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HomeMy WebLinkAboutESG OPERATIONS AGREEMENT for OPERATIONS, MAINTENANCE AND MANAGEMENT SERVICES for AUGUSTA, GEORGIA THIS AGREEMENT is made on this ~"day of December, 2009; between AUGUSTA, GEORGIA, by and through the Augusta-Richmond County Commission, a political subdivision of the State of Georgia (hereinafter "Augusta"), and ESG OPERATIONS, INC., a Georgia corporation, (hereinafter "ESG"). Augusta and ESG, for and in consideration of the mutual covenants, agreements and promises as hereinafter set forth, do hereby agree and contract as follows: 1. GENERAL 1.1 All definitions of words or phrases used in this Agreement are contained in Appendix A which is herewith incorporated by reference and made a part hereof. 1.2 All grounds, facilities, equipment, and vehicles owned by Augusta as of the date of this Agreement or acquired by Augusta during the term of this Agreement shall remain the property of Augusta. 1.3 This Agreement shall be governed by and interpreted in accordance with the laws of the State of Georgia. 1.4 This Agreement shall be binding upon the successors and assigns of each of the parties, but neither party will assign this Agreement without the prior written consent of the remaining party to this Agreement. Consent concerning a proposed assignment shall not be unreasonably withheld. 1.5 All notices required or permitted to be made under this Agreement shall be in writing, signed by the party giving such notice, and delivered personally, sent by certified mail or sent by overnight mail to the other party at the address set forth below, or at such other address as the other party may hereafter designate in writing. City of Augusta City Administrator, 530 Greene Street, Room 801, Augusta, GA 30911 Utilities Director, 360 Bay St, Suite 180, Augusta, GA 30901 ESG Operations, Inc., 6400 Peake Road, Macon, Georgia 31210 Page 1 of 23 1.6 This Agreement, including Appendices, is the entire Agreement of the parties. This Agreement may be modified only by written agreement signed by both parties. Wherever used, the terms "ESG" and "Augusta" shall include the respective officers, agents, directors, elected or appointed officials, and employees. 2. ESG's SCOPE OF SERVICES ESG shall, pursuant to the terms and conditions of this Agreement, perform the following services as may be related to the Project (collectively the "Scope of Services"): 2.1 Operate and maintain the Project over a 24-hour per day, seven-day per week period, under full-service contract operations and maintenance. The agreed on initial budgeted staffing levels to provide adequate operation and maintenance of the Project is identified in Appendix F. The Messerly facility shall be staffed continuously; however, ESG may utilize off-site staff to meet staffing requirements regarding the remaining Project facilities. ESG shall make every reasonable effort to maintain the agreed to staffing levels, but will not be in breach of this agreement for mutually-agreed upon deviations in actual staffing, or for short term fluctuations due to the time required to hire replacement employees. ESG and Augusta acknowledge that staffing for the Project may require modification due to changes in the requirements of proper operation and the services to be provided pursuant to the terms of this Agreement. Following the initial six (6) months of this Agreement, ESG may, at any time during the term of this Agreement, recommend an alteration in staffing for consideration and approval by Augusta. 2.2 Staff the Project with qualified personnel, inclusive of management, administrative, operational, technical, laboratory and clerical, who meet the applicable certification requirements of the State of Georgia as may be specifically related to the Project tasks performed by each such employee. ESG staff shall be capable and demonstrate the necessary experience to operate and maintain the Project. 2.3 Provide a minimum of 26 hours per year per employee (prorated for those not working a full year) of training for personnel in areas of operation, maintenance, and safety, with additional training as appropriate for professional and specific skills development. 2.4 Augusta shall have the right to approve each and every resident Project Manager that ESG assigns to direct the management, operation and maintenance of the Project. The initial Project Manager shall be Paul Tickerhoof. ESG agrees not to reassign the initial Project Manager for at least the initial three years of this Agreement, unless directed or agreed by Augusta. Augusta agrees not to unreasonably withhold approval of a proposed Project Manager in the event the initial Project Manager is (a) reassigned by ESG following the completion of the initial three year period; (b) voluntarily terminates his or her employment with ESG; or (c) is terminated by ESG. 2.5 Within the design capacity and capability of the Messerly WPCP, Spirit Creek WPCP and Spirit Creek Pump Station facilities, manage, operate, and maintain said facilities in full compliance with the requirements of the applicable NPDES permit for each facility Page 2 of23 and all applicable federal, state and local laws or regulations. Meet reporting requirements as provided by all applicable laws and regulations concerning the operation, management and maintenance of the Messerly and Spirit Creek facilities. 2.6 The Messerly and Spirit Creek facilities shall be operated in a manner that effectively controls odor and noise so that no avoidable disruption of adjacent neighborhoods or businesses results. 2.7 Provide for monitoring and control of septage deliveries as provided by Augusta's applicable sewer use ordinance. 2.8 Provide for the collection and hauling of screenings, grit, sludge and scum ("Waste") to Augusta's existing or approved disposal sites. All Waste and/or byproduct generated during ESG's performance of services are and shall remain the sole and exclusive property of the Augusta. All manifests or other documentation required for disposal of Waste shall be signed by or in the name of Augusta. 2.9 Effective January 1, 2010 provide for the disposal of sludges and biosolids to disposal utilization sites consistent with industry-accepted management practices. ESG will maintain adequate records regarding disposal or utilization of residuals and make reasonable efforts to minimize associated cost. Any permits for sludge disposal or utilization shall remain in the name of Augusta. 