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HomeMy WebLinkAbout21-05 RESOLUTION• RESOLUTION NO. 21- 0 5 _ A RESOLUTION APPROVING AMENDMENT NO. 12 TO THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL (OMI); AND APPROVING A BUDGET ADJUSTMENT TRANSFERRING $887,000.00 FROM USE OF FUND BALANCE TO THE WASTEWATER TREATMENT PLANT GENERATOR CAPITAL PROJECT 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 approves Amendment No. 12 to the contract with Operations Management International (OMI). A copy of Amendment No. 12, marked Exhibit "A" is attached hereto, and made a part hereof. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment transferring $887,000.00 from Use of Fund Balance to the Wastewater Treatment Plant Generator Capital Project. PASSED and APPROVED this 8th day of February 2005. ````,\111111114Uff 4e.0 ,\YT0•95G&•'s _ ) •• :-P S • • FAYETTEVILLE 5 14-1 ;rin:QKANSP*J2 " ATTEST: By: SO DRA SMITH, City Clerk APPROVED: By: DfA''� CO • DY, Mayor • • AMENDMENT NO. 12 TO AGREEMENT FOR OPERATIONS, MAINTENANCE AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT NO. 12 to the Agreement for Operations, Maintenance and Management Services for the City of Fayetteville, Arkansas Wastewater Treatment Plant dated September 1, 1994 (the "Agreement"), made effective on the 9th day of February, 2005, by and between the City of Fayetteville, Arkansas, whose address for any formal notice is 113 W. Mountain St, Fayetteville, Arkansas 72701 (hereinafter the "City") and Operations Management International, Inc., with offices at 9193 S. Jamaica Street, Suite 400, Englewood, Colorado 80112 (hereinafter "OMI") is made and entered into for purposes of amending certain provisions of 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. NOW THEREFORE, the City 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 services rendered during calendar year 2005 the City of Fayetteville shall pay to OMI the actual cost of services performed plus an annualized management fee of Eighty One Thousand Six Hundred Ninety Seven Dollars and Eighty Six Cents ($81,697.86). 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 the cost for services for calendar year 2005 shall be Five Million Three Hundred Twenty Seven Thousand Two Hundred Fifty Two Dollars and Eighty -Nine Cents ($5,327,252.89). Details of said cost are shown in Appendix J. The base fee shall be negotiated each year in September for the upcoming calendar year. Should the City 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 City prior to OMI incurring additional costs. 3. A new Appendix L is added in the form attached hereto. This Amendment No. 12 together with the Agreement constitutes the entire agreement between the Parties and supersedes all prior oral and written understandings with respect to the subject matter set forth herein. Unless specifically stated all other terms and conditions of the Agreement shall remain in full force and effect. Neither this Amendment nor the Agreement may be modified except in writing signed by an authorized representative of the Parties. Page 1 of 4 The Parties, intending to be legally bound, indicate their approval of the Amendment by their signatures below. OPERATIONS MANAGEMENT INTERNATIONAL, INC. Roger B. Quayle Senior Vice Presi ent HI Date: 6 2/0 12 --oto S CITY OF FAYETTEVILLE APPROVED AS TO FORM: ItrWilliams City Attorney Date: 7//1-I (di Page 2 of 4 Appendix J COST DETAIL The annualized estimated costs for calendar year 2005 are as follows: Description Direct Labor & Benefits Labor Markup Electricity Electrical Markup Other Direct Costs Other Direct Costs Markup Subtotal Fixed Fee Lift Station Odor Control Capital Item Amortization Power Generator Project Equipment Costs Construction Management $ Total Est. 0 & M Budget Total Est Annualized Budget Estimated Increase Existing 2005 Estimated Costs 1,671,071.00 501,321.00 642,720.00 1,288,073.00 128,807.00 4,231,992.00 82,349.00 69, 362.00 100,622.00 $ $ $ $ $ 4,484,325.00 $ $ 4,484,325.00 $ The following are some of the major reasons for cost circumstances: Amended 2005 Estimated Costs 1,671,071.00 501,321.00 588,480.00 1,306,961.16 130,696.12 4,198,529.28 81,697.86 69,362.00 100,622.00 762,645.00 114,396.75 5,327,252.89 5,327,252.89 842,927.89 1. Continued increase in the efficient use of technological automation and job -sharing within the OMI network. 2. Continued upward pressure on the cost of fuel and vehicle expenses. 3. Ever increasing cost to maintain community -expected high level of performance with many pieces of equipment nearing the end of their life cycle and destined to be replaced or upgraded as part of the ongoing Wastewater Improvement Project. 4. Continued population growth causing a related increase in sludge production and ultimate sludge disposal costs. 5. Additional costs for maintenance of 4-5 new sewage lift stations during the next year. 6. Potentially less expensive sludge disposal alternatives continue to be evaluated, which may or may not become feasible within the next 12 months. 7. Addition of the Power Generator Project as described in Appendix L hereto. Page 3 of 4 • • Appendix L POWER GENERATOR PROJECT - SCOPE OF WORK Due to significantly increased emphasis on preventing all possible wastewater overflows and/or interruptions in wastewater treatment capability by the Arkansas Department of Environmental Quality and the United States Environmental Protection Agency, as well as currently available favorable electrical rate structures it has become necessary for the City to install full -backup 2 megawatt power generation equipment at the Paul R. Noland wastewater treatment plant (WWTP). The City has reviewed available options and has determined that it desires to install a power generation system manufactured by PowerSecure, Inc. The cost of the power generation equipment (the "Equipment") to effect the implementation of the power generation system at the Noland WWTP, including applicable sales taxes and a four-year extended warranty, is estimated to be $762,645.00 OMI hereby agrees to procure and manage the construction of the Equipment on behalf of the City during calendar year 2005. The costs for managing the construction of the Equipment will be $114,396.75 and the City hereby agrees that it will repay the purchase price of and construction management costs for the Equipment to OMI over the remainder of the calendar year 2005 in equal monthly installments in accordance with Article 5.1 of the Agreement. Copies of purchase orders, bills of sale or invoices evidencing OMI's purchase will be furnished to the City upon request. Title to and risk of loss for the Equipment will reside with the City at all times. Notwithstanding the foregoing, if for any reason the Agreement is terminated by either party prior to the end of calendar year 2005; the City will pay to OMI the remaining balance due for the Equipment and the construction management fee, in full, within thirty (30) days following termination. Costs for diesel fuel will be provided directly by the City of Fayetteville as described in Article 3.8 of the Agreement. Costs for natural gas, applicable taxes, insurance, maintenance, and monitoring fees will be included in the actual cost of services as shown in Appendix J. Page 4of4 City of Fayetteville, Arkansas • Budget Adjustment Form Budget Year 2005 Department: Operations Division: Fleet Operations Program: Capital Expenditures Date Requested 2/15/2005 Adjustment Number Project or Item Requested: $887,000 is need in the Wastewater Treatment Plant Generator capital project. Project or Item Deleted: None. $887,000 from the Use of Fund Balance account. Justification of this Increase: The funding is needed for the purchase of a generator system for the wastewater treatment plant. Justification of this Decrease: There are sufficient funds available in the Water & Sewer Fund for this request. Increase Budget (Decrease Revenue) Account Name Account Number Amount Project Number Fixed assets 5400 5800 5801 00 887,000 05026 1 Decrease Budget (Increase Revenue) Account Name Account Number Amount Project Number Use of fund balance 5400 0940 4999 99 887,000 Approval Signatures Requested B Date z -7-o S Budget Manager Date Department Director Date Finance & Intern Mayor Services Dire Date Budget Office Use Only Type: A B C "C„,±3 E Date of Approval Posted to General Ledger Posted to Project Accounting Entered in Category Log Initial Date Initial Date Initial Date Initial Date • OMI pts - 870 -5 E5 P7a5 01/ -0-5 CMZA»undnovt/4 MEMO RAND UMantnei-4r TO: Billy Ammons FROM: Heidi Gilbert DATE: February 10, 2005 SUBJECT: Amendment No. 12 PROJECT(s): Fayetteville — AR 01 Billy — Attached are two duplicate originals of Amendment No. 12. Please have the Client execute each original and return one fully executed original to my attention. If you have questions please let me know. Regards, Heidi D:\Data\My Documents \Correspondence\2005\Fayetteville Amd 12 Memo.doc FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE TO: Mayor Dan Coody City Council COPY: David Jurgens, Steve Davis FROM: Matt Taylor DATE: February 2, 2005 RE- Noland Treatment Plant Generator - Potential Savings Calculations Attached is a spreadsheet that contains information about the potential cost savings from the use of a 2 megawatt generator at the Noland Treatment Plant. The spreadsheet was developed by Power Secure and is well detailed. It is based on the 12 month period from February 2003 — January 2004 and shows a gross potential savings of approximately $206,000 per year. A second spreadsheet was developed based on information obtained directly from Ozarks Electric (from Keith Kaderly, our customer service representative) that used the 12 month period from November 2003 — October 2004. It was slightly less detailed than the attached spreadsheet, but it indicated a gross potential savings of approximately $145,000 per year. Both values were in relative agreement, but we reduced our estimate of the potential savings to $150,000 per year to account for lower predicted flows at the plant and the cost of diesel fuel to operate the generator. Based on the information available, the savings estimate of $150,000 per year is very conservative. If you have any questions please feel free to call me at 575-8318, or 1 can address questions at the meeting on Tuesday. zm R a 0 0 6 0 0 0 0 0 0 0 co 0 to n 0 0 0 a 0 c N c CO 0 0 E W O0000 gar 0 ' w w mm U CO > e 14 g3 E 09c0E., 3 00gY ,00LLS J N 2 W a 0 b 4 - a, a 4400 m n a G m 6 it C p MW - W -0 v J 0 a N a4 -a0 t for Consumption Under the Large Power Over 350 kVa Rate Schedu • 0 O N n 1` T O O N m T w,- %0 ,- bg b 0 0 0 m T 0 '91Xo Mlno lay.