Beneficial Reuse Management LLC Handling Contract THE CITY OF 411WA Dubuque*****
DUBB E All erica City
Masterpiece on the Mississippi
2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Agreement with Beneficial Reuse Management, LLC
DATE: July 31, 2012
Economic Development Director Dave Heiar recommends City Council approval of a
storage and handling agreement with Beneficial Reuse Management, LLC to store
gypsoil, which is a form of gypsum used for agricultural purposes in the industrial
riverfront area. The agreement is effective July 31, 2012 through December 31, 2013.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/7AAh kt1&1
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
David J. Heiar, Economic Development Director
Masterpiece on the Mississippi
TO: Michael C. Van Milligan, City Manager
FROM: David J. Heiar, Economic Development Director
DATE: July 31, 2012
RE: Agreement with Beneficial Reuse Management, LLC
Dubuque
All- America City
II 111!
2012
PURPOSE
The purpose of this memorandum is to provide information and recommend a course of
action regarding the attached, tentative agreement between the City of Dubuque and
Beneficial Reuse Management, LLC.
BACKGROUND
Over the last couple months, City staff have been negotiating a new storage and
handling agreement with representatives of Beneficial Reuse Management, LLC. The
company wants to store gypsoil, which is a form of gypsum used for agricultural
purposes. The attached document is the outcome of those negotiations. It is for
seventeen (17) months (July 31, 2012 through December 31, 2013).
The company agrees to bring at least 10,000 tons of gypsoil in calendar year 2012 and
10,000 ton of gypsoil in calendar year 2013. The company will pay $8.00 per ton of
which $5.50 of this fee will be used to cover handling costs. These costs are the same
that have been offered to Morton Salt Company for salt storage and handling fees.
REQUESTED ACTION
Your endorsement of the attached contract documents is recommended and requested.
Attachment
cc: Barry Lindahl, City Attorney
Don Vogt, Public Works Director
John Klostermann, Street /Sewer Maintenance Supervisor
F: \USERS \Econ Dev \Gypsoil\20120731_Beneficial Reuse Managment Agreement- Council Memo.doc
GYPSUM STORAGE AND HANDLING AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
BENEFICIAL REUSE MANAGEMENT, LLC
This Agreement, dated for reference purposes the 31st day of July of 2012 (the
"Effective Date), is made and entered into by and between the City of Dubuque ( "City ")
with a place of business at 50 West 13th Street, Dubuque, Iowa, 52001, and Beneficial
Reuse Management, LLC., with its principal office and place of business at 212 W.
Superior, Suite 402, Chicago, IL 60654 ( "Company ").
Product to be unloaded from barges, stored, and reloaded onto trucks.
agricultural gypsum /calcium sulfate ( "the Product ").
Location of storage and handling facility: Purina Drive, Dubuque, Iowa ( "the
Facility ").
Term: The "initial term" of this Agreement shall be seventeen (17) months, beginning on
the Effective Date. This Agreement shall be in effect commencing on the 6th day of
August, 2012 through and including the 31St day of December, 2013.
Unload, Storage and Handling fees: Company shall pay to City the following unload,
storage and handling fee(s):
1. $2.50 per ton for Product storage with a minimum of 10,000 tons in
calendar year 2012 and 10,000 ton in calendar year 2013. Storage payment
shall be due monthly for the tonnage placed on the pad in the preceding month.
All storage payments including the minimum storage payment shall be paid in full
by December 1, 2014. Payment for additional services shall be due and payable
within 30 days of receipt of invoice.
2. $4.00 per ton for Product off - loaded at the Facility with a minimum of
10,000 tons in calendar year 2012 and 10,000 ton in calendar year 2013.
Payment for handling shall be due and payable within 30 days of receipt of
invoice. Payment for the balance of storage and handling for the minimum
tonnage shall be due and payable by no later than December 1, 2014.
3. $1.50 per ton for Product truck loaded at the Facility with a minimum of
10,000 tons in calendar year 2012 and 10,000 ton in calendar year 2013.
