1994-104-RES WHEREAS, the City Council of the City of Paris, did, heretofore, on the 29th day of August, 1991, agree
RESOLUTION NO. 94-104
WHEREAS, the City Council of the City of Paris, did, heretofore, on the 29th day of
August, 1991, agree to provide water at a cost of service rate to Campbell Soup Co. under a
contract to be finalized by October I, 1992; and,
WHEREAS, such agreement was not finalized by October I, 1992, due to factors not
totally attributable to either party; and,
WHEREAS, the terms of the cost of service rate offered by the City Council of the City
of Paris were not met even though the parties negotiated in good faith and continued to negotiate
in good faith until a contract, dated October 1, 1993, was finally executed in the latter part of
1993, so, therefore, a compromise settlement is justified; and,
WHEREAS, the compromise agreed to by representatives of Campbell Soup Co. and of
the City of Paris, with the understanding that the City of Paris staff would present such
compromise to the City Council for approval, is contained in Exhibit A, attached hereto, and
should, in all things, be approved; NOW, THEREl<'ORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, that the
terms of the compromise agreement between Campbell Soup Co. and the City of Paris, for water
furnished to Campbell Soup Co. during 1992 and 1993, contained in Exhibit A, attached hereto,
be, and the same are hereby, approved.
PASSED AND AOOYrED llii, 8lli d" or A"",. 19~..--: ---:,
Eric S. Clifford, May~m
ATTEST:
Mattie Cunningham, City Cler
Dr. Osman M. Aly
May 13, 1994
Page 2
3. A new contract was not entered Into by October 1, 1992. (A new contract
was in fact entered Into dated October 1, 1993.)
4. Since the Council specifically authorized the Cost of Service rate only If a
new contract was signed by October 1, 1992, and in fact no new contract
was signed by that date, that special Cost of Service provision expired.
Therefore, Paris is enlltled to payments pursuant to the agreed rate
methodology in the 1988 contract.
5. Any reasons for delay In signing a new contract past the October 1, 1992
expiration date are Irrelevant since Campbell representatives knew of the
expiration date and could have addressed the Council requesting an
extension of the Cost of Service rate. For whatever reasons, Campbell
chose not to address the Council and request an extension.
6. Since the governing body of Paris Q.e., the Council) did not amend or
extend the Cost of Service rate provision, and the requirements of the
Council's Cost of Service agreement were not met, the 1988 contract
governs the payments from Campbell for the 1991/92 and 1992/93 period.
7. CampbeR was billed and paId $2,444,796.37 versus their obligation under
the 1988 contract of $2,540,886.84; Campbell now owes Paris the difference
of $96,090.47.
CamDbell's position
1. The delay In signing the new contract was not solely the fault of either of the
parties; Campbell should not be penalized for famng to have a new contract
signed by the October 1, 1992 expirallon date of the Cost of Service
provision since the City Is also at fault for the delay.
2. Even though the Council only approved the Cost of Service rate
methodology ~ntingent upon signing a new contract by October 1,1992,
a.new contract was In fact agreed to on October 1, 1993 evidencing good
intentions in negollatlng a new contract.
3. Because Campbell acted in good faith and ultimately signed a new contract,
the Cost of Service rate methodology should apply for the entire 1991/92
and 1992/93 timeframe.
4. The Paris staff should use the Cost of Service methodology for the entire
period although the CouncIl has not authorized them to do so.
5. The splrft of good feIth should govern rather than the legal authorization of
the CouncIl.
. -
1~I~f~I.-S'r.)"'I~ & .~... -
I
/
INCORPORATEO
May 13. 1994
Dr. Osman M. Aly
Director of Environmental Affairs
Campbell Soup Company
CAmpbell Place
Camden, New Jersey 08103-1799
RE: City of Paris Settlement
for Fiscal Years 1991/92 and 1992/93
Dear Dr. Aly:
We enjoyed the opportunity to meet with you Tuesday. This letter is drafted at the
request of you and the city of Paris (Paris) staff to summarize the results of the meeting
pertaining to charges for water In 1991/92 and 1992/93. I will first state my
understanding of the positions of the two parties and then the settlement we discussed.
Inthe context of this letter, only the disputed portion of the payments will be addressed.
payment and volume data were provided by Parts as shown on the enclosed
spreadsheet.
Paris' position
Paris' position Is premised on its legal rightS and obligations under the Water Purchase
Contract dated September 29, 1988. between the City of Paris and Campbetl Soup
Company (Texas), Inc. Said contract explicitly sets forth the agreement between the
parties as to the rate methodology and payment for charges.
It is also Paris' position that It Is strictly bound by COuncil action and Council action Q.Oh1.
regarding any wholesale ebritracts or changes to any terms or conditions contained within
the contracts. .
Paris' current position regarding charges to Campbell for water service during the
1991/92 and 1992/93 time frame a.r~ as follows:
1. Campbell billing for 1991/92 and 1992/93 under the agreed contract
methodology should have been $2.540,886.84.
2. The City Council of Paris authorized In 1991 that Campbell would be billed
under the lower COst of service rate methodology In fiscal year 1991/921!
and only If a.new contract was 8nterecllnto before October 1, 1992.
'117 "'co' ~o ATL8.J FWV.SUTE 1107
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Dr. Osman M. Aly
May 13, 1994
Page 3
6. Under the Cost of Service methodology for 1991/92 end 1992/93, Campbell
should have paid $2,293,552.66 rather than the $2,444,796.37 they actually
paid; Paris owes Campbell the difference of $151,243.71.
Settlement Aareement
In order to maintain good relations and resolve this dispute, the parties agreed to .split
the difference" as follows:
Paris' Position -
Contract Charges
Campbell's Position
Cost of Service Charges
Total
$2,540,886.84
2.293.552.66
$4,634,439.50
Compromise -
Divide by 2 for Average
Less Amount Actually Paid by Campbell
Net Credit Due to Campbell
$2,417,219.75
2.444.796.37
$(27.51:6.62)
Note that Paris Is willing to forego $123,667.09 In revenues ($96,090.47 plus $27,576.62)
In order to resolve this dispute.
It was my understanding that you were authorized by Campbell to settle this dispute and
that you agreed to this settlement.
Paris must present this proposal to Council for approval and will notify you when It Is
approved or if any problems arise regarding Council approval.
Should you have any questions or concerns, please do not hesitate to call me at (214)
458-9388.
Very truly yours,
crrCft ~
Jay Joyce
Senior Consukent
JJ:ks
Enclosure
cc: Mr. Mike Malone (w/attachment)
Mr. T. K. Haynes (w/attachment)
Mr. Gene Anderson (w/attachment)
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