«piano omrvnnrveduioria _ww`$ww$ww»wwww tt 4. T9 ~m ebN 24 Y1m a r czw 8 8 m 04pww0N _aNh0 b2202NN47.21.11UU Un4 0 20m:x81473nI82 nS0f� tVT070f0O; 0 T °«w ai ow olnn w w w w w w 1Vm00004SNn< y 1V 0 0 C1 N m 0 1� SraiSS o0B»»ww4w� 44441.4, 0n2e»04401p 8 7 O g m n n N 0 Oy O t•tp• m T m LLU 9.2J mnyo 10OenObbm W NNUUU^«"Vw;t;w 4822848888828 r 0 3- 8 'n T a e n$ -06a 0wb 22 m nn� wow` 434.4. 4.4.44oi44444ii 434.434,4.0wNN»»w > Teeveeeeveem m' v.Y 3 C o o o o o o o o G G O N 2 y U U• 0 0 0 U U U Col 0.I 01 WO mNp000000000 UUUUNUUUU CV m E 20 OO 200222222222 000' '0 0000 0000000000 aaa»»»»»»»»a Ew888888888888 m m 2 2 2 210 2 b 2 b 0 2 0 0 0 » N » » » » w » » » w w 8F E• 88$0$8088$$$ m8o8a1Tsis2fino,$e 22(0222020000 1V 01NrvrvN Nl'104 f222p7oWITC 4000 Mli2Q�-5 0C VInUZO J as - t ry 0 T $241.444.80 Billing demand of 2,160 kW, established during the summer of 2003, is used for all months covered by this analysis. L P2-• ° - U L e) U2 a Igo C OywaEE' 3 m 0 O 2 $mm� m'0 asm J Z O W 3 05 15 Y JC '0 0 Annual Generator Run Hours: Primo Generator Capacity: Fuel Cost per Kilowatt-hour: Cost for Consumption Under the Large Power Off -Peak Rate Schedule with Generator Operation p 0 0 0 0 ' 0 0 nm m o(p( 10 O -d N1fm' • x00_nnn0 0 0n NNNp0NNNNNNN nn0nmo0onaoo b O O- N N n T o 04- ?80n1^`4o,0401 nu T 000000000000 w m O n m b 1'1 0 m b N 0 j c y a ri S 4 IA 0 N N 0 N 303 I V U~� ww wiww a44 0`5-) m 0fl O80 '- EiieiTmry e DU]wr<-630, yi1e551S9 VwNN-NNN E n O n O m n o N a gw14w»»4w»4w»w 000090000000 4 4 4 8r 4n0 0 0 0 4 4 o•mN 0Y)oNb mm 0Omm wo0neJrv000mmov0 4,4.4.4.4.4.444.4,4.444. c 888888888888 a C ( 00000 0000 O m °°«;;47);««a»1-9;71 U N g T N 0.‚4 Oa a a 01 - a N N N N N N N N N N 22222202222 oOTm000 mo o O00000000 wwww . wwwww 0.000000000 •Como m mo mm 0)0)0 00w««««««««««« 0 0 0 0 2 CO 0 0 0 0 O 8888 V 9 3 T S N w L'03 - 54 ca mE000000002200 CLoc4c4c4e4c4c4e4c4c4oicipi 00 00000000 p 0009 O O N O n N,0000 b 4^^$ 0 000000000000 come, O m 0 4 415222”29092°1 O2 2m �Z�QSS��Q1nUZ0 LL $6,402.39 S25,609.57 -51,551.92 . $22.460.05 8 2 O 0 IA 14.086.800 216,000 • • RESOLUTION NO. A RESOLUTION APPROVING AMENDMENT NO. 12 TO THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL (OMI); AND APPROVING A BUDGET ADJUSTMENT TRANSFERRING $887,000.00 FROM USE OF FUND BALANCE TO THE WASTEWATER TREATMENT PLANT GENERATOR CAPITAL PROJECT. 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 approves Amendment No. 12 to the contract with Operations Management International (OMI). A copy of Amendment No. 12, marked Exhibit "A" is attached hereto, and made a part hereof. Section 2. That the City Council of the City of Fayetteville, Arka'C hereby approves a budget adjustment transferring $887,000.00 from Li;,e�o and Balance to the Wastewater Treatment Plant Generator CapitaLPj PASSED and APPROVED this 8th day of Febru ATTEST: By: S $DRA SMITH, City Clerk OODY, Mayor • r AMENDMENT NO. 12 TO AGREEMENT FOR OPERATIONS, MAINTENANCE AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT NO. 12 to the Agreement for Operations, Maintenance and Management Services for the City of Fayetteville, Arkansas Wastewater Treatment Plant dated September 1, 1994 (the "Agreement"), made effective on the 1`r day of January, 2005, by and between the City of Fayetteville, Arkansas, whose address for any formal notice is 113 W. Mountain St, Fayetteville, Arkansas 72701 (hereinafter the "City") and Operations Management International, Inc., with offices at 9193 S. Jamaica Street, Suite 400, Englewood, Colorado 80112 (hereinafter "OMP') is made and entered into for purposes of amending certain provisions of 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. NOW THEREFORE, the City 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 calendar year 2005 the City of Fayetteville shall pay to OMI the actual cost of services performed plus an annualized management fee of Eighty One Thousand Six Hundred Ninety Seven Dollars and Eighty Six Cents. ($81,697 86) 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 the cost for services for calendar year 2005 shall be Five Million Three Hundred Twenty Seven Thousand Two Hundred Fifty Two Dollars and Eighty -Nine Cents ($5,327,252.89). Details of said cost are shown in Appendix J. The base fee shall be negotiated each year in September for the upcoming calendar year. Should the City 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 City prior to OMI incurring additional costs. 3. A new Appendix L is added in the form attached hereto This Amendment No. 12 together with the Agreement, constitutes the entire agreement between the Parties and supersedes all prior oral and written understandings with respect to the subject matter set forth herein Unless specifically stated all other terms and conditions of the Agreement shall remain in full force and effect. Neither this Amendment nor the Agreement may be modified except in writing signed by an authorized representative of the Parties. Page 1 of 4 • r The Parties, intending to be legally bound, indicate their approval of the Amendment by their signatures below. OPERATIONS MANAGEMENT CITY OF FAYETTEVILLE INTERNATIONAL, INC. Roger B. Quayle Dan Goody Senior Vice President Mayor Date: Date: APPROVED AS TO FORM: Kit Williams City Attorney Date: Page 2 of 4 r Appendix J COST DETAIL The annualized estimated costs for calendar year 2005 are as follows: Description Direct Labor & Benefits Labor Markup Electricity Electrical Markup Other Direct Costs Other Direct Costs Markup Subtotal Fixed Fee Lift Station Odor Control Capital Item Amortization Power Generator Project Equipment Costs Construction Management Total Est. 0 & M Budget Total Est. Annualized Budget Estimated Increase Existing 2005 Estimated Costs $ 1,671,071.00 $ 501,321.00 $ 642,720.00 $ 1,288,073.00 $ 128,807.00 $ 4,231,992.00 $ 82,349.00 $ 69,362.00 $ 100,622.00 $ 4,484,325.00 $ 4,484,325.00 • Amended 2005 Estimated Costs 1,671,071.00 501,321.00 588,480.00 1,306,961.16 130,696.12 4,198,529.28 81,697.86 69,362.00 100,622.00 762,645.00 114,396.75 5,327,252.89 5,327,252.89 842,927.89 The following are some of the major reasons for cost circumstances: 1. Continued increase in the efficient use of technological automation and job -sharing within the OMI network. 2. Continued upward pressure on the cost of fuel and vehicle expenses. 3. Ever increasing cost to maintain community -expected high level of performance with many pieces of equipment nearing the end of their life cycle and destined to be replaced or upgraded as part of the ongoing Wastewater Improvement Project. 4. Continued population growth causing a related increase in sludge production and ultimate sludge disposal costs. Additional costs for maintenance of 4-5 new sewage lift stations during the next year. 6. Potentially less expensive sludge disposal altematives continue to be evaluated, which may or may not become feasible within the next 12 months. 7. Addition of the Power Generator Project as described in Appendix L hereto. Page 3 of 4 Appendix L POWER GENERATOR PROJECT - SCOPE OF WORK Due to significantly increased emphasis on preventing all possible wastewater overflows and/or interruptions in wastewater treatment capability by the Arkansas Department of Environmental Quality and the United States Environmental Protection Agency, as well as currently available favorable electrical rate structures it has become necessary for the City to install full -backup 2 megawatt power generation equipment at the Paul R. Noland wastewater treatment plant (WWTP). The City has reviewed available options and has determined that it desires to install a power generation system manufactured by PowerSecure, Inc. The cost of the power generation equipment (the "Equipment") to effect the implementation of the power generation system at the Noland WWTP, including applicable sales taxes and a four-year extended warranty, is estimated to be $762,645.00 OMI hereby agrees to procure and manage the construction of the Equipment on behalf of the City during calendar year 2005. The costs for managing the construction of the Equipment will be $114,396.75 and the City hereby agrees that it will repay the purchase price of and construction management costs for the Equipment to OMI over the remainder of the calendar year 2005 in equal monthly installments in accordance with Article 5.1 of the Agreement. Copies of purchase orders, bills of sale or invoices evidencing OMI's purchase will be furnished to the City upon request. Title to and risk of loss for the Equipment will reside with the City at all times. Notwithstanding the foregoing, if for any reason the Agreement is terminated by either party prior to the end of calendar year 2005; the City will pay to OMI the remaining balance due for the Equipment and the construction management fee, in full, within thirty (30) days following termination. Costs for diesel fuel will be provided directly by the City of Fayetteville as described in Article 3.8 of the Agreement. Costs for natural gas, applicable taxes, insurance, maintenance, and monitoring fees will be included in the actual cost of services as shown in Appendix J. Page 4 of 4 • • Noland Wastewater Treatment Plant Improvements Standby Generator Options The Noland Plant improvements project presents an opportunity for the City to invest in a standby electrical generator that is larger than the minimum required for emergency operation purposes, but which will result in significant annual savings through a reduction in the rate paid for electricity throughout the year Option 1. The least expensive option in terms of capital cost is to install a 750kW generator at the facility to operate only critical equipment. It will not be large enough to operate all treatment equipment. The generator will operate screening equipment and other critical items and wastewater will be pumped to storage for later treatment when electric power is restored. This approach is acceptable to the regulatory agencies, but is labor intensive and could result in a discharge of inadequately treated wastewater during extended power outages. The capital cost of this option is approximately $450,000. The labor costs will vary from year to year depending on the frequency and duration of power outages to the treatment facility. Option 2. A second option is to purchase a generator large enough ( 2000kW ) to power significantly more of the treatment processes during outages and reduce reduce the electric power demands of the treatment facility during peak periods. This minimizes the chance of a discharge of partially treated waste, but more importantly it decreases both the rate paid for electrical power the plant and the total power purchased. If a 2000kW generator is installed and operated strategically, it will lower the annual electrical bill at the facility by approximately $150,000 per year OMI has been in contact with a company that buys generators on a volume basis, manufactures the switch gear necessary to place a generator in service, and provides the majority of the installation and start-up services necessary. The cost for all equipment, installation, start-up, and project management/coordination by OMI would be $877,042. This is approximately $430,000 more than the cost of the minimum generator required, but the annual power cost savings would recover this additional capital cost in roughly 3 years. The generator should have a useful life of at least 15 years, so the total savings recognized could be as high as $1.8M over 15 years. If electric costs increase over the years, the savings would be even greater. If this new generator can be installed and in service by June 1, 2005 the City will be on the new, reduced rate structure on January 1, 2006 and will begin to realize monthly power cost savings at that time. If the generator is not on-line by June I s` the reduced rates will not take effect until one year later (January 1, 2007) and one full year of potential savings ($150,000) will be lost. They have indicated that a signed, formal approval no later than February 15th should allow the work to be completed in advance ofJune 1, 2005. Option 2A. A variation of Option 2 above is for the City to pay to have a system designed, solicit bids for a generator, and contract with an electrical contractor for the installation and start-up of the system. Although this approach could work,.there are several reasons it is not economical at this time. First, whether the City buys one or several generators, it will not receive the same price as a Targe vendor that purchases dozens or hundreds of generators per year. Second, the switch -gear and controls to utilize this generator for peak -shaving use ( to reduce electric rates paid at the plant) are specialized and not widely manufactured. The purchase price for to the City or a local electrical contractor would be significantly higher than for a vendor that either manufactures this equipment or buys it in bulk. Third, the City is likely to pay more to both the installer and OMI if equipment is purchased from various sources and they are expected to integrate those materials and put them into service. If multiple suppliers and product representatives are involved, there is also an increased risk of disputes and delays. Finally, and possibly most importantly, is timing. If the generator is not on-line by June 1 s', one full year of potential savings ($150,000) will be lost. SCOPE OF POWERSECURE SERVICES In general, PowerSecure (PS) will provide the following services to serve The Paul R. Noland Wastewater Treatment Facilities in Fayetteville, Arkansas. 2000 kW Standby; 1825 kW Prime; 480Y/277V; CAT Bi -Fuel Generator Sound Attenuated to 75db at 10 meters PS will provide all work necessary for the complete installation of the system, including but not limited to: 1. Site Preparation 2. Excavation 3. Concrete Pads 4. Primary Electrical Interconnection 5. Medium Voltage Recloser 6. Power Transformer 7. NexGear® Advanced Paralleling Switchgear 8. CAT Engine Generator 9. Weatherproof Enclosure 10. Engine Generation System Auxiliary Systems 11. Power Feeders 12. Control Wiring 13. In -Service Training 14. Operations Manuals PS will provide all engineering and design services necessary to complete construction documents for this project in accordance with the State of Arkansas, including construction documents signed and sealed by a Registered Professional Engineer of Record in Arkansas. The Generation System will include: Engine Generator Set including: a. Permanent Magnet Generator b. Electronic Engine Governor c. Charging Alternator 24V d. Lead Acid Batteries, Rack and Battery Charger e. Engine Cooling System f. Exhaust System with Silencer g. Double Wall (UL142), 3000 Gallon Sub -base Tank with Level Sensors. h. Weather Resistant Enclosure i. Lubricating Oil and Antifreeze — Initial fill IV. Bi -Fuel System • • Each CAT 3516B Engine Generator will be equipped with a Series IV -B PowerSecure Standard Bi -Fuel Conversion System. Each Bi -Fuel System shall include a gas train kit and control system accessory kit. PS will provide a NexGear® Advanced Paralleling Switchgear (APS) for each generation system to provide the following Modes of Operation: 1. Load Management Mode: Long-term Synchronized/Parallel Operation with Ozark Electric Cooperative 2. Islanding Mode: Short-term Synchronized Operation with Ozark Electric Cooperative followed by a Make -Before -Break Separation from Ozark Electric Cooperative. 3. Standby Mode: During Ozark Electric Cooperative outages, each system will provide the following Automatic, Dead Bus, Block Load Transfer of a maximum of 2000kW 4. Test Mode: Synchronized/Paralleled Operation at Full Load, without Interruption of facility's Normal Electrical Service. Each APS will utilize a Woodward Controller, Cutler Hammer System Circuit Breaker(s), Beckwith Utility Grade Multifunction Intertie Relay(s), and all U.L. listed components. Each APS will include all necessary functions to prevent connection or parallel operation of the IDG® System with Ozark Electric Cooperative unless the service voltage and frequency are of normal magnitude, and will meet Ozark Electric Cooperative published interconnection requirements. PS will utilize their in-house licensed Electrical Construction Group to provide a fully coordinated installation. The PS Project Manager will serve as the single point interface with Ozark Electric Cooperative during construction/start-up and will be present on-site for all critical activities and key construction milestones. The entire system comes standard with a one year warranty, and the City has elected to purchase an additional four year extended warranty. PS will provide onsite in-service training on the operation and maintenance of the system. OMI MEMORANDUM TO: David Jurgens Matt Taylor FROM: Billy Ammons DATE: January 31, 2005 SUBJECT: Purchase of Power Secure Generator The subject of backup power generation for the existing and proposed wastewater treatment facilities has been discussed on numerous occasions over the past year or so with all interested parties, including Greg Boettcher, OMI employees, and consultants from Bums & McDonnell(BM)-Black & Veatch (BV)-McGoodwin, Williams & Yates (MWY), and various other sub -consultants. At least one vendor presentation on this subject was also held during 2004 at the offices of MWY. Due to the extreme complexities involved with this subject, however, no resolution had been reached as of October 2004. A meeting was scheduled at the Noland WWTP to allow a company called Power Secure to present their concept of backup power generation and the use of the `Off -Peak' rate structure available in Arkansas to help offset the cost of the generators. Representatives of BM, BV, MWY, OMI, and the City were present on 28 October. The presentation was well received and the general consensus of the group was that this was the best alternative yet proposed and the direction that should be pursued. The cost estimates available from electrical sub -consultants ranged from $850,000 - $1,000,000 for a similar system, and the Power Secure system final cost of $877,042 after complete configuration was thought to be extremely competitive, especially for a completely integrated turnkey system. After much discussion, it was determined that due to the somewhat fragmented procurement schedule for the separate Wastewater System Improvement Project (WSIP) contracts, procuring the equipment from Power Secure or any specific single vendor would be very difficult. The suggestion was made that the generators be procured in a manner similar to the highly successful belt -filter -press negotiated purchase, which resulted in an expedited purchase and great savings for the City. Greg Boettcher indicated that the BFP procurement model could not be followed exactly, since there was not an existing generator to show the need for standardization. Mr. Boettcher did suggest that OMI could purchase the generators on behalf of the City and that the City would then pay back the costs for the generators over a five year period, thus extending OMI's contract for an additional five years while at the same time allowing the City to pay for the generators from the savings acquired by going to the `Off -Peak' rate structure in a positive cash-flow scenario. MEMORANDUM Page 2 • • OMI agreed to examine this arrangement and investigate additional alternatives if available, then present a solution to the City. Everyone at the meeting recognized the need for quick action, as the deadlines for moving forward on each of the major construction contracts was drawing near. Over the next few weeks, OMI contacted NexGen, a company who has provided similar services to those proposed by Power Secure at OMI projects in the Northeastern U.S., in an attempt to secure competitive pricing for the Fayetteville generator project. After reviewing the application and the specific requirements of the Fayetteville facilities, however, NexGen declined to provide a competitive price or even to indicate that they would be willing to participate in any way. Since no other viable alternative was readily apparent and the City and their consultants had previously agreed that the Power Secure option appeared to be the most practical, OMI subsequently niet with Power Secure officials and investigated various contract options between OMI, Power Secure, and the City that might accomplish the desired result while still providing all parties adequate protection. After several discussions with City officials, it has been decided to purchase only one generator at this time, install the generator at the Noland facility, and move to the `Off -Peak' rate structure as soon as possible. The purchase of this generator and accompanying switchgear as a turnkey system from Power Secure has been determined to be the only viable altemative. To this end, a proposed contract amendment between OMI and the City that directs OMI to affect this purchase and installation has been drafted and will be presented to the City Council for approval on Tuesday February ls'. 0 • Date: February 1, 2005 To: Matt Taylor Jerry Sonderegger Jim Norris From: Brian Foy Re: Power Secure Estimate The lead electrical cost estimator at Bums & McDonnell has completed a cursory review of the Power Secure estimate. He has been with Bums & McDonnell for 15 years and prior to that was an estimator for an electrical contracting company for 10 years. He has done many estimates on projects with generators and has worked closely with manufacturer's representatives on these projects. The evaluation was based upon a review of manufacturer cut -sheets and a scope -of -work provided by Power Secure. Two quotes were received, on a budgetary basis, from different generator vendors who believed they could meet the requirements of this project. After applying the installation labor, materials, contractor overhead and markups to the equipment quotes, our estimator arrived at a budgetary cost of approximately $800,000. The evaluation was cursory in nature and should be used for rough budgetary purposes only. If you have any questions regarding the cost review, please feel free to contact me at 816-822-3039. 9400 Ward Parkway Kansas City. Mssoud 64114-3319 Tel: 816 333-9400 Fax: 816 333-3690 www.bumvnal.mm From: Clarice Pearman To: Taylor, Matt Subject: OMI Amendment 12 The City Council passed a resolution approving Amendment 12. Please let me know when to expect a signed Amendment 12 to continue processing the resolution for this item. Thanks. From: Matt Taylor To: Pearman, Clarice Date: 2/9/05 10:01 AM Subject: Re: OMI Amendment 12 They will send signed copies by FedEx and I will bring them tomorrow when they arrive. >>> Clarice Pearman 02/09/05 09:58AM >>> The City Council passed a resolution approving Amendment 12. Please let me know when to expect a signed Amendment 12 to continue processing the resolution for this item. Thanks. Clarice Pearman - Res. 21-05 OMI Page 1 From: Clarice Pearman To: Taylor, Matt Subject: Res. 21-05 OMI Attached is a copy of the Agreement No. 12 with OMI. Sondra has the original agreement for OMI in her office. They are coming to pick it up. . . 4' 445. a 1 -as February 21, 2005 Re: Waste Management, Inc. Owners and Contractors Protective Liability Policy Enclosed you will find the 0CP Policy for 1/1/2005 through 1/1/2006. Please retain this for your records or let me know if this policy is no longer needed. If you need additional information or have any questions, please contact me at (713) 458- 5367 or sholland n,lockton.com. Thank you. Best Regards, Ci�'CQQoncD Shala Holland Assistant Account Manager Lockton Companies L(X:KTON COMPANIES OF HOUSTON, INC. i8l7 Snn PcI;pc. `•!utr 1'l` 'n1.a{m. r) 170:; (7I1)4iiI12t10W9 • ACE USA PRIVACY POLICY The ACE USA group of companies strongly believes in maintaining the privacy of information we collect about individuals. We want you to understand how and why we use and disclose the collected information. The following provides details of our practices and procedures for protecting the security of nonpublic personal information that we have collected about an individual. This privacy policy applies to the companies listed below. INFORMATION WE COLLECT The information we collect about your employees or customers will vary depending on the type of product or service being provided to them, and may include: • Information we receive from you, your customers, or employees such as name, address, age, phone number, social security number, assets, income, or beneficiaries; • Information about transactions your employees or customers have with us, with out affiliates, or with others, such as policy coverage, premium, payment history, motor vehicle records; and • Information we receive from a consumer reporting agency, such as credit histories. INFORMATION WE DISCLOSE We do not disclose any personal information to anyone except as is necessary in order to provide our products or services or otherwise as we are required or permitted by law. YOUR RIGHT TO VERIFY THE ACCURACY OF INFORMATION WE COLLECT Keeping our information accurate and up to date is important to us. Your customers or employees may see and correct personal information that we collect about them except for information relating to a claim or a criminal or civil proceeding. CONFIDENTIALITY AND SECURITY We restrict access to personal information to our employees, our affiliates' employees, or others who need to know that information to service your account or in the course of conducting our normal business operations. We maintain physical, electronic, and procedural safeguards to protect personal information. DC 196161.1 05473 00718 7/04 • CONTACTING US If you have any questions about this privacy statement or would like to learn more about how we protect the confidentiality or personal information, please consult our web site, www.ace-ina.com, or write to us at ACE USA Customer Services, Two Liberty Place, TL35D, P.O. Box 41484, Philadelphia, PA 19101-1484. ACE American Insurance Company ACE American Lloyds Insurance Company ACE Employers Insurance Company ACE Fire Underwriters Insurance Company ACE Insurance Company of Illinois ACE Insurance Company of Ohio ACE Insurance Company of the Midwest ACE Insurance Company of Texas ACE Indemnity Insurance Company ACE Property and Casualty Insurance Company Allied Insurance Company Atlantic Employers Insurance Company Bankers Standard Fire and Marine Company Bankers Standard Insurance Company Century Indemnity Company Illinois Union Insurance Company INA Surplus Insurance Company Indemnity Insurance Company of North America Industrial Underwriters Insurance Company Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company ESIS, Inc. DC 196161.1 05473 00718 7/04 • ACE USA General Liability Policy - Declarations ❑ Bankers Standard Insurance