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Home My WebLink About4285 Resolution - CERB Grant - Contingency Agreement with Darigold RESOLUTION NO.4285 A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING SUBMISSION OF THE INTERIM CITY MANAGER TO ENTER INTO AN AGREEMENT FOR A COMMUNITY ECONOMIC REVITALIZATION BOARD (CERB) LOAN WITH THE WASHINGTON STATE DEPARTMENT OF COMMERCE FOR THE PROCESS WATER REUSE FACILITY PRETREATMENT PHASE 3 PROJECT. WHEREAS,the City currently owns and operates a Process Water Reuse Facility(PWRF) that operates for the benefit of large agriculture food processors to pretreat, treat, and dispose of approximately one billion gallons of agricultural industrial wastewater via land application on 1854 acres of City-owned farmland pursuant to Washington State Discharge Permit No. ST0005369; and WHEREAS, the PWRF is being improved via multiple projects that will increase the treatment and storage capacity of industrial wastewater for Pasco; and WHEREAS, through the process outlined in RCW 70A.140, the City selected Burnham SEV Pasco, LLC (Burnham) to be the PWRF Pretreatment Phase 3 project developer. The City and Burnham are currently working on an agreement for the design and construction of the project that will include wastewater treatment, development of renewable natural gas, and biological nitrogen removal; and WHEREAS, to help fund these improvements, Community Economic Revitalization Board (CERB) funds are available to support economic development projects that are ready to implement and for which jobs are to be created or retained; and WHEREAS,the City desires to apply far $5 million in CERB loan funding at an interest rate of 1.5-2.0% (depending on eligibility) for the PWRF Pretreatment Phase 3 project, of which said project is consistent with the purposes of the CERB; and WHEREAS,the specific CERB loan program being pursued requires a Committed Private Partner, which Darigold has agreed to be for this loan; and WHEREAS, the loan application requires the attachment of a Contingency Agreement between the applicant(City), the PWRF project developer(Burnham), and the Committed Private Partner(Darigold)to ensure that the public and private improvements will be completed contingent on receiving a CERB loan. Resolution-Contingency Agreement for CERB Loan Application-Page 1 NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO,WASHINGTON: That the Interim City Manager is hereby authorized to execute the attached Contingency Agreement for the purposes of including it with the CERB loan application for the PWRF Pretreatment Phase 3 project, a copy of which is attached hereto and incorporated herein by reference as Exhibit A. Be It Further Resolved that the Interim City Manager is hereby further authorized to provide such additional information as may be necessary to secure approval of such loan application. Be It Further Resolved that the Interim City Manager is hereby authorized to make minor, non-substantive edits to the Contingency Agreement as needed by all parties. Be It Further Resolved that this Resolution shall take effect immediately. PASSED by the City Council of the City of Pasco, Washington, this 5`h day of December 2022. _ —__---, ., \ � Blanche ara�as Mayor ATTEST: APPROVED AS TO FORM: C � � Debra Bar�am, CMC Kerr Fe son Law, PLLC City Clerk Cit ttorneys Resolution-Contingency Agreement far CERB Loan Application-Page 2 FILED FOR RECORD AT REQUEST OF: City of Pasco,Washington WHEN RECORDED RETURN TO: City Clerk City of Pasco,Washington 525 North 3rd Pasco WA 99301 PROCESS WATER REUSE FACILITY CONTINGENCY AGREEEMENT COMMUNITY ECONOMIC REVITILIZATION BOARD LOAN THIS AGREEMENT between the City of Pasco, a Washington Municipal Corporation, hereinafter referred to as "City", Darigold, Inc., hereinafter referred to as "Darigold", and Burnham SEV Pasco, LLC, hereinafter referred to as "Developer", collectively referred to as "Parties", enter into this agreement ("Contingency Agreement") for the purpose of making a loan application to the Community Economic Revitalization Board, hereinafter referred to as "CERB", related to the proposed improvements to City's Process Water Reuse Facility, hereinafter referred to as "PWRF", in accordance with the following terms and conditions. WHEREAS, the City owns, operates, and maintains a Washington State Department of Ecology ("Ecology")-approved Process Water Reuse Facility (PWRF) along with 14 nearby farm circles for the treahnent and disposal of over 900 million gallons of industrial wastewater from six local agricultural food processing plants; and WHEREAS, Darigold proposes to build a $500 million milk processing plant in Pasco, scheduled to be operational in early 2024, and plans to send industrial wastewater from the new plant to the City's PWRF; and WHEREAS, the City has an opportunity to apply for a low-interest loan in the approximate amount of $5 million from the CERB and said loan program requires this Contingency Agreement and a Committed Private Partner; and WHEREAS, City, Developer, and Darigold agree it is in the interest of the Parties to enter into this Contingency Agreement for the mutual benefit of the parties. NOW, THEREFORE, and in consideration of the mutual covenants contained herein, the Parties agree as follows: City-Burnham-Darigold PWRF Pretreahnent Project-CERB Contingency Agreement Page 1 of 5 A. Pur�ose• A. Clarify the intentions of the Parties regarding the completion of the PWRF Pretreatment Improvement Project and the construction of Darigold's new milk processing facility. B. City to prepare and submit a loan application to the CERB to help finance the proposed Project which will accommodate industrial wastewater from Darigold's new plant. C. Darigold identified as a Committed Private Partner related to the CERB loan application for the proposed PWRF Pretreatment Improvement Project. B. BackQround• 1. City and Developer are negotiating a final agreement for the design and construction of the PWRF Pretreatment Improvement Project, which consists of two 35- million-gallon anaerobic digesters, a biological nitrogen removal system, and a renewable natural gas ("RNG")plant, (hereinafter referred to as the "Public Facilities Project"). 