HomeMy WebLinkAboutItem #27 - Discussion Item8 CITY OF MIAMI 1
CITY ATTORNEY'S OFFICE
MEMORANDi
TO: Donald H. Warshaw, City
FROM: Alejandro Vilarello, City
DATE: October 19, 1998
RE: Discussion Item- Oct*4
Status Report-BedminsA
c:
C7, 1998 City Commission Meeting
Seacor Services v. City of Miami
Pursuant to the directive of the City Commission at its of October 13, 1998, please schedule
the following item on the October 27, 1998 Agenda:
A STATUS REPORT FOR PENDING LITIGATION: BEDMINSTER
SEACOR SERVICES V. THE CITY OF MIAMI, CASE NO. 98-20458
CA 32, IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL
CIRCUIT.
Elvi Alonso, Agenda Coordinator
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DONALD H. WARSHAW
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CITY MANAGER
October 21, 1998
Roger E. Tuttle, President
Bedminster Seacor Services Miami Corp.
320 Grand Avenue
Englewood, New Jersey 07631
Dear Mr. Tuttle:
P.O. BOX 330708
MIAMI, FLORIDA 33233-0708
(305)416-1025
FAX (305) 400-5043
I am in receipt of your October 2, 1998 letter proposing that the City agree to be bound
by the results of an independent audit.
Please be advised that the City has considered your offer and that the City remains
interested in resolving its differences with Bedminster. However, the City is not in a position
to enter into an agreement with Bedminster if that agreement is not in the best interests of the
City and its residents.
In an effort to reach a mutually acceptable agreement, I would therefore propose the
following:
1. The City will agree to participate in a non -binding evaluation and comparison of
(a) the City's current waste disposal costs, (b) the waste disposal costs to the City under the
proposed extension agreement, and (c) the waste disposal costs to the City were the City to .
explore other presently available options in the market.
2. The evaluation and comparison described in paragraph 1 will be undertaken at
Bedminster's expense by an individual (or individuals) with the necessary industry expertise
acceptable both to the City and to Bedminster (the "experts").
3. The City and Bedminster will provide to the experts any and all documents within
their possession necessary to facilitate the evaluation and comparison described in paragraph
1.
4. Upon receipt of the evaluation and comparison in paragraph 1, the City will meet
with Bedminster in an effort to reach a mutually acceptable agreement.
�s�ss
a.
Roger E. Tuttle, Presides
Bedminster Seacor Services Miami Corp.
October 20, 1998
Page 2
5. Bedminster will promptly dismiss its lawsuit against the City without prejudice.
6. The City will agree not to declare Bedminster in default of the Restated Agreement
or the proposed extension agreement during the evaluation and comparison described in
paragraph 1.
This counter -proposal is made in good faith and for the purposes of resolving the City's
differences with Bedminster. We believe that the counter -proposal outlined in this letter
accommodates the interests of Bedminster and the City in reaching an agreement which is
mutually acceptable to both parties, safeguards the interests of taxpayers in the City, and
avoids needless legal expenses.
I look forward to hearing from you soon.
Very truly yours,
abnaold$W.ars�haw
City Manager
c: Honorable Mayor and Members
of the City Commission
Alejandro Vilarello, City Attorney
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Bedminster Seacor Services Miami Corp.
320 Grand Avenue, Englewood, NJ 07631 Tel. 201-541-9393 Fax 201-541-1303
October 2, 1998
Donald H. Warshaw, Acting City Manager
City of Miami
3500 Pan American Drive
Miami, FL 33133
Re: Bedminster Composting Agreement
Dear Mr. Warshaw:
I understand that at the City Commission meeting held on Monday, September 28, 1998,
there was discussion regarding the Bedminster contract by several City Commissioners.
The discussions centered at one point on whether City staff had further inquired
regarding my public statement to the effect that our company would fund an audit
analysis of the Bedminster Agreement in comparison with your current pickuptwaste
disposal agreement in order to finally demonstrate the benefits of the Bedminster
Agreement to the City.
To date, no one from the City has contacted me, although I have read your public
statements in the media to the effect that we should be talking to each other. I
wholeheartedly agree that we should talk to each other.
We are confident that the Bedminster plan will not cost the taxpayers of the City of Miami
any more than the City's current waste disposal methods and will provide several
significant economic benefits, including significant environmental enhancements.
Therefore, we are willing to put the entire matter in the hands of an independent third
party.
