Loading...
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: