HomeMy WebLinkAboutR-2006-002 Natural Selection Farms, Inc. Contract AmendmentRESOLUTION NO. R-2006-02
A RESOLUTION authorizing and directing the City Manager of Yakima to execute an
amendment to the May 2003 contract between the City of Yakima and
Natural Selection Farms, Inc. regarding establishing a per unit of nitrogen
cash value for biosolids as a soil amendment and adjusting the contract
service fee.
WHEREAS, the City executed an agreement with Natural Selection Farms, Inc. in May
2003 (City of Yakima contract No. 2003-55) regarding the application of biosolids generated by
the City of Yakima Wastewater Treatment Facility to agricultural lands in Eastern Washington;
and
WHEREAS, the City desires to establish and collect a cash value for the biosolids as a
soil amendment in order to qualify for certain tax exemptions pursuant to state law; and
WHEREAS, Natural Selection Farms, Inc. is willing to assist in that endeavor in
exchange for an increase in the contract service fee and other terms and conditions outlined in
the attached Amendment One;, and
WHEREAS, the City Council has determined that it is in the best interest of the City of
Yakima to agree to the attached Amendment One, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute the attached and
incorporated "Amendment One to Agreement for the Beneficial Use of Biosolids" with Natural
Selection Farms, Inc. regarding establishing a per unit of nitrogen cash value for biosolids as a
soil amendment and adjusting the contract service fee.
ADOPTED BY THE CITY COUNCIL this 3`d day of Ja► a , 2006.
City Clerk
Mayor
AMENDMENT ONE TO
AGREEMENT FOR THE BENEFICIAL USE OF BIOSOLIDS
PARTIES:
RECITALS:
Generator: The City of Yakima, Washington, a Washington
municipal
corporation
NSF: Natural Selection Farms, Inc., a Washington
corporation
A. The parties hereto have previously entered into that certain agreement between the
City of Yakima, Washington, and Natural Selection Farms, Inc., dated on or about May
20, 2003, for the beneficial use of biosolids pursuant to City of Yakima Resolution No.
R-2003-82 (the "Initial Agreement").
B. The Initial Agreement provided for a number of terms and conditions addressing the
parties' rights and obligations with respect to biosolids generated by the City of Yakima
at its Wastewater Treatment Facilities. Said terms and conditions included payment
obligations, insurance provisions, biosolids testing requirements, records and
documentation requirements, and other similar provisions.
C. The purpose of this amendment one (the "Amendment") is to memorialize the
supplemental terms of agreement of the parties in addition to those set forth in the Initial
Agreement.
IN CONSIDERATION of the covenants herein contained and for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Generator and NSF hereby agree as follows:
1. Establishment of value of biosolids as soil amendment.
NSF agrees to use its best efforts to work with farmers/landowners who receive
Generator's biosolids to establish a "per unit of nitrogen" cash value for the soil
amendment benefits provided from biosolids. NSF shall periodically update Generator
regarding NSF's efforts to establish such a value, and agrees to work in good faith with
Generator so that the establishment of a value will be mutually beneficial to Generator,
NSF and the farmer/landowner; provided, however`, that all parties acknowledge and
agree that the actual per unit of nitrogen cash value will be determined in large part by
market forces over which NSF has no control. Thus, NSF expressly disclaims any
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representation or warranty that a certain cash value shall be obtained in advance of actual
efforts to establish the same.
The per unit of nitrogen cash value actually obtained by NSF shall be tendered to
Generator on an annual basis, together with a statement of account provided by NSF :-
detailing the manner in which said per unit of nitrogen cash value was calculated for the
preceding period.
2. Adjustment in service fee.
In consideration of the efforts of NSF to establish a per unit of nitrogen value for
biosolids, and in contemplation of a reasonable forecast for the actual cash value that may
be obtainable by NSF, but not as a requirement or obligation of NSF to obtain a specific
per unit cash value, the parties agree that the service fee contained in the Initial
Agreement at paragraph 6(b) shall be increased to sixteen dollars ($16.00) per wet ton of
biosolids subject to the Initial Agreement.
3. Price Adjustment for Inflation and Fuel Costs.
Paragraph 6(c) of the Initial Agreement shall be stricken and replaced with the
following:
The service fee provided herein shall be adjusted annually on
February 1' of each year of this contract, commencing on February
1' 2007. Said adjustment shall be dictated by, and directly
proportional to, the percentage change in the Consumer Price Index
for All Urban Consumers (CPI -U) for all U.S. cities over the same
period of time.
Twenty percent (20%) of the total service fees shall also be adjusted
monthly after the first month following execution of Amendment One
to this agreement using the data found in the Bureau of Labor Statistics
Producer Price Index -Commodities Data for #2 diesel fuel (Series ID:
WPU057303), or its successor index, as found at www.bls.gov, applied
in a manner consistent with the following example:
Example: Service fee effective 1/1/06: $16.00 per ton @ 20% = $3.20
fuel costs
Assume applicable PPI data of 1/1/06 is 200
Assume applicable PPI data of 2/1/06 is 250
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Difference in PPI data is an increase of 25%. New service fee is
adjusted accordingly. New rate effective 3/1/06 is $3.20 increased by
25% ($.80), for a new service fee per ton of $16.00 plus $.80 = $16.80
per ton.
4. Full force and effect.
Except as specifically amended herein, the Initial Agreement shall remain in full
force and effect pursuant to its terms.
NATURAL SELECTION FARMS, INC. THE CITY OF YAKIMA, a Washington
a Washington corporation municipal corporation
Bye _ Date: c ByDat\i
Ted Durfey, R.A. Zais, Jr.
