HomeMy WebLinkAbout21-02 RESOLUTIONRESOLUTION NO. 21-02
A RESOLUTION TO APPROVE A PROPOSAL
FOR SOLIDS SUPPLY AGREEMENT WITH
DUKE SOLUTIONS, INC. AND HARMONY
PRODUCIS, INC.
WHEREAS, the City of Fayetteville along with our sister cities of
Springdale, Siloam Springs and Bentonville desire to wurk toward the
development of a gasification and fertilizer facility to convert our wastewater
solids into fertilizer; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas
hereby agrees to the Summary of Proposed Terms and Conditions attached as
Exhibit A and authorizes Mayor Coody to sign this document.
PASSED and APPROVED this the 5th day of February, 2002.
APPROVED:
By
?flfr
•' E
n
ather Woodruff, City erk
•
DAN COODY, Mayo
NAME OF FILE:
CROSS REFERENCE:
Resolution No. 21-02
02/05/02
Resolution No. 21-02
Proposal for Wastewater Solids Supply Agreement with Harmony
Products, Inc., Duke Solutions, Inc. and the Cities of Fayetteville,
Springdale, Bentonville and Siloam Springs, Arkansas
02/20/02
Letter to Greg Boettcher, Public Works Director, from Thomas W.
McCandlish, Harmony Products, Inc.
02/11/02
Memo to Mayor Dan Coody, from Heather Woodruff, City Clerk
NOTES:
FAYETTEVISLE
THE CfTV OF FAYETTEVILLE. ARKANSAS
July 16, 2003
Mr. Thomas W. McCandlish, Chairman
Harmony Products, Inc.
2005 Old Greenbrier Road
Chesapeake, VA 23320
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RE- Summary of Proposed Terms and Conditions (Term Sheet)
Duke Solutions, Harmony Products and
City of Fayetteville, Arkansas
February 22, 2002
Dear Mr. McCandlish,
In compliance with Item 9 of the Term Sheet executed by and between the above -
referenced parties, please consider this letter as a written notice of cancellation of
activities under such agreement, ceasing all subsequent project development activities
under agreements, letters of intent or Definitive Agreements. Such cancellation shall be
effective 60 days after the date of this agreement.
The interest you have shown in providing services for the City of Fayetteville
relating to the management of wastewater biosolids has been appreciated. Should you
have any questions regarding this communication, please do not hesitate to contact me at
479-575-8330.
Dan Coody
Mayor
cc: Kit Williams, Fayetteville City Attorney
Greg Boettcher, Water & Wastewater Director
Sondra Smith, Fayetteville City Clerk
113 WEST MOUNTAIN 72701 479421-7700
FAX 479-5754257
FAYETTEVI4.LE
TNS CITY OF FAYETTEVILU. ARKANSAS
DEPARTMENTAL CORRESPONDENCE
To: Dan Coody, Mayor
From: Heather Woodruff, City Clerk
Date: February 11, 2002
Attached is a copy of the resolution regarding Duke Solutions and the only original. Please have
the original signed by Duke Solutions, then return it to the City Clerk's office. The original will
then be microfilmed and filed with the City Clerk.
cc: Nancy Smith, Internal Audit
ti
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IIWM0N
i neWithNatures
Via Federal Express
February 20, 2002
Mr Greg Boettcher, P.A.
Public Works Director
City of Fayetteville, Arkansas
113 West Mountain
Fayetteville, Arkansas 72701
Dear Greg:
HARMONY PRODUCTS, INC.
2005 OLD GREENBRIER RD., SUITE 101
CHESAPEAKE, VA 23320
PHONE 757-523-2849
FAX 757-523-9567
www.harmonyproducts.com
Enclosed are the three copies of the Proposal for Wastewater Solids
Supply Agreement between Harmony Products, Inc., DukeSolutions, Inc and the
City of Fayetteville which I have signed.
Sincerely,
Thomas W McCandlish
Enclosure
RECEIVED
FEB 22 2002
CITY OF FAYETTEVILLE
CITY CLERK'S OFFICE
0
010 03 City of Fayetteville 2/15/2002
Update Tndex Maintenance • 11:56:53
Document Ite Action
Reference Date Ref. Taken Brief Description
RES 2052002 21-02 DUKE SOLUTIONS,INC/HARMONY PRODUCTS
Enter Keywords RES. 21-02
PROPOSAL
SOLIDS SUPPLY
AGREEMETN
DUKE SOLUTIONS, INC.
HARMONY PRODUCTS, INC.
