HomeMy WebLinkAbout2008-09-22 08-319 ORDERttemfloO8 319
Date: September 22, 2008
Item/Subject: Autlwrizing the City Manager to E Wcute an Amendment W the Fuel Storage and
Handling Agreement with lz xonMobil Oil Corporation
Responsible Department: Legal
Commentary: In 2007, the Rated Maine revisal R Unitary Tax taw redeftning how Maine taxes mrpomte
revenue. The unitary tax taxes an entity ba ed on the [dal revenues of a unitary business Other Man only
revenues ronnerated In the Rale of Maine. Previously, the unitary tax was apportionetl based on three factors: l)
payrdl; 2) property; and 3) sales. In 2007, the apportionment factor clanged! and Is now based solely on sales.
The flwntlal Impact on a company depends on We breadth and scope of related/unitary buslness and whether or
nuY a mmpary Is horizontally «wothmily integrated.
The Fuel Storage and Handling Agreement with ExxonMobil was scheduled W automabmlly renew at the and of the
year unless they nctifietl us d Meir Intention nor to renew by the end d lune. In order to remain in compliance
with the direGive frorn Ev N,Obll headquarters and the existing lease which requires a six month notice of Intent
not W extend, they provided the Airport a letter stating that they will not elect W renes the anent Wntrad are
requested an amendment to the existing Agreement to extend the time for ExxonMobll to gFre the City entice of its;
Intent not to renew the Agreement until September 30, 2008; void the mace mcearetl In June; and change the
effective data of nomination if ExxonModl decides not W renew from December 31, 2008 W MOW 30, 2009. In
July 2000 We City Coundl approved the amendment.
In August E nMWA modified the City dot it wished W assign the agreement W Westem Petroleum and if fine City
objected to the asigWhom, then, in the alterna iw, it would not renew the agreement. The City has bean
emmising due diligence W determine R an assignment W western Petroleum is in the best Interest of me aty.
Howner, that son nd be completes prior W the Septanbo 30, 2008 deadline. Therefore, EcanMobil has agreed
W sound me agreement W extend the time for ExxonMobil W give the City notice of its intent not W renew the
Agreement until January 31, 2008; void the ndke moored in August 2008; and change the effective date of
termination if EsvinMobll decides rot to renew from Manch 30, 2009 W July 31, 2009.
The Order will authorize execution of the amendment.
DepaMlent Head
M.anage's Clonlineinuft::,p
City Manager
AssociaMtl InformatlOn:
Budget Approval:
Fi once Director
Legal Approval:
Solicitor
Intro uced for
Passage
_ First Reading Page _ of _
Referral
08 31.9
5 AssillaWto Councilor p•Errl o SePtev6er 22, 2008
CITY OF BANGOR
(TREE.) ORDER, Authorizing the City Manager W Execute an Amendment to the Fuel
Storage and Handling Agreement with ExxonMobil Oil Corporation
WHEREAS, the City of Bangor and ExxonMobil Oil Corpoadon (ExxonMobil) are Parties W a
Fuel Storage and Handling Agreement dated June 3, 1976, as previously amended by
agreements dated June 24, 1976, September 30, 1991, October 25, 1994, December 2004,
August 18, 2006 and! July 22, 20%; and
WHEREAS, under the Agreement the base term continued in effect until December 31, 1983
and thereafter renews for eight conseafive five-year periods unless ExxonMobil provides a
notice of intent not to renew at least six months prior to the expiation of the term or the
applicable renewal period; and
WHEREAS, the notice of renewal period was extended by the July 22, 2008 amendment From
June 30, 2008 to September 30, 2008 to permit ExxonMobil to have additional time to further
investigate supply options; and
WHEREAS, by notice received by the City of Bangor on August 27, 2008 ExxonMobil notified the
City of Bangor that it wished to renew the agreement subject to the the City agreeing to a
future assignment to Westem Petroleum and absent said consent that H would not elect to
renew the agreement; and
WHEREAS, the City of Bangor requires additional time to further investigate the advisability of
an assignment to Western Petroleum and wishes to extend she notice period from September
30, 2008 to January 31, 2009; and
WHEREAS, an amendment to extend the notice period will also include a provision Nat the
City will have six months from any notice of non -renewal and termination of the Agreement.
