1381r
ORDINANCE NO. I.3~ ~
AN ORDINANCE APPROVING A CONTRACT BETWEEN THE CITY OF
WEST MEMPHIS AND OPERATIONS MANAGEMENT INTERNATIONAL,
INC., FOR OPERATION OF THE CITY'S WASTEWATER TREATMENT
PLANT, AUTHORIZING THE EXECUTION OF THE CONTRACT,
DECLARING AN EMERGENCY AND FOR OTHER PURPOSES.
WHEREAS, McCullough Environmental Services, Inc. has
elected to terminate its contract for the operation of the
City's wastewater treatment plant; and
WHEREAS, the West Memphis Utility Commission has
considered proposals for the operation of the wastewater
treatment plant and recommended that the contract be
awarded to Operations Management International, Inc. (OMI);
and
WHEREAS, pursuant to Arkansas Code 8-5-606 and 8-5-607,
~,,,.g ,
4
et. seq., notice was duly published and a public hearing
conducted regarding the City's intention to adopt an
ordinance accomplishing the privatization of the operation
of the wastewater treatment plant; and
WHEREAS, Arkansas Code 8-5-609 specifically exempts
privatization contracts and service agreements from the
provisions of any laws or regulations requiring competitive
bidding; and
WHEREAS, upon authorization of the City Council, the
City and OMI have entered into a non-binding Memorandum of
Intent which action should be, and hereby is, approved and
ratified in all aspects;
IT IS HEREBY ORDAINED BY THE CITY COUNCIL OF THE CITY
OF WEST MEMPHIS, ARKANSAS:
1. The contract between the City of West Memphis and
Operational Management International, Inc., for the
operation of the City's wastewater treatment plant is
hereby approved and the Mayor, or the Vice-Mayor in the
May-or's absence, and the City Clerk are hereby authorized
to execute said contract on behalf of the City of West
Memphis.
2. Emer~encv Clause. It having been found and
determined by the City Council of the City of West Memphis, I'~
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~.,; ~ i,~~~~~'~('O,F~ICE
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Arkansas, that an urgent need exists for the prompt
replacement of the departing operator of the City's
wastewater treatment plant, an emergency is hereby declared
to exist, and this ordinance being necessary for the
protection of the public peace, health, safety and welfare
of the citizens of the City of West Memphis shall be in
full force and effect from and after the date of its
passage and approval.
PASSED AND APPROVED this 20th day of April, 1989.
~-~ L.b ,
KEITH M. INGRAM, Mayor
ATTEST:
DA CRAFT, ity erk
SPONSORED BY:
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Draft No. 3
April 5, 1989
AGREEMENT
fo r
OPERATIONS, MAINTENANCE AND
MANAGEMENT SERVICES
for the WEST MEMPHIS, ARKANSAS
bVASTEWATER TREATMENT PLANT
THIS AGREEMENT is made on this day of 19 between
the West Memphis Utilities Commission hereinafter '~Tr) , whose address
is for any formal notice is 604 East Cooper, West Memphis, Arkansas 72301
and Operations Management International, Inc., (hereinafter "OMI") with
offices at 900 Rockmead Drive, Suite 265, Kingwood, Texas 77339, whose
address for any formal notice is P. O. Box 5169, Kingwood, Texas
77325-5169.
Owner and OMI agree:
1. GENERAL
1.1 All definitions of words or phrases used in this Agreement are
contained in Appendix A.
1.2 All grounds, facilities, equipment and vehicles now owned by
Owner or acquired by Owner shall remain the property of Owner.
1.3 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Arkansas.
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 other party.
Consent shall not be unreasonably withheld.
1.5 All notices shall be in writing and transmitted by certified mail to
the address noted above.
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
"OMI" and "Owner" shall include the respective officers, agents,
directors, elected or appointed officials, and employees.
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AW1.west memphis.02d3 - 1 - 040589
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2. SCOPE OF SERVICES -- OMI
OMI shall:
2.1 After the aeration improvements are completed, and as long as the
wastewater flow rate and loadings are within the mutually agreed
design capacity of the Project, manage, operate, and maintain the
Project so that effluent discharged from the Project meets the
requirements specified in Appendix C. During the period in which
the aeration improvements presently contemplated are being
completed, OMI will operate the Project on a best efforts basis and
implement operational changes to improve treatment performance.
OMI may alter the process and/or Project facilities to achieve the
objectives of this Agreement; provided, however, that no alteration
shall be without Owner's written approval if alteration shall cost in
excess of One Thousand Dollars ($1,000).
2.2 Provide and document all Maintenance for the Project. Owner shall
have the right to inspect these records during normal business
hours.
2.3 Provide and document all Repairs for the Project, provided the
total amount OMI shall be required to pay does not exceed
$14,980.00 during the first year of this Agreement. Owner shall
pay for all Repairs in excess of the Repairs limit excluding repairs
caused by OMI's intentional or negligent acts. Owner shall have
the burden of proof in determining the extent of OMI's negligence,
if any.
2.4 Provide Owner with an accounting of Repairs on a monthly basis.
Oti11 will provide Owner with a detailed invoice of Repairs over the
Repairs limit and/or for those Repairs necessitated by the
negligent and/or intentional act of OMI, its servants, agents, and
employees. Should OMI replace any item instead of repairing
same, OMI will cause the warranties and/or guarantees, if any, to
be placed in the name of Owner.
2.5 Negotiate each year with Owner the Repairs limit in Article 2.3.
Should Owner and OMI fail to agree, the Repairs limit will be
determined by the application of the Consumer Price Index (CPI )
component of the base fee adjustment formula referred to in
Article 4.2.
2.6 Rebate to Owner the entire amount that actual Repairs, exclusive
of Repairs necessitated by the negligent and/or intentional acts of
OMI, its servants, agents and employees, are less than the
Repairs limit in any year of this Agreement.
2.7 Pay all Cost as identified in Appendix A incurred in normal Project
operations.
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- 2 -
040589
2.8 Staff the Project with employees who have met the certification
requirements of the State of Arkansas.
2.9 Prepare and sign all NPDES permit reports and submit these to
Owner for signature and transmittal to appropriate agencies.
2.10 Provide, at the cost of OMI, for the disposal of screenings, grit
and sludge so long as the products to be disposed of meet State
and Federal guidelines as long as there is an approved site willing
to accept said products within fifteen (15) miles each way of the
Project. During the initial operating period, OMI will assist the
Owner in the evaluation of the toxicity of the existing sludge and
will cooperate with Owner to the extent of providing any and all
information reasonably necessary for Owner to seek performance of
the prior operator's agreement to remove said products currently
on site. Costs for the disposal of sludge that does not meet State
and Federal guidelines shall be paid in accordance with Article
2.14.
2.11 Perform all laboratory testing and sampling presently required by
the NPDES permit and/or the consent decree between the Owner
and the United States Environmental Protection Agency (EPA).
2.12 Provide an inventory of vehicles and equipment that are being
used at the Project when OMI begins service.
2.13 Provide twenty four (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 Project shall be provided Owner by OMI. All visitors to the
Project shall comply with OMI's operating and safety procedures.
2.14 Perform other services that are incidental to the Scope of Services
as directed by Owner. Such services will be invoiced to Owner at
OMI's Cost plus fifteen percent (15$).
2.15 OIIQI shall make available upon request of Owner, all operational
data including but not limited to operational data, laboratory data,
maintenance data, and analysis of special samples.
2.16 Provide reasonable assistance to the Owner from the staff of OMI
and its parent in conjunction with the scope of service of this
contract in areas that are mutually beneficial to the Project and
agreed to by both parties.
3. SCOPE OF SERVICE -- OWNER
Owner shall:
3.1 Provide for all Capital Expenditures which have been previously
approved in writing by Owner. OMI agrees that Owner may
arbitrarily refuse authorization of OMI's request for Capital
AW1.west memphis.02d3 - 3 - 040589
Expenditures. OMI further agrees that it will only honor written
authorization from the Manager of the West Memphis Utility
Commission and/or the West Memphis Utility Commission and/or the
Mayor of the City of West Memphis acting on behalf of the City of
Nest Memphis, Arkansas, and OMI further agrees to honor no
other written authorization except from the above persons and/or
entities. If Owner refuses to implement Capital Expenditures that
are necessary for the design capacity of the plant, Otitl shall be
relieved of its obligations under Article 2.1 provided that the
Owner's failure to implement Capital Expenditures requested by
OMI is determined to be causally related to the failure of OMI to
meet NPDES requirements. The determination of whether the
failure to meet NPDES requirements is causally related to the
failure to make Capital Expenditures shall be determined in
accordance with the procedure set out in Appendix C.
3.2 Maintain all existing Project warranties, guarantees, easements,
and licenses that have been granted to Owner.
3.3 Pay all property, franchise or similar taxes associated with the
Project.
3.4 Provide OMI within a reasonable time after request any piece of
Owner's heavy equipment that is available so that OMI may
discharge its obligations under this Agreement in the most
cost-effective manner.
3.5 Provide all licenses for vehicles titled in Owner's name used in
connection with the Project.
3.6 Provide for OMI's use all vehicles and equipment presently in use
at the Project, including the vehicles described in Appendix D.
3.7 Maintain the present industrial waste sampling and laboratory
analysis program.
3.8 Provide the equipment for mowing of the plant grounds.
3.9 Pay for the cost of repairs that exceed the agreed-to repairs
budget excluding repairs caused by OMI's intentional or negligent
acts and provided OMI has received the appropriate approval to
make said expenditures. Owner shall have the burden of proof in
determining the extent of OMI's negligence, if any.
4. COMPENSATION
4.1 Owner shall pay to OMI as compensation for services performed
under this Agreement a base fee of Five Hundred Forty-Six
Thousand Six Hundred Forty Dollars ($546,640.00) for the first
year of this Agreement. Subsequent years' base fees shall be
determined as hereinafter specified.
AW1.west memphis.02d3 - 4 - 040589
4.2 The base fee shall be negotiated each year three (3) months prior
to anniversary of the effective date hereof. Should Owner and
OMI fail to agree, the base fee will be determined by the
application of the base fee adjustment formula shown in
Appendix E.
4.3 Owner will pay as additional compensation to OMI any increase in
electricity costs above Two Hundred Twenty-Nine Thousand Eight
Hundred Ninety-Seven Dollars ($229,897.00) for the first year of
the agreement. OMI will rebate to the Owner 75 percent of any
savings in electrical costs below $229,897.00. Twenty-five percent
of any savings shall be paid to OMI as an incentive. Each year of
the Agreement, OMI and the Owner shall negotiate an electrical
budget for the ensuing year. The budget shall be based on the
kbVh of energy anticipated to be used as provided by in the basic
fee formula in Appendix E.
4.4 In the event that a change in the scope of services provided by
OMI occurs, Owner and OMI will negotiate a commensurate
adjustment in base fee.
5. PAYMENT OF COMPENSATION
5.1 One-twelfth (1 / 12) of the base fee for the current year shall be
due and payable on the first of the month for each month that
services are provided.
5.2 All other compensation to OMI is due upon receipt of OMI's invoice
and payable within fifteen (15) days.
5.3 Any monies arising from Article 2.6 and 4.3 will be paid to Owner
within sixty (60) days after the end of each Agreement year.
6. INDEMNITY, LIABILITY AND INSURANCE
6.1 It is understood and agreed that provisions for indemnity to OMI
from Owner and to Owner from OMI are material to this Agreement.
The parties have not arrived at language which is satisfactory to
both, but OMI and Owner are desirous of turning the Project over
to OMI as soon as possible. Therefore, the parties agree that
language for Articles 6.1 and 6.5 which is acceptable to Owner and
OMI will be negotiated and added to the Agreement within
ninety (90) days after this Agreement is executed.
6.2 Upon notice to proceed, OMI shall enter a transition period of at
least ninety (90) days during which the aeration improvements are
completed, the toxicity of the sludge is evaluated, and all
corrective maintenance is completed pursuant to the terms of this
Agreement. After this transition period, OMI and Owner shall
meet to jointly determine the capacity of the Project. Upon mutual
agreement by the parties of the capacity of the Project, OMI shall
be liable for those fines and/or civil penalties to a maximum
AW1 . west memphis.02d3 - 5 - 040589
aggregate of Two Hundred Thousand Dollars ($200,000.00)
which are assessed per year of this Agreement which may
be imposed by a regulatory agency (state, federal
and/or local) for violations of the effluent
requirements specified in Article 2.1 that are a result
of OMI's operation. Determination of this liability as
between the parties shall be made according to the
procedure set out in Appendix C. It is understood and
agreed that the arbitrators may apportion liability
based upon a comparison of fault of the parties. The
first year for which OMI shall be liable for such fines
and/or civil penalties shall begin with the first day
that the transition period ends and thereafter, each
new year shall be on the anniversary of that date. It
is the intent of the parties that the limit of OMI's
liability shall be determined not in the year which the
fine and/or civil penalty is ultimately paid, but for
the period for which it is assessed. Thus if a fine
were assessed that covered portions of two years, as
defined above, that portion of the fine and/or civil
penalty that was assessed for one year would apply to
the limit for that year and the remainder for the next
year. By way of illustration, if the year begins
August 1, 1989, any fine which is incurred from
December, 1989, through February, 1990, would be
applied to the limits for 1989 and not to the year
beginning August 1, 1990. The parties agree to assist
each other to contest any such fines and/or penalties
in administrative proceedings and/or court prior to any
payment by OMI. Should it be later determined by
agreement or by arbitration pursuant to the procedure
set out in Appendix C. that liability for such fines
and/or penalties is not the sole responsibility of OMI,
the parties and/or the arbitrators shall determine the
amount of costs incurred in contesting such fines
and/or civil penalties including attorneys' fees, to be
paid by OMI and/or Owner. Should the financial
limitation established for OMI be met and/or exceeded,
OMI shall nevertheless assist Owner in contesting such
fines and/or penalties in administrative proceedings
and/or court prior to any payment by Owner with costs
to be paid as established hereinabove. This limitation
of liability shall not apply to any act of OMI, its
agents, servants and employees which is intentional.
6.3 OMI's liability to Owner under this Agreement
specifically excludes any and all indirect or
consequential damages arising from the operation,
maintenance, and management of Project.
6.4 Each party shall obtain and maintain insurance coverage
of a type and in the amounts described in Appendix F.
Each party shall name the other party as an additional
insured on all insurance policies covering the Project
and shall provide the other party with satisfactory
proof of insurance.
6.5 See Article 6.1
AW1. west memphis.02d3 -6- 040589
7. TERM AND TERMINATION; DEFAULT REMEDIES
7.1 The initial term of this Agreement shall be one (1) year
commencing on 1989. This Agreement may be
renewed upon mutual agreement evidenced in writing each year for
four consecutive years. If Owner does not renew the Agreement,
except for cause, then Owner shall pay to OMI a demobilization fee
of Forty Thousand Dollars ($40,000.00) for year one (1 ), Twenty
Thousand Dollars ($20,000.00) for year two (2), Ten Thousand
Dollars ($10,000.00) for year three (3). If the Agreement is
renewed two times, then the Owner shall not be required to pay a
demobilization fee to Oh11 if Owner exercises its right to terminate
and/or not renew this Agreement without cause after the first
three years. Nothing contained in this Agreement shall be
construed to prohibit Owner from terminating this Agreement at
any time without cause and/or at will.
7.2 Either party may terminate this Agreement for a material breach by
the other party after giving written notice of the breach and
providing the party in breach with thirty (30) days to correct the
breach. OMI shall be permitted to terminate this Agreement for
pecuniary default after giving notice of same and providing Owner
with twenty (20) days to cure such pecuniary default. All other
defaults and/or breaches of this Agreement by either party shall
require thirty (30) days written notice of intent to terminate from
the party which claims an event of default and/or breach on the
part of the other. The party which receives the notice shall have
an additional thirty (30) days from and after the original
thirty (30) day notice period of the intention to terminate has
expired to cure such default or breach. Either party may
terminate this Agreement without cause after giving written notice
of its intention to terminate this Agreement ninety (90) days in
advance. If notice of termination is given by Owner, without
cause, during the first year of this Agreement or during the first
or second renewal years of this Agreement, then Owner agrees to
pay OMI a demobilization fee in accordance with Article 7.1. After
the third year of this Agreement, Owner may terminate this
Agreement at will and without cause without having to pay a
demobilization fee to OMI.