Its: President Its: City Manager
ATTEST:
4v2 -v%-- )
Karen Roberts, City Clerk
CITY CONTRACrNO -bas
RESOLUTION NO: W.-007496
- 3 -
MENKE JACKSON BEYER ELOFSON EHLIS & HARPER, LLP
Attorneys at Law
ANTHONY F MENKE
ROCKY L. JACKSON
G. SCOTT BEYER
Mr. Richard Zais
City Manager
City of Yakinia
129 North 2nd Street
Yakima WA 98901
807 NORTH 39TH AVENUE • YAKIMA, WASHINGTON 98902
(509) 575-0313 • FAX. (509) 575-0351
DAVID A. ELOFSON
KIRK A. EHLIS
KENNETH W HARPER
ATTORNEY-CLIENT
PRIVILEGED & CONFIDENTIAL
COMMUNICATION
November 18, 2005
FAX TRANSMITTAL/U.S. MAIL
(509) 576-6335
RE: Amendment to Biosolids Contract between Natural Selection
Farms, Inc., and the City of Yakima
Dear Mr. Zais:
Several years ago, in May of 2003, I wrote to you regarding my representation of
Natural Selection Farms, Inc., with regard to a contract for the hauling and
management of biosolids from the City of Yakima Wastewater Treatment Plant.
The purpose of my earlier letter, dated May 1, 2003, was to apprise you of the
potential conflict of interest inherent in my representation of Natural Selection
Farms, Inc., during my simultaneous representation of the City of Yakima on
unrelated matters.
At that time, you believed it to be appropriate to waive any such potential conflict of
interest. Subsequently, a successfully -negotiated contract between Natural
Selection Farms, Inc., and the City of Yakima was executed.
It has now come to my attention that my client, Natural Selection Farms, Inc., has
been in discussions with Max Linden regarding the possibility of amending the
previous agreement to the mutual advantage of both Natural Selection Farms, Inc.,
and the City of Yakima.
I have been asked by Natural Selection Farms, Inc., to prepare a draft amendment
to the previous agreement.
I must, therefore, raise the topic of conflicts of interest with you again.
Mr. Richard Zais
November 18, 2005
Page 2
This letter is written to more fully explain my position with regards to a potential
conflict of interest. I continue to perform legal services for Natural Selection Farms,
Inc., with regard to land use and environmental matters. Of course, I also continue
to perform legal services for the City of Yakima.
State ethics and conflict of interest rules require me to obtain the written consent of
my clients in any case where there is even a potential conflict such that
representation of one client may be adverse to the interest of another client. Under
the present circumstances, in my judgment, it is extremely unlikely that my
representation of Natural Selection Farms, Inc., in negotiating an amendment to
the earlier biosolids contract with the City of Yakima would be likely to lead to an
actual conflict of interest.
In the event that an actual conflict of interest develops in the future, please be
aware that I would be obligated to withdraw from representing either client in this
matter.
If you have questions about anything contained in this letter, I would strongly
suggest that you discuss them with a member of the City of Yakima legal
department.
On the other hand, if you believe that you have been adequately informed to
understand the possibility of a conflict of interest, please sign this letter where
indicated and return it to me, by fax, at your earliest convenience.
Very truly yours,
Kenneth W. Harper
KWH:ksl
cc: Ray Paolella, Yakima City Attorney VIA FAX ONLY
Max Linden, Utility Engineer VIA FAX ONLY
R. A. Zais, Jr., City Manager
BUSINESS OF THE CITY COUNCIL
YAIUMA, WASHINGTON
AGENDA STATEMENT
Item No. 1
For Meeting of January 3, 2006
ITEM TITLE A resolution authorizing and directing the City Manager of Yakima to execute an
amendment to the May 2003 contract between the City of Yakima, Washington and
Natural Selection Farms, Inc., regarding establishing a per unit of nitrogen cash value
for biosolids as a soil amendment and adjusting the contract service fee.
SUBMITTED BY: Douglas Mayo/ Wastewater Manager
Max Linden/ Wastewater Utility Engineer
CONTACT PERSON/TELEPHONE: Douglas Mayo/ 575-6077
SUMMARY EXPLANATION:
In May 2003, the City executed an agreement with Natural Selection Farms, Inc. (City of Yakima contract
No. 2003-55) regarding the application of biosolids generated by the City of Yakima Wastewater Treatment
Facility to agricultural lands in Eastern Washington. In order to qualify for certain tax exemptions pursuant
to state law, during the upcoming Capital project, the City desires to establish and collect a cash value for
the biosolids as a soil amendment. Natural Selection Farms, Inc. is willing to assist in that endeavor in
exchange for a slight increase in the contract service fee and other terms and conditions outlined in the
attached Amendment One. The City's Wastewater Utility will receive a net financial benefit from these
actions.
Resolution XX Ordinance _ Other (Specify)
Contract Amendment XX Mail to (name and address): Natural Selection Farms, Inc.
P.O. Box 893 Sunnyside, WA 98944
Cost: Net benefit to the Wastewater Utility
Funding Source Fund 473 Wastewater operating F
Phone (509) 837-3501
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Approve the resolution authorizing the City Manager to execute an
amendment to the May 2003 contract between the City of Yakima, Washington and Natural
Selection Farms, Inc., for the beneficial use of biosolids.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2006-02
AN AGREEMENT BETWEEN
CITY OF YAKIMA, WASHINGTON, AND
NATURAL SELECTION FARMS, INC.,
FOR THE BENEFICIAL USE OF BIOSOLIDS
This Contract is made and entered into as of the_ day of May, 2003, (the "Effective
Date') by and between the City of Yakima, Washington (the "Generator") and Natural
Selection Farms, Inc., ("NSF"), a Washington corporation.