2.9.1 Industry accepted management practices shall include, but shall not be limited to, the following: 2.9.1.1 General. ESG shall be responsible for removing sludges and biosolids from the Messerly facility for transporting said sludges and biosolids to destination points at approved sites, and for applying the biosolids to Approved sites in an approved manner. ESG shall be responsible for acquiring, operating, and maintaining all equipment, and for providing sufficient, trained personnel required for its operations described herein. 2.9.1.2 Utilization at Approved Sites. ESG shall: 2.9.1.2.1 Arrange for utilization of all of the biosolids on approved sites. ESG acknowledges that Augusta currently has contracts in place for the utilization of biosolids on certain sites within Richmond County, Burke County, and Jefferson County, Georgia, which sites shall be Approved sites. ESG agrees to continue the utilization of biosolids on said sites, and to comply with all terms and conditions contained in those existing contracts. Owner and ESG may open new sites with the mutual consent of the parties, which sites will then become Approved sites. In such instance, ESG and Owner shall collaborate in negotiating contracts acceptable to Augusta for the utilization ofbiosolids on the site, for Page 3 of23 executing any and all contacts required for use of any approved site and in advance of utilization, obtain all permits; provided, however, that any such permits shall be in the name of Augusta, Georgia. Augusta may, in its sole discretion, direct ESG to develop and use a particular site as an Approved site, pending necessary regulatory and/or landowner approval. Any such directive shall comply with all applicable environmental laws and all other applicable laws. Such agreements shall be between Augusta and the site owners. 2.9.1.2.2 Obtain, when contracting for the use of any approved site, the long-term, continued right of ingress and egress by Augusta for the purpose of testing and monitoring each approved site to review compliance by ESG with all federal, state, and local Environmental Laws. 2.9.1.2.3 Not place, hold, locate, release or dispose of, or knowingly permit others to place, hold, locate, release, or dispose of, any hazardous substance, hazardous waste, or other toxic substance on, under or at any Approved site. 2.9.2 Utilization of Biosolids. ESG shall dispose of and utilize the biosolids in accordance with the Rules of the Georgia Environmental Protection Division, Chapter 391-3-4, all Federal Statutes, rules, and regulations, including without limitation 40 CFR Part 503, and all applicable State and local statutes, rules and regulations. 2.9.3 Equipment and Vehicles. ESG shall be responsible for providing all equipment and vehicles necessary to remove, transport, and utilize the biosolids without unreasonable interruption of operation due, for example, to breakdown or in operation of such equipment and vehicles. ESG will maintain all of its equipment and vehicles, including any which are leased by ESG, in good working order and clean, free from any buildup of mud, dirt, rock, gravel and other sediment. ESG shall take every precaution reasonably necessary to prevent its equipment and vehicles from depositing Biosolids, mud, dirt, rock, gravel or other sediment on public roadways or rights-of-way. 2.9.3.1 ESG further acknowledges and agrees that it is responsible for procuring any and all licenses and permits, and making all filings with the State of Georgia and/or other applicable regulatory authorities, necessary in connection with operation of the vehicles. 2.9.4 Liming Program. ESG shall operate a liming program in conjunction with the biosolids services to be performed hereunder, as follows: Page 4 of 23 2.9.4.1 ESG shall be responsible for taking annual soil samples of approved sites, and applying lime to said sites in accordance with the results/recommendations of the soil samples. 2.9.4.2 ESG shall not apply, nor invoice Augusta for more lime than is indicated by the soil samples. 2.9.4.3 ESG agrees that it will avoid liming of any approved sites as to which past liming practices have been poor with the intent of this subsection that Augusta not be required to pay for reclamation liming of such sites, but be required to apply only for liming which is part of a soil pH maintenance program. 2.9.5 Federal Permit Requirements. ESG shall abide by all federal rules and regulations governing the land application of wastewater and water residuals. This includes the self-implementing provision of 40 CFR Part 503. ESG shall abide by all federal monitoring and reporting requirements applicable to land appliers. This includes preparation of an annual report to Augusta meeting the monitoring and reporting requirements of 40 CFR Part 503 that are applicable to land application, for submittal by Augusta to Region IV of the EP A. 2.9.6 State Land Application Permit Requirements. ESG shall abide by all requirements and conditions of the State of Georgia Environmental Protection Division Permit No. GA0037621 that are applicable to the land applier for the continued operation of Augusta's wastewater residual land application program. This includes preparation of an annual report to Augusta meeting the monitoring and reporting requirements of State Regulations to land application for submittal by Augusta. 2.9.7 Local Requirements and Issues. ESG shall comply with the following local requirements: 2.9.7.1 ESG shall endeavor to maintain excellent working relationships with the landowners. Periodic work shops shall be held to inform the landowners of the current status of the program and of any changes. 2.9.7.2 ESG shall maintain equipment in a condition that is reasonably acceptable to maintain a positive image for Augusta. 2.9.7.3 ESG shall develop a spill protection plan for transport and land application sites and submit the plan for approval prior to beginning operations. 2.9.7.4 ESG shall inspect ESG's residuals storage, transport, and application facilities to prevent malfunctions and deterioration, operator errors and wastewater residual discharges which may cause or lead or the release of wastes to the environment, a threat to human health, or a nuisance. ESG Page 5 of 23 shall maintain an inspection log or summary including at least the date and time of the inspection, observations made, and any maintenance, repairs, or corrective actions taken by ESG. 2.9.7.5 ESG shall maintain and submit to Owner as requested a 6-month "look ahead" schedule to facilitate communication with program participants regarding potential application dates. This schedule will be updated monthly. 2.9.8 If any part of the work under this Agreement is sublet or if any independent contractor is hired to perform any part of the work under this Agreement, the Subcontractor and/or independent contractor shall be required to meet all insurance requirements set forth in Appendix C to the Agreement dated January 1, 2010, and the provision for Automobile Liability Insurance hereinafter set forth. However, this will in no way relieve ESG from meeting all insurance requirements or otherwise being responsible for the subcontractor and/or independent contractor. 2.9.8.1 Automobile Liability. For each vehicle (whether owned, non-owned or hired) utilized by ESG or any independent contractor or subcontractor working with ESG in the performance of this Agreement, automobile liability insurance must be carried as follows: bodily injury and property damage liability covering all owned, non-owned and hired automobiles for limits of not less than One Million Dollars ($1,000,000) bodily injury each person, each accident and One Million Dollars ($1,000,000) combined single limit bodily injury and property damage. 2.10 Be responsible for maintaining all manufacturers' warranties on new equipment purchased by Augusta for Project use and assist Augusta in enforcing existing warranties and guarantees applicable to equipment in use for the Project as of the effective date of this Agreement. 2.11 Provide Augusta with a schedule for preventive and corrective maintenance on all Augusta owned equipment utilized to execute the Scope of Services to be performed by ESG in accordance with manufacturer's recommendations or good maintenance practices at intervals and in sufficient detail as may be determined by Augusta. Provide Augusta with complete documentation of maintenance performed inclusive of corrective and preventive maintenance and a spare parts inventory. 2.12 Maintain the present industrial waste sampling and laboratory analysis program, as described in the Augusta Pretreatment Ordinance. Results of all industrial sampling and testing shall be reported to Augusta in a timely manner. 2.13 Be responsible for all laboratory testing and sampling required by any current or future NPDES permit for the Project or for any other current or future permits required for the Page 6 of 23 Project, excluding air quality testing except as related to odor control system performance testing 2.14 Prepare state and federal plant performance reports and submit them to Augusta for review and approval prior to transmittal by ESG to appropriate agencies. Any unreasonable costs incurred in preparing said reports on account of an error or omission by ESG shall be borne by ESG and not Augusta. 2.15 Prepare all NPDES permit reports related to the Scope of Services performed by ESG or any report as may be required by any administrative order issued by the Georgia Environmental Protection Division. Any such report shall be submitted to Augusta for approval. ESG shall transmit approved reports to the appropriate agency. In the event a fine is levied as a result of the submission of a late report, ESG shall be responsible for payment of the fine if ESG failed to complete the report, secure Owner approval and file the report in a timely manner. 2.16 Implement and maintain an operator safety program in compliance with all applicable laws, rules and regulations and make recommendations to Augusta regarding the need, if any, for Augusta to rehabilitate, expand or modify the Project to comply with governmental safety regulations applicable to ESG's operations hereunder. 2.17 Develop and implement an Emergency Response Plan (ERP) on or before April 1 S\ 2010. The ERP shall be submitted to Augusta for approval prior to implementation. Approval by Augusta of the ERP shall not be unreasonably withheld. 2.18 Provide an inventory of equipment, chemicals and lubricants as set forth in Appendix D that are presently being used for the Project as of the Effective Date of this Agreement. Such inventory shall be provided on an annual basis to Augusta at the conclusion of each contract year. 2.19 Provide and document all chemicals for the Project. Provide Augusta with an accounting of actual chemical expenditures and consumption on not less than a quarterly basis. ESG will provide Augusta with a detailed invoice of chemical expenditures over the annual chemical expenditure budget. Should Augusta and ESG fail to agree for any given Contract Year, the chemical expenditure budget will be determined by the application of the Consumer Price Index adjusted for actual consumption in the prior year and any flow increases over the prior year. Upon termination of this Agreement, ESG shall leave all unused chemicals purchased by Augusta for operation of the wastewater treatment facilities. 2.20 Provide and document repairs for a cost not to exceed the budget shown in Appendix F for the initial year of this Agreement, January 1 S\ 2010 through December 31 S\ 2010 and for a cost not to exceed the established amount for repairs as established for each subsequent Contract Year. In the event actual repair costs exceed the repair cost limit established, ESG shall invoice and Augusta shall pay excess repair costs on a monthly Page 7 of 23 basis. Said repairs will be invoiced at direct costs with no markup for overhead or profit. ESG shall rebate to Augusta the entire amount that actual repair costs are less than the repair limit established for any year of this Agreement. Repair costs below or in excess of annual repairs limits shall not contribute to base fee overages or underages. ESG shall notify Augusta in writing as soon as repair trend provides a reasonable indication that actual repair costs may exceed annual budget. ESG shall not exceed repair budget without written authorization from Augusta's Designated Representative. 