Company 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 ❑ Century Indemnity Company 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 ❑ ACE Fire Underwriters Insurance Company 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 Z ACE American Insurance Company 1601 Chestnut Street, P.O. Box 41484 City of Fayetteville 113 W. Mountain Street Fayetteville, AR 72701-6083 NAMED INSURED IS BUSINESS OF INSURED POLICY PERIOD Municipality Government FROM 01/01/2005 ❑ ACE Property and Casualty Insurance Company 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 ❑ Indemnity Insurance Company of North America 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 ❑ Insurance Company of North America 1601 Chestnut Street, P.O. Box 41484 Philadelphia, Pennsylvania 19101-1484 ❑ Pacific Employers Insurance Company 1601 Chestnut Street, P.O. Box 41484 POLICY IDENTIFICATION OCP G2171513A OCP G21707016 TO 01/01/2006 PREMIUM PAYMENT CONDITIONS AUDIT PERIOD Not Auditable PAYMENT FREQUENCY : Annual PAYMENT SCHEDULE Annual TOTAL ADVANCE PREMIUM: $ Included in HDO G21712978 PREMIUMS RESULTING FROM AUDIT ARE NOT INCLUDED IN THE ABOVE. LD-BE00b (8/96) Printed in the U.S.A. • POLICY mETiTWIC TION DECLARATIONS - GENERAL LIABILITY POLICY Page 2 OCP G2171513A COVERAGES AND LIMITS OF INSURANCE In return for the payment of premium indicated above, we agree with you to provide the following coverage(s) at the limits shown, subject to all of the terms and conditions of this policy. Coverage Form: Limits of Insurance Owners and Contractors Protective Liability Aggregate Limit $ 2,000,000 Each Occurrence Limit $ 2,000,000 Deductible Amount (this reduces the Limit of Insurance shown as $ applicable to each "Occurrence") CONTRACTOR INFORMATION Description of Operations: Collection of residential and commercial refuse and residential and commercial collection of recycled items compost and/or sludge. Name and Address of Designated Contractor: Waste Management, Inc. 1001 Fannin Street, Suite 4000 Houston, TX 77002 Name and Address of involved Governmental Authority or other contracting party (if applicable): SCHEDULE OF LOCATIONS LOCATION NUMBER AND ADDRESS City of Fayetteville 113 W. Mountain Street Fayetteville, AR 72701-6083 LD-2478 (Ed. 3/87) Printed in U.S.A. POLICY IDENTIFICATION DECLARATIONS - GENERAL LIABILITY POLICY Page 3 OCP G2171513A SCHEDULE OF COVERAGES COVERAGE PART: Location Class Code/ Premium Number Coverage Classification Description Basis Exposure Rate Premium 1 OCP 16291 $ $Inc1. $ $ TOTAL PREMIUM FOR THIS COVERAGE PART $ Incl. When used as a premium basis the following code definitions apply: A - Area - Per 1,000 square feet of area O - Other C - Total Cost - per $1,000 of total cost P - Payroll — per $1,000 of payroll D - If Any S - Gross Sales - per $1,000 of Gross Sales E - Admissions - per 1,000 admissions U - Units F - Flat Charge X - Each J - Total Operating Expenditures — per $1,000 of Expenditures LD-2D51a (Ed. 3/87) Printed in U.S.A. AA067271a W riJCV IDENTIFICATION DECLARATIONS — GENERAL LIABILITY POLICY Page 4 ocP G2171513A FORMS AND ENDORSEMENTS (Page 1 of 1) FORMS AND ENDORSEMENTS ATTACHED TO THIS POLICY AT INCEPTION SCHEDULE OF COVERAGE PARTS CC00091001 Owners and Contractors Protective Liability Coverage Form - Coverage for Operations of Designated Contractor SCHEDULE OF Endt. No. Form No. Description 1. LD7F23 Absolute Pollution Exclusion 2. LD3R16 Exclusion - Asbestos 3. LD4S35 Exclusion - Lead 4. IL00210504 Nuclear Energy Liability Exclusion Endorsement (Broad Form) 5. TRIAl2 Policyholder Disclosure Notice of Terrorism Insurance Coverage 6. CG29230490 Arkansas Changes This declaration and the coverage form(s) and endorsements, if any, listed above and attached, completes this policy. COUNTERSIGNED AT: AUTHORIZED AGENT):- "-R 4CZet ; DATE: LD-2A48a (Ed. 3/87) Printed in U.S.A. AA 067266a C-1 • POLICY NUMBER: OCP G2171513A COMMERCIAL GENERAL LIABILITY CG 00 09 10 01 OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM - COVERAGE FOR OPERATIONS OF DESIGNATED CONTRACTOR Various provisions of this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the Company providing this insurance. The word "insured" means any person or organization qualifying as such under Section II — Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section V — Definitions. SECTION I - COVERAGES BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section III — Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments. b. This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" and arises out of: (a) Operations performed for you by the "contractor" at the location specified in the Declarations; or (b) Your acts or omissions in connection with the general supervision of such operations; (2) The "bodily injury" or "property damage" occurs during the policy period; and (3) Prior to the policy period, no insured listed under Paragraph 1. of Section II — Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. c. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II — Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim, includes any continuation, change or resumption of that "bodily injury" or "property damage" after the end of the policy period. CG 00 09 10 01 © ISO Properties, Inc., 2000 Page 1 of 9 O F 0 d. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II — Who Is An Insured or any "employee" authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; (2) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or (3) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur. e. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". Exclusions This insurance does not apply to: a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. b. Contractual Liability "Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement; or (2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract", reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage", provided: (a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract"; and (b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. c. Work Completed Or Put To Intended Use "Bodily injury" or "property damage" which occurs after the earlier of the following times: (1) When all "work" on the project (other than service, maintenance or repairs) to be performed for you by the "contractor" at the site of the covered operations has been completed; or (2) When that portion of the "contractor's" "work", out of which the injury or damage arises, has been put to its intended use by any person or organization, other than another contractor or subcontractor working directly or indirectly for the "contractor" or as part of the same project. d. Acts Or Omissions By You And Your Employees "Bodily injury" or "property damage" arising out of your, or your "employees", acts or omissions other than general supervision of "work" performed for you by the "contractor". e. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. f. Employer's Liability "Bodily injury" to: (1) An "employee" of the insured arising out of and in the course of: (a) Employment by the insured; or (b) Performing duties related to the conduct of the insured's business; or (2) The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph (1) above. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". Page 2 of 9 © ISO Properties, Inc., 2000 CG 00 09 10 01 O C rn g. Damage To Property (c) Which are or were at any time "Property damage" to: transported, handled, stored, treated, disposed of, or processed as waste by (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or or for: any other person, organization or entity, for (i) Any insured; or repair, replacement, enhancement, (ii) Any person or organization for whom restoration or maintenance of such property you may be legally responsible; or for any reason, including prevention of (d) At or from any premises, site or location injury to a person or damage to another's on which any insured or any contractors property; or subcontractors working directly or (2) Property loaned to you; indirectly on any insured's behalf are (3) Personal property in the care, custody or performing operations if the "pollutants" control of the insured; or are brought on or to the premises, site or location in connection with such (4) "Work" performed for you by the operations by such insured, contractor "contractor". or subcontractor. However, this h. War subparagraph does not apply to: "Bodily injury" or "property damage" due to (i) "Bodily injury" or "property damage" war, whether or not declared, or any act or arising out of the escape of fuels, condition incident to war. War includes civil lubricants or other operating fluids war, insurrection, rebellion or revolution. This which are needed to perform the exclusion applies only to: normal electrical, hydraulic or (1) Liability assumed under an "insured the operation of mechanical functions le equipment" contract"; or or its parts, if such fuels, lubricants (2) Expenses for first aid. or other operating fluids escape from i. Mobile Equipment a vehicle part designed to hold, store or receive them. This exception does "Bodily injury" or "property damage" arising out or of the use of "mobile equipment" in, or while in not apply if the "bodilyproperty damage" arises ey injury" out of the e practice for, or while being prepared for, any prearranged racing, speed, demolition, or intentional discharge, dispersal