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HomeMy WebLinkAboutResolution - 2108 - Letter Of Intent To Contract - EPR Inc - Resource Recovery Facility - 08/08/1985DGV:js RESOLUTION Resolution #2108 August 8, 1985 Agenda Item #33 WHEREAS, the City Council of the City of Lubbock believes that the construction of a resource recovery facility within the City of Lubbock to provide for the conversion of municipal waste into electric energy would be of great benefit to the citizens of the City of Lubbock; and WHEREAS, the City of Lubbock has received proposals for the construc- tion of such a facility from several corporations; and WHEREAS, the proposal received from EPR, Inc., of Houston, Texas, is deemed to be the best and most feasible proposal for such a facility; NOW THEREFORE: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1. THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Letter of Intent to Contract with EPR, Inc., for construction of a resource recovery facility within the City of Lubbock, a copy of which Letter of Intent is attached herewith which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part'of this Resolution as if fully copied herein in detail, and SECTION 2. THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock such other associated documents required for construction of said resource recovery facility, which documents shall be attached herewith and shall constitute and be a part of this Resolution as if fully copied herein in detail upon execution. Passed by the City Council this 8th d ATTEST: anettb Boyd, City Secretary n.�„ttc+ APPROVED AS TO CONTENT: APPROVED AS TO FORM: Bob Cass Ao ld G. Vandiver Deputy City Manager Assistant City Attorney Resolution #2108 The Honorable Alan Henry Mayor, City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Dear Mayor Henry: It is our understanding that the City of Lubbock, through a legal procurement process, has designated EPR to design, construct, finance, own and operate a Resource Recovery facility for the disposal of acceptable municipal solid waste generated within the City. It is the intention of EPR and the City to enter into conclusive negotiations and to assist Underwood, Neuhaus & Co., the Senior Managing Underwriter of the Industrial Revenue Bonds, in all ways possible to obtain financing on the project in 1985. Both parties recognize the urgency of completinq the financing this year due to the uncertainties of tax reforms in 1986. It is mutually understood and agreed that: (1) The City will have the right to name the disposal/ electric plant and to design the entrance to the facility. (2) EPR will immediately commence all necessary efforts and expense to obtain the design engineering, permits and contracts required for the financing. (3) EPR will design and construct a resource recovery plant with a capacity of 500 tons per day, or approximately 180,000 tons per year, of municipal solid waste. EPR and its representatives will be responsible for all engineering and design decisions and for the operation and maintenance of this facility for 25 years in accordance with all federal, state and local permits and requirements. (4) The City shall enter into a 25 year lease with EPR covering the land (and buildings necessary) to con- struct and operate the facility as planned. (5) EPR shall have the right to perform site borings and do demolition work on agreed upon equipment or structure with the express written consent of LP&L prior to finalizing all the agreements. (6) The City shall enter into a 25 year take -or -pay contract with EPR to purchase all of the electric output of the power plant, with a fixed price schedule for the first 10 years. The electric prices for the balance of the contract will be negotiated in the future, with both parties recognizing that certain economic requirements of the bondholders and equity participants must be met. However, the negotiated price will not exceed the amount Lubbock Power and Light would pay for firm purchased power from another utility. (7) The City and EPR shall enter into a 25 year service contract for the disposal of municipal solid waste which will include, among others, the following points: (A) The City shall guarantee to deliver, or have delivered, certain specified quantities of acceptable waste, this amount being 125,000 tons in 1988. Realizing that the plant capacity will be 180,000 tons per year, EPR agrees to make every reasonable effort to obtain additional outside sources of waste, and the City agrees, if re- quired, to pass and make every reasonable effort to enforce a flow control ordinance to assure the balance of the waste stream. The tipping fee charge will be $9.00 per ton for the first 10 years, with charges for the balance of the contract to be negotiated at a later date to a price of not more than $9.00 per ton. (8) The City and EPR will mutually develop a program to minimize the risk of any hazardous or toxic wastes being processed by the facility. The cost of development of such program shall be borne equally by EPR and the City. (C) The City will be responsible for providing landfill for the ash residue, as well as for unacceptable waste or waste the facility is unable to process. EPR will guarantee the quantity and quality of the residue and limit the bypassed waste to an agreed upon annual quantity. The cost for disposal of unacceptable waste or hazardous waste not supplied by the City shall be charged to the person delivering such waste and credited to the City. (D) EPR will obtain and be responsible for insurance coverage on the facility as agreed upon by both parties and as is generally required by under- writers on projects of a similar nature to protect the interests of bondholders and equity partici- pants. If additional insurance is required or desired by any party at a later time, said party - 41 will seek to self -insure to avoid any negative impact on the tipping fee. (8) The City is willing to operate the electric power plant pursuant to negotiation of a suitable contract, and the advantages and disadvantages of this will be reviewed by both parties prior to a final decision being made. (9) The City will continue to provide access to the existing power plant to EPR or its designated repre- sentatives. (10) The City and EPR agree to keep each other informed as to the expenses relative to the resources recovery project. The parties further agree that all expenses incurred by EPR or its representatives and the City shall be shared in accordance with the following: (A) If the City should decide to cancel this project, the City shall reimburse EPR for direct and reasonable expenditures made by EPR or its agents, including underwriters, design engineers and independent feasibility engineers in an amount not to exceed $200,000.00. (B) If EPR should choose to discontinue the project for reasons within its control, then EPR shall reimburse the City for its direct and reasonable expenses. (C) Both parties shall share equally in the expenses for underwriters, design engineers, and indepen- dent feasibility engineers should the project be terminated due to reasons beyond the control of either party, but in no event shall the City be liable for more than $200,000.00. DATE: EPR, INC. BY: PRES ENT ATTEST: S-Iqretary DATE: