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HomeMy WebLinkAboutPR 23747: CONTRACT WITH VITOL BIOMETHANE, PROJECT TO CONVERT LANDFILL GAS INTO A GAS-TO-ENERGY PROJECT ,'ll i City of nrr rthu T(XUS INTEROFFICE MEMORANDUM Date: April 30, 2024 To: The Honorable Mayor and City Council Through: Ronald Burton, CPM, City Manager From: Flozelle C. Roberts, EIT, MEng, MBA, CPM, Director of Public Works RE: PR 23747—Authorizing the City Manager to Negotiate a Contract with Vitol BioMethane for the Property Lease and Development of a Project to Convert Landfill Gas into a Gas-to-Energy Project Introduction: This agenda item intends to seek the City Council's approval for PR 23747 authorizing the City Manager to negotiate a contract with Vitol BioMethane for the property lease and development of a project to convert landfill gas into a gas-to-energy project. Background: The decomposition of organic materials in the landfill produces landfill gas,which is comprised of methane, carbon dioxide, and other organic compounds (collectively known as greenhouse gases).Methane gas is more potent than carbon dioxide,and its regulation has been implemented by the United States Environmental Protection Agency(EPA)under the Clean Air Act. The Landfill's size does not warrant the installation and operation of a gas collection and control system. However, the City is taking a proactive approach to countering regulation by pursuing a landfill gas-to-energy project. This project proposes to lease property at the Landfill for the construction and operation of a gas-to-energy facility to reduce greenhouse gas emissions, help improve the local air quality, and provide revenue for the Landfill. Staff issued a request for qualifications on January 24,2024,with three(3)submissions received from Morrow Energy of Midland,Texas;Vitol BioMethane of Houston,Texas; and OCI Global "Remember,we are here to serve the Citizens of Port Arthur" Cell.of f. rihur !< l : of Houston, Texas. Interviews with each respondent were conducted with Vitol BioMethane receiving the most points from the proposal and interview scoring. Budget Impact: There is no cost associated with negotiating the contract. Recommendation: It is recommended that the City of Port Arthur's City Council approve PR number 23747 authorizing the City Manager to negotiate a contract with Vitol BioMethane of Houston, Texas, for the property lease and development of a project to convert landfill gas into a gas-to-energy project. "Remember,we are here to serve the Citizens of Port Arthur" P.R.No.23747 05/01/2024 FCR Page 1 of 3 RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO NEGOTIATE A CONTRACT WITH VITOL BIOMETHANE OF HOUSTON, TEXAS, FOR THE PROPERTY LEASE AND DEVELOPMENT OF A PROJECT TO CONVERT LANDFILL GAS INTO A GAS-TO-ENERGY PROJECT. FUNDS ARE NOT REQUIRED TO NEGOTIATE THE CONTRACT. WHEREAS,landfills produce greenhouse gases that are regulated by the United States Environmental Protection Agency under the Clean Air Act; and, WHEREAS,the City of Port Arthur's landfill size does not warrant the installation and operation of a gas collection and control system. However, staff deems it prudent to take a proactive approach to countering regulation by pursuing a landfill gas-to-energy project; and, WHEREAS,the project proposes to lease property at the Landfill for the construction and operation of a gas-to-energy facility to reduce greenhouse gas emissions,help local air quality,and provide revenue for the Landfill; and, WHEREAS, staff issued a request for qualifications on January 24, 2024, with three(3) submissions received from Morrow Energy of Midland, Texas; Vitol BioMethane of Houston, Texas; and OCI Global of Houston,Texas; and, WHEREAS, staff conducted interviews with each proposer and scored each on their proposals and interviews, with Vitol BioMethane receiving the most points from the scoring (see Exhibit A); and, WHEREAS, the City Council of the City of Port Arthur finds it to be in the best interest of the citizens and businesses of Port Arthur to negotiate a contract with Vitol BioMethane (see Exhibits B and C) to lease property at the Landfill for the construction and operation of a gas-to-energy facility;now,therefore, P.R.No.23747 05/01/2024 FCR Page 1 of 3 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR,TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Manager of the City of Port Arthur is hereby authorized and directed to negotiate a contract between the City of Port Arthur and Vitol BioMethane of Houston, Texas,to lease property at the Landfill for the construction and operation of a gas-to- energy facility with said contract being subject to the final approval of the City Council. Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED, AND APPROVED this day of , A.D., 2024, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: (Mayor) Councilmembers: • NOES: Thurman Bill Bartie Mayor ATTEST: Sherri Bellard, TRMC City Secretary P.R.No.23747 05/01/2024 FCR Page 1 of 3 APPROVED AS TO FORM: fir.F144" s M. Black,Esq. City Attorney APPROVED AS TO ADMINISTRATION: Ronald Burton, CPM City Manager lozell . Robert ,EI , MEng, MBA, CPM Direc r f Public s APPROVED AS TO AVAILABILITY OF FUNDS: A/ A Lynda Boswell, ICMA-CM, MA Director of Finance LAN Clifton E. Williams, Jr., CPPB Purchasing Manager PR 23747 Exhibit A 0� / \VP*/ f8 © : /, ,� 4..3'. � q = ® _ k z q o © = \ 2 - N 2 / q n m cct2 c c . = U 2 3o / co •C " S... 04. 7 a $ q c (N (15 ƒ , i. 0 3 44 » m o o q 3 w) q 7 ° % J N w - / U 4 = \ a c _ , 7 0 2 % It c > \ Ug / •7 / / m m � m o o o o o k * ■ `© ® w w w m el Uri el w / 2 \ ii � � / k o / 4 / 4. § 0 E « ( @ -= E 0 V c f £ � � ON 0 t 2 2 . [ _ ) / § tz. 7 \ c � '\ i 04.1 T. \ \ \ ƒ 0 « ,� 'c k 7 % G ° .@ '% , 2 -73 E 2 ? \ J 0 0 a § ct = ■ a CP Q o W 0 2 3 >- PR 23747 Exhibit B VBM Vrtol BoMha►e Section 2:Executive Overview 11 VBM Yrol BoMethar e Proposal should include an Executive Overview/Summary of the proposed service describing the approach, methodology, City's responsibilities and overall schedule and cost. Approach. VBM considers Port Arthur's landfill LFGE Project to be a "partnership" between itself, the City of Port Arthur (City), and the Port Arthur Sanitary Landfill (Landfill), with each side obligating itself to assist in critical aspects of the Project now and in the future to maximize the opportunity for success. Methodology. The core of VBM's proposal is the Renewable Identification Number (RIN) program. RINs were created as part of the Renewable Fuel Standard, introduced through the Energy Policy Act 2005. These credits dramatically increase the value of the methane produced by landfills and make the construction and operation of facilities economically viable to capture and clean ("process") the gas into usable fuel for transportation and other uses. By collecting, cleaning, and piping landfill gas to the U.S. natural gas pipeline network, RIN credits become available to generate income to support these processing facilities. See Exhibit 2 for more information on the RIN program. City Responsibility. The City and Landfill, for their part, will have an ongoing responsibility in our "partnership" for (i) access to the Landfill, (ii) exclusive rights to the biogas, (iii) ongoing procurement and contribution of future waste, and (iv) making reasonable faith efforts to procure a favorable mix of organic waste most likely to produce quality gas. A detailed discussion of the responsibilities shared between the City/Landfill and VBM as operator is provided in Section 4. VBM Responsibility. For its part, VBM will undertake the following contributions and ongoing responsibilities: (i) paying in full for the construction, operation, and maintenance of the landfill gas collection and control system, (ii) construction, modification, maximization, expansion, operation, and maintenance of state-of-the-art landfill gas treatment facilities; (iii) construction, operation, and maintenance of natural gas pipeline facilities; and (iv) marketing/trading gas and associated environmental attributes to the strongest counterparties. Overall Schedule. Upon completion of the RFP process, and assuming VBM is selected, the City and VBM will finalize the terms of and execute the Landfill Gas Agreement(LGA). As discussed further in Section 5 herein, the project development schedule for the City's project is of critical importance given the expiration of attractive tax benefits at the end of 2024. Given this factor and the long lead times for equipment (currently six months for critical components), the City would be prudent to select the project award and negotiate the GPA as soon as possible. VBM would immediately enter equipment orders and place deposits to assure delivery. All major tasks would be undertaken immediately and proceed in tandem, and VBM would expect all these tasks to be completed before receipt of equipment(i.e., six months). Once equipment is received, plant start- up can be accomplished in twelve months. As a result, depending on how fast the LGA can be negotiated, the entire project can be completed in 17-20 months following notice of the award. Cost. There will be no cost to the City, as VBM will pay in full for all costs (see "VBM Responsibility" above). 12 VBM Vito'BbMethane Section 3:Firm Qualifications 13 U VBM Vitol goy pare Any Proposer who did not submit a statement of qualification in response to the City's Request for Qualifications, Study, Design, and Develop a Project to Convert Landfill Gas Into a Landfill Gas to Energy Project, Project P23-047, dated May 11, 2023 (RFQ), must include a statement of qualifications containing the "Required Qualifications Contents" of the RFQ. A copy of the RFQ is available on request. VBM submitted a statement of qualifications on June 14th, 2023, in response to the City's Request for Qualifications P23-047 dated May 11, 2023. This submission was made in the name of VBM's predecessor entity,BioMethane Partners. BMP was acquired by Vitol,Inc.,the world's largest multi- national energy trading firm, on September 6th, 2023. Vitol is headquartered in Switzerland, but its most significant operations are in Houston,Texas.Vitol recorded 2022 revenues of$505 billion, ranking it as one of the largest private companies in the world.The firm's oil trading operations move the equivalent of Japan's oil consumption,the 4th largest economy in the world, worldwide every day(approximately 7.4 million barrels daily). See Exhibit 1 for an overview of Vitol. VBM, a Texas-based LFGE company, will be directly responsible for the Project's design, building, and operation. Our team leaders have over 100 years of experience building and operating gas collection systems, natural gas treatment plants, and midstream operations across the LFG and traditional natural gas businesses. Below is an updated list of VBM's key members from our June 14th, 2023 submission and their responsibilities. We believe that the combination of VBM's operational team,Vitol's marketing and trading expertise,and Vitol's financial strength create the industry's strongest and most experienced landfill-gas-to-energy company. Mike Noack— CEO, VBM (469) 875-6901 Stephen Smith— Senior Project Advisor (346)265-0686 Kyle Walker— VP of Engineering—GCCS (469) 435-4698 Matt Willison— VP of Engineering& Operations (469)475-6059 Tyler Betz— Director of Plant Operations (346)624-0083 Will Smith— Gas Operations Manager (346) 265-0392 Paul Manley— VP of Business Development (832) 316-6272 Robert McGinley— VP of Renewable Partnerships (469) 953-5843 14 U VBM Vttol BioMethane Mike Noack.Mike has a BS in Mechanical Engineering from Oral Roberts University. He began his professional career with Shell Oil in the 1980s as a production engineer. He subsequently headed an E&P company based in Lake Charles, LA, where he drilled, completed, and operated oil and gas wells across the Gulf Coast. Mike moved back to North Texas in 2005 as head of operations of Cimmarron Gathering, a midstream company that gathered wells from public and private producers. Cimmarron's principal system was over 50 miles of the poly pipe moving high CO2 gas to three methane processing facilities with compression and CO2 removal equipment.It is now part of Kinder Morgan. Since then, he has started three private-equity-backed companies under the Tristate Midstream name that have owned and operated over 1,000 miles of pipelines in East Texas and North Louisiana and a dozen CO2 extraction facilities employing numerous compression and gas-treating processes. During his 30-year-plus career, he has overseen the construction and operation of over 50 methane processing plants and negotiated interconnects and transportation agreements with numerous interstate pipeline companies. Stephen Smith, P.E. Stephen holds a Bachelor of Science in Agricultural Engineering from Colorado State University and a Master of Science in Sanitary Engineering from the University of Colorado. He has performed leadership roles at numerous engineering and operating companies across the globe's waste treatment and renewable energy spaces. Stephen has unparalleled experience successfully building and operating LFGE sites using different technologies. These companies and achievements include: • Black&Veatch Consulting Engineers: Project Manager over multiple wastewater, sludge management, beneficial agricultural use, industrial treatment, and landfill projects around the globe. • ET Technologies,Inc.: Vice President,where he developed,permitted,constructed, and operated the Soils Regeneration Site located at the Salt Lake Valley Landfill. • Solid waste and Landfill related companies that developed, permitted, constructed, and operated the Arizona Soils Composting Facility. This included the implementation of an 845-acre rail-haul landfill facility. • Waste Management: After Waste Management acquired the Arizona sites, he worked for WM as Division President for Arizona. He was responsible for all the landfills and transfer stations in Arizona and, eventually, all the post-collection facilities in a five-state area. Responsibilities included managing employees, regulatory requirements,operations,and community relations. • SCS Engineers: As Vice President, he led 80 personnel in permitting, design, construction, and GCCS operations. He was responsible for the permitting, compliance, and construction oversight of over 500 landfills and over 20 RNG electrical power facilities in the US and many foreign countries. • Hydro Geo Chem, Inc.: President and COO, where his team designed and constructed GCCS systems and expansion of systems for over 11 landfills. Most recently, Stephen spent a decade as Senior Vice President and Chief Operating Officer for Clean Energy Renewable Fuels (CERF), where he was responsible for the financials and operations of over 14 renewable natural gas and 34 electrical power plant facilities owned by the company. He developed, designed, permitted (including zoning/special use), constructed, and operated these RNG facilities ranging in size from 1,700 scfm to 9,500 scfm. His comprehensive 15 VBM Vital Bk Methar e responsibilities included expansion of RNG facilities to accommodate growth; management of pipeline and electrical service interconnect agreements; institution of employee safety and health training programs; compliance with all permitting requirements; evaluation and management of operating data; outreach to local communities; and more. At CERF,he helped form a joint venture with Aria Energy(now BP Archaea)to actively pursue six additional RNG projects,ranging in size from 3,000 scfm to 6,000 scfin each. Over 2.5 years, Stephen evaluated six different RNG plants in the fleet,having four other upgrading technologies. BP has now acquired these projects. See Exhibits 3 and 4 for Stephen Smith's Experience Details Kyle Walker,P.E. Kyle has a BS and MS in Environmental Engineering from the University of Oklahoma and is a Licensed Professional Engineer in Texas. He has worked in the landfill gas industry his whole career. Kyle worked as a Project Engineer for industry-leading GCCS engineering consulting firms (Weaver Consulting Group and Biggs and Mathews Environmental). He worked with over 35 landfills throughout Texas, Midwest, and Southeast United States during this time. This work included GCCS development, design, permitting, construction plans, details/specifications, construction quality assurance, field surveying, and surface emissions monitoring. Kyle then worked as VP of operations and President for Tri Con Works, an industry-leading GCCS installation contractor. During this time, Kyle oversaw GCCS projects on over 150 landfills throughout the United States for over 57 companies/municipalities. These sites included 27 high BTU renewable natural gas projects,25 medium BTU landfill gas to electricity projects, and ten direct thermal projects. See Exhibit 5 for Kyle Walker's Experience Details Matt Willison, P.E. Matt holds a Bachelor of Science in Civil and Environmental Engineering from Mississippi State University. He began his professional career an engineer working as a design and project engineer for various civil-related projects, including 1) water distribution systems, including well design, treatment plant design, storage tank design, and distribution systems; 2) wastewater/sanitary sewer system design including high-pressure force main, lift station/pump station design, and gravity sewer collection system design; 3) new roadway design and construction; 4) roadway reconstruction design and construction; 5) bridge and box culvert design and construction; 6) traffic signalization design and construction; and 7) Site/Grading/Drainage plans. Matt then worked as a Project Engineer and Project Manager for a natural gas midstream company located in Texas with assets in Texas and Louisiana (Tristate Midstream). Matt was responsible for over 700 miles of existing steel high-pressure gathering lines, including over 500 gas meters, 11 compressor stations, and six treating facilities. Matt was responsible for constructing over 50 miles of new high-pressure steel pipelines,metering stations with transmission pipeline companies, and building over ten gas compressors and treatment stations.He was also responsible for air permitting,SPCCC plans,and hydraulic modeling of those assets. Tyler Betz. Tyler holds a Bachelor of Science in Chemical Engineering from the University of Kansas.He began his career as a plant operator for a bioethanol plant,including operating various units such as pumps, distillation columns, filter presses, and fermentation processes. Tyler then 16 CI VBM Yitol B ;Methane worked as an Environmental Engineer and Senior Process Engineer for CERF,Aria Energy(BP Archaea), and Ameresco. Responsibilities included air and building permits, health and safety, hazardous waste reporting, and design engineering for plant processes. Tyler has commissioned and operated over ten RNG facilities using various technologies, such as Pressure Swing Absorption, membrane systems, water wash (water-scrubbing), and solvent wash using digester and landfill gas feedstocks.Tyler was responsible for developing landfill gas curves,process flow diagrams, P&IDs, standard operating procedures for operations such as nitrogen purging, plant startup, and plant shutdown, creating HAZOPs and HAZOP administration, determining equipment sizing and selection, writing control narratives and programming changes, managing gas sampling for pipeline approval and quality testing,factory acceptance testing,function testing, and the Management of Change program. See Exhibit 6 for Tyler Betz's Experience Details Will Smith. Will has been in the landfill gas industry for over 12 years. He has directly managed the GCCS for 15 landfill sites in Texas, Oklahoma, and Virginia, with flow rates ranging from 150 scfm to over 7,000 scfm. Responsible for overseeing wellfield tuning, O&M,regulatory requirements,and regulatory reporting for over 3,000 landfill gas extraction wells. Will has worked with GTE Solar turbines, 3520 CAT engines, 3516 CAT engines, and 3 RNG facilities. Will has worked with LFG Specialties, Parnel Biogas, and John Zink, both enclosed and open flares. He holds a Bachelor of Science(BS)in Geology from the University of Texas San Antonio and a Master of Business (MBA) from Wilmington University. Paul Manley.Paul is a successful entrepreneur,starting and selling companies focusing on the oil and gas industry and multifamily development. He has decades of development experience, most recently successfully developing produced water pipeline gathering systems in the Permian Basin for multiple companies. Robert McGinley,Jr. Rob started his career as a lawyer in King & Spalding's Atlanta office as a financial transactions practice group member. He returned home to the Gulf Coast,representing companies in complex commercial litigation before transitioning back into financial transactions in 2012.Rob has extensive experience in project development,corporate management,transaction structuring and execution, and public and private entity governance. He received his JD, cum laude, from the University of Alabama School of Law and a BA from Washington & Lee University in Lexington,Virginia. In addition to the updated list of team members from our RFQ dated June 14th,2023,VBM would like to provide an updated list of its current projects similar to Port Arthur's LFGE Project. We also provide a current reference with contact information for each project. Texoma Area Solid Waste Authority in Grayson County,Texas(Texoma Landfill).VBM has a contract with the Texoma Area Solid Waste Authority in Grayson County, Texas. After an extensive RFP process awarded the project to VBM, VBM constructed and initiated production from a new GCCS at Texoma,producing natural gas at levels above its projected gas model.Plant 17 VBM Vrtol BoMethane construction has recently been initiated. VBM's primary contact in that Project is John O'Steen, Executive Director of the landfill authority. John O'Steen,Executive Director 25090 State Highway 56 Whitesboro,Texas 76273-4993 903-564-4749 josteen@taswa.com City of Mobile, Alabama (Chastana Landfill). VBM also has a contract with the Solid Waste Authority of Mobile,Alabama,for its Chastang landfill.VBM will upgrade and expand an existing GCCS, construct an RNG plant, construct a natural gas pipeline and interconnect, and sell and market renewable natural gas. Construction will commence this spring. Because the landfill is operated by a third party, Waste Management, the contacts in Mobile are with the Solid Waste Authority's outside attorney, Chuck Miller, and the Authority's outside expert consultant, Jim MacNaughton. Chuck Miller Chuck@clmillerlaw.com (251)463-5421 Jim McNaughton jimmcnaughton@comcast.net (initial telephone contact through Chuck Miller) Black Warrior Solid Waste Authority in Tuscaloosa County, Alabama (Black Warrior Landfill). According to an RFP process, VBM was awarded an RNG project with Black Warrior Solid Waste Authority in Tuscaloosa County, Alabama, and has executed a contract. VBM will commence construction shortly. Like Mobile, the Black Warrior Project has an existing GCCS, which VBM will upgrade, expand, and operate. VBM will also construct an RNG plant, a renewable natural gas pipeline, and interconnect. VBM's primary contact for this Project is Fred Rogers,Executive Director of the landfill authority. Fred Rogers,Executive Director 3301 Landfill Dr, Coker,AL 35452 (205) 339-7330 frogers@bwswa.com DeSoto Parish, Louisiana (Port Arthur Landfill). After an RFP process, VBM was awarded a project with the Mundy Sanitary Landfill in DeSoto Parish, Louisiana. A contract has been executed, and VBM will initiate facility construction next month (March 2024). VBM will construct a new GCCS, since this project does not have an existing GCCS, and construct an RNG plant and pipeline interconnect. VBM's primary contact for this Project is Michael Norton, the Parish Administrator. Michael Norton, Parish Administrator Desoto Parish Policy Jury 18 C7 VBM Vitol B :Met,dr 101 Franklin Street Mansfield,LA 71052 318.872.0738 MNorton@desotoppj.com Other Projects.VBM is in various phases of project development with numerous landfills,which are still confidential, including landfills in Maryland, Alabama, Mississippi, Louisiana, Virginia, South Carolina,Texas,Kentucky, Florida, and North Carolina. VBM's team has worked on other projects listed in Exhibits 3,4, 5, and 6. 19 PR 23747 Exhibit C - THURMAN BILL BARTIE,MAYOR RONALD BURTON TIFFANY HAMILTON,MAYOR PRO TEM City(�f CITY MANAGER r,t COUNCIL MEMBERS: SHERRI BELLARD,TRMC WILLIE BAE LEWIS "� CITY SECRETARY DONEANE BECKCOM HAROLD L.DOUCET,SR u r t r t h u r VAL TIZENO THOMAS KINLAW III Texas CITY ATTORNEY DONALD FRANK,SR. January 23,2024 REQUEST FOR PROPOSAL TO LEASE PROPERTY FOR THE STUDY, DESIGN,AND DEVELOPMENT OF A PROJECT TO CONVERT LANDFILL GAS INTO A LANDFILL GAS TO ENERGY PROJECT DEADLINE: Sealed proposal submittals must be received and time stamped by 3:00p.m., Central Standard Time,February 14,2024 (The clock located in the City Secretary's office will be the official time.)All proposals received will be read aloud at 3:15 p.m. on February 14,2024 in the City Council Chambers, City Hall, 5th Floor, Port Arthur, TX. Proposals will be opened in a manner to avoid public disclosure of contents;however, only the names of proposers will be read aloud. MARK ENVELOPE: P24-023 DELIVERY ADDRESS: Please submit one (1) original and three (3) exact duplicate copies of your RFP to: CITY OF PORT ARTHUR CITY OF PORT ARTHUR CITY SECRETARY or CITY SECRETARY P.O. BOX 1089 444 4TH STREET, 4th Floor PORT ARTHUR, TEXAS 77641 PORT ARTHUR, TEXAS 77640 POINTS OF CONTACT: Questions concerning the Request for Proposal should be directed in writing no later than February 7, 2024 at 1:00 pm to: City of Port Arthur, TX Clifton Williams, Purchasing Manager P.O.Box 1089 Port Arthur, TX 77641 c 1 ifton.wi I l iamsna,portarthurtx.gov Purchasing Division/Finance Department 1 Purchasing Manager,Clifton Williams,CPPB P.O. Box 10891444 4t`Street' Port Arthur,Texas 776411409.983.81601Fax 409.983.8291 The enclosed REQUEST FOR PROPOSAL (RFP)and accompanying General Instructions are for your convenience in submitting proposals for the enclosed referenced services for the City of Port Arthur. Proposals must be signed by a person having authority to bind the firm in a contract. Proposals shall be placed in a sealed envelope, with the Vendor's name and address in the upper left-hand corner of the envelope. ALL PROPOSALS MUST BE RECEIVED IN THE CITY SECRETARY'S OFFICE BEFORE OPENING DATE AND TIME. It is the sole responsibility of the firm to ensure that the sealed RFP submittal arrives at the above location by specified deadline regardless of delivery method chosen by the firm. Faxed or electronically transmitted RFP submittals will not be accepted. CizWai td Clifton Williams Purchasing Manager ii w REQUEST FOR PROPOSAL TO LEASE PROPERTY FOR THE STUDY,DESIGN,AND DEVELOPMENT OF A PROJECT TO CONVERT LANDFILL GAS INTO A LANDFILL GAS TO ENERGY PROJECT SECTION 1. GENERAL INFORMATION 1.1 Purpose. The City of Port Arthur, Texas(City) is seeking to enter into a long-term agreement with a qualified landfill gas to energy (LFGE)developer to lease property from the City to be used for the study, design, and develop a project to convert landfill gas into a landfill gas to energy project. See Section 3 for more detail on the scope of work. The City is in Jefferson County, 90 miles (140 km) east of Houston, within the Beaumont- Port Arthur metropolitan area of the Golden Triangle in the State of Texas. According to the United States Census Bureau, the City has a total area of 144.1 square miles (373.1 km2), of which 76.9 square miles(199.2 km2) are land and 67.1 square miles(173.9 km2), or 46.61%, are covered by water. The City has a population of 56,039. The City owns and operates the City of Port Arthur Landfill Permit No. 1815-A(Landfill). The Landfill was permitted as a 266.816-acre Type I Landfill in 1986. The City revised the Landfill's permit documents in 1994 to address the Subtitle D regulations. These permit modifications provided updates to the disposal area. 1.2 Term of Agreement. The intended term of the agreement will begin upon execution and continue for ten(10)years with the option for additional renewal terms of ten (10)years each. 1.3 Questions, Communications,and Interpretation of this RFP. No oral interpretations of the RFP will be made to any Proposer. All questions and any explanations must be requested in writing and directed to the City no later than date specified as indicated on the cover page or as extended per addendum. Oral explanations or instructions are not binding. Any information modifying a solicitation will be furnished to all Proposers by addendum. When submitting a question in regard to this RFP, use the following format: 1. RFP Page Number 2. RFP Section Reference 3. Question 1.4 Addenda. Any interpretations, corrections or changes to the RFP will be made by addenda no later than 48 hours prior to the date and time fixed for submission of proposals. Sole issuing authority of addenda shall be vested in the City of Port Arthur Purchasing Manager. The City assumes no responsibility for the Proposer's failure to obtain and/or properly submit any addendum. Failure to acknowledge and submit any addendum may be cause for the proposal to be rejected. It is the 1 Proposer's responsibility to check for any addenda that might have been issued before closing date and time.All addenda will be numbered consecutively,beginning with 1. 1.5 Late Proposals. Proposals, modifications of proposals received after the exact hour and date specified for receipt may be rejected. 1.6 Cancellation of RFP or Postponement of Proposal Opening. The City reserves the right to cancel this RFP at any time. The City may change the date and time for submitting proposals prior to the date and time established for submittal. 1.7 Examination of Proposal and Contract Documents. The submission of a proposal constitutes an acknowledgement upon which the City may rely that the Proposer has thoroughly examined and is familiar with all requirements and documents included with the RFP, including any addenda, and has reviewed and inspected all applicable statutes, regulations, ordinances and resolutions addressing or relating to the services to be provided hereunder. The failure of a Proposer to comply with the above requirement shall in no way relieve the Proposer from any obligations with respect to its proposal or to any agreement awarded pursuant to this RFP.No claim for additional compensation shall be allowed which is based upon a lack of knowledge or misunderstanding of this RFP. 1.8 Cost of Proposals The City is not liable for any costs incurred by Proposer in the preparation and evaluation of proposals submitted. 1.9 Modifications of Proposal or Withdrawal of Proposal Prior to Proposal Due Date. At any time before the time and date set for submittal of proposals, a Proposer may submit a modification of a proposal previously submitted to the City. All proposal modifications shall be made in writing, executed and submitted in the same form and manner as the original proposal. Proposals may be withdrawn by written notice received prior to the exact hour and date specified for receipt of proposals. A proposal also may be withdrawn in person by a Proposer or authorized representative provided their identity is made known and they sign a receipt for the proposal, but only if the withdrawal is made prior to the exact hour and date set for receipt of proposals.All requests for modification or withdrawal of proposals, whether in person or written, shall not reveal the amount of the original proposal. 1.10 Proposal Withdrawal After Opening. Except for claims of error granted by the City, no Proposer may withdraw a proposal after the date and time established for submitting proposals, or before the award and execution of an agreement pursuant to this RFP, unless the award is delayed for a period exceeding the period for proposal effectiveness. Requests to withdraw a proposal due to error must be submitted in writing along with supporting evidence for such claim for review by the City. Evidence must be delivered to the City within two (2)business days after request to withdraw. The City reserves the right to require 2 additional records or information to evaluate the request. Any review by the City of a proposal and/or any review of such a claim of error, including supporting evidence, creates no duty or liability on the City to discover any other proposal error or mistake, and the sole liability for any proposal error or mistake rests with the Proposer. 1.11 Error and Administrative Corrections. The City shall not be responsible for any errors in proposals. Proposers shall only be allowed to alter proposals after the submittal deadline in response to requests for clarifications or Best and Final Offers by the City. The City reserves the right to allow corrections or amendments to be made that are due to minor administrative errors or irregularities, such as errors in typing,transposition or similar administrative errors. 1.12 Compliance with RFP Terms,Attachments and Addenda. 1.12.1 The City intends to negotiate an agreement based on the terms, conditions, attachments and addenda contained in this RFP. Proposers shall submit proposals, which respond to the requirements of the RFP. 1.12.2 The City reserves the right at its sole discretion to reject any and all proposals received without penalty and not to issue a contract as a result of this RFP.The City also reserves the right at its sole discretion to waive minor administrative irregularities contained in any proposals. 1.12.3 The City reserves the right to reject any proposal for any reason including, but not limited to,the following— (a) Any proposal,which is incomplete, obscure, irregular or lacking necessary detail and specificity; (b) Any proposal that has an unacceptable qualification, limitation, exception or provision attached to the proposal; (c) Any proposal from Proposers who (in the sole judgment of the City) lack the qualifications or responsibility necessary to complete the project; (d) Any proposal submitted by a Proposer which is not registered or licensed as may be required by the laws of the state of Texas or local government agencies; (e) Any proposal for which a Proposer fails or neglects to complete and submit any qualifications information within the time specified by the City. 1.12.4 Proposers are strongly advised to not take exceptions to the terms, conditions, attachments and addenda; exceptions may result in rejection of the proposal. An exception is not a response to a proposal requirement. If an exception is taken, a `Notice of Exception' must be submitted with the proposal. The `Notice of Exception' must identify the specific point or points of exception and provide an alternative. 3 1.12.5 The City may, at its sole discretion, determine that a proposal with-a`Notice of Exception' merits evaluation.A proposal with a `Notice of Exception' not immediately rejected may be evaluated, but its competitive scoring shall be reduced to reflect the importance of the exception. Evaluation and negotiation shall only continue with the Proposer if the City determines that the proposal continues to be advantageous to the City. 1.12.6 In consideration for the City's review and evaluation of its proposal,the Proposer waives and releases any claims against the City arising from any rejection of any or all proposals, including any claim for costs incurred by Proposers in the preparation and presentation of proposals submitted in response to this RFP. 1.12.7 Proposals shall address all requirements identified in this RFP. In addition,the City may consider proposal alternatives submitted by Proposers that provide cost savings or enhancements beyond the RFP requirements. Proposal alternatives may be considered if deemed to be in the City's best interests. Proposal alternatives shall be clearly identified. 1.13 Collusion. If the City determines that collusion has occurred among Proposers, none of the proposals from the participants in such collusion shall be considered. The City's determination shall be final. 1.14 Proposal Effective Date. The proposal shall remain in effect for 6 months after the proposal due date, unless extended by agreement. 1.15 Procedure When Only One Proposal is Received. If the City receives a single responsive proposal,the City may request an extension of the proposal acceptance period and/or conduct a price or cost analysis on such proposal. The Proposer shall promptly provide all cost or pricing data, documentation and explanation requested by the City to assist in such analysis. By conducting such analysis,the City shall not be obligated to accept the single proposal;the City reserves the right to reject such proposal or any portion thereof. 4 SECTION 2. SCOPE OF WORK 2.1 The selected Proposer must be able to undertake the following: 2.1.1 Finance, develop, collect, operate, transport, purchase, condition, and market the Landfill gas generated by the City's Landfill, current and future. 2.1.2 Maintain and operate the equipment and facilities in a clean and sanitary condition and following all regulatory requirements, TCEQ and EPA. 2.1.3 Work cooperatively with the City to resolve any operational and maintenance-type issues that may occur. 2.1.4 Provide specific details about the method and equipment used for gas collecting, processing, storing, transporting, and marketing in the proposal. 2.1.5 Only destroy or incinerate Landfill gas with written approval from the City. 2.1.6 Provide the City with monthly reports and written certification for all materials diverted from the Landfill. 2.1.7 Assume full responsibility and liability for collecting, processing,and marketing of Landfill gas generated by the Project at the Landfill. 2.2 Information regarding the Landfill is included in the provided Exhibits, including: 2.2.1 Exhibit C - Site map: the landfill property 5 SECTION 3. PROPOSAL CONTENTS AND EVALUATION 3.1 Proposal Submittal and Organization. Proposals will only be accepted from Proposers able to complete the delivery of services described in the scope of work. Joint ventures shall submit one proposal for the team, with accompanying proof of the joint venture agreement. Proposals are to contain and be organized as follows: Section Title Preface Exhibit A—Proposer Signature Page Exhibit B - Internal Revenue Service Form W-9 1. Letter of Transmittal 2. Executive Overview Proposal should include an Executive Overview/Summary of the proposed service describing the approach, methodology, City's responsibilities and overall schedule and cost. 3. Firm Qualifications Any Proposer who did not submit a statement of qualification in response to the City's Request for Qualifications, Study, Design, and Develop a Project to Convert Landfill Gas Into a Landfill Gas to Energy Project, Project P23-047, dated May 11, 2023 (RFQ), must include a statement of qualifications containing the "Required Qualifications Contents" of the RFQ. A copy of the RFQ is available on request. 4. Description of Proposed Project Proposers will describe the project (or projects) they expect to develop in response to this RFP, and if appropriate an alternative project (or projects) to the primary project. The description should as a minimum identify: • LFGE technology employed; • LFGE facility design capacity; • Site size/dimensions; • Expected year-by-year landfill gas consumption and energy production for the term of the agreement; • Air emissions and air permitting strategy; • expected purchaser(s) of the energy product, and/or outline the plan and schedule for securing an energy purchaser(s); • a summary of expectations for energy pricing, and the basis for these expectations; and • a description of how the project will be financed. 6 PI 5. Project Development Schedule Proposer will provide an expected project development schedule, expressed in months after notification of award. It is expected that design will take no more than two (2) years and construction / startup will take no more than two (2) years. As a minimum, the proposal should show early completion dates and late completion dates for the following key milestones: • Execution of an agreement with the City; • Submittal of permit applications; • Execution of energy sales agreement; • Commencement of construction; and • Initiation of commercial operation. Failure to meet the late completion dates specified by the Proposal may justify termination of the agreement. The Proposal can offer alternatives to termination in his proposal (i.e., per day delay payments to City). 6. Compensation to City In addition to compensation for the ground lease provided in the agreement, the Proposal must include proposed compensation terms for landfill gas, fixed percentage of gross revenue, variable percentage of gross revenue or fixed monthly payment. Proposer can submit any compensation approach,as long as the calculation methodology is transparent and verifiable. Proposer should also indicate whether compensation proposed includes the sharing of any tax incentives, tax benefits, renewable energy certificates, assistance payments, or other financial or monetary benefits received by virtue of the characterization of LFG as a renewable energy resource. The Proposal must provide an initial proposed term sheet for City's consideration. The document should be included as an appendix to the proposal.The Proposal must also include a form of the monthly report to be submitted to the City which provides all relevant information to calculate the compensation to the City. The form of the monthly report must be included as an appendix to the proposal. 7. Notice of Exceptions The proposal must identify any exceptions to the RFP and the agreement attached to the RFP. 8. Attestation The proposal must be signed by an officer of the entity that is making the proposal, attesting that: • The individual signing the proposal has the authority to make the proposal; 7 Fr • The contents of the proposal are truthful and accurate; and • The proposal is valid for 180 days. The name and title of the individual must be shown below the signature, along with the date of the signature. 3.2 Proposal Evaluation. Proposals will be evaluated in accordance with the following criteria: Criteria Points Assembly of Proposal 5 Approach and understanding of requirements 15 Experience of Proposer(from RFQ) 15 Experience on LFG Recovery/Control Projects Experience on Similar LFGE Projects Project References Technical Approach 15 Description of Proposed LFGE Project - Energy Sale Plan(s)and Commitments Compliance with City Requirements and Goals Development Schedule/Milestones Financial Qualifications of Proposer 10 Compensation to City 40 Total Written Points 100 Interviews/Oral Presentations/Demos 50 Total Points Possible 150 SECTION 4. AGREEMENT The scope of work described herein will be authorized by agreement. The form of agreement the City intends to use with the selected Firm is attached to this RFP as Exhibit D. The final contract scope, design and construction schedule, and payment terms will be negotiated with the selected Proposer. SECTION 5. EXHIBITS This RFP incorporates the following Exhibits: Exhibit A—Signature Page 8 Exhibit B—W-9 Exhibit C—Site Map Exhibit D—Agreement 9 EXHIBIT A SIGNATURE PAGE RFP No. P23-047 I have read and (Full Printed Name) (Title) understand the RFP and I am duly authorized to commit my company to perform the services described herein. I understand by signing this RFP I am not obligating the City to make this procurement, nor am I signing a contract to perform this service. By signing this document I agree to comply with all specifications, scope of services, requirements, terms and conditions described herein, unless specifically noted. This RFP is firm for 180 days from the due date identified on the cover page of this RFP. Authorized Representative: Signed: Date: Name: Title: Company: A-1 EXHIBIT B W-9 W-9 form is available online at: https://www.irs.gov/forms-pubs/about-form-w-9 B-1 EXHIBIT C SITE MAP g i "k'a?t urc t1 ( w t .8 ( r� *tr rY Kt R z I Ci h N1.1 a t Qu •a (` ,, p ray g73 _4 .; ` y'• sr Q r" E. °e'rr `P �'r�t �lO'OQ'7-ri:r teb4IttliN-... kai.,,r 4 0, I LI �Y i z J Z 8 P° S yu,a &i!4t °C m t � 2 to oa i'sr°rfrc 2,....44, �_z Lv i IL • iii IIIIIL\* . 44 II Q o, � (I ti N isii --co, i n y y GROUND LEASE AND LANDFILL GAS LICENSE by and between City of Port Arthur("City") and ("Company"). TABLE OF CONTENTS TABLE OF CONTENTS 2 RECITALS 3 AGREEMENT 3 ARTICLE 1. DEFINITIONS 3 ARTICLE 2. TERM AND RENEWAL 4 ARTICLE 3. PAYMENTS 4 ARTICLE 4. GROUND LEASE;LANDFILL GAS LICENSE; ACCESS RIGHTS 5 ARTICLE 5. DESIGN,CONSTRUCTION,AND MAINTENANCE OF COMPANY FACILITIES 7 ARTICLE 6. THE PARTIES' RESPONSIBILITIES AND OBLIGATIONS 9 ARTICLE 7. OWNERSHIP OF COMPANY FACILITIES 11 ARTICLE 8. INDEMNIFICATION AND INSURANCE 1 1 ARTICLE 9. TAXES 13 ARTICLE 10. SURRENDER, DEFAULT,TERMINATION,AND REMEDIES 13 ARTICLE 11. GENERAL TERMS 15 APPENDIX A DEFINITIONS 21 APPENDIX B PROPERTY DESCRIPTION AND DEPICTION 26 APPENDIX C LEASED PROPERTY DESCRIPTION AND DEPICTION 27 APPENDIX D DESIGN AND CONSTRUCTION SCHEDULE 28 APPENDIX E INSURANCE REQUIREMENTS 29 APPENDIX F LEASE AND LICENSE PAYMENT 33 APPENDIX G PERFORMANCE BOND 35 GROUND LEASE AND LANDFILL GAS TO ENERGY LICENSE This Ground Lease and Landfill Gas to Energy License ("Agreement") is made and entered into on this day of , 2024 ("Effective Date"), by and between City of Port Arthur("City"), a Texas home-rule municipality located in Jefferson County, Texas, and ("Company"). RECITALS WHEREAS, the City owns that certain real property located at located at 4732 West Highway 73, Beaumont Texas 77705 ("Property") and operates the Landfill on a portion of the Property; WHEREAS, in May 2023,the City released a Request for Qualifications to Study, Design, and Develop a Project to Convert Landfill Gas into a Landfill Gas to Energy Project("Project"); WHEREAS, Company submitted qualifications and was selected to submit a response to a Request for Proposals for the Project and was selected as the winning proposer; WHEREAS, Company desires to lease a portion of the Property and obtain licenses from the City for the purpose of undertaking the Project by constructing and operating facilities designed to capture and convert landfill gas into energy; and WHEREAS, the City has determined that giving Company the exclusive right to capture, process, and sell landfill gas pursuant to this Agreement benefits the health, safety, and welfare of the citizens of Port Arthur and, further, this Agreement serves important and proper public purposes. AGREEMENT NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations, benefits and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Company agree that they shall be bound by and shall comply with the following provisions of this Agreement: ARTICLE 1. DEFINITIONS 1.1 Terms used in this Agreement shall have the meanings specified in Appendix A to the Agreement. 1.2 As used in this Agreement,(A)the masculine gender shall include the feminine and neuter and the singular number shall include the plural,and vice versa,(B) unless expressly stated otherwise, references to a governmental authority includes any government authority succeeding such authorities functions and capacities, (C) "days" shall mean calendar days, unless the term "Business Days"is used(if the time for performing an obligation under-this- Agreement expires on a day that is not a Business Day,the time shall be extended until that time on the next Business Day), (D) where a word or phrase is specifically defined, other grammatical forms of such word or phrase have corresponding meanings;the words "herein," "hereunder,""hereof'and this"Agreement"refer to this Agreement,taken as a whole,and not to any particular provision of this Agreement; (E)"including" means "including, for example and without limitation,"and other forms of the verb"to include" are to be interpreted similarly, and (F)all references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made. ARTICLE 2. TERM AND RENEWAL 2.1 Initial Term. Unless earlier terminated or renewed for a longer period, this Agreement shall take effect on the Effective Date and continue for a period of ten(10)years(the"Initial Term")following the Commercial Operations Date. 2.2 Renewal Term. This Agreement shall automatically extend for up to three(3)consecutive 10-year renewal terms(each, a"Renewal Term"),unless the Company or the City indicates the intent not to renew the Agreement for the Renewal Term by providing written notice to the other party at least one hundred eighty(180) days prior to the end of the Initial Term, or the then current Renewal Term, as the case may be. All renewals shall be subject to the same terms, conditions, and fees set forth herein, unless agreed to otherwise in writing by both Parties in a written amendment to this Agreement. ARTICLE 3. PAYMENTS 3.1 Payments.No later than the fifteenth (15th) day of each month following the Effective Date, Company shall pay City the amount(s) set forth in Appendix F (the "Lease and License Payment"). 3.2 Landfill Gas (LFG) Statement. 3.2.1 Monthly LFG Statement. On the fifteenth(15th)day of each month,starting with the first full month after the Commencement Date, Company shall provide a Monthly LFG Statement to the City sufficient for the City to calculate the Lease and License Payment amount. Unless different information is identified in Appendix F, the Monthly LFG Statement shall identify: (1) the total amount of LFG extracted from the Landfill (standard cubic feet)which the Company deems acceptable for conversion into energy; (2) the total amount of LFG extracted from the Landfill(standard cubic feet) which the Company deems unacceptable for conversion into energy; (3) the monthly average methane content of the acceptable LFG; (4) the calculated MMBTU's provided to the Company Facility;and (5) the price or prices at which the Processed Gas Products were sold to end users. 3.3 In accordance with the dispute resolution procedures in Article 11 of this Agreement, Company and the City shall use diligent, good faith efforts to resolve any dispute regarding the amounts due to Company. If any portion of any disputed amount is determined to be due and owing to the City, Company shall pay the City. If it is determined that Company overpaid the City, such overpayment may only be offset against future payments due to the City from Company at the time such payments are due; provided, however, overpayments occurring in the last twenty-four(24)months of this Agreement will be paid on demand if future payments are reasonably expected to be insufficient to provide for reimbursement by offset. ARTICLE 4. GROUND LEASE; LANDFILL GAS LICENSE; ACCESS RIGHTS 4.1 Leased Property. Subject to the terms and conditions of this Agreement, City agrees to lease to Company the Leased Property. City makes no covenants or warranties respecting any condition of the Leased Property or the Landfill. By entering on and accepting the Leased Property, Company accepts the Leased Property AS IS with no representations and warranties as to condition or fitness for a particular purpose. 4.1.1 Use of Leased Property. Company may only use the Leased Property for the purposes set forth in this Agreement and in accordance with the terms and conditions in this Agreement, which purposes include, but are not limited to constructing, operating and maintaining the Company Facilities. 4.1.2 Use Prohibitions. Company agrees that in connection with the use and operation of the Leased Property Company will not and will not authorize, cause, permit, allow, or facilitate any person or entity to: 4.1.2.1 Sell or assign its interest in this Agreement, including any mortgage, deed of trust or encumbrance; or 4.1.2.2 Sublease all or any portion of the Leased Property or improvements thereon without the express written consent of City; or 4.1.2.3 Cause or permit substantial and obnoxious odors to emanate or be dispelled from the Leased Property or Company Facilities; or 4.1.2.4 Permit undue accumulations of garbage,trash, rubbish or any other refuse; or 4.1.2.5 Create, cause, maintain or permit any nuisance or waste (as defined under Applicable Laws) in, on or about the Leased Property or Company Facilities; or [ 4.1.2.6 Knowingly use or allow the Leased Property or Company Facilities to be used for any unlawful purpose; or 4.1.2.7 Cause or permit any insurance coverage on the Leased Property or Company Facilities to become void or voidable(unless Company has previously obtained replacement coverage in the same amounts) or make it impossible to obtain any required insurance at commercially feasible rates; or 4.1.2.8 Violate any law, ordinance or regulation applicable to the Leased Property or Company Facilities. 4.2 Gas License. Subject to the terms and conditions of this Agreement, City hereby grants, conveys and assigns to Company for the Term of this Agreement the exclusive right and license to explore for, extract, gather, process, develop, measure, filter, produce,take and use or sell the Landfill Gas produced and recovered from the Landfill including the right to claim any federal tax incentives arising from the production and sale of Landfill Gas from the Landfill. City makes no covenants or warranties respecting any condition of the Landfill Gas or the Landfill. By entering on and accepting the gas license granted herein, Company accepts the Landfill Gas AS IS with no representations and warranties as to condition or fitness for a particular purpose. This license is subject to the following: 4.2.1 Limitations on license.Company shall coordinate all activities to explore for, extract, gather, and take the Landfill Gas with City and shall ensure such activities do not interfere with Landfill operations.Company undertakes all such actions,whether with Company's own employees or through contractors or subcontracts, at Company's own risk. If Landfill operations require the relocation of any Company Facilities located on the Property subject to an easement or right of way,Company shall relocate such Facilities at Company's own cost; provided,however, that City shall provide an alternate easement or right of way location for such relocated facilities. 4.2.2 Delivery of Landfill Gas. Company shall direct and deliver to the Company Facility at the Connection Point the Landfill Gas produced from the Landfill and treat the Landfill Gas in compliance with all Applicable Laws. 4.2.3 In the event Company's Facility is shut down for any reason, or fails, for any reason, to take and process Landfill Gas made available to Company, Company shall promptly start and operate the Flare Station or Stations in accordance with all Applicable Laws. 4.2.4 Company shall incur costs and expenses associated with permitting, market, resource, non-specification energy, changes in law, construction, and performance- related risks related to the Agreement and Company's Facility. 4.2.4.1 Resource risks refer to all risks associated with the quality and/or quantity of Landfill Gas, including risks that Landfill Gas may damage Company's Facility. w 4.2.4.2 Non-specification energy risks refer to all risks associated with the quality and/or quantity of High-BTU Gas, including risks that High-BTU Gas may cause damage to Company's equipment. 4.3 Easements and Rights of Way. Subject to the terms and conditions of this Agreement, City agrees to grant and convey to Company easements and rights of way for the Term of this Agreement in a form typical of such easements and rights of way on City owned property: 4.3.1 Easements.Appurtenant easements on, over and through the Landfill for 4.3.1.1 the construction, installation, operation, and maintenance of any Landfill Gas pipelines to transport Landfill Gas collected by the Company's Landfill Gas collection system to the gas treatment facility or facilities; 4.3.1.2 the construction, installation, operation, and maintenance of any gas pipelines to transport Processed Gas Products to the Sales Interconnection Point; 4.3.1.3 any condensate lines to or from the Landfill; and 4.3.1.4 sewer, electric, gas, water, telephone and other utilities that are necessary or desirable for the Company Facilities, all of which shall not unreasonably restrict or interfere with City's efficient use or operation of the Landfill, or cause any violation of any zoning or use ordinance applicable to the Landfill or City's use or operation thereof. 4.3.2 Rights-of-way. Rights of way over the Property and rights of ingress and egress over and through the Property by vehicle or on foot to the Landfill and the Company Facility. ARTICLE 5. DESIGN, CONSTRUCTION,AND MAINTENANCE OF COMPANY FACILITIES. 5.1 General. Company shall, at Company's sole cost and expense, design, construct and maintain Company Facilities in compliance with all Applicable Laws. Company shall undertake design and construction activities in accordance with the terms and provisions set forth in Appendix D to this Agreement. Company shall use its best efforts to complete design and construction of the Company Facilities and issue a notice of commencing Commercial Operations within the timeframe set forth in Appendix D, and will coordinate design aspects with City, to ensure the Company Facilities have a collection system, gas processing facility, and flare capacity available at all times sufficient to accommodate all of the Landfill Gas produced by the Landfill while maintaining compliance with Applicable Laws and with all City Landfill Permits and any other Governmental Approvals covering the Landfill. Company shall design, permit, and construct Flare Stations to provide back-up capacity for Company Facilities that treat, process and/or manage Landfill Gas. 5.2 Premises Conditions. City makes no covenants or warranties respecting any condition of the Leased Property. By entering on and accepting the Leased Property, Company accepts Pr the Leased Property AS IS with no representations and warranties as to condition or fitness for a particular purpose. 