Resolution 1981-07
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RESOLUTION No. 81 - 7
A RESOLUTION CONFIRMING AND AUTHORIZING
EXECUTION AND DELIVERY OF
SEWER REVENUE AGREEMENT
Industrial Wastewater Treatment
and Disposal Facilities Project
RESOLVED, by the City Council of the City of Gilroy, California,
that:
WHEREAS, on January 5, 1980, there was presented to this council
a Sewer Revenue Agreement, a copy of which is attached hereto, and this
Council did authorize the execution of said agreement:
NOW, THEREFORE, I~ IS RESOLVED, DETERMINED AND ORDERED as
follows:
1. The authorization of the Mayor to execute and deliver the
Sewer Revenue Agreement and of the City Clerk to affix the seal of the
City and attest thereto is hereby confirmed.
2. ~he Mayor is hereby directed, on behalf of the City, to
execute the sewer Revenue Agreement, as of February 17, 1981 and the
City Clerk is hereby directed to affix the seal of the City and attest
thereto, and to deliver executed copies to each of the parties.
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I hereby certify that the foregoing resolution was duly and
regularly adopted by the City Council of the City of Gilroy,
California, at a regular meeting thereof held on the 17th day of
February, 1981, by the fOllowing vote of the members thereof:
AYES, and in favor thereof, Councilmembers: ALBH.:R1', CUT\1NI~GHAM, HUr;HAN,
LINK, PATE, TAYLOR and GOODRICH.
NOES, Counci1members: None
ABSENT, Counci1members:
None
APPROVED:
RESOLUTION NO. 81 - 7
. SEWER REVENUE AGREEMENT.
This Agreement, by and between the City of Gilroy, a California
charter city ("City"), and Gilroy Foods, Incorporated, a California
corporation, California Canners and.Growers, a California corporation,
Foremost-McKesson, Inc., a Maryland corporation, and GVF Cannery,
Inc., a California corporation, the latter four parties and their
successors and assigns and other persons becoming parties as provided
by paragraph 7 herein sometimes being referred to as the "Other
Parties,"
WIT N E SSE T H:
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WHEREAS, the industrial wastewater treatment and disposal
system owned and operated by the City (the "Enterprise"), which at ~he
present time exclusively serves the Other Parties to this agreement,
has been the source of air pollution resulting in the issuance by the
Bay Area Air Pollution Control District of several citations to the
City over the past few years and in the issuance by the California
Regional Water Quality Control Board, Central Coast Region, of a
notice of violation in October, 1979;
WHEREAS, as a result of a study commissioned by the City,
Harris & Associates, on November 9, 1979, reported ("Harris Report")
to the City upon several alternative ways by which the air pollution
problem might be solved and recommended the aerobic pond system
alternative at a total estimated project cost not exceeding $1,000,000
and implementation by January, 1980, in order that the project might
be completed in time for the 1980 period of greatest potential air
pollution,
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WHEREAS, upon~view of the Harris Report4lthe Other Parties,
concluded that by a modification of the aerobic pond system
alternative, the reliability of disposal of up to 8 mgd of industrial
wastewater could be improved as well as the air pollution problem
reduced at approximately the same cost:
WHEREAS, the City, on December 17, 1979, accepted the Harris
Report and adopted the recommended project thereunder, subject to
modification by further study, and adopted, by Ordinance No. 79-30,
the City of Gilroy Sewer Revenue Bond Ordinance, a bond resolution or
other similar official action authorizing the issuance of revenue
bonds for the project, and on January 11, 1980, by Ordinance No. 80-1,
readopted said ordinance in confirmation of its decision to undertake
such project and issue bonds therefor:
WHEREAS, subsequent thereto the City has entered purchase
orders, contracted with Harris, Associates, on February 4, 1980, fdr
desigh and construction management services and undertaken other
commitments with respect to such project, each of which orders and
other commitments are fully compatible with the aerobic pond system
alternative of the Harris Report as so modified (the "Project");
WHEREAS, the City has also instituted and completed a study and
pursuant thereto has established charges in accordance with the
estimated costs of making available and providing an industrial
wastewater treatment and disposal service using such project, which
charges are set forth in a resolution or resolutions adopted by the
City Council of the City prior to the date of this agreement as
entered by the City in the testimonium clause:
WHEREAS, the parties hereto desire that the project be further
implemented as soon as possible and that bonds be issued and sold
therefor in order to obviate the possibility of air pollution in 1980;
NOW, THEREFORE, the parties hereto agree as follows:
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1. CHARGE ESTABLISHMENT
(a) City4ltall establish from time t~ime charges payable
to the City for the making available and the providing of an
industrial wastewater treatment and disposal service by the City.
(b) The charges shall be established by the City in
accordance with law and in observance of the principle of charge
establishment in accordance with costs. Cost items include those of
odor control, improvement, treatment, silt removal, general operation
and maintenance and other costs of making available and providing the ,
service, such as bond principal and interest, funding and replacement
funding of any reserve established to secure the bonds and coverage of
any potential revenue variations at least to the extent required by
any such covenant given to secure the bonds.
(c) Charges shall at least include service charges and
standby charges, and in the event the City permits the discharge into
the Enterprise of wastewater of some other person, right of use
charges. Service charges shall be established using the criteria of
biochemical oxygen demand, silt and effluent flow, and with respect to
each of the Other Parties, revenues received from such Other Party
froa service charges in excess of the revenues receivable on the basis
of charges for services rendered shall be credited upon the charges of
such Other party for the succeeding year.
(d) A reserve approximating maximum annually-maturing bond
principal and interest may be established with bond proceeds and
investments, and the coverage covenant may obligate the City to
establish charges sufficient, together with other revenues received,
to provide net revenues up to 1.25 times the aggregate amount of bond
principal and interest coming due within the next succeeding 12 months.
(e) Any reserve remaining in the last year of the bond
term shall be used to pay principal of and interest on the bonds
maturing in such year and shall otherwise, together with other
revenues received (to the extent not inconsistent with other
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provisions of this a~ment), be credited in re~tion of the costs
upon which the charges for the year are based.
2. ANNUAL STANDBY CHARGE
(a) The annual standby charge shall be payable only in the
event an industrial wastewater treatment and disposal service is
available from the City and is not received by one or more of the
Other Parties during any calendar year, and shall be payable solely by
such party or parties not receiving such service.
(b) The annual standby charge payable by a party shall be
based upon a ratio computed for the latest calendar year that
industrial wastewater treatment and disposal service is received by
such party. The ratio is that of the gross revenues of the City for
such service from such party to that of the gross revenues of the City
for such service from the Other Parties (including the party) from
which no standby charge was payable. Such ratio shall be applied to
the annual fiscal agent fee and expenses, if any, and the principal of
and interest on the bonds maturing during subsequent calendar years as
reduced by any standby charge payable by another party the ratio of
which is computed for a calendar year preceding the calendar year for
which the ratio of the party is computed, and the product is the
standby charge of the party for such calendar year.
3. CHARGE COLLECTION
(a) The service charges shall be due on the first day of
the month succeeding the month in which an industrial wastewater
treatment and disposal service is rendered and shall be delinquent the
first day of the next month thereafter, except that service charges
shall be recomputed within the last 3 months of each calendar year,
and such charges for services rendered, together with right of use and
annual standby charges, if any, shall be due by the twentieth day of
November and shall be delinquent the first day of December of each
calendar year.
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(b) Delinquent charges shall accrue penalties as
established by the City and shall be collectible by suit, lien and
foreclosure, or other appropriate remedy, including denial of service,
and the amount due from a party shall be a personal obligation of such
party, payment of which may be enforced by any other party together
with reasonable attorneys fees and costs of suit.
4. CHARGE SUFFICIENCY
Nothing in this agreement shall prevent the establishment
and collection by the City of service charges clearly sufficient under
the resolutions and other similar official actions providing for the
issuance of the bonds; however, the service charges shall be adjusted
in accordance with right of use and annual standby charges received.
5. SERVICE AVAILABILITY AND RECEIPT
An industrial wastewater treatment and disposal service
shalll for purposes of this agreement, be deemed to be available from
the City if, with respect to each party separately, such party can
lawfully discharge wastewater into the Enterprise within an aggregate
period of two (2) months during a calendar year and shall be deemed to
be received by Such party during such calendar year if such party
does discharge wastewater to the Enterprise within an aggregate period
of 45 days that such party is in actual operation during such calendar
year.
6. PARTIES \
(a) Nothing in this agreement prohibits the City from AllJVl1
permitting the discharge into the Enterprise of wastewater of othe~ ~
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persons, provided that such persons become obligated to pay a right of <~
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use charge, the City undertakes to enforce such obligation, and upon'
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payment of such right of use charge such persons become parties
entitled to exercise every right and power of the Other Parties under
this agreement by assuming in writing the obligations of Other Parties
under this agreement and if any such person is a subsidiary of a
parent which consolidates annual financial statements of such person
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with ~uch parent, sudllbarent guarantees payment4lt the assumed
obligations.
(b) Successors by consolidation or merger of an Other
Party, or assignees of all or substantially all of the assets of an
Other Party which are used or useful in the business conducted at the
premises of a party for which the City's industrial wastewater
treatment and disposal service is available, shall succeed to, and be
substituted for, and may exercise every right and power of such party
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under this agreement, without the payment of a right of use charge, by
assuming, in writing, the obligations of Other Parties under this
agreement, provided that, at the time of any such assumption, such
party is not in default under this agreement, and provided further
that if such successor or assignee is a subsidiary of a parent which
consolidates annual financial statements of such successor or assignee
with such parent, such parent guarantees payment of the assumed
oblig~tions.
7. TERM
This agreement shall continue in full force and effect so
long as any bonds issued pursuant to Ordinance Nos. 79-30 or 80-1 are
unpaid, or until provision for full payment of the bonds has been made
as provided in the resolutions and other similar official actions
providing for issuance of the bonds.
