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HomeMy WebLinkAboutResolution - 2020-R0176 - Amendment To MOU, Palisade Pipeline - 05/26/2020Resolution No. 2020-RO176 Item No. 7.11 May 26, 2020 RESOLUTION BE IT RE -SOLVED 13Y TI I1 CITY COUNCIL OF "ITIE' CITY OF 1, BBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, an Amendment to Memorandum of Understanding deti11ing roles and responsibilities of the: City of Lubbock and Palisade Pipeline, LLC of I louston, 'Texas, and related documents. Said Amendment is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes ofthe City Council. Passed by the City Council on _ _ - - _ _ May 26. 2020 DANIL"•L M. POPE, MAYOR ATTEST: R ebee c a arza, City Secretar APPROVED AS TO CONTENT: ITV, Ja ett Atkinson. City Manager , I•irst Assistant City Attorney ccdocs:'RES.Amend-MOO -Palisade Pipeline, LLC Ma. 13. 2020 Resolution No. 2020-ROl76 AMENDMENTTO MEMORANDUM OF UNDERSTANDING This Amendment to Memorandum of Understanding ("Amendment") Is entered Into on this, the 26thday of May , 2020 by and between the City of Lubbock, Texas, a Texas municipal corporation ("City") and Palisade Pipeline, LLC of Houston, Texas ('Palisade"), collectively the "Parties". WHEREAS, the Parties entered into a Memorandum of Understanding (the "MOU") dated June 11, 2019 (Resolution No. 2019-110215) setting forth certain terms and conditions respecting the potential purchase by Palisade of rights to a portion of the City's effluent water; and WHEREAS, the MOU provides that, unless extended, the MOU shall expire upon the earlier to occur of: 1) twelve months passage from its execution; or 2) the subsequent execution by the Parties of a Reclaimed Water Use Agreement; and WHEREAS, the MOU further provides that, unless extended, an Exclusivity Period shall run for a period of twelve (12) months from the date of the execution of the MOU, wherein said period of time the City may not solicit, initiate, or participate in discussions or negotiations, or otherwise enter Into a Reclaimed Water agreement such as is contemplated by the MOU, with any other party; and WHEREAS, the MOU further prospectively sets forth aspirational terms and conditions of the contemplated Reclaimed Water Use Agreement, including an automatic termination provision; and WHEREAS, in light of the delays and other inconveniences resulting from the COVID-19 pandemic, the Parties now desire to amend certain provisions contained in the MOU, as set forth below, with all other terms of the MOU remaining unchanged. NOW THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree to amend, and do amend, the MOU as follows: A. Section 1 of the MOU is amended to read as follows: "1. TERM Unless earlier terminated pursuant to the terms hereof, this MOU shall expire upon the earlier to occur of: 1) eighteen (18) months after its execution; or 2) upon the execution by the Parties of a subsequent agreement (the "Water Purchase Agreement" or "WPA") for the purchase of Effluent Water (the "Term"); provided, however, that the Term may be extended up to two (2) additional forty-five (45) day periods upon mutual written agreement of the Parties, and tender of any additional required consideration as set forth herein." Amendment to Memorandum of Understanding City of Lubboek/Pnihade Pipeline, LLC Page 1 of 3 B. Section 3(a) of the MOU is amended to read as follows: "a. Exclusivity Period. In consideration of the time, effort and expense anticipated to be incurred by Palisade in connection with its due diligence in advance of the contemplated WPA, the Parties agree that for a period of eighteen (18) months from the date of this MOU (the "Exclusivity Period"), City, Its administrators, officials, council members, officers, directors, employees, agents, and representatives, shall not directly or indirectly solicit, initiate, or participate in discussions or negotiations, or enter into any agreement with any person, company or entity, other than Palisade, concerning any transaction related to the Effluent Water, or otherwise similar to that described in this MOU or the essential terms of a WPA as set forth below, or any unrelated transaction that would in any way reduce the amount of Effluent Water to be allocated to Palisade pursuant to the WPA; provided, however, that nothing herein shall preclude or prohibit City from undertaking obligations it has attendant to existing agreements concerning effluent water. The Exclusivity Period may be extended by written consent of City for an additional forty-five (45) days; provided, however, that Palisade shall pay to City TWENTY THOUSAND AND NO/100 DOLLARS ($20,000.00) for each forty-five (45) day extension. There shall not be more than two (2) extensions of the Exclusivity Period unless expressly approved by the City Council." C. Section 3(d) of the MOU is amended to read as follows: "d. Interim Period and Payment. Upon the expiration of the Exclusivity Period, and prior to the commencement of Palisade's taking Effluent Water under the terms of the WPA, Palisade and City agree that the sum of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) per twelve (12) month period shall be paid by Palisade to the City in equal quarterly installments of SIXTY-TWO THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($62,500.00), with the first payment due within seven (7) days of the expiration of the Exclusivity Period, and each succeeding quarterly payment due three months thereafter, until payment commences by Palisade pursuant to Section 4(e) hereof." D. Section 4(n)(ii) of the MOU is amended to read as follows: "ii. The Agreement shall automatically terminate if Palisade does not either pay or take Reclaimed Water pursuant to Section 4(e) within forty-two (42) months of the execution of this MOU, unless an extension of said requirement for six (6) months is mutually agreed upon by City and Palisade." Amendment to Memorandum of understanding City of Lubbock/Palisade Pipeline, LLC peg. 2 of 3 The Parties further agree that all other terms and conditions of the MOU shall continue in full force and effect for all purposes. CITY OF LUBBOCK PALISADE PIPELINE, LLC 1� DANIEL M. POPE, MAYOR ATTEST: Reba a Garza, City Secretary APPROVED AS TO CONTENT: W. Jarrett'Atkinson, City Manager APPROVED AS TO FORM: e I att e, first Assistant City Attorney Phillip J. Laughlin, President Amendment to Memorandum of understanding City of Lubbock/Palisade Pipeline, LLC Page 3 of 3 The Parties further agree that all other terms and conditions of the MOU shall continue in full force and effect for all purposes. CITY OF LUBBOCK PALISADE PIPELINE, LLC DANIEL M. POPE, MAYOR ATTEST: Rebecca Garza, City Secretary APPROVED AS TO CONTENT: W� W. Jarc t Atkinson, City Manager APPRCSTO FOR+• "Mitch-eirs—attemwite,'First Assistant City Attorney Phillipl. Laughlin, President Amendment to Memorandum of Undemanding City of Lubbock/Palisade Pm.11ne, LLC Page 3 of 3