5.3 Performance Bond. Company must furnish a performance bond (the"Performance Bond") as provided for in Appendix G, to guarantee Company's performance of all terms and conditions of this Agreement related to the construction of Company Facilities located on the Property. 5.4 Coordination. Company and City shall use reasonable, good faith efforts to coordinate the design, Governmental Approvals, and construction of the Company Facilities and the installation and maintenance of interconnections between their respective facilities. Company will be responsible for all costs, fees, and expenses of Governmental Approvals, and of bringing and connecting the respective facilities of the City and Company to the Connection Point. With regard to either the Company Facilities or Landfill and other improvements that will be constructed or installed by the Company, Company's proposed plans, specifications, contracts, and other documents shall be designed to provide safe, reliable, and efficient operations consistent with Applicable Laws and industry standards. All such facilities will have warranties provided by the applicable supplier or contractor consistent with industry standards. The Company's contracts with third parties shall contain appropriate provisions to ensure that Company is able to comply with its obligations under this Agreement. 5.4.1 Company shall coordinate design of the Connection Point facilities with City. Company shall provide all applications for Governmental Approvals and design documents to City for review and acceptance or comment. All documents submitted for the City review and acceptance shall be acted upon and returned to Company within a reasonable time, as set forth below, with the City acceptance or with any comments regarding any further review or modification by Company to conform to Applicable Laws,technical specifications, requirements, and this Agreement. If additional modifications are needed, unless disputed, Company shall proceed with the requisite modifications requested by the City. If requested, Company shall re- submit the same to the City for review and approval. The City shall advise Company in writing within forty-five(45)days of receipt of such re-submitted documents as to their acceptability and approval. The various comments and approvals made by the City on the plans, specifications, drawings, schedules and other matters shall not relieve Company from any of its obligations under this Agreement. The City acceptance and approval of the plans and other matters shall not be unreasonably withheld. 5.4.2 Unless otherwise specified, reasonable time for review and approval by the City shall mean forty-five(45)days. If the City fails to return any design documents to Company within forty-five(45)days after the documents are received by the City, then the City shall be deemed to have waived any comments or objections thereto; provided, however, that if within the forth-five (45)business days, the City notifies Company in writing that additional review time is necessary,the City shall have an additional fifteen (15)business days to complete its review. 5.4.3 After the necessary Governmental Approvals are obtained, the Company shall expeditiously commence construction of the Company Facilities necessary for the Company to extract and use LFG. 5.5 Notice of Commencing Commercial Operations. Company shall give the City seven (7) days' notice in writing when the Company is ready to commence Commercial Operations, and Company, in mutual agreement with the City, shall identify the date that Company wishes to designate as the Commercial Operations Date. The proposed Commercial Operations Date shall be designated as soon as practicable after the notice from Company. The City shall, as soon as it is ready, notify the Company that it is ready to commence Commercial Operations on an agreed Commercial Operations Date. ARTICLE 6. THE PARTIES' RESPONSIBILITIES AND OBLIGATIONS 6.1 City Responsibilities and Obligations. 6.1.1 The City shall manage the Landfill in compliance with Applicable Laws. 6.1.2 City shall review all applications for Governmental Approvals and design documents prepared by Company in accordance with Article 5 before the Company submits them to permitting authorities. 6.1.3 The City shall be allowed to monitor all operations and activities associated with the permitting, construction, startup and commissioning of the Company Facilities and any other improvements located on the Leased Property. 6.1.4 There shall be no Liens placed on the Company's real property, personal property or fixtures as a result of the City activities. If a Lien is placed on the Company's property as a result of the City acts or omissions, the City shall immediately take whatever steps are necessary to ensure that the Lien is released promptly. If City fails to secure the timely release of such Lien, the Company may take any and all steps to secure the release of the Lien and then the Company's costs and expenses will be reimbursed by the City within 30 days of notice. 6.2 Company Responsibilities and Obligations. 6.2.1 Applicable Laws. Company shall at all times comply with, and shall pay all costs and expenses which may be incurred or required to be paid in order to comply with, any and all Applicable Laws. Company shall obtain and comply with all Governmental Approvals needed to provide for and continue the delivery of Landfill Gas to the Connection Point, its processing, and its subsequent use by Company. The City and Company shall cooperate in connection with such filings. Company and City shall keep each other apprised of its progress toward obtaining the necessary authorizations. 6.2.2 Operation and Maintenance. 6.2.2.1 Company will (i) operate and maintain the Company Facilities in accordance with all Applicable Laws and this Agreement , (ii) assume sole responsibility for the cost to construct, operate, maintain, expand, and repair the Company Facilities, including the cost of utilities, (iii) use good faith efforts to beneficially use the LFG for energy recovery at a 95%Availability Rate. 6.2.2.2 Company shall be responsible for performing operations, preventative maintenance, corrective maintenance, furnishing consumables, and maintaining all necessary regulatory compliance required to keep the Company Facility in operation. The inability of the Firm to keep its biogas system operating for its intended use at a 95%availability rate shall result in the Firm paying for the Floor amount of gas as stipulated in the Agreement 6.2.2.3 Company shall, in connection with its operations on the Leased Property hereunder, dispose of any condensate resulting from any activities of the Company Facilities in accordance with Applicable Laws. City may, but is not obligated to accept for disposal at any point on the Landfill designated by City, any liquids produced and recovered by the Company as a result of the collection of Landfill Gas prior to processing and any liquids that are not Hazardous Substances and which are recovered by Company as a result of the processing of Landfill Gas and not otherwise disposed of by Company. If City accept said liquids that are not Hazardous Substances for disposal, Company shall pay an invoice reflecting the actual costs of such disposal as part of the Lease and License Payment. The disposal of Hazardous Substances produced by the Company Facility shall be the sole responsibility of Company. 6.2.2.4 Company shall install meters and monitoring facilities sufficient to monitor the amount and nature of LFG collected from the Landfill, processed in the Company Facilities, and supplied through the Sales Interconnection Point in order to fulfill any monitoring, payment, and reporting requirements set forth in this Agreement and Applicable Laws. 6.2.2.5 Company shall ensure there is no spill, release, or unintended discharge of leachate or condensate into the environment and that all tanks, pipelines and other equipment used by Company for the transportation of condensate and leachate are operated and maintained in compliance with Applicable Laws, including but not limited to the City's Permits, Company's Permits and Environmental Laws. 6.2.3 Insurance. The Company shall be solely responsible for having in place the necessary insurance for the Company's Facility required by this Agreement. 6.2.4 Liens. Company shall not incur or create and shall at all times take whatever action is necessary to keep the Property, including the Leased Property, free of liens, levies, and encumbrances of any nature or kind, except liens, levies, and encumbrances created by the City; provided, however, nothing herein shall be Mir construed to prohibit Company from creating a lien on Company's Facility in connection with any financing of such facility. If a=Lien is placed on the Property by any of Company's suppliers or contractors, Company shall immediately take whatever steps are necessary to ensure that the Lien is released promptly. If Company fails to secure the timely release of such Lien,the City may take any and all steps to secure the release of the Lien and the City costs and expenses will be reimbursed by the Company within thirty (30)days of notice. 6.2.5 Costs, Expenses, Taxes. Company shall be solely responsible for the operation, utility costs,maintenance,repair, income taxes, and insuring of Company's Facility. Company shall be solely responsible for all costs and expenses of securing rights-of- way, if necessary, for the pipeline from Company's Facility to the Sales Interconnection Point. ARTICLE 7. OWNERSHIP OF COMPANY FACILITIES Company shall own all right,title and interest to or in the Company Facilities during the Term of this Agreement. Upon surrender, expiration, or termination of this Agreement, all right, title and interest to or in the Company Facilities shall transfer as provided in Article 10. ARTICLE 8. INDEMNIFICATION AND INSURANCE 8.1 Indemnification. 8.1.1 To the extent permitted by law Company shall defend, protect, hold harmless and indemnify City,its councilmembers,directors,officers,employees,and agents and contractors (the "City Indemnified Persons") from and against any cost, expense, loss, claim or liability whatsoever, including the cost of attorneys' fees and appeals, for injury to any person or loss or damage to any property arising out of(a)the negligence or wrongful misconduct of Company, its directors or partners (as applicable), officers, employees, other agents or contractors of any tier; (b)the failure of or by Company, its directors or partners (as applicable), officers, employees, other agents or contractors of any tier to comply with applicable law or regulations of federal, state or local governments; (c)the performance or failure to perform of the Company under this Agreement; and (d)any breach by Company of any representation or warranty made in this Agreement. Company is not required to hold harmless or indemnify any City Indemnified Person for any cost,expense,loss, claim or liability to the extent caused by any City Indemnified Person's negligence or reckless misconduct. 8.1.2 To the extent permitted by law the City shall defend, protect, hold harmless and indemnify the Company,its directors or partners(as applicable),officers, employees, other agents or contractors (the "Company Indemnified Persons") from and against any cost, expense, loss,claim or liability whatsoever, including the cost of attorneys' fees and appeals, for injury to any person or loss or damage to any property arising out of: (a)the negligence or wrongful misconduct of the City, its commissioners, directors, officers, employees, and agents and contractors of any w tier; (b) the failure of or by the City, its councilmembers, directors,officers, employees, and agents and contractors of any tier to comply with applicable law or regulations of federal, state or local governments; (c)the performance or failure to perform of the City under this Agreement; and (d) any breach by City of any representation or warranty made in this' Agreement. City is not required to hold harmless or indemnify any Company Indemnified Person for any cost, expense, loss, claim or liability to the extent caused by any Company Indemnified Person's negligence or reckless misconduct. 8.1.3 Environmental Liabilities. Company shall retain any and all liabilities arising from the presence,handling,treatment, storage, transportation,removal or disposal of Hazardous Substances on the Leased Property. Regardless of whether any Event of Default shall have occurred and be continuing or any remedies in respect of the Property are exercised by City, Company shall defend, indemnify, and hold harmless Lender from and against any and all liabilities (including strict liability), suits, actions, claims, demands, penalties, damages (including, without limitation, lost profits, consequential damages, interest, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, attorney's fees and expenses, and remedial costs) (the foregoing are hereinafter collectively referred to as "Liabilities")which may now or in the future (whether before or after the culmination of the transactions contemplated by this Agreement) be incurred or suffered by Lender by reason of, resulting from, in connection with, or arising in any manner whatsoever out of the violation of any Environmental Laws and/or which may be asserted as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission, or release from the Company Facilities or Leased Property of any Hazardous Substance or arise out of or result from the environmental condition of the Leased Property or the applicability of any Environmental Laws relating to Hazardous Substances. Such Liabilities shall include, without limitation: (i) injury or death to any person; (ii)damage to or loss of the use of any property; (iii)the cost of any demolition and rebuilding of the Improvements, repair or remediation and the preparation of any activity required by any Governmental Approval; (iv)any lawsuit brought or threatened, good faith settlement reached, or governmental order relating to the presence, disposal, release or threatened release of any Hazardous Substance on, from or under the Leased Property; and(v)the imposition of any lien on the Leased Property arising from the activity of Company or Company's predecessors in interest on the Leased Property or from the existence of Hazardous Substances upon the Leased Property. The covenants and agreements contained in this Section shall survive the consummation of the transactions contemplated by or the expiration or termination of this Agreement. 