8. WARRANTIES NEGATED
The City makes no warranty express or implied as to the
condition of the Enterprise after completion of the project, that the
Enterprise will be sufficient for the treatment and disposal of
industrial wastewater of the Other Parties, or will be suitable
therefor without air pollution.
9. MODIFICATIONS AND AMENDMENTS
This agreement may be modified or amended from time to time
by a writing duly executed by the parties, provided that no such
modification or amendment shall reduce either the obligations of the
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Other Parties to pay the established charges or the term of this
ag reement .
10. NOTICES
All communications hereunder shall be in writing and shall
be given to each of the parties at the address of such party on file
with the City Clerk and communicated to each of the parties. Until so
changed, the addresses stated in Exhibit A hereto are the addresses so
filed and communicated.
11. BINDING EFFECT
This agreement shall inure to the benefit of, and shall be ·
binding upon, each of the parties and their respective successors and
assigns, subject, however, to the limitations of paragraph 6(b).
12. LAW GOVERNING
This agreement is entered into in California by the
execution and delivery of same by the City in California on the date
entered by it in the testimonium clause below subsequent to the
execution and delivery of same by each of the Other Parties, and
subsequent to the execution and delivery of the indorsements of
guarantY,if any, and shall be construed in accordance with and
governed by the laws of the State of California.
IN WITNESS WHEREOF, the City being authorized by valid and
subsisting resolution of its City Council duly adopted, has caused
this agreement to be executed and delivered in its name and behalf by
and through the Mayor, with the City seal impressed hereon and
attested by the City Clerk, and each of the Other Parties being
authorized by valid and subsisting resolution of its Board of
Directors, duly adopted, has caused this agreement to be executed and
delivered in its name and behalf by its officers thereunto duly
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authorized, all as of the
day of
, 1980, with
actual execution occurring on the date set out after the respective
signatures appearing below.
CITY OF GILROY
By 7f~~~
Mayor
Executed this~'
JAN 1981
5 day of
, n80:
ATTEST:
"Ci ty"
GILROY
By
Title:
-
Ex:r;,ed this ;;l~ day of
;10/. , 1980.
ATTEST:
,1.:/ /.~tI.HW: C;/z'1 f.:;
Secretary
(SEAL)
CALIFORNIA CANNERS AND GROWERS
By ~/4%g.~.
Title: Vice-Pres. Production
Executed this
July
3rd day of
, 1980.
ATTEST:
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cretary
(SEAL)
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FOREMOST-MCKE~, INC.
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ATTEST:
APPROVED
AS TO
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, AS 10_
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I TtINS ANO'" .
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o APPRMO I
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By N. W. MARKUS, ,JR.
Title:
Vice President
Executed this
_____~tember
4th day of
, 1980.
CSEAL)
GVF
day of
, 1980.
By
Title:
ATTEST:
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(SEAL)
III
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"Other parties"
INDORSEMENT OF GUARANTY
McCORMICK & COMPANY, INCORPORATED, a Maryland corporation
("Guarantor"), of which Gilroy Foods, Incorporated ("Obligor"), one of
the corporations that executed the foregoing agreement, is a
wholly-owned subsidiary, and for the direct benefit of which Guarantor
in the conduct by Obligor of the business of Guarantor the foregoing
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City of Gilroy
City Hall
7390 Rosanna Street
Box 66
Gilroy, California 95020
Attn: Susanne E. Steinmetz,
City Clerk
Gilroy Foods, Inc.
1350 Pacheco Pass Highway
Gilroy, California 95020
Attn: Richard R. Zahner,
Director of Engineering
California Canners and Growers
Box 395
Lewis street
Gilroy, California 95020
Attn: Tom Filice,
Plant Manager
Foremost-McKesson, Inc.
P. O. Box 37
Gilroy, California 95020
Attn: Menandro Gomez,
Production Coordinator
GVF Cannery, Inc.
7050 Monterey Street
P. O. Box 1787
Gilroy, CA 95020
Attn: Fred Avall!,
President
EXHIBIT "A"
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4gre'ement has been executed, for and in consideration of the executioh'
by the City of Gilroy (.City.) of the foregoing agreement,
unconditionally guarantees to City, its successors and assigns, the
full, prompt and faithful payment and performance by Obligor of each
of the provisions and conditions of the foregoing agreement on its
part to be discharged and any modification or amendment of such
agreement authorized thereunder, and hereby waives notice of
acceptance hereof and of default under such agreement as so modified
or amended.
IN WITNESS WHEREOF, this indorsement is executed and delivered
on the date set forth after the signature of the Guarantor below-
McCORMICK & COMPANY, INCORPORATED
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ATTEST-.f" /
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La.
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By )I. \.~ tv :J.'1-r ~-.-/
Title: f'R"l:::>Il>Li:N-r I
Executed 8lAd d. eli'::'*:r..~d)this 1811z::.--
day of A,.VJ!.t!e-T1t.A'..VC-/ , 1980.
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(SEAL)
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