2.21 ESG may alter the process and/or facilities to achieve the objectives of this Agreement; provided, however, no alteration shall be made without Augusta's written approval if alteration shall cost in excess of Two Thousand Dollars ($2,000.00). Further, no material alternation shall be made without ESG providing written documentation of such to Augusta's Designated Representative to document said modification or alternation. 2.22 Interface with state regulatory agencies and represent Augusta as may be necessary concerning operation, maintenance and management of the Project relative to all permits issued by the state of Georgia directly related to the operations associated with the Project. Coordinate and facilitate permit renewals and expansions related to the Project. 2.23 Investigate and respond to citizen complaints. 2.24 Assist Augusta on an as needed basis when Augusta undertakes grant applications related to the Project. 2.25 Utilize Augusta's computerized maintenance management and asset management system that furnishes complete and accurate records and is capable of readily providing historical data and trends. 2.26 Provide Augusta within the first ninety (90) days of the term of this Agreement a listing of any recommended capital improvements, inclusive of safety improvements, that ESG believes will be required for any of the facilities covered under this Agreement. In the event a recommended capital improvement does not require immediate implementation such recommendation shall be included in the five year capital plan. 2.27 Provide an updated recommended five year capital plan each year for the wastewater facilities. ESG shall work with Augusta staff and the engineer designated by Augusta in the development and providing of each five year capital plan. 2.28 Provide Augusta with a full accounting of all project specific expenditures at intervals and in sufficient detail as may be determined by Augusta and assist Augusta in the preparation of annual operating budgets. Augusta shall be allowed to conduct or have conducted audits at Augusta's sole cost and expense of all accounting related to the direct performance of the Scope of Services pursuant to the terms of this Agreement at times to be mutually agreed by the parties. To the extent possible all ESG project specific expenditures with take place in Augusta, Georgia, unless otherwise agreed. ESG shall provide that all accounts, operating records, documents, spreadsheets and correspondence Page 8 of 23 relating to the performance of the Scope of Services under the terms of this Agreement shall be open to inspection to Augusta during normal business hours upon the providing of reasonable notice for the purpose of auditing costs or verifying ESG's performance. ESG shall provide to Augusta copies of all records, accounts, operating records, documents, spreadsheets and all correspondence relating to the performance of the Scope of Services under the terms of this Agreement within thirty days of the termination of this Agreement. 2.29 Owner-Directed Capital Improvements, to be funded by Augusta and which are not included in Appendix F, are provided for during the term of this Agreement with an annual allowance of Five Hundred Thousand Dollars ($500,000) for each year in order to provide funding for ESG to perform major corrective repair, replacement, rehabilitation, and/or construction of facilities and equipment associated directly with or peripheral to Augusta's wastewater conveyance and treatment facilities. Augusta has the sole authority to identify specific projects and issue formal written requests to ESG to perform Owner-Directed Capital Improvements. ESG may accept or reject a project based upon ESG's determination if the company has the expertise or resources available to perform the project. ESG's compensation for Owner-Directed Capital Improvement projects is direct cost plus five percent rather than the Management and Administrative Fee established in Article 4. On site labor already covered under this Agreement shall not be billed against the Owner-Directed Capital Improvements account. 2.30 Operate and maintain the present Industrial Pretreatment Program (IPP) including all monitoring, inspections, sampling, testing, reporting and record keeping consistent with Augusta's existing NPDES permits and IPP program. Results of all industrial sampling and testing shall be made available to Owner upon request. 2.31 Provide 24-hour per day access to Project for Owner's personnel. Visits may be made at any time by any of Owner's employees so designated by Owner's Representative. Keys for the Project shall be provided Owner by ESG. All visitors to the Project shall comply with ESG's operating and safety procedures. 2.32 Acknowledge that under Georgia law its records, accounts, operating records, documents, spreadsheets and all correspondence relating to the Scope of Services, and other documentation pertaining to the Scope of Services may be public records subject to Georgia's Open Records Act (O.C.G.A. & 50-18-70, et seq.). ESG agrees to deliver immediately to Augusta's Designated Representative any request made to ESG under Georgia Open Records Act and to cooperate fully in responding to any request made to either Owner or ESG and making all records, not exempt, available for inspection and copying as provided by Georgia Law. 2.33 Provide Owner a statement of annual operating expenses prepared by ESG's external auditor within one hundred twenty (120) days of year end (April 30th) with the auditor to perform an agreed upon procedure certifying that expenses and fees are calculated in accordance with this Agreement. This statement shall be prepared in accordance with generally accepted accounting principles. Page 9 of 23 2.34 Submit a written report to Owner's Designated Representative outlining the complete details of any incidents of violations of Local Regulations, environmental requirements, or an employee behavior resulting in a complaint from the public. 2.35 Provide Owner with a copy of ESG's Employee Manual and make every effort to conform to guidelines contained within said manual. 2.36 Provide Owner with a copy of ESG's site-specific Emergency Response Plan and Safety Plan. 2.37 Perform other services that are incidental to, but not included in, the Scope of Services as directed by Augusta. Such services will be invoiced to Augusta based upon a mutual agreement between Augusta and ESG regarding scope and fee. 3. SCOPE OF SERVICE - AUGUSTA Augusta shall: 3.1 Pay all Capital Expenditures inclusive of owner-directed Capital Improvements. 