8.2 Insurance. Without limiting Company's indemnification of City, Company shall provide and maintain, at its own expense, during the Term of this Agreement,the programs of insurance set forth in Appendix_to this Agreement. Such insurance shall be provided by insurer(s) reasonably satisfactory to City. All such policies shall name the City as an additional insured. Evidence of such programs satisfactory to City shall be delivered to City within ten (10)days after the Effective Date of this Agreement. Such evidence shall specifically identify this Agreement and shall contain express conditions that City is to be given written notice at least 30 days in advance of any material modification or termination of any program of insurance. ARTICLE 9. TAXES 9.1 Personal Property Taxes. Company shall pay before delinquency all taxes, assessments, license fees and other charges that are Error! Bookmark not defined.levied and assessed against Company's personal property installed or located in or on the Leased Property which become payable during the term. On demand by the City, Company shall furnish the City with satisfactory evidence of these payments. 9.2 Real Property Taxes. Company shall pay all real property taxes (including, if applicable, any possessory interest taxes), general and special taxes and assessments("Real Property Taxes")levied and assessed against the Leased Property, the Company Facilities, and Company's alterations on the Leased Property. Company shall pay the Real Property Taxes not later than the taxing authority's delinquency date and shall furnish the City with satisfactory evidence of these payments. 9.3 Sales Taxes. Company shall be responsible for all sales and gross receipt taxes, if any,that are assessed after extracting LFG from the Landfill and the City shall be responsible for all such taxes, if any, incurred prior to such extraction. ARTICLE 10. SURRENDER,DEFAULT,TERMINATION,AND REMEDIES 10.1 Surrender. After providing one hundred and eighty days (180)written notice to City, Company may, in its sole discretion, surrender and terminate this Agreement if a suitable purchaser or purchasers of Processed Gas Products cannot be obtained or maintained, or if Landfill Gas cannot reasonably be recovered from the Landfill in Commercial Quantities, and thereby be relieved of all obligations as to City; provided such failure to find a suitable purchaser or recover Commercial Quantities is not due to the actions of Company. 10.2 Default and Termination. 10.2.1 Events of Default. Either Party may immediately terminate this Agreement on written notice to the other Party for cause, without prejudice to any other rights or remedies the terminating Party may have under applicable law, except as provided herein, when there is an uncured Event of Default by the other Party. An event of default(an"Event of Default") occurs if any of the following occur: 10.2.1.1 Company suspends or liquidates its business, 10.2.1.2 Company becomes insolvent or subject to a petition of involuntary bankruptcy and the appointment of a trustee or receiver, 10.2.1.3 Company makes an assignment for the benefit of creditors, 10.2.1.4 Company fails to pay annual property taxes,or 10.2.1.5 Any Party fail to perform a material obligation under this Agreement and such failure is not cured within thirty(30)days after receipt of written notice of such failure or, if such failure cannot reasonable be cured within such thirty (30)day period, a good faith reasonable plan to correct the failure within sixty(60) days is not implemented within such thirty(30)day period. 10.3 Remedies. 10.3.1 Except as otherwise set forth herein, in the event of a default or breach by a Party of any of its obligations hereunder,the other Party shall have the rights specified herein, and any remedy to which it is entitled at law or in equity for such breach,subject to Exclusivity of Remedies below. 10.3.2 Exclusivity of Remedies. Each Party waives all claims against the other Party (and against the affiliates of each, and their respective members, shareholders, officers, directors, agents and employees)for any consequential, incidental, indirect, special, exemplary or punitive damages arising out of this Agreement; and, regardless of whether any such claim arises out of breach of contract, guaranty or warranty, tort, product liability, indemnity, contribution, strict liability or any other legal theory, each Party hereby releases the other Party from any such liability.This waiver and exclusion shall apply even if any express warranty set forth herein fails its essential purpose.Any liquidated damages payable under this Agreement shall not be deemed consequential damages. 10.4 Effect of Expiration, Termination, or Surrender of Agreement. 10.4.1 Notwithstanding the expiration,termination, or surrender of this Agreement pursuant to its terms,any duty or obligation of a Party which has not been fully observed, performed and/or discharged and any right, unconditional or conditional, which has been created for the benefit of a Party and which has not been fully enjoyed, enforced and/or satisfied (including but not limited to the duties, obligations and rights, if any, with respect to secrecy, indemnity, warranty, and guaranty)shall survive the expiration, termination, or surrender of this Agreement until such duty or obligation has been fully observed, performed or discharged and such right has been fully enjoyed, enforced and satisfied. 10.4.2 Upon expiration,termination, or surrender of this Agreement or of the Company's right or obligation to receive LFG, as the case may be, each Party shall within 60 days provide the other Party with a written claim for any amounts that are due and owing under this Agreement. 10.4.3 Upon expiration,termination. or surrender of this Agreement, the following shall occur: 10.4.3.1 the collection system and Flare Stations located on the Landfill shall become the property of City and, unless there is a pending order or an existing enforcement action issued as a result of Company's actions during the Term, Company shall have no further responsibility with respect to said collection system and Flare Stations; 10.4.3.2 and the City shall have the right of first refusal to purchase the Company Facilities (except for the collection system and Flare Stations addressed in the subsection above). Company shall act reasonably and in good faith to negotiate a purchase price for the Company Facilities. In the event the parties are unable to reach an agreement with respect to the purchase price within fifteen(15) days of the notice of surrender, expiration or termination,the parties shall mutually select a third-party appraiser(the "Appraiser") and evenly split the fees for the Appraiser's services. Upon receipt of the Appraiser's report, City shall have fifteen (15) days to accept the appraised value in the Appraiser's report and agree to purchase the Company Facilities (except for the collection system and Flare Stations addressed in the subsection above) at the value stated therein. 10.4.3.3 If City declines to purchase the Company Facilities(except for the collection system and Flare Stations addressed in the subsections above), Company shall remove the above ground, and seal the below ground, Company Facilities that are installed and located on the Leased Property within one hundred eighty(180)days after the City declines to purchase the Company Facilities and shall restore the Leased Property to its near original condition, ordinary wear and tear excepted. Company's right to access, occupy and use Property, Leased Property,and Landfill shall continue for the same time period provided herein for Company to remove its Company Facilities(except for the collection system and Flare Stations addressed in the subsection above). On or before the expiration of the removal period, Company shall execute a written release of any license, easement, and right of way that was granted by the City pursuant to this Agreement. ARTICLE 11. GENERAL TERMS 11.1 Authorized Agent. The City and Company, respectively, shall each designate an individual to serve as that Party's authorized agent under this Agreement for the purpose of making decisions necessary to implement this Agreement and for receiving correspondence and documents regarding the design and construction of the Company Facilities and any other assets provided by Company on the City's Landfill property. 11.2 Inspections. Each Party shall have the right to inspect and copy the books and records of the other Party and real property and facilities subject to this Agreement, when and to the extent necessary to verify compliance with this Agreement. Such inspections shall be coordinated in advance between the Parties and shall be conducted during normal business hours. The cost of copying documents shall be paid by the Party requesting the copies. 11.3 Public Information. The Parties acknowledge that the City and this Agreement are subject to the requirements of the Texas Open Meetings Act and the Texas Public Information Act (Texas Government Code Chapters 551 and 552) (collectively, the"Open Government Acts"), and the City is required to disclose to the public (upon request)this Agreement and other records, subject to the requirements of the Open Government Acts. 11.4 Survival. Any term, condition,covenant, or obligation in this Agreement that requires performance by a Party subsequent to termination of this Agreement shall remain enforceable against such Party subsequent to such termination. 11.5 Dispute Resolution. The Parties shall attempt to resolve any and all disputes to the mutual satisfaction of both Parties by good faith negotiations. Whenever a Party desires to initiate the dispute resolution process set forth in this section, it shall do so by delivering a dispute notice to the other Party. Within ten (10) days after the delivery of a dispute notice, the Parties shall meet for the purpose of negotiating a resolution of the dispute. The Parties will use their best efforts to informally resolve the dispute within forty-five(45)days after the date of the written notice. If the dispute has not been resolved to either Party's satisfaction during this time period, the requirement for informal negotiations shall be satisfied. The Parties may, by mutual agreement, extend the period for informal negotiations.Nothing in this section shall prevent either Party from seeking judicial remedies in a court of law at any time. If a Party disputes any claim for payment, a written objection must be filed with the other Party within thirty (30)days of receiving the claim. The written objection must identify the specific reasons for the objection, and it must be accompanied by full payment for all undisputed amounts. After an objection is filed, the Parties shall initiate the dispute resolution process in this Agreement 11.6 Assignment. This Agreement shall not be assigned by either Party without the prior express written consent of the other Party, which shall not be unreasonably withheld. Notwithstanding the above, Company may assign the Agreement to an affiliate company or to a trustee or lender in connection with the financing or refinancing of the Facility, without obtaining the City prior approval. A permitted assignment shall neither be effective nor relieve a Party of its obligations under this Agreement unless this Agreement shall have been assumed by the assignee. 11.7 Relationship of the Parties; Beneficiaries. This Agreement reflects an arms-length transaction.Nothing herein shall create a fiduciary, partnership,joint venture or employment or other agency relationship between the Parties. This Agreement is not entered into for the benefit of,nor are any rights granted to, any third party. 11.8 Use of Contractors. 11.8.1 It is recognized that the City will discharge some of its responsibilities through contractors. The City shall be solely responsible for executing any necessary contracts with contractors. Any such contract shall be entered into by the City as an independent contractor and not as a representative of Company. V 11 • arge somenf its responities through - lely responsible for executinny -` suck contract shall be enured into by the Company as an independent contractor and not as a representative of the City. 11.9 Further Assurances. Each Party agrees to execute and deliver any instruments and to perform any action that may be necessary or reasonably requested in order to give full effect to this Agreement. Each Party shall use all reasonable efforts to provide such information, execute such further instruments and documents, and take such action as may be reasonably requested by the other Party, not inconsistent with the provisions of this Agreement and not involving the assumption of obligations other than those provided for in this Agreement,to carry out the intent of this Agreement. 11.10 Notices. Any notices or communications required or permitted under this Agreement shall be in writing and may be either delivered in person,transmitted by telecopy followed by a mailed confirmation copy, or sent by recognized express mail or courier service, postage prepaid,at the following addresses of the Parties.Notices sent under this Agreement shall be deemed received upon actual receipt. Facsimile is acceptable notice and is effective when received; however, facsimiles received(i.e., printed)after 5:00 P.M. will be deemed received on the next Business Day. Email is acceptable notice and is effective when properly addressed and sent without receipt by the sender of a failure to deliver error; however, emails received after 5:00 P.M. will be deemed received on the next Business Day. The original of a notice must still be mailed as required herein. Changes in the telephone numbers through which telecopy may be transmitted or the address to which notices are to be delivered may be made by written notice given in accordance with this section. To City: City Manager's Office 444 4th Street Port Arthur, Texas 77640 Phone: (409) 983-8101 Email: ron.burton@portarthurtx.gov With a copy to City Attorney 444 4th Street Port Arthur, Texas 77640 Phone: (409)983-8126 Email: To Company With a copy to 11.11 Waivers. No provision of this Agreement shall be deemed waived without the express written consent of the Party granting the waiver. The waiver by either Party of a default or a breach of any provision of this Agreement by the other Party shall not operate or be construed to operate as a waiver of any subsequent default or breach. The making or the acceptance of a payment by either Party with knowledge of the existence of a default or breach shall not operate or be construed to operate as a waiver of any subsequent default or breach. 