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Home My WebLink About7/20/2005 - STAFF REPORTS (17) i° PALMS.. V y1 � ~ RIORAi fO ip' % c�`' °R"�P City Council Staff Report DATE: July 20, 2005 Consent Calendar SUBJECT: Short-Term Extension of Wastewater Services Agreement FROM: David H. Ready, City Manager BY: City Manager's Office SUMMARY The City has heretofore entered into an agreement with Veolia (formerly US Filter) for the operations and management of the City's Wastewater Treatment Plant. This agreement was for a five year term expiring on June 30, 2005. On June 29, 2005, the City Council approved an amendment extending the term of the existing agreement for an additional thirty (30) days to facilitate negotiations on a new agreement. Although substantial progress has been made on this agreement, there is insufficient time to properly draft and review an agreement prior to the expiration date of the current term. The proposed amendment extends the term of the existing agreement through September 7, 2005 to allow the parties to complete their negotiations and to finalize an agreement. RECOMMENDATION: 1. Adopt a Minute Order approving the Third Amendment to Agreement 4123 with Veolia Water North America-West, LLC. (formerly US Filter Operating Services Incorporated) extending the term of the existing Agreement through September 7, 2005 to enable the parties to finalize a new agreement. 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 year term expiring on June 30, 2005. Because the sale of the Wastewater Treatment Plant to the Desert Water Agency has not occurred as originally anticipated, the City continues to need the services of Veolia to operate and maintain the treatment plant and sewage collection system. On June 29, 2005, the City Council approved the Second Amendment which extended the term of Item No. 2 .J . City Council Staff Report July 20, 2005 -- Page 2 Short-Term Extension to Wastewater Services Agreement with Veolia the agreement for thirty (30) days to enable City staff and Veolia to negotiate a new agreement. Although the City and Veolia have since reached a tentative understanding on a new agreement, the parties believe that there is insufficient time to finalize an agreement for City Council action prior to the expiration date as set forth in the Second Amendment. Moreover, the parties would like to give the Desert Water Agency an opportunity to review and comment upon the draft agreement before it is fully finalized. Unfortunately, the Desert Water Agency has indicated that they are unable to complete their review prior to the expiration of the current agreement and have requested an extension of time. Under the proposed amendment, the term of the agreement will be extended through September 7, 2005 to provide additional time for the Desert Water Agency to complete their review of the proposed agreement. All terms and conditions of the current Wastewater Services Agreement will remain in effect during this extension. FISCAL IMPACT: There is no fiscal impact to the City. 7- TlLrP Butzla 's distant City Manager David H. Ready,kCity M n c f Attachments: 1. Minute Order THIRD AMENDMENT TO WASTEWATER SERVICES AGREEMENT (O&M) THIS THIRD AMENDMENT TO WASTEWATER SERVICES AGREEMENT (O&M) ("Amendment') is made and entered into as of this day of 2005, by and between the CITY OF PALM SPRINGS, a California municipal corporation ("City") and VEOLIA WATER NORTH AMERICA-WEST, LLC., a Delaware limited liability company ("Veolia"). RECITALS A. 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 "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 terms are defined in, and pursuant to the terms of, the Agreement. Initially capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. B. On or about May 16, 2001, City and Filter entered into that certain Amendment No. 1 to Agreement No. 4123 (herein "First Amendment), for the provision of certain capital project administration parameters all related to the improvement of the Treatment Facility. C. 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 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 known as Veolia Water NA. D. The original term of the Agreement was for five (5)-years, such that the original Agreement would have expired on June 30, 2005. E. City continues to require the services of Veolia to operate and maintain the Wastewater Treatment Facility and Sewage Collection System and has been actively negotiating with Veolia to extend the term of the Agreement. F. On June 29, 2005, City and Veolia entered into the "Second Amendment to the Agreement for Wastewater Services Agreement (O&M)" ("Second Amendment'), which extended the term of the Agreement an additional thirty (30) days, to allow the parties to continue their negotiations on a new agreement. July 15, 2005 1 Draft Document G. City and Veolia have reached a tentative understanding on a new agreement. However, due to the complexity of the issues involved and the parties' mutual desire to provide the Desert Water Agency an opportunity to review and comment upon that agreement, the parties do not believe that they will be able to finalize an agreement for Council approval prior to the current expiration date as set forth in the Second Amendment. H. City and Veolia desire to extend the term of the Agreement through September 7, 2005 to enable the parties to finalize the agreement. I. This Amendment is entered into pursuant to both of California Government Code Section 5956.1 et. sea. and Chapter 3.12 of the Palm Springs Municipal Code. Each of the foregoing statutes constitutes an independent authority for the City to enter into this Amendment and procure the services with respect to the Treatment Facility, the Sewage Collection System, and the Down and Under System as described herein and in the Agreement. NOW THEREFORE, in consideration for promises and covenants contained herein, the above recitals, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Term. Section 4.1 of the Agreement, entitled "Term", shall be amended in its entirety to read as follows: "Section 4.1 Term. The term of this Agreement shall be extended to September 7, 2005, unless earlier terminated in accordance with Section 12.10 of this Agreement, or until this Agreement has been superseded by an amended and restated agreement." 2. Authorization. The person(s) executing this Amendment on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are dully authorized to execute and deliver this Amendment on behalf of said party, (iii) by so executing this Amendment, such party is formally bound to the provisions of this Amendment, and (iv) the entering into this Amendment does not violate any provision of any other agreement to which said party is bound. 3. Except as modified by this Third Amendment, all other terms and conditions of the Agreement are hereby ratified and confirmed by the parties. IN WITNESS WHEREOF, the parties hereto executed this Third Amendment to be effective as of the date first written above. [signatures on next page] July 15, 2005 2 Draft Document IN WITNESS WHEREOF, the parties have executed and entered into this Amendment as of the date first written above. "City' ATTEST: CITY OF PALM SPRINGS, a California municipal corporation By City Clerk City Manager APPROVED AS TO FORM: City Attorney "Veolia" VEOLIA WATER NORTH AMERICA - WEST, LLC a Delaware limited liability company By Signature Name Title End of Signatures July 15, 2005 3 Draft Document MINUTE ORDER NO. APPROVING THE THIRD AMENDMENT TO THE WASTEWATER SERVICES AGREEMENT (O&M) WITH VEOLIA WATER NORTH AMERICA-WEST, LLC. --------------- I HEREBY CERTIFY that this Minute Order, approving the Third Amendment to the Wastewater Services Agreement (O&M) with Veolia Water North America-West LLC., was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 20`h day of July, 2005. James Thompson City Clerk