Fort Walton Beach Council minutes — 12-05-2001 Special — reading text

to address the issue whether or not Council is willing to let them have the dirt. The City Manager said there are some other issues with the purchase agreement concerning wording that are workable. He said the important issue is the cost and that BFI is going to do the total clean up. He mentioned the City obtained a consultant, PolyEngineering, to look at the report prepared by BFI's consultant to ensure that the methodology they used in the assessment was reasonable, that their conclusions were reasonable, and that the prices indicated were realistic prices. He said Poly Engineering did concur it was a reasonable study, a reasonable methodology, with reasonable conclusions based on the information, and the prices were reasonable. The City Manager described the broad parameters negotiated on the Disposal Agreement for a ten year period where the City would take its garbage to their transfer station which includes yard waste, most recyclables, household and commercial garbage, some construction and demolition debris. He said the City would pay a I tipping fee of $38. 68 per ton for garbage for the first five years. He noted the City is currently paying $ 41.75 per ton at the Waste Management transfer station, which includes a County add- on fee to pay for their administrative cost and closure costs for landfills in the County. He said in year six the tipping fee with BFI would be adjusted by 3% for an amount of $39. 84 for years six and seven of the agreement, and again adjusted by 3% in year eight for an amount of $41.04 per ton for years eight and nine, then adjusted by 3% in year ten for an amount of $ 42.47. He said yard waste and construction debris would start at $ 33. 00 per ton and that amount would remain fixed for five years then be adjusted by 3% the same as the garbage is adjusted beginning in year six. He stated in addition, BFI has guaranteed that the rate the City pays will always be at least 5% lower than the rate charged by the County to dump at the landfill as specified under the Interlocal Agreements with other municipalities.  12- 5- 01 14 JptJa.../*_,. Mr. Carnathan wondered if the County no longer entered into Interlocal Agreements with the municipalities and negotiated with the individual municipalities then used a different methodology to calculate the tipping fee, if it would affect the City. He suggested adding a statement that the tipping fees would be consistent with any municipal waste stream into that transfer station in the event the County no longer used Interlocal Agreements. He mentioned the payment as identified by an Interlocal Agreement could set up an opportunity for a lawsuit if the County changed their methodology. The City Manager acknowledged there is language about an Interlocal Agreement but BFI is guaranteeing that the City would pay the lowest rate and the language could be changed. The City Manager reported the County Manager told him they do not care ifthe City goes with BPI, but they do expect the City to continue paying a closure cost. He explained before the garbage started being hauled to Spring Hill, the County ran a series of landfills where the garbage was disposed and apparently were not charging for the closure of those landfills and, once they were closed, for the continuous on- going monitoring. The County has asserted the City has a moral obligation to continue paying for those costs, and the City says it has paid the tipping fee or if during a time where a tipping fee was not charged, the City paid ad Valorem taxes and if that money was not set aside, that is the County' s business. He said since the garbage has been taken to the Waste Management landfill, part of the $ 41 tipping fee being paid includes some type of closure cost. He mentioned that BFI would defend the City on any issue related to entering into a disposal agreement with them, but that point still needs to be negotiated to a satisfactory conclusion. The City Manager further reported another feature BPI agreed to is a host City fee. He explained because there will be a lot of garbage trucks traveling through the City delivering garbage, there will be wear and tear on the roads and administrative impacts, so BFI has agreed to pay the City for every ton of garbage that goes to that station $ 1.50 for the first five years, then $ 1.75 for the next five years, then increased by 5% every five years for as long as BFI runs that transfer station. He noted the exclusion is that the host fee would not be charged on any garbage generated in Fort Walton Beach, it is only garbage brought in from outside the City with the other exception being the amount of garbage that BFI is currently under contract to pick up that amounts to 38 tons per day. Dr. Pullen left the meeting at 6: 45 p. m. The City Manager mentioned there is essentially one area of disagreement that staff and BPI have not been able to resolve which involves Section 11. The City Attorney mentioned there are two locations in the agreement, Sections II and 16c, that need a little