers entered into by Veolia. Upon such assignment, City shall assuine all of Veolia's
obligations arising on and after the date of such assignment under any such assigned contracts,
and Veolia shall have no further obligations therefor. City shall not assume any liability for any
failure by Veolia, prior to the transfer date, to perform any obligation of any contract transferred
to City under this Section,
(e) Performance Guarantee and Warranties. All warranties by Veolia arising
in connection with this Agreement, including the Performance Guarantee, shall terminate and be
of no further force and effect after the effective date of termination of this Agreement.
(f) Actual Damages. Subject to the limitations set forth in Section 10.1(c), if
the termination is as a result of an Event of Default, the Non-Defaulting Party entitled to
terminate this Agreement shall be entitled to recover its actual damages as a direct result of such
Event of Default.
(g) Limitation of Damages. Under no circumstances shall either party be
liable to the other for any incidental, consequential, special, punitive, lost profit, lost economic or
other damages other than actual, direct darnages, regardless of whether such damages arise under
breach of contract, tort, strict liability, or any other theory of or equity.
Section 12.12 Waiver. No delay or omission in the exercise of any right or remedy by a non-
defaulting party on any default shall impair such right or remedy or be construed as a waiver. A
patty's consent to or approval of any act by the other party requiring the party's consent or
approval shall not be deemed to waive or render umiecessary the other paty's consent to or
approval of any subsequent act. Any waiver by either party of any default must be in writing and
shall not be a waiver of any other default concerning the same or any other provision of this
Agreement.
Section 12.13 Governing Law, Venue. This Agreement shall be construed and interpreted both
as to validity and to performance of the parties in accordance with the laws of the State. If,
notwithstanding the provisions set forth in Sections 12.6-12.9, litigation occurs between the City
and Veolia with respect to this Agreement, the venue for such litigation shall be the Superior
Court for the County of Riverside.
320994 13 DOC -57-
ARTICLE XIII.
IDENTITY OF REPRESENTATIVES; ASSIGNMENT
Section 13.1 Representative of Veolia. Jack Martin is hereby designated by Veolia as the
Plant Manager to operate the Treatment Facility. Chibby Alloway(or his successor) is
authorized to act on Veolia's behalf with respect to the work specified herein and make all
decisions in connection therewith and, unless specified, any approval required hereunder by
Veolia shall be exercised by Chibby Alloway and Veolia shall not argue lack of authority with
respect to any decision made by Chibby Alloway. It is expressly understood that the experience,
knowledge, capability and reputation of the foregoing individuals were a substantial inducement
for City to enter into this Agreement. In the event that Veolia desires to change the Plant
Manager or reassign Chibby Alloway's duties or the Plant Manager or Chibby Alloway cease to
be employees of Veolia,it will notify the City and the City shall be entitled to participate in the
selection process with Veolia. Veolia will not appoint a new Plant Manager or reassign Chibby
Alloway's duties to another Veolia employee that the City, in its reasonable discretion,
disapproves, such disapproval to be evidenced by the City delivering to Veolia written notice of
its disapproval within 15 days after Veolia's notification to the City of the identity of the
replacement employee along with sufficient information for City to evaluate the qualifications of
such replacement employee(and the failure of the City to deliver such notice within such 15 day
period shall be deemed City's approval of such replacement).
Section 13.2 Contract Officer. The Contract Officer shall be such person as may be
designated by the City Manager of City. It shall be Veolia's responsibility to keep the Contract
Officer informed of the progress of the performance of the services and Veolia shall refer any
decisions which must be made by City to the Contract Officer. Unless otherwise specified
herein, any approval of City required hereunder shall mean the approval of the Contract Officer.
The Contract Officer shall have authority to sign all documents on behalf of the City required
hereunder to cant'out the terns of this Agreement.
Section 13.3 City Sale. City shall be entitled to sell or otherwise transfer, lease or encumber
the Treatment Facility or Treatment Facility Site at any time during the Tern upon written notice
to Veolia, and subject to the other provisions of this Section 13.3. City may sell, transfer, lease
or encumber the Treatment Facility or the Treatment Facility Site without requiring the approval
of Veolia provided that(i) in no event shall such transfer, lease or encumbrance release the City
from its obligations under this Agreement; (ii) such transfer, lease or encumbrance shall be
subject to the terns of this Agreement and the transferee, lessee or encumbrancer assumes, in
writing, the City's obligations tinder this Agreement; and (iii) Veolia may, in its sole discretion,
terminate this Agreement within sixty(60) days after receipt of City's written notice.
Alternatively, provided that City obtains the prior written approval of Veolia, such approval not
to be unreasonably withheld, in connection with any sale, transfer, lease or encumbrance of the
Treatment Facility or the Treatment Facility Site, clause i and clause iii herein shall not apply,
except that the City shall remain liable for all obligations that have accrued or arisen prior to the
date of such transfer, lease or encumbrance. Veolia shall cooperate with any reasonable request
from City to facilitate such sale, transfer, lease or encumbrance.
Section 13.4 Veolia Assignment. The experience, knowledge, capability and reputation of
Veolia, its employees, team members and agents, were a substantial inducement for the City to
320994 13 DOC -58-
enter into this Agreement. Therefore, this Agreement shall not be assigned by Veolia without
City's written consent, which consent shall not be unreasonably withheld, except that Veolia
shall have the right to assign this Agreement, without City's consent, to (i) an Affiliate; (ii) one
or more lenders providing financing to the City, Veolia or any Affiliate; or (iii) a corporation,
limited liability company or other entity with whom Veolia merges, consolidates or transfers or
sells substantially all of its assets. If any assignment is made where City approval is required and
such approval is not obtained, including any bankruptcy proceeding, such assigrunent shall be
void. No approved transfer shall release Veolia or any surety of Veolia of any liability hereunder
without the written consent of City.
ARTICLE XIV.
ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS
Section 14.1 Notices. All notices required or desired to be given hereunder to either party shall
be effective if given by personal delivery, certified or registered mail, postage prepaid, return
receipt requested, by nationally recognized overnight delivery company, or by telecopy(with
telephone confirmation of receipt), if addressed or the following addresses or telecopy numbers:
If to Veolia:
President
Veolia Water North America-West, LLC
2300 Contra Costa Boulevard
Suite 470
Pleasant Hill, California 94523
Phone: 925-681-2304
Fax: 925-681-0236
With copies to:
Regional Couuisel
Veolia Water North America-West, LLC
14950 Heathrow Forest Parkway
Houston, TX 77032
Phone: (281) 985-5423
Fax: (281) 985-5595
320994 13.DOC -59-
If to City:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Manager
Phone: (760) 322-8350
Fax: (760) 323-8207
With copy to:
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attention: City Attorney
Phone: (760) 323-8202
Fax: (760) 323-8207
Any party may change its address for the purpose of this Section 14.1 by giving written notice of
such change to the other parties. Notices delivered personally or by telecopy (with telephone
confirmation of receipt) shall be deemed given as of actual receipt. Mailed notices shall be
deemed given as of three days after mailing. Notices given by overnight delivery company shall
be deemed given as of the date and time of delivery indicated on the delivery company's receipt.
Section 14.2 Covenant Aeainst Discrimination. Veolia covenants that, by and for itself, it
heirs, executors, assigns, and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this
Agreement. Veolia shall take affirmative steps to insure that applicants are employed and that
employees are treated during employment without regard to their race, color, creed, religion, sex,
marital status, national origin, or ancestry.
Section 14.3 Further Responsibilities of Parties. Both parties agree to use reasonable care
and diligence to perform their respective obligations under this Agreement. Both parties agree to
act in good faith to execute all instruments,prepare all documents and take all actions as may be
reasonably necessary to cant'out the purposes of this Agreement. Unless otherwise specified,
neither party shall be responsible for the service of the other.
Section 14.4 Severability. hi the event that any one or more of the phrases, sentences, clauses,
paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by
a valid judgment or decree of a court of competent jurisdiction or an arbitrator, such invalidity or
unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or
sections of this Agreement which are hereby declared as severable and shall be interpreted to
carry out the intent of the parties hereunder unless the invalid provision is so material that its
invalidity deprives either party of the basic benefit of their bargain or renders this Agreement
meaningless.
320994 13.DOC -60-
Section 14.5 Inteeration, Amendment It is understood that there are no oral agreements
between the parties hereto affecting this Agreement and this Agreement supersedes and cancels
any and all previous negotiations, arrangements, agreements and understandings, if any, between
the parties, and none shall be used to interpret this Agreement. This Agreement may be amended
at any time by the mutual consent of the parties by an instillment in writing.
Section 14.6 Non-liability of City Officers and Employees. No officer or employee of the
City shall be personally liable to Veolia, or any successor in interest, in the event of any default
or breach by the City or for any amount which may become due to Veolia or to its successor, or
for breach of any obligation of the terms of this Agreement.
Section 14.7 Conflict of Interest. No officer or employee of the City shall have any financial
interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in
any decision relating to this Agreement which effects his financial interest or the financial
interest of any corporation, partnership or association in which he is, directly or indirectly,
interested,in violation of any State statute or regulation. Veolia warrants that it has not paid or
given and will not pay or give any officer or employee of the City any money or other
consideration for obtaining this Agreement.
Section 14.8 Successors and Assilzns. This Agreement shall be binding upon, and inure to the
benefit of, the parties and their respective successors and permitted assigns.
Section 14.9 Execution of Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which together shall be
deemed to be one and the same instrument.
320994 13.DOC -61-
IN WITNESS WHEREOF, the parties have hereunto entered into and executed this
Agreement,by their duly authorized representatives, as of the date first above.
CITY
CITY OF PALM SPRINGS, a municipal
corporation
David H. Ready,
City Manager
ATTEST:
James Thompson
City Clerk
APPROVED AS TO FORM:
Douglas C. Holland
City Attorney
VEOLIA
VEOLIA WATER NORTH AMERICA-
WEST, LLC, a Delaware limited liability
company
By:
Name:
Title:
By:
Name:
Title:
320994 13 DOC -62-
LIST OF SCHEDULES
A Treatment Facility Description
B Treatment Facility Site Legal Description
C Veolia Operating and Maintenance Services
D Staff Plan of Operations
E Monitoring Requirements
F Preventive and Predictive Maintenance Program
G Reporting Requirements
H Intentionally Omitted
I Biosolids Services
J Sewage Collection System Services
K Existing Equipment Warranties and Guarantees
L Down and Under System Description
M Effluent Specifications
N Influent Quality and Quantity Specifications
O Down and Under System Services
P Corporate Guarantee
Q Compliance Matters
R Septage Fees
S QA/QC Program
T Veolia Assumptions
U Rolling Stock
V Intentionally Omitted
W Intentionally Omitted
X Street Sweeping Services
Y New Vehicles
Z Waste Discharge Requirements for Sanitary Sewer Services and Stonnwater Monitoring
Services
AA Pre-Approved Capital Projects List And Scope
BB Intentionally Omitted
CC Pool Chemicals
DD Sanitary Sewer Master Plan Description
List of Schedules-1
3209942_13 DOC
SCHEDULE A
TREATMENT FACILITY DESCRIPTION
Headworks
The headworks consists of a mechanical barscreen, with a manually-cleaned bar-rack in a bypass
channel. An ultrasonic flow meter is located in the headworks channel downstream of the
barscreen. The meter is rated for a flow range of 348-17,361 gallons per minute (gpm).
After the Influent flow meter, the sewage influent goes through one of two grit chambers where
sand and other inorganic constituents are removed. Three Blowers supply air to the grit
chambers and provide air to allow removal of the grit via air lift pumps. This grit is sent to a
classifier where organic sewage solids are washed from the grit. The washed grit is conveyed by
a screw auger to a waste bin where it is collected and then removed for disposal.
The headworks odor control system consists of an exhaust fan which pulls air off the influent
channels and grit chambers and blows it into the bottom of#1 trickling filter. In addition, a
misting odor control system applies a masking agent in the area of the screening bin and grit
classifier.
Primary Clarification
Three rectangular primary settling tanks provide initial removal of TSS and BOD. These tanks
are covered and off-gases are vented through an activated carbon scrubber to control odors.
Hmary sludge is brought to the center of each tank by chain and flight collection systems. A
sludge screw carries the sludge to a pit and three pumps, located in the biofilter lift station are
used to pump the primary sludge to the gravity thickener or digester. Scum is collected by a
tipping weir in each tank and held in one of two scum pits until manually pumped to the gravity
thickener. The effluent from the primary tanks mixes with recycled flow and is pumped to the
biofiltration process by pumps in the biofilter lift station.
Bio-Filtration
The biological secondary treatment component of this plant is composed of four Biofiltration
Units. Primary effluent is mixed with recycled flow from the biofilter effluent and is pump over
the rock media via the rotating distribution anus. These units have natural drafted air moving up
through the rock bed to provide the needed oxygen for the organic reduction. None of the units
is covered nor do they have any odor control removal/treatment units.
The recirculation flow, using secondary effluent or biofilter effluent, is mixed with the primary
effluent to improve the removal efficiency of the biofilters and to maintain a constant hydraulic
flow rate to the biofilters.
sai,A-1
3209942_13.DOC
The primping of primary effluent and recycle is accomplished by the primary and secondary
biofiltration pump stations. The primary pump station contains three Variable Frequency Drive
controlled pumps, each with a maximum capacity of 8000 gpm. The secondary pump contain
two natural-gas-fired, engine-driven pumps with a capacity of 4800 gpm each, and a variable
speed electric-motor-driven pump with a 7200 gpm capacity. Either pump station can be use to
pump to all of the biofilters. It is also possible to operate the two pairs of biofilters in series
mode by using the two pump stations in a primary and secondary configuration.
Secondary Clarifier
The effluent from the biofilters flows by gravity to the six secondary clarifiers. Sludge and scum
that are removed in the secondary clarifiers are deposited in sludge pits and then pumped back to
headworks or to the gravity thickener. Secondary effluent that leaves the clarification system
flows either to the percolation pond system or to Desert Water Agency's (DWA) tertiary
filtration system located offsite of the Treatment Facility.
Percolation Pond System
Treated effluent flows from the secondary clarifiers to a series of six percolation ponds which
provide for the ultimate disposal of much of the effluent from the Treatment Facility. The
percolation ponds are constructed in the Tahquitz Wash area. The soil in this area is made up of
porous material so that the treated effluent flows down through the normally occurring strata, as
it also moves in a down gradient. The soil also provides some additional treatment to the
discharged effluent. The percolation ponds are utilized in series so that one pond is always in
use and all others are either drying out or being prepared for the next effluent application.
Typically,the ponds rotated on a 4-day/ 3-day cycle during each week. This minimizes the load
on each pond and allows sufficient drying between application. Treatment Facility staff
cultivates each pond after each use to break up the surface layer utilizing a fann tractor with a
spring tooth harrow.
Sludge Disposal System
All sludge and scum wasted from the primary and secondary processes is first sent to the gravity
thickener to increases the percent solids prior to discharge to the anaerobic digestion system. The
anaerobic system achieves greater than 50% reduction of volatile organic material and stabilizes
the waste. The most of the digested material is applied to one of twenty-six sludge drying beds,
where it readily dewaters and dries to 60-65%total solids. After this drying process, the organic
material is removed by a front-end loader to windrows in the sludge storage area where further
drying occurs to over 90%total solids. All of the drying beds have an underdrain system which
collects all filtrate water and returns it to the headworks area of the plant for processing.
In 2002, a Belt Filter Press (BFP) was added to dewater sludge during the winter months, when
the sludge drying on the drying beds is much slower and the beds become filled to capacity. The
BFP uses polymer to aid the dewatering and produces biosolids at about 20—25% total solids.
This material is spread in the sludge holding area and allowed to further dry to over 90% TS.
soh A-2
3209942_13.DOC
Both the crying bed and BFP dewatered sludges are stored on site and allowed to air dry for a
minimum of 90 days. The dried biosolids are then tested to ensure it meets Class B, with a
mutual goal that such biosolids meet Class A—Exceptional Quality criteria. This material is then
hauled to nearby Date Orchards for disposal by a sub-contractor.
Administration Building
A combination administration/laboratory/motor control building is located at the Treatment
Facility Site.
Emergency Power Generation and Supplemental Power Production
In case of a power outage, the Treatment Facility is equipped with an emergency generator,
capable of providing power to all essential equipment needed to treat and pump the Influent.
In 2003, two Microturbines were installed to provide supplemental electrical power. This
equipment is fueled by natural gas and provides about 40% of the Treatment Facility's power
needs. The heat from the microturbines is captured and used to heat the anaerobic digesters.
Pump Stations
Within the Sewage Collection System there are five sewer lift stations. These are located at:
I. Golf Course;
2. Golf Club Drive;
3. Palm Springs View Estates;
4. 34th Avenue;
5. Sonora and El Cielo.
soh A-3
3209942_13.DOC
Existing Design Criteria—Treatment Facility
Raw Wastewater
Design Flow, 30 Day Average (mgd) 10.9
Peak Flow, Instantaneous (mgd) 21.8
Headworks
Mechanical Bar Screen
No. Of Units 1
Width, 8. 6.5
Free Opening, inches 3/
Parshall Flume, Influent
Number of units 1
Range, mgd 1.5 —32.0
Size, inches 36
Aerated Gait Chamber
No. of units 2
Size, ft. length x width x depth 31x15x10
Volume of each, cubic feet 4650
Grit Washer, dewatering screw type
No. of units 1
Diameter, inches 9
Flight pitch, inches 4,5
Length, ft. 33
Volume, cf/hr 40
Primary Units
Primary Clarifiers
Number(each) 3
Size of each, ft., length x width x depth l60x32x6.8
Overflow rate, gals/sq.ft./day, @ 10.9 mgd 710
Detention time, hours @ 10.9 mgd 1.72
Primary Pumping Station, Variable Electrical Drives
No. of pumps 3
Size of each, gpm/inches 8000/16
Horsepower of each 200
Secondary Units
Trickling Filters
Number 4
Diameter of each, ft. 140
Depth of each, ft. 9.5
Volume of each, c.f. 146,167
Organic Loading, #BOD5 /day/1,000 e,f. 23.2
Hydraulic Loading with recirculation, gpd/sq. ft. 354
Secondary Clarifiers
soh A-4
3209942_13.DOC
Number 6
Length of each, ft. 164
Width of each, ft. 25
Depth of each, ft 9.5 to 11.0
Overflow Rate, gpd/sq. Ft./day with recirculation 886
Detention time, hrs., with recirculation 2.1
Secondary Pump Station
No. of pumps 3
Size of each, #1 , gpm/inches 4800/ 10
Hp 75
Size of each, #3 gpm/inches 7200/ 14
Hp 100
Percolation Ponds
No. of Units 6
Percolation rate, gpd/sq. ft. 15.2
Bottom area, total acres 23.3
Solids Handling Units
Gravity Sludge thickener
No. of units 2
Depth of each, ft. 10.5
Diameter of each, ft. 30
Overflow rate, gpd/ sq. ft. 700
Solids loading, #/day/sq. ft. 8
Anaerobic Digesters
Number of units 2
Diameter, ft.
Primary 85
Secondary 65
Depth of each, ft. 30
Volume, gals
Primary 1,270,000
Secondary 748,000
Solids loading, #/sq. ft./yr. 0.08 to 0.1
Sludge Beds
Number of units 26
Size, feet—length X width 100 x 50
Solids loading, #/sq. ft./yr. 15 to 22
Tertiary Reclamation Units (these units were abandoned in place by the City)
Sand Filter(currently not operable)
No. of Units 2
Size, ft. length x width 58x12
Area of each, sq. ft. 725
Media depth, inches 11
Hydraulic loading each @ 2.1 mgd rate: gal/sq.ft./min. 2
soh A-5
3209942_13.DOC
Chlorine contact Chamber
No. of units 1
Volume, gals. 98,978
Detention Time @ 4.15 mgd flow,minutes 34
@ 2.1 mgd flow, minutes 65
Effluent holding Basin
No. of units I
Size &base, ft., length x width 182.5x262.5
Volume, @ 5.1 ft. depth, gals. 2,300,000
Per ft. of depth 470,000
Chlorination System(Removed
No. of units 4
Capacity of each, 3/day 300, 500, 1000, 2000
Polymer Feed System
No. of units 3
Digester Gas System
Power Generation System
Microturbines -No. of units 2
Size of each— 60 kw
Standby IC Engine HP/generator KW 415/275
Gas Storage Sphere (This equipment is no longer operable)
Capacity, C.F. @ 14.7 psi 2406
Capacity, C.F. @ 100 psi 18,800
Waste Gas burner, capacity c.f./hr. 4000
Heating boilers
No. of units 1
Size of each, million btu/hr. 1.5
Sch A-6
3209942_13.DOC
SCHEDULE B
TREATMENT FACILITY LEGAL DESCRIPTION
The Treatment Facility is located at 4375 Mesquite Avenue in the City of Palm Springs,
California. The plant is located in SE '/ of Section 19, Township 4S, Range 5E, SBBM on
USGS Palm Springs and Cathedral Quadrangles, at latitude 33' 48' N and longitude 1160 30' E.
The existing Treatment Facility encompasses an area of approximately 50 acres.
sch.B-1
3209942_13.DOC
SCHEDULE C
OPERATING AND MAINTENANCE SERVICES
Veolia shall perform the following operation and maintenance services in accordance with the
terns of this Agreement:
1. Operate and maintain all equipment and processes located at the Treatment'Facility, subject
i.e any limitations set forth in this Agreement as per Prudent Industry Practices and in
conformance with applicable state and federal standards.
2. Perform all sampling, testing, and laboratory analyses of the Influent and Effluent required
by the WDR Permit and SWRCB and/or RWQCB Regulations, and all sludge analyses
required by the Riverside County or RWQCB Biosolids regulations. This includes all
necessary QA/QC Program testing and the completion of all in-house process control testing
to evaluate individual unit processes (i.e., biofilters, gravity thickeners).
3. Prepare and certify all discharge monitoring reports required under the WDR Pen-nit and
SWRCB and/or RWQCB Regulations, and submit these reports to the City for execution and
transmittal to the appropriate Agencies.
4. Handle all Biosolids, grit and screenings as set forth in this Agreement.
5. Prepare and certify all biosolids disposal reports required under 40 CFR Part 503 regulations.
6. Purchase all chemicals, fuels, parts and supplies required to perform the aforementioned
services.
7. Cooperate with the City in enforcing existing equipment warranties and guarantees, and in
maintaining warranties on any equipment purchased on behalf of the City.
8. Veolia will operate all treated Effluent percolation disposal facilities.
9. Complete all laboratory work as required by the current WDR Permit and the two down-
gradient well monitoring wells.
10. Veolia will provide monitoring and analysis for the one upgradient monitoring well.
11. If requested by the City under and in accordance with this Agreement, Veolia will design a
Reclaim Water Business Plan which will be shared and discussed with City Staff.
12. Veolia will complete a capacity report and submit to the City.
13. 'Veolia will perfonn Sewage Collection System Services as per Schedule J herein.
14. Veolia shall update its O&M manual for the Treatment Facility as needed for major facility
changes or as required by Applicable Law.
Sch,C-1
3209942_13 DOC
SCHEDULED
STAFF PLAN OF OPERATIONS
The organization chart as of June 2006 is shown below. Veolia will provide a full-time Project
Manager with a CA Grade V operation certification and several years of experience in
overseeing plant operations, construction management and employee training to the Treatment
Facility. This staffing plan is subject to change over time as contemplated by Schedule Z,
including a reduction of one FTE in connection with Sewage Collection System work after
approximately July 2011.
The Treatment Facility will nonnally be staffed for 10 hours each weekday including weekends
and holidays. Emergency on-call services will be provided 24 hours/day, 7 days/week.
Organization Chart
PALM SPRINGS VWVfP ORGANIZATION CHART
Project Manager
.. ;, - Administrame
Operations&Maintenance
Manager
Maintenance Lead Lead Operator SSMP Manager
Maintenance Tech Ins ector Collection
olle G System
II 111 Operator III Lead
I
Maintenance Tech Operator 111 _ CCTV Tech
Operator Collection System
Tech II
Collection System
Tech II
Collection System
Tech II
Collection System
Techl
Sch.D-1
3209942_13 DOC
SCI3EDULE E
MONITORING REQUIREMENTS
INFLUENT MONITORING
Influent samples shall be collected downstream from the last connection through which wastes
can be admitted to the Sewage Collection System. Influent shall be sampled and analyzed for
the following constituents, and in the following manner and frequency:
Constituent Units Type of Sample Sampling Frequency
20°C BOD5 mg/1 24-hour composite Monthly
Suspended Solids mg/1 24-hour composite Monthly
EFFLUENT MONITORING
The Effluent shall be sampled from the secondary Effluent prior to the percolation ponds or
holding basin. Effluent shall be sampled and analyzed for the following constituents, and in the
following manner and fi-equency:
Constituent Units Type of Sample Sam lin Frequency
Total Daily Flow MGD Measurement Daily
20°C BOD5 mg/1 24-hour composite
Semi-Weekly
Suspended Solids mg/1 24-hour composite
Semi-Weekly
Hydrogen Ion(pH) Grab Daily
Settleable Matter ml/1 Grab at peak flow Daily
Total Dissolved Solids mg/1 Grab Monthly
Sulfate (SO4) mg/l Grab Monthly
Chloride (CI) mg/l Grab Monthly
Fluoride(F) mg/l Grab Monthly
Nitrate as Nitrogen (NO3- mg/I Grab Monthly
N)
Nitrite mg/I Grab Monthly
Total Nitrogen mg/l Grab Monthly
Soh.a-n
3209942_I3.DOC
Volatile Organic Ug/1 Grab Quarterly
Compound (EPA 601 &
602)
GROUND WATER MONITORING
Ground Water shall be sampled from the three (3)monitoring wells and analyzed for the
following constituents:
Constituent Units Type of Sample Samnlina Fre uenc
Total dissolved Solids mg/l Grab Quarterly
mg/1 Grab Quarterly
Sulfate(SO4)
mg/1 Grab Quarterly
Chloride(Cl)
mg/l Grab Quarterly
Fluoride(F)
mg/1 Grab Quarterly
Nitrates
Nitrites mg/1 Grab Quarterly
Total Nitrogen mg/l Grab Quarterly
Volatile Organic ug/1 Grab Quarterly
Compound
Depth to Ground water Feet Measurement Quarterly
Flow Direction Calculation Quarterly
SLUDGE MONITORING
The discharger shall report quarterly on the quantity, location and methods of disposal of
all sludge and similar solid materials being produced at the wastewater treatment plant facility.
The sludge that is generated at the treatment facility shall be sampled and analyzed for the
following constituents:
Constituent Units Type of Sample Frequency
Arsenic Mg/kg Grab Annually
Cadmium Mg/kg Grab Annually
Cbronrirun Mg/kg Grab Annually
soh E-2
3209942 13BOC
Copper Mg/kg Grab Annually
Lead Mg/kg Grab Annually
Mercury Mg/kg Grab Annually
Molybdenum Mg/kg Grab Annually
Nickel Mg/kg Grab Annually
Selenium Mg/kg Grab Annually
Zinc Mg/kg Grab Annually
Soh.E-3
3209942 13.DOC
SCHEDULE F
PREVENTIVE AND PREDICTIVE MAINTENANCE PROGRAM
Vealia developed and implemented a computerized Preventative Maintenance ("PM") Program.
