HomeMy WebLinkAboutCOM 0708.001 2016-2018 •.o07.. F y, ,• Joseph K. Kamelamela
•Harry Kim ,�'•'��^ \���►•3 Corporation Counsel
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Mayor *i4� s�..�(i*
--= • Renee S.C. Schoen
Assistant Corporation
'•'f,TE'OF•
Counsel
COUNTY O F HAWAII
OFFICE OF THE CORPORATION COUNSEL
101 Aupuni Street,Suite 325 • Hilo, Hawai'i 96720 • (808)961-8251 • Fax(808)961-8622
February 7, 2018 ,
Chair Eileen O'Hara
And County Council Committee Members
Committee on Environmental Management
County Council
County of Hawai`i
25 Aupuni Street Lk/
Hilo, Hawai`i 96720
Aloha, Chair O'Hara and County Council Committee Members
Re: Comm. 708-Update on Supplemental Contract with Hawaiian Earth
Recycling, LLC
In Communication 708, dated January 17, 2018, you inquired"as to who is bearing the
cost of the attorneys engaged in developing" a modified Agreement. In addition, you requested
an update on the supplemental contract, that is, the modified Agreement. This letter is in
response to your inquiries.
The Service Agreement for an Organic Waste Diversion Program on East Hawai`i and
West Hawai`i was executed by the County of Hawaii ("County") and Hawaiian Earth
Recycling, LLC ("HER") on July 1, 2016 ("Agreement").
The County, through the Department of Environmental Management ("DEM"), has
processed, and will review, evaluate and process, claims for payment of attorneys' fees and costs
through its administration of the Agreement. Pursuant to Article XV, Section 15.6 of the
Agreement, the County is required to reimburse HER for expenses relating to legal services
related to contract amendments, including requirements specifically tied to or contingent upon
building a compost facility at Kiyosaki Quarry. See, Attachment A, Supplemental Agreement
No. 2, at page 2, 2nd WHEREAS provision, to page 4.
In your request for an update, you state that"it has been almost a year since the
[Agreement] was amended and renegotiated." As you may recall, the County and HER, through
their representatives, (hereby referred to as "Parties"), orally agreed to resolve concerns of the
Parties within about a week prior to the issuance to HER of the April 18, 2017 Rescission Notice
of the February 16, 2017 Termination Notice. Moreover, after April 18, 2017, while negotiating
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Hawaii County is an Equal Opportunity Employer and Provider
Ref. To: ._
Ref. Date EB 0 7. nm I
Chair Eileen O'Hara
February 7, 2018
Page 2 of 2
the specific terms and conditions of a modified Agreement, the Parties agreed that several
supplemental agreements would need to be executed prior to finalizing a modified Agreement.
On June 30, 2017, the Parties executed Supplemental Agreement No. 1 to amend certain
terms and conditions of the Agreement. See, Attachment B, Supplemental Agreement No. 1. In
Supplemental Agreement No. 1, the Parties agreed to defer and to cancel the performance by
HER in building a compost facility at Kiyosaki Quarry until a new site is selected, change the
price per ton used to calculate the service fee, adjust the commencement of the Consumer Price
Index adjustments to July 1, 2018, and clarify the County's renewal options for the Agreement.
Id., at pages 3 through 6.
On or about September 7, 2017, the Parties completed their review of the Agreement
and agreed to material and substantial modifications of the Agreement. Those modifications
included the County's obligation to select a new site for construction of compost facility, the
County's review and approval of design submittals, the County's financing of the construction of
the facilities (that is, on the East side the compost facility and on the West side the receiving
facility for mulch), and the County's bid proposal for the construction of the facilities with
project management from HER. Realizing the amount of time and effort required to draft a
modification of the Agreement, the Parties agreed to allow the County to draft such a
modification and DEM hired a consultant, HDR Engineering, to assist in the drafting and
finalization of the modified Agreement and Appendices.
After months of consultations with HDR Engineering and DEM personnel on the
modification of the Agreement, on January 26, 2018, a final draft of the modified Agreement,
entitled Amendment and Restated Service Agreement, was sent to HER's attorney for review by
her and her clients. Prior to sending that final draft, we had discussions with HER's attorney in
December 2017 and the early part of January 2018 discussing and identifying several matters
that were not previously discussed earlier, and that the modifications of the Appendices were not
completed.
At this time, we anticipate at least another two (2) months to finalize and execute the
Amendment and Restated Service Agreement, with the modified Appendices. Should you have
any further questions, or concerns, please contact us at any time.
Respectfully,
Josep . Kamelamela
Corporation Counsel
Attachment A, Supplemental Agreement No. 2
Attachment B, Supplemental Agreement No. 1
cc: Mayor Harry Kim (with Attachments)
Managing Director Wil Okabe (with Attachments)
William Kucharski, DEM Director (with Attachments)
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October 31, 2017
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TO: HAWAIIAN EARTH RECYCLING, LLC®
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VeAk SUBJECT*. REQUEST FOR PROPOSAL NO. 3298. FOR FURNISHING i7.(riTi;)
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AND IMPLEMENTING AN ORGANICS DIVERSION
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PROGRAM IN EAST HAWAr I AND WEST HAWAI'I FOR
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reduction of Organics Processing Facilities, for the subject proposal has .A.