or stunting activity. release of the fuels, lubricants or other operating fluids, or if such j. Pollution fuels, lubricants or other operating (1) "Bodily injury" or "property damage" arising fluids are brought on or to the out of the actual, alleged or threatened premises, site or location with the discharge, dispersal, seepage, migration, intent that they be discharged, release or escape of "pollutants": dispersed or released as part of the operations being performed by such (a) At or from any premises, site or location insured, contractor or subcontractor; which is or was at any time owned or occupied by, or rented or loaned to, any (ii) "Bodily injury" or "property damage" insured. However, this subparagraph sustained within a building and does not apply to: caused by the release of gases, fumes or vapors from materials (i) "Bodily injury" if sustained within a brought into that building in building and caused by smoke, connection with operations being fumes, vapor or soot from equipment performed by or on behalf of any used to heat that building; insured; or "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; (b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; (iii) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire". CG 00 09 10 01 © ISO Properties, Inc., 2000 Page 3 of 9 O I (e) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants". (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants"; or (b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of "pollutants". However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority. k. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "work" performed for you by the "contractor" or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "work" performed for you by the "contractor". SUPPLEMENTARY PAYMENTS We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend: a. All expenses we incur. b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which this insurance applies. We do not have to furnish these bonds. c. The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work. e. All costs taxed against the insured in the "suit". f. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. g. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. h. Expenses incurred by the insured for first aid administered to others at the time of an accident, for "bodily injury" to which this insurance applies. These payments will not reduce the limits of insurance. 2. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: a. The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; b. This insurance applies to such liability assumed by the insured; C. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract"; d. The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee; e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and Page 4 of 9 © ISO Properties, Inc., 2000 CG 00 09 10 01 O I f. The indemnitee: (1) Agrees in writing to: (a) Cooperate with us in the investigation, settlement or defense of the "suit"; (b) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit'; (c) Notify any other insurer whose coverage is available to the indemnitee; and (d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (2) Provides us with written authorization to: (a) Obtain records and other information related to the "suit": and (b) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b.(2) of Section I — Coverages — Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the limits of insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys fees and necessary litigation expenses as Supplementary Payments ends when: a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met. SECTION II - WHO IS AN INSURED 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to their duties as partners or members of a joint venture. c. A limited liability company, you are an insured. Your members are also insureds, but only with respect to their duties as members of a limited liability company. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. 2. Each of the following is also an insured: a. Any person (other than your "employee") or any organization while acting as your real estate manager. b. Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property; and (2) Until your legal representative has been appointed. c. Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this Coverage Part. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. SECTION III - LIMITS OF INSURANCE 1. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. The Aggregate Limit is the most we will pay for the sum of damages because of all "bodily injury" and "property damage". 3. Subject to 2. above, the Each Occurrence Limit is the most we will pay for the sum of damages because of all "bodily injury" and "property damage" arising out of any one "occurrence". If you designate more than one project in the Declarations, the Aggregate Limit shall apply separately to each project. CG 00 09 10 01 © ISO Properties, Inc., 2000 Page 5 of 9 O • The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. SECTION IV - CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Cancellation a. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation. b. We may cancel this policy by mailing or delivering to the first Named Insured and the "contractor" written notice of cancellation at least: (1) 10 days before the effective date of cancellation if we cancel for non-payment of premium; or (2) 30 , days before the effective date of cancellation if we cancel for any other reason. c. We will mail ordeliverour notices to the first Named Insured's and the "contractor's" last mailing address known to us. d. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date. e. If this policy is cancelled, we will send the "contractor" any premium refund due. If we cancel, the refund will be pro rata. If the first Named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. f. If notice is mailed, proof of mailing will be sufficient proof of notice. 3. Changes This policy contains all the agreements between you, the "contractor" and us concerning the insurance afforded. The first Named Insured shown in the Declarations and the "contractor" are authorized to make changes in the terms of this policy with our consent. This policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy. 4. Duties In The Event Of Occurrence, Claim Or Suit a. You must see to it that we are notified as soon as practicable of an "occurrence" which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence". b. If a claim is made or "suit" is brought against any insured, you must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You must see to it that we receive written notice of the claim or "suit" as soon as practicable. c. You and any other involved insured must: (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit" (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply. d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. 5. Examination Of Your Books And Records We may examine and audit your books and records as well as the "contractor's" books and records as they relate to this policy at any time during the policy period and up to three years afterward. 6. Inspections And Surveys a. We have the right to: (1) Make inspections and surveys at any time; (2) Give you reports on the conditions we find; and (3) Recommend changes. Page 6 of 9 © ISO Properties, Inc., 2000 CG 00 09 10 01 O b. We are not obligated to make any inspections, surveys, reports or recommendations and any such actions we do undertake relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. And we do not warrant that conditions: (1) Are safe or healthful; or (2) Comply with laws, regulations, codes or standards. c. Paragraphs a. and b. of this condition apply not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. d. Paragraph b. of this condition does not apply to any inspections, surveys, reports or recommendations we may make relative to certification, under state or municipal statutes, ordinances or regulations, of boilers, pressure vessels or elevators. 7. Legal Action Against Us No person or organization has a right under this Coverage Part: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Part unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 8. Other Insurance The insurance afforded by this Coverage Part is primary insurance and we will not seek contribution from any other insurance available to you unless the other insurance is provided by a contractor other than the designated "contractor" for the same operation and job location designated in the Declarations. Then we will share with that other insurance by the method described below. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 9. Premiums The "contractor": a. Is responsible for the payment of all premiums; and b. Will be the payee for any return premiums we pay. 10.Premium Audit a. We will compute all premiums for this Coverage Part in accordance with our rules and rates. b. Premium shown in this Coverage Part as advance premium is a deposit premium only. At the close of each audit period we will compute the earned premium for that period and send notice to the "contractor". The due date for audit and retrospective premiums is the date shown as the due date on the bill. If the sum of the advance and audit premiums paid for the policy period is greater than the earned premium, we will return the excess to the "contractor". c. The "contractor" must keep records of the information we need for premium computation, and send us copies at such times as we may request. 11. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom claim is made or "suit" is brought. 12. Transfer Of Rights Of Recovery Against Others To Us If the insured has rights to recover all or part of any payment we have made under this Coverage Part those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. If all of the other insurance permits contribution by 13. When We Do Not Renew equal shares, we will follow this method also. If we decide not to renew this Coverage Part, we Under this approach, each insurer contributes will mail or deliver to the first Named Insured equal amounts until it has paid its applicable limit shown in the Declarations written notice of the of insurance or none of the loss remains, nonrenewal not less than 30 days before the whichever comes first. expiration date. CO 00 09 10 01 © ISO Properties, Inc., 2000 Page 7 of 9 O L I If notice is mailed, proof of mailing will be sufficient proof of notice. SECTION V — DEFINITIONS 1. "Auto" means a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment". 2. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. 3. "Contractor" means the contractor designated in the Declarations. 4. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker". 5. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document. 6. "Hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 7. "Impaired property" means tangible property, other than work performed for you, that cannot be used or is less useful because: a. It incorporates work performed for you that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of the work performed for you; or b. Your fulfilling the terms of the contract or agreement. 8. "Insured contract" means: a. A lease of premises; b. A sidetrack agreement; c. Any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad; d. An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; or e. An elevator maintenance agreement. 9. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker". 10."Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment: a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; b. Vehicles maintained for use solely on or next to premises you own or rent; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted: (1) Power cranes, shovels, loaders, diggers or drills; or (2) Road construction or resurfacing equipment such as graders, scrapers or rollers; e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: (1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) Cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., C. or d. above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": (1) Equipment designed primarily for: (a) Snow removal; (b) Road maintenance, but not construction or resurfacing; or (c) Street cleaning; (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 11."Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 12."Pollutants" mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 13. "Property damage" means: Page 8 of 9 © ISO Properties, Inc., 2000 CG 00 09 10 01 O n a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. For the purposes of this insurance, electronic data is not tangible property. As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from, computer software, including systems and applications software, hard or floppy disks, CD- ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 14."Suit" means a civil proceeding, brought in the United States of America (including its territories and possessions), Puerto Rico or Canada, in which damages because of "bodily injury" or "property damage" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 15."Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short- term workload conditions. 16."Work" includes materials, parts or equipment furnished in connection with the operations. CG 00 09 10 01 © ISO Properties, Inc., 2000 Page 9 of 9 O POLICY NUMBER: OCP G2171513A • . ENDT. #1 ABSOLUTE POLLUTION EXCLUSION Named Insured City of Fayetteville Endorsement Number 1 Policy Symbol Policy Number Policy Period Effective Date of Endorsement OCP G2171513A 01/01/2005 to 01/01/2006 01/01/2005 Issued By (Name of Insurance Company) ACE American Insurance Company Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement replaced any pollution exclusion and amends all insurance provided under the following: COMMERCIAL GENERAL LIABILITY FORM FARM COVERAGE FORM OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM RAILROAD PROTECTIVE LIABILITY COVERAGE FORM SPECIAL PROTECTIVE AND HIGHWAY LIABILITY POLICY - NEW YORK This insurance does not apply to any injury, damage, expense, cost, loss, liability or legal obligation arising out of or in any way related to pollution, however caused. Pollution includes the actual, alleged or potential presence in or introduction into the environment of any substance if such substance has, or is alleged to have, the effect of making the environment impure, harmful, or dangerous. Environment includes any air, land, structure or the air therein, watercourse or water, including underground water. We shall have no duty to defend any suit arising out of or in any way related to pollution. LD-7F23 (Ed. 3/91) Ptd. In U.S.A. POLICY NUMBER: OCP G2171513A • • ENDT. #2 EXCLUSION - ASBESTOS Named Insured City of Fayetteville Endorsement Number 2 Policy Symbol Policy Number Policy Period Eff. Date of Endorsement OCP G2171513A 01/01/2005 to 01/01/2006 01/01/2005 Issued By (Name of Insurance Company) ACE American Insurance Company is THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM FARM COVERAGE FORM LIQUOR LIABILITY COVERAGE FORM OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM POLLUTION LIABILITY COVERAGE FORM PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM RAILROAD PROTECTIVE LIABILITY COVERAGE FORM SPECIAL PROTECTIVE AND HIGHWAY LIABILITY POLICY - NEW YORK This insurance does not apply to any loss, demand, claim or "suit" arising out of or related in any way to asbestos or asbestos -containing materials. 4d.a _ems - '-- Authorized Agent LD-3R16 (Ed. 3/87) Printed in U.S.A. Reprinted in part with permission of Insurance Service Office, Inc., 1985 POLICY NUMBER: OCP G2171513A • • ENDT. #3 EXCLUSION - LEAD Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY FORM FARM COVERAGE FORM OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE FORM PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE FORM RAILROAD PROTECTIVE LIABILITY COVERAGE FORM SPECIAL PROTECTIVE AND HIGHWAY LIABILITY POLICY - NEW YORK THE COMBINE POLICY - SECTION II COMMERCIAL FARM POLICY - SECTION II FARMERS PACKAGE POLICY - SECTION II This insurance does not apply to, and we shall have no duty of any kind with respect to, any injury, damage, expense, cost, loss, liability or legal obligation arising out of or allegedly arising out of or in any way related to the toxic properties of lead or lead -containing products, materials or substances. This exclusion applies to all forms of lead, including but not limited to solid, liquid, vapor and fumes. This exclusion applies, but is not limited, to any injury, damage, expense, cost, loss, liability or legal obligation to test for, monitor, abate, remove, or take any other remedial action with respect to lead or lead -containing products, materials or substances. The addition of this endorsement does not imply that other policy provisions, including but not limited to any pollution exclusion, do not also exclude coverage for lead -related injury, damage, expense, cost, loss, liability or legal obligation. Authorized Agent Named Insured City of Fayetteville Endorsement Number 3 Policy Symbol Policy Number Policy Period Effective Date of Endorsement OCP G2171513A 01/01/2005 to 01/01/2006 01/01/2005 Issued By (Name of Insurance company ACE American Insurance Company LD-4S35 (Ed. 6/92) Ptd. In U.S.A. I POLICY NUMBER: OCP G2171513A ENDT. #6 COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ARKANSAS CHANGES This endorsement modifies insurance provided under the following: OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART SCHEDULE Minimum Premium: (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) A. Paragraph e. of the Cancellation Condition is B. The following is added to the Cancellation replaced by the following: Condition (Section I V): e. (1) If this policy is cancelled, we will send the g. Cancellation of Policies in Effect More Than "contractor" any premium refund due. 60 Days. (2) We will refund the pro rata unearned (1) If this policy has been in effect more than premium if the policy is: 60 days or is a renewal policy, we may (a) Cancelled by us or at our request; cancel only for one or more of the following reasons: (b) Cancelled but rewritten with us or in our (a) Nonpayment of premium; company group; (c) Cancelled because you no longer have (b) Fraud or material misrepresentation an insurable interest in the property or made by you or with your knowledge in business operation that is the subject of obtaining the policy, continuing the this insurance; or policy or in presenting a claim under the (d) Cancelled after the first year of a policy; prepaid policy that was written for a term (c) The occurrence of a material change in