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Resolution No. 8068• ♦ 1 1 RESOLUTION NO. 8068 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF 3 VERNON APPROVING .AND AUTHORIZING THE EXECUTION OF A 4 LEASE BY AND BETWEEN THE CITY OF VERNON AND IONICS ULTRAPURE WATER CORPORATION PROVIDING FOR PURIFIED 5 WATER FOR THE OPERATION AND MAINTENANCE OF THE TURBINE GENERATORS 6 7 WHEREAS, on October 17, 2001, the City Council of the City of 8 Vernon adopted Resolution No. 7850 approving a one year lease with 9 Ionics Ultrapure Water Corporation to provide and maintain a Reverse 10 Osmosis/Deionization System (the "System") to purify water for the 11 operation of the turbine generators which expired on October 4, 2002; 12 and 13 WHEREAS, the City of Vernon has a continuing need for the 14 System to purify water for the operation of the turbine generators; 15 and 16 WHEREAS, on September 24, 2002, the Finance Committee 17 recommended that the City Council approve the recommendation of Bruce 18 V. Malkenhorst, Director of Finance, dated September 18, 2002, that 19 recommended that a three (3) year lease be approved with Ionics 20 Ultrapure Water Corporation at an approximate monthly cost of One 21 Thousand Dollars and No Cents ($1,000.00), not including chemical 22 fees. 23 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 24 CITY OF VERNON AS FOLLOWS: 25 SECTION 1: The City Council of the City of Vernon hereby 26 finds and determines that the recitals contained hereinabove are true 27 and correct. 28 SECTION 2: The City Council of the City of Vernon hereby 1 approves the Lease with Ionics Ultrapure Water Corporation, a copy of 2 which is attached hereto as Exhibit "A" and made a part hereof. 3 SECTION 3: The City Council of the City of Vernon hereby 4 authorizes the Mayor and the City Clerk to execute said Lease for, and 5 on behalf of, the City of Vernon. 6 SECTION 4: The City Council of the City of Vernon hereby 7 directs the City Clerk, or his designee, to send one fully executed 8 Lease to: 9 Ionics Ultrapure Water Corporation Attn. Winston Mar, General Manager 10 7777 Industry Avenue 11 Pico Rivera, CA 90660 12 SECTION 5: The City Clerk of the City of Vernon shall 13 certify to the passage of this resolution, and thereupon and 14 thereafter the same shall be in full force and effect. 15 APPROVED AND ADOPTED this 9th day of October, 2002. 16 17 LEONIS C. MALBU G, May r 18- 19 ATTEST: 20 21 22 BRUCE V. MALKENHORST, City Clerk 23 24 25 26 27 28 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8068, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Wednesday, October 9, 2002, and thereafter was duly signed by the Mayor of the City of Vernon. ( SEAL ) BRUCE V. MALKENHORST, City Clerk - 3 - SUPPORTING DOCUMENTS EXHIBIT V4, IONICS ULTRAPURE WATER COMVPATM 7777 Industry Avenue • Pico Rivera, CA 90660 (562) 942-2200 • Fax (562) 948-4640 LEASE IONICS ULTRAPURE WATER CORPORATION, hereinafter called "Lessor," and CITY OF VERNON, whose address is 4305 Santa Fe Avenue, Vemon, CA 90058 (Equipment location: Project Site, 2715 East 50th Street, Vernon); hereinafter called "Lessee," in consideration of the promises made herein and intending to be legally bound, agree as follows: 'a:%7g#:Af7_1:LQt#0 ,613 1. Lessor hereby leases to Lessee one (1) Reverse Osmosis/Deionization System (hereinafter referred to as "System"). This Lease shall become effective on or about October 5, 2002, and shall continue for a full term of three (3) years. RENTALS 2. Lessor shall maintain said System at the address set forth above. Lessee shall pay a monthly rental for the use of said System at the rate set forth in paragraph 12, hereof. The rent due and payable ten (10) days following delivery of each monthly invoice and continuing for the term of this Lease and any renewal thereof. The flrst.rental payment shall include the rental charge for the first month and a prepayment of an amount equal to the rental charges for the last "0" month of this Lease, as a security deposit, by Lessee for the performance of the covenants, conditions, and agreements of this Lease, and also for any damage which Lessor may sustain by reason of an act of Lessee. Such deposit may be applied by and at the option of Lessor to the payment or performance of any obligation of Lessee hereunder, and such application shall not constitute a waiver of payment of such obligation except at