HomeMy WebLinkAbout6/29/2005 - STAFF REPORTS (21) U � N
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FORN,p City Council Staff Report
DATE: June 29, 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's current agreement with Veolia (formerly US Filter) for the operations and
management of the City's Wastewater Treatment Plant expires on June 30, 2005. Staff
and Veolia have been negotiating in good faith to reach an agreement 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
for an additional thirty (30) days to allow the parties to complete their negotiations and
to finalize an agreement.
RECOMMENDATION:
1. Adopt a Minute Order approving the Second Amendment to Agreement 4123
with Veolia Water North America-West, LLC. (formerly US Filter Operating
Services Incorporated) extending the term of the agreement for thirty (30) days to
facilitate further negotiations.
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.
Under normal circumstances staff would have recommended a reasonable extension to
this agreement well in advance of its expiration. However, in light of the sale of the
Wastewater Treatment Plant to the Desert Water Agency (DWA) staff has been
reluctant to finalize an extension to Veolia's agreement not knowing when this
transaction would be finalized. Unfortunately, the sale of the Wastewater Treatment
Plant has not been finalized as originally anticipated and the current agreement with
11 EM NW.
City Council Staff Report
June 29, 2005 -- Page 2
Short-Term Extension to Wastewater Services Agreement with Veolia
Veolia is about to expire.
In order to maintain current operations at the Wastewater Treatment Plant, staff
believes that a short-term extension of the existing agreement with Veolia is necessary.
Staff has been working with Veolia over the past several months to negotiate a new
agreement that will extend the term for an additional two (2) to five (5) years depending
on the length of time the City Council prefers. Although substantial progress has been
made, both parties realize that it is unlikely that this agreement can be finalized prior to
the expiration of the current agreement. As a result, staff is recommending a short-term
extension of thirty (30) days to facilitate continued negotiations with Veolia so an
agreement can be finalized. The City has received correspondence from James Good,
Vice President of Veolia, indicating their concurrence with a short-term extension. A
copy of this correspondence is attached for your review.
Under the proposed amendment, the term of the agreement will be extended for an
additional thirty (30) days. All terms and conditions of the current Wastewater Services
Agreement will remain in effect during the extension. Veolia has requested that the City
Council approve, as part of the proposed amendment, a CPI adjustment to their service
fee. This adjustment, which is authorized under the existing agreement, would increase
the amount the City pays Veolia by approximately 4.1% (May 2004-05 CPI-U). Staff
concurs with Veolia's request and recommends that the City Council authorize an
adjustment to their service fee.
FISCAL IMPACT:
If the City Council approves this amendment and corresponding adjustment in the
service fee there will be a slight increase (4.1%) in the amount the City pays Veolia to
manage and operate the Wastewater Treatment Plant.
�.Tiro�, . Butzl s istant City Manager David H. Ready, City Manage j
Attachments:
1. Letter from James Good dated June 17, 2005
2. Minute Order
VE t LIA
,.ter
June 17, 2005
Troy L. Butzlaff
Assistant City Manager
City of Palm Springs
3200 E. Tahquitz Canyon Way
P.O. Box 2743
Palm Springs, CA 92263-2743
Re: Short-term extension of Wastewater Services Agreement (WSA)
Dear Mr. Butzlaff:
We believe that the City and Veolia are working constructively towards an extension of
the WSA and that agreement will soon be reached. However, because, despite these
cooperative efforts, we may not reach an agreement in time for Council action prior to
the June 30, 2005, expiration of the WSA, we are requesting that the existing WSA
between Veolia Water and the City of Palm Springs be extended through September 30,
2005, at the next meeting of the Palm Springs City Council.
Per our conversation today, despite this extension, the City and Veolia will strive to
complete a longer-term extension in time for consideration by the Council in July. During
the short-term extension period, the WSA would remain unchanged (except for
implementing the CPI increase on July 1, 2005) until superceded by a longer-term
extension agreement between Veolia and the City.
Sincerely,
James L. Good
Vice President
VEOLIA WATER NORTH AMERICA
2300 Contra Costa Blvd.,#470
Pleasant Hill,CA 94523 . I,fA
Ph:(925)681-2306/fax:(925)681-0236 Enyiiuruneni
www.Vocliawateme.com
MINUTE ORDER NO.
ADOPT A MINUTE ORDER APPROVING THE
SECOND AMENDMENT TO AGREEMENT 4123
WITH VEOLIA WATER NORTH AMERICA-WEST,
LLC. (FORMERLY US FILTER OPERATING
SERVICES INCORPORATED) EXTENDING THE
TERM OF THE AGREEMENT FOR THIRTY (30)
DAYS TO FACILITATE FURTHER NEGOTIATIONS.
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that
this Minute Order adopting the approval of second amendment to Agreement
4123 with Veolia Water North America-West, LLC. (Formerly US Filter Operating
Services Incorporated) extending the term of the Agreement for thirty (30) days
to facilitate further negotiations, was adopted by the City Council of the City of
Palm Springs, California, in a meeting thereof held on the day of
, 2005.
James Thompson, City Clerk
DRAFT
SECOND AMENDMENT TO
WASTEWATER SERVICES AGREEMENT (O&M)
THIS SECOND 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. sea. 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 current agreement with Veolia expires on June 30, 2005.
E. Because of the success of the parties' existing relationship under the existing
Agreement, the City and Veolia desire to enter into an extension of that Agreement.
F. Although City and Veolia have been negotiating in good faith over the past months
to reach an agreement for a new agreement for operations and maintenance
services, and although substantial progress has been made, there is insufficient time
to properly draft and review an agreement prior to the expiration date of the current
agreement.
307406_12.DOC 1
DRAFT
G. City and Veolia desire to extend the term of the Agreement for an additional thirty
(30) days to enable the parties to finalize negotiations and to prepare a draft
agreement.
H. 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 extend to July 29,
2005, unless earlier terminated in accordance with Section 12.10 of this
Agreement, or until this Agreement has been superseded 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 Second 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 Second Amendment
to be effective as of the date first written above.
[signatures on next page]
307406_12.DOC 2
DRAFT
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
307406_12.DOC 3