7.3 Upon notice of termination by either party, OMI shall assist Owner
in resuming the operation of the Project. The period of assistance
shall extend no longer than ninety (90) days at the option of the
Owner. OMI will provide the Owner at the date of termination the
quantities of chemicals shown in Appendix G. Owner will pay OMI
for the Cost of quantities in excess of the quantities shown in
Appendix G. If additional Cost is incurred by OMI at the written
request of Owner, Owner shall pay OMI such Cost in accordance
with Article 2.14.
AW1 . west memphis.02d3 - 7 - 040589
8. LABOR DISPUTES; FORCE MAJEURE
8.1 In the event activities by Owner's
cause a disruption in OMI's ability
Owner, with OMI's assistance or OM
appropriate injunctive court orders.
OMI shall operate the Project on a
such disruptions cease.
employee groups or unions
to perform at the Project,
at its own option, may seek
During any such disruption,
best-efforts basis until any
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, due to 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.
Both parties indicate their approval of this Agreement by their signatures
below.
Authorized signature:
Authorized signature:
~~.,.., C~ . ~ A
Don S. Evans
Title: President
OPERATIONS MANAGEMENT
INTERNATIONAL, INC.
Date
Title: ~~~ ~ c: /~fa yoY`
__ _ I
Date: a0 / $
AW1.west memphis.02d3 - 8 - 040589
Appendix A
DEFINITIONS
A.1 The "Project" means all equipment, vehicles, grounds and Project
facilities described in Appendix B and where appropriate, the
management, operations and maintenance of such.
A.2 "Capital Expenditures" means any expenditures for (1) the purchase of
new equipment or Project items that cost more than One Thousand
Dollars ($1 ,000); or (2) major repairs which significantly extend
equipment or Project service life and cost more than One Thousand
Dollars ($1 ,000); or (3) expenditures that are planned, nonroutine and
budgeted by Owner.
A.3 "Cost" means the total of all costs 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 of those routine and/or repetitive
activities required or recommended by the equipment or system
manufacturer or OMI 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
due to failure or to avert a failure of the equipment, sewer, vehicle, or
system or some component thereof.
A.6 "Biologically Toxic Substances" means any substance or combination of
substances contained in the plant influent in sufficiently high concen-
trations 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 Owner'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, phosphorus and
iron contents proportional. to BODS in the ratio of five (5) parts
nitrogen, one (1) part phosphorus, and one half (0.5) part iron for
each one hundred (100) parts BODS.
A.8 "Consent Decree" means Civil Action No.
States Eastern District Court of Arkansas
America and the City of West Memphis,
Commission, and the State of Arkansas.
J-C-84-356 of the United
between the United States of
West Memphis Utility
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Appendix B
LOCATION OF PROJECT
6.1 OMI agrees to provide the services necessary for the management,
operation and maintenance of the following:
a) All equipment, vehicles, grounds and Project facilities now existing
within the present property boundaries of or being used to operate
Owner's Nlastewater Treatment Plant located at:
West Memphis, Arkansas
ALN1.west memphis.02d3 - 10 - 040589
Appendix C
NPDES PERMIT AND PROJECT CHARACTERISTICS
C.1 OMI will operate Project so that effluent will meet the requirement of
NPDES permit No. AR0022039 (copy attached). OMI shall be responsible
for meeting the effluent quality requirements of Owner's NPDES permit
unless one or more of the following occurs and are causally related to
the failure to meet Owner's NPDES requirements; (1) the Project
influent does not contain Adequate Nutrients to support operation of
Project biological processes and/or contains Biologically Toxic
Substances which cannot be removed by the existing process and
Project facilities; (2) dischargers into Owner's sewer system violate any
or all regulations as stated in the Water and Sewer Ordinance to be
passed by the Owner during the ninety (90) day transitional period
except minor violations as described in Article C.5 and, (3) the flow,
influent BOD and/or suspended solids exceeds the Project design
parameters w~iich will be determined and mutually agreed upon by both
parties after the aeration improvements presently contemplated and
corrective_ maintenance are completed and the plant capacity is
evaluated. The determination of causality shall be made in accordance
with the procedure established in Article C.5.
C.2 In the event any one of the Project influent characteristics, suspended
solids, BODS, or flow, exceeds the design parameters stated above,
OMI 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
10$ or Less
Above 10$ Less than 20$
20$ and Above
Recovery Period
Maximum
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 in Nutrients in the influent, then
OMI will have a thirty (30) day recovery period after the influent is
free from said substances or contains Adequate Nutrients.
C.3 OMI shall not be responsible for fines or legal actions 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 provided that
any and/or all of the above were causally related to the failure to meet
Owner's NPDES requirements. The determination of causality shall be
made in accordance with the procedure established in Article C.S.
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C.4 The estimated Costs for services under this Agreement are based upon
the following Project characteristics:
Flow -- 4.5 million gallon per day
BOD -- 9,371 pounds per day
TSS -- 5,623 pounds per day
The above characteristics are the actual twelve (12) months average
prior to the date services are first provided under this Agreement.
Any change of ten percent (10$) or more in any of these character-
istics, based upon a twelve (12) month moving average, will constitute
a change in scope.
C.5 If NPDES permit requirements are violated, Owner and OMI shall meet
to determine the impact of any breach of this Agreement by Owner
and/or any claim of exemption from liability provided to OMI under this
Agreement. If the parties cannot agree as to effect of such claim by
either or both, then the parties shall submit the issue to binding
arbitration. Each party shall select one arbitrator who shall be an
engineer licensed to do business in the State of Arkansas. These two
engineers shall select a third engineer who shall be mutually agreeable
to both. Each party may be represented by counsel and the arbitration
proceeding shall be had in accordance with the rules of the American
Arbitration Association provided that each party not only shall have the
right to be represented by counsel, but each party shall also have the
right to present evidence on its behalf, cross-examine witnesses, and
have discovery available pursuant to the Federal Rules of Civil
Procedure. Any claim by the Owner that the fines and/or civil
penalties were not caused by the Owner's breach of this Agreement
and/or any claim of exemption from such liability provided to OMI under
this Agreement, shall be proved by Owner by a preponderance of
evidence. The costs of the arbitrators and the arbitration proceedings
exclusive of attorneys' fees, costs of experts and the like, shall be
borne equally by the parties.
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Appendix D
VEHICLE DESCRIPTION
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Appendix E
BASE FEE ADJUSTMENT FORMULA
BF = BFo'(.58 C + .42E )
~ E
0 0
where
BFo = Base fee specified in Article 4.1
BF = Adjusted base fee
Co = Consumer Price Index 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 M eginning service under this
Agreement.
C = Consumer Price Index 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.
Eo = Electrical Cost for the twelve (12) months included in the
base fee specified in Article 4.1.
E = Electrical Cost anticipated for the twelve (12) months of the
adjusted base fee. Anticipated electrical cost to be
determined by multiplying the kWh used times the projected
cost per kWh.
Illustrative Example
BFo = $546,640; first year Base Fee
Co = 120.5; December 1988 C. P. I .
C = 126.5; Hypothetical December 1989 C. P. I . (5$ general
inflation)
Eo = $229,897; First-year Electrical Cost
E _ $241 ,392; Anticipated second-year Electrical Cost (5$ electrical
inflation)
BF = $546,640 (.58 126.5 + .42 241,392 )
120.5 229,897
BF = $546,640 (.61 + .44)
BF = $546,640 (1.05)
B F = $573 , 972 ; Second-year Base Fee
AW1.west memphis.02d3 - 14 - 040589
Appendix F
INSURANCE COVERAGE
OMI shall maintain:
1. Statutory worker's compensation for all of OMI's employees at the
Project as required by the State of Arkansas.
2. Comprehensive general liability insurance in an amount not less
than $1 ,000,000 combined single limits for bodily injury and/or
property damage.
Owner shall maintain:
1. Property damage insurance for all property including vehicles
owned by Owner and operated by OMI under this Agreement. Any
property including vehicles not properly or fully insured shall be
the financial responsibility of Owner.
2. Automobile liability insurance for all vehicles owned by Owner and
operated by OMI under this Agreement.
AW1.west memphis.02d3 - 15 - 040589
Appendix G
THIRTY-DAY INVENTORY
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