2. Darigold's industrial wastewater, along with increased volumes of existing food processor's industrial wastewater, will be pretreated through the Public Facilities Project prior to being disposed of via irrigation to City farm circles. 3. The Public Facilities Project and Darigold's new milk processing plant are currently scheduled to be completed in early 2024. C. A�reement• 1. City and Developer agree to construct the Public Facilities Project to support the pretreatment of industrial wastewater from the new Darigold milk processing plant, subject to reaching final agreement. 2. Darigold agrees to construct a new milk processing plant, which is currently estimated to create 200 new permanent, full-time jobs to operate the plant. 3. Darigold's estimated private investrnent for the new milk processing plant in Pasco is $500 million. 4. Darigold agrees to contact the local Workforce Development Council (WDC) and the State Employment Security Department for assistance in filling new positions. 5. Darigold agrees to provide City with employment and investment data as requested by CERB for a period no less than five years following the completion of the Public Facilities Project. City-Burnham-Darigold PWRF Pretreatment Project-CERB Contingency Agreement Page 2 of 5 6. Developer expects to invest up to $150 million to construct the Public Facilities Project. D. Contin enc : This Contingency Agreement is contingent upon receipt of CERB funds by City and is intended to provide convincing evidence of private development as required by CERB. E. Other Terms and Conditions: 1. Dis ute Resolution. In the event of dispute, the parties shall first meet in a good faith attempt to resolve such dispute, with or without the assistance of inediation. In the event the dispute remains, it shall be resolved by binding arbitration pursuant to RCW 7.04A, as amended, and the Mandatory Rules of Arbitration (MAR} with all parties waiving the right of a jury trial upon de novo review. Venue shall be placed in Franklin County, Washington; the laws of the State of Washington shall apply; and the substantially prevailing pariy shall be entitled to its reasonable attorney fees and costs. 2. AssiQnabilitv. This Contingency Agreement, and the rights and responsibilities hereunder, shall not be assigned, conveyed, sublet, or transferred by Developer or Darigold without the prior written consent of the City, which consent shall not be unreasonably withheld. 3. Notice. Any notice or infortnation required or permitted to be given to the parties under this Contingency Agreement shall be to the following addresses, unless otherwise specified: City of Pasco Burnham SEV Pasco, LLC Dari� City Manager Attn: Chris Tynan Attn: General Counsel 525 North 3rd 1201 Wilson Blvd., 27�Floor 5601 6�'Ave S, Suite#300 Pasco, WA 99301 Arlington, VA 22209 Seattle, WA 98108 Notice shall be deemed given upon receipt of personal delivery, e-mail transmission, or five (5) days after deposit in the United States Mail in the case of regular mail, or next day in the case of overnight delivery. 4. Modification. This Contingency Agreement may not be amended, modified, or terminated except by written agreement signed and approved by all parties. 5. Effective Date. This Contingency Agreement shall become effective upon the date of signature approval by the last pariy as indicated below. DATED this day of , 2022. [Signature pages follows.] City-Burnham-Darigold PWRF Pretreatment Project-CERB Contingency Agreement Page 3 of 5 CITY OF PASCO,WASHINGTON: By: Adam Lincoln Interim City Manager STATE OF WASHINGTON ) : ss COUNTY OF FRANKLIN ) On this day personally appeared before me Adam Lincoln, Interim City Manager of the City of Pasco, Washington, described in and who executed the within and foregoing instrument, and acknowledged that he signed the same as his free and voluntary act and deed for the uses and purposes therein mentioned. GIVEN under my hand and official seal this_day of , 2022. Notary Public in and for the State of Washington Residing at My Commission Expires: BURNHAM SEV PASCO,LLC By: Chris Tynan Chief Executive Officer STATE OF VIRGINIA ) : ss COUNTY OF ARLINGTON) On this day personally appeared before me Chris Tynan, Chief Executive Officer of the Burnham SEV Pasco, LLC, described in and who executed the within and foregoing instrument, and acknowledged that he signed the same as his free and voluntary act and deed for the uses and purposes therein mentioned. GIVEN under my hand and official seal this_day of , 2022. Notary Public in and for the State of Virginia Residing at My Commission Expires: City-Burnham-Darigold PWRF Pretreatment Project-CERB Contingency Agreement Page 4 of 5 DARIGOLD, INC.: By: Joe Coote Chief Executive Officer STATE OF WASHINGTON ) : ss COUNTY OF FRANKLIN ) On this day personally appeared before me Joe Coote, Chief Executive Officer of King County, Washington, described in and who executed the within and foregoing instrument, and acknowledged that they signed the same as their free and voluntary act and deed for the uses and purposes therein mentioned. GIVEN under my hand and official seal this_day of , 2022. Notary Public in and for the State of Washington Residing at My Commission Expires: City-Burnham-Darigold PWRF Pretreatment Project-CERB Contingency Agreement Page 5 of 5