Payment for handling shall be due and payable within 30 days of receipt of
invoice. Payment for the balance of storage and handling for the minimum
tonnage shall be due and payable by no later than December 31, 2013.
073112
4. Any Product remaining at the Facility after December 31, 2013 shall be
disposed of as follows:
For any Gypsoil remaining after December 31, 2013, Company shall pay on
January 1, 2014, in addition to the fees paid under 1 and 2, $3.00 per ton for
additional storage cost. Loading costs of the Product remaining after December
31, 2013 will be billed at the time and rate in effect at the time of loading.
City or City's subcontractor shall:
* Provide a non - permeable bulk storage pad at the Facility suitable for storing a
minimum of 10,000 tons of Product and will make reasonable efforts to provide
additional storage if Company requires.
* Receive and promptly unload barges for immediate delivery to Company's
customers or move Product to storage pad at the Facility. Unloading of the
barges shall involve removing and replacing barge lids, unloading promptly and
blade cleaning. Barge shall be considered to be "Bobcat Clean" prior to release.
* Receive orders from Company and load trucks, as directed by Company, to
complete the orders.
* Ensure that each and every truck that arrives at the Facility for loading is
weighed empty, to obtain the tare weight. Trucks will be loaded and weighed to
obtain the gross weight.
* Maintain a scale certification log to verify compliance with scale certification
rules and regulations. Said log will include documented date of scale certification
and the corresponding seal number, and will, at all times, be available at the
Facility for review by Company representatives.
* Ensure that the operator of the scale is properly trained and is familiar with
current and appropriate weight laws. If applicable, ensure that the operator of the
scale shall be certified by the appropriate local or state agency, with a copy of
said certificate at the Facility.
* Load all trucks within the legal load limits.
* Prepare shipping documents, barge receipts, and inventory reports in
accordance with Company specifications.
* Unload barges in the order they are received (first -in, first -out), using best
efforts to unload one (1) barge per day, but in no event shall City or City's
Subcontractor's be required to unload more than three (3) total barges in any
work week (i.e., Monday — Friday). If the City or City's subcontractor is unable to
unload three (3) barges per week, the City will pay any demurrage incurred. If
2
Company ships more than three (3) barges in any one week Company will be
responsible for all demurrage costs.
* Providing that Company is in compliance with the terms and conditions of this
Agreement, City agrees not to unload and /or store Product at either the
Facility for any other entity during the term of this Agreement unless City first
obtains Company's prior written consent.
Company shall:
* Pay storage and handling fees within thirty (30) days of receipt of invoice.
* Provide City with shipping documents, recaps and inbound barge schedules
and barge weights.
In addition, the parties agree to the following terms and conditions:
1. Services. Company shall from time to time during the term hereof deliver
or cause to be delivered to the Facility by barge quantities of Product.
City shall provide all of the necessary labor and equipment, including
stevedoring, trucking to stockpile, stacking, and blade cleaning of barge, to
unload the Product from the barges onto trucks for delivery to Company's
customers or to store and stack the Product on the storage pad. When unloading
the barges, City agrees to inspect each barge and the Product for damage or
contamination and report any such damage or contamination to Company. In the
event the Product is damaged or contaminated, City shall suspend unloading
immediately and notify Company of such damage or contamination. Company
will instruct City how to proceed.
City shall properly stack and shape the Product into a conical shape to ensure no
water is ponding or accumulating within the stockpile.
2. Taxes. All taxes and assessments levied against the Facility shall be for
City's account and City agrees to indemnify and hold Company harmless from
and against any liability for same. All taxes levied against the Product, while in
store at the Facility, shall be for Company's account, and Company agrees to
indemnify and save City harmless from and against any liability for same.
3. Insurance. During the term of this Agreement, City shall, at its own
expense, carry in full force and effect those insurance policies more fully
described herein:
(a) Commercial General Liability Insurance ( "CGL "), including personal
injury, contractual liability and coverage for the property of others in City's
care, custody and control, with limits of $5,000,000.00 per occurrence.
3
(b) City shall either (i) delete the marine operations exclusion and the
care, custody, and control exclusion in City's CGL policy, or (ii) obtain
Wharfinger's Liability Insurance (to insure City's warranty of a safe berth
and City's obligations as bailee of Company owned or leased property)
and Terminal Operator's Liability Insurance (to insure City against liability
arising from its acts or omissions which cause personal injury or property
damage to third parties) and Stevedore's Liability Insurance, with limits of
$5,000,000.00.
(c) Workers Compensation Insurance with statutory limits.
(d) Employer's Liability Insurance with limits of $5,000,000.00 per
occurrence.
(e) U.S. Longshore and Harbor Workers' Act coverage with statutory
limits.
If any work is subcontracted, City shall require each subcontractor to maintain
the insurance described above. City shall provide Certificates of Insurance
evidencing the above coverages prior to commencement of this Agreement. All
policies except Workers Compensation and Employer's Liability shall name
Product Company, Incorporated as an additional insured. Said policies shall
provide Product Company with thirty (30) days written notice of cancellation or
material change and shall be obtained from companies reasonably satisfactory to
Product Company.
4. Indemnity. City agrees that it shall be fully responsible for, and shall
indemnify and hold Company harmless from and against, any and all losses and
damages, any and all injuries to or death of any person(s) and any and all
damage to or destruction of any property or properties caused by or arising out of
the acts or omissions of City in the performance of or failure to perform under this
Agreement and for any breach of any term of this Agreement. In addition, City
shall be fully responsible for, and shall indemnify and hold Company harmless
from and against, all wages, unemployment compensation, and workers'
compensation for City employees, agents, and independent contractors. City will
not create, incur or suffer to exist any pledge, security interest, lien, levy or other
encumbrance of or upon any of the Product except for a warehouseman's lien
and then only in the amounts owed City by Company.
5. Product Quality. Any shortages of the Product in excess of an allowed
shrinkage of 2 percent shall be City's sole liability, and City shall reimburse
Company for such shortages at the then prevailing market price for the Product;
provided, however, that City shall not be liable for loss due to an event of force
majeure as defined in Section 13 or theft, unless such losses are the result of
City negligence.
4
The amount of shrink shall be the difference between the tonnage shipped in,
unloaded and stored (as verified by the barge freight bills) and the tonnage
reloaded and shipped out (as verified by the truck scale tickets).
If either party protests the weights designated on the barge freight bills or on the
truck scale tickets, the protesting party shall have the right and duty to check
such weights by weighing such inbound or outbound shipments itself and shall
inform the other party of any discrepancies. In the event the parties are unable to
resolve a dispute concerning weights, they shall have a mutually agreed upon
third party determine the weights, whose determination shall be final and binding.
6. Independent Contractors. Nothing contained herein shall be construed in
such a manner as to deem the relationship between the parties as that of
principal••agent, master - servant, partners, or joint venturers. Rather, City is an
independent contractor and has no authority to make binding commitments for or
on behalf of Product Company, and each party shall be solely responsible for the
acts and omissions of its own employees and agents and shall further be
responsible for all wages, salaries, social security, unemployment insurance, and
all other obligations, whether compulsory or in the nature of fringe benefits, due
its own employees and agents.
7. Breach. If either party breaches of any of its obligations under this
Agreement, the non - breaching party may give thirty (30) days notice of
termination, and if the breach has not been cured during the said 30 -day period,
either party may terminate this Agreement. In addition, if there are more than
three or more material breaches in any consecutive twelve -month period, even if
cured in a 30 -day period, then this Agreement shall terminate.
In the event City (i) files a voluntary petition in bankruptcy; (ii) makes an
assignment for the benefit of creditors; (iii) is adjudicated as bankrupt; (iv)
becomes insolvent; (v) abandons the Facility; or (vi) breaches Section 11 herein,
Product Company may terminate this Agreement effective immediately and
remove all Product from Facility.
Termination, pursuant to this Section, while being in itself a remedy for breach,
shall not preclude any other legal or equitable remedy which is available to the
terminating party.