3.2 Maintain all existing Project warranties, guarantees, easements, and licenses that have been granted to Augusta. 3.3 Pay all property, franchise, or other taxes associated with the Project. 3.4 Provide ESG, within a reasonable time after a request by ESG, use at no cost of any piece of Augusta's heavy equipment that is available so that ESG may discharge its obligations under this Agreement in the most cost-effective manner. ESG shall not use or allow the use of any of Augusta's heavy equipment under ESG's control by any person who is not trained and qualified in the operation of the heavy equipment in question, including licensing and certification, where appropriate. Such use may not be granted if Augusta determines that removing the equipment from its normal activities for the time period requested will be detrimental to Augusta's operations. 3.5 Provide all licenses and tags for vehicles owned by Augusta used in connection with the Project. 3.6 Provide for ESG's use all vehicles, computers, copy machines, tools and equipment currently owned by Augusta and in use at the Project, including the vehicles described in Appendix D. 3.7 Pay directly to the vendors or suppliers the following Project costs: 3.7.A All electrical power costs associated with the Project. 3.7.B All potable water costs associated with the Project. Page 10 of23 3.8 Pay ESG the amount specified in Article 4.1 to operate the Project. 3.9 Provide access to Augusta's computerized maintenance management system. 3.10 Carry out enforcement of the IPP, in accordance with State and EP A requirements including issuance of Notices of Violation (NOVs). Further, issue Significant Industrial User (SID) permits which meet all State and EPA requirements. Permits shall be prepared for Owner issuance by ESG per historical precedence. 4. COMPENSATION 4.1 Augusta shall pay to ESG a base fee equal to the Augusta budget shown in Appendix F. This includes the actual cost of the Scope of Services performed by ESG plus a Management and Administrative Fee. The base fee shall not include services which are not specifically defined by Section 2 of this Agreement. The base fee for the initial term of this Agreement shall be Four Million, Seven Hundred Fifteen Thousand, Two Hundred Thiry Four Dollars ($4,715,234.00) and the Management and Administrative Fee shall be Five Hundred Eighty Nine Thousand, Four Hundred Four Dollars and Twenty Five Cents ($589,404.25). The base fee and the Management and Administrative Fee shall be payable in advance in equal monthly installments and for the initial term of this Agreement the monthly amount shall be Four Hundred Forty Two Thousand, Fifty Three Dollars and Nineteen Cents ($442,053.19). Said base fee shall be for the period beginning on January 1St, 2010 and ending on December 31St, 2010. Thereafter, the Base Fee will be negotiated as described in Article 4.2. The Management and Administrative Fee shall increase proportionally with the base fee adjustments described in Articles 4.2 and 4.4. 4.2 The parties agree that the base fee represents an estimate of the cost of providing the Scope of Services for the Contract Year in question. In the event actual expenditures are projected to exceed the established base fee for a Contract Year by more than Twenty Thousand Dollars ($20,000.00) the approval of Augusta of such costs shall be required. ESG shall notify Augusta in writing as soon as trend of actual costs provides a reasonable indication that the actual costs may exceed annual budget. ESG shall not exceed the Augusta budget shown in Appendix F without written authorization from Augusta's Designated Representative. The Management and Administrative Fee will not be applied to any amounts in excess of the base fee in any contract year without prior approval of Augusta. ESG shall perform a reconciliation of estimated to actual cost attributable to the performance of the Scope of Services on a quarterly basis and submit the reconciliation to Augusta within thirty days following the conclusion of the quarter. A year-end reconciliation shall be performed by ESG following ESG's annual audit and submitted to Augusta within one hundred twenty days of the conclusion of the Contract Year in question. Any difference due to Augusta will be paid within thirty days of the submission Page 11 of 23 of the reconciliation by ESG. Augusta will pay ESG any amount due within 21 days of final Augusta-Richmond County Commission approval. The base fee shall be negotiated and agreed each year not less than three (3) months prior to the beginning of each subsequent Contract Year. An increase or decrease in the annual base fee may be based upon legal or regulatory changes that relate to the operation of the Project, regulatory reporting or monitoring requirements, treatment level requirements and personnel qualifications for staffing requirements. In the event Augusta and ESG fail to agree, the base fee will be determined by the application of the base fee adjustment formula shown in Appendix E which is incorporated by reference and made a part hereof. ESG shall provide Augusta written notice no later than September 1 st of each Contract Year to initiate the negotiation process. 4.3 A Management And Administrative Fee of 12.5% shall be added to all costs with the exception of costs resulting from the providing of unrelated services as may be directed by Augusta pursuant to Paragraph 2.37, Owner Directed Capital Improvement costs as provided by Paragraph 2.29. It is specifically understood that the Management and Administrative Fee is included in the calculation of the annual base fee. The Management and Administrative Fee shall include all charges for personnel not assigned to the Project on a full time basis (those working in Augusta, Georgia, and approved as part of the Project budget). ESG support is included in the Management and Administrative Fee, and any request for additional support is to be made to Augusta. From time to time ESG may seek approval from Augusta for additional ESG staff as necessary to fulfill ESG's contractual obligations or in response to Augusta's request for additional services. 