Whereas, the Generator produces significant amounts of sewage sludge (hereinafter
referred to as "biosolids") as a by-product of its sanitary sewage treatment process; and
Whereas, NSF has expertise in the storage and application of biosolids to agricultural
lands in Eastern Washington; and
Whereas, it is in the best interests of the environment, the Generator, the agricultural
community and the public health, safety and welfare of Generator's citizens that this Contract
be entered into;
Now, therefore, in consideration of the mutual promises and covenants herein contained
and for other good and valuable consideration, it is hereby agreed as follows:
1. Purpose. Generator and NSF enter into this Contract to establish terms and
conditions for NSF to beneficiallyuse or otherwise manage biosolids produced
by Generator.
2. Generator's Obligations. Generator shall be obligated to perform the following
with respect to a minimum of ninety percent (90%) of the biosolids generated
at Generator's wastewatertreatment facilities,or 1,200 dry tons of biosolids, per
calendar year, whichever amount is less:
a. deliver biosolids to such Yakima County site or sites as may be directed
by NSF, using trucks and other necessary and sufficient equipment of
Generator, at Generator's sole cost and expense, and at a time mutually
agreeable to Generator and NSF;
b. ensure that the tendered biosolids meet applicable federal, state and
local standardsgoverning land applicationof biosolids to agriculturallands
as the same currently exist and as they may be modified or altered from
time to time, and as set forth herein at Section 3;
o test the tendered biosolids in accordance with appropriate testing
procedures and applicable federal, state, and local law and regulations
and provide NSF all information required by law or that otherwise is
necessary for NSF to use and manage application of the biosolids to
agricultural lands in a safe, consistent, and reliable manner, including
providing to NSF test results confirming acceptable compliance with all
applicable trace metal standards as well as confirming percent solids by
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weight and nitrogen content as expressed by total Kjeldahl nitrogen
(TKN);
d. provide certificationto NSF that biosolidsare qualified as such as the term
"biosolids" is defined in applicable law and regulations, including Ch.
70.95J RCW and Ch. 351 Title 173 WAC, or as the same may be
hereafter amended, and as further evidenced by Generator's provision
to NSF of certification in a form substantially similar to the document
attached hereto as Exhibit "A" and incorporated herein by this reference;
and,
e. pay NSF service fees as provided in Section 6 below and all Health
District oversight fees as the same currently exist or may be modified
from time to time during the term of this Contract.
3. Generator's Covenants and Warranties. Generator hereby expressly warrants
that all biosotids tendered to NSF shall comply with all standards and
requirements under federal, state and local laws and regulations applicable to
NSF's intended use of the biosolids for land application as described herein, as
the same currently exist and as they may be modified or altered from time to
time.
4. NSF's Obligations. NSF shall:
a receive biosolids at such site or sites as may be directed pursuant to
Section 2(a), above, and use the same for applicatiot o agricutturallands
in Eastern Washingtonas a soil amendment,compost ingredient or other
permitted beneficial use as may be determined by NSF, in NSF's sole
discretion; and,
b. provide all of the facilities, equipment, and personnel necessary for such
work, and perform the application of biosolids in compliance with all
applicable local, state, and federal regulations.
5. NSF's Covenants and Warranties. NSF warrants and represents that it has the
business, professional, and technical expertise to use and manage the
application of biosolids and shall at all times do so in a prudent and workmanlike
manner. Furthermore, NSF warrants and represents that it has the equipment,
plant and employee resources required to perform this Contract.
6. Billing and Payment.
a Billing. NSF shall provide to the Generator, by the fifteenth (15th) day
of the month following acceptance of the Generator's biosolids, a statement
in a format that is mutually agreeable to NSF and the Generatoiletailing the
number of wet tons of biosolids accepted by NSF in the preceding month.
The method of determining tonnage shipped shall be by public or private
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number of wet tons of biosolids accepted by NSF in the preceding month.
truck scales as may be mutually selected by the Generator and NSF. The
scale charge for weighing on the truck scales shall be paid by the Generator.
b. Service Fees. NSF's service fee for receiving, transporting and land
applying Generator's biosolids will be fifteen dollars ($15.00) per wet
ton; provided that this service fee will be adjusted from time to time as
set forth herein.
c. Price Adjustment for Inflation: The service fee shall be adjusted annually
on February 1st of each year commencing February 1, 2004. Said
adjustment shall be dictated by, and directly proportional to, the
percentage change in the Consumer Price Index for All Urban
Consumers (CPI -U) for all U.S. cities over the preceding twelve (12)
months for which applicable data is available.
d. Price Adjustmentfor Change in Law. NSF may, after noticto Generator,
increase the servicefee by up to one hundred percent (100%) of NSF's
reasonable actual increased costs of performing its obligationsander this
Contract due to a change in law. For purposes of this section, a "change
in law" includes new laws, regulations, ordinances of general application
and modifications of them; new decisions of tribunals, either judicial or
administrative, and any modifications of them; or the imposition of any
material conditions on the renewal of any permit, license or approval
which makes the transportation, storage, land application or other
management of biosolids more burdensome financially than under the
requirements in effect at the Effective Date. Whether or not a change in
law materialto this Contract has occurred shall be determineahutually by
NSF and the Generator. In the event that a mutual agreement cannot be
reached, either party may, at their option, terminate this Contract upon
written notice and with no further obligation to the other.
e. Payment in the Event of Termination. In the event that either party
terminates this Contract under Section 15, NSF shall be compensated
in accordance with the above terms for all satisfactory services provided
to the Generator under this Contract up to the effective termination date.