File Reference # • MICROFILM
Security Class
Expiration Date
Date for Cont/Referred:
Name Referred to
Retention Type:
**** Active *TTT
Cmdl-Return Cmd8-Retention Cmd4-Delete Cmd3-End Press 'ENTER' to Continue
CmdS-Abstract Yes No (c) 1986-1992 Munimetrix Systems Corp.
• • OR!G!NAL
PROPOSAL FOR WASTEWATER SOI,IDS SUPPLY AGREEMENT /\c's � OR
BETWEEN HARMONY PRODUCTS, INC., DUKESOI,UTIONS, INC. AND
THE CITIES OF FAYETTEVILLE, SPRINGDALE, BENTONVILLE
AND SILOAM SPRINGS, ARKANSAS
SUMMARY OF PROPOSED TERMS AND CONDITIONS ("Term Sheet")
This Term Sheet is intended to summarize the principal terms of a proposed
Agreement among DukeSolutions, Inc. ("DukeSolutions"), Harmony Products, Inc.
("Harmony"), and the City of Fayetteville Arkansas (the "City") (collectively, the "Parties")
regarding the development of a gasification and fertilizer facility to which the City with one
or more of the Cities of Fayetteville, Springdale, Rogers, Bentonville and Siloam Springs,
Arkansas (the "Cities") would supply wastewater solids ("Solids") to a fertilizer plant.
The Parties wish to commence negotiating definitive written agreements with each of
the Cities providing for the Project (a "Definitive Agreement"). Based on the information
currently known to Harmony and DukeSolutions, each Definitive Agreement will include the
following terms:
1. Parties:
2. Services:
DukeSolutions, Harmony and the City.
DukcSolutions and Harmony, acting by or through a
special purpose entity, Harmony Northwest Arkansas LLC,
(the "Project Company") would design, build, own, and lease
to Harmony ("Operator") to operate, and maintain a
gasification and fertilizer plant ("Plant") at one site located in
appropriate proximity to the Cities wastewater treatment
facilities ("Facilities'). The City would provide wastewater
solids to the Plant as outlined below.
3. Solids: Solids shall mean the nonhazardous, waste activated,
wastewater treatment sludge derived at the Facilities,
excluding grit, screenings and grease. The Solids have a
content of 13% to 17% dry matter and will have lab analyses as
provided previously to Harmony, attached hereto as
Attachment 1.
4. Fee:
Each City will pay an initial charge of 534.00 per wet ton
("Fee") of Solids delivered to the "operator" for disposing of
the Solids escalated at the Consumer Price Index for the
Northwest Arkansas area published by the Bureau of Labor
Statistics for delivery of a combined amount of 4.000 wet
tic
mf
5. Quantity:
6. Term:
tons per month of Solids to the Plant ("Target Minimum
Quantity"). The Fee for amounts delivered by the Cities in
excess of a rate of 4,000 wet tons per month will he $28 per
wet ton, escalated as provided above. In addition, the Cities
will receive the benefit of any governmental grants supporting
the construction or operation of the Plant.
The City will provide a minimum quantity of 1,500 wet
tons of Solids per month to the Plant (the "Minimum
Quantity"). If the Cities in the aggregate deliver more than the
Targeted Minimum Quantities to the Plant, the Fee for amounts
of Solids over cumulative TYTD of 4,000 per month and less
than 10,000 per month (the "Incremental Quantity") shall be
$28 per wet ton escalated as provided above. In that event, the
reduced $28 Fee will be applied proportionately to the
Incremental Quantity to each City based on the greater of the
City's Minimum Quantities or actual delivered wet tons of
Solids. In the event the Cities wish to provide to the Operator
cumulative TYTD in excess of 10,000 Tons per month, the
Cities and Operator will negotiate in good faith an appropriate
Fee for such additional amount.
The initial term of the "Definitive Agreement" would be for a
period of years to be agreed by the parties. The initial term
shall be followed by six consecutive and successive five (5)
year options to renew by each City. These options to renew
shall be automatic unless any City exercises its right not to
renew at least three months prior to the expiration of the term
of the "Definitive Agreement" or any renewal period.
7. Commercial Upon execution of the Definitive Agreement, and
Operation: selection of a mutually agreeable site having all necessary
local land use permits, DukeSolutions and Harmony
will have 18 months to design, permit, finance and have the
Plant mechanically complete. DukeSolutions and Harmony
will be obligated to receive the solids beginning on the
earlier of commercial operation of the plant or 18 months
from the execution of the Definitive Agreement.
