R2001-199 AUTHORIZING AGREEMENT - Laserfiche WebLink

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�,. . . LEGAL DEPARTMENT MEMORANDUM No. 2001-21 November 1, 2001 TO: Honorable Mayor and City Council Members FROM: Steve Ga City Manager John W. C er, Corporation Counsel RE: ADM -North Water Treatment Plant SUMMARY RECOMMENDATION: Council should approve amendments to the sales agreements with ADM concerning the North Water Treatment Plant ("NWTP"), thereby permitting the transaction to be completed. BACKGROUND: In January of 1999, the City Council approved the sale of the NWTP to ADM. The terms and conditions of the sale were contained in two (2) different agreements: (1) a "purchase" agreement, concerned primarily with the sale, and (2) a "raw water" agreement, which dealt with the use of raw water from Lake Decatur by ADM in the operation of the NWTP after purchase. At that time, it was contemplated that the sale would be completed no later than May 1, 1999. Subsequent to the signing of the "purchase" agreement, ADM found that it would take longer than anticipated to modify the NWTP to meet its needs. Accordingly, both parties agreed to extend the date for closing until these modifications were complete. ADM has now informed the City that these changes have been made, and ADM is prepared to finalize the purchase. The parties have tentatively agreed on November 8 as the date of closing, after which ADM will be the owner and operator of the NWTP. During the two (2) years in which ADM has been involved in modifying the NWTP, it became clear to both parties that certain terms of the original "purchase" and "raw water" agreements would need to be changed. In part, this was due to the mere passage of time, making some of the ariginal terms no longer workable, and in part it was due to increased awareness on , the part of each party. as to what was necessary for its respective operation. Negotiations commenced over these matters, and earlier this year agreement was reached between ADM and City staff. These amendments are presented to the Council, and staff recommends their approval. In essence, these amendments clarify ADM's rights regarding the quality of water that ADM is permitted to produce - ADM stated that it was absolutely necessary that it be able to produce industrial quality and potable water for its operations, and these amendments clarify that right. In addition, billing procedures were modified so that ADM is billed only for water