NOW, THEREFORE, BE JT ORDERED BY THE CRY COUNCIL OF THE CITY OF BANGOR THAT
The City Manager, Edward A. Banett, is hereby authorized, on behalf of the City of Bangor, to
execute an Amendment of the Fuel Storage and Handling Faclltdes Agreement by and between
the City of Bangor and Exxonslobil Oil Corporation W provide that for the current tens of the
Agreement ending March 31, 2009, any notice of non -renewal of the Agreement by
ExxonMobil may be given to the CM on or before January 31, 2009; that in the event of a
notice of rgn-renewal of the Agreement by ExxonMobil the efFecdve data of terminatim shall
be July 31, 2009; and that any notice of non -renewal submitted by ExxonMobil to the City to
date are null and void. Said Amendment shall be in a final form as approved by the City
Solicitor or Assistant City Solicitor.
IB CIT4 C011 m
September 22 2008 1
Motion Made and Seconded I p OB -3l9
far assage N
pa ed na➢RP
CI CL6R6 1218 e 6nthor3zin6 the City Manager to
en ll�eod—n �To FGTGTBto3Be
and Zt1iag 9gree®eut with 8uon Mobil
corporation
NcldoedbCouueOar
I
III
08 319
Amendment to Fuel Storage and Handling Facilities Agreement
This Amendment is made effective as of September 2008 to the Fuel Sound:
and Handling Facilities Agreement dated June 3, 19'16, as previously amended by
agreements dated June 24,1976, September 30, 1991, October 25, 19%, December 2004,
August 18, 2006 and July 22, 2008 ("Agreemene) between the City of Danger, Maine
(the "City' and sometimes "Leeson') and Exxon Mobil Corporation (formerly known as
- Exxon Corporation) and assigned by the tatter to ExxonMobil Oil Corporation
("ExxtuMobir) effective October 1, 2001.
Recitab
Whereas, under the Agreement, the base lease tam contimres in effect until December 31,
1983 and thereafter, it automatically renews for eight successive five -year periods
unless ExxonMobil provides notice at least six months prior to the expiration of the base
lease term or the applicable renewal period; and
Whereas, for the renewed period currently in effect, the City of Bangor requires additional
time an evaluate ExxonMobil's request to assign the Agreement to Western Petroleum
and wishes to extend the notice period mail January 31, 2009; and
Whereas, ExxonMobil has agreed to such extension in order to accommodate the City of
Bangor's request;
NOW, THEREFORE, in consideration of the mutual covenams Mrein contained and
other good and valuable consideration, the mutual receipt and sufficiency of which is
hereby acknowledged, the pasties agree as follows:
Agreement
1. Paragraph 2(TERM)ofthe Agreement is amended to read as follows
'7. TERM: This Agreement shall become effective on the date on which payment
shall be due from the City of Bangor and Exxon Corporation to George W. Kurt,
Chapter X Trustee of Trans -East Air, Inc. under the terms of settlement
agreement approved and ordered by the U.S. Bankruptcy Court for the District of
Maine, Northem Division and shall creature in effect until December 31, 1983
and will thereafter continue in effect for eight successive five (5) year additional
periods beyond the base lease period unless ExxunMobil shall have given Lessor
at least six (6) months' prior notice of its election not to renew at the exp'union of
the base lease term or any renew period then yr effect Notwithsmndingte
foregoing, for the renewal period scheduled to expire on December 31, 2008, the
parties some that should ExxonMobil elect not to renew, this Agreement,
ExxoMdobd may provide the City with notice on or before January 31, 2009. In
such event, the effective date of nomination shall be July 31, 2009. Further, any
08 319
notice ofnon-renewal submitted by ExxonMobil prior to the date of this
Amendment is hereby tendered null and void."
2. Except as expressly provided herenythe turns and provisions of flue Fuel Storage
and Handling Facilities Agreement and the rights and obligations thereunder shall
remain unchanged and in full force and effect.
IH WITNESS WHEREOF, the parties have executed Us Amendment to the
Agreement effective the day and year first written above.
ATTEST:
City of Bangor, Maine:
By:
Title:
Tile:
Dane:
Date:
ATTEST:
ExxooMobil Oil Corporation:
By:
Title:
Tide:
Dale:
Date: