HomeMy WebLinkAboutR-2001-069 Interfund Loan (re: Del Monte Wastewater Agreement)RESOLUTION NO. R-2001— 69
A RESOLUTION authorizing an interfund Loan from
551 -Equipment Rental Fund to the 478 -Wastewater
Facility Project Fund and providing for repayment,
and declaring the City's intent to issue bonds to
reimburse prior expenditures.
WHEREAS, the Equipment Rental Fund has sufficient resources available for
investment to make the Interfund Loan authorized by this Resolution; and
WHEREAS, funds must be loaned to the 478 -Wastewater Facility Project Fund in
order to provide for cash flow requirements on the construction and rehabilitation of the
Wastewater Treatment facility; and,
WHEREAS, the Internal Revenue Code of 1986 requires that a municipality
declare its intent to issue tax-exempt bonds to reimburse the municipality for prior
expenditures before the expenditures are incurred, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
A loan of up to $1,420,000 may be borrowed in whole or in part only at such time
as it becomes necessary to complete the project. The interest rate shall be the Current
Maturing Three -Year Treasury Note at the time of each draw, and each draw on the loan
shall be repaid with principal and interest within three years from the borrowing date.
Repayment shall be made from the Wastewater Operating or Facility Project Funds.
The City reasonably expects to reimburse the following expenditures with the
proceeds of bonds to be issued by the City: Construction and rehabilitation of the
Wastewater treatment facility. The City expects to issue approximately $1,420,000
principal amount of bonds for these projects. The expenditures to be reimbursed from
bond proceeds will be made from the Wastewater Facility Project Fund.
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ADOPTED BY THE CITY COUNCIL this - day of April, 2001.
ATTEST:
CITY CLERK
Legal BD/Resolutions
Interfiuid Loan
7�*Y
PLACE, MAYOR
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of 4/17/01
ITEM TITLE: Implementation of Del Monte Wastewater Agreement
SUBMITTED BY: Dick Zais, City Manager
Ray Paolella, City Attorney
Rita Anson, Finance Director
Douglas Mayo, Wastewater Manager
CONTACT PERSON/TELEPHONE: Dick Zais / 575-6040
REQUESTED ACTION:
To enable the City to fulfill its commitment to Ecology and Del Monte, staff presents for your consideration and
action:
A) Consideration of an Ordinance Amending the 2001 Wastewater Capital Budget (Fund 478) Providing
authorization for Expenditures to convert the treatment of Del Monte's wastewater from the sprayfield to the
treatment facility at an estimated cost of $1,420,000.
B) Consideration of a Resolution Authorizing an Interfund Loan, from Fund 551 -Equipment Rental Fund, at an
indexed interest rate currently less than 5.0%, for Capital Expenditures for the Treatment Plant conversion.
C) Consideration of an Ordinance Amending the Municipal Code Enacting Increase in Wastewater Rates (2%) to
cover Financing of the loan and future revenue bond issue for this project.
(continued)
Resolution 1 Ordinance 2 Other (Specify)
Contract Mail to (name and address): Phone
Funding Source
ROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: A) Read appropriation ordinance by title only at 4/17/01 Council meeting. Pass
appropriation ordinance following second reading at 5/1/01 meeting.
B) Adopt resolution authorizing an interfund loan.
C) Pass ordinance enacting a 2% wastewater rate increase.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: (A) . First reading of ordinance; second reading scheduled 5-1-01.
(B). Resolution adopted. RESOLUTION NO. R-2001-69
(C). Ordinance passed. ORDINANCE NO. 2001-17
(Continued from page one)
SUMMARY EXPLANATION: On February 6, 2001, by resolution R-2001-26, City Council authorized,
approved, and ratified a Draft Statement of Intent Regarding proposed elements of a settlement with Del Monte
Corporation. Part one of this settlement speaks to Future Treatment of Del Monte Wastewater. Recent
discussions and negotiations between the City, Department of Ecology and Del Monte have lead to the
conclusion that future Del Monte food processing wastewater should be treated by the City's Wastewater
Treatment Facility. The sprayfield shall be retired from its historic usage.
A full scale pilot study, conducted last fall, has shown that considerable construction and rehabilitation to the
treatment facility is required immediately to accommodate treatment of Del Monte fruit processing wastewater by
the 2001 season. Review of the future demands of growth within our Wastewater Service area show that most of
this same construction is needed for future growth without Del Monte. Due to the seasonality of Del Monte's
operation, the same construction can fulfill both requirements.
Also on February 6, 2001, by resolution R-2001-18, City Council authorized the engagement of CH2M-Hill for
professional services for this project. The design element of their contract is well under way.
The estimated project cost for the immediate work is $1,420,000. This cost will be shared by Del Monte, City
rate payers, and our wholesale customers (Terrace Heights and Union Gap) Per the above mentioned
settlement, Del Monte shall contribute $495,500 directly for these improvements, they also will contribute
$441,514 for an allocation of existing capacity. Their total contribution of $937,014 will be paid over a 20 year
time frame with annual payments of approximately $74,000. Our wholesale customers shall pay their allocation
of the improvements plus debt coverage with annual payments of approximately $17,600. The remaining debt
service and debt coverage shall be born by City retail rate payers. (Approximately $145,500 annually) Staff
proposes an "across-the-board" increase of 2% to all retail customer classes to finance the City's obligation.
Because of the cost involved in preparing a bond issue, we chose to utilize an interfund loan for short term
interim financing. After resolution of litigation, the City shall pursue a revenue bond for the long term financing of
this project.
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 41 !
For Meeting Of 2/6/01
ITEM TITLE: Request For Approval of Resolution Authorizing Execution of Agreement for Engineering
Services with CH2M Hill, Inc.
SUBMITTED BY: Glenn Rice, ACM
Doug Mayo, Wastewater Manager
CONTACT PERSON/TELEPHONE: Doug Mayo/575-6077
SUMMARY EXPLANATION:
The City of Yakima owns and operates wastewater collection and treatment facilities in accord with applicable
Federal, State and Local regulations, and the City desires to obtain Engineering Services related to planning and
design of the Treatment Facility improvements required to accommodate treatment of the Food Processing
Wastewater from Del Monte. (continued)
The cost of this Agreement is not to exceed $ 162,000
Resolution X Ordinance _. Other (Specify) Agreement for Engineering Services
Contract_ Mail to (name and address): CH2M Hill Inc. P.O. Box 9150013ellevue. WA 98004-5538 Attn.:
Funding Source
APPROVED FOR SUBMITTAL:
T.
STAFF RECOMMENDATION:
Staff respectfully requests City Council approve resolution authorizing the City Manager and City Clerk to execute
an agreement with CH2M Hill, Inc.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
(...continued from front page..)
Due to extreme time constraints to complete construction and operational start-up prior to the NPDE; permit
deadline of July 1,. 2001 and more importantly prior to Del Monte's 2001 Dear ranninn canenn /ei in.,�+ , cx aw- r,:,.
is intending to contract with a subsidiary of CH2M Hill to perform Construction Management/General�Construction
(CM/GC) of the construction project. This will be done under a separate Agreement. It is the intent of this
legislation that execution authority be delegated to the City Manager for these and any other documents required
to complete the required construction.
City Council is respectfully requested to approve the attached resolution authorizing the City Manager and City
Clerk to execute an Agreement and necessary future Agreements for engineering and Construction
Management/General Construction services with CH2M Hill, Inc.
Pan 2
RESOLUTION NO. R-2001-18
A RESOLUTION authorizing the City Manager and City Clerk of the City of Yakima to
execute an Agreement for professional engineering services with
CH2M Hill, Inc.
WHEREAS, the City of Yakima owns and operates wastewater collection and
treatment facilities in accord with applicable Federal, State and Local regulations; and
WHEREAS, the City desires to obtain Engineering services related to planning
and design of the Treatment Facility improvements required to accommodate treatment
of the Food Processing Wastewater from Del Monte; and
WHEREAS, the City Council deems it to be in the best interest of the City of
Yakima to enter into the attached agreement with CH2M Hill, Inc., now, therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager and City Clerk are hereby authorized to execute an Agreement
with CH2M Hill, Inc. for professional services necessary for the completion of
improvements to the Wastewater Facility to accommodate the treatment of the Food
Processing Wastewater from Del Monte. The agreement shall be approved as to form
by the City Attorney.
ADOPTED BY THE CITY COUNCIL this 6th day of February, 2001
ATTESTS/ KAREN S. ROBERTS
City Clerk
Certified to be a true and correct co
original filed in my office. ��� P f the
CITY CLERK
By
_._.Deputy
�l
CITY OF YAKIMA
WASTEWATER TREATMENT PLANT AND Cni_.T.F.CTTnN .gvci=n,r
SCOPE OF WORK v v -•+
SECTION 1 - BASIC SERVICES
1.1 Description of Basic Services
The services are in response to recommendations made in the technical memorandum prepared
for the City of Yakima in August 2000 by CH2M HILL titled "AKART Analysis — Yakima Del
Monte." The AKART (all know, available, and reasonable methods of treatment) analysis
zs. M 1 -Ta — iiSG:.3luu.- to Ueat indust iai wastewmer from lite Del Monte huit canning facility In
Yakima, Washington. Del Monte's wastewater is seasonal (July through November) and has
higher concentrations of biochemical oxygen demand (BOD) and total suspended solids (TSS)
than domestic wastewater. The WWTP was not designed for the higher loading from Del Monte.
Historically the majority of Del Monte's wastewater has been land applied to spray fields
adiacent to the WWTP. However, the Washington State Department of Ecology (Ecology) is
concerned about potential groundwater impacts in the area of the spray field and the application
rates nay exceed the agronomic application. Ecology requested the AKART analysis to develop
long-term actions to mitigate the environmental affects of the land -applied wastewater.
