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Home My WebLink About15-96 RESOLUTION• • • • RESOLUTION NO. 15-96 A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL, INC. (OMI) FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE WASTEWATER TREATMENT PLANT, AND APPROVAL OF A BUDGET ADJUSTMENT BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves Amendment No. 1 to the contract with Operations Management International, Inc. (OMI) for operations, maintenance, and management of the city's wastewater treatment plant, and authonzes the Mayor and City Clerk to execute same. A copy of the amendment is attached hereto marked Exhibit "A" and made a part hereof. Section 2. The City Council hereby approves a budget adjustment in the amount of $195,000 increasing WWTP Operations Contract, Acct. No. 5400 5100 5328 00 by decreasing Use of Fund Balance, Acct. No. 5400 0940 4999 99. A copy of the budget adjustment is attached hereto and made a part hereof. PASSED AND APPROVED this 6th day of February , 1996. (cAcct: Traci Paul, City Clerk APPROVED' By: • • "red Hanna, Mayor f .r eye . .!, i r.. pat1<' :y.'.r ,'li,nrm.,II' City of Fayettevilld, Arkansas _ . Budget Adjustment Form • Budget Year 1996 Department: Public Works Division: Wastewater Treatment Plant Program: Date Requested' 01/19/96 Adjustment # Project or Item Requested: Additional funds are requested to =tease the operations contract with OMI for the wastewater treatment plant Project or Item Deleted: None. Use of fund balance is proposed for this adjustment. Justification of this Increase: The additional funds are needed due to various operations cost elements increasing. Justification of this Decrease: Sufficient cash & investments exist to fund this request. Increase Account Name Amount Account Number Project Number WWTP Operations Contract 195,000 5400 5100 5328 00 Decrease Account Name Amount Account Number Project Number Use of Fund Balance 195,000 5400 0940 4999 99 Approval Signatures Department Director May C \ APP \96BUD\W WTPBA.WK1 Budget Office Use Only Type: A Date of Approval Posted to General Ledger Entered in Category Lid o 8 i9 8 • ' Budget Office Cop Tar EXHIBIT A AMENDMENT NO. 1 TO THE AGREEMENT FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AGREEMENT, entered into this 6 2 day of F'c4. , 1996, by and between the City of Fayetteville, Arkansas (hereinafter "Owner"), whose address for any formal notice is 113 West Mountain Street, Fayetteville, Arkansas 72701 and Operations Management International, Inc., (hereinafter "OMI") with offices at 5299 DTC Boulevard, Suite 1200, Englewood, Colorado 80111-3333 is made and entered into for purposes of amending certain provisions of the "Agreement for Operations, Maintenance, and Management Services for the City ofFayetteville's Wastewater Treatment Plant," dated August 16, 1994 (the "Agreement") to prevent the facilities covered by the Agreement from being deemed to be used in the trade or business of OMI pursuant to Section 141 (b) of the Internal Revenue Code of 1986, as amended. This is Amendment No. 1 to the Agreement dated the 16th day of August, 1994, between Owner and OW. NOW THEREFORE, Owner and OMI agree to amend the Agreement as follows: 1. Article 4.1 is hereby deleted in its entirety and replaced with the following Article 4.1: 4.1 For services rendered during the first year of this agreement owner shall pay to OMI the actual cost of services performed plus a management fee of Seventy Six Thousand Eight Hundred and Seventy Five Dollars ($76,875). Said fee and estimated cost (base fee) shall be paid in twelve (12) equal monthly installments. The management fee for subsequent years will be determined proportional to the increase in estimated cost. 2. Article 4.3 is hereby deleted in its entirety and replaced with the following Article 4.3: 4.3 OMI estimates that cost for services for calendar year 1996 shall be Three Million Forty One Thousand Two Hundred and Fifty One Dollars ($3,041,251) annually. Details of said cost are shown in Appendix J. The base fee shall be negotiated each year in September, beginning in 1996 for calendar year 1997. Should Owners and OMI fail to agree, the base fee will be determined by the application of the base fee adjustment formula shown in Appendix F. Should the actual expenditures exceed estimated expenditures by more than Twenty Thousand Dollars ($20,000), in any year of this agreement, specific approval will be obtained from the owner. 