HomeMy WebLinkAbout16-98 RESOLUTION•
RESOLUTION NO 16-98
A RESOLUTION APPROVING AMENDMENT NO. 3 TO THE
AGREEMENT WITH OPERATIONS MANAGEMENT
INTERNATIONAL (OMI), IN THE AMOUNT OF $3,271,051 PER
YEAR, FOR OPERATING, MAINTENANCE, AND
MANAGEMENT OF THE WASTEWATER TREATMENT
FACILITY.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS•
Section 1. That the City Council hereby approves Amendment No.3 to the agreement
with Operations Management International (OMI), in the amount of $3,271,051 per year, for the
operating, maintenance, and management of the wastewater treatment facility; and authorizes the
Mayor and City Clerk to execute said contract. A copy of Amendment No.3 is attached hereto
marked Exhibit "A" and made a part hereof.
7 Pi;§11n AND APPROVED this 3rd day of February , 1998.
ATTEST:
By G &-n t //t6
e Heth, Deputy City Clerk
APPROVED:
By
Fred Hanna, Mayor
•
AMENDMENT NO. 3
TO THE
AGREEMENT FOR OPERATIONS,
MAINTENANCE, AND MANAGEMENT SERVICES
FOR THE CITY OF FAYETTEVILLE, ARKANSAS
WASTEWATER TREATMENT PLANT
THIS AGREEMENT, entered into this 3rd day of raj). , 1998, by and between the
City of Fayetteville, Arkansas (hereinafter "Owner"), whose address for any formal notice is 113
W. Mountain St, 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 of Fayetteville'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. 3 to the Agreement dated the 16th day of August, 1994, between Owner
and OMI.
NOW THEREFORE, Owner and OMI agree to amend the Agreement as follows:
Article 4.1 is hereby deleted in its entirety and replaced with the following Article 4.1:
4.1 For se es rendered during the third year of this agreement owner shall pay to
OMI the ctual cost of services performed plus a management fee of Eighty Two
Thousand Hundred and Sixty Five Dollars ($82,665). 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.
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 1998 shall be Three Million
Two Hundred Seventy One Thousand Fifty One Dollars($3,271,051) annually.
Details of said cost are shown in Appendix J. The base fee shall be negotiated
each year in September, beginning in 1998 for calendar year 1999. 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.
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r.,
3. Appendix J is hereby deleted in its entirety and replaced with the attached Appendix J
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:
6e Bemar A. Miller Fre Hanna, Jr.
Title: President Title: Mayor
OPERATIONS MANAGEMENT CITY OF FAYETTEVILLE
INTERNATIONAL, INC.
Date: l-/ 7" `l8 Date: J - 3 - 98
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Appendix J
COST DETAIL
The proposed annual estimated costs for 1998 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
Fixed Fee
Total Budget
Projected
1997
$1,208,021
$ 422,807
$ 521,075
$ 26,054
$ 660,546
$ 66,055
$2,904,558
$ 76,260
$2,980,819
Proposed
1998
$1,290,521
$ 451,682
$ 540,000
$ 27,000
$ 799,257
$ 79,926
$3,188,386
$ 82,665
$3,271,051
The following are some of the major reasons for cost circumstances:
1. Projected increase in chemical costs for odor control activities at the plant and in the
collection system of approximately $150,000.
Projected increase in electncal usage for additional aeration and pumping, due to
operation of sludge enhancement/odor control equipment and increased organic loading.
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