1997 AGN SPC MAY 19 - Laserfiche WebLink

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Agenda Report City Council Meeting May 19, 1997 Summary of Proposed Changes The following briefly summarizes the changes that have been made: Deletion of Transition Requirements At the time that the Agreement was executed, a wide variety of things needed to be done to complete the transaction. Specific requirements were established that included the obligation to hire all City personnel, the obligation to provide a letter of credit for completion of the MRF facility, payment of a transition fee, conducting a customer satisfaction survey, acquisition of appropriate vehicles for service, and the like. The amendment purports to remove only those provisions that have been fulfilled. By the deletion of some of those provisions, however, the amendment eliminates certain protections that were built into the agreement. For example, all the representations regarding payment of lobbyists and gifts and contributions contained in Exhibit 2.01 have been deleted. Those representations were made as of the date of execution of the Agreement and no subsequent amendment should delete them. To do so may invalidate the original representation. In view of the fact that there is no need to make such a change, it is surprising that the change has been proposed. Further, the representation regarding hiring of all City employees has also been deleted. While it may be argued that Taormina fulfilled this obligation, as you are aware, there is some concern that City employees were later terminated by Taormina. If the obligation has been properly performed, there should be no problem in leaving the provision in the Agreement. Ordinarily, Agreements are not revised simply to chronicle performance. In addition, the remaining obligation to City employees who are still with Taormina should be preserved. City Guarantee of Exclusive Franchise The amendment purports to restate a "warranty" by the City that Taormina is intended to have an exclusive franchise within the City and that that franchise will extend to all City accounts upon termination of the existing franchise agreement with Jack's Disposal, Inc. ("Jack's"). That warranty is absent from the existing Agreement. Taormina, in Exhibit 4.02(b) has not only created this warranty, it has attempted to make the warranty retroactive to the date of execution of the Agreement. Further, Taormina's changes impose a penalty on the City equal to approximately $2.4 million if the City fails to terminate its franchise agreement with Jack's by 1999. That was never part of the