The AKART analysis evaluated and screened several long-term AKART alternatives. The
preferred alternative is to make improvements to the WWTP to allow Del Monte to discharge
their wastewater to the plant instead of apply it to the spray fields. This contract is for design and
construction support services for the improvements.
SCOPE SERVICES
The objective of the Yakima WWTP improvements is to design and construct facilities, to allow
Del Monte to discharge their industrial wastewater to the existing trickling filter pumping station.
A pumping station is required to enable the WWTP to use the existing trickling filter clarifier to
settle solids generated by the additional organic loading from Del Monte. The new pumping
station will pump effluent from the trickling filter clarifier to the aeration basins.
The equipment for the project will be purchased by the Contractor shortly after Notice to Proceed
to minimize the equipment delivery time.
Improvements at the WWTP include:
• Modify the existing diversion box to a be a trickling filter clarifier effluent pumping station to
pump effluent to the aeration basins.
• Install connections to existing piping for flow into and out of the trickling filter clarifier
effluent pumping station.
• Construct a sludge pumping station for pumping solids from the trickling filter clarifier to the
DAFT.
• Replace the trickling filter arm hydraulically -driven mechanisms with P1Prrriratt.r_.i,
mechanisms.
• Install a by-pass from the trickling filter pump station to a primary clarifier for use during the
canning season.
• Replace two existing industrial waste pumps, suction and discharge valves and piping, and
sump level control.
It is anticipated that the Yakima VrNW improvements will be executed in several distinct work
phases as follows:
• Equipment Purchase Document Preparation
• Schematic Design
• Construction Documents
• Construction Support Services
• Record Drawings
• Operations and Maintenance Manual
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RESOLUTION NO. R-2001- a 6
A RESOLUTION authorizing, approving, and ratifying a Draft Statement of Intent
l.c-6C000►6 rioposeu Elements or Settlement with Del Monte
Corporation.
WHEREAS, O , D-aCe .,,bee � 20"0 representatives ` the City Council and Dei
vi LL.t.�.taL CL 1, V , le lesentaLives oil 1
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, irLcI WrIg the execution of all 'legal documents as contemplated by the Draft
Statement of In'ten't.
ADOPTED BY THE CITY COUNCIL this 6th day of February, 2001.
A 1 I EST:
!31 NA MT. S. ROBERTS, CMI
pk)m/DdMontee ffi— mrp
City Clerk
MU
A 0 N A
Lo ml
Mary Place, Mayor
DRAFT STATEMENT OF INTENT REGARDING
PROPOSED ELEMENTS OF SETTLEMENT
Part 1: Future City Treatment of Del Monte Wastewater
Del Monte and the City shall enter into a 20 -year written austcmer contract
containing at least the following terms and conditions.
1. Del Monte shall pay a connection fee in the amount of $441,514.
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 1 and 2 above, and debt service at an interest rate
not to exceed 6-1/4 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 City has overcharged Del Monte for service rendered in the past.
PRIVILEGED AND CONFIDENTIAL DOCUMENT AND ATTORNEY WORK PRODUCT SUBJECT
TO JOINT DEFENSE AGREEMENT BETWEEN DEL MONTE AND CITY OF YAKIMA IN
MURPHY V. CITY OF YAKIMA ET AL.
P=rt 2: UuuiaLiOn
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
CeM... 4 nnnw _� . _....
a w1 va1 y e, Lw a and an aaati}onai $l SU,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 j or to te
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 ®avable to the City Rof"m +tie
expenditure exceeds $100,000, Del Monte'; attorneys shall notify the City.
In the event that Del Monte's Litigation Costs exceed $250,000, Del Monte
shall cover all such Litigation Costs in excess of $250,000.
3. The "Termination Date" shall be the later of: (a) 30 days after the hearing
on plaintiffs' motion for class certification; or (b) March 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 I tt°gation.
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
7.60.020.0.
Part 3: Other
1. 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.
PRIVILEGED AND CONFIDENTIAL DOCUMENT AND ATTORNEY WORK PRODUCT SUBJECT
TO JOINT DEFENSE AGREEMENT BETWEEN DEL MONTE AND CITY OF YAKIMA IN
MURPHY V CITY OF YAKIMA ET AL.
Dated: 12/1/00
Signed and approved subject to ratification by the Yakima City Council:
Richard A. Zais, Jr.
City Manager
Counsel to City of Yakima
Signed and approved subject to ratification by Del Monte executive management:
David Wthycombe
Senior Vice President
I A.,V
Bradley M. Marten
Counsel to Del Monte
PRIVILEGED AND CONFIDENTUL DOCUMENT AND ATTORNEY WORK PRODUCT SUBJECT
TO JOINT DEFENSE AGREEMENT BETWEEN DEL MONTE AND CITY OF YAKIAfA IN
MURPHY V. CITY OF YAKIMA ET AL