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I: 4: Attached for your files is a fully executed copy of Supplemental Sz,
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...A Digitally signed by Steve Wilhelm
(# ON:cn=Steve Wilhelm,o=County
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Date:2017.10.31 13:55:47-1000' tai
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STEVE WILHELM
Acting Purchasing Agent
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Attachment A
Naito('County is an Equal Opportunity Provider and Employer
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SUPPLEMENTAL AGREEMENT NO. 2
CONTRACT NO. C.005770
This SUPPLEMENTAL AGREEMENT is made and entered into this +11 day
of O c,+obese'", A.D. 2017, by and between the COUNTY OF HAWAII, hereinafter called
the"COUNTY", and HAWAIIAN EARTH RECYCLING LLC, of 91-400 Malakole Street,
Kapolei, Hawai'i 96707, hereinafter called the "COMPANY",
WITNESSETH THAT:
WHEREAS, the parties hereto entered into a Contract dated July 1, 2016, for the Service
Agreement for an Organic Waste Diversion Program on East Hawai'i and West Hawai'i for
RFP No. 3298, Contract#C.005770, which contract is hereinafter referred to as the
"AGREEMENT";
WHEREAS, the parties executed a Supplemental Agreement No. 1 on June 30,2017,to
amend the AGREEMENT to, among other things: cancel the performance by the parties to the
AGREEMENT that was tied to or contingent upon building a compost facility at Kiyosaki
Quarry; change the price per ton used to calculate the service fee; adjust the commencement date
of the Consumer Price.Index adjustment to July 1, 2018; and clarify the COUNTY's renewal
the for AGEMENT;
WHEREAS,pursuant to Article XV, Section 15.6 Termination of Convenience, of the
AGREEMENT,the COUNTY issued to the COMPANY a Notice of Termination for
Page 1 of 6
Convenience of the Service Agreement effective June 30, 2017, dated February 16, 2017
("Termination Notice");
WHEREAS, the COUNTY issued to the COMPANY a Notice Rescinding the
Termination Notice on April 18, 2017 ("Rescission Notice");
WHEREAS, as a result of the COUNTY taking action under Article XV, Section
15.6(A)Termination for Convenience of the AGREEMENT,the parties desire to memorialize
in this Supplemental Agreement No. 2 the COMPANY's specific cost claim.reimbursements for
which the COUNTY will reimburse the COMPANY's expenses claimed under the
AGREEMENT that were related to contract amendments required by the County, including
requirements specifically tied to or contingent upon building a compost facility at Kiyosaki
Quarry;
NOW, THEREFORE, consistent with their respective rights and obligations under
Article XV, Section 15.6 of the Agreement, in consideration of the mutual agreements set forth
herein, and in the interest of facilitating such agreements, the parties agree, pursuant to Article
XV, Section 15.6(D)(3) of the AGREEMENT,that the COUNTY will reimburse the
COMPANY's expenses as follows:
1. The legal services fees and costs of the Company's attorneys, Alston'Hunt Floyd&
Ing, incurred between the dates of the Termination Notice and the Rescission Notice,
in the amount of FIFTY THOUSAND SIX HUNDRED EIGHTY EIGHT DOLLARS
AND TWENTY SIX CENTS ($50,688.26);
2. Fees incurred by Company subcontractor Engineering Partners, Inc., for services
performed specific to the Kiyosaki Quarry site, in the amount of SIXTY EIGHT
Page 2 of 6
THOUSAND EIGHTY SIX DOLLARS AND THIRTY FOUR CENTS
($68,086.34);
3. Total fees owed by the COMPANY and payable to GW Construction to date, which
includes, but is not limited to, work GW Construction completed specific to the
Kiyosaki Quarry site in the amount of FIFTY ONE THOUSAND ONE HUNDRED
NINETY FIVE DOLLARS AND ZERO CENTS ($51,195.00);
4. The COMPANY's rental expenses for one loader in the amount of FIVE
THOUSAND ONE HUNDRED NINETY ONE DOLLARS AND NINETEEN
CENTS ($5,191.19), for use between the dates of the Termination Notice and the
Rescission Notice;
5. The proposal,Agreement and/or termination related services and costs for employees
and principals of Oahu Waste Services, Inc. and Cedar Grove Systems, LLC.,for
services rendered to and on behalf of the Company prior to the COUNTY's issuance
of the July 1, 2016 Notice to Proceed to the COMPANY, in the amount of
EIGHTEEN THOUSAND SIX HUNDRED SIXTY DOLLARS AND NINETY
EIGHT CENTS ($18,660.98);
6. The contract and/or termination related services and costs for employees and
principals of Oahu Waste Services, Inc. and Cedar Grove Systems, LLC., for services
rendered to and on behalf of the Company between the dates of the Notice to Proceed
and the Termination Notice, in the amount of FORTY THOUSAND TWO
HUNDRED FORTY SEVEN DOLLARS AND FOURTEEN CENTS ($40,247.14);
Page 3 of 6
7. The contract and/or termination related services and costs for employees and
principals of Oahu Waste Services, Inc. and Cedar Grove Systems, LLC., for services
rendered to and on behalf of the Company between the dates of the Termination
Notice and the Rescission Notice, in the amount of FORTY THREE THOUSAND
THREE HUNDRED FOURTEEN DOLLARS AND SEVEN CENTS ($43,314.07);
8. The total reimbursed costs in this Supplemental Agreement No. 2 from the COUNTY
to the COMPANY is TWO HUNDRED SEVENTY SEVEN THOUSAND THREE
HUNDRED EIGHTY TWO DOLLARS AND NINETY EIGHT CENTS
($277,382.98).