3. Appendix I is hereby deleted in its entirety and replaced with the attached appendix I. Appendix J is hereby deleted in its entirety and replaced with the attached Appendix J agreemntWey01 al.wp6 -1- 02796 • • • All other terms and conditions remain in effect in accordance with the Agreement referenced in this Amendment. Both parties indicate their approval of this Amendment to the Agreement by their signatures below as of the date shown above. Authorized Signature: Authorized Signature: est LE_ //d/10,-, Bernie Miller Title: Vice President Fred Hanna, Jr. Title: Mayor OPERATIONS MANAGEMENT CITY OF FAYETTEVILLE INTERNATIONAL, INC. Date: o? -1-9L. Date: 2701 agreemntWayOI al.wp6 02796 Appendix I SLUDGE ENHANCEMENT/ODOR MANAGEMENT Black and Veatch, Inc contracted with The City of Fayetteville to perform a sludge disposal and odor management study that was completed in December, 1992. OMI will provide financing, engineering, labor and contract administration necessary to implement the recommendations of this odor management study in phases designed to provide the most economical, effective solution. OMI has coordinated research Incorporating Innovative chemical additions and determined that chemical addition alone will not sufficiently abate the odor associated with the Fayetteville plant. OMI proposes to perform the following: A. B. C. D. E Three Aluminum Domes @ $110,000 ea One Three stage odor scrubber Two mechanical aerators @ $50,000 ea Second gravity belt thickener (DAF replacement) Miscellaneous/Other Total Most of the above will be completed prior to December 31, following during the 1994 and 1995 budget. Expenditures: 1. Unanticipated DAF replacement 2. Vinyl dome, chemical tests, misc. Total $330,000 $300,000 $100,000 $ 60,000 $ 79.000 $869,000 1995. OMI has performed the $110,000 $ 60.000 $170,000 ANNUAL COST FOR SLUDGE ENHANCEMENT/ODOR ABATEMENT 10 YEAR AMORTIZATION $152,000 ANNUAL OPERATING COST $125,000 Amortization of all capital cost will be based on a ten (10) year schedule even though only a five (5) year contract is proposed If for any reason the contract option renewal is not made, or the contract is terminated prior to the completion of capital cost amortization, the Owner will pay to OMI the remaining capital improvement principal amount, in full, within 30 days following contract termination. Annual operating cost is strictly an estimate based on the best information available. Actual chemical cost for the scrubber operation may be more or less Should the above prove to provide insufficient odor management, the Owner and OMI will negotiate future stages of the Black and Veatch study until the odors are adequately managed. ageemnt\ lfay0lal.wp6 02796 or OMI will prepare or obtain plans, specifications and permits required for installation of the necessary capital improvements to complete the outlined phases of the odor management study. All plans and specifications will have Owner review and approval. OMI estimates odor management implementation on the following schedule. Time for Owner approvals not included: Completion time* Completion Item 1/1/96 Completion of two domes 2/28/96 Completion of all proposed work *OMI has allowed time for regulatory approval of plans and specifications should it be required Should regulatory approval be unnecessarily lengthy the time frames would be extended ac- cordingly. OMI can not be responsible for delays for circumstances beyond its control. ag eemnOfU'ay01 a1.wp6 - 4 - 02796 9 Appendix J COST DETAIL The proposed annual estimated costs for 1996 were calculated as follows: Direct labor and benefits Labor overhead ® 35% Electricity Electric overhead @ 5% All other direct costs Other direct costs overhead 10% Sub -Total Odor Management - Chemicals Sludge Enhancement Electrical Odor Management - Amortization Sub -total Fixed Fee, Total Budget Annual Estimated Cost Proposed 1995 1996 $1,080,012 $ 378,004 $ 573,124 $ 28,656 $ 479,083 $ 47,908 $2,586,787 $ 45,000 $ 0 $ 69,390 $2,701,177 $ 70 000 $2,771,177 $1,184,029 $ 414,410 $ 605,000 $ 30,250 $ 412,443 $ 41 244 $2,687,376 $ 75,000 $ 50,000 $ 152 000* $2,964,376 $ 76 875 $3,041,251 *Note: City will reimburse final $114,000 of capital expense for Sludge Enhancement/Odor Management equipment, material and services, in total, directly to OMI, within 60 days after justification of expenses. The following are some of the major reasons for cost increase: Projected 4 percent increase in loading with added electricity, chemicals, and labor. 2. Additional electricity, chemicals, and labor to operate and maintain the sludge enhancement/ odor control equipment. 3. Amortization of equipment purchases for sludge enhancement/odor control. agreemnt'ftfay0 lal.wp6 - 5 - 02796