4.4 ESG's compensation for Owner-Directed Capital Improvements shall be as follows: (1) programs undertaken by ESG personnel shall be subject to mutually agreeable terms and conditions of compensation and payment; (2) programs which ESG assigns to subcontractor personnel shall be billed at cost plus a fee of five percent of direct costs in lieu of the Management and Administrative Fee. On-site labor already covered under this Agreement shall not be billed against the Owner-Directed Capital Improvements account. The total annual compensation limit for Owner-Directed Capital Improvements for each year ofthis Agreement shall be as defined in 2.29. The costs for Owner-Directed Capital Improvements are not included in the annual base fee. 4.5 In the event a change in the scope of services becomes necessary as a result of ESG's obligations under Section 2, Augusta and ESG will negotiate a commensurate adjustment in base fee. 5. PAYMENT OF COMPENSATION 5.1 One-twelfth (1112) of the base fee, the Management and Administration Fee for the initial year and each subsequent Contract Year shall be due and payable on the first day of the month for each month that services are provided, assuming that the Augusta Page 12 of23 Representative receives an accurate and payable invoice by the 15th of the previous month. 5.2 All other compensation in addition to the monthly base fee, Management Fee and Administrative Fee is due on receipt of ESG's invoice and payable within thirty (30) days; provided, however, Augusta may contest any such invoice in the exercise of good faith, and may delay payment of sums that are being contested. 6. INDEMNITY, LIABILITY AND INSURANCE 6.1 ESG hereby agrees to and shall hold Augusta and its agents, assigns, officers and employees, harmless from any liability or damages for property damage or bodily injury, including death, which may arise from ESG's negligent operations, willful misconduct or material breach of contract under this Agreement, to the proportion such negligence, willful misconduct or material breach of contract contributed to the damages, injury, or loss. Augusta, to the extent allowed by law, agrees to and shall hold ESG harmless from any liability or damages for property damage or bodily injury, including death, which may arise from Augusta's negligence to the proportion such negligence contributed to the damages, injury or loss. 6.2 In any Contract Year, ESG shall be liable for those fines or civil penalties to a maximum aggregate of Five Hundred Thousand Dollars ($500,000) for the Contract Year in question, which may be imposed by a regulatory agency having jurisdiction for violations of the effluent quality requirements specified in Article 2.1 or which result from the failure to comply with the terms and conditions of any duly authorized permit, court order, administrative order, law statute or ordinance, that are a result of ESG's negligent operation. Augusta will assist ESG to contest any such fines in administrative proceedings and/or in court prior to any payment by ESG. ESG shall pay the costs of contesting any such fines. 6.3 ESG's liability to Augusta under this Agreement specifically excludes any and all indirect or consequential damages arising from the operation, maintenance, and management of Project. However, in the event the indirect or consequential damages incurred are the direct result of ESG' s sole negligence or material breach of the terms of this Agreement this exclusion shall not be applicable. Augusta's liability to ESG under this Agreement specifically excludes any and all indirect or consequential damages arising from Augusta's negligence. 6.4 ESG and Augusta recognize that existing conditions within the sanitary sewer collection system vary and that failures may occur in the system over time. ESG's scope of work is limited to operation and maintenance of Augusta's two wastewater treatment facilities and one pumping station. Augusta is responsible for maintenance of free-flowing conditions within the collection system and to clean the sanitary collection system as needed over the course of this Agreement. ESG shall be responsible only for injury, property damage or economic loss that was caused by ESG's negligence or willful misconduct. Furthermore, Augusta, to the extent allowed by law, agrees to indemnify Page 13 of23 ESG against such claims for injury, property damage, or economic loss arising from failures in the sanitary collection system unless such claims are caused by ESG's negligence, willful misconduct or material breach by ESG of its obligations pursuant to the terms of this Agreement. This Article takes precedence over any conflicting Article of this Agreement, and extends to ESG, its officers, employees, and subcontractors. 6.5 ESG shall obtain and maintain during the term of this Agreement insurance coverage of the type and in the amounts described in Appendix C which is incorporated by reference and made a part hereof. Augusta shall be named as an additional insured on each policy of insurance. ESG shall provide to Augusta a certificate evidencing such insurance upon execution of this Agreement and as may be requested by Augusta during the term of this Agreement. 6.6 It is understood and agreed that, in seeking the services of ESG under this Agreement, Augusta is requesting ESG to undertake uninsurable obligations for Augusta's benefit involving the presence or potential presence of hazardous substances. Therefore, Augusta, to the extent allowed by law. agrees to hold harmless, indemnify, and defend ESG from and against any and all claims, losses, damages, liability, and costs including, but not limited to, costs of defense arising out of or in any way connected with the presence, discharge, release, or escape of contaminants of any kind, excepting only such liability as may arise out of the sole negligence, willful misconduct or breach of contract of ESG in the performance of services under this Agreement. 7. TERM AND TERMINATION; DEFAULT REMEDIES 7.1 The initial term of this Agreement shall be five (5) years commencing on January 1St, 2010. Thereafter, this Agreement may be renewed by Augusta for successive five (5) year terms subject to the mutual agreement of the parties to the terms and conditions of such renewal. 