The system tracks equipment histories by the specific equipment alpha-numeric code. The PM
Program has the following attributes:
Preventive Maintenance
• PM tasks will be performed per O&M Manual or manufacturer's recommendations.
• PM tasks, wherever appropriate, will include the taking of a measurement of some kind (such
as `Check and record oil pressure').
• :PM tasks will be computerized unless an adequate hard copy system is in use. The Veolia
Manager must approve hard copy systems.
• The individual performing PM will initial the PM task and note the time required.
• PM accomplishment will be entered into the management system on a weekly, or more
;Frequent basis.
• 'Year-end PM Group schedules will be printed and filed after each calendar year.
• ]Electrical PM is included in the PM program.
Predictive Maintenance
+ The Veolia Manager will define a Predictive Maintenance program addressing the following:
• - General:
• Program Scaling appropriate to the needs of the Treatment Facility. The goal should be to
create a useful program reasonably minimizing effort and expense at the plant level.
• Vibration Instrumentation - Will be provided on all large prime movers within the Treatment
Facility.
• Regional Support for Plant Predictive Maintenance—Will be provided as required to support
the local Treatment Facility staff.
• Selection. Treatment Facility staff will select the critical equipment to be monitored.
Sch F-1
3209942_13.DOC
• Determination of Points to be Monitored. Normally, one position per bearing is necessary
for routine monitoring. The measurement points will be marked.
• Measurement Schedule Set-U. The measurement should be listed as a task with the PM
Group.
• Routine Program Execution:
Record keeping System. CMMS (Computerized Maintenance Management System) will be
used with existing equipment data files.
• Schedule Adjustment. CMMS will adjust measurement periods based on computerized
analysis of previous data, run-time, mileage or calendar days.
Sch P-2
3209942 13 DOC
SCHEDULE G
REPORTING REQUIREMENTS
Veolia shall develop a format for its monthly report reasonably acceptable to the City and shall
include, without limitation, the following items:
1. Prepare and certify all discharge monitoring reports required under the WDR Permit and the
WDRs adopted by the State Water Resources Control Board and/or Regional Water Quality
Control Board and all relevant spill reports to the Regional Board.
2. Prepare and certify all biosolids monitoring reports required by the Riverside County
Biosolids Ordinance or 40 CFR Part 503 Regulations.
3. Prepare a Monthly Operations Report to the City suimnarizing the following:
• Treatment Facility Performance and Compliance
• Treatment Facility Preventive Maintenance Activities
• Treatment Facility Connective Maintenance Activities
• .Sewage Collection System and Down and Under System Maintenance and Down and Under
Systern Labor Component (for purposes of Section 5.4(f)
• Special Projects and Events
• Construction Progress and Activity
• ]Plan for the corning month
• Comm arity Relation Activities
• Grease Trap Subsidy Program
• Low Flush Toilet Program
• Summary table for energy consumption including: electrical power from the grid and on-site
sources, as well as natural and methane gas consumption.
4. Amivally prepare an O&M report surnmarizing significant events and accomplishments over
the past year and provides a five year rolling capital improvements program for the City's review
and comment.
5. Quarterly prepare a groundwater monitoring report.
6. Monthly Septage summary of quantities received, fees collected and any constituent
rneasurements made
Sch.G-1
3209942_13.DOC
SCHEDULEI
BIOSOLIDS SERVICES
Veelia will provide the following services with respect to biosolids generated at the Treatment
Facility via its Sub Contractor:
• Veolia will operate the Anaerobic Digestion and Sludge Drying Beds to achieve, as a goal,
Class A biosolids as described in 40 CFR Part 503.
• Veolia via its sub-contractors will remove dried Biosolids from the drying beds as required.
At other times, the sludge shall be stored at the Treatment Facility site.
• As required by applicable law, but in no event less frequently than annually, Veolia will test
die Biosolids for fecal coliform, metals, total solids, total nitrogen, and any other required
constituents.
Sell.I-7
3209942_13.DOC
SCHEDULEJ
SEWAGE COLLECTION SYSTEM SERVICES
Sewage Collection System services consists of maintaining the Sewage Collection
System as needed to ensure that the system functions to convey all Influent flows to the
Treatment Facility for disposal or reuse. Veolia shall perform the following operation and
maintenance services with respect to the Sewage Collection System in accordance with the terms
of this Agreement. It is anticipated that this schedule will be amended as appropriate to be
consistent with the work undertaken under Schedule Z
1. Clean the Sewage Collection System as needed to prevent blockages and odors.
2. Use commercially reasonable efforts to respond to emergency calls within one hour
after notice and rectify normal operation as soon as reasonably possible.
3. Conduct emergency Sewage Collection System repairs as reasonably needed to
protect the public, employees and public streets.
4. Inspect and maintain all pump stations as reasonably required to provide safe and
efficient operation.
5. Provide customer service as reasonably required in response to complaints regarding
insects, odors and blockages.
6. Monitor flows and make observations of water quality as needed to detect changes in
Influent characteristics indicative of industrial use or poor maintenance of grease
interceptors.
7. Operate and perform all required preventive and corrective maintenance on the
sewage lift station(s)located within the City limits. Currently there are five (5) pump
stations to be maintained.
8. The cleaning frequency will follow the stated practice:
Most sewage collection system operators schedule cleaning based on either
cleaning a certain percentage of the system each year or by a set schedule that
establishes targets for linear feet cleaned with additional cleaning in trouble spots.
The basis of a good cleaning program is to keep the sewers flowing freely without
back ups. Frequently, managers over clean systems to avoid the risk of back ups
or overflows. While this is not entirely wrong, it is inefficient.
Veolia determines cleaning frequency by evaluating the results of cleaning
activities. As each section of a sewer is cleaned, the cleaning crew evaluates the
amount of debris removed. If the section is relatively clear, the cleaning
frequency can be decreased. If the debris is heavy, the frequency is increased.
For example, the debris severity is evaluated by the worker to determine the
severity rating using the following scale:
schr-1
3209942_13.DOC
Where "D" equals the amount of debris removed.
D=O, the line was clear
D=1, the line contained a mild amount of debris
D=2, the line contained a moderate amount of debris
D=3, the line contained a severe amount of debris
D=4, stoppage of flow in a line.
The objective of the program is to clean a line when the severity is equal to two.
The cleaning frequency is then determined using this table.
D=0 (Clean) VT=2.0 x T
D=1 (Mild) VT=1.75 x T
D=2 (Moderate) VT=1.0 x T
D=3 (Severe) OT=0.75 x T
D=4 (Stoppage) VT=0.5 x T
Where: VT=Recommended time interval between cleanings and T=the existing
interval between cleanings.
For example, if a section of the collection system was cleaned and received a"I"
rating, the cleaning interval would be increased by 1.75 times. If the period was
12 months, the interval would be changed to 21 months before the next cleaning.
If the rating was 3 after the cleaning, the interval would be reduced to eight
months. If a stoppage occurred after six months, the frequency would be changed
to three months (VT times 0.5).
This explanation is a simplification of the system used by the Maintenance
Management System (MMS) to determine and adjust cleaning frequency. The
occurrence of stoppages overrides this system and sets a preventative schedule to
prevent a reoccurrence of a stoppage situation.
Veolia will review the existing scheduling system and computer database to
optimize the cleaning of the Sewage Collection System. The existing database
can be converted to our computerized Maintenance Management System (MMS).
The existing schedule will be used until we have evaluated the condition and
cleaning frequency for each section of the collection system.
The MMS system also allows the plant staff to scan system maps that can be
printed with each work order. This allows the staff to add cormnents directly to
the system map for record keeping after the work is performed.
The sewage lift stations must also be maintained to prevent overflows. Of the
five current lift stations, only one has telemetry to alert the plant operators that the
lift station has failed. These failures can result in sewage back ups and overflows
if the system operators are unaware of the failure. Veolia will add telemetry
Sit,.i-2
3209942_13.DOC
systems to the four lift stations that are not currently equipped so that the
operators can be notified by phone or pager when the failure occurs.
Additionally, the lift stations will be included in the MMS along with all of the
treatment plant equipment.
Sch.J-3
3209942_13.DOC
SCI3EDULE K
EXISTING EQUIPMENT WARRANTIES AND GUARANTEES
None.
Sch.K-I
3209942_I3.DOC
SCHEDULE L
DOWN AND UNDER SYSTEM DESCRIPTION
[See Attaelnuent]
Sch.L-I
3209942_13.DOC
SCHEDULE M
EFFLUENT SPECIFICATIONS
The Effluent Specification shall be as follows:
1. Effluent discharged to the infiltration basins from the Treatment Facility shall not contain
constituents in excess of the following limits:
Constituent Units Monthly Average Value Maximum Daily
Value
20°C BOD5(24 hour mg/l 30.0 45.0
composite)
Suspended Solids (24 mg/l 30.0 45.0
hour composite)
Settleable Matter MI/I 0.3 0.5
(grab sample)
2. Effluent discharged to holding and/or infiltration basins shall not contain constituents in
excess of the following limits:
Constituent Units Annual Average Value
Total Dissolved Solids Mg/l 400 greater than level in the
water supply
Sulfate Mg/l 90.0
Chlorides Mg/l 70.0
Fluoride Mg/l 1.2
3. The 30-day average removal of the pollutant parameters BOD5 and Suspended Solids shall not
be less than 65%.
4. The pH of the Effluent shall be maintained within limits of 6.0 to 9.0.
5. Effluent dry weather flow to the infiltration basin shall not exceed 16.5 MGD.
sch.M-1
3209942 13 DOC
SCHEDULE N
INFLUENT QUALITY AND QUANTITY SPECIFICATIONS
INFLUENT SPECIFICATIONS
Unit Average
* Flow (Annual Avg. mgd) mgd 6.47
* Flow (Max) (Daily Max. mgd) mgd 7.85
* TSS (Annual Avg. mgd) mg/l 259
* BOD (Annual Avg. mgd) mg/l 214
* Sett Solid (Annual Avg. mgd) ml/l 13.2
* TDS (Annual Avg. mgd) mg/l 478
* SO4 (Annual Avg. mgd) mg/l 79
* Cl (Annual Avg. mgd) mg/l 70
* Fluoride(Amual Avg. mgd) mg/l 0.5
These are based on last 12-months ending April 30, 2006.
Mg/1
Arsenic 1.0
Cadmium 1.0
Copper 3.0
Cyanide 1.0
Lead 1.0
Nickel 4.0
Mercury 0.002
Oil & Grease 200
Selenium 3.0
Silver 0.5
Total Chromium 3.0
Zinc 3.0
Proposed Palm Springs MIPP Local Limits
Sch.N-1
3209942_13 DOC
SCHEDULE O
DOWN AND UNDER SYSTEM SERVICES
Down and Under System services consist of maintaining the Down and Under System
catch basins to enable the Down and Under System to convey all normal rain and other surface
water flows into the Down and Under System without back ups. This task involves the
following activities.
1. Clean the down and under catch basins as needed or reasonably requested by City to
prevent blockages and control odors.
2. Use commercially reasonable efforts to respond to emergency calls within one hour
after notice and rectify normal operation as soon as reasonably possible.
3. Provide customer service as reasonably required in response to complaints regarding
insects, odors and blockages.
Sch.O-1
3209942 13 DOC
SCHEDULE P
CORPORATE GUARANTEE
This Guarantee made as of the day of June, 2006, by Veolia Water North America
Operating Services, LLC, a Delaware limited liability company ("Guarantor"), to and for the
benefit of the City of Palm Springs, California("City").
WI'fNESSETH:
WHEREAS, Veolia Water North America-West, LLC, a Delaware limited liability
company, (the "Company") having an office at 14950 Heathrow Forest Parkway, Houston, TX
77032, has entered into that certain Amended and Restated Wastewater Services Agreement
dated as of , 2006 (the "Agreement") with the City.
WHEREAS, Guarantor is willing to guarantee, as set forth below, performance of all
obligations and payment obligations of the Company under the Agreement; and
WHEREAS, City would not enter into and perform its obligations under the Agreement
unless the Guarantor provided this Guarantee;
NOW, THEREFORE, as an inducement to the City to enter into the Agreement, the
Guarantor agrees as follows:
1. Subject to the limitations set forth in Section 12 below, Guarantor hereby guarantees the hill
and prompt payment by the Company of all of the Company's obligations under the
Agreement in accordance with the terns and conditions contained in this Guarantee.
2. Subject to the limitations set forth in Section 12 below, Guarantor hereby guarantees all
obligations, conditions and terms of the Company under the Agreement.
3. This Guarantee shall be governed by the law of the State of California exclusive of the choice
of law rules thereof, and Guarantor hereby agrees to the service of process in the State of
California for any dispute, claim or controversy arising out of this Guarantee or relating to
any breach hereof. Disputes, claims or controversies arising fiom or relating to perfonnance
of this Guarantee shall be resolved in accordance with the arbitration provisions set forth in
Section 12.6-12.9 of the Agreement.
4. 'This Guarantee shall be binding upon and enforceable against the Guarantor, its successors,
assigns and legal representatives (including any successor by merger or consolidation or any
transferee of all or substantially all of the assets of Guarantor), whether or not such
obligations are expressly assumed by such successor, assignee or transferee and is for the
benefit of the City, and any permitted successors and assigns under the Agreement.
Sch.P-1
3209942 13.DDC
5. This Guarantee may be enforced by the City only after having first exhausted all of the City's
rights and remedies against the Company under the Agreement provided that the City will
provide a ninety (90) day written notice to the Guarantor of the Company's default prior to
any demand for relief under this Guarantee.
6. The Guarantor shall be entitled to assert, as defenses hereunder, any defenses available to the
Company under the Agreement.
7. No failure or delay by the City in exercising any right, power or privilege hereunder or under
the Agreement shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other right, power, or privilege. No waiver, amendment, release or
modification of this Guarantee shall be established by conduct, custom, or course of dealing,
but solely by an instrument in writing duly executed by the party against whom such waiver,
amendment, release or modification is sought to be enforced.
8. Guarantor may not assign its obligations hereunder, except to a successor by merger or
consolidation, or a transferee of all or substantially all of Guarantor's assets; or an affiliate of
Guarantor that is not a single purpose entity, has assets other than the Agreement and
otherwise has the financial capacity to perform under this Guarantee. Notice of any such
assigmuent shall be given in writing to City at least thirty(30) days prior to the effective date
of such assigmnent. Any assignment other than as set forth above shall be subject to the
prior written approval of City. Any purported assignment or transfer, voluntarily or by
operation of law, in violation of the provisions of this Section 8 shall be void.
9. This Guarantee may be executed simultaneously in several counterparts, each of which shall
be deemed an original, and all of which together shall constitute one and the same
instrument. The invalidity or unenforceability of one or more provisions of this Guarantee
shall not affect the validity or enforceability of the remaining portions this Guarantee. This
Guarantee is entered into by Guarantor solely and exclusively for the benefit of the City, and
may be enforced against Guarantor by the City. The City shall not assign its rights or
obligations hereunder except in connection with an assignment of the Agreement that is
expressly permitted by the Agreement.
10. Any tern used but not otherwise defined herein and defined in the Agreement shall have the
meaning attributed to it in the Agreement.
11. Notices to be given pursuant to this Guarantee unless otherwise stated shall be in writing and
shall be served personally or sent by certified mail, return receipt requested to:
Guarantor at:
Veolia Water North America Operating Services, LLC
14950 Heathrow Forest Parkway
Houston, TX 77032
Attn: President
sch.P-2
3209942_13.DOC
With copies to:
Veolia Water North America Operating Services, LLC
14950 Heathrow Forest Parkway
Houston, TX 77032
Attn: Regional Counsel
Veolia Water North America Operating Services, LLC
184 Shuman Boulevard, Suite 450
Naperville, IL 60563
Attn: General Counsel
City: City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attn.: City Manager
With a copy to: City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attn: City Attorney
or to such other address as shall be designated by such party in a written
notice to the other party hereto. Any notice given pursuant to this Section,
if transmitted by certified mail, shall be effective immediately upon
receipt and if delivered by hand, upon delivery.
12.NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
GUARANTEE, THE AGGREGATE MAXIMUM LIABILITY OF THE GUARANTOR
HEREUNDER, INCLUSIVE OF COSTS INCURRED BY THE CITY TO ENFORCE ITS
RIGHTS HEREUNDER, SHALL BE LIMITED IN ACCORDANCE WITH SECTIONS
10.1(c)(iii)-(iv) OF THE AGREEMENT.
13. This Guarantee shall come into force upon the execution and coming into force of the
Agreement. Upon expiration or termination of the Agreement, this Guarantee shall continue
in effect, for obligations for which no teen or expiration is provided, for a period of five (5)
years after the earlier of expiration or termination of the Agreement; provided, however, that
for any terns of the Agreement that continue in effect after the expiration or termination of
the Agreement and which have a survival period ascribed to them, this Guarantee shall
remain in effect for five(5) years after each of those terms expires.
Sch.P-3
3209942_13.DOC
IN WITNESS WHEREOF, Guarantor and City have executed this instrument the day and
year first above written.
CITE':
CITY OF PALM SPRINGS, a municipal
corporation
David H. Ready
City Manager
ATTEST:
James Thompson
City Clerk
APPROVED AS TO FORM:
Douglas C. Holland
City Attorney
GUARANTOR:
VEOLIA WATER NORTH AMERICA
OPERATING SERVICES, LLC, a
Delaware limited liability company
By:
Name:
Title:
By:
Name:
Title:
Sch P-4
3209942 t3 DOC
SCHEDULE Q
COMPLIANCE MATTERS
None.
Sch.Q-I
3209912_I3.DOC
SCHEDULE R
SEPTAGE FEES
The Treatment Facility currently accepts Septage. A permit system has been established and
manifests are completed with each load received. A fee system is in place with charges of
$3511000 gallons for those pennittees resident or with businesses withiiir the City and$70/1000
gallons for those pennittees resident or with businesses outside of the City.
Sch.R-1
3209942_13 DOC
SCHEDULES
QA/QC PROGRAM
Veolia, in its capacity as principal program manager and coordinator, is responsible, to the fall
extent set forth in this Agreement, for the quality and results of the wastewater treatment,
reclamation, stormwater, biosolids disposal, and (if required in the future)the pretreatment
programs. Additional responsibilities include specific monitoring and reporting as required by
regulations and contracts. Veolia will perform treatment plant, industrial, and reclamation
sampling in accordance with the NPDES or WEIR permits for each of these programs.
Compliance reports are reliably submitted to the state and the EPA before their due dates. All
sampling will be performed by Veolia or under Veolia oversight. All permit-required testing
must be performed in a State-certified laboratory. All permit-required testing will be done
according to Federal and State approved procedures and conducted in a California Department of
Health Services certified laboratory. Veolia will perform process control testing in the laboratory
at the wastewater plant.
A Quality Assurance/Quality Control (QA/QC) Program will be implemented at the City/Veolia
laboratory. The manual for this program will establish a QA/QC program. It will define the
requirements for written SOP development, QC testing and control limit utilization, and other
practices associated with a well-run, professional laboratory operation.
sch.s-1
3209942_13.DOC
SCHEDULE T
VEOLIA ASSUMPTIONS OF FACTS
1) Effluent discharge does not require nitrification/denitrification.
soh.T-1
3209942_13.DOC
SCHEDULE U
ROLLING STOCK
TREATMENT FACILITY ROLLING STOCK
UNIT MAKE MODEL YEAR DESCRIPTION
NUMBER
040192 FORD RANGER 92 %2 TON MINI
040280 FORD MEYERS 80 SEWER JET-REAR
MOUNTED
040495 JOHN DEERE L6200 95 TRACTOR-FRONT LOAD
040561 ROTO-ROOTER 61 MECHANICAL PADDER
040796 FORD LN-80000 96 CAMEL JET AND VACUUM
040895 CHEVY PICK UP 95 ONE TON PICK UP 4X4 --
MULE LIFT
040995 CHEVY PICK UP 95 ONE TON PICK UP 4X4-
SPRAY RIG
041097 JOHN DEERE 5300 97 TRACTOR W/SPRING TOOTH
HARROW
041181 FORD/JAEGER PUMP 81 PORTABLE PUMP
041586 HOLLAND DUMP 186 1 TRAILER DUMP
TUFF WASHER 02 STEAM CLEANER
042390 JCB 930-2 90 FORKLIFT
046891 1 GMC TC7HO42 191 CAMEL-VACUUM ONLY
U-1
3209942_13.DOC
SCHEDULE V
INTENTIONALLY OMITTED
V-1
3209942 13.DOC
SCI3EDULE W
INTENTIONALLY OMITTED
w-1
3209942_13.DOC
SCHEDULE X
STREET SWEEPING SERVICES
The scope of work shall be as set forth in Appendices A and B of the contract between Veolia
and C1eanStreet, which appendices are attached hereto.
[See Attached]
x-1
3209942 13.DOC
APPENDIX "A"
SCOPE OF SERVICES
Area Swept: Downtown Area
Scheduled: Four times per week
Days Swept: Thursday, Friday, Saturday, and Sunday
Palm Canyon from Granvia Valmonte Parocela
Indian Canyon Drive from Granvia Vahnonte to Camino Parocela
Belardo Road from Alejo Road to Ramon Road
Amado Road from Palm Canyon Drive to Indian Canyon Drive
Tahquitz Canyon Way from Museum Drive to Indian Canyon Drive
Arenas Road from Palm Canyon Drive to Calle Encilia
Baristo Road from Belardo Road to Indian Canyon Drive
Ramon Road from Palm Canyon Drive to Indian Canyon Drive
Area Swept: Palm Springs Train Station Parking Lot
Scheduled: One time per week
Area Swept: City-Owned Parking Lots
Scheduled: One time per week
Lobster Company Parking Lot
Las Casuelas Parking Lot
Henry Frank Arcade Parking Lot
Mercado Plaza Parking Lot
The Vineyard Parking Lot
Blue Coyote Parking Lot
Area Swept: City Parking Stricture
Scheduled: 3 times per week, including emptying all trash receptacles and cleaning all
elevators.
Area Swept: Arterial Streets
Scheduled: One time per week
Amado Road Crossley-Rarnon to Mesquite
Andreas Road El Cielo Road
Aviation Drive Golf Club Drive- Mesquite to East Palm Canyon
Baristo Road Louella Drive
Calle E1 Segundo Luring Drive
Calle Encilia Mesquite Avenue-El Ciela to Crossley
Cerritos Road Sunset Way
Civic Drive Tachevah Drive
Sch.X-2
3209942 13.DOC
"APPENDIX A"
SCOPE OF SERVICES
(Page Two)
All remaining public streets within the City of Palm Springs will be swept once per month. The
complete listing of streets is given in the Exhibit A-1 to this Appendix A. All debris will be
transported to the Wastewater Treatment Plant, 4537 Mesquite Avenue, for disposal. Contractor
will utilize late model CNG TYMCO Regenerative Air machines, compliant with AQMD Rules.
Subject to the prior written approval of the City of Palm Springs, California, the Contractor may
store two (2) Regenerative Air machines at the City's Wastewater Treatment plant located at
4375 East Mesquite, Palm Springs, California. Use of any other street sweepers will require
written approval from the VWNA Contract Officer. The Contractor shall maintain a toll-free 24-
hour phone number for emergency contact by VWNA. The Contractor shall additionally provide
and regularly update a website link listing the weekly sweeping schedule for inclusion on the
City of Palm Springs website. The Contractor shall also provide a toll-free phone number for use
by VWNA to field reports, complaints, or requests for services outside the scope of this
Agreement. The Contractor's representative shall meet once per month with the VWNA
Contract Officer to review perfonnance and service.
If requested in writing by VWNA, additional sweeping services beyond the scope noted above
shall be provided by Contractor in accordance with the rates specified in Appendix B.
Sch.x-3
3209942_13.DOC
"APPENDIX B"
Additional street sweeping beyond that listed in"Appendix A", when requested by VWNA, shall
be performed at the rate of$15 per curb mile.
Any additional sweeping of areas (not streets) requested by VWNA shall be completed for the
rate of$65 per hour ($75 per hour if requested as overtime work hours as shown on an approved
schedule).
The Contractor shall, at no cost to VWNA, amorally provide sweeps of the five (5) events
specified below, with such events subject to change from time-to-time as may be agreed to in
writing between the parties:
1. Veteran's Day Parade
2. Palm Springs High School Home Coming Parade (Varies. Typically late October to early
November)
3. Festival of Lights Parade (Second Saturday in December)
4. Pride Festival Parade (November)
5. Fourth of July at Palm Springs Stadium (Parking lot and Pavilion Way)
sal,.x-a
32099,12_13.DOC
SCHEDULE Y
NEW VEHICLES
CITY MAKE Year Year Suggested Replacement
UNIT purchased Replacement
NUMBER needed
40192 Ford Ranger 92 2006 Ford Ranger Pickup
40280 Ford Meyers 80 2007 Ford F-150 Ext. cab, long bed
pickup.
404'95 John Deere L6200 95 2008 John Deere L6225 Tractor
Tractor
40561 ROTO-ROOTER 61 No replacement needed
40796 Ford LN-8000 Camel 96 2010 Ford Camel Jet/Vactor Model 200
Jet/Vacuum
40895 Chevy 1-ton Pickup 4x4 95 2006 Ford 350 Std. Cab 4x4 pickup
40995 Chevy 1-ton Pickup 4x4 95 2006 Ford 350 Std. Cab 4x4 pickup
41097 John Deere 5300 Tractor 97 2007 Small Wheel Loader (CAT 90413)
with light-material bucket, minimum
1.7-cu.yards.
42390 JCB 930-2 Forklift 90 2010 JCB 930 Forklift
46891 GMC Topkick Vacuum 91 2006 Ford- Calnel Jet/Vacuum Model 200
Truck
Y-1
3209942_13.DOC
OTHER VEHICLES NEEDED
New Vehicle Vehicle Type Year Needed
1 Ford 1/2-ton Econoline Cargo Van Est. 2006
2 Used 6-yard durnp truck Est. 2006
3 Bobcat Skid Steer with Brown Bear Est. 2006
4 Cues CCTV Unit with Van Est. 2006
5 Trailer mounted emergency generator Est. 2006
Sch.Y-2
3209942_13.DOC
SCHEDULE Z
WASTE DISCHARGE REQUIREMENT FOR SANITARY SEWER SERVICES AND
STORMWATER MONITORING SERVICES
SCOPE OF WORK FOR ENHANCED COLLECTION SYSTEM ACTIVITIES
Executive Summary
The Sewage Collection System will, in the very near future,become subject to a number of new
regulations that will require an enhanced level of effort to ensure compliance. The regulations
can be broadly organized into the three following categories:
• Fats, Oil and Grease(FOG)/Conunercial User Pollution Control Program
• Stonnwater Quality Program
• Sewer System Management Plan (SSMP)
This document is Veolia's scope of work to implement these programs for the City. Each of the
three listed programs requires significant administrative program development work during
2006-2007 to prepare for full implementation. This administrative workload may decline in
subsequent years, to be replaced with field staff that implements the programs. Veolia will
spread some of the program implementation work over two years and utilize Veolia Technical
Support Resources to assist in some of the initial program development work.
Veolia expects to hire four additional personnel to perform the work related to these three
programs. The amnual fees for the initial start-up and ongoing operation are shown below and a
breakdown of this additional work is provided in the following sections.
First year start-up and operational amount $311,177
Ongoing operational amounts $378,026
Fats, Oil and Grease (FOG)/ Commercial User Pollution Control Program
Requirements to implement these programs derive from two sources. One is the City of Palm
Springs's Ordinance#1682. The other is the statewide waste discharge requirements (WDR) for
Sanitary Sewer Overflows Systems, as adopted May 2, 2006 by the State Water Resources
Control Board-Order No. 2006-003 (SSO). More infonnation about this latter program is found
below in the section entitled Sanitary Sewer Management Program. For ease of reference, the
provisions of the WDR governing FOG programs are listed here.
Section 13 (vii) of the WDR requires that the FOG program contain the following elements:
• (vii) (a) An implementation plan and schedule for a public education and outreach
program that promotes proper disposal of FOG;
• (vii) (b) A plan and schedule for the disposal of FOG generated within the sanitary sewer
system service area
• (vii) (c) The legal authority to prohibit discharges to the system and identify measures to
prevent SSOs and blockages caused by FOG;
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• (vii) (d) requirements to install grease removal devices, design standards for the removal
devices, maintenance requirements, BMP requirements, record keeping, and reporting
requirements
• (vii) (e) Authority to inspect grease producing facilities, enforcement authority;
(vii) (f) An identification system of sewer system sections subject to FOG blockages and
establishment of a cleaning maintenance schedule for each section;
• (vii) (g) Development and implementation of source control measures, for all sources of
FOG discharged to the sewer system, for each source identified in(f) above.
To comply with these requirements Veolia will prepare and implement a FOG source control
program to reduce the amount of these substances discharged to the Sewage Collection System.
This plan will include the following:
Implementation
During 2006-2007, Veolia personnel will concentrate primarily on developing and implementing
a FOG Control Program, as described in Ordinance#1682. This program will target Food
Service Establishments (FSE) within the City of Palm Springs, with the goal of preventing SSO
caused by FOG discharges. From the business license list provided by the City, it is estimated
that there are over 200 FSE in the City.
During 2006-2007 Veolia will:
• Hire personnel and provide initial orientation and basic training. Veolia teclutical support
staff will conduct specific training in the techniques for inspection of FSE and other
commercial users, sampling teelmiques, and data collection and handling. The support
staff will assist in the development of site specific procedures for inspections, business
surveying and permitting, grease trap subsidy program procedures, procedures for
handling non-compliance, and permit forms and reporting procedures. These efforts will
be coordinated with the City's Building & Safety Department and Public Works
Department.
�• Veolia will conduct an initial survey of all FSE to gather current information as to the
presence or absence of a grease interceptor and other pertinent information. Veolia will
also provide information to the FSE on best management practices (BMP), ordinance
requirements and the grease trap subsidy program. Veolia will then prepare user permits
for all FSE requiting grease control devices or the implementation of BMP. The survey
information and permits will be turned over to the City Building & Safety Department for
review and this department will issue all permits, establish the appropriate trap sizes
when new traps are required and provide plan approval and conduct all construction
inspections. Veolia personnel will assist the City in these activities, as needed.
• Veolia will conduct FSE facility inspections for implementation of BMP and trap
maintenance. As needed, Veolia will re-inspect FSE that were initially out of compliance
to ensure they are making progress toward becoming folly compliant with the terns of
the City's FOG Ordinance (Ordinance#1682) and Title 15 of the City Code.
�• Veolia will conduct sampling of habitual offenders and/or those facilities that are subject
to enforcement actions that require special sampling.
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• The results of the grease trap/interceptor inspections will be documented and reported to
the Building and Safety Department for further action. The City is responsible for
escalating enforcement for users with a history of persistent non-compliance.
Estimate Basis
The first year of the FOG program implementation will require special focus on establishing
program procedures, employee training, initial surveys, permit preparation and inspections. hi
addition,Veolia anticipates higher noncompliance in the first year of implementation than in
subsequent years as many establishments will be unfamiliar with program requirements. This
will necessitate follow-up inspections for each non-compliant user, which will further increase
the workload in the first year. Veolia will provide adequate staff to meet this initial manpower
requirement through support from off-site technical staff, as well as support from other in-house
personnel. The parties agree to negotiate in good faith for a price for this scope of services or to
reduce the scope.
Subsequent years:
After 2006-2007, Veolia will inspect all FSE twice each year, or less frequently if a pattern of
compliance is shown, with follow up inspections for those users found to be in non-compliance.
However, non-corpliance among FSE may decrease, reducing the workload in the FOG
prograrn. Sampling and analysis of FSE waste streams will be only for the worst cases and are
estimated to not exceed 10 to 15 sampling events per year. After 2006-2007, Veolia will only
conduct initial FSE surveys and permitting when a new FSE applies for a business license or
substantial changes are made to the business. If and tot the extent that this reduction in labor
force required for the FSE program occurs, Veolia personnel will begin establishing a program
for surveying and monitoring activities on other commercial user groups.
There are a number of other commercial user groups that generate waste that can potentially
impact the Treatment Facility or the stormwater quality. The County's NPDES permit for
stormwater discharges requires corn munities to use BMP in identifying and controlling these
discharges from targeted industries or cornrnercial establislunents that could potentially
contribute a substantial pollution load to the stormwater system. Automotive service businesses,
commercial cleaning and dry cleaning business are examples of the types of commercial
establishment of concern.
Beginning in July 2007, Veolia will utilize City business license infonnation and conduct an
initial survey of each of these businesses. Veolia will prepare pen-nits for those businesses it
determines to have the highest potential to contribute a pollutant load to the stormwater system
or the Treatment Facility. Veolia will provide pollution prevention and waste minimization
information to the businesses, as well as explain the requirements in the City's Water and Sewer
Code and Stonrrwater Permit. The goal will be to ensure each business is using BMP to handle
their wastes and prevent the discharge of pollutant to either the City's Sewage Collection System
or stormwater system.
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For example, a pollution control program for automotive repair establishments and car washes
will be established. The BMP program for this group promotes the use of oil/water separators
and grit sumps, and discourages the discharge of oily wastes into the wastewater collection
system or stormwater conveyance system. Veolia will inspect the automotive repair shops and all
carwashes with grit sumps and oil sumps similar to FSE inspection. In addition, the Veolia
inspectors will check how waste oil, used antifreeze, used tires, and other automotive wastes are
disposed or recycled. There are approximately 55 automotive and mechanical repair facilities in
the City that would fall under this program.
In summary, Veolia will implement the FOG Control Program for the FSE during 2006-2007.
Then, commencing July 2007, part of the inspectors' time would be used to develop and
implement the monitoring program for the other commercial users. Its full implementation would
be complete by the end of 2009. After the FOG and commercial users programs are fully
implemented, the workload may decrease on an ongoing basis. After about five years (mid-
2011), it is likely that commercial users will be very familiar with the requirements and a high
level of user compliance will be achieved. A further reduction in the monitoring program and
workload may occur at this time.
Materials and Supplies
In addition to labor requirements, the implementation of the FOG program will also require
vehicles,materials and supplies. Most costs are minor including phone service, office supplies
and health and safety equipment, however, there are major costs in the purchase of vehicles and
vehicle related expenses for the execution of this program. The costs of sampling and laboratory
supplies will vary with the cost being highest for the first year of the Agreement and potentially
declining thereafter.
Stormwater Quality Program
Veolia, on behalf of the City, will develop and implement a specific Sanitary Spill Response
Procedure in accordance with Board Order Bo. RS-2002-011 (MS4 Permit) and the Board Order
No.01 —077 (NPDES No. CAS617002) Whitewater Municipal Stonnwater Permit (WMSP).
This will include:
Developing standard procedures consistent with and to meet the reporting requirements
of the Unified Sanitary Spill Response Procedure (part of the stonnwater NPDES permit
renewal due in September 2006).
Developing standard procedures consistent with and to meet the spill response
requirements of the Unified Sanitary Spill Response Procedure. This will include taking
immediate measures to attempt to contain the release and minimize impacts to the water
quality and the MS4. Veolia will clean up spills and debris left from spills on public
property and sanitize the area, if necessary.
Veolia will respond and assist in attempts to control and contain spills that arise from
private property or result from blockages in a private lateral or grease interceptor.
Veolia will hack and report on changes to major structural controls for stonnwater
runoff, new outfall stonnwater information, and the inventory of industries.
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is Veolia will assist City staff in detecting and attempting to prevent the dumping or
discharging of pollutants into storm drains and drainage channels. Veolia will assist the
City in conducting field inspections of the storm drain system and targeted industrial
facilities, and will maintain data on the number of incidents, types of dumps or
discharges, and types of industries through the use of incoming complaint logs,
investigation reports, and responsible party forms.
• Veolia will assist the City in educating the public and businesses about the County's
household hazardous waste programs, which provide a convenient means of disposing of
oil, antifreeze,pesticides, herbicides, paints, solvents and potentially harmful chemicals,
on the impacts of durnping pollutants into the storm drainage system.
• Veolia will coordinate with the City departments to develop a list of targeted industries
which potentially could contribute substantial pollutant loads to the storm drain system.
• If the new WMSP (due for renewal in September 2006) requires sampling and
monitoring of stormwater outfall locations, Veolia will conduct the monitoring and
sampling activity,including taking the sampling to a State certified laboratory for
analysis.
• Veolia will clean up to 364 stonnwater catch basins (Attachment A) of debris that could
interfere with the flow of stonnwater or create nuisance conditions.
• Veolia will provide adequate training for its staff in reporting procedures, BMP
procedures and sanitary sewer spill control procedures.
Work associated with spill clean-ups is not included in Veolia's O&M Fee unless otherwise
specifically stated in this Exhibit. During 2006-2007,Veolia will develop the site specific Spill
Response and Reporting Plan. In addition, Veolia will respond to sewer overflows as required by
a Unified Sanitary Spill Response Procedure and Reporting Procedure. Included at Attachment
B is an example of such a document from the Santa Ana Regional Board; the Riverside Regional
Board is expected to publish its requirements for such procedures in September 2006. Veolia will
clean the 364 stormwater catch basins once per year. If periodic inspecting and sampling of
stormwater discharges is required in the new NPDES permit, Veolia will perform these tasks on
behalf of the City. Veolia will track the monitoring and spill information, and assist the City
staff in the preparation of the Annual Stonnwater Report.
Materials and Supplies
In addition to labor requirements, the implementation of the stonnwater program will also
require materials and supplies. Most costs are minor, including phone service, office supplies
and health and safety equipment. There are, however, major costs in the purchase of vehicles
and vehicle related expenses for the execution of this program. The City will acquire these
vehicles for Veolia's use. The costs of sampling and laboratory supplies will vary with the cost
being highest for 2006-2007 and potentially declining thereafter.
Sewer System Management Plan (SSMP)
On May 3, 2006, the State Water Resources Control Board adopted final Waste Discharge
Requirements (WDR) for all publicly-owned sanitary sewer collection systems in California.
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Among other provisions, the WDR requires each public entity with a sewer collection system to
prepare a Sewer System Management Plan(SSMP).
Section 13 of the WDR outlines the requirements for the implementation of a Sewer System
Management Plan. The required elements are:
• Goals
• Organization
• Legal Authority
• Operations and Maintenance Program
• Design and Performance Provisions
• Overflow Emergency Response Plan
• Fats, Oils and Grease (FOG) Control Program
• System Evaluation and Capacity Assurance Plan
Monitoring, Measurement, and Program Modifications
• SSMP Program Audits
• Cornmunication Program
Veolia will develop and implement the SSMP containing the components described below, and
make it available to the State and/or Regional Water Board per the requirements of the WDR.
Operation and Maintenance Program -The SSMP shall include,those elements listed below that
are appropriate and applicable to the Sewage Collection System:
• Maintain all up-to-date map of the Sewage Collection System, showing all gravity line
segments and manholes, pumping facilities, pressure pipes and valves, and applicable
storawater conveyance facilities;
• Describe routine preventive operation and maintenance activities by staff and contractors;
including a system for scheduling regular maintenance and cleaning of the sanitary sewer
system with more frequent cleaning and maintenance targeted at known problem areas.
The preventative maintenance program will have a system of tracking activities, such as
work orders;
• Identify and prioritize system deficiencies and implement short-tern and long-term
rehabilitation actions to address each deficiency. The program will include regular visual
and closed circuit television (CCTV) inspections of manholes and sewer pipes, and a
system for ranking the condition of sewer pipes and scheduling rehabilitation.
Rehabilitation and replacement will focus on sewer pipes that are at risk of collapse or
prone to more frequent blockages due to pipe defects. Finally, the rehabilitation and
replacement plan will include a capital improvement plan that addresses management and
protection of these infrastructure assets;
Provide training on a regular basis for staff in sanitary sewer system operations,
maintenance, and require contractors to be appropriately trained; and
Provide equipment and replacement part inventories, including identification of critical
replacement parts.
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The preparation of this plan will require support from Veolia's regional technical personnel as
well as the work of our on-site staff. To meet all the requirements on an ongoing basis will
require an increase in on—site staffing as described at the end of this section.
Overflow Emergency Response Plan—Veolia will develop and implement an overflow
emergency response plan that identifies measures to protect public health and the environment.
This plan should include the following:
• Notification procedures to primary responders and regulatory agencies;
• A program to provide response to overflows;
• Procedures to ensure prompt notification to appropriate regulatory agencies;
• Procedures to ensure that appropriate staff and contractor personnel are aware of and
follow the overflow emergency response plan and are appropriately trained;
• Procedures to address emergency operations, such as traffic and crowd control and other
necessary response activities; and
• A program to ensure that all reasonable steps are taken to attempt to contain untreated
wastewater and attempt to prevent discharge of untreated wastewater to surface waters
and minimize or correct any adverse impact on the environment.