7. Employment -Related Taxes and Assessments. NSF shall be solely responsible
for compensating its employees and for paying all related taxes, deductions, and
assessments, including but not limited to, federal income tax, FICA, social security
tax, assessmentsfor unemployment and industrial injury, and other deductions frorn
income which may be required by law or assessed against either party as a result
of this Contract.
8. Sales Tax. The application of biosolids is not subject to state sales or use tax,
however, if for any reason the state requires sales or use tax for this service,
Generator will make payments directly to the state for all applicable state sales or
use taxes. If NSF is so registered, it shall add the sales or use tax to each invoice
and upon receipt of payment from Generatorpromptly remit appropriateamounts
to the State of Washington.
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9. Nondiscrimination Provision. During the performance of this Contract, NSF shall not
discriminate on the basis of race, age, color, sex, religion, national origin, creed,
marital status, political affiliation, or the presence of any sensory, mental or physical
handicap. This provision shall indude but not be limited to the following:
employment, upgrading, demotion, transfer, recruitment, advertising, layoff or
termination, rates of pay or other forms of compensation, selection for training, and
the provision of services under this Contract.
10. No Conflict of Interest. NSF represents that it and its employees do not have any
interest and shall not hereafter acquire any interest, direct or indirect, which would
conflict in any manner or degree with the performance under this Contract. NSF
further covenants that it will not hire anyone or any entity having such a conflict of
interest during the performance of this Contract.
11. Conditions Precedent. It shall be a condition precedent to the obligations of
either party hereunder that that party shall have obtained all applicable and
necessary permits, licenses and approvals of any federal, state, and local
government or other governmental authority; provided, however, and except
as provided herein to the contrary, the failure of either party to obtain any
necessary permits, licenses, or approvals shall not constitute a defense to any
liability to the other party for any breach of this Contract.
12. Term and Extension. The term of this Contract shall be for five (5) years,
commencing as of the Effective Date herein. This Contract shall b e
automatically renewable for additional one year terms as provided for herein;
provided, however, that each such renewal shall be subject to the re -negotiation
of the succeeding year's minimum service fees to be paid to NSF. Either party
may prevent said automatic renewal without cause by giving the other party
written notice of intention not to renew at least sixty (60) days prior to the
Contract termination date.
In the event of a re-negotiationof the service fee to be paid to NSF, the parties
shall execute a written agreementreflecting the Contract's continuance under saic
re -negotiated fees. A meeting of the parties for the re -negotiation of service
fees shall occur not less than sixty (60) days prior to the Contract termination
date and may be called for by either party. Failure to agree on a new service
fee shall permit either party to terminate the Contract by written notice delivered
prior to the termination date then approaching.
13. Insurance.
a No Insurance. It is understood that the Generator does not
maintain liability insurance for NSF and/or its employees, agents,
officers, and subcontractors.
b. Commercial Liability Insurance. Before this Contract is fully
executed by the parties, NSF shall provide the Generator with a
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certificate of insurance as proof of commercial liability insurance
with a minimum liability limit of Two Million Dollars
($2,000,000.00) combined with single limit bodily injury and
property damage. The certificate shalt clearly state who the
provider is, the coverage amount, the policy number, and when
the policy and provisions provided are in effect (any statement in
the certificate to the effect of "this certificates issued as a matter of
information only and confers no right upon the certificate holder"
shall be deleted.) Said policy shall be in effect for the duration of
this Contract. The policy shall name the Generator, its elected
officials, officers, agents, and employees as additional insureds,
and shall contain a dause that the insurer will not cancel or change
the insurance without first giving the Generator thirty (30) calendar
days prior written notice (any language in the clause to the effect
of "but failure to mail such notice shall impose no obligation or
liability of any kind upon the company" shall be crossed out and
initialed by the insurance agent.) The insurance shall be with an
insurance company or companies rated A -VD or higher in Best's
Guide and admitted in the State of Washington.
c Commercial Automobile Liability Insurance. Before this Contract
is fully executed by the parties, NSF shall provide the Generator
with a certificate of insurance as proof of commercial automobile
liability insurancewith a minimum liability limit of Two Million Dollars
($2,000,000.00) combinedsingle limit bodily injury and property
damage. Automobile liability will apply to "Any Auto" and be
shown on the certificate. The certificate shall clearly state who the
provider is, the coverage amount, the policy number, and when
the policy and provisions provided are in effect (any statement in
the certificate to the effect of "this certificates issued as a matter of
information only and confers no right upon the certificate holder'
shall be deleted.) Said policy shall be in effect for the duration of
this Contract. The policy shall name the Generator, its elected
officials, officers, agents, and employees as additional insureds,
and shall contain a dause that the insurer will not cancel or change
the insurance without first giving the Generator thirty (30) calendar
days prior written notice (any language in the clause to the effect
of "but failure to mail such notice shall impose no obligation or
liability of any kind upon the company" shall be crossed out and
initialed by the insurance agent.) The insurance shall be with an
insurance company or companies rated A -VII or higher in Best's
Guide and admitted in the State of Washington.
d. Insurance Provided by Subcontractors. NSF shall ensure that all
subcontractors it utilizes for work/services required under this
Contract shall comply with all of the above insurance
requirements.
14. Permits. NSF shall maintain all necessary permits and approvals in accordance
with law.