7.2 Notwithstanding the other terms and conditions set forth herein Augusta and ESG maintain the right to terminate this Agreement for the following reasons: a) ESG management is not performing satisfactorily, and reasonable efforts are not being made on ESG's behalf to correct the problem. If reasonable efforts have not been initiated by ESG and reported to Augusta in writing by ESG within 45 days of ESG's receipt of written notice from Augusta specifying the performance for which Augusta is dissatisfied, Augusta may terminate this Agreement by providing 15 days written notice to ESG of termination and the basis thereof. b) Sufficient documentation is provided to ESG not less than 120 days prior to the close of any fiscal year of Augusta, that Augusta will be unable financially, due to budgetary constraints, to continue the services provided by ESG under the terms of this Agreement in the forthcoming fiscal year of Augusta. Page 14 of23 c) Owner may terminate this Agreement at any time after giving ESG four (4) months notice of intent to terminate. Should Augusta exercise termination for convenience on or before December 31 st, 2010, Augusta shall Pay ESG a lump sum payment of $100,000.00 for demobilization and transition costs. This lump sum payment shall be in addition to any other compensation due ESG under the terms of this Agreement as of the effective date of the termination by Augusta. In the event Augusta terminates this Agreement for convenience after December 31 st, 2010, ESG shall only be entitled to compensation due under the terms of this Agreement as of the effective date of termination by Augusta. d) Upon a four (4) month written notice to Augusta, ESG may terminate this Agreement for convenience. 7.3 Upon notice of termination by Augusta, ESG shall assist Augusta at a mutually agreeable price for the purpose of assisting Augusta's resumption of the operation of the Project. ESG will provide Augusta at the date of termination the quantities of chemicals shown in Appendix D, which is incorporated by reference and made a part hereof. Augusta will pay ESG for the cost of quantities in excess of the quantities shown in Appendix D. If additional cost is incurred by ESG at request of Augusta, Augusta shall pay ESG such cost in accordance with Article 5.2. 8. LABOR DISPUTES; FORCE MAJEURE 8.1 In the event activities by Augusta's or ESG's employee groups or unions cause a disruption in ESG's ability to perform at the Project, Augusta, with ESG's assistance or ESG, at its own option, may seek appropriate injunctive court orders. During any such disruption, ESG shall operate the facilities on a best-efforts basis until any such disruptions cease. 8.2 Neither party shall be liable for its failure to perform its obligations under this Agreement if performance is made impractical, abnormally difficult, or abnormally costly, as a result of any unforeseen occurrence beyond its reasonable control. The party invoking this Force Majeure clause shall notify the other party immediately by verbal communication and in writing by certified mail of the nature and extent of the contingency within ten (10) working days after its occurrence. 9. MISCELLANEOUS 9.1 Augusta and ESG agree that ESG is an independent contractor and not an employee or agent of Augusta. ESG shall have exclusive control of and the exclusive right to control the details of the services and work performed hereunder, and nothing herein shall be construed as creating a partnership, agency, joint venture or other similar relationship between ESG and Augusta. ESG agrees that it will not represent to anyone that its relationship with Augusta is other than that of an independent contractor. Page 15 of23 9.2 Augusta and ESG recognize that the environment of Augusta, specifically its rivers, springs, bays and estuaries, are a vital part of the fragile environment and economy of Augusta and that Augusta has long been dependent on same for industry, tourism and its economy. Therefore, it is imperative that the parties continue protection of the environment foremost in all their action under this Agreement at all times. 9.3 In the event a civil action is initiated by either party to this Agreement concerning a claim, a dispute, or the enforcement of the terms of this Agreement said action shall be brought in Augusta and ESG hereby submits to the jurisdiction and venue of said court. The prevailing party in any such litigation shall be entitled to reasonable attorney fees and costs. Both parties indicate their approval of this Agreement by their signatures below. Authorized signatures: AUGUSTA, GEORGIA By: Daniel E. Groselle, Jr., PE, Principal By: CS2~.(/ David S. Cope~er Mayor Date: j'z, ( {~ ( D1 h t~\ <d-~~\ \~ ~~\o'\ Date: l zl" /O'i I I Date Ivf III/! 1 Page 16 of23 Appendix A DEFINITIONS A.l The "Project" means all facilities, equipment, vehicles and grounds described in Appendix B and where appropriate, in accordance with the terms of this Agreement, the management, operation, and maintenance of such. As of the effective date of this Agreement the facilities are comprised of the James B. Messerly WPCP ("Messerly"), the Spirit Creek WPCP ("Spirit Creek") and the Spirit Creek Pump Station. A.2 "Capital Expenditures" means any expenditures for (1) the purchase of new equipment or facility items that cost Five Thousand Dollars ($5,000.00) or more; or (2) major repairs that significantly extend equipment or facility service life and cost Five Thousand Dollars ($5,000.00) or more; or (3) expenditures that are planned, non-routine, and budgeted by Owner. A.3 "Cost" means the total of costs for the scope of work defined by this Agreement as determined on an accrual basis in accordance with generally accepted accounting principles, including but not limited to direct labor, labor overhead, chemicals, materials, supplies, utilities, equipment, maintenance, repair, and outside services. A.4 "Maintenance" means the cost ofthose routine and/or repetitive activities required or recommended by the equipment or facility manufacturer or ESG to maximize the service life of the equipment, sewer, vehicles, and facility. A.5 "Repairs" means the cost of those nonroutine/nonrepetitive activities required for operational continuity, safety, and performance generally resulting from failure or to avert a failure of the equipment, sewer, vehicle, or facility or some component thereof. A.6 "Biologically Toxic Substances" means any substance or combination of substances contained in the plant influent in sufficiently