When a sanitary sewer overflow occurs, Veolia will take steps and remedial actions to attempt to
1) control or limit the volume of untreated wastewater discharged, 2) terminate the untreated
wastewater discharge, and 3) recover as much of the untreated wastewater discharged as
reasonably possible for proper disposal, including any wash down water.
Monitoring Measurement, and Pro grain Modifications.
Veclia will:
• Maintain information that can be used to establish and prioritize appropriate SSMP
activities;
• Monitor the implementation and measure the effectiveness of each major element of the
SSMP;
• Assess the success of the preventative maintenance program;
Update prograin elements, as appropriate, based on monitoring or performance
evaluations; and
Identify and illustrate SSO trends, including: frequency, location, and volume.
SSMP Program Audits - As part of the SSMP, Veolia will conduct internal audits every two
years, appropriate to the size of the system and the number of SSOs.
Veolia will incorporate this requirement into its existing environmental, health and safety audit,
which currently conducted at all Veolia operated facilities every two years.
Communication Program—Veolia will communicate on a regular basis with the public on the
development, implementation, and performance of its SSMP.
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3209942_13.DOC
Capital Improvement Pro grain
System Evaluation and Capacity Assurance Plan: Veolia, with funding fi-om the City, as part of
the Sanitary Sewer Master Plan described in Schedule DD, will prepare and implement a capital
improvement plan(CIP) that will provide hydraulic capacity of key sewer system elements for
dry weather peak flow conditions, as well as the appropriate design storm or wet weather event.
The plan shall include:
• Evaluation: Steps to evaluate those portions of the sanitary sewer system which are
experiencing or contributing to an SSO discharge caused by hydraulic deficiency. The
evaluation shall provide estimates of peak flows associated with conditions similar to
those causing overflow events, estimates of the capacity of key system components,
hydraulic deficiencies and the major sources that contribute to the peak flows associated
with overflow events;
• Capacity Enhancement Measures: Establish a short- and long-term CIP to address
identified hydraulic deficiencies including prioritization, alternatives analysis, and
schedules. The CIP may include increases in pipe size, infiltration/inflow reduction
programs, increases and redundancy in pumping capacity, and storage facilities. The CIP
will include an implementation schedule and will identify sources of funding.
General Monitoring and Reporting Requirements
• Veolia, on the City's behalf, will furnish to the State or Regional Water Board any
information which the State or Regional Water Board may request (i) as required by the
adopted WDR order; or(ii)to determine whether cause exists for modifying, revoking
and reissuing, or terminating the applicability of the Order(WDR)to the City. Veolia, on
the City's behalf, will also farnish to the Executive Director of the State Board copies of
records required to be kept by this Order.
• Veolia will comply with the monitoring and reporting program presented above.
Monitoring results will be reported at the intervals specified in monitoring and reporting
program.
• Veolia will obtain SSO database accounts to allow controlled and secure entry into the
SSO database. Additionally,prior to recording spills into the SSO database, Veolia will
complete the"Collection System Questionnaire", which collects pertinent infonmation
regarding the collection system.
Discharges of untreated wastewater to storm drains and drainage channels, whether man
made or natural or concrete lined, will be reported as required above. All SSOs greater
than 1,000 gallons discharged in or on any waters of the State, or discharged in or
deposited where it is, or probably will be, discharged in or on any surface waters of the
State will also be reported to the Office of Emergency Services pursuant to California
Water Code Section 13271.
At this time, the State is developing BMP guidelines for close circuit television (CCTV) work in
the Sewage Collection System. Veolia will televise the entire system in accordance with these
guidelines. In addition, new BMP guidelines for sewer cleaning will likely change and Veolia
will also meet these more stringent requirements for cleaning the entire collection system.
Furthermore, this program will require the establisbrnent of a software database to handle and
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organize the considerable amount data gathered by the evaluation program, which will
significantly increase the workload on an ongoing basis. Other parts of this program will require
increases in sewage lift stations maintenance, increased dye and smoke testing and the oversight
of the capital improvement work in the Sewage Collection System.
Materials and Supplies
In addition to labor requirements, the implementation of the SSMP will also require vehicles,
materials and supplies. Most costs are minor including phone service, office supplies and health
and safety equipment.
Staffing Summary
The staffing anticipated for the implementation of the programs outlined in this schedule is
summarized in Table 1.
Table 1 SSMP Staffing Requirements
Program FTE Year One FTE Years Two to Five FTE Subsequent years
FOG 2.62 1.21 0.51
SSMP 1.17 2.17 2.17
Stonnwater 0.68 0.68 0.33
Total 4.47 4.06 3.01
The following paragraphs describe the job duties of additional personnel to execute these
programs:
Program Manager
Duties will include:
• Assist off-site technical persomiel in the preparation of site-specific program, plans and
procedures. Update these procedures as needed to meet changing conditions and
requirements.
• Oversee and participate in the surveying and permitting FSE and other commercial users
• Oversee and conduct site inspections of FSE and other commercial users.
• Using computer software, enter, organize, analyze and report data gathered from the
commercial user program, stormwater program and SSMP.
• Prepare required reports for the City, regulatory agencies and for internal use.
• Provide oversight and tracking of the Sewage Collection System capital improvement
program.
• Oversee the grease trap subsidy program.
• Order chemicals for the City's pool at the direction of the City.
• Perform public outreach activities,produce and distribute public informational literature,
and prepare correspondence to commercial users.
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Inspector
Duties will include:
41 Assist in the surveying and permitting of FSE and other commercial users.
U Conduct site inspections of FSE, other commercial users and storrwater discharges.
41 Conduct sampling and perform field testing on the discharges from FSE and other
commercial users, on stormwater discharges and the Sewage Collection System.
41 Enter monitoring data into the computerized database.
41 Respond to customer calls concerning collection system or stormwater system problems.
•o Perform minor maintenance and calibrations on sampling equipment, meters and other
equipment.
41 Perform dye testing and smoke testing in the Sewage Collection System.
Vacuum/Flusher Truck Driver/ CCTV Operator (two positions)
Duties will include:
• Operate vacuum/flusher truck to clean the Sewage Collection System manhole and pipes,
Down and Under System, and stormwater catch basins.
• Operate the CCTV truck and camera equipment to evaluate the condition of the sewer
manhole and pipes, and stormwater laterals.
• Perform repairs and maintenance on sewage lift station equipment.
• Respond to sewer overflows and spills.
• Conduct site inspections of FSE and other commercial users,
sit, z-10
3209942 13.DOC
SCHEDULE AA
PRE-APPROVED CAPITAL PROJECTS LIST AND SCOPE
Capital Project 30% Design Cost Final Design/Construction Not to Exceed
Amount
Secondary Digester $90,000 $2,685,039 $2,775,039
Rehabilitation
Lift Station#1 Wet Well $10,000 $563,470 $573,470
Rehabilitation
Percolation Ponds 7A, $44,571 $1,332,215 $1,376,786
713 and 8
Plant Reclaimed Water $53,138 $570,745 $623,883
Pump Station
TOTALS $197,709 $5,151,469 $5,349,178
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3209942 13DOC
SCHEDULE AA
PRE-APPROVED CAPITAL PROJECTS LIST AND SCOPES
Task A- Secondary Digester Rehabilitation
The secondary digester was built in 1960 and was last cleaned by the City in 1997. At that time,
it was inspected and it was found the coating on the cover was damaged in some areas. The
digester gas, which the cover is in contact with when the tank is in operation, is extremely
corrosive and can corrode the unprotected steel cover fairly quickly. The steel would become
unprotected if the existing coating system were compromised. In the spring of 2004, operators
discovered four small holes in the secondary digester cover. Additionally, leaking gas would
reduce the working gas pressure in the digester resulting in less efficiency in any future
cogeneration project. The holes were temporarily repaired with silicon.
Veolia will prepare plans and technical specifications for the rehabilitation of the existing
secondary digester floating cover. The existing floating cover has experienced areas of severe
localized corrosion at the outer edges of the cover. Pacific Technical Services prepared an
ultrasonic inspection of the floating cover that will be used as the basis for further analysis.
This scope of work does not address any potential mechanical or structural deficiencies that may
be evident once the digester is emptied and cleaned in preparation for the cover removal and
rehabilitation. Veolia has included the cost to empty, clean, and screen the sludge that is in the
digester.
The following is a preliminary list of drawings for the project(final design sheet count will be
detennined during subsequent negotiations):
G-1: Cover sheet
C-1: General or yard piping and site plan
C-2: Project area site plan (larger scale)
C-3: Demolition instruction sheet with photos
M-1: New digester cover plan and sections
M-2: Digester cover installation sections and details
M-3: New digester mixing system plan and sections
M-4: Existing generator room plait and sections with demolition instructions
M-5: New heat exchanger installation plan and sections
M-6: New heat exchanger installation sections and details
M-7: Heat exchanger room piping layout details
M-8: Misc. digester improvements (knife gate valve replacement)
M-9: Misc. digester improvements (gas meter installation)
M-10: Misc. digester improvements (installation of digester sampling taps and
piping)
M-11: Heat exchanger room ventilation modifications (if needed)
M-14: Misc,mechanical details
S-1: Misc. structural details
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3209942_13.DOC
E-1: Electrical site plan, digester cover pressurization blowers and mixing pump
station
E-2: Electrical site plan, heat exchanger room
E-3: Single line diagram, existing panel
E-4: Single line diagram, expanded panel with new equipment
E-5: Control schematics diagram 1
N-1: Instrumentation symbols and abbreviations
N-2: P&ID, digester heating and mixing
Vealia is proposing to execute this work via a design/build approach. Our current estimate for
this work is $2,685,039. This estimate includes the following:
• Remove all sludge, grit, sand,rags, plastics, grease and other miscellaneous debris from
the digester. The material will be screened and pumped to the on-site drying beds. The
screenings will be deposited in the onsite drying beds, roll-off bins or other receptacles
for disposal. Assumption for the tank material include: < 5% average solids concentration
(grit&heavier solids anticipated) and a maximum volume of 600,000 gallons (7' solids)
• Open and when finished properly secure access hatches
• Construction and as-built drawings as listed above
• If lead paint or asbestos is detected at the Digester Dome, the lead paint and asbestos
removal will be an additional charge.
• Constriction schedule for all of this work to be mutually agreed upon by
WMLyles/Veolia
• Costs to demo digester dome & salvage offsite
• Demo generator & appurtenances and salvage offsite if energy study determines that it is
not worth refurbishing
• Use of existing generator pad to mount heat exchanger for digester mixing system.
• Cap piping&make safe electrical
• Furnish & install new digester gas storage cover
• Furnish & install 7 Draw Off Valves
• Furnish & Install Equipment Pad for Dome Blowers
• Fumish and install digester mixing system
• Furnish and install major equipment such as heat exchanger and cogeneration heat and its
ancillary equipment to convert secondary digester to primary digester
• Fix sample taps
• Gas metering
• Provide plasma cutter, grinders, wheels and all other equipment necessary for preparation
• If deemed necessary, structural repairs to the digester and any cost for destructive testing
i.e. core drilling and testing has been excluded because access to the interior of the
digester tank is not available
• Contractor work hours to be set dependent on season
• Cost for any city building permit or license has been excluded
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3209942_13,DOC
• Surety Bond,builders risk insurance, and general liability
• Miscellaneous quality control inspection provided by Veolia
• All work shall be compliant with current city building codes and inspections
• Taxes on all permanent material
The parties agree to negotiate in good faith a price for this scope of services or to change the
scope as needed.
Veolia is assuming that there is no lead paint on Digester Dome and currently has not budgeted
for its removal. Veolia will work with the City to remediate lead paint should any be found.
Since this work would be executed in the middle of the summer, the current plan is to perfonn
this work between the hours of 2 am and 12 pm, if determined to be mutually acceptable.
Task B-Lift Station No. 1 Wetwell Rehabilitation
Lift Station#1 is the largest sewage lift station in the collection system and is located next to
Tahquitz Canyon Golf Course Driving Range. This lift station was built in 1984 and has not
been rehabilitated since that time. In this lift station's wetwell, the coating covering the concrete
has pulled away in several areas and is hanging down from the ceiling and walls. Over the long-
term, the corrosive sewer gas will eventually eat away at the concrete structure. A more
immediate problem could occur if a large section of the thick coating material broke away from
concrete and plugged one of the lift station pumps. Potentially, this could cause the wetwell to
overflow or backup sewage coming into the lift station.
Veelia has prepared a scope of work to address re-coating the pump station wetwell. Veolia will
utilize existing as-built drawings to show the dimensions of the existing wetwell and identify the
work to be perfonned. After the wetwell has been emptied, dried and inspected, Veolia will
reconnrnend repair to damages from hydrogen sulfide corrosion and re-coating of the wetwell
interior. Veolia will provide a technical specification for the surface preparation and recoating of
the wetwell. Veolia will assume for now the design of an epoxy coating that typically has a
service life of approximately 10-years; however, the duty life of the epoxy coating system is
dependent upon the quality of the surface preparation. If the City desires a longer duty life, the
City may elect to proceed with the more expensive shot-crete and PVC liner system.