11.12 Entire Agreement; Modifications; Appendices. The provisions of this Agreement(except captions), including the appendices hereto, shall (a)constitute the entire agreement between the Parties, superseding all prior or contemporaneous negotiations, understandings or agreements and(b)not be modified in any respect except by express written agreement executed by the Parties. The appendices attached hereto are incorporated by reference. 11.13 Headings. Captions and headings in this Agreement are for ease of reference only and do not constitute a part of this Agreement. Captions and headings shall not be deemed to affect the meaning or construction of any of the terms or provisions hereof. 11.14 Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original. 11.15 Venue. Any and all suits for breach of this Agreement shall be instituted and maintained in a state or federal court of competent jurisdiction having jurisdiction over Jefferson County, Texas. 11.16 Governing Law and Construction. This Agreement and any questions concerning its validity, construction and performance shall be governed by the laws of the State of Texas, without giving effect to any conflicts-of-law rules requiring the application of the substantive laws of other jurisdictions. The language of this Agreement shall be construed according to its fair meaning, not strictly for or against the Company or City, and not against either Party as its drafter, because both Parties agree they had an equal hand in drafting this Agreement. The singular shall include the plural; use of the feminine, masculine,or neuter genders shall be deemed to include the genders not used. 11.17 Waiver of Jury Trial. Each Party hereby knowingly, willingly, and irrevocably waives its right to a trial by jury concerning claims arising under this Agreement. 1 1.18 Severability. In the event that any provision of this Agreement shall, for any reason, be determined to be invalid, illegal, or unenforceable in any respect,the Parties shall negotiate in good faith and agree to such amendments, modifications or supplements of, or to, this Agreement or such other appropriate changes as shall,to the maximum extent practicable in light of such determination, implement and give effect to the intentions of the Parties as reflected herein, and the other provisions of this Agreement shall, as so amended, modified, supplemented, or otherwise effected by such action remain in full force and effect. 11.19 Reasonableness Standard. All determinations, consents, reviews and approvals to be granted and conducted by the Parties under this Agreement and any other acts calling for the exercise of discretion shall be performed in good faith and, unless otherwise so specified, under a standard of reasonableness that is consistent with normal industry practices for the type of work involved. Where time periods are not specified, a reasonable period of time shall be allowed. l 11.20 Time of Essence. The Parties each understand and acknowledge that time is of the essence of this Agreement. 11.21 Cooperation and Release of Information. City shall cooperate with Company's requests for public information and City shall release public records concerning the City, when such documents are requested by Company in compliance with the Texas Open Records Act. 11.22 Sovereign Immunity.Nothing in this Agreement is or shall be construed as a waiver of the City governmental immunity or the limitations on liability provided in state or federal law. 11.23 Records Retention.All records required to be prepared or maintained by the Company or City shall be retained by the Company or City, respectively, for at least five (5)years after the date when the records are prepared. THE REMAINDER OF THIS PAGE IS BLANK SIGNATURE PAGE TO GROUND LEASE AND LANDFILL GAS LICENSE IN WITNESS WHEREOF,the Parties have authorized the execution of this Agreement by y their respective officials on the day, month and year below given. ATTEST: By: By: City Approved: APPROVED: By: City Manager APPROVED AS TO LEGAL FORM AND SUFFICIENCY: By: City Attorney COMPANY: WITNESSES: By: Name: Title: Dated APPENDIX A DEFINITIONS - When the following words and phrases are used in this Agreement, they shall be defined and construed as follows: Applicable Laws—means any and all laws, statutes, ordinances, rules, regulations , orders, and guidance which apply to the design, construction, operation and use of the Leased Property and Company Facilities and distribution and sale of Processed Gas Products, including those requiring alterations or additions to be made to, or safety appliances and devices to be maintained or installed in, on or about the Leased Property under any laws, statutes, ordinances,rules, regulations, orders, and guidance now or hereafter adopted, enacted or made and applicable to the Leased Property or Company Facilities or operations, and payment of any fees, charges or assessments arising out of or in any way related to the Leased Property or Company Facilities or operations as a source of adverse environmental impacts or effects. "Applicable Laws" includes but is not limited to City's Landfill Permits, Company's Permits, Governmental Approvals, and Environmental Laws. Availability Rate — means the percentage of time the Company Facilities operate satisfactorily to produce Commercial Quantities of Processed Gas Products. BTU—means British Thermal Unit;the amount of heat required to raise the temperature of one avoirdupois pound of pure water from approximately 60 degrees Fahrenheit to 61 degrees Fahrenheit. Business Day— means every day other than a Saturday, Sunday or a day on which it is a holiday in the State of Texas. Change in Law —means the enactment, adoption, promulgation, modification or repeal of any laws, codes, ordinances, statutes, rules, regulations, orders, decrees after the Effective Date. City's Landfill Permits - means City's Air Permit, Texas Pollutant Discharge Elimination System (TPDES) Permit for surface water discharges, Stormwater Pollution Prevention Plan (SWPPP), Spill Prevention Control and Countermeasures (SPCC) Plan, and Solid Waste Permit Where this agreement conflicts with the City's Landfill Permits, subsequent renewals or modifications, or Environmental Laws, the provisions in those documents that conflict shall supersede this Agreement. City's Air Permit - means the facility's permit issued by the Texas Commission on Environmental Quality (TCEQ), as it may be amended from time to time. City's Solid Waste Permit means permit number 1815A issued by the TCEQ, as it may be amended from time to time. Commercial Operations - means the operation of Company's Facility on a commercial and continuing basis on and after the Commercial Operations Date. Commercial Operations Date - means the date Company's Facility begins Commercial Operations. Commercial Quantities—means the amount of Processed Gas Products sufficient to pay for all operations and maintenance expenses associated with the Company Facility plus a reasonable profit. Company Facility or Company Facilities— means the GCCS, Sales Interconnection Point, Flare Stations, utilities, roads, and all above ground and below ground structures and facilities installed by Company to (i) enable Company to collect the gas, interconnect with the GCCS at the Connection Point, (ii) accept delivery of Landfill Gas at the Connection Point; (iii) treat, process and/or manage Landfill Gas;(iv)connect to the Sales Interconnection Point;(v)provide utilities;and (vi)provide access to and from the Leased Property. Condensate—are liquids which are removed from a gas control system at a landfill and which are produced by the condensation of Landfill Gas being conveyed by that system. Connection Point-means the point or points of interconnection between the Landfill and the gas collection system that is or are part of the Company Facility. Day—means calendar day unless otherwise noted in the Agreement. Effective Date—means the date on which the last of the Parties has signed this Agreement. Environmental Attributes — means any and all reclamation credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the extraction, collection, reclamation, and recovery of Landfill Gas, including the generation of energy, recycling, or its displacement of conventional energy generation. Environmental Attributes do not include (i) production tax credits associated with the construction or operation of Company's Facilities, or any other associated contract or right, and other financial incentives in the form of credits, reductions, or allowances associated with Company's Facilities or the Landfill that are applicable to a state or federal income taxation obligation, or (ii) emission reduction credits encumbered or used by Company's Facilities for compliance with local, state, or federal operating and/or air quality permits. Environmental Laws shall mean any applicable federal, state, or local governmental law, statute, rule, regulation, order, consent decree, decree,judgment, permit, license, covenant, deed restriction, ordinance or other requirement or standard relating to pollution or the regulation or protection of health, safety, natural resources, or the environment, now existing or hereafter in effect, including, without limitation, those relating to releases, discharges, emissions, injections, leachings, or disposals of Hazardous Substances or pollution into air, water, land or groundwater, to the withdrawal or use of groundwater, or to the use, handling, treatment, removal, storage, disposal, processing, distribution, transport, or management of Hazardous Substances. "Environmental Laws"shall include,but shall not be limited to,the Clean Air Act;the federal Water Pollution Control Act; the Safe Drinking Water Act; the Toxic Substances Control Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act;the Occupational Safety and Health Act; the Hazardous Materials Transportation Act;the Oil Pollution Act of 1990;and any similar federal, state or local statutes and regulations. Event of Default—has the meaning set forth in Section 10.2. Event of Default does not include any instance of Force Majeure. Flare Stations—means all piping,equipment and appurtenances used or intended to be used to incinerate landfill gases at the Landfill. Force Majeure—means acts of God; strikes, lockouts or industrial disputes or disturbances; civil disturbances; military action; extended closures of banks and/or financial institutions; interruptions by government or court orders (except resulting from allegations against the Company); present and future orders of any governmental authority having jurisdiction (except resulting from allegations against the Company); acts of the public enemy; war, whether or not actually declared; sabotage; riots; blockades; insurrections; inability to secure labor, supplies, or materials due to government proclaimed public health emergencies; inability to secure materials by reason of allocations promulgated by governmental authorities; epidemics; pandemics; landslides; lightning; earthquakes; fire (except fires at the Landfill caused by improper operation of their respective areas of responsibility by the City or by the Company); storm;wind; floods; hurricanes; tornadoes; actual or potential environmental hazards (except those caused, in whole or in part, by the Company);other natural catastrophes;or any other cause,whether of the kind herein enumerated or otherwise, not reasonably within the control of the party claiming force majeure and which precludes that Party from carrying out, in whole or in part, its obligations under this Agreement. Gas Collection and Control System or GCCS - means the Gas Collection and Control System, and is comprised of the system of wells and piping that collects or assists in the collection and destruction of Landfill Gas from the Landfill, including, but not limited to, extraction wells, horizontal wells, lateral and header piping,valves,sumps,wellheads,air supply piping,liquid force- main piping, pumps, and other appurtenances, blowers and motors, flares, air compressors, flow meters, flare facility controls, and any monitoring and recording device, Flare Stations, and the Meters and any other associated equipment or feature upstream of the Connection Point. Future expansions of the GCCS shall be considered part of the GCCS. Good Engineering Practices-shall mean any of the practices,methods and acts that comply in all material respects with manufacturer's specifications and that, in the exercise of reasonable judgment by an independent engineering professional in light of the facts known, or that in the exercise of reasonable due diligence, should have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with reliability, safety,environmental protection,expedition,project economics and applicable laws and regulations for similar facilities in the State of Texas. "Good Engineering Practice"is not intended to be limited to the consideration of any one practice, method or act to the exclusion of all others, but rather is intended to require the consideration of a spectrum of possible practices, methods or acts that will yield the most desired and cost-effective result. Governmental Approvals — means permits, endorsement, orders, and other authorization required by any government agency for the design, construction, installation, operation, and maintenance of the Company Facilities, including but not limited to the provision and sale of I Processed Gas Products to end users. Governmental Approvals includes but is not limited to any- amendments to existing City Permits needed to implement the purposes of this Agreement. Hazardous Substances means any substance defined as a "Hazardous Substance" or "Hazardous Waste"in any Environmental Laws,and