IT IS FURTHER UNDERSTOOD AND AGREED that although initially claimed for
reimbursement,the COMPANY will not pursue the costs related to the Seattle trip with the
Pana`ewa community representatives directed by the County, in the amount of SIXTEEN
THOUSAND SIX HUNDRED NINETY DOLLARS AND EIGHTY CENTS ($16,690.80).
IT IS FURTHER UNDERSTOOD AND AGREED between the parties that the
COUNTY owes no additional compensation to the COMPANY for the costs related to the
Kiyosaki Quarry site and the Termination Notice through the date of the Rescission Notice,
however, the County agrees to compensate the Company for additional costs claimed after the
Rescission Notice for services and costs of employees and principals of Oahu Waste Services,
Inc. and Cedar Grove Systems, LLC., and attorneys of Alston Hunt Floyd & Ing, related to
efforts to settle expenses associated with the modifications of the AGREEMENT, including cost
claims. The parties otherwise agree that this Supplemental Agreement No. 2 encapsulates the
parties' understanding as it pertains to the cost claim reimbursements set forth herein.
Page 4 of 6
IT IS FURTHER UNDERSTOOD AND AGREED that total compensation under this
AGREEMENT shall not exceed the amount of available funds, except as amended by
supplemental agreements. The amount of funds available for Fiscal Year 2017-2018, which runs
from July 1, 2017 to June 30, 2018, shall be THREE MILLION SIX HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($3,650,000.00) for organics processing and mulch
loading(of which $929,548.87 has already been disbursed), plus TWO HUNDRED SEVENTY-
SEVEN THREE HUNDRED EIGHTY-TWO AND 98/100 DOLLARS ($277,382.98) for
reimbursed costs for a total of THREE MILLION NINE HUNDRED TWENTY-SEVEN
THREE HUNDRED EIGHTY TWO AND 98/100 DOLLARS ($3,927,382.98), unless amended
by supplemental agreements.
IT IS FURTHER UNDERSTOOD AND AGREED that Article VIII Section 8.4(A)
and (B), Composting Facilities Mobilization Fee, has been revised to delete the content of those
provisions, including the mobilization fee of$10,375,038.32, and substituted with the following
provision:
Article VIII, Section 8.4, CONSTRUCTION COSTS TO BE BORNE BY COUNTY.
County shall be responsible for all costs for construction of the composting facilities. Any cost
overruns or savings are the County's responsibility or benefit.
IT IS FURTHER UNDERSTOOD AND AGREED that this Supplemental Agreement
No. 2 is a supplement to the AGREEMENT heretofore executed by the parties and it shall in no
way act as a waiver of any of the conditions and obligations imposed upon the parties by the said
AGREEMENT, as supplemented or amended, or the specifications attached thereto and made a
part thereof, and any rights which any of the parties may have by virtue of the said
Page 5 of 6
AGREEMENT as supplemented or amended, are to remain in full force and effect except as the
same may have been altered or modified by this and any other Supplemental Agreement.
This Supplemental Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Supplemental
Agreement No. 2 on the day and year first above written.
HAWAIIAN EARTH RECYCLING COUNTY OF HAWAII
LLC
By: By: 111441
Name: 4,7 0/&I Name: FREP K 0 • :E
Title: Prox y 5.1ephem / -rie-1,2,-0 Sr. Title: Managing threctoi
Date: /0/2 7/6-7 Date: OCT 3 1 2017
RECOMMENDED APPROVAL:
40 6.•
By: ior
411-6, ame: illiam Kucharski
IF Title: Director, Department of
Environmental Management
APPROVED AS TO FORM: APPROVED AS TO FORM:
By: BY: *IA/al itir‘
Name: Alston Hunt Floyd &Ing Name: Jr seph K.Iv amela a
Corianne W. Lau
Title: Attorney for Hawaiian Earth Title: Corporation Counsel
Recycling LLC
Page 6 of 6
AGREEMENT as supplemented or amended, are to remain in full force and effect except as the
same may have been altered or modified by this and any other Supplemental Agreement.
This Supplemental Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF,the parties hereto have executed this Supplemental
Agreement No. 2 on the day and year first above written.
HAWAIIAN EARTH RECYCLING COUNTY OF HAWAII
LLC
By: By:
Name: Name:
Title: Title:
Date: Date:
RECOMMENDED APPROVAL:
By:
Name: William Kucharski
Title: Director,Department of
Environmental Management
APPROVED AS TO FORM: APPROVED AS TO FORM:
/
By: By:
Name: A` on unt Floyd &Ing Name: Joseph K. Kamelamela
Corianne W. Lau
Title: Attorney for Hawaiian Earth Title: Corporation Counsel
Recycling LLC
Page 6 of 6
STATE OF HAWAII )
) SS.
CITY and COUNTY OF HONOLULU )
On this A/141 day of 6th&A/ , 2017, before me appeared
1. Q 4i i vb ,'to me personally known, who, being by me duly
sworn (or affirmed), did say that he/she/they is/are of �,,,
.. i &h Poi b tf•tt
i l Cion►a C;and that t•. - :. -.