the option of Lessor, and shalt not excuse the performance at the time and in the manner prescribed herein of any obligation of Lessee or prevent default thereof, and any such deposit not so applied will be returned to Lessee after termination of the Lease. USE OF SYSTEM 3. The system covered hereby may be used by Lessee only at the PROJECT SITE above and shall not be removed therefrom or sublet, or otherwise disposed of, nor this Lease assigned without the previous written consent of Lessor. OWNERSHIP 4. It is expressly understood that this is an agreement of Lease only, and that Lessee acquires no right, title, or interest in or to the System described herein, other than the right to the possession and use of the same in accordance with the terms .of this Lease. Any identification labels attached to System shall not be removed. COST OF USE 5. Lessee shall bear the entire cost of using the leased System during the term of this agreement, except as provided hereunder. GUARANTEED MAINTENANCE SERVICE 6. During the term of this agreement, Lessor will render guaranteed maintenance service during ordinary business hours, at the Lessee's above -listed address, consisting of the replacement, without any charge, of all worn parts with new parts unless made necessary by fire, flood, accident, carelessness, or abuse; and regular oiling, greasing, adjusting. Also no additional charge will be made for extra service calls required between regular inspections, except when made necessary by fire, flood, accident, carelessness, or abuse. Page 1 of 3 Initials WATER QUALITY AND MAINTENANCE WARRANTY 7. Lessor agrees to the following conditions as regards to operation and maintenance of the System: a) The System will be serviced on a weekly basis by a trained technician. A status report will be supplied to the Lessee after each service. b) An operating log will be maintained at the System site for review by:the Lessee. c) Lessor will operate the System at a quality level that will exceed the Lessee requirement for which the complete System was designed. Quality levels of the System product water will be determined by tests that determine "percent rejection" and total dissolved mineral content of the product water. Water quality will be maintained at a level of 90% or better rejection level at all times. d) Design parameters for product flow (gallons per minute) will be maintained at all times during the term of the contract. e) Lessor agrees to provide emergency service on a seven day, twenty-four tour basis upon four- hour notification by the Lessee to Lessor, to the attention of Mike Espinosa, Service Manager. f) In the event of System failure or any downtime for System maintenance or repair, Lessor agrees to provide an alternate system of adequate size and capacity to the Lessee at no extra charge, including but not limited to the supply of purified water by truck. TAXES 8. Lessor hereby shall pay any personal property taxes levied against the System covered hereby. Any otter taxes levied or based on this agreement or the use of the System covered hereby, except taxes based on Lessors net income, shall be paid by Lessee. WARRANTY AND BREAKDOWN 9. It is understood that Lessee has guarantees or warranties regarding the leased System as to material, workmanship, or the capacity of the System for the full term of the Lease (three years). Lessor shall not be responsible for any loss of time or any other loss resulting from any System breakdown or other failures. Lessor will replace any defective parts within a reasonable time of being notified. It is also understood that there shall be no abatement of rental during any period of breakdown or nonuse of the leased System. ACCIDENTS AND INSURANCE 10. Lessee shall insure all of the personal property involved in this Lease or any amendments thereto against any loss or damage by fire or other hazard or perils, ordinarily included under the standard extended coverage endorsement. Lessee also agrees to insure said property against loss by theft or any other hazard which is not covered by said standard coverage. If the property involved herein is damaged or destroyed by means which are not covered by said insurance, then Lessee shall pay the cost of repairs to restore the same. If the damage is beyond repair, then Lessee shall pay Lessor the reasonable market value of the property before such damage or destruction and