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HomeMy WebLinkAboutLamb Weston Agreement - Capital Facility Plan and Funding 12-11-17AGREEMENT FOR PREPARATION OF A CAPITAL FACILITY PLAN AND FUNDING This Agreement for Preparation of a Capital Facility Plan ("Plan") and Funding ("Agreement") is made and entered into on this 9 day of 2017 (the "Effective Date"), by and between the CITY OF PASCO, a Washington municipal corporation (hereinafter referred to as "City"), and LAMB WESTON, INC., a Delaware corporation (hereinafter referred to as "Lamb Weston"). City and Lamb Weston are referred to collectively throughout this Agreement as the "Parties." WITNESSETH: I. Recitals WHEREAS, Lamb Weston operates a food processing facility on its property located in Franklin County, Washington ("Facility") which currently treats and disposes its wastewater subject to Washington State Department of Ecology's regulations as detailed in Washington State Discharge Permit No. ST0005309; and WHEREAS, the City operates a Process Water Reuse Facility ("PWRF") which treats and disposes of industrial process water subject to Washington State Department of Ecology's regulations as detailed in Washington State Discharge Permit No. ST0005369 ("PWRF Permit"); and - WHEREAS, the City is evaluating capacity restrictions and related expansion capacity of its PWRF and is in the process of developing a Plan as more particularly described in a July 20, 2017 letter from the City to Lamb Weston which is incorporated herein as Exhibit A; and WHEREAS, Lamb Weston is evaluating alternatives to its current wastewater management which includes storage, treatment and disposal of process wastewater at the City's PWRF; and WHEREAS, the City is willing to evaluate options for storing, treating or disposing of Lamb Weston's process wastewater at the PWRF in the Plan and Lamb Weston is willing to fund a portion of the cost of the Plan as more particularly described herein. NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Lamb Weston do hereby agree as follows: II. Agreement Incorporation of Recitals. The recitals set forth above are hereby incorporated into this Agreement by reference. 2. Terms and Conditions. A. Capital Facility Plan. The City shall prepare a comprehensive Plan as set forth in Exhibit A which includes: 1) The following well defined options for handling Lamb Weston's wastewater. Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 1 a) Optionl- City treats all process wastewater from Lamb Weston's Facility and disposes of the wastewater according to City's PWRF Permit. b) Option 2 - City treats all the process wastewater from Lamb Weston's Facility to Washington State Ecology Reuse water standards and returns the treated water back to the Lamb Weston Facility for utilization in Lamb Weston's production processes. G) Option 3 - City stores process wastewater from the Lamb Weston Facility during the winter, provides necessary pre-treatment as required per the City's Washington State Discharge Permit No. ST0005369 and returns the pre-treated effluent back to the Lamb Weston Facility for further land application and treatment per Lamb Weston's Washington State Discharge Permit No. ST0005309. 2) Analysis of proposed distribution and pump station to accommodate Lamb Weston's wastewater at the PWRF and, as applicable, return of any treated water to Lamb Weston which includes a description of route, point of transition between Lamb Weston's owned and managed system and City's owned and managed system, as well as a description of all road & railroad crossing locations. 3) Treatment system details including analysis of land application requirements, additional land acquisition requirements, treatment to Ecology requirements, capacity targets, and feasibility and cost of bringing each option to completion. 4) A detailed level of capital cost development for each option to understand all components of the initial, annual, and long-term costs to Lamb Weston. This will include capital costs, connection fees, depreciation schedules, preliminary annual operation and maintenance costs, land acquisition and access costs, annexation requirements if any, as well as any other cost components that will contribute to potential cost increases. 5) The Plan shall be prepared by PACE Engineers, Inc., a licensed professional engineering firm with expertise in wastewater treatment requirements, wastewater reuse treatment requirements, wastewater management design, and related cost estimates, whose services have been secured by the City, in part to provide sufficient information to Lamb Weston to make an informed decision on future wastewater management options. B. Funding for the Plan. Lamb Weston will fund the portion of the Plan which meets the requirements set forth in Paragraph ILA herein, in the amount of $140,000, together with any mutually agreed change orders ("Funding Contribution") which shall be paid as follows: $70,000.00 paid within ten (10) working days after the Effective Date of this Agreement. On May 13, 2018, (unless mutually extended by the parties), the City shall deliver the second milestone as provided in Section 11.5.C.2) below. Lamb Weston shall have twenty eight (28) days within which to accept or reject the milestone data. Lamb Weston may reject the performance and terminate this Agreement in the Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 2 event (a) performance is not timely, or (b) the performance does not meet the milestone objectives. In the event of rejection, Lamb Weston shall provide the City with a Notice of Rejection. Within thirty (30) days of receipt of Lamb Weston's Notice of Rejection, the City shall refund to Lamb Weston its initial payment of $70,000.00. Unless rejected, Lamb Weston shall, within thirty (30) days of receipt of milestone 2, pay to the City the remaining balance of $70,000.00. On or before September 1, 2018, the City shall deliver the final milestone No. 4 as provided in Section 11.5.C.4) to Lamb Weston. Lamb Weston shall have twenty eight (28) days within which to accept or reject the Milestone data. Lamb Weston may reject the performance and terminate this Agreement in the event (a) performance is not timely, or (b) the performance does not meet the milestone objectives. In the event of rejection, Lamb Weston shall provide the City with a Notice of Rejection. Within thirty (30) days of receipt of Lamb Weston's Notice of Rejection, the City shall refund to Lamb Weston its second installment payment of $70,000.00. 3. Effective Date. This Agreement shall be effective as of the date executed by the City, and shall remain in effect until terminated as provided below. 4. Termination of Agreement. The City may terminate this Agreement if Lamb Weston fails to pay the Funding Contribution in a timely manner. In addition, the City may terminate this Agreement at any time, upon sixty (60) days' notice to Lamb Weston. If the City terminates this Agreement before completion of the Plan, it shall refund to Lamb Weston any Funding Contribution at the time of termination. 5. Performance Timelines. For the purpose of this Agreement, time is of the essence requiring the prompt performance of each party. During the term of this Agreement: A. The City shall within fourteen (14) days of the execution of this Agreement by both parties, provide Lamb Weston its request for data necessary for the preparation of the Capital Facility Plan. B. Lamb Weston shall within fourteen (14) days thereafter, or such additional extended term as may be required by Lamb Weston, provide the requested data. C. Preparation of the Facility Plan shall meet the following milestone dates at which time that information shall be shared with Lamb Weston for review and comments as follows: 1) Milestone December 15, 2017 Foster Wells Services Area Future Conveyance Evaluations Analysis of proposed distribution and pump station to accommodate Lamb Weston's wastewater at the PWRF and, as applicable, return of any treated water to Lamb Weston which includes a description of route, point of transition between Lamb Weston's owned and managed system and City's owned and managed system, as well as a description of all road and railroad crossing locations. Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 3 2) Milestone May 13, 2018 Recommended Treatment Alternatives and Preliminary Engineering a) Option 1 — City treats all process wastewater from Lamb Weston's Facility and disposes of the wastewater according to City's PWRF Permit. b) Option 2 — City treats all process wastewater from Lamb Weston's Facility to Washington State Ecology Reuse water standards and returns the treated effluent back to the Lamb Weston Facility for utilization in Lam Weston's production processes. C) Option 3 — City stores process wastewater from the Lamb Weston Facility during the winter, provides necessary pretreatment as required per the City's Washington State Discharge Permit No. ST0005369 and returns the pretreated effluent back to the Lamb Weston Facility for further land application and treatment per Lamb Weston's Washington State Discharge Permit No. ST0005309. d) Treatment system details and analysis of land application requirements, additional land acquisition requirements, treatment to Ecology reuse requirements, capacity targets, and feasibility and cost of bringing each option to fruition. 3) Milestone June 29, 2018 Capital Improvement Program and Financial Analysis A detailed level of capital cost development for each option to understand all components of the initial, annual, and long-term costs to Lamb Weston. This will include capital costs, connection fees, depreciation schedules, monthly operation and maintenance costs, land acquisition and access costs, annexation requirements if any, as well as any other cost components that will contribute to potential cost increases. 4) Milestone September 1, 2018 Draft Capital Facilities Plan and Engineering Report A draft of the Capital Facility Plan and Engineering Report will be submitted for Lamb Weston review in a form appropriate for submission to the Washington State Department of Ecology. This draft will contain the above -referenced information identified in subsections 1) through 3) above. This same draft report will be submitted to Ecology for review. D. Following submission of each of the milestones data provided in subsections 1) through 4) above, to Lamb Weston, Lamb Weston shall have twenty eight (28) days from which to review, comment, and request changes or supplementation necessary for its implementation. If the City fails to make the milestone dates, or if Lamb Weston, upon reasonable cause, determines that the milestones data submitted above are not adequate, Lamb Weston may terminate this Agreement upon written notice within twenty eight (28) days of receipt of the milestone data. Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 4 E. The milestone goal dates as provided above, may only be modified my mutual written agreement of the parties. F. If Lamb Weston terminates this Agreement at any milestone date as provided above, Lamb Weston shall not be entitled to any of the milestone data received by the City thereafter. 6. Confidentiality of Data and Information. The Parties acknowledge that it may be necessary for Lamb Weston to provide data and information to the City or the City's consultants related to Lamb Weston's food processing facility that may be confidential business information or trade secrets as defined by RCW 19.108. Such information shall be conspicuously designated, and the City agrees that any information or data provided by Lamb Weston shall not be disclosed by the City provided that: (i) the City may disclose any such data or relevant information to its legal advisors or consultants who have an obligation to maintain the confidentiality of such information; and (ii) the Parties acknowledge the City is subject to the Washington State Public Records Act, and the City may disclose such information and data to the extent required by that law, however, Lamb Weston shall be noted, in advance of any such disclosure, to afford it an opportunity to prevent its disclosure. Any data and information provided by Lamb Weston under this Agreement shall be returned to Lamb Weston by the City upon completion of the Plan or termination of the Agreement. 7. Notice. All notices required to be given under this Agreement shall be in writing and shall be deemed served when mailed via certified mail, return receipt requested, to the attention of the individual or position identified below. The Parties may, upon mutual agreement, determine to accept notice via email. For the City of Pasco: For Lamb Weston: City Manager Plant Manager 525 N. Third Ave. 960 N. Glade Rd. Pasco, WA 99301 Pasco, WA 99301 (509) 543-5738 (509) 547-8671 E-mail: zabelld@pasco-wa.gov E-mail: 8. Dispute Resolution. In the event of a dispute between the Parties in regards to the breach, interpretation, or enforcement of this Agreement, the Parties shall first meet in a good faith attempt to resolve such dispute, with or without the assistance of mediation. Any remaining dispute shall be resolved by binding arbitration pursuant to RCW 7.04A, and the Mandatory Rules of Arbitration (MAR); venue being placed in Franklin County, Washington; and the substantially prevailing party being awarded its reasonable attorney's fees and costs in the action. 9. Legal Relationship. No partnership, joint venture or joint undertaking shall be construed from the existence of this Agreement, and except as herein specifically provided, neither party shall have the right to make any representations for, act on behalf of, or be liable for the debts of the other. All terms, covenants and conditions to be observed and performed by either of the Parties hereto shall be joint and several if entered into by more than one person. 10. Severability. If any provision of this Agreement is found by a court of competent jurisdiction to be invalid or unenforceable as written, the remainder of the Agreement or the applications of the remainder of the Agreement shall not be affected. Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 5 11. Exhibits. All exhibits attached hereto shall be incorporated by reference as if set out in full herein. 12. Captions. Paragraph titles or captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement. 13. Binding Effect. Regardless of which party prepared or communicated this Agreement, this Agreement shall be of binding effect between the City and Lamb Weston only upon its execution by an authorized representative of each such party, and after receiving approval of the Pasco City Council, 14. Warranty of Authority. The persons executing and delivering this Agreement on behalf of Lamb Weston and the City of Pasco each represent and warrant that each of them is duly authorized to do so, and that execution of this Agreement is the lawful and voluntary act of the person or entity on whose behalf they purport to act. 15. Construction. The Parties acknowledge that each party and its counsel have reviewed this Agreement with opportunity to comment, and that the normal rule of construction providing that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendment or exhibits hereto. 16. Complete Agreement. This Agreement, together with its attached Exhibit, represents and contains the entire understanding between the Parties. The Parties acknowledge that no other oral or written collateral agreements, understandings, or representations exist outside of this document, with the exception of any documents expressly incorporated by reference in this Agreement. Any prior agreements, whether verbal or written, not specifically referred to in this Agreement are hereby terminated. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF PASCO ave Zabel City ManagerPlant Manager Attes: a Dani a Erickson, City Clerk Approved as to Form: Leland B. Kerr, City Attorney INC. Lamb Weston Agreement for Preparation of a Capital Facility Plan and Funding —2017 Page 6 545-3404 / Fax (509) 545-3403 P.O. Box 293, (525 North 3rd Avenue) Pasco, Washington 99301 / www.pasco-wa.gov June 8, 2017 Todd Goodman, Manager Engineering -Environmental Lamb Weston 1009 Center Parkway Kennewick, WA 99336 RE: City of Pasco Process Water Reuse Facility Outlook Dear Mr. Goodman: This letter is intended to serve as a formal document outlining the City's ongoing work pertaining to the review and planning for future expansion of the Process Water Reuse Facility (PWRF). As you know, a portion of the review and planning effort is specifically focused on the possibility of introducing Lamb Weston flows to the City's facility. Earlier this month, PACE Engineering was awarded a contract to conduct a Facilities Plan, inclusive of an Engineering Report and Hydro -Geological Study. PACE was selected by the committee for their expertise in project management, historical experience, and their proven ability to deliver on projects similar in scope to the City's PWRF Facilities Plan. Unique to others compared in the selection process, PACE has assembled a highly specialized team of sub consultants in order to position the right people in the proper roles to execute key project deliverables. The Facilities Plan will include: an inventory and assessment of existing operational infrastructure; an alternatives evaluation for the treatment, conveyance, and application of processed waste water; a review of service area and potential future industrial users; a funding strategy; and regulatory compliance review. The Facilities Plan is expected to conclude upon receipt of approval from the Department of Ecology in May of 2018. Portions of the Facilities Plan will be available prior to the submittal date to support planning efforts for internal parties, as they become available. A number of key milestones throughout the process for completion of the Facilities Plan will provide both the City and Lamb Weston an increasingly clear and accurate understanding of the costs and operational requirements associated with the potential introduction of Lamb Weston flows to the PWRF: 1. Completion of alternatives evaluation, October 2017 a. Establishes treatment alternatives, provides long tern operational outlook (6, 10, 20 years), including expanding service to new areas (e.g. Lamb Weston). Todd Goodman, Lamb Weston RE: City of Pasco Process Water Reuse Facility Outlook June 8, 2017 - Page 2 of 3 2. Land acquisition requirements, December 2017 a. Dependent on alternatives, evaluation and conclusions; additional ground for agriculture processed water application/treatment will be required to support potential Lamb Weston flows. b. Testing of Lamb Weston flow constituent loading; TSS and sand to be incorporated with existing testing parameters. 3. Phased CIP/Funding Strategy, February 2018 - a. A cost allocation model for all users to be developed by PACE sub consultant, FCS Group. 4. Updated Operational Cost Allocation, February 2018. a. Update the current cost allocation model to account for other significant PWRF users based on discharge characteristics and flow. 5. Ecology Approval of expansion areas; including Lamb Weston, May 2018 a. Hydro-Geological/Engineering study to identify loading capacity of spray fields for sustainable operation. The Facilities Plan and associated documents, a requirement of the Department of Ecology, will outline how the City will sustain, improve and operate the facility over the next several years and will serve as a prerequisite to Ecology's consideration in allowing new users into the system. Independent of the Facilities Plan, to continue its further evaluation of the Lamb Weston proposal - for the City to accept flows, the City will require of Lamb Weston input and partnership to establish the following: 1. Preferred route/conveyance from Lamb Weston's operation to PWRF, inclusive of booster station and rail road crossing. "- 2. Potential farm partnerships (50 year lease) or land acquisition to support the reported 2.8MGD land treatment application, subject to Ecology approval. 3. Financial commitment for expansion project. Expansion/Retrofit costs for the PWRF associated with acceptance of increased users and subsequent flow volume will be borne solely by PWRF user(s). 4. Timeline for Lamb Weston annexation into City limits. This information, in addition to a comprehensive Facilities Plan, will provide the necessary data to make informed decisions that will best serve the City and Lamb Weston, as well as the region's -._ agriculture processors utilizing the facility in both the near and long term planning horizons. I trust that the process, in satisfaction of DOE's requirements, as well as the City's requests made herein, are self-evident and understandable. Todd Goodman, Lamb Weston RE: City of Pasco Process Water Reuse Facility Outlook June 8, 2017 Page 3 of 3 The City is very interested in pursuing a partnership with Lamb Weston, as it will serve both our interests to the benefit of our respective constituencies. I understand key Lamb Weston representatives are meeting in mid-June to determine a course of action based on information to date, including this communication; we are hopeful the outcome of those discussions is to move forward with exploring this partnership. Please feel free to contact me with thoughts, questions or concerns. Sincerely, v Dave ZZabell—� City Manager - DZ/tlz cc: Rick Terway, Public Works Director