• •- •. . t • = :_ and the instrument was signed and sealed in behalf of
the corporation (or partnership) by authority of its board of directors (partners or
trustees), and said crv\ Ket4n,islit itt acknowledged the said
instrument to be the free act and deed of said of corporation, partnership or other entity.
, it— /1,—. .,t.-------
Signa •e
eAi/L. k ,---th my teno,
Print or Type Name
Notary Public, State of 0f1
My Commission Expires: NOW,Mlaa l r ii-
NOTARY CERTIFICATION
Doc.Date: Undated at time of notary No.of Pages: 1
Notary Name' /1 /1 !dam+ r o, _Judicial Circuit
Do .Description t I P(40 ,
6 * 66,517 b
* ' 14— 44..... ID i
4-10 .
Notary nature Date
Generic Corporate Notary
IN1 OF Ai
•
COUNTY OF HAWAII
CERTIFICATION OF AVAILABILITY OF FUNDS
I hereby certify that on the date of filing of this change order with the
Director of Finance, there are sufficient funds in the contract's remaining
balance to cover the deobligation in the amount of :
$ 3,650,000.00 in 085.601.5610.02.115
$ 277,382.98 in 085.601.5610.02.115
$ (10,375,038.32) in 110.699.5699.33.115
$ (6,447,655.34) Total
of the County of Hawaii under this contract.
Contract Title: Supp Agmt #2--RFP# 3298 - Legal Fees and construction
costs for work done and reduction of Organics
Processing Facilities
Vendor: Hawaiian Earth Recycling, LLC.
Contract No.: C.005770
Director of Finance
Date: October 30, 2017
County of Hawai'i is an Equal Opportunity Provider and Employer
,V.: U OF HFAI'I Page 1 / 1
::::
DEPARTMENT F FINANCE-PURCHASING DIVISION
" ' ` :`f/ 25 AUPUNI STREET
ORIGINAL PO DATE PO NUMBER'
`k ',—, ... HILO, HAWAII 96720
07/01/2016 C.005770
!!' (808)961-8231 FAX(808)961-8248
Hawaii County is an Equal Opportunity Provider and Employer
SHIP TO: ENVIRONMENTAL MGMT-SOLID WASTE .
345 KEKUANAOA ST
SUITE 41
HILO, HI 96720
Special Inst:
VENDOR: 62881 FOB Point:
HAWAIIAN EARTH RECYCLING LLC Terms: A/P Net 30 Days
PO BOX 861601 Req.Del.Date:
WAHIAWA, HI 96786 Req.No.: emsw .00779
Dept.:
Contact Name: PETERS, LINDA
Contact Phone: (808)961-8942
Confirming? No(If Yes, DO NOT Duplicate)
Quantity Unit Description ,. Unit Price. Ext.Price, .. .
THIS IS A REVISED PURCHASE ORDER
RFP3298 Organics processing for the 4,000,000.00
EHOF and WHOF and mulch loading
services at the KRTS for July 1,2016-
June 30,2017.
RFP3298 Organics Processing Facilities 10,375,038.32
ADDITIONAL ENCUMBRANCE FOR THE TIME 65,000.00
PERIOD OF JULY 1,2016 THROUGH JUNE'30,
2017.
Additional Encumbrance for FY 2018 , 3,650,000.00
Supplemental Agreement No.2-Legal 277,382.98
Fees&Construction Costs
Supplemental Agreement No.2- 10,375,038.32-
Reduction of Construction Costs
(Organics Processing Facilities)
SUBTOTAL 7.992.382.98
BILL TO: DEPT OF ENV MGMT-SOLID WASTE TAX 0.00
345 KEKUANAOA ST SUITE 41 FREIGHT 0.00
HILO, HI 96720 TOTAL 7,992,382.98
INSTRUCTIONS: This order is subject to the terms and conditions of the above referenced Request for Quotes(RFQ),
Invitation for Bids(IFB)or Request for Proposals (RFP). Shipping and freight charges shall be FOB,Destination Prepaid and
Allowed unless otherwise noted. Invoices shall include the Purchase Order Number, with the original invoice and one copy
being mailed or delivered to the BILL TO: address listed above. No changes or modifications to the terms, quantities or
specifications shall be made without written authorization from the Purchasing Division.
PURCHASING AGENT
SUPPLEMENTAL AGREEMENT NO. 1
CONTRACT NO. C.005770
AA
This SUPPLEMENTAL AGREEMENT is made and entered into this "24) day
of X1()`1` > A.D.2017, by and between the COUNTY OF HAWAII, hereinafter called
the"COUNTY",and HAWAIIAN EARTH RECYCLING LLC, of 91-400 Malakole Street,
' Kapolei,Hawai'i 96707,hereinafter called the"COMPANY",
WITNESSETH THAT:
WHEREAS,the parties hereto have entered into a Contract dated July 1,2016,for the
Service Agreement for an Organic Waste Diversion Program on East Hawai'i and West Hawai'i
for RFP No. 3298, Contract#C.005770,which contract is hereinafter referred to as the
"AGREEMENT";
WHEREAS,Article XIV,Section 14.2(B), Service Fee Definition and 14.2(C), Service
Fee Formula,Minimal Annual Payment,of the AGREEMENT has a current contract of
$99.58/ton (East Hawaii Organics Facility or"EHOF")and$85.08/ton(West Hawai'i Organics
Facility or"WHOP")to calculate the service fee;
WHEREAS,Article XIV, Section 14.5,Annual Price Adjustment,of the
AGREEMENT provided for an.annual adjustment of the contract price for the service fee to be
adjusted by the percentage change in the Consumer Price Index("CPI")for the preceding twelve
months;
Page 1 of 7
Attachment B
WHEREAS,parties desire to amend the AGREEMENT rate per ton used to calculate
the service fee,and delay the CPI adjustment to commence on July 1,2018; •
WHEREAS Article III Section 3.1,Initial Term, of the AGREEMENT provides that
the contract term was from July 1,2016 until June 30,2026;
WHEREAS Article III, Section 3.2,Renewal Option provided that the COUNTY shall
have the option in its sole discretion to renew the AGREEMENT,for up to two additional five
year terms;
WHEREAS the parties desire to amend the AGREEMENT to provide for an amended
Term of the AGREEMENT and clarify the COUNTY'S Renewal Options;
WHEREAS the parties wish to memorialize specific cost claim availability should the
COUNTY exercise its right to terminate the contract for convenience;
WHEREAS the parties desire to memorialize that performance of the parties under the
AGREEMENT, that is tied to building of the compost facility at Kiyosaki Quarry is deferred or
canceled until a new site is selected;
WHEREAS,Article X, Section 10.29,Modifications to Service Agreement,of the
AGREEMENT authorizes the parties to amend the price per ton,adjust the commencement date
of the CPI,memorialize adjustments to the contract term and option years and make other
amendments within the general scope of the AGREEMENT;
WHEREAS,the COMPANY is willing and able to perform the services under the
amended conditions;
Page 2 of 7
NOW,THEREFORE,the parties, in consideration of the mutual agreement set forth,
agree to amend the AGREEMENT as follows:t
1. The per ton charges in Section 14.2 Service Fee Formula shall be adjusted as follows:
a. The EPTC means EHOF per ton Charge.For the period of July 1,2017
through June 30,2018,the EPTC shall be reduced to $78.00 times the number
of Tons of MDOM received and accepted at EHOF (but excluding Pre-
Processing Contamination)excluding Tons transported from WHOP. The'
F
COMPANY shall not receive any additional Service Fee for material
transported by the COUNTY from WHOF and processed at EHOF;
b. The WPTC means WHOF per Ton charge. For the period of July 1,2017
through June 30,2018,the WPTC shall be reduced to $78.00 times the
number of Tons of MDOM(i)processed at WHOF and(ii)received at WHOF
and transported to, and processed at,EHOF;
c, On July 1,2018 and every July 1 thereafter,prices shall be adjusted by the
percentage change in the Consumer Price Index-Urban,Honolulu Metro Area
(CPI) for the preceding twelve months. The CPI utilized shall be for the
twelve-month period immediately preceding each annual adjustment date,
Adjusted prices shall be the product of the then-current prices and the
modifier shall be correct to the nearest whole cent($.01). The Consumer
Price Index used herein shall be the second half index for all urban Consumers
(for all items,Honolulu,Hawai`i)—published by the U.S.Department of
Abbreviations and capitalized terms appearing here shall be given the same meaning as those found in the
AGREEMENT.
Page 3 of 7
•
Labor,Bureau of Labor Statistics www.b1s.govicpi, CPI increases and
decreases in excess of 5%per year are subject to documentation of actual
. .
increases or decreases in cost for the prior 12 month period; and
d. July 1,2020: automatic increase to original contract price($99.58/ton for
EHOF and $85.08/ton for WHOF)plus CPI adjustment back to July 1,2017.
2. ECMMA means the cumulative minimum monthly amount for EHOF for any given
Billing Period, The ECMMA, prior to the Organics Diversion Program Acceptance
Date, shall be reduced to $65,000.00 times the number of Billing Periods that have
elapsed in the current Contract Year,up to and including the Billing Period for which
the ESF is being calculated. This temporary reduction shall be effective from July 1,
2017 until June 30,2020,or Facility Acceptance, whichever occurs first.
3. WCMMA means the cumulative minimum monthly amount for WHOF for any given
Billing Period, The WCMMA,prior to the Organics Diversion Program Acceptance
Date,shall be reduced to $143,000,00 times the number of Billing Periods that have
elapsed in the current Contract Year,up to and including the Billing Period for which
the WSF is being calculated. This temporary reduction shall be effective from July 1,
2017 until June 30,2020,or Facility Acceptance,whichever occurs first.
4. The Minimum Annual Payment shall be reduced to$2,496,000 (10,000 tons times
$78/ton (EHOF) plus 22,000 tons times$78/ton (WHOF))effective July 1,2017 until
June 30,2020,or Facility Acceptance,whichever occurs first.
Page 4 of 7
5, If the in-vessel(closed system)compost facility is built prior to July 1,2020,the
automatic increase shown in Section 1.d.will take effect immediately upon Facility
Acceptance by the COUNTY.
6, Term of AGREEMENT and Renewal Option: The COUNTY shall have the option
in its sole discretion to renew the AGREEMENT,for up to two additional five year
terms(the"Renewal Term")on the same conditions as are applicable during the
Initial Term hereof,with rates to be paid to COMPANY in the same amounts as
those effective at the end of the Initial Term. The COUNTY shall use good faith
efforts to provide the COMPANY at least 60 days' notice of its intent to exercise any
renewal option. The COUNTY shall allow the COMPANY to conduct the Phase II
Operations,as described in Article IX,Section 9.8 of the AGREEMENT,for a
minimum period of eight(8)years("Initial Term").Therefore, if the Organics
Diversion Program Acceptance Date,as defined in Article VIII,Section 8.1, is on or
after July 1,2019,the COUNTY shall exercise its renewal option with the
COMPANY for an initial One(1) additional five(5)year term("First Five Year
Renewal Option"),notwithstanding COUNTY'S right lof sole discretion to renew the
AGREEMENT as described above.The First 5 Year Renewal Option shall be
exercised by the COUNTY, so long as any delay in the Organics Diversion Program
Acceptance Date is not caused by COMPANY Fault, as defined in the
AGREEMENT. The COMPANY shall not unreasonably withhold acceptance of
the First Five Year Renewal Option.
7. Termination for Convenience: The COUNTY and COMPANY have agreed to a
reduced per ton fee of$78 at EHOF and WHOF until the Organics Diversion
Page 5 of 7
Program Acceptance Date or July 1,2020 whichever is sooner,down from$99.58/ton
for EHOF and$85.08/ton for WHOF. If the COUNTY exercises its right to
Termination for Convenience pursuant to Section 15.6,the COMPANY shall be
entitled to the difference between the original AGREEMENT price and the reduced
rate based on the total actual tons processed during the period that the reduced rate
remains in effect. This amount due to COMPANY by COUNTY shall be included
and compensated by the COUNTY as part of a termination claim as defined in-
Section 15.6(D)(1) or 15.6(D)(3),and subject to Section 15.6 (D)(2) of the
AGREEMENT, The COUNTY shall not owe such amount if it does not exercise a
Termination for Convenience during the Term of the AGREEMENT.
8. Performance by the parties of terms of the AGREEMENT that are tied to or
contingent upon building a compost facility at Kiyosaki Quarry as provided for in the
AGREEMENT, is cancelled,with site-specific actions deferred until such time as a
new suitable site for the compost facility is selected.
IT IS FURTHER UNDERSTOOD AND AGREED that this Supplemental Agreement
No. 1 is supplement to the AGREEMENT heretofore executed by the parties and shall in no
way act as a waiver of any of the conditions and obligations imposed upon the parties by the said
AGREEMENT, as supplemented or amended,or the specifications attached thereto and made a
part thereof,and any rights which any of the parties may have by virtue of the said
AGREEMENT as supplemented or amended,are to remain in full force and effect except as the
same may have been altered or modified by this Supplemental Agreement.
This Supplemental Agreement may be executed by a signature that is delivered
Page 6 of 7
electronically,including a signature delivered via email or facsimile transmission,which will be
valid and enforceable and will have the same legal effect as an original signature.This
Supplemental Agreement may be executed in one or more counterparts,each of which shall be
deemed an original,but all of which together shall constitute one and the same instrument.
1 IN WITNESS WHEREFOR,the parties hereto have executed this Supplemental
Agreement No. 1 on the day and year first above written.
HAWAIIAN EARTH RECYCLING COUNTY OF HAWAII
LLC
By: J v \ By:
Name: 3, S T . A MEL%
Title: p CN-. Title: 14-v VA-c'./cc'
Date: /al/17 Date:
RECOM NDED APPROVAL:
By: Acriaiw_
Name: illiamKucharski
Title: Director,Department of
Environmental Management
APPROVED AS TO FORM: APPROVED AS TO I t
By: By:
Name: Alston Hunt Floyd&Ing Name: Jo "p K.Kamelamela
Corianne W. Lau
Title: Attorney for Hawaiian Earth Title: Corporation Counsel
Recycling LLC
.111......1113.1.1q...01011119101....1114,006.. 11103121.1.1•11m.019
Pursuant to Section 6-6.3 and 13-13(d)
of the Hawal'i County Charter, I have
examined this contract and find that it
imposes no *- . obli:ation un
the Coup .
t
Page 7 of 7 JUN 3 0 e 01
Date 1-1 Director of Finance
electronically, including a signature delivered via email or facsimiles transmission, which will be
valid and enforceable and will have the same legal eliect as an original signature.This
Supplemental Agreement may be.executed in one or more counterparts,each or which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS H REFOR, the parties hereto have executed this Supplemental
Agreement No. I on the day and year first above written.
IAWAll AN EARTH.RECYCLING COUNTY OF HAWAII
LLC
13y: y:
Name: Name:
Title: Title.:
Date: late:
R E:.'01VII\'ZIf,:NI)ED APPROVAL:
I3y: _.
Name: William Kucharski
Title: Director, Department of
l,nvirunn eraial Management
APPROVED AS TO FORM: APPROVED A,s To.o FORM:
47/
—
fly:
Name: Alston Hunt Floyd & !rig Name: • Joseph K. I.,amelamela
C,`o r i a n t a e: W, .I_.a u
"Title: Attorney for I lawaiian Earth Title: Corporation Counsel
Recycling LLC
_.._._.
Page
7 e.a# 7
Dare(MMIDDlYYYY)
ARD CERTIFICATE OF LIABILITY INSURANCE 01/06/2017
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies)must be endorsed. If SUBROGATION IS WAIVED,subject to the
terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder In lieu of such endorsement s. .