high concentrations so as to interfere with the biological processes necessary for the removal of the organic and chemical constituents of the wastewater required to meet the discharge requirements of Augusta's NPDES permit. Biologically toxic substances include but are not limited to heavy metals, phenols, cyanides, pesticides, and herbicides. A.7 "Adequate Nutrients" means plant influent nitrogen, phosphorous, and iron contents proportional to BODS in the ratio of five (5) parts nitrogen, one (1) part phosphorous, and one-half (0.5) part iron for each one hundred (100) parts BODS. A.8 "Contract Year" means each year subsequent to the initial year of January IS" 2010 through December 31 s" 2010, for which this Agreement is in effect. A.9 "Fiscal Year" shall mean for Augusta that period beginning any January I and ending the next following December 31. A.I0 "Augusta's Designated Representative" shall mean Assistant Director for Wastewater Treatment. Page 17 of23 Appendix B WASTEWATER PROJECT CHARACTERISTICS NPDES PERMIT AND PROJECT CHARACTERISTICS B.l ESG will operate Project so that effluent will meet the requirement ofNPDES Permits No. GA0037621 and GA0047147 (copies attached). ESG shall be responsible for meeting the effluent quality requirements of Augusta's NPDES permit unless one or more of the following occurs; (1) the Project influent does not contain Adequate Nutrients to support operation of Project biological processes and/or contains Biologically Toxic Substances that cannot be removed by the existing process and facilities; (2) dischargers into Augusta's sewer system violate any or all regulations as stated in the Water and Sewer Ordinance; (3) the flow, influent BOD5, suspended solids and/or ammonia loading exceeds the Project design parameters for the WWTP facility, which are million gallons of flow per day, pounds of BOD5 per day, pounds of suspended solids, pounds of ammonia, and a daily peaking factor of times flow. Define Maximum Month Average Daily Values for: JB Messerly WPCP 46.1 mgd 90,000Ibs/day 90,000Ibs/day 8000 Ibs/day 1.5 Flow, MGD Influent BOD, Lbs/Day Influent TSS, Lbs/Day Influent Ammonia, Lbs/Day Daily Hydraulic Peaking Factor Spirit Creek WPCP 2.24 mgd 4200 Ibs/day 4200 Ibs/day 375 Ibs/day 1.5 B.2 In the event of permit violation and anyone of the Project influent characteristics, suspended solids, BOD5, ammonia, or flow, exceeds the design parameters stated above, ESG shall return the plant effluent to the characteristics required by the NPDES permit in accordance with the following schedule after Project influent characteristics return to within design parameters. Characteristics Exceeding Design Parameters By Recovery Period Maximum 10% or Less Above 10% Less than 20% 20% and Above 5 days 10 days 30 days Not withstanding the above schedule, if the failure to meet effluent quality limitations is caused by the presence of Biologically Toxic Substances or the lack of Adequate Nutrients in the influent, then ESG will have a thirty (30) day recovery period after the influent is free from said substances or contains Adequate Nutrients. B.3 ESG shall not be responsible for fines or legal action as a result of discharge violations within the period that influent exceeds design parameters, does not contain Adequate Nutrients, contains Biologically Toxic Substances, and the subsequent recovery period. Page 18 of23 Appendix C INSURANCE COVERAGE ESG shall maintain: 1. Statutory workers' compensation for all of ESG's employees at the Project as required by the State of Georgia. 2. Comprehensive general liability insurance in a minimum amount not less than Five Million Dollars ($5,000,000.00) combined single limits for bodily injury and/or property damage. 3. Property damage and liability insurance in a minimum amount not less than One Million Dollars ($1,000,000.00) for all vehicles owned and operated by ESG under this Agreement. 4. Contractor's Pollution Liability insurance for pollution events arising from operation ofthe Project in a minimum amount of not less than Two Million Dollars ($2,000,000.00) per claim and in the aggregate. Page 19 of23 Appendix D DESCRIPTION OF FACILITIES AND INVENTORY OF CHEMICALS, LUBRICANTS, & EQUIPMENT DESCRIPTION OF FACILITIES: The Facilities shall include all of the following, in existence as of the commencement date hereof: James B. Messerly WPCP 46.1 MCG advanced secondary treatment facility followed by a 360 acre constructed treatment wetland. Spirit Creek WPCP 2.24 MGD aerated lagoon facility employing parallel treatment trains. Spirit Creek Pump Station located adjacent to the Spirit Creek WPCP. INVENTORY OF CHEMICALS. LUBRICANTS & EQUIPMENT: ----To be completed on January 1,2010----- Page 20 of23 Appendix E BASE FEE ADJUSTMENT FORMULA BF = BFa x C/Co Where: BFa Base fee specified in Article 4.1 for previous contract year BF Adjusted base fee Co CPI for All Urban Consumers (U,S. City Average) as published by U.S. Department of Labor, Bureau of Labor Statistics in the CPI Detailed Report for the month three (3) months prior to ESG beginning service of previous year under this Agreement C CPI for All Urban Consumers (U,S. City Average) as published by U,S. Department of Labor, Bureau of Labor Statistics in the CPI Detailed Report for the month three (3) months prior to the beginning of the period for which an adjusted base fee is being calculated Page 21 of23 Appendix F 2010 Project Budget and Staffing Plan Project Budget PERSONNEL SERVICES $ 1,926,234.00 ADMINISTRATIVE EXPENSES 119,000.00 UTILITIES 96,000.00 CHEMICALS 399,000.00 MATERIALS & SUPPLIES 110,000.00 VEHICLES & EQUIPMENT 125,000.00 OUTSIDE SERVICES 285,000.00 BIOSOLIDS MANAGEMENT 1,105,000.00 MAINTENANCE & REPAIR 300,000.00 TOTAL OPERATING BUDGET $ 4,465,234.00 MANAGEMENT & ADMINISTRATIVE FEE (12.5%) 558,154.25 CONTRACTOR'S SUBTOTAL $ 5,023,388.25 DIRECTOR'S ALLOWANCE $ 250,000.00 MANAGEMENT & ADMINISTRATIVE FEE (12.5%) 31,250.00 DIRECTOR'S ALLOWANCE SUBTOTAL 281,250.00 TOTAL 2010 BUDGET $ 5,304,638.25 Page 22 of 23 Appendix F (Continued) 2010 Project Budget and Staffing Plan Project Staffing Plan Bud2eted Position Bud2eted Number Project Director 1 Assistant Project Manager 1 Lab/IPP Manager 1 Maintenance Manager 1 Land Application Manager 1 Operators 10 Lab Analysts 2 IPP Technicians 3 Mechanics 8 Maintenance Support 3 Administrative 1 Page 23 of23