said sum shall become immediately due and payable to Lessor. TERMINATION 11. This Lease may be terminated by Lessor prior to the expiration date set forth in paragraph 1. hereof on ten (10) days written notice delivered or mailed to Lessee at its address as set forth above, in the event that lessee (1) fails to pay rental charges within the time specified herein; or (11) makes any breach or default under this agreement; or (111) become bankrupt, insolvent, or makes assignments for benefit of creditors; or (IV) discontinues operation, abandons, or permits the System to be subjected to unreasonable hazards or risks. Such termination of the Lease by Lessor or taking or recovery of the leased System shall not deprive Lessor of any of its rights, remedies, or actions against Lessee for rents or damages or affect Lessee's obligation to make payments provided hereunder. On termination of this Lease for whatever reason, Lessee agrees .that Lessor may immediately take possession of the System covered hereby and remove the same from Lessee's premises without the necessity of resorting to any legal process. This Lease may be terminated by Lessee prior to the expiration date set forth in paragraph 1. hereof on ten (10) days written notice delivered or mailed to Lessor at its address as set forth above. In the event of such termination, Lessee shall only be responsible for Lease payments up to the effective date of Lease termination. Page 2 of 3 Initials RATE SCHEDULE 12. The following rate schedule applies to this agreement: Lessee agrees to pay Lessor 0 cents per gallon of Treated Water for the first 174,000 gallons of Treated Water per month and 0.11 cents per gallon above 174,000 gallons. The minimum rental shall be $1,000.00 per month. GENERAL 13. (a) This agreement contains the full and entire agreement between the parties hereto, and no oral or written understanding with any representative of lessor is of any force or effect whatsoever. (b) This agreement is binding on and shall inure to the benefit of the heirs, executors, administrators, successors, or assigns, of the respective parties thereto. (c) This agreement shall not be amended or altered in any manner unless such amendment or alternation is in writing. • (d) This Agreement shah be construed and enforced in Los Angeles County, Callfomia, in accordance with the laws of the State of California. EXECUTED ON , 2002 at CA "LESSOR" IONICS ULTRAPURE WATER CORPORATION By: Wi Mar, Vice Presid " General Manager t By: Huber Bongolan, SaR�Engineer "LESSEE" CITY OF VERNON By: Leonis C. Mahwrg, Mayor ATTEST: Brace V. Malkenhorst, City Clerk APPROVED AS TO FORM: Eduardo Olivo, Onviolvi City Attorney Page 3 of 3 e CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro -Tern WM. `BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/ City Clerk FAX (323) 826-1438 Finance Committee City of Vernon EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 September 18, 2002 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 e� On October 17, 2001, this legislative body approved an agreement with Ionics Ultrapure Water Corporation for the period from October 5, 2001 through October 4, 2002. At this time, the Director of Utilities is requesting authorization to enter into a three-year Lease Agreement with the same for the lease of one Reverse Osmosis/Deionization System to provide water quality for the operation of the turbines at a minimum cost of $1,000.00 per month, based on $0.11 per gallon above 174,000 gallons of treated water. This has been reviewed by the City Attorney and it is hereby recommended that a three-year Lease Agreement with Ionics Ultrapure Water Corporation be approved and executed. Very truly yours, Bruce V. Malkenhorst Director of Finance BVM/gm September 18, 2002 TO: Bruce V. Malkenhorst, City Administrator FROM: Kenneth J. DeDario, Director of Utilities SUBJECT: Ionics Ultrapure Water Corporation Lease Agreement I recommend approval of the attached Lease Agreement between Ionics Ultrapure Water Corporation and the City of Vernon. This is a three-year lease providing one (1) Reverse Osmosis/Deionization System which will maintain the quality of water used for running the turbines. The cost is a minimum of $1,000 per month based on $0.11 per gallon above 174,000 gallons of treated water. This Agreement has been reviewed by the City Attorney. If you have any questions or