8. Primary Fuel:
The Operator intends to produce fertilizer by using
poultry litter as the primary fuel for the Plant. The
Project Company will collect or have collected such
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9. Exclusivity:
• •
poultry litter from area growers and transport the
litter to the Operator's Plant.
The City agrees not to pursue or participate in
development of any other energy, waste -to -energy or
fertilizer projects with respect to Solids during the
time the Parties are actively developing the agreement or
operating the project contemplated by this Term
Sheet, and for a period of sixty (60) days after written
notice of cancellation or conclusion of such activities
including any subsequent project development
activities under an agreement letter of intent or
Definitive Agreement.
10. Nondisclosure of files which would give advantage to competitors:
Subject to the requirements of the Arkansas Freedom of
Information Act, the Cities agree to keep confidential any
private files designated by the parties which, if disclosed,
would give advantage to competitors of DukeSolutions,
Inc., or Harmony Products, Inc. pursuant to A.C.A §25-
19-105 (b)(9)(A).
THIS TERM SHEET IS INTENDED AS AN OUTLINE ONLY AND DOES NOT
PURPORT TO SUMMARIZE ALL OF THE CONDITIONS, COVENANTS,
REPRESENTATIONS, WARRANTIES AND OTHER PROVISIONS THAT WOULD BE
CONTAINED IN MORE DEFINITIVE LEGAL DOCUMENTATION OR THE
AGREEMENTS(S) CONTEMPLATED HEREBY, EXCEPT PARAGRAPHS 9 AND 10,
WHICH ARE INTENDED TO BE BINDING ON THE PARTIES THIS TERM SHEET IS
NOT INTENDED TO CREATE ANY LEGALLY BINDING OBLIGATIONS ON THE PART
OF DUKESOLUTIONS, HARMONY, THE CITIES OR THE PROJECT COMPANY, AND IT
IS EXPRESSLY UNDERSTOOD AND AGREED THAT THIS TERM SHEET DOES NOT
CONSTITUTE AN OFFER OR ACCEPTANCE BY EITHER PARTY TO EXECUTE ANY
DEFINITIVE AGREEMENT RELATING TO THE SERVICE.
HARMONY PRODUCTS, INC. CITY OF FAYETTEVILLE, ARKANSAS
2005 Old Greenbrier Road 113 W. Mountain Street
Suite 101 Suite 313
Chesapeake, VA 23320Fayetteville, AR4 701
Signature:'6C1'2°147
Signature
Thomas W. McCandlish, Chairman Dan Coody, Mayor
Date: 2" )' O2 Date
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• COPY
PROPOSAL FOR WASTEWATER SOLIDS SUPPLY AGREEMENT
BETWEEN HARMONY PRODUCTS, INC., DUKESOLUTIONS, INC. AND
THE CITIES OF FAYETTEVILLE, SPRINGDALE, BENTONVILLE
AND SILOAM SPRINGS, ARKANSAS
SUMMARY OF PROPOSED TERMS AND CONDITIONS ("Term Sheet")
This Term Sheet is intended to summarize the principal terms of a proposed
Agreement among DukeSolutions, Inc. ("DukeSolutions"), Harmony Products, Inc.
( Harmony"), and the City of Fayetteville Arkansas (the "City") (collectively, the "Parties")
regarding the development of a gasification and fertilizer facility to which the City with one
or more of the Cities of Fayetteville, Springdale, Rogers, Bentonville and Siloam Springs,
Arkansas (the "Cities") would supply wastewater solids ("Solids") to a fertilizer plant.
The Parties wish to commence negotiating definitive written agreements with each of
the Cities providing for the Project (a "Definitive Agreement"). Based on the information
currently known to Harmony and DukeSolutions, each Definitive Agreement will include the
following terms:
1. Parties:
2. Services:
DukeSolutions, Harmony and the City.
DukeSolutions and Harmony, acting by or through a
special purpose cntity, Harmony Northwest Arkansas LI..C,
(the "Project Company") would design, build, own, and lease
to Harmony ("Operator") to operatc, and maintain a
gasification and fertilizer plant ("Plant") at one site located in
appropriate proximity to the Cities wastewater treatment
facilities ("Facilities"). The City would provide wastewater
solids to the Plant as outlined below.
3. Solids: Solids shall mean the nonhazardous, waste activated,
wastewater treatment sludge derived at the Facilities,
excluding grit, screenings and grease. The Solids have a
content of 13% to 17% dry matter and will have lab analyses as
provided previously to Harmony, attached hereto as
Attachment 1.
