1997 AGN MAY 06 I20 - Laserfiche WebLink

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�%r Agenda Report Meeting of May 6, 1997 Page 2 The provision of Section 15.02 in question was included in the Agreement to aliow minor technical and non-substantive revisions to the Exhibits to conform to the actual deal encompassed by the overall Agreement. The table in question is not a"report" or "form," it is a schedule of substantive performance required by the provisions of Section 4.02(b)(1) of the Agreement. Had there been a discrepancy, then the editing and revision language af Section 15.02 would have applied to allow the table to be brought into compliance with the express terms of the Agreement upon written authorization. That was not the case. In order to change the schedule as requested by Taormina, the provisions of Section 4.02(b)(1) must first be altered. Section 4.02{b)(l) of the Agreement, which contains material pravisions that can only be amended by Council action, provides as follows: "Contractor will provide an irrevocable letter of credit issued by a bank satisfactory to the City in its independent judgement [sic] #o be attached to such Exhibit 4.02(b(1}#1, being an inevocable obligation in an aggregate amount equal to $100,000 to make payment to the City of $20,000 if Contractor has not acquired all requisite interest in its project site in the reasonable judgement [sic] of the City necessary and sufficient for praject development within six months of the date hereof; $35,000 if in the reasonable judgement [sic] of the City Contractor has not completed a11 environmental review (including final approval of any required enviroz�mental impact repork) and received all permits (including any solid waste facility permits) within thirty-six months of the date hereof; and $45,000 if in the reasonable judgement [sic] af the City Contractor has not cornpleted construction and commenced processing operations (including processing Recyclables, Bulky Waste and Commercial MSV� within fifty-four months af the date hereof. Such funds sha11 be immediately available to the City upon City's sole presentation to such bank of a sight draft drawn on sueh bank accompanied by certification of the City Manager that the milestones described in the preceding sentence have not timely oecurred." While the request of Taormina io adjust the acquisition deadline may be reasonable given all the circumstances, amendment of Section 4.02(b){1), which was required to permit the delay, is a material and discretionary change for which Council approval was required. In the absence of Council approval, the $20,OQ0 penalty should have been forfeited to the City as provided in the Agreernent. The Agreement placed the entire risk for acquiring an appropriate site on Taormina and Taormina accepted that risk when it entered into the Agreement as evidenced by the penalty provisian. At the present time, this matter is being presented to the City Council for action to either amend the Agreement formally ar to enforce the farfeiture provisian of Section 4.02(b)(1) to require payment of the $20,400 penalty. , _ _ __ _ _, 1 __�,. __ -