PRODUCER ;
NAME ROBSON BUNDA
JHC SERVICES,INC.DBA P, ^ �,E,i);808-534-7304 M,Not:808-521-5995
JOHN H.CONNORS INSURANCE AGENCYrVALEss:RSUNDA@CQNNQRSHAWAII.COM
500 ALA MOANA BLVD,#303 INSURER(S)AFFORDING COVERAGE NAIC#
HONOLULU,HAWAII 96813 INSURER k. ADMIRAL INSURANCE COMPANY
INSURED INSURER B: ISLAND INSURANCE COMPANY
MENEHUNE GREEN,LLC INSURER O:
DBA HAWAIIAN EARTH PRODUCTS
7343 EAST MARGINAL WAY SOUTH INSURER 0:
SEATTLE,WA 98108 INSURER E: .
INSURER F:
COVERAGES CERTIFICATE NUMBER: 101... _--
582 REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.�ULIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS,
INR TYPE OF INSURANCE NSDL WVD POLICY NUMBER POLICY EFF WDO/OUCY EXP UMITS
(MPNPIY`m') (MM/DDIYYYY)
A X COMMERCIAL GENERAL LIABILITY X FEl-EIL-18779-03°" 01/15/17 01/15/18 EACH OCCURRENCE $ 1,000,000
X CLAIMS-MADE X OCCUR DAMAEMaF i?Ea occurrence) $ 300,000
PR
X POLLUTION MED EXP(Any one person) $ 25,000
_ PERSONAL&ADV INJURY $ 1,000,000
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000
119 POLICY JECT LOC PRODUCTS-COMP/OP AGG $ 2,000,000
OTHER: $
B AUTOMOBILE UABILJTY X ITP9720888-03 01/15/17 01/15/18 (e accidennt)INGLE LIMIT $
X ANY AUTO BODILY INJURY(Per person) $ 1,000,000
III ALLAUT 5 A TBWNED S�Ij ULED
BODILY INJURY(Pec accident) $ 1,000,000
1. HIRED AUTOS AUNO WNED PROPERTY
DAMAGE
(Per t) $ 1,000,000
$
A ill UMBRELLA!IAB X OCCUR FEI-EIL-18780-03" 01/15/17 01/15/18 EACH OCCURRENCE 5,000,000
III EXCESS UPS X CLAIMS-MADE AGGREGATE $ 5,000,000
DED RETENTION$ $
B WORKERSCOMPENSATION Y/N PWA9720889-03 01/15/17 01/15/18 X PERTUTE 'M
AND EMPLOYERS LIABILITY
ANY PROPRIETOR/PARTNERIEXECU IV N/A E.L EACH ACCIDENT $ 1,000,000
(Mandatory in NAR EXCLUDED? E.L DISEASE-EA EMPLOYEE$ 1,000,000
if yes,describe under
DESCRIPTION OF OPERATIONS below E.L DISEASE-POLICY LIMIT $ 1,000,000
DESCRIPTION OF OPERATIONS t LOCATIONS/VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached If more space Is required)
RE:RFP#3298
ADDITIONAL INSUREDS AND DESCRIPTION ON ATTACHED PAGE.
"THIS INSURANCE CONTRACT IS ISSUED BY AN INSURER WHICH IS NOT LICENSED BY THE STATE OF HAWAII AND IS NOT SUBJECT TO ITS REGULATION OR EXAMINATION,IF THE INSURER IS FOUND
INSOLVENT,CLAIMS UNDER THIS CONTRACT ARE NOT COVERED BY ANY GUARANTY FUND OF THE STATE OF HAWAII'JOHN H CONNORS INSURANCE(SURPLUS LINE BROKER LICENSE#115577)500 ALA
MOANA BLVD.#2-303,HONOLULU,HI 96813
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
COUNTY OF HAWAII THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
25 AUPUNI STREET,SUITE 1101 ACCORDANCE WITH THE POLICY PROVISIONS.
HILO, HI 96720
AUTHORIIJ:D REPRESENTATIVE
r
Eigra41
O 1988-2013 ACORD CORPORATION. All rights reserved.
ACORD 25(2013104) The ACORD name and logo are registered marks of ACORD
THE COUNTY OF HAWAII AND ANY OTHER ENTITY THEY SHALL DESIGNATE,
INCLUDING THEIR ELECTIVE AND APPOINTED OFFICERS, OTHER OFFICERS AND
DIRECTORS, LIMITED AND GENERAL PARTNERS, EMPLOYEES AND AGENTS ARE
ADDITIONAL INSURED ON THE GL AND AUTO. A WAIVER OF SUBROGATION
APPLIES IN THEIR FAVOR. INSURANCE IS PRIMARY AND NON-CONTRIBUTORY AS
TO ALL ADDITIONAL INSUREDS.
This is to certify that the policies of insurance described herein
have been issued to the insured for whom this certificate is
executed and are in force at this time. In the event of
cancellation in a policy affecting the certificate holder, sixty
(60) calendar days prior written notice shall be given to the
certificate holder.