Veolia is proposing to execute this work via a design/build approach. Our current estimate for
this work is $563,470. This estimate includes the following:
• Development of specifications and procurement documents as needed
• Remove all sludge, grit, sand,rags,plastics, grease and other miscellaneous debris from
the wetwell using City's Vactor. All material will be taken back to the plant for disposal
• Construction of a 200' temporary sandbag dike to divert possible overflow into a nearby
percolation pond
• Wash down walls after sludge removal
• Provide fans for dehumidification of wetwell to properly dry wet well before applying
new coating system
• Provide and install temporary chopper pumps and all other appurtenances necessary for
bypassing pumping around the existing wetwell
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3209942_t3.DOC
• Labor and equipment to pull the duty pump 1 to 2 times per week to check for plugging
and wear on the pump. This cost is included to avoid any pump failures and sanitary
sewer overflows onto the golf course
Provide and install plugs into all incoming and outgoing pipes in the upstream manhole
• Due to the proximity of this lift station to the golf course and the importance of this lift
station to the collection system, labor for evening and weekend watch of the bypass
pumps and control system is being provided
�• Mobilize and demobilize coating subcontractor
• Coatings subcontractor to blast and recoat interior of wet well
• Complete rebuild of emergency generator
• Surety Bond, builders risk insurance, and general liability insurance
• Miscellaneous quality control inspection provided by Veolia
• Taxes on all permanent material
The parties agree to negotiate in good faith a price for this scope of services or to change the
scope as needed.
Task C - Percolation Ponds 7A, 7B & 8
The existing percolation ponds 5, and 6 must be relocated due to new development. At the same
time, additional percolation pond capacity is needed as the percolation rate in some of the
existing ponds is underperfonning, as noticed during the winter months
Veolia will prepare plans and specifications for the development of percolation ponds 7a, 7b, and
8, with associated distribution piping. Included in this effort will be a site survey(land) and
geotechnical evaluation.
The following is a preliminary list of drawings for the project (actual design will be determined
during subsequent negotiations):
G-1 COVER SHEET, NOTES, ABBREVIATIONS
C-1 PERCOLATION POND PLAN VIEW WITH SITE PIPING
C-2 PERCOLATION POND 7A PLAN VIEW WITH CONTOURS
C-3 PERCOLATION POND 7B PLAN VIEW WITH CONTOURS
C-4 PERCOLATION POND 7A & 7B SECTIONS
C-5 PERCOLATION POND 8 PLAN VIEW WITH SITE PIPING
C-6 PERCOLATION POND 8 SECTIONS
C-7 DETAILS
C-8 DETAILS
Our current estimate for this work is $1,332,215. This estimate includes the following:
• Construction project will be procured in two parts; the mechanical and civil structures
portion will be procured in the open book/ closed book method and the grading portion
will be procured as a competitive bid.
• Site survey for design, geotechnical evaluation, and construction drawings as listed above
Construction water via an onsite fire hydrant by the City
Clear/Grub/Set up for water tower
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U Water tower Rent
O Implementation of a site specific stormwater pollution prevention plan(SWPPP)
O Due to the very dry and sandy conditions at the new percolation pond site, it is required
that a prewater or watering by water trucks happen before any dirt moving operation
occurs. The dirt is not manageable in this very dry condition. This activity continues
throughout the entire dirt moving project
Dumpsters for debris
Street sweeping during construction
Cut/Fill Pond#8 - 30,000 CY
Due to the lack of material on the new percolation pond site, Veolia has assumed that we
can obtain an additional 37,000 cubic yards of material from Ponds#1 thru#4 to build
#7A, #7B and#8
The berms at the percolation pond will be compacted to 90%max density.
780 lineal feet of 36"bell and spigot HPDE pipe, 700 lineal feet of 48"bell and spigot
HPDE pipe; survey, dig, install, and properly backfill.
Four(4) 36" irrigation isolation butterfly valves for the percolation ponds' distribution
system
Two concrete diversion structures
Fine grade new ponds/disturbed ones
The percolation pond bottoms are to be left in a `ripped' state upon completion.
Allowance for replacement of asphalt paving
Items excluded are any ground dewatering, costs to import or export material off site, and
the removal of any asbestos pipe that may be encountered
Three competitive bids for civil site grading
Surety Bond,builders risk insurance, and general liability insurance
Miscellaneous quality control inspection provided by Veolia
Taxes on all permanent material
The parties agree to negotiate in good faith a price for this scope of services or to change the
scope as needed.
Task D—Plant Reclaimed Water Pump Station
The wastewater plant currently relies upon the irrigation water system at DeMuth Park as the
source of plant water. Plant water demands include wash down water, engine cooling water, and
onsite irrigation. The reliability of the park irrigation water system is questionable and plant
staff does not have access to the park irrigation pumps. Therefore, Veolia proposes to
design/build an onsite reclaimed water purnp station to satisfy plant water demands. The
detailed subtasks include:
D-1 —Data Collection and Review
D-2: Site Visit
Veolia will conduct a design site visit to develop the 30% and final design of the plant
water pump station.
D-3. Integration with operations
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Develop operational strategy for the new plant water pump station to refine the design
effort.
D-4: Construction Drawings
Veolia will prepare construction drawings and specifications as required to satisfy the
plant water demands. These plans are intended to be the 30% design plans, ready for
construction.
The following is a preliminary list of drawings for the project
G-1: Cover sheet
C-1: General or yard piping site plan
C-2: Project site plan(larger scale)
C-3: New pump station discharge piping and tie-in to existing distribution system
C-4: Project area yard piping plan(larger scale)
C-5: Misc. civil details
M-1: New plant water pump station layout
M-2: New plant water pump station section and details
M-3: Misc. mechanical details
M-4: Misc. mechanical details
E-1: Electrical symbols and abbreviations
E-2: Electrical site plan
E-3: Single line diagram
E-4: Control schematics diagram
E-5: Misc. electrical details
S-1: Chlorination basin modifications for purnp mounting
S-2: Misc. structural details
N-1: Instrumentation symbols and abbreviations
N-2: P&ID
N-3: Misc. instrumentation details
D-5: Specifications
Veolia will prepare technical specifications to reflect the recommended design pursuant
to the plant water study and the Construction Drawings.
Veolia is proposing to execute this work via a design/build approach. Our current estimate for
this work is $570,745. This estimate includes the following:
" Construction drawings as listed above
■ Provide and install two pumps and all other appurtenances
■ Modification of grating &installation of support beams for pumps
■ Furnish and install 2-8" discharge piping, valves and appurtenances for a total of 300'
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• If needed, tannish and install new hydro-pneumatic tank slid appurtenances
• If needed, form and Pour concrete pad for the hydro-pneumatic tank and appurtenances
(air compressor, local control)
• Repair of damaged irrigation lines
• If needed, a painting allowance for the hydro-pneumatic tank&piping
• If needed, an electrical allowance which includes variable frequency drives for 2-40 hp
motors
• Contractor work hours to be set dependent on season and upon mutual agreement
amongst all parties
• Items excluded are any ground dewatering, costs to import or export material off site, any
new building that might be needed to house any variable frequency drives. It is assurne
that any necessary variable frequency drives will be located in an existing building
• Cost for any city building permit or license has been excluded
• Surety Bond, builders risk insurance, and general liability
• Miscellaneous quality control inspection provided by Veolia
• Taxes on all permanent material
The parties agree to negotiate in good faith a price for this scope of services or to change the
scope as needed.
Proeram and Project ManalZement
Veolia will also perform the program and project management activities required in the
execution of the tasks included in this Scope of Services. Such activities include the following:
Meetings
It is assumed that the total program, as proposed, will be completed over a period of 18-
months. During this period, Veolia will conduct monthly progress meetings with the City and
the CONTRACTOR(as applicable) to discuss task progress, direction and specific technical
aspects of the project. All meetings will be conducted at Veolia's office, at the project site, or by
conference call. Topics of discussion will generally include:
• Progress accomplished during the preceding month
• Review of work products
• Review and update of project schedule
• Coordination of work items
Veolia will prepare and distribute a meeting agenda to the City in advance of each of
these meetings. Within five working days after each meeting, Veolia will prepare and distribute
meeting minutes to the City. A total of ten (10)project meetings are anticipated. Construction
and specific project task meetings will be included in routine field trips to the project site.
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Documentation
Veolia will maintain project records, such as progress reports, memoranda, letters,
meeting minutes, action item lists and project submittals.
PROJECT DELIVERABLES
Veolia will provide the following deliverables, as applicable, under this Scope of
Services:
O Studies/Reports—Five print copies (Draft and Final), one electronic copy(Final— City's
current AutoCADD version).
u Drawings—Five 11 x 17 inch sets (Draft), five 11 x 17 inch sets (Final), one full size (24
x 36 inch) print set(Final), one electronic copy(Final—City's current AutoCADD
version).
Specifications—Five print copies (Draft and Final), one electronic copy(Final—City's
current AutoCADD version).
Meeting Minutes—Electronic copies via email.
ADIDITIONAL SERVICES
All services requested of Veolia by the City during the PROJECT that are not specifically
described in the scope of work shall be provided by Veolia as Additional Services. Additional
services may include the following:
1. Geotechnical and survey investigations other than where indicated in the scope
)_. Environmental clearances and pennitting work
3. Water quality testing
4. Obtaining City, County and other agency approvals
5. Design of facilities not specifically included in the scope of work (pipelines, tanks,
pumping stations, etc.)
The following information will need to be provided by the City to Veolia if it is not
currently in the possession of Veolia:
1. Environmental studies and reports related to project
2. Record drawings and specifications for the existing plant and collection system
3. Copy of shop drawings (for selected equipment)
4. Engineering design binders from original project
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5. Plant operations and quality/performance records
5. Financial, budget and schedule limitations and scope
Scope of Work for 30% Design for the Pre-Approved Capital Projects
30% design for the Pre-Approved Capital Projects shall commence as of the effective date of this
Agreement based on the fees outlined in the fee schedule in Schedule AA. As a deliverable for
each Pre-Approved Capital Project task, Veolia will submit a design criteria summary and
conceptual design drawings, as outlined below, to clearly demonstrate that the Project will, at a
minimum, achieve all required Agreement standards and performance guarantees.
The 30% design deliverable will also include a conceptual design of the proposed improvement,
a list of the major equipment, construction schedule, and the detailed job cost estimate
breakdown that will be used during the open book/closed book process.
The preliminary list of drawings for each task is the current estimated sheet description and
count Veolia feels is necessary to construct the project. The number, titles and content of the
sheets shall be deemed preliminary and may change throughout the development of the 30%
design. Updates and changes to the list will be discussed within the monthly reviews leading up
to the lump sum proposal. Preliminary design and specifications are not stamped by a
professional engineer as they are not complete.
Veolia will provide a lump sum final design/build price for each task. Each cost will include all
costs for taking the design from 30% to 100% construction drawings, constructing, startup,
acceptance testing, insurance, surety bonds, and all applicable taxes. After successful
negotiations of the lump sum fee, a schedule of values will be developed to be used for payment
purposes
Meetings
During this period, Veolia will conduct progress meetings with the City and the
CONTRACTOR (as applicable) to discuss task progress, direction and specific technical aspects
of the project. Meetings will be conducted at Veolia's office, at the project site, or by conference
call. Topics of discussion will generally include:
U Progress accomplished during the preceding month
U Review of work products
U Review and update of project schedule
U Coordination of work items
Veolia will prepare and distribute a meeting agenda to the City in advance of each of
these meetings. Within five working days after each meeting, Veolia will prepare and distribute
meeting minutes to the City.
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Documentation
Veolia will maintain project records, such as progress reports, memoranda, letters,
meeting minutes, action item lists and project submittals.
]PROJECT DELIVERABLES
Veolia will provide the following deliverables, as applicable,under this Scope of
Services:
O Design criteria summary- Documentation of recommended improvements during the
progress meetings, subsequent technical memoranda, and meeting minutes.
u Preliminary Drawings—Three 11 x 17 inch sets (Draft)
O Preliminary Specifications—Three print copies (Draft)
O Preliminary Project schedule (Draft)
U Detailed job cost estimate
O Meeting Minutes—Electronic copies via email.
Task A- Secondary Digester Rehabilitation
The following is a preliminary list of drawings for the project:
G-1: Cover sheet
C-1: General or yard piping and site plan
C-2: Project area site plan (larger scale)
C-3: Demolition instruction sheet with photos
M-1: New digester cover plan and sections
M-2: Digester cover installation sections and details
M-3: New digester mixing system plan and sections
MA Existing generator room plan and sections with demolition instructions
M-5: New heat exchanger installation plan and sections
M-6: New heat exchanger installation sections and details
M-7: Heat exchanger room piping layout details
M-8: Misc. digester improvements (knife gate valve replacement)
M-9: Misc. digester improvements (gas meter installation)
M-10: Misc. digester improvements (installation of digester sampling taps and
piping)
M-11: Heat exchanger room ventilation modifications (if needed)
M-14: Misc. mechanical details
S-1: Misc. structural details
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E-1: Electrical site plan, digester cover pressurization blowers and mixing pump
station
E-2: Electrical site plan, heat exchanger room
E-3: Single line diagram, existing panel
E-4: Single line diagram, expanded panel with new equipment
E-5: Control schematics diagram 1
N-1: histnimentation symbols and abbreviations
N-2: P&ID, digester heating and mixing
Task B -Lift Station No. 1 Wetwell Rehabilitation
The current plan is to not develop any construction drawings for this task. Veolia will develop a
constriction narrative and a mutually agreed upon coatings specification.
