HomeMy WebLinkAboutR-2001-026 Proposed Settlement with Del Monte CorporationRESOLUTION NO. R-2001- 26
A RESOLUTION authorizing, approving, and ratifying a Draft Statement of Intent
Regardingv Proposed Elements of Settlement with Del Monte
Corporation.
WHEREAS, On December 1, 2000, representatives of the City Council and Del
Monte Corporation agreed to enter into a twenty (20) year written customer contract for
treatment of Del Monte wastewater, together with a settlement in compromise of
potential and actual claims between the City and Del Monte; and
WHEREAS, the City Council of the City of Yakima deems it to be in the best
interests of the City of Yakima to enter into this Settlement Agreement with Del Monte
Corporation, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The attached and incorporated Draft Statement of Intent Regarding Proposed
Elements of Settlement with Del Monte Corporation is hereby authorized, approved,
and ratified by the Yakima City Council. The City Manager is authorized and directed
to take all necessary and prudent actions to implement the attached Draft Statement of
Intent, including the execution of all legal documents as contemplated by the Draft
Statement of Intent.
ADOPTED BY THE CITY COUNCIL this 6th day of February, 2001.
/Mary Place, Mayor
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City Clerk
(1k)res/Del Monte settlement.rp
DRAFT STATEMENT OF INTENT REGARDING
PROPOSED ELEMENTS OF SETTLEMENT
Part 1: Future City Treatment of Del Monte Wastewatat
Del Monte and the City shall enter into a 20 -year written customer contract
containing at least the following terms and conditions.
1. Del Monte shall pay a connection fee in the amount of $441,5114.
2, As a term and condition of the Wastewater Manager's agreement to
accept wastewater in excess of 300 mg/L of BOD and suspended solids,
Del Monte Shall pay $495,500 toward capital improvements that will
handle its wastewater stream.
3. Del Monte may pay its combined connection fee and payment toward
capital improvements over a period of 20 years provided that Del Monte
pays the City's full actual costs of issuance up to 2 percent of the amounts
specified in paragraphs I and 2 above, and debt service at an interest rate
not to exceed 6-114 percent for a revenue bond to finance said amount.
4. In the event that Del Monte wishes to cease taking service as a
wastewater customer of the City, prior to terminating service, it shall
immediately pay the unpaid balance of the combined connection fee and
capital improvement payment. Del Monte shall provide financial
assurance that meets the financial test for liability coverage set forth in 40
CFR section 260.147(f). The prevailing party shall be entitled to an award
of all attorneys fees and costs in any legal action to recover an unpaid
balance pursuant to this section.
5. Del Monte shall pay the monthly service rates generally applicable to other
customers subject to the strong waste surcharge pursuant to YMC
7.60,020.13, or any successor ordinance provision.
6. Del Monte shall pay the outstanding invoice from the City dated July 2000
in the amended amount of $109,705.51 within 30 days of its receipt of said
amended invoice.
7. Del Monte shall pay forthcoming invoices from the City for service
rendered by CH2M Hill for the pilot test and related analyses, parts and
equipment, within 30 days of its receipt of supporting documentation.
8. Del Monte shall release any claims it may have based on allegations that
the Uy has overcharged Del Monte for service rendered in the past.
Part 2: Litigation
1. in settlement and compromise of potential and actual Claims between the
City and Del Monte, Del Monte shall pay the City $200,000 on or before
February 1, 2001 and an additional $150,000 on or before August 1, 2001.
2. In addition, Del Monte shall allocate $250,000 for payment of its attorneys
fees and costs (including expert witness fees) ("Litigation fists") or to the
City as follows. Said allocation shall be used first, to pay Del Monte's
Litigation Costs associated with the litigation and incurred on and after
December 15, 2000.`In the event that such Litigation Costs do not reach
$250,000 prior to the Termination Date (as defined in paragraph 3 below),
then the balance of said allocation shall be payable to the City. Before the
expenditure exceeds $100,000, Del Monte's attorneys shall notify the City.
In the event that Gel Monte's Litigation Costs exceed :$200,000, Del Monte
shall cover all such Litigation Costs in excess of $250,300.
3. The "Termination Gate" shall be the later of: (a) 30 days after the hearing
on plaintiffs' motion for class certification; or (b) Marcie 31, 2001. Del
Monte shall continue its participation in the Murphy odor litigation after the
Termination Date.
4. The City shall indemnify Del Monte against any direct payment of any
judgment or settlement amount in the Murphy odor litigation.
5. The City anticipates that it will recover its costs in the litigation through
rates that are generally .applicable to its wastewater customers. Del
Monte shall pay such costs through rates on the same basis as other
customers that are subject to the strong waste surcharge under YMC
7.60.020.8.
Part 3: Other
9 , The City shall absorb all costs associated with terminating the use of the
sprayfield and all unamortized costs associated with the sprayfield.
2. The City shall retain the sprayfield and all associated equipment.
3. The City shall absorb the unamortized capital costs of trunks, interceptors
and lift stations that will continue to serve Del Monte's waste stream.
Dated: 1211/00
Signed and approved subject to ratification by the Yakima City Council:
Rich Thomas N. 1 VO'l
City Manager Counsel to City of Yakima
Signed and approved subject to ratification by Del Monte executive management:
David Withycombe
Senior Vice President
Bradley M. Marten
Counsel to Del Monte