Resolution No. 6623
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RESOLUTION NO. 6623
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION
OF AMENDMENT NUMBER ONE TO THE TRANSMISSION
SERVICE AGREEMENT BY AND BETWEEN JEFFERSON
SMURFIT CORPORATION (FORMERLY KNOWN AS CONTAINER
CORPORATION OF AMERICA) AND THE CITY OF VERNON
FOR A COGENERATION FACILITY LOCATED AT 2001 EAST
57TH STREET
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WHEREAS, the City of Vernon and Jefferson Smurfit
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Corporation (formerly known as container Corporation of America)
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(hereinafter "Jefferson Smurfit") entered into a Transmission
Service Agreement dated November 26, 1984, for a cogeneration
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facility located at 2001 East 57th Street within the City of
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Vernon; and
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WHEREAS, the city of Vernon and Jefferson Smurfit have
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had some disputes over certain rights and duties of the parties
under the Transmission Service Agreement; and
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WHEREAS, the City of Vernon and Jefferson Smurfit desire
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to resolve their dispute and to amend the Transmission Service
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Agreement as set forth in Amendment Number One thereto; and
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WHEREAS, as part of this dispute resolution, Jefferson
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Smurfit agrees to pay to the City of Vernon before June 1, 1995,
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the sums owed for capital costs and operation and maintenance
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costs resulting from the installation, operation and maintenance
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of interconnection facilities by the city of Vernon.
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
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CITY OF VERNON AS FOLLOWS:
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SECTION 1: The City Council of the City of Vernon does
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hereby find and determine that the recitals contained hereinabove
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are true and correct.
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approves the Amendment Number One to the Transmission Service
SECTION 2: The City Council of the City of Vernon hereby
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Agreement, a copy of which has been presented to the City Council
concurrently with this resolution, and the City Council hereby
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orders said Amendment to be received and filed by the City Clerk.
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authorizes the Mayor and the City Clerk to execute said Amendment
SECTION 3: The City Council of the City of Vernon hereby
for, and on behalf of, the City of Vernon.
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certify to the passage of this resolution and thereupon and
SECTION 4: The City Clerk of the City of Vernon shall
thereafter the same shall be in full force and effect.
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ATT~
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BRUCE V.
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APPROVED AND ADOPTED this 16th day of May, 1995.
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MALKENHORST, City Clerk
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STATE OF CALIFORNIA )
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COUNTY OF LOS ANGELES )
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I, BRUCE V. MALKENHORST, City Clerk of the City of
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Vernon, do hereby certify that the foregoing Resolution, being
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Resolution No. 6623, was duly adopted by the City Council of the
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City of Vernon at a regular meeting of the City Council duly held
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on Tuesday, Mav 16, 1995, and thereafter was duly signed by the
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Mayor of the City of Vernon.
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BRUCE V. MALKENHORST, City
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(SEAL)
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". AND
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EXECUTION COPY
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AMENDMENT NUMBER ONE TO TRANSMISSION SERVICE
AGREEMENT FOR A COGENERATION FACILITY LOCATED AT
2001 EAST 57TH STREET
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This Amendment Number One to Transmission Service
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Agreement is made and entered into and executed in duplicate
o[iginals,.. at Vernon, California effective l/f)ru; / u , 1995.
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BY AND BETWEEN
CITY OF VERNON, a Municipal
corporation (hereinafter referred to
as"Vernon"),
4305 Santa Fe Avenue
Vernon, CA 90058
JEFFERSON SMURFIT CORPORATION, a
Delaware corporation (formerly known
as container corporation of America)
(hereinafter referred to as
"Cogenerator")
8182 Maryland
Clayton, Missouri 63105
RECITALS
WHEREAS, Vernon and Cogenerator entered into that certain
Transmission Service Agreement dated November 26, 1984, for a
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cogeneration facility located at 2001 East 57th Street within the
City of Vernon; and
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WHEREAS, Vernon and Cogenerator have had some disputes
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over certain rights and duties of the parties under the
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Transmission Service Agreement; and
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WHEREAS, Vernon and Cogenerator desire to resolve their
disputes and to amend the Transmission Service Agreement so as to
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reflect the agreement set forth herein; and
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WHEREAS, one such dispute under the Agreement pertains to
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final payment for certain capital costs for Interconnection
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Facilities, Special Facilities, and Transmission Facilities; and
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WHEREAS, pursuant to letters from Cogenerator dated
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April 28, 1986, January 23, 1987, and January 22, .1990, the
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parties agreed to delay final payment until such time as final
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costs were developed and Cogenerator had an opportunity to review
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all work orders, jOb orders, drawings, schedules, etc.; and
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~EREAS, such capital improvements were made and such
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records were maintained by Energy Services, Inc.