15. Records and Meetings.
The following provisions in this paragraph 15 governing the obligation of NSF
to maintain records, provide status reports, attend meetings, and report spills or
other similar serious occurrences, shall apply only with respect to the subject
matter of this Contract (i.e., biosolids tendered by Generator and NSF's
performance of its duties with respect thereto):
a NSF shall maintain records showing the design and location of biosolids
storage or composting facilities, amounts and duration in storage, areas and
rates of application, calculations for determining application rates, and any
known instances of migration of biosolids from the area intended for their
storage or application. NSF shall also maintain copies of all reports to and
correspondence with regulatory agencies. Copies of all records required to
be maintained shall be provided to the Generatoas they are createdand/or
received. These records shall also be availabldor Generator'scopying and
review upon seven (7) written days notice provided to NSF. All records
required to be maintained by NSF shall be preserved for at least three (3)
years following termination of this Contract.
b. When requested to do so by Generator representatives, NSF shall make
the cost records, accounts and related financial documents pertaining to this
Contract available for inspection by Generator representatives during the
term of this Contract and for a period of three (3) years following the final
payment to NSF by Generator. Subject to said duty to preserve records,
in the event that any audit or inspection identifies any discrepancy in such
financial records, NSF and/or Generator, as the case may be, shall provide
each other with appropriate clarification and/or financial adjustments within
thirty (30) calendar days of notification of the discrepancy.
c. NSF shall provide weekly status reports to Generator in a format
substantially similar to the report set forth as Exhibit B, and incorporated
herein by this reference.
d. NSF shall collect and document all data required by appropriate regulatory
or permitting agencies and shall assist Generator in producing an annual
report. The annual report shall include at a minimum the following:
i. Total deliveries and locations;
ii. Actual application rates versus prescribed application rates;
iii. Total applications and location;
iv. Environmental data; and
v. Crop information.
e. Generator representativeswill meet with NSF on a monthly basis or as may
be required to discuss the service provided under this Contract. The
purpose of these monthly meetings shall be to inform Generator and NSF
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of the status of operations conducted under this Contract.
f. In the event of a spill or other seriousimilar occurrence,NSF shall immediately
contact Generator's biosolids contact and shall submit a report summarizing
the incident within 24 hours.
16. Termination; Default.
a NSF may terminate this Contract if:
i. the Generator fails to make any payment required
hereunder within fifteen (15) days after receiving notice of
nonpayment from NSF;
ii. the Generator breaches any material representation or
warranty set forth herein;
iii. the Generator defaults in the performance of any other
obligation of the Generator under this Contract and fails to
cure such default within thirty (30) days after receiving
written notice thereof from NSF;
iv. any applicable law or governmental regulations or other
circumstances outside NSF's control cause the services
required of NSF to be economically unfeasible for NSF,
or NSF is otherwise prohibited from providing the
services required of it by the Contract; or
v. as provided in section 6(d) above.
b. Generator may terminate this Contract if:
i. NSF breaches any material representationor warranty set:
forth herein;
ii. NSF defaults in the performance of any other material
obligation of the Generator under this Contract and fails to
cure such default within thirty (30) days after receiving
written notice thereof from the Generator;
iii. NSF fails to comply with any federal, state or local laws,
rules, orders or ordinances,or regulations that pertairto the
transportation of use of biosolids and fails to cure such
non-compliance within thirty (30) days after receiving
written notice from the appropriate agency or court; or
iv. as provided in section 6(d) above.
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17. Non -conforming Biosolids. NSF shall be entitled to inspect and analyze each
load of biosolids tendered by the Generator. NSF's right to verify Generator's
biosolids testing under this section is entirely discretionary and imposes no duty
on NSF. Generator bears sole responsibility under this Contract for tendering
only biosolids that conform to the warranty standards set forth herein. If NSF
tests Generator's biosolids and the biosolids are found to be non -conforming,
Generator shall pay NSF's commerciallyreasonablecosts incurred in the testing.
If NSF determines that the biosolids do not conform to the warranty standards
set forth herein, it may reject the biosolids by notifying the Generator in writing.
Timely removal (if necessary) and disposal of rejected biosolids shall be at the
Generator's sole cost and responsibility; provided that if NSF rejects biosolids
as non -conforming, NSF reserves the right, notwithstanding any other remedy
available at law or otherwise, to transport the biosolids to a disposal site or to
return the biosolids to Generator's site, and to collect from Generator any
commercially reasonable expenses or damages incurred thereby, including but
not limited to transport, storage or disposal costs. Before biosolids may be
rejected, transported and/or disposed of as non -conforming under this section,
an independent third party selected by both NSF and Generator must confirm
non -conformity through verification sampling and testing.
18. Indemnification.
a NSF agrees to protect, defend, indemnify,exonerate, and hold harmless
Generator, its agents, elected officials, officers, and employees from and
against any and all claims, demands, causes of action, damages,
liabilities, losses, expenses, liens, fines, lawsuits and other proceeding;;
and all judgments, awards, costs and expenses, ("Losses") as well as
attorneys' fees and disbursements resulting from NSF's performance
and/or nonperformance of this Contract.
b. Generator agrees to protect, defend, indemnify, exonerate and hold
NSF, its agents, officers,and employees, harmless from and against any
and all claims, demands, causes of action, damages, liabilities, losses,
expenses, liens, fines, Iawsuitsand other proceedingsand all judgments,
awards, costs and expenses caused by or resulting from (I) Generator's
obligation to tender only biosolids that conform to the warranty standards
set forth above or other breach of this Contract and (ll) Generator's
negligent acts or omissions in the performance of its duties as described
in this Contract.
Notwithstanding any other provision herein, the obligationsreated by this section shall
survive any termination of this Contract.
19. Safety Standards and Instruction. NSF shall provide adequate training of its
personnel involved in management of biosolids. NSF shall inform its personnel
that sewage treatment plants process sanitary and industrial waste, that any
workers involved in biosolids management may be exposed to pathogens,
and that such workers should follow proper hygiene and workplace safety
practices.