shall further include polychlorinated biphenyls or substances containing polychlorinated biphenyls, asbestos or materials containing asbestos, urea formaldehyde foam insulation, petroleum or petroleum products, flammable or explosive substances,radon gas,and any other wastes,pollutant,contaminant,material,chemical,gas or other substance that could subject any person to liability for costs of clean-up, removal, response or remediation under any Environmental Laws or the exposure to which is prohibited, limited or regulated under any Environmental Laws. High-BTU Gas means Landfill Gas, whether processed or not, that is sold by Company. Landfill—means the City Class I landfill located at 4732 West Highway 73, Beaumont Texas 77705 with its currently permitted waste disposal capacity of approximately 9.125 million cubic yards and 73 years total life expectancy. Landfill Gas or LFG—means carbon dioxide, methane, and other gasses produced by the Landfill, excluding gasses from monitoring wells used for controlling migration. Leachate — means water and other liquids that have percolated through the Landfill and leached out some of the Landfill constituents. Lease and License Payment—means the payment amount and any payment terms included in Appendix F to this Agreement. Leased Property—means that portion of the Property described and depicted in Appendix C to this Agreement and any easements, rights of way and other access rights granted under this Agreement and any location on the Property with temporary construction impacts or permanent structures undertaken or installed in accordance with this Agreement. Meters means,collectively,methane analyzer(s)and flow meter(s) installed by Company to measure the quality and quantity of LFG delivered to the Flare Stations and/or Company's Facility. MMBTU—means one million British thermal units. Party—means either the Company or the City. The Company and the City are collectively referred to herein as the Parties. Person— means any and all persons, natural or artificial, including any individual, firm, partnership, joint venture, or other association, however organized; any municipal or private corporation organized or existing under the laws of the State of Texas or any other state;any county or municipality; and any governmental agency of any state or the federal government. Property — means that certain real property owned by the City, located at 4732 West Highway 73, Beaumont Texas 77705, where the Landfill is currently located. The Property is w further described and depicted in Appendix B to this Agreement. Processed Gas Product(s) — means the renewable natural gas and processed High-BTU gas, including but not limited to all associated environmental attributes, emission credits and values, processed by the Company Facilities that is able to meet the specifications needed for sale to any end user. Sales Interconnection Point means the point at which Processed Gas Products produced from Company's Facility are transferred to a transportation pipeline. APPENDIX B PROPERTY DESCRIPTION AND DEPICTION [Insert Property Description and Depiction Behind This Page] APPENDIX C LEASED PROPERTY DESCRIPTION AND DEPICTION [Insert Leased Property Description and Depiction Behind This Page] APPENDIX D DESIGN AND CONSTRUCTION SCHEDULE [Insert Design and Construction Schedule Behind This Page] APPENDIX E INSURANCE REQUIREMENTS - The following insurance requirements apply to Company. Company shall obtain, and at all times during the Term of this Agreement, maintain all of the insurance described in this Appendix. Company shall not allow any contractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this Agreement. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause.Company shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf,and shall be on forms acceptable to the City.All certificates and endorsements must be received and approved by the City within ten (10)days after the Effective Date. A. Additional Insureds; Waiver of Subrogation. The City, its officials,officers, employees, agents and authorized volunteers shall be named as Additional Insureds on Company's All Risk policy and on Company's and its subcontractors' policies of Commercial General Liability and Automobile Liability insurance using, for Company's policy/ies of Commercial General Liability insurance, ISO CG forms 20 10 and 20 37 (or endorsements providing the exact same coverage, including completed operations), and, for subcontractors' policies of Commercial General Liability insurance, ISO CG form 20 38 (or endorsements providing the exact same coverage). Notwithstanding the minimum limits set forth in this Agreement for any type of insurance coverage, all available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds hereunder. Company and its insurance carriers shall provide a Waiver of Subrogation in favor of those parties. B. Workers' Compensation Insurance. The Company shall provide workers' compensation insurance for all of the employees engaged in work under this Agreement, on or at the Leased Property, and the Company shall require any contractor and subcontractor similarly to provide workers' compensation insurance for all their employees as prescribed by State law. C. Employer's Liability Insurance. Company shall provide Employer's Liability Insurance, including Occupational Disease, in the amount of at least one million dollars ($1,000,000.00) per person per accident. Company shall provide City with a certificate of Employer's Liability Insurance. Such insurance shall comply with the Agreement. The policy shall be endorsed, if applicable, to provide a Borrowed Servant/Alternate Employer Endorsement and contain a Waiver of Subrogation in favor of the City. D. Commercial General Liability Insurance. Company shall provide "occurrence" form Commercial General Liability insurance coverage at least as broad as the most current ISO CGL Form 00 01, including but not limited to, premises liability, contractual liability, products/completed operations, personal and advertising injury which may arise from or out of Company's operations, use, and management of the Leased Property, or the performance of its obligations under this Agreement. The policy shall not contain any exclusion contrary to this Irr Agreement including but not limited to endorsements or provisions limiting coverage for(-I) --- contractual liability (including but not limited to ISO CG 24 26 or 21 39);r(2)cross-liability • for claims or suits against one insured against another. Policy limits shall not be less than $2,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this location or the general aggregate limit shall be twice the required occurrence limit. Defense costs shall be paid in addition to the limits. 1. Such policy shall comply with all the requirements of this Agreement. The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Company from liability in excess of such coverage, nor shall it limit Company's indemnification obligations to the City, and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or Applicable Law. 2. All general liability policies shall be written to apply to all bodily injury, including death, property damage, personal injury, owned and non-owned equipment, blanket contractual liability, completed operations liability, explosion, collapse, under- ground excavation, removal of lateral support, and other covered loss, however occasioned, occurring during the policy term, and shall specifically insure the performance by Company of that part of the indemnification contained in these General Conditions relating to liability for injury to or death of persons and damage to property. 3. If the coverage contains one or more aggregate limits, a minimum of 50% of any such aggregate limit must remain available at all times; if over 50%of any aggregate limit has been paid or reserved, the City may require additional coverage to be purchased by Company to restore the required limits. Company may combine primary, umbrella, and as broad as possible excess liability coverage to achieve the total limits indicated above.Any umbrella or excess liability policy shall include the additional insured endorsement described in the Agreement. 4. All policies of general liability insurance shall permit and Company does hereby waive any right of subrogation which any insurer of Company may acquire from Company by virtue of the payment of any loss. E. Automobile Liability Insurance. Company shall provide "occurrence" form Automobile Liability Insurance at least as broad as ISO CA 00 01 (Any Auto) in the amount of,at least, one million dollars($1,000,000)per accident for bodily injury and property damage. Such insurance shall provide coverage with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by Company or for which Company is responsible, in a form and with insurance companies acceptable to the City. All policies of automobile insurance shall permit and Company does hereby waive any right of subrogation which any insurer of Company may acquire from Company by virtue of the payment of any loss. F. Pollution Liability Coverage. Company shall provide pollution liability insurance in an amount not less than $1,000,000 per occurrence and $2,000,000 aggregate. G. Company shall require all tiers of sub-contractors working under this Agreement to provide the insurance required of Company under this Agreement unless otherwise agreed to in writing by City. Company shall make certain that any and all contractors hired by Company are insured in accordance with this Agreement. If any contractor's coverage does not comply with the foregoing provisions, Company shall indemnify and hold the City harmless from any damage, loss, cost, or expense, including attorneys' fees, incurred by the City as a result thereof. H. Form and Proof of Carriage of Insurance. 1. Any insurance carrier providing insurance coverage required by the Agreement shall be admitted to and authorized to do business in the State of Texas unless waived, in writing,by the City's Risk Manager.Carrier(s)shall have an A.M.Best rating of not less than an A:VII. Insurance deductibles or self-insured retentions must be declared by the Company. At the election of the City, the Company shall either a) reduce or eliminate such deductibles or self-insured retentions, or b) procure a bond which guarantees payment of losses and related investigations, claims administration, and defense costs and expenses. If umbrella or excess liability coverage is used to meet any required limit(s) specified herein, the Company shall provide a "follow form" endorsement satisfactory to the City indicating that such coverage is subject to the same terms and conditions as the underlying liability policy. 2. Each insurance policy required by this Agreement shall be endorsed to state that: (1) coverage shall not be suspended,voided,reduced or cancelled except after thirty(30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its officials, officers, agents, employees, and volunteers. 3. The Certificates(s) and policies of insurance shall contain or shall be endorsed to contain the covenant of the insurance carrier(s)that it shall provide no less than thirty (30) days written notice be given to the City prior to any material modification or cancellation of such insurance.In the event of a material modification or cancellation of coverage, the City may terminate the Agreement in accordance with the Agreement, unless the City receives, prior to such effective date, another properly executed original Certificate of Insurance and original copies of endorsements or certified original policies, including all endorsements and attachments thereto evidencing coverage's set forth herein and the insurance required herein is in full force and effect. Company shall not take possession of, or use the Leased Property, or commence work under this Agreement until the City has been furnished original Certificate(s) of Insurance and certified original copies of endorsements or policies of insurance including all endorsements and any and all other attachments as required in this Agreement. The original endorsements for each policy and the Certificate of Insurance shall be signed by an individual authorized by the insurance carrier to do so on its behalf. 4. The Certificate(s) of Insurance, policies and endorsements shall so covenant and shall be construed as primary, and the City's insurance and/or deductibles and/or self-insured retentions or self-insured programs shall not be construed as contributory. 5. City reserves the right to adjust the monetary limits of insurance coverages during the term of this Agreement including any extension thereof if, in the City's reasonable judgment, the amount or type of insurance carried by the Company becomes inadequate. 6. Company shall report to the City, in addition to the Company's insurer, any and all insurance claims submitted by the Company in connection this Agreement. APPENDIX F LEASE AND LICENSE PAYMENT No later than the fifteenth (15th)day of each month following the Effective Date, Company shall pay City an amount equal to the sum of the following: 1. Ground Lease Payment in the amount of: [WRITE OUT AMOUNT HERE ($XXXX.00)]. Beginning on the first anniversary of the Effective Date and continuing each year thereafter, the Ground Lease Payment amount shall increase by the greater of three percent(3%) each year or the percentage change in the U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPI-U) (All Items, All Consumers, 1982- 1984=100)that occurred during the previous one year period for the Beaumont- Port Arthur, Texas Area, as measured in the month two months prior to the anniversary of the Effective Date, over the amount paid for the immediately preceding year. 2. Landfill Gas License Payment and in the amount of[amount to be determined during request for proposal process], but in no case less than $1,000 per month if the Company Facilities fall below a 95%Availability Rate. 3. Leachate disposal costs, if any, set forth in the invoice provided by the City for such disposal in accordance with this Agreement. When submitting the Lease and License Payment required in this Agreement, Company shall submit the LFG Statement, which shall be in substantially same form as the form attached to this Appendix. Attachment 1 to Appendix F Form of LFG Statement [Attach Form of LFG Statement Behind This Page] APPENDIX G PERFORMANCE BOND [Attach Performance Bond Behind This Page]