(ESI), a
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9ubsidiary of Southern California Edison Company, which terminated
its contract to operate and maintain the Vernon Electric System on
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July 1, 1989, and the requests to ESI by both Cogenerator and
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Vernon were ineffectual in obtaining such records; and
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WHEREAS, Vernon entered into arbitration with ESI to
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obtain all records for the Vernon Electric System which
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arbitration was settled in 1994; and
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WHEREAS, the parties have agreed that the payment to be ~
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made hereunder by Cogenerator to Vernon constitutes an adequate
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settlement of the capital costs of such facilities as shown in the
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records; and
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WHEREAS, another dispute between Cogenerator and Vernon
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pertains to the amount of fees due to Vernon for operation and
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maintenance costs under the Agreement; and
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WHEREAS, the parties have agreed that the payment to be
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made hereunder by Cogenerator to Vernon constitutes an adequate
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settlement of the operation and maintenance costs owed to the
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City; and
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WHEREAS, as part of the dispute resolution, Vernon shall
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continue to operate and maintain the Interconnection Facilities
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and Cogenerator shall pay to Vernon the sum of Four Thousand
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Dollars ($4,000) per month each month during the remaining term of
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the Agreement for performin9 the operation and maintenance of the
Interconnection Facilities.
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NOW, THEREFORE, in consideration of the mutual covenants,
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promises, and conditions contained herein, and the Recitals
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~ettlement of the dispute referenced above, the following sums,
to which includes interest, on or before June 1, 1995:
11 a. For past due capital costs: $400,000.00
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12 b. For past operation and maintenance: $400,000.00
13 Total $800,000.00
14 c. Pay the fees provided for in the amended Section
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16 2. In furtherance of said settlement, the Parties hereby
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amend Article 27.0 of the Transmission Service Agreement to read
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as follows:
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27.0
Ownership and Operation of
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Interconnection Facilities
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27.1 Cogenerator has commenced parallel
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operation of the Cogeneration Facility and
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written approval for operation of the
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Interconnection Facility has been given by
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Vernon.
27.2 Vernon shall own, operate and maintain
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the Interconnection Facilities.
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27.2.1 Vernon shall bill Cogenerator
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"If
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and Cogenerator shall pay Vernon a fee in an
amount equal to Four Thousand Dollars ($4,000)
per month starting on June 1, 1995, for
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performing the operation and maintenance
(including the replacement thereof, if
necessary) of the Interconnection Facilities.
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27.2.2 The operation and maintenance
fee for the Interconnection Facilities provided
for herein shall be adjusted after May 31, 1996,
and on an annual basis thereafter. The first
fee adjustment shall take effect on June 1,
1996. Said fees shall be adjusted based upon
the seasonally unadjusted Consumer Price Index
for the Los Angeles/Long Beach Anaheim
Metropolitan Area (all items: 1967=100) as
reported by the United states Department of
Labor. Said adjusted fee shall be derived as
follows: A x B/C = adjusted operation and
maintenance fee where A = $4,000 per month; B =
CPI for March 1996; and C = CPI for April 1995.
Said adjusted operation and maintenance fee
shall be applicable from June 1, 1996 through
May 31, 1997. The adjusted operation and
maintenance fee for June 1, 1997 through May 31,
1998 shall be derived as follows: A x B/C =
adjusted operations and maintenance fee where
A = $4,000 per month; B = CPI for March 1997;
and C = CPI for April 1995. For each succeeding
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twelve (12) month period, the adjusted operation
and maintenance fee shall be determined in the
same manner, e.g., A = $4,000 per month; B = CPI
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for the last month in the immediately preceding
twelve (12) month period; and C = CPI for April
1995.
~ignatures.
DATED: JJ{t?y~ 0{ Y
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BRUCE V.
, 1995
CITY OF VERNON
BY~
-- LEOlHS C. MAL . RG, May r
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MALKENHORST, City Clerk
APPROVED AS TO FORM:
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DAVID B. BREARLEY, city A torney
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DATED:
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DATED:
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17 May
, 1995
17 May
, 1995
JEFFERSON SMURFIT CORPORATION,
a Delaware corporation
(former known as CONTAINER
CORPORATION OF AMERICA)
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Name: W.N. Wandmacher
Title: Div. V.P. Containerboard Mills
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By: --;:> _j ()~ ~4JWvfY\~
Name: E. h. Dunsmoor Jr. "-..
Title: General Manager Vernon Mill
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