Task C - Percolation Ponds 7A. 7B & 8
The following is a preliminary list of drawings for the project:
G-1 Cover sheet, notes, abbreviations
C-1 Percolation pond plan view with site piping
C-2 Percolation pond 7a plan view with contours
C-3 Percolation pond 7b plan view with contours
C-4 Percolation pond 7a& 7b sections
C-5 Percolation pond 8 plan view with site piping
C-6 Percolation pond 8 sections
C-7 Details
C-8 Details
Task D— Plant Reclaimed Water Pump Station
The following is a preliminary list of drawings for the project:
G-1: Cover sheet
C-1: General or yard piping site plan
C-2: Project site plan(larger scale)
C-3: New pump station discharge piping and tie-in to existing distribution system
C-4: Project area yard piping plan (larger scale)
C-5: Misc. civil details
M-1: New plant water pump station layout
M-2: New plant water pump station section and details
M-3: Misc. mechanical details
M-4: Misc. mechanical details
E-1: Electrical symbols and abbreviations
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E-2: Electrical site plan
E-3: Single line diagram
E-4: Control schematics diagram
E-5: Misc. electrical details
S-1: Chlorination basin modifications for pump mounting
S-2: Misc. structural details
N-1: Instrumentation symbols and abbreviations
N-2: P&ID
N-3: Misc. instrumentation details
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SCHEDULE BB
INTENTIONALLY OMITTED
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SCHEDULE CC
POOL CHEMICALS
The following chemicals are used at the City of Palm Springs Pavilion Swim Center:
Sodium Hypochlorite 12.5% (a.k.a. Chemchlor)— 1 gallon units —Usage is approximately
11,000—13,000 gallons/year.
Muriatic Acid 20BE (a.k.a. Hydrochloric Acid) — 1 pound units (9.67 lbs/gal)—Usage is
approximately 12,000— 14,000 pounds /year (1240— 1450 gallons /year)
Pool Conditioner, Calcium Chloride—Usage is approximately 5000 lbs. / year.
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SCHEDULE DD
SANITARY SEWER MASTER PLAN DESCRIPTION
Background
The City's sanitary sewer collection system consists of a piping system serving a permanent
population of approximately 45,000, with an additional "seasonal' population of about 30,000.
The City provides sewage disposal and treatment using a pipeline system, pump stations, and a
wastewater treatment plant. The City desires the preparation of a comprehensive master plan for
the sanitary sewer collection system. The master plan will include a computer model of the
collection system so that future upgrades can be quickly and efficiently performed.
Phasing
The project work plan is to be divided into phases, which are generally listed below:
• Project Organization, Data Gathering and Review, and System Inventory
• Flow Generation Determination
• Collection System Field Data Collection
• Computer Model Preparation and Calibration
• System Analysis and Recommendations
• Capital Improvement Plan
• Reports and Presentations
The phases will generally be executed in this order with some overlap as described more fully in
the work plan task descriptions below.
Objectives
The;project objective and goal is to prepare a Sanitary Sewer Master Plan (SSMP) that will
accommodate the 2025 population and the planned land uses that were established in the Land
Use element of the latest General Plan. The 2015 population and land uses are to be analyzed as
an intermediate planning milestone.
More specifically, the objectives are as follows:
• Identification of current capacity deficiencies in the existing sanitary sewer system and
deficiencies due to growth to the year 2025.
• Recommendations for system improvements to carry current and projected flows through
2025 (with longer-range conceptual planning).
• Development of a computer model of the sanitary sewer system that manages graphic and
nongraphic data in an AutoCAD environment on a personal computer. The computer
model will also be designed for integration with the City's planned Geographic
Information System (GIs).
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Work Tasks
The following tasks will be included in the Sanitary Sewer System Master Plan:
Task 100 —Project Overview and Understanding of Scope
Veolia will provide a written project overview of what the Sanitary Sewer Master Plan is to
address, the overall scope, schedule, and the limitations of the Master Plan. The overview will
include such topics as the study area, land uses, and population growth rates, current fee
schedules, and other related topics to be addressed in the Master Plan document. This
information will be summarized in a document at the beginning of the project and discussed with
the various City departments to obtain concurrence with the scope and expectations of the project
prior to proceeding with the work.
Task 200 —Design Standards and Analysis Criteria
Veolia will review the current sewer system operation and design standards and analysis criteria
for the sanitary sewer system. The standards will include pipeline materials, design slopes,
manhole spacing, allowable depths of flow(d/D), peaking factors, lift station criteria, etc. These
standards and criteria will be summarized for review by City staff prior to proceeding with the
work. Upon receipt of City comments, changes will be made and a final document prepared.
Task 300 — GIS Scoping Study and Needs Assessment
Veolia will review available records and information and meet with City staff to assess data
needs, goals and preferences for the preparation of a GIS database. The needs assessment and
staf,Frneetings will be held over a two-day period, following which a Scoping study and needs
assessment summary report will be prepared by Veolia.
Task 400 —Data Search/System Inventory
Veolia will review existing City data, including a City-provided comprehensive citywide sanitary
sewer map, subdivision construction drawings,previous studies, and flow measurements. This
data will be provided to Veolia in electronic format as available in order to expedite
incorporation into the databases and mapping. City Engineering and O&M staff will also be
interviewed to identify operational problems. City staff will provide to Veolia written lists of
maintenance performed on the system over the past five years. Maintenance items such as
grease removal, root intrusion, lift station operational problems, manhole problems, customer
complaints, storm water infiltration, and broken pipelines or services will be compiled in an
organized manner and discussed with City Maintenance staff.
Upon completion of this effort, Veolia will address deficiencies in the available information, if
any., with the City to detennine the need for supplemental data collection from the field. Veolia's
scope for this task includes three person-days of field assistance to work with City crews in
collecting such information.
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Task 500—Land Use (Flow Generation) Analysis
Veolia will develop preliminary unit flow generation rate estimates for the City's current and
planned land uses. The unit flow rates will be determined by using data from other similar cities
in the area that have recently performed sewer modeling and in-field flow testing as the starting
point. These estimates will also consider water consumption records (winter flows) to determine
percentages of water that ultimately flow to the sewer system. Water consumption records,
obtained during the current water master plan work, will be used by Veolia as a starting point to
develop discharge characteristics that are representative of the various land use types. The
results of this analysis will be provided to City staff to evaluate and confirm prior to proceeding
with the study.
Task 600 —Measurement of Existing Pipe Flows
With City staff input, Veolia will develop a list of recommended locations for in-field, dry
weather wastewater flow monitoring. The primary objective of this flow monitoring will be to
further refine the assumed wastewater flow generation characteristics for specific land uses that
will be used in the master plan and computer model. A secondary objective will be to develop
an appropriate exponentially decreasing peak flow factor based on average daily flow. We do
not anticipate that all land uses in the City will need to be monitored, but only the major land use
types such as the various densities of residential and cormnercial uses. The ideal locations for in-
field flow monitoring will be those that isolate a single type of land use, preferably at a "straight
flow through"manhole that does not have entry side laterals. We recommend that multiple
samples of some land uses, such as single-family residential, be acquired. A total of eight in-
field locations are presently anticipated over a two-week period. The in-field flow monitoring
will be performed by a Veolia subconsultant, who will provide assistance in identifying
appropriate locations, provide flow monitoring equipment, and provide guidance for the
installation,monitoring and removal of the flow monitoring equipment.
Veolia will clean existing pipelines as necessary prior to initiation of actual flow monitoring.
Task 700—Develop Computer Model
Veolia will develop a new computer model of the City's sanitary sewer collection system that
can be used to simulate flow conditions throughout the system. The model will be used to
determine pipe capacities and flows under existing and future conditions. Our modeling effort
will include 10-inch and greater lines as well as some critical 8-inch lines. The model will be
calibrated and refined against the in-field measured flows. Pump stations will be evaluated for
adequacy in terns of capacity to purnp out current and projected influent flows.
Flow modeling software is assumed to be either 1i20map or WaterCAD.
Task 800—Existing System Analysis
Based on the City's current land uses, Veolia will analyze the existing sanitary sewer system
with the computer model to determine the available capacity in the major lines of the system and
identify overloaded lines based on the established design criteria. Veolia will then meet with
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City staff to discuss the initial findings and determine if further work is needed to investigate
deficiencies identified by the modeling effort. Additional work may include inspection of certain
maaholes to observe flow depth or sedimentation. Veolia's scope includes three person-days of
field assistance to work with City crews in collecting such information.
Task 900—Future Land Use Analysis
The flows that will be generated by the planned 2015 and 2025 land uses will be analyzed with
the calibrated computer model. A tentative future sewer collection system will be developed
based on existing topography and discussions with City engineering staff. Location for possible
lift stations, if necessary, will be discussed. It is assumed that the existing sewer treatment
facility will remain in the same location. Flow projections will be developed for future growth
beyond the year 2025 (build out) based on land use plans provided by the City Plamiing
Department.
Task 1000—Recommend System Improvements
The improvements that will be needed to serve the planned 2015 and 2025 land uses will be
determined and recommendations for system infrastructure will be presented for City review.
The improvements will be phased in accordance with the anticipated phased growth established
by City staff for the development periods. Lon'teen (build-out) system needs will also be
conceptually addressed.
Task 1100—Prepare Capital Improvement Plan
A Capital Improvement Plan (CIP) for the recommended improvements identified and accepted
in Task 900 will be prepared. An implementation schedule that prioritizes the improvements and
provides cost estimates will also be included. This CIP will be prepared in tabular form in a
spreadsheet program with associated cost formulas to allow for easy updates and modifications
as estimated unit costs are updated.
Task 1200—Prepare Master Plan Report
A comprehensive master plan report that documents the research, findings, and
recommendations will be prepared. This report will be formatted in such a way that the City
staff can readily understand, apply, and update the material. An outline and draft sections of the
report will be submitted to the City for review during the course of the project. The report will
also include a comprehensive citywide map showing the peak flows and the pipeline capacity for
mainline pipes.
Pour bound copies of all adnimistrative draft of the report will be submitted to the City for
review. Comments on the draft report from City staff will be incorporated into the final report.
Four bound copies of the final draft report will be submitted to the City for review. Comments
from City staff on the final draft report will be incorporated into the final report. A total of 10
bound copies and one reproducible copy of the final report will be submitted to the City. The
report text will be supplied in Microsoft Word format on compact disk (CD-ROM) to the City.
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Task 1300—Prepare Master Plan Maps
A citywide base map that displays existing sanitary sewer facilities, the major (tributary) sub
areas, and the identified deficiencies will be prepared. The existing sewer collection system
geometry will be provided from the City's records for use in preparing this map. A planning
map displaying the base map information plus the recommended improvements will also be
prepared. The base information on the maps will include city streets and the expected 2025
urban area boundaries as provided by the City. The master plan maps will be prepared in an
AutoCAD enviromnent such that the graphic data can be loaded onto the City's AutoCAD and
future GIS system.
Task 1400—Staff Presentation
One presentation to City staff dining the Master Plan review and adoption process will be made
by'deolia upon completion or as directed by the City's Public Works Department.
Work Products
The following work products and deliverables will be provided to the City during the course of
the project work tasks as described above:
• Notes taken during periodic coordination meetings and presentations.
• Summary of pipe cleaning needs and recommendations. Summary of flow monitoring
results taken in the field.
• GIS Needs and Seeping Study report
Outline of Master Plan report and brief description of each section(3 copies).
• Administrative draft of Sanitary Sewer Master Plan report (4 copies).
• Final draft of SSMP report (4 copies).
• Final SSMP report (10 copies) with reproducible copy and copy of data on CD.
Base map of city sewer system provided by the City will be used to include layering of
study areas, deficiencies, and future facilities in AutoCAD at approximately 1"=1,000'
scale.
Presentation materials for one presentation to City staff.
Graphical and non-graphical input data to sewer model.
Data stored on CD.
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Meetings
Following is a list of the major meetings anticipated during the course of this project:
• Kick-off meeting (1)
• Meeting (1) to review design standards, analyze criteria, land use types, stage growth,
and land use mapping
• Meeting (1) to assess needs and discuss goals and preferences for a GIS database.
• Meeting (1) to discuss need, if any, of field information to supplement information
collected from available City records.
• Meeting (1) with maintenance staff to review records and plan for pipe cleaning and in
field flow metering
• Meeting (1) to discuss modeling results and plarming of expansion to sewer system
• Meeting(1) to discuss CIP
• Meeting (1) to discuss draft report
• Staff meeting/presentation(I total)
Assumptions
1. General project management and quality control activities are implicit in the execution of the
tasks outlined in this scope.
2. Information about the sanitary sewer system gathered from City records, including reports,
maps, and drawings, along with interviews and meetings with its representatives, may be relied
on as accurate.
3. The City shall make available all reports, maps, and drawings (or copies thereof) related to
the sanitary sewer system on a "loan-out" basis to Veolia.
Additional Services
Additional requested work not included in this scope of services will be negotiated on a case-by-
case basis in accordance with Veolia's then current Fee Schedule. Such services include,but are
not limited to, the following:
1. Surveys
2. Geotechnical work
3. Environmental clearances and permitting work
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4. Obtaining City, County and other agency approvals
5. Field services and assistance beyond those levels already provided in this scope
6. Preparation of instruction manuals
Veolia will be compensated in the amount not to exceed $363,639 for the scope of work
indicated. The parties agree to negotiate in good faith for a price for this scope of services or to
reduce the scope. The work of this project will be conducted on a lump sum basis, with invoices
submitted and payable on a monthly basis according to percentage of completion. Backup
documentation of a reasonable and mutually agreeable form and content will be required to
verify percentage completed.
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SCI3EDULE EE
COMPONENTS OF O&M ANNUAL CAPITAL RECOVERY AND O&M FIXED
COMPONENT
0&M Annual Capital Recovery Components
• Money to make capital improvements to the Down and Under System ($20,000 per year
as of the date of this Agreement)
• Allowance for environmental insurance premiums ($21,502 per year as of the date of this
Agreement)
O&M Fixed Component Components
• Items set forth in Sections 5.2, 5_4 and 5_5, generally summarized as follows:
o Treatment Facility
o Sewage Collection System
o Down and Under System
o Fat, Oils and Grease program
o Applicable provisions of the SSO WDR (Order#2006-003)
o Stormwater program
o Provision of street sweeping services
• Veolia's profit and overhead as to these items are also included in the O&M Fixed
Component
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