bit of language adjustment regarding the Indemnity provisions. The City Manager reported Section II is presented as staff preferred but BPI indicated they want additional language inserted which states " BFI shall only be responsible for providing such legal counsel at no charge to the City as aforesaid, and BPI shall in no way be responsible for or liable to the City for any damages, liabilities, judgments, penalties, fines, losses, costs, expenses, obligations, assessments, charges, fees, taxes, surcharges or any other liabilities of any sort whatsoever incurred by the City as a direct, or indirect, result of such lawsuits." He explained if the City is sued, and if judgment is rendered against the City, BFI has agreed to hire an attorney and defend the City and BFI agreed they would reduce the tipping fee so it still would remain 5% less that the lowest fee charged at the station; what BFI is not willing to agree to is, if the City loses the lawsuit and assessed attorney fees or closure costs, then the City would have to pay. He stated BFI indicated it is their corporate policy that the paragraph must be inserted into Section 11. The City Attorney reported staff cannot recommend that insertion. He characterized the difference in the two concepts is that one is a duty to defend and the other is an indemnity and hold harmless. He said the City would prefer the full duty to defend and indemnity and hold harmless, and BFI is willing to give a limited indemnity to defend. Brian Garrett, General Manager of BFI, expressed that they want to offer competition and are here for the long haul. He commented BFl believes there is no legal basis that mandates a municipality must pay a closure fee to the County. Mr. James added that BFI is willing to defend the City but BPI believes it is unreasonable to pay damages in the event the City loses. Mr. Garrett further commented, on the issue of fines and penalties, ifthat is the issue that will singly kill the deal, then it will kill it because it is Allied Waste Industries corporate policy not to do that. The City Manager stated staff needs direction on that one point whether or not to insert BFl's proposed language intI' <;:"", ti"" 1 1" f'thp A lT1'ppmp" t  12- 5- 01 15 i__ Mr. Carnathan moved to insert BFI' s proposed language into Section 11 of the Agreement. Mr. Tucker seconded motion. The City Attorney mentioned language would also be included regarding indemnity if the City is dissatisfied with representation and noted Council is conceding the language that BFI will only be responsible for defending and to strengthen the City' s capacity for participation in the continuing selection and use of Counsel. The Mayor questioned if there should be a time frame to close on the property. The City Manager stated once I BPI has lined up all their permits, they would close. The City Attorney noted there is a closing date in the Contract but BFI has asked for something that is indefinite, and that is one of the items still on the table. Mr. James explained there are two issues preventing them from closing and starting construction because everything is ready. One is the permit application submitted with the Department of Environmental Protection 45 days ago and they have a meeting with the Air Force tomorrow on the BASH Committee because the facility is within 10, 000 feet of a runway they have to sign off but they have verbally said they do not have a problem. Mr. James mentioned there has been some confusion as to the deposit. He explained their position that they are floating a $ 2. 5 million bond issue to buy the property and build a facility. He said their intent was to put 27, 000 down, close on the bonds, and clean the property; the City then takes the remediation money and sets that aside in escrow, but the City wants BFI to put down $ 323, 000 to bind the deal. He said they want to close in 30- 45 days and felt there is no sense to borrow a half million- dollar bridge loan when they are going to close the financing in mid-January if they can get the final resolution. He said he anticipates having the permit from DEP this month, get the BASH signed off in the next ten days, execute the documents, close the financing, the City retains the remediation funds, and they go to construction. He said they will start construction of the facility and the remediation simultaneously and will run 24- hour shifts to try to meet the deadline when the City' s existing contract expires in the Interlocal Agreement. He said in the event BFI does not complete construction, they would do what is necessary for the City to have a place to dump its garbage. The City Attorney pointed there is direction on two issues, one is that BFI shall only accept the language proposed and the second is the control issue for the City regarding Counsel selection and use during defense. The Mayor called for the vote on the motion and it carried unanimously with Carnathan, Baggett, Tucker, Kelley, and Anderson in favor Dowl ( ing and Pullen absent). Being no further business, the meeting adjourned at 7 :20 p. m. MAYOR: I C t./