By the way of this correspondence I would like to formalize my offer to fund an audit to
determine the true cost of the City's current disposal methods as well as the cost of
composting to the City. The audit would include a comparison of at least the following:
recycling costs savings, disposal costs, transportation costs, transfer station costs,
savings from combining pickups, manpower savings, recycling grants, etc. The source
documents would include all documents in the possession of the City of Miami, which
are public records, as well as the current Bedminster contract, the February Resolution,
and the Amended Agreement developed by the City whereby Bedminster agreed among
other things to accept branches over 2 inches.
Our company is willing to make this additional investment only if the City is willing to
resolve this issue completely and in good faith and be bound by the audit results.
Therefore, I offer the following:
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1. Our Company will fund an audit by any of the Big Five accounting firms, to
determine the true cost of the City's current disposal methods as well the cost
of composting to the City under our contract if the City agrees to the following
conditions:
a. The auditing firm will be selected at random by a method mutually
agreeable to both parties. If we cannot agree on the method selection,
then we will simply pick a name out of a hat.
b. The City would pass a resolution, agreeing to be bound by the results of
the independent audit. Specifically, if the results of the audit conclude
that the Bedminster Agreement is either revenue neutral or revenue
positive - including recycling credits to the City -vis-a-vis its current
disposal methods, the Extension Agreement will automatically be deemed
to have full force and effect. Further, the period of time from February of
1998 — at which the time the Extension Agreement was approved by
resolution of the City — and the time at which the audit is finally presented,
will be added to the Extension Agreement as additional time within which
Bedminster which is to perform its obligations.
c. The City will provide full and complete access to all of its records, which
are public records, to the auditing firm so that they can make a true,
independent and unbiased analysis of the disposal costs of the City. The
scope of the audit will also include an analysis of the true recycling costs
that the City will incur in the next two years.
d. Bedminster, in the same manner, will provide any and all documents
necessary to perform an analysis of the Bedminster plan.
e. The City and our company shall agree to immediately'abate the pending
lawsuit, to wit: Bedminster Seacor Services v. City of Miami Case #98-
20458 CA 32 pending in the 11t' Judicial Circuit, until the audit is
concluded, thereby saving the City the $25,000 in legal fees that it
approved to oppose the lawsuit.
f. The City shall agree that during the time that the lawsuit is abated and the
audit is ongoing, Bedminster shall not be in default under the terms of any
agreement between the City and Bedminster including, but not limited to,
the Extension Agreement. This is commonly called a "standstill"
agreement.
Our offer is made in good faith and is structured so that the City will save at least
$25,000 in needless legal expenses. Our intent is to resolve all issues between
Bedminster and the City, in an audit process that will not cost the taxpayers of the City
one penny. Commissioner Gort, at the above mentioned public hearing, stated that "we
need to get the truth of the numbers." That is also our Company's position and
frankly, a major reason that compelled us to seek relief before the Courts. It would seem
to us that, as a responsible public official, you as well as the Commissioners of the City,
would truly like to know from an independent, unbiased party what the true cost of your i
current waste disposal methods are as well as the cost of the alternative me ds under
our composting agreement. *91
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Our offer is firm and irrevocable for a period of 30 days from the date of the letter. We
feel that this is a reasonable time for the City to analyze this offer and accept it. The
offer may be accepted by simply passing a resolution re -stating the understandings
above and a subsequent written communication by you that the City accepts our offer.
If you would like to meet with me to further discuss this matter, and would be willing to
proceed on this more expeditious and cost effective method of resolving this issue, I
leave it up to you to inform me, In writing, as to the time, place and date to meet with
you.
I anxiously await the City's response.
Sincer ,
Roger E. Tuttle
President
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cc: City Commissioners
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320 Grand Avenue
Englewood. Now Jersey 07631
October 23, 1998
Mr. Donald H. Warshaw
City Manager
City of Miami
3 500 Pan American Drive
Miami, FL 33133
Dear Mr. Warshaw:
I am in receipt of your October 21, 1998 letter wherein you respond to the offer that I
made through you to the City in my letter of October 2,1999.
I had requested in my earlier letter that the offer be accepted (or if it is the City's desire,
rejected) through a Resolution of the City Comminion since it is my underatending that
only the Commission can legally bind the City. I an therefore perplexed by your letter,
which is represented to be a counter -proposal. because you seem to have rejected the
offer made by Bedminster without Commission input. Moreover, your letter seems
contrary to the Commission's policy. directive - announced at do Commission's October
13* meeting - to seek a dispositive solution to this matter.