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20. Landowners/Lessees of Land Application Sites. NSF shall have a separate
agreement with each landowner/lessee of land application site that provides
NSF the authorization to use the land for biosolid application. NSF shall inform
the landowner of any sites where NSF will apply Generator's biosolids about
the general benefits and risks of the use of municipal biosolids as a soil
amendment. NSF shall encourage landowners/lesseemf land application sites
to maintain application sites in a clean and orderly fashion and NSF shall
cooperate fully with Generator to maintain the highest reasonable public image.
21. Compliance with Laws. The Generator and NSF shall each fully comply with �iII
applicable laws, ordinances, decisions, orders, rules or regulations of any
government or governmental agency pertaining to its handling, storage,
transportation, treatment, use or management of the biosolids.
22. Disputes, Governing Law, Venue. This Contract shall be governed by and
construed in accordance with the laws of the State of Washington. If litigation
arises concerning the interpretation of any of the terms of this Contract, venue for
such litigation shalt be in the Superior Court of the State of Washington in
Yakima County.
23. Savings. If any part of this Contract is declared to be invalid or unenforceable,
the rest of the Contract shall remain binding, unless such invalidity or
unenforceability destroys the purpose and intent of this Contract.
24. Independent Contractor, No Third Party Beneficiaries. Each party hereto is and
shall perform this Contract as an independent contractor, and as such, shall have
and maintain completecontrol over all of its employes, agents, and operations.
Neither party nor anyone employed by it shall be, represeniact, purport to act
or be deemed to be the agent, representative,employee partner or servant of
the other party. No term or provision of this Contract is intended to be, or shall
be, for the benefit of any person, firm, organization or corporation not a party
hereto, and no such other person, firm, organizatiorer corporation shall have any
right or cause of action hereunder, whether as a third party beneficiary or
otherwise.
25. Force Majeure. Should either party be prevented wholly, or in part, from
performing its respective obligationsunder this Contract by a cause reasonably
outside of and beyond the control of the partyaffected thereby,including but not
limited to war, government regulation, strike, lockout, accidents, storms,
earthquake, fire, acts of God or public enemy or any similar cause beyond the
control of the parties,then such party shall be excused hereundeduring the time
and to the extentthat the performanceof such obligationsare so prevented,and
such party shall have no liability whatsoever for any damages, consequential or
otherwise, resulting therefrom.
9
26. Non -Waiver. Either party's failureto strictly enforce its rights under any provision
of this Contract shall not be construed to be a waiver of that provision. No
waiver of any breach of this Contract shall be held to be a waiver of any other
breach.
27. Assignment. This Contract shall not be assignable by either party without the
prior written consent of the other, which shall not be unreasonably withheld. In
the event that such prior written consent to an assignment is granted, the
assignee shall assume all duties, obligationsand liabilities of NSF stated herein.
28. Notices. All notices required under this Contract shall be personally delivered
or mailed by certified or registered mail, postage prepaid as follows:
If to the Generator, addressed to:
Mr. Doug Mayo
Yakima Regional Wastewater Treatment Facility
2220 East Viola Street Yakima, WA 98901
If to NSF, addressed to:
John A. Huffman
Natural Selection Farms
PO Box 893
Sunnyside, WA 98944
or to such other address as any party shall specify by written notice so given.
Notices shall be deemed to have been given and received as of the date so
delivered or three (3) business days after being deposited in the U.S. Mail.
10
29. Entire Contract, Amendment. This Contract constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes any
and all other communications, representations, proposals, understandings or
agreements, either written or oral, between the parties with respect to such
subject matter. This Contract may not be modified or amended, in whole or in
part, except by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Contract as of the date first
above written.
NATURAL SELECTION FARMS, INC.,THE CITY OF YAKIMA
By:
Ted Duffey,
President
Date:
R.A. Zais, Jr.
Its: City Manager
By:���
ST:
\( A K''
11
g(-/L,QJ
s, City Clerk
2/ oda_ Ale2 4i /015 4c-rir j
Sti-r', t;C;;'( AC'r No: -u„ f ,�,Y,
Exhibit A,
A. Please pro. ids oilutent concentrations
t Concentration (mg/kg) Poliutant Concantration,4 ailing Concentrations*
Measured Dry Weight (mg/kg) (Table 3 40 CFR (Table 1 In 40 CPR 503 13)
Arsenic _".,. 111•,
Instantaneous value 503.1monthly average) (Instantaneous maximum)
41
Cadmium
Chromium 1,200
3,000
75
39 $5
Copper
Lead 1,500
4,300
Mercury 1 84000 .-
Mofybdenun NIA
Nickel 420 420
Selenium 36 100
Zinc
T Kms—.. 2,800 7,500
NH4-N N/A N/A
N/A N/A
NO3-N N/A
*Sewage sludge rr iy not be Iand applied if any pollutant ooncentra ionsI n an any o sed these values
B Pathogen F 3duction (40 CFR 503.32) - Please Indicate the level achieved
E :Class A Class B
N/A
C Vector Attr4 ction Reduction (40 CFR 503.33) - Please indicate the option performed
E:Option 1
E :Option 5
(__„.]Option 2
Option 6
Option 3
Option 7
:No vector attraction reduction options were performed
D. CERTIFICA rION
I cer fy, under penalty of law, that this document and all attachments were prepared under my direction or
supe vision In accordance with a system designed to assure that qualiried.personnel properly gather and
even ate the Information submitted, Based on rtty inquiry of the person or persons who manage the system
or th persons direotly responsible for gathering thy information, the Information submitted ie, to the beet of
my I. iowledge and belief, true, accurate, end complete. I am aware that there are 8ignlfieent penalties for
subs ltting false information, including the possibility of fine and Imprisonment for Knowing vioations,
Yakima, Wash]; gton
_,,,iOption 4
L___1Option 8
A. Name and C fficial Title (type or print)
C Signature
B. Area Code and Telephone Number
D. Date Signed
OUR SOIL • OUR STRENGTH
IIT B
Biosolids Weekly Summary
Contractor: Natural Selection Farms Project:. Green Valley
Project Manager: Ted Durfey Site/Operations Supervisor: Arlie Huffman
Deliveries see haul tickets for actual
8Ile.nsburg
•
Grandview
Harrah.