4. Fee:
Each City will pay an initial charge of $34.00 per wet ton
("Fee") of Solids delivered to the "operator" for disposing of
the Solids escalated at the Consumer Price Index for the
Northwest Arkansas area published by the Bureau of Labor
Statistics for delivery of a combined amount of 4.000 wet
5. Quantity:
6. Term:
tons per month of Solids to the Plant ("Target Minimum
Quantity"). The Fee for amounts delivered by the Cities in
excess of a rate of 4,000 wet tons per month will be $28 per
wet ton, escalated as provided above. In addition, the Cities
will receive the benefit of any governmental grants supporting
the construction or operation of the Plant.
The City will provide a minimum quantity of 1,500 wet
tons of Solids per month to the Plant (the "Minimum
Quantity"). If the Cities in the aggregate deliver more than the
Targeted Minimum Quantities to the Plant, the Fee for amounts
of Solids over cumulative TYTD of 4,000 per month and less
than 10,000 per month (the "Incremental Quantity") shall be
$28 per wet ton escalated as provided above. In that event, the
reduced $28 Fee will be applied proponionatcly to the
Incremental Quantity to each City based on the greater of the
City's Minimum Quantities or actual delivered wet tons of
Solids. In the event the Cities wish to provide to the Operator
cumulative TYTD in excess of 10,000 Tons per month, the
Cities and Operator will negotiate in good faith an appropriate
Fcc for such additional amount.
The initial term of the "Definitive Agreement" would be for a
period of years to be agreed by the parties. The initial term
shall be followed by two consecutive and successive five (5)
year options to renew by each City. These options to renew
shall be automatic unless any City exercises its right not to
renew at least three months prior to the expiration of the term
of the "Definitive Agreement" or any renewal period.
7. Commercial Upon execution of the Definitive Agreement, and
Operation: selection of a mutually agreeable site having all necessary
local land use permits, DukeSolutions and Harmony
will have 18 months to design, permit, finance and have the
Plant mechanically complete. DukeSolutions and Harmony
will be obligated to receive the solids beginning on the
earlier of commercial operation of the plant or 18 months
from the execution of the Definitive Agreement.
8. Primary Fuel:
The Operator intends to produce fertilizer by using
poultry litter as the primary fuel for the Plant. The
Project Company will collect or have collected such
9. Exclusivity
•
poultry litter from area growers and transport the
litter to the Operator's Plant.
The City agrees not to pursue or participate in
development of any other energy, waste -to -energy or
fertilizer projects with respect to Solids for the period
that is greater of (i) one hundred eighty (180) days
after execution of this Term Sheet or (ii) during the
time while the Parties are actively developing or
operating the project contemplated by this Term
Sheet, including any subsequent project development
activities under an agreement, letter of intent or
Definitive Agreement.
10. Nondisclosure of files which would give advantage to competitors:
Subject to the requirements of the Arkansas Freedom of
Information Act, the Cities agree to keep confidential any
private files designated by the parties which, if disclosed,
would give advantage to competitors of DukeSolutions,
Inc., or Harmony Products, Inc. pursuant to A.C.A. §25-
19-105 (b)(9)(A).
TI -IIS TERM SHEET IS INTENDED AS AN OUTLINE ONLY AND DOES NOT
PURPORT TO SUMMARIZE ALL OF THE CONDITIONS, COVENANTS,
REPRESENTATIONS, WARRANTIES AND OTHER PROVISIONS THAT WOULD BE
CONTAINED IN MORE DEFINITIVE LEGAL DOCUMENTATION OR THE
AGREEMENTS(S) CONTEMPLATED HEREBY, EXCEPT PARAGRAPHS 9 AND 10,
WHICH ARE INTENDED TO BE BINDING ON THE PARTIES. THIS TERM SHEET IS
NOT INTENDED TO CREATE ANY LEGALLY BINDING OBLIGATIONS ON THE PART
OF DUKESOLUTIONS, HARMONY, THE CITIES OR THE PROJECT COMPANY, AND IT
IS EXPRESSLY UNDERSTOOD AND AGREED THAT THIS TERM SHEET DOES NOT
CONSTITUTE AN OFFER OR ACCEPTANCE BY EITHER PARTY TO EXECUTE ANY
DEFINITIVE AGREEMENT RELATING TO THE SERVICE.
HARMONY PRODUCTS, INC.
2005 Old Greenbrier Road
Suite 101
Chesapeake, VA 23320
CITY OF FAYETTEVILLE, ARKANSAS
113 W. Mountain Street
Suite 313
Fayetteville, AR 72701
Signature: Signature:
Thomas W. McCandlish, Chairman Dan Coody, Mayor
Date: Date:
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