The purpose of my offer to the City was precisely to engage in a process that would be
ela . ldve: of the issues between Bedminster and the City. I wholeheartedly agree with
you that the City should proceed with the Bedminster Agreatnent only if it is in its beat
iniererft and that of its resided. That is wby I had suggested that the City would proceed
with the Extension Agreement only if the audit result concluded that the Bedminster
Agreement was either revenue neutral or revenue positive compared to the City's current
disposal costs. To Bully address your stated cancan. I have liurther offered that even if
the audit results conch,& to the contrary, Bedminster would go back to the negotiation
table and ensure that the agreement was revenue positive for the City or, if unable to do
to, we would walk away.
Your counter proposal to engage iu a wow-bindixg evaluation at our expense neither
fosters a resolution of the issues between the City and Bedminster, nor frankly does it
give any assurance to our company that the City would not find some other excuse by
which to continue to delay the implementation of our contract Our conclusion in that
regard is based on the actions taken by the City in the past which have created an
uncertainty as to the City' a willingness to meet its contractual obligations.
Specifically, when we entered into negotiations on the Extension Agreeemaat, the City
asked us to address issues regarding acceptable waste. We negotiated those issues m
good faith and made the concessions that satisfied the City's concerns.
The City then interpoe_.. the issue of recycling costs during -Ac 2-year extension period.
Since at that time we did not see it as a pretext, we agreed in good faith to cover your
recycling costs based on the estimate that were given to us.
Soon thereafter, that estimate was revised to a higher number. Bedminster agreed to pay
that second higher figure. No sooner had we reached that agreement, than the City came
to us with a third revised figure. Again, we agreed to pay.
Then we were told that the agreement could not be signed because it did not include a
clause requiring the County's approval. We pointed out to your attorneys that your
Interlocal Agreement does not require County approval. Nevertheless, we agreed to
language in that regard, so that it was clear that you would send notice to the County
which is all the lnterlocal Agreement required.
Having thought that all the mates were resolved, we were surprised that the City
subsequently came out with a fourth figure on recycling costs which varied from the first
figure by over $1 million per year. These four figures that were genmrated by your stall
all claimed to be accurate, were produced in a period of approxivastely 6 months. We
asked for documentation justifying the fourth purportedly accurate figure. The City was
either unwilling or unable to document that figure.
Your staff then conducted a study performed on am agreement that was obsolete. Then
without giving us an opportunity to comment you published a report that claimed the City
would lose money on the Bednimster Agreement and that it was not in the best interest of
the City. This caused us to respond in the public forum with accurate figures which show
a significant economic benefit to the City and its residents.
As was correctly stated by one of your Com djdonas at a recent public hearing, it was
the City's dilatory tactics that forced us to file suit.
Since you clearly defined the issue as one of economics, in a final attempt to resolve this
matter, we in good faith offered to pay for an audit that would squarely address this issue
and would demonstrate conclusively that our agreement is in fact in the bat economic
interest of the City. not to mention the significant environmental benefits to the
community that will result ftom out composting program. We an franldy at a loss to
understand why you would now try to deflect attention from the economic issue and the
accuracy of your staWs numbers, which -would be thoroughly analyzed through an
independent audit.
The issue of economic benefit or detriment can best be analyzed by any of the
international Big Five accounting firms which undoubtedly have competent, experienced
staff capable of evaluating the Agreement. Your offer to have some non -identified expert
"with industry expertise" conduct a non -binding evaluation does not address the City's
stated concern. As you know, we obtained award of this Agreement in a competitive
process wherein our company was evaluated by a blue-ribbon panel, created by the City,
that analyzed and rec-.amended our proposal. Therefore, ae do not feel that going
through this exercise again serves any valid purpose.
In essence, you offer to participate at our expense in an evaluation and comparison that is
also irrelevant, in that the City does not have the legal capacity to enter into an agreement
with someone other than Bedminster. Indeed, your Second Interlocal Agreement
between Metropolitan Dade County and the City of Miami, dated September 29, 1995,
specifically Article 2, limits you to either continuing your waste disposal through the
County, or entering into an agreement with Bedminster.