KC:WP
KC -Rn
Nachos
Prosser
Puyallup
Sunnyside
Kitsap
Mabton
Midway
Current Site Information (field and storage status):
A ' . Iications
Future Site Schedule (anticipated applications for following week):
COnlments (milestones, meetings, site tours, interactions with public/media, operational variations, etc.):
NSF Biosolids Application Contract
I 1EM TITLE
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. *0l°2.e
For Meeting Of May 20, 2003
Resolution authorizing execution of sole source agreement with Natural Selection
Farms, Inc., for the receipt and beneficial use of biosolids
SUBMII1'ED BY: Douglas Mayo/ Wastewater Manager
Daryl Bullard/ Wastewater Biosolids Chief Operator
CONTACT PERSON/ TELEPHONE: Douglas Mayo/ 575-6077
SUMMARY EXPLANATION:
The Yakima Regional Wastewater Treatment Facility ("YRWwTF") generates approximately 1,600 dry tons
(approximately 8,000 wet tons) of biosolids annually. For a number of years these biosolids were taken to a
site owned by Charron Company, Inc. In December 2002, the Charron Company informed Wastewater
Division representatives that due to changes in its farming practices, it could no longer utilize these
biosolids.
A search was conducted for an alternative site within the Yakima Valley that could receive and use the
biosolids in accordance with environmental law and regulations. The only available permitted facility
within that geographic scope is that of Natural Selection Farms, Inc. ("NSF"). NSF has offered to provide
this service at a rate of $15 per wet ton received and in accordance with the other terms and conditions of
the attached agreement. To ensure a stable biosolids utilization program, the agreement has a 5 year term.
(Continued)
Resolution X Ordinance _ Other (Specify) Contract X
Mail to (name and address): Natural Selection Farms, Inc.
P.O. Box 893 Sunnyside, WA 98944 Phone (509) 837-3501
Cost $120,000 per year
Funding Source Fund 473 Wastewater operating Fund (unbudgeted)
appropriation ordinance)
APPROVED FOR SUBMITTAL:
(see accompanying
City Manager
STAFF RECOMMENDATION:
Approve resolution authorizing execution of sole source agreement
with Natural Selection Farms, Inc. for the receipt and beneficial use of
biosolids.
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2003-82
(Continued from front page)
NSF will be responsible for receiving and applying biosolids on agricultural land under the environmental
regulations and guidance of the Washington State Department of Ecology. NSF work in partnership with
City of Yakima personnel to manage this project, which includes hundreds of neighboring farmers and
landowners using biosolids on thousands of acres of farmland for its soil conditioning.
Based upon the production figure of 8,000 tons, the annual estimated cost is $120,000, or approximately
$600,000 over five years; the estimated cost for the remainder of 2003 is $90,000. There is a provision in the
agreement for annual adjustment of the rate based upon the consumer price index that may increase the
annual costs during the term of the agreement.
The Wastewater Treatment Division is seeking authorization of a sole source exception to standard
procurement procedures to award a special market condition contract for the receipt and application of
YRWwTF's biosolids. The contract, if approved, would be with Natural Selection Farms, Inc. ("NSF"),
located in Yakima County. A sole source contract appears justified by the unique circumstance of this
issue.
History - The YRWw 1r has been working with Charron Company, Inc., located approximately 7 miles east
of Moxee since 1988. This site utilised most of the biosolids produced at YRWw1'I. Staff has been
responsible for the biosolids site permitting processes, the required soil and water monitoring, biosolids
hauling and has assisted with the biosolids application. Since October 1998, dewatered biosolids hauled
directly from the plant's centrifuge facility have been stockpiled at the ufilization site for subsequent
application. The City was informed in late December of 2002, that due to a change in Taming practices,
Charron would no longer be utilizing biosolids.
no longer available utilization, hauling biosolids to
When the Charron site was longer aJauaivic for biosolids u�..�_�+�.��=y the City began ___� _ _ _
the only two permitted sites within a reasonable distance, Cheyne Landfill (Yakima County) and NSF.
However, Cheyne Landfill does not have sufficient acreage to utilize the biosolids quantity produced at the
City's wastewater treatment facility. Long-term usage of the landfill. for biosolids is also not allowed under
the state permit. Finally, of the two facilities, only NSF is considered a beneficial use facility for utilizing
biosolids by the regulatory agencies.
Consequently, since the beginning of 2003, nearly all dewatered biosolids have been hauled to one of NSF's
storage sites, near Sunnyside. NSF is a permitted biosolids utilization facility with thousands of acres
under permit. NSF charges a fee for use of its sites. These charges cover the costs of testing, applying, and
monitoring the areas where biosolids are applied. Ownership and ultimate responsibility of the biosolids
still remain with the City.
Sole Source Tustification ® Justification of the agreement with NSF as a sole source purchase without calling
for bids largely rests upon two operational and safety criteria: (1) that YRWwTF employees and equipment
are utilized to transport the biosolids to the chosen site; and (2) that the site be located within the Yakima
Valley within Yakima County. Use of YRWwTF employees and equipment to transport the biosolids from
the treatment facility to the storage; utilization site is critical for several reasons. The City's new NPDES
permit requires that the City shall at all times properly operate and maintain all facilities and systems of
treatment and control. Treatment facility drivers are already knowledgeable of state rules and regulations
regarding handling and transportation of biosolids. Use of these trained drivers assists the City in meeting
said NPDES permit requirements and avoids the issue of constantly training contract drivers regarding
travel routes, policy, safe handling standards and actions to take in the event of a spill. It is also easier to
ensure that City -owned trucks and trailers are properly maintained and operated.