8. Assignment. This Agreement shall not be assigned, in whole or in part, by
either party hereto without the prior written consent of the other consent not to be
unreasonably withheld. Any purported assignment not so consented to shall not
relieve the assigning party from its obligations herein. Subject to this limitation,
this Agreement shall be binding upon the parties hereto and their respective
successors and permitted assigns. Notice of a request for assignment shall be
5
given to the other party not less than 30 days prior to the proposed effective date
of assignment.
9. Access to Facility. Company shall have access to the Facility at all
reasonable times for the purpose of verifying records, taking inventories,
removing the Product or other purposes related to the operations contemplated
herein.
10. Title. Title to all of Company's Product stored at the Facility shall remain
in Company. City agrees to indemnify and hold Company harmless and protect
the Product from all liens or claims arising out of transactions or litigation
between City and third parties.
11. Compliance with Laws. City- shall comply with all present and future
federal, state, and municipal laws, regulations, and ordinances, including without
limitation those relating to the environment, covering facilities, equipment, and
the services contemplated under this Agreement. City represents and warrants
that it has (and will maintain throughout the term of this Agreement) all permits
from the governing local, state, and federal authorities necessary to perform the
services contemplated herein.
12. Dispute Resolution. The parties shall submit any dispute, controversy or
claim arising out of, relating to, or having any connection with this Agreement to
arbitration in Dubuque, Iowa in accordance with the commercial arbitration rules,
then obtaining, of the American Arbitration Association ( "AAA "), except to the
extent modified herein, and agree to abide by the arbitral decision and award.
Judgment upon the award shall be final and binding and may be entered by any
court of competent jurisdiction. This Agreement shall be construed in accordance
with the laws of the State of Iowa.
The arbitrators shall be appointed as follows: each party shall appoint an
arbitrator from a list to be prepared by the AAA. The arbitrator appointed by each
party must be either (a) actively engaged in the buying or selling of industrial
products and have been so engaged for a minimum of five years, or (b) retired
after at least five years of active engagement in the buying or selling of industrial
products. The party- appointed arbitrators shall select from the AAA's list a third
arbitrator who meets the above requirement. If the party- appointed arbitrators fail
to agree on a third arbitrator, the AAA shall appoint a third arbitrator who meets
the above requirement.
13. Force Majeure. If City or Company is unable to perform an obligation
under this Agreement by reason of a force majeure event, the time for
performance of this obligation shall be extended until the force majeure event
ceases. However, if the force majeure event lasts for more than ninety (90)
days, the non - affected party may terminate this Agreement immediately by giving
the other party written notice of such termination.
6
"Force majeure" shall mean any cause beyond the reasonable control of the
affected party preventing said affected party in whole or in part from performing
its obligations hereunder. Force majeure shall include, but is not limited to, the
following: acts of God, acts of any governmental body, whether civil or military of
foreign or domestic, acts of public enemy, riots, strikes, labor disputes, all perils
and accidents of the seas or other waters, fires, explosions, floods, winds, and
embargoes and major mechanical breakdown.
Upon occurrence of a force majeure event, the affected party shall promptly
notify the other party giving a description of the nature, cause, and probable
duration of the force majeure event. Said affected party shall exercise due
diligence to remedy and overcome the force majeure event.
14. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties. There are no terms or conditions other than
those stated herein, and no agreements, understandings, representations, or
warranties, oral or written, of any kind, except those expressly set forth herein.
This Agreement shall supersede any other storage and handling agreement
previously executed by the parties, or any amendment thereto, and all such
previous agreements shall have no force and effect.
15. Notices. All notices which either party is required to give to the other party
hereunder shall be deemed to have been given if sent by U.S. mail, postage
prepaid or by overnight courier and addressed to the other party at its respective
principal address as set forth above, or at such address as the parties may later
advise.
CITY OF DUBUQUE, IOWA
By:
Michael C. Van Milligen
City Manager
7
BENEFICIAL REUSE MANAGEMENT,
LLC
By: i Is[ ,il
Jason S.. r s/ if
Director of O . erations