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HomeMy WebLinkAbout4618-17 Approving Special Rate Agreement with I/N TEK, I/N KOTE LPAttest RESOLUTION No. 4618 -17 Passed by the Common Council of the City of South Bend, Indiana February 27, 2p 17 Presented by me to the Mayor of the City of South Bend, Indiana February 28 20 17 City Clerk ident of Common Council Approved and signed by me 20 City Clerk 0 RESOLUTION NO. M A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING SPECIAL RATE AGREEMENT WITH UN TEK, LP AND I/N KOTE LP PURSUANT TO CITY CODE SECTION 17 -29 WHEREAS, the City of South- Bend, Indiana, Board of Public Works (the "Board ") is authorized under City Code Section 17 -29 ( "Ordinance ") to enter into a special rate contract with customers of the sewage works where clearly identifiable reduction in cost to the sewage works can be determined with any reduction being limited to such reduced costs; and WHEREAS, the Board entered into a special rate contract with I/N Tek L.P. and I/N Kote, L.P. ( "Agreement ") after holding a public hearing at its regularly scheduled meeting of February 14, 2017, receiving written evidence as required by the Ordinance and finding the rate reduction in the Agreement does not exceed the reduction in costs to the sewage work ( "Board's Action "); and WHEREAS, the Agreement is attached hereto and made a part hereof as Exhibit "A "• and WHEREAS, the Ordinance requires before any special rate contract to become effective the Common Council must adopt a resolution ratifying the Board's Action. WHEREAS, the Common Council desires to adopt a resolution ratifying the Board's Action finding the Agreement complies with the terms and conditions of the Ordinance including the written information provided the Board and contained in the Agreement which justifies the rate reduction. NOW THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. That the Common Council hereby ratifies the Board's Action, and the Agreement by this ratification is effective subject to the terms of this Resolution. SECTION H. That the Common Council hereby authorizes the Board to take such actions necessary to enforce the terms of the Agreement including but not limited to requiring I/N Tek & Kote to annually present on or before August 30 of each year relevant data to show the "clearly definable reduction in costs to the sewage works." SECTION III. That this resolution shall be in full force and effect from and after its adoption by the Common Council. Member of the Common PRtSENTELS A(--' An ." 11 NOT APPROW, }� j in Clerk's Office FEB 2 2 2017 KAREEMAH FOWLER CITY CLERK, SOUTH BEND, IN EXHIBIT A Special Rate Agreement SPECIAL RATE AGREEMENT Between THE CITY OF SOUTH BEND INDIANA "a I/N TEK L.P., a Delaware Limited Partnership 0 I/N KOTE L.P., a Delaware Limited Partnership Regarding WASTE WATER FEES This Special Rate Agreement ( "Agreement ") is entered effective the 1" day of January, 2017, by and between the City of South Bend, Indiana ( "City") acting by and through its Board of Public Works ( "Board ") and I/N Tek L.P., a Delaware Limited Partnership & I/N Kote L.P., a Delaware Limited Partnership (collectively "I /N Tek ") for the treatment of waste water. WHEREAS, I/N Tek L.P. is currently a wastewater customer of the City and desires to remain a wastewater customer of the City for the duration of this Agreement; and WHEREAS I/N Kote, L.P. is a party to this Agreement as it is a joint operator with I/N Tek L.P. who shares costs for the treatment of waste water provided by City and therefore has third party rights under this Agreement; and WHEREAS, the City desires to keep I/N Tek as a wastewater customer; and WHEREAS, pursuant to Section 17 -29 of the City's Code, the City's Common Council ( "Common Council ") must approve this Agreement prior to it becoming effective; and WHEREAS, in recognition of factors solely unique to I/N Tek, the City hereby acknowledges the following comprehensive list of factors, when taken in aggregate, support the justification of a special rate for wastewater services due to the public benefit received by the City: a. I/N Tek has been a wastewater customer since May 30, 1989, b. at an approximate cost of $8,700,000, which was funded through St. Joseph County TIF, I/N Tek constructed two (2) dedicated wastewater sewer lines between 1989 -1991 from its facility to the City's treatment center; c. I/N Tek, at the City's request, constructed these two (2) wastewater sewer lines at a location, depth and size which accommodated the City's interest in future City development in the vicinity of the wastewater sewer lines, d. upon completion of the dedicated wastewater sewer lines, I/N Tek transferred ownership of the dedicated wastewater sewer lines to the City, e. the approximate cost, in 2017 dollars, for the City to construct (2) wastewater sewer lines of similar size and location to the two (2) lines constructed by I/N Tek is $16,000,000, f. the wastewater sewer lines led to the development of the real property more commonly known as the Blackthorn district, g. I/N Tek manages its own storm water issues, thus mitigating any potential capital investments from the City as it relates to the City's combined sewer overflow issue, and other waste treatment issues. h. I/N Tek's construction and subsequent dedication of the two (2) wastewater sewer lines created public benefits to the City that justify the approximate $3,200,000 rate credit offered herein pursuant to the calculations found in paragraph 2 of the Agreement. NOW, THEREFORE, in consideration of the obligations, terms and conditions contained herein, the adequacy of which the parties expressly acknowledge, the City and I/N Tek agree as follows: 1. INCORPORATION OF RECITALS The Recitals are incorporated into the operative provisions of this Agreement as if fully set out herein. 