comments, please contact me. Thank you for your consideration. KJD:ah Attachment ■ ■mu ■ u ■ A IONICS ULTRAPURE WATER CORPORATION 7777 Industry Avenue • Pico Rivera, CA 90660 (562) 942-2200 • Fax (562) 948-4640 LEASE IONICS ULTRAPURE WATER CORPORATION, hereinafter called "Lessor," and CITY OF VERNON, whose address is 4305 Santa Fe Avenue, Vernon, CA 90058 (Equipment location: Project Site, 2715 East 50th Street, Vernon); hereinafter called "Lessee," in consideration of the promises made herein and intending to be legally bound, agree as follows: PROPERTY AND TERMS 1. Lessor hereby leases to Lessee one (1) Reverse Osmosis/Deionization System (hereinafter referred to as "System"). This Lease shall become effective on or about October 5, 2002, and shall continue for a full term of three (3) years. RENTALS 2. Lessor shall maintain said System at the address set forth above. Lessee shall pay a monthly rental for the use of said System at the rate set forth in paragraph 12, hereof. The rent due and payable ten (10) days following delivery of each monthly invoice and continuing for the term of this Lease and any renewal thereof. The first rental payment shall include the rental charge for the first month and a prepayment of an amount equal to the rental charges for the last "0" month of this Lease, as a security deposit, by Lessee for the performance of the covenants, conditions, and agreements of this Lease, and also for any damage which Lessor may sustain by reason of an act of Lessee. Such deposit may be applied by and at the option of Lessor to the payment or performance of any obligation of Lessee hereunder, and such application shall not constitute a waiver of payment of such obligation except at the option of Lessor, and shall not excuse the performance at the time and in the manner prescribed herein of any obligation of Lessee or prevent default thereof, and any such deposit not so applied will be returned to Lessee after termination of the Lease. USE OF SYSTEM 3. The system covered hereby may be used by Lessee only at the PROJECT SITE above and shall not be removed therefrom or sublet, or otherwise disposed of, nor this Lease assigned without the previous written consent of Lessor. OWNERSHIP 4. It is expressly understood that this is an agreement of Lease only, and that Lessee acquires no right, title, or interest in or to the System described herein, other than the right to the possession and use of the same in accordance with the terms of this Lease. Any identification labels attached to System shall not be removed. COST OF USE 5. Lessee shall bear the entire cost of using the leased System during the term of this agreement, except as provided hereunder. GUARANTEED MAINTENANCE SERVICE 6. During the term of this agreement, Lessor will render guaranteed maintenance service during ordinary business hours, at the Lessee's above -listed address, consisting of the replacement, without any charge, of all worn parts with new parts unless made necessary by fire, flood, accident, carelessness, or abuse; and regular oiling, greasing, adjusting. Also no additional charge will be made for extra service calls required between regular inspections, except when made necessary by fire, flood, accident, carelessness, or abuse. Page 1 of 3 Initials WATER QUALITY AND MAINTENANCE WARRANTY 7. Lessor agrees to the following conditions as regards to operation and maintenance of the System: a) The System will be serviced on a weekly basis by a trained technician. A status report will be supplied to the Lessee after each service. b) An operating log will be maintained at the System site for review by. the Lessee. c) Lessor will operate the System at a quality level that will exceed the Lessee requirement for which the complete System was designed. Quality levels of the System product water will be determined by tests that determine "percent rejection" and total dissolved mineral content of the product water. Water quality will be maintained at a level of 90% or better rejection level at all times. d) Design parameters for product flow (gallons per minute) will be maintained at all times during the term of the contract. e) Lessor agrees to provide emergency service on a seven day, twenty-four hour basis upon four- hour notification by the Lessee to Lessor, to the attention of Mike Espinosa, Service Manager. f) In the event of System failure or any downtime for