Mr. Warshaw, with all due respect, your counter proposal made without the input of the
City Commission which previously passed a resolution approving the Extension
Agreement, is not acceptable.
Bedminster will not dismiss its lawsuit and forego the rights that it can enforce in a court
of law, in exchange for an agreement to participate in anon -binding evaluation and
continue conversations. As you can appreciate, any reasonable person that reviews the
above chronology of the City's conduct would likely delude that even when this non-
binding evaluation was resolved in Bedminster's favor, another excuse would be found
by the City to delay this matter.
We are only interested in Snsocing a process that would be diapositive of the issues
between us, and we we amenable to slrvcttning it as a settlamant agreement within the
context of our current lawsuit Certainly, you are fi+ee to conduct any other studies you
would like at your own expa m.
To restate our offer, we are proposing to find an suudit on the conditions stated in our
October 2, 1998 letter where dw City would be bound by the results of the audit and
would proceed with the PUtemon Agree®enI only if Bedminster's Agreement is either
revenue neutral or positive for the City. As I have stated before: if the results are not
revenue positive Bedminster would than negotiate furduer concessions to make it revenue
positive or simply walls away. Our offer to the City Commission is therefore a proposal
where the City could not possibly proceed with the Bedminster Agreement unless it was
in its beat interest and that of its residents.
As your attorneys will tell you, the solutions you propom particularly in paragroph 4,
where you state dot, "upon receipt of the (non -binding) evaluation and comparison in
ph 1. the City will meet with Bedminster in an effort to reach a mutually
acceptable agreement" is simply "an agreement to try to agree" and therefore illusory and
non -enforceable.
In conclusion, the offer made to the City, which has been clearly re -stated in this letter, is
available to the City if your Commission, on October 27, 1999 chooses to accept it. I
would hope that your Commission gives it serious consideration so that we may have the
opportunity to engage in a diapositive process that will abate our current lawsuit - thereby
saving the City's taxpayers needless expense - and be conducted in a professional manner
by an independent auditing firm whose services will not cost the taxpayers one cent.
Sincerely yours.
Roger E. Tuttle
cc. City Commissioners
Bedminster Seacor Services Miami Corporation
320 Grand Avenue
Engelwood, New Jersey 07631
Mr. Donald H. Warshaw October 26, 1998
City Manager
City of Miami
3500 Pan American Drive
Miami, Florida 33133
Dear Mr. Warshaw:
It was my understanding that at the City of Miami Commission meeting of October 13,
1998, the Commission had resolved to place the offer contained in my letter to you of
October 2, 1998 on the agenda for "action" at the Commission's October 27th meeting.
The videotape of the Commission meeting reflects that the motion was made by
Commissioner Regalado, duly seconded and unanimously adopted.
I have recently come into possession of the agenda for the Commission's October 27th
meeting. Agenda Item 18 states: "Pursuant to the Directive of the City Commission at
its meeting of October 13, 1998, a status report for pending litigation: Bedminster Seacor
Services v. The City of Miami, Case No. 98-20458 CA 32, in the Circuit Court of the
Eleventh Judicial Circuit." (Emphasis added). No fair minded person who saw or heard
what happened at the Commission's October 13th meeting, or watched the videotape of
that meeting, would come away with the impression that the Commission wanted a
"status report." Rather, the Commissioners directed that the Bedminster issue be
placed on the agenda "for action."
Moreover, page 20 of the agenda -- which contains agenda item 18 -- has the following
somewhat cryptic legend:
"Legislation may result from City Commission consideration of any
Commission Discussion item.
This portion of the agenda is separately designated as being available for
the purpose of providing and securing City Commission information,
direction, and guidance in significant pending and concluded matters,
including matters not specifically set forth herein.
3
It is anticipated that no input from anyone other than the City personnel is
needed or expected while the City commission is considering any matter in
this portion of the Agenda; accordingly, no member of the public may
address the City Commission during this time."
I am not quite sure what this note is intended to accomplish. However, to ensure that
there is a full, complete and robust public discussion of the offer contained in my
October 2nd letter, your response of October 21st, and my letter of October 23rd,
Bedminster hereby agrees that anything said at the Commission's October 27th meeting
will not be used in any way, shape or form against the City of Miami in the litigation
presently pending between the City and Bedminster.
Bedminster looks forward to the Commission's consideration of our offer, to answering
any questions which the Commission may have, and to the Commission's action on
our offer.
cc: City Commissioners