7
Serial#:101562
MANAGER-MANAGED OPERATING AGI .y@EEMENT
HAWAIIAN.: N Ef R�'.��RECYC .�.N( [LC
This Manager-Managed Operating Agreement("Agreement")is entered into as of this
_j.__ day of 2009, for HAWAIIAN .E A.R`l'TI RECYCLING 11E, a Hawaii
limited liability company(the"Company"),by and between MEN-MUNE GREEN,TIC,a.Hawaii
limited liability company, and CEDAR GROVE COMPOSTING, INC., a Washington corporation
(the"Members"):
The Members have agreed to organize and operate a limited liability company in
accordance with the terms and subject to the conditions set forth in this Agreement.
NOW, [T[EREFORfi, (or good mid valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties, intending legally to be bound, agree as follows:
Article I
Definition
The following capitalized terms shall have the meaning.specified in this Article I. Other terms
are defined in the text of this Agreement; and,throughout this Agreement, those terms shall have
the meanings respectively ascribed to them:
"Accounting Period" means (i) the period commencing on the date of formation of the
Company and ending on the last day of the fiscal year of the Company (as determined by the
Manger) (ii) any succeeding -fiscal year of the Company, and (iii) any portion of any period
described in clauses (i) Or (ii) ending on the day on which the book value or the assets of the
Company are adjusted to reflect their fair market value.
'Act" means Chapter 428, Hawaii. Revised Statutes (the Hawaii Uniform Limited
Liability! Company Act). as amended kromn time to time.
"Adjusted Ccpital Account l)eJicii" means, with respect to any Interest I[older, the
deficit balance, if any, in the Interest Holder's Capital Account as nt the end of the relevant
taxable year, after giving effect to the fbllowing adjustments:
(i:) the Capital Account shall be credited with the amounts which the .interest I[older is
deemed obligated to restore pursuant to Regulation Sections 1.704-2(g)(1) and (i)(5) (i.e.., the
Interest Holder's share of Minimum.Cain and Member Minimum Gain); and
(ii) the Capital. Account shall be debited with the items described in Regulation Sections
1..704-1(b)(2)(i i)(d)(4), (5) and (6),
"Adjusted Capital f3ealc7'1c.'e" means, as of'any day, an Interest.•EIoldcr's total Capital
Contributions less all amounts actually distributed to the Interest Holder pursuant to= "c3ctiom
•
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•
4.5.3. All Profit and Loss shall he allocated, and all distributions shall be made,to
the Persons shown on the records of the Company to have been Interest Holders as of the last day
of the taxable: year for which the allocation or distribution is to be made. Notwithstanding the
foregoing-, unless the Company's taxable year is separated into segments, if there is a Transfer or
an Involuntary Withdrawal during the taxable year, the Profit and toss shall be allocated
between the original interest I Iolder and the successor on the basis of the number of days each
was an Interest :Holder during the taxable year; provided, however, to the extent permitted under
Section 706 of the Code the Company's taxable year shall be segregated into two or more
segments in order to account for Profit, Loss, or proceeds attributable to a Capital Transaction or
to any other extraordinary nonrecurring items of the Company.
4.5.4. The Manager is hereby cauthorived, upon the advice of the Company's tax
counsel, to amend this Ar'tic'le IV to comply with the Code and the Regulations promulgated
render Section 704(b) of the Code; provided, however, that no amendment shall materially affect
distributions to an interest Holder without the Interest Holder's prior written consent.
Article V
'Management
5.1. ,A`ancrger.
5,1.:1. In General. The business and affairs of the Company shall be managed by
the Managers. Except. as otherwise expressly provided iIra this Agreement, the Managers shall
have full and complete authority, power and discretion to manage and control the business.
affairs and properties of the Company, to make all decisions regarding those matters and to
perf.brm any and all other acts or activities customary or incident to the management of the
Company's business.
5.1.2. Specific Powers. Without limiting the generality of the foregoing, each
Manager shall have the power and authority, on behalf of the Company, to:
5.1.2.1. Acquire by purchase, lease, or otherwise, any real or personal
property,tangible or intangible;
5.1.2.2. Construct, operate, maintain, finance, and improve, and to own,
sell, convey, assign, mortgage, or lease any real estate and any personal property;
5.1.2.3. Except. as provided in Section 5.1..y.6,. sell, dispose, trade, or
exchange Company assets in the ordinary course of the Company's business;
5.1.2.4. inter into agreements and contracts and to give receipts, releases
and discharges
5.1.2.5. Purchase liability and other insurance to protect the Company's
properties and business;
1901 1,1 v:?
TN.WT'i'[Nt1.;SS WHEREOF,the parties hereto have executed this Agreement as of the date
and year first above tivcitlea.
HAWAIIAN EARTH..I.1. CYCLING LLC,
a I luwaii limited liability company
By: Cedar Grove Composting,Inc.,
a Washington corporation
its: Manager
1
tLJLLJ'
V /
i.ts:
CEDAR GROVE COMPOSTING, INC,
a Washington corporation
f)
a a�
17
i ,
iiii
�f
.[ts. �
I\4EN.lii,ITUNE GREEN, LI/C,
a Hawaii limited liability company
By: COC [lawaii 1.1,C,
a Washington limited liability company
Its: Manager
i } i
I
! rr
f '~ t
Signature,_ 2[5,'-(4,44_, ,,,A.,-(4-4,,,--41_,___.
J. Stc.ahan L,anehero,Jr. lr.
Its: Manager
72_
19()I t 4)v?
l