System maintenance or repair, Lessor agrees to provide an alternate system of adequate size and capacity to the Lessee at no extra charge, including but not limited to the supply of purified water by truck. TAXES 8. Lessor hereby shall pay any personal property taxes levied against the System covered hereby. Any other taxes levied or based on this agreement or the use of the System covered hereby, except taxes based on Lessor's net income, shall be paid by Lessee. WARRANTY AND BREAKDOWN 9. It is understood that Lessee has guarantees or warranties regarding the leased System as to material, workmanship, or the capacity of the System for the full term of the Lease (three years). Lessor shall not be responsible for any loss of time or any other loss resulting from any System breakdown or other failures. Lessor will replace any defective parts within a reasonable time of being notified. It is also understood that there shall be no abatement of rental during any period of breakdown or nonuse of the leased System. ACCIDENTS AND INSURANCE 10. Lessee shall insure all of the personal property involved in this Lease or any amendments thereto against any loss or damage by fire or other hazard or perils, ordinarily included under the standard extended coverage endorsement. Lessee also agrees to insure said property against loss by theft or any other hazard which is not covered by said standard coverage. If the property involved herein is damaged or destroyed by means which are not covered by said insurance, then Lessee shall pay the cost of repairs to restore the same. If the damage is beyond repair, then Lessee shall pay Lessor the reasonable market value of the property before such damage or destruction and said sum shall become immediately due and payable to Lessor. TERMINATION 11 This Lease may be terminated by Lessor prior to the expiration date set forth in paragraph 1. hereof on ten (10) days written notice delivered or mailed to Lessee at its address as set forth above, in the event that lessee (1) fails to pay rental charges within the time specified herein; or (11) makes any breach or default under this agreement; or (III) become bankrupt, insolvent, or makes assignments for benefit of creditors; or (IV) discontinues operation, abandons, or permits the System to be subjected to unreasonable hazards or risks. Such termination of the Lease by Lessor or taking or recovery of the leased System shall not deprive Lessor of any of its rights, remedies, or actions against Lessee for rents or damages or affect Lessee's obligation to make payments provided hereunder. On termination of this Lease for whatever reason, Lessee agrees that Lessor may immediately take possession of the System covered hereby and remove the same from Lessee's premises without the necessity of resorting to any legal process. This Lease may be terminated by Lessee prior to the expiration date set forth in paragraph 1. hereof on ten (10) days written notice delivered or mailed to Lessor at its address as set forth above. In the event of such termination, Lessee shall only be responsible for Lease payments up to the effective date of Lease termination. Page 2 of 3 Initials RATE SCHEDULE 12. The following rate schedule applies to this agreement: Lessee agrees to pay Lessor 0 cents per gallon of Treated Water for the first 174,000 gallons of Treated Water per month and 0.11 cents per gallon above 174,000 gallons. The minimum rental shall be $1,000.00 per month. GENERAL 13. (a) This agreement contains the full and entire agreement between the parties hereto, and no oral or written understanding with any representative of Lessor is of any force or effect whatsoever. (b) This agreement is binding on and shall inure to the benefit. of the heirs, executors, administrators, successors, or assigns, of the respective parties thereto. (c) This agreement shall not be amended or altered in any manner unless such amendment or alternation is in writing. (d) This Agreement shall be construed and enforced in Los Angeles County, California, in accordance with the laws of the State of California. EXECUTED ON 2002 at , CA "LESSOR" IONICS ULTRAPURE WATER CORPORATION By: Wi to Mar, Vice F B =_< Y� Huber Bongolan, "LESSEE" CITY OF VERNON By: Leonis C. Malburg, Mayor General Manager neer ATTEST: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: Eduardo Olivo, Assistant City Attorney Page 3 of 3 (1)