Using treatment facility drivers and equipment is more efficient in other ways. Using treatment plant
drivers, trucks and trailers increases flexibility for dewatering schedules, which makes dewatering
planning easier. The drivers are immediately available when needed and are able perform other
operational duties at the treatment facility when not engaged in the process of transporting biosolids.
There is no downtime waiting for a private hauling contractor to show up. The facility also has a sufficient
number of trucks and trailers available to avoid the problem of interrupting the dewatering process
because no trucks/trailers are available. A trailer can always be switched out when full without having to
overload the trailers or interrupt dewatering process.
Location of the site within the Yakima Valley within Yakima County is crucial for both safety and
operational reasons. It provides that there are no significant hills, passes and/or grades on the travel route
to the biosolids delivery site. This produces less wear and tear on the vehicles and reduces fuel
consumption. The relatively short travel distance of this requirement has a similar effect. The lack of
geographic features and abbreviated transportation route is also safer for vehicle operators, especially
during periods of inclement weather. Operationally, a site within the Yakima Valley means that drivers
spend less time away from their other operational duties at the wastewater facility. Finally, a travel route
within the Yakima Valley largely avoids "dead" communication areas.
Extensive search efforts by YRWwTF representatives revealed that only the site owned and operated by
Natural Selection Farms, Inc. meets the aforesaid criteria. Thus, it appears that it would be futile to call for
bids, as it would only produce one responsive bid. Accordingly, authorization is requested to enter into a
biosolids utilization agreement with NSF as a sole source contract without calling for bids.
RESOLUTION NO. R-2003- 82
A RESOLUTION authorizing the City Manager to execute, as a sole source purchase
without calling for bids, an agreement between the City of Yakima and
Natural Selection Farms, Inc. whereby said entity shall accept and
utilize biosolids from the Yakima Regional Wastewater Treatment
Facility for application to agricultural land in accordance with
applicable environmental laws and regulations.
WHEREAS, Article VI, section 6 of the City of Yakima Charter and the Yakima
Municipal Code Chapter 1.80 generally require that purchases of services in excess of
$25,000 be done by competitive bidding, subject to certain exceptions; and
WHEREAS, the law recognizes a "sole source" exception from these competitive
bid requirements when, due to unique service requirements, it would be futile to utilize
competitive bidding; and
WHEREAS, in December 2002 the Wastewater Division was informed that, due
to the declining market for hops, Charron Farms would no longer be available for
application of the City's biosolids; and
WHEREAS, for the following operational reasons, the Wastewater Division
requires hauling of biosolids to be performed by its own staff and with Wastewater
Division equipment:
• Increased flexibility and efficiency of biosolids de -watering schedules.
• Wastewater Division drivers_ and equipment are immediately available to pickup
and,. ,haulbiosolids to the ,utilization site (no downtime waiting for contract
hauler).
• Wastewater Division has sufficient equipment to permit immediate switching of
trailers when full without having to wait for a driver or another trailer.
• Wastewater Division drivers are trained and familiar with state rules and
regulations regarding the handling and transportation of biosolids.
• Wastewater Division has greater ability to properly control and maintain its
facilities and equipment to meet NPDES permit requirements.
• Greater flexibility in scheduling maintenance and cleaning of equipment.
WHEREAS, due to inclement weather road conditions, geographic features,
safety considerations, equipment use/maintenance, need to minimize vehicle fuel
consumption, communication concerns, operational efficiency, and familiarity of drivers
with local roads, the biosolids utilization site must located in the Yakima Valley within
Yakima County; and
WHEREAS, the Wastewater Division has conducted extensive research regarding
available service providers and concluded that Natural Selection Farms, Inc. has the only
permitted biosolids utilization site in Yakima Valley within Yakima County; and
WHEREAS, Natural Selection Farms, Inc. is willing to offer such services for a
service fee of $15.00 per wet ton of biosolids in accordance with the attached
.,•, of Yakima,
Washington,
and Natural Selection Farms,
Between the City r akima, rr ashington,
Inc., for the Beneficial Use of Biosolids"; and
WHEREAS, the City Council finds it would be futile to call for bids regarding the
described services because Natural Selection Farms, Inc. is the only source available for
said services; and
WHER A c City Council lint]. that is in the hest interest of the City to
vv liLiAOi+L'1V, the p.itay d...,bbm .��....., it _� ___ --- interest - -
authorize purchase of services from Natural Selection Farms, Inc. as a sole source
purchase without calling for bids, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
YAKIMA:
The City Manager is hereby authorized to execute, as a sole source purchase
without calling for bids, the attached and incorporated "Agreement Between the City of
Yakima, Washington, and Natural Selection Farms, Inc., for the Beneficial Use of
Biosolids" whereby NSF shall accept and utilize biosolids from the Yakima Regional
Wastewater Treatment Facility for application to agricultural land in accordance with
applicable environmental laws and regulations.
ADOPTED D BY CITY COI TATE IT tbi s 70th rl ay of Mav, 2003
.(-lvvr aL,a✓ as a THE mai i �.vvi�va� ..,,,., .... ...�� .... �.,....d,
ATTEST:
City Clerk
8 MARY PLACE
Mayor Mary Place
Certified to be a true cnd correct copy
C_i i Y CLERK