2. RATE In recognition of the unique facts set forth above surrounding I/N Tek's customer relationship with the City and I/N Tek's capital contribution to the City's wastewater infrastructure, the City hereby grants a special rate to I/N Tek in the amount as set forth below: January 1, 2017 through December 31, 2017 — 5% reduction in the rate determined by Section 17 -21 of the City Code ( "Base Rate "). Section 17 -21 of the City Code is incorporated herein by reference as if fully set out in this Agreement. January 1, 2018 through December 31, 2018 — 10% reduction in Base Rate. January 1, 2019 through December 31, 2026 — 14% reduction in Base Rate. I/N Tek shall also pay the surcharge under Section 17 -81 of the City Code as well as any other surcharge applicable under the City Code, including but not limited to, Section 17 -23 of the City Code which addresses heavy demand. I/N Tek shall promptly pay the Ciry in a manner consistent with the City's routine billing services the net amount due under the special rate (Base Rate, less credit, plus applicable surcharges). 3. TERM OF AGREEMENT Throughout the term of this Agreement, I/N Tek shall remain connected to and a customer of the City for all of its requirements for wastewater collection and treatment. The term of this Agreement Page 2 of 6 shall be effective January 1, 2017 and remain in effect through December 31, 2026. There shall be no automatic renewal of this Agreement. If the parties hereto desire to renew this Agreement for an additional term of ten (10) years, I/N Tek must initiate such renewal and receive the approval from both the Board and Common Council. 4. MODIFICATION OF AGREEMENT This Agreement may only be modified by mutual written agreement of both parties with such modification requiring approval by Council. I/N Tek understands the requirements set forth under Section 17 -29 of the City Code and shall present annually to Common Council to present relevant data on the following factors: a. review the terms of this Agreement, b. consider any reasonable modifications to the Agreement, c. review any other pertinent issues relative to wastewater treatment or to this Agreement. 5. ADDITIONAL LEGAL TERMS a. Independent Contractor. Nothing herein contained shall be construed to place the parties in a relationship of partners, joint venturers or employer- employee, and neither party hereto shall have the right to obligate or bind the other party in any manner whatsoever. No employee, agent, servant or representative of the City shall be, or shall be deemed to be, an employee, agent, servant, or representative of I/N Tek. b. Responsibility for Acts of Agents. Each party shall at all times remain liable for the negligent, tortious or unlawful acts, omissions or misrepresentations of its employees, agents, servants, contractors and representatives in connection with the entry into and the performance of any of its obligations, duties or rights arising out of or related to this Agreement. c. Nondisclosure of Trade Secrets or Statutorily Protected Information. Both parties acknowledge that each may, in the course of this Agreement, have access to trade secret(s) or confidential information of the other party that is protected from disclosure by a particular statute, rule or regulation. Both parties agree to protect such information to at least the same extent that they would safeguard similar information of their own. However, no party shall be obligated to keep confidential any such information which was lawfully and independently obtained from a third party prior to the commencement date of this Agreement or without violating its terms. If information protected from disclosure under this paragraph is required to be disclosed pursuant to a valid court order or a valid subpoena issued under the authority of a court of competent jurisdiction, then the party of whom said request is made may disclose said information as required without violating this Agreement. Page 3 of 6 d. Termination Upon Default. If there is a material default by either party in performing the terms and conditions of this Agreement, and such specified default shall continue for a period of thirty (30) days after receipt of written notice thereof, then this Agreement shall terminate as of the thirty -first day following receipt of such written notice. This Agreement may be immediately terminated by either party in the event that the other party hereto shall become insolvent or