of more than one year. the risk which substantially increases any hazard insured against after policy (3) If the policy is cancelled at the request of issuance; the first Named Insured or the "contractor," (d) Violation of any local fire, health, safety, other than a cancellation described in (2) (b), (c) or (d) above, we will refund 90% of building or construction regulation or the pro rata unearned premium. However, ordinance with respect to any insured the refund will be less than 90% of the pro property or its occupancy which rata unearned premium if the refund of such substantially increases any hazard amount would reduce the premium retained insured against under the policy; by us to an amount less than the minimum (e) Nonpayment of membership dues in premium for this policy, those cases where our by-laws, (4) The cancellation will be effective even if we agreements or other legal instruments have not made or offered a refund. require payment as a condition of the issuance and maintenance of the policy; (5) If the first Named Insured or the or contractor cancels this policy, we will retain the minimum premium shown in the (f) A material violation of a material Schedule. provision of the policy. CG 29 23 04 90 Copyright, Insurance Services Office, Inc., 1990 Page 1 of 2 O E L (2) If we cancel for nonpayment of premium, we will mail or deliver written notice of cancellation, stating the reason for cancellation, to the first Named Insured and the "contractor" at least 10 days before the effective date of cancellation. If we cancel for any other reason, we will mail or deliver notice of cancellation to the first Named Insured and the "contractor" at least 20 days prior to the effective date of cancellation. C. The following is added to CONDITIONS (Section IV): 13. Multi -Year Policies We may issue this policy for a term in excess of twelve months with the premium adjusted on an annual basis in accordance with our rates and rules. Page 2 of 2 Copyright, Insurance Services Office, Inc., 1990 CG 29 23 04 90 O POLICY NUMBER: OCP G2171513A ENDT. #4 INTERLINE IL 00 21 05 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT (Broad Form) This endorsement modifies insurance provided under the following: COMMERCIAL AUTOMOBILE COVERAGE PART COMMERCIAL GENERAL LIABILITY COVERAGE PART FARM COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART POLLUTION LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART PROFESSIONAL LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART 1. The insurance does not apply: A. Under any Liability Coverage, to "bodily injury" or "property damage": (1) With respect to which an "insured" under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters, Nuclear Insurance Association of Canada or any of their successors, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or (2) Resulting from the "hazardous properties" of "nuclear material" and with respect to which (a) any person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof, or (b) the "insured" is, or had this policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America, or any agency thereof, with any person or organization. B. Under any Medical Payments coverage, to expenses incurred with respect to "bodily injury" resulting from the "hazardous properties" of "nuclear material" and arising out of the operation of a "nuclear facility" by any person or organization. C. Under any Liability Coverage, to "bodily injury" or "property damage" resulting from "hazardous properties" of "nuclear material", if: (1) The "nuclear material" (a) is at any "nuclear facility" owned by, or operated by or on behalf of, an "insured" or (b) has been discharged or dispersed therefrom; (2) The "nuclear material" is contained in "spent fuel" or "waste" at any time possessed, handled, used, processed, stored, transported or disposed of, by or on behalf of an "insured"; or (3) The "bodily injury" or "property damage" arises out of the furnishing by an "insured" of services, materials, parts or equipment in connection with the planning, construction, maintenance, operation or use of any "nuclear facility", but if such facility is located within the United States of America, its territories or possessions or Canada, this exclusion (3) applies only to "property damage" to such "nuclear facility" and any property thereat. IL 00 21 05 04 © ISO Properties, Inc., 2001 Page 1 of 2 O 2. As used in this endorsement: "Hazardous properties" includes radioactive, toxic or explosive properties; "Nuclear material" means "source material", "Special nuclear material" or "by-product material"; "Source material", "special nuclear material," and "by-product material" have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; "Spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor"; "Waste" means any waste material (a) containing "by-product material" other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed primarily for its "source material" content, and (b) resulting from the operation by any person or organization of any "nuclear facility" included under the first two paragraphs of the definition of "nuclear facility". "Nuclear facility" means: (a) Any "nuclear reactor", (b) Any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing "spent fuel", or (3) handling, processing or packaging "waste"; (c) Any equipment or device used for the processing, fabricating or alloying of "special nuclear material" if at any time the total amount of such material in the custody of the "insured" at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235; (d) Any structure, basin, excavation, premises or place prepared or used for the storage or disposal of "waste": and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations; "Nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a self- supporting. chain reaction or to contain a critical mass of fissionable material; "Property damage" includes all forms of radioactive contamination of property. Page 2 of 2 © ISO Properties, Inc., 2001 IL 00 21 0504 O POLICY NUMBER: OCP G2171513A • • ENDT. #5 POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE Named Insured Endorsement Number City of Fayetteville 5 Policy Symbol Policy Number Policy Period Effective Date of Endorsement OCP G2171513A 01/01/2005 to 01/01/2006 01/01/2005 Issued By (Name of Insurance Company) ACE American Insurance Company The remainder THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. You should be aware that under the Terrorism Risk Insurance Act of 2002 ("The Act") effective November 26, 2002, any losses caused by certified acts of terrorism under your existing coverage may be partially reimbursed by the United States under a formula established by federal law (applicability is subject to the terms and conditions of each individual policy). The Act was specifically designed to address the ability of businesses and individuals to obtain property and casualty insurance for terrorism and to protect consumers by addressing market disruptions and ensure the continued availability of terrorism coverage. Under the terms of The Act, you may now have the right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States -to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property; or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Responsibility for Compensation under The Act is shared between insurance companies covered by The Act and the United States. Under the formula set forth in The Act, the United States pays 90% of covered terrorism losses exceeding the statutorily established deductible, which is paid by the insurance company providing the coverage. We are providing you with the terrorism coverage required by The Act. We have not established a separate price for this coverage; however the portion of your annual premium that is reasonably attributable to such coverage is: $ * *Included in HDO G21712978 aat:ia ef.i�• ✓V_ �4 Authorized Agent SIGNATURES Named Insured Endorsement Number Policy Symbol Policy Number Policy Period to Effective Date of Endorsement Issued By (Name of Insurance Company) Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the THE ONLY SIGNATURES APPLICABLE TO THIS POLICY ARE THOSE REPRESENTING THE COMPANY NAMED ON THE FIRST PAGE OF THE DECLARATIONS. By signing and delivering the policy to you, we state that it is a valid contract. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 1 91 01-1 484 BANKERS STANDARD FIRE AND MARINE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 BANKERS STANDARD INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 1 91 01-1 484 ACE INDEMNITY INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 1 91 01-1 484 ACE AMERICAN INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 ACE PROPERTY AND CASUALTY INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 INSURANCE COMPANY OF NORTH AMERICA 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 PACIFIC EMPLOYERS INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 ACE FIRE UNDERWRITERS INSURANCE COMPANY 1601 Chestnut Street, P.O. Box 41484, Philadelphia, Pennsylvania 19101-1484 " GE GE D. MULLIGAN. Secretary 6•i.` — SUSAN RIVERA. President WESTCHESTER FIRE INSURANCE COMPANY 1133 Avenue of the Americas, 32nd Floor, New York, NY 10036 /y! �/ ��yw•—•••T�/E D. MULLIGAN. Secrelar dGEDNG BRIAN E. D0W0. President Authorized Agent CC -1 K11 d (04/02) Ptd. in U.S.A.