subject to voluntary or involuntary bankruptcy proceedings, receivership, conservatorship or similar proceedings under state or federal law. Notwithstanding, the City reserves the right to charge the full rate, rather than the discounted rate described in Paragraph 2 above, if I/N Tek fails to annually present relevant data related to this Agreement to Council. The full rate will be applied to IN Tek's monthly bill for each month until I/N Tek satisfies the requirements under Section 17 -29 of the City Code. e. Governing Law. This Agreement is made under, and shall be governed by and construed in all respects in accordance with, the laws of the State of Indiana. Any claim or dispute arising out of or related to this Agreement in any manner, or to the performance or alleged non - performance hereof, shall be resolved exclusively via confidential, binding arbitration in St. Joseph County, Indiana. f. Headings for Convenience. The Words of this Agreement appearing as headings are for identification purposes only and are not a part of this Contract. g. Non - Assignment. This Agreement is personal to the parties. Neither party hereto shall have the right to assign or transfer any of its rights, duties, obligations or interests arising out of or relating to this Agreement to any third party at any time without the prior written permission of the other parties to this Agreement. h. Authority to Enter Agreement. The undersigned parties each hereby represent and warrant that they have been duly authorized to enter into this Agreement on behalf of the respective organization for which they sign. i. Entire Agreement /Waiver. This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and cancels, terminates and supersedes any prior agreement or understanding (written or verbal) relating to the subject matter hereof. None of the provisions of this Agreement can be waived or modified except expressly in a writing signed by the party or parties to be charged. There are no representations, promises, agreements, warranties, covenants or undertakings other than those contained herein. If any term hereof shall be, or deemed to be, void or unenforceable by a court or tribunal of competent jurisdiction, then the remaining terms hereof shall remain in full force and effect. The waiver by either party hereto of a breach by the other party hereto of any provision herein shall not in any way constitute a waiver of any succeeding breach of the same or any other provision. Page 4 of 6 j. Compliance with Laws. In carrying out their respective rights and obligations hereunder, the City and I/N Tek each agree to comply with applicable local, state and federal statutes, laws, regulations and ordinances. k. Third Party Beneficiaries. Nothing contained in the agreement shall create any relationship, contractual or otherwise, with, or any rights in favor of, any third party. 1. Non - Waiver. The Parties acknowledge this Agreement is based upon the current form of Sections 17 -21; 17 -29; and 17 -81 of the City Code. In the event the Common Council should modify the terms of the Sections of the City Code as such sections relate to this Agreement, I/N Tek shall have all rights granted under Indiana Law to contest the validity of such modifications and their applicability, if any, to this Agreement. M. Withdrawal of Petition. I/N Tek, as a condition precedent of the effectiveness of this Agreement, agrees to withdraw its Petition Opposing Increase in Sewage Rates and Charges For the City of South Bend, Indiana — Ordinance No. 10461 -16 filed on January 27, 2017. I/N Tek shall provide the City with separate written confirmation of said withdrawal, however, such withdrawal shall be without prejudice to I/N Tek to challenge any ordinance imposing increases to rates or surcharges. n. Material Change. This Agreement is based upon on the Petition submitted by Robert Miller, Sr. ( "Miller Petition), which challenges the outside city surcharge in Section 17 -81 of the City Code being withdrawn dismissed or ultimately rejected by final judgment no longer subject to appeal (the "Miller Petition "). I/N Tek shall not support the petitioner(s) in the Miller Petition in any manner. Should the Miller Petition be granted, the Parties agree it will be a Material Change to this Agreement, and as a result, this Agreement shall be void ab initio. IN WITNESS WHEREOF, I/N Tek and the City, through their duly authorized representatives, have caused this Agreement to be executed as of the day and year first written above. The parties have read and understand the foregoing terms of this Agreement and do, by their respective signatures hereby agree to its terms. [SIGNATURES CONTAINED ON FOLLOWING PAGE] Page 5 of 6 I/N TEK L.P. Date Signed: re,6 , /!g c;2017 By: Thorn s W. Cayia Its: President I/N KOTE L.P. ✓ /J By. Thomas W. Cayia Its: President P: \WP51 \D0C \JVice1or \IN Tek Special Rate Agreement RAN5.docx CITY OF SOUTH BEND, INDIANA Date Signed: By: kA�A- Gary Gilot, President Suzanna M. Fritzberg, Member J s A. Mueller, Member Therese J. Dora , Mera r Elizabeth A. Maradik, Member ATTEST: Linda Mat-tin Clerk of the Board of Public Works Page 6 of 6