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HomeMy WebLinkAbout2007-02-12 07-087 ORDER_COUNCIL ACTION Item No. DI-DRI Date: February 12, 200] Item/Subject ORDER, Authorizing the Execution of a Settlement Agreement with Citizens Communications Company Responsible Department Legal In November 2002 Me City of Bangor fled wit In the United States District Court for the district of Maine against Citizens Communications Company (Citizens) alleging that Citizens contributed to pollution of the Penobscot River (City of Bangor, Maine v. Citizens Communications Company, et al., Civil Action 02 -183- B -S). The District Court established a three-phase procedure for trying Me Issues M be litigated. Phase 1 addressed liability as between Me City and Others, Phase U would address selecting Me method of clean up for the pollution in Me River, and Phase III would address Me potential liability a additional third parties named by Cigars in the Lawsuit Ager the Phase I Mal, the Court found Mat Cil zens was 60% liable for the remediation of the pollution and Mat Me City was 40% liable. Phase ]I (remedy selection) and Phase III (third -party liability) remain to be tried by Me Court. This Order will authorize Me efe on of a settlement agreement with Citizens Communiations provided that, under Me definitive settlement agreement: 1) @liens shall pay the sum of $7.625 million Into an ewl account Mat may be Invested In a prudent manner at Me City's direction; 2) Me City will perform the remedy for the pollution in the Penobscot River as finalized wM the Department of Environmental Protection (DEP), provided Me City shall have Me we right to complete remedy ne podatlons with the DEP and to manage the clean up project; 3) Me City will be permitted to use Me parties'joint erwhonmental consultant to Me extent it dears; 9) the City will be allowed to draw down on the escrow account to pay Me costs of constructing the remedy and shall retain any remaining escrow funds after the remedy is completed; 5) in Me event Me escrow fund Is depleted poor to completion of the remedy, Me City will pay any remaining costs; 6) any recovery from third party defendants in Me perp ing litigation, after reimbursement of expenses Incurred from the data of a ution of the settlement agreement forward, shall be divided two-thirds to Citizens and one -Mini to Me escrow fund; 7) to the. extent allowed by law, the amounts due from Citizens to the escrow fund will be reduced by 2/3rds of the amount of the clean up performed pursuant to a federal appopriabon, if any; 8) Citizens shall protect Me City against any claims, losses, costs or expenses resulting from Citizens' daims against Mind party defendants; 9) the City shall provide an indemnity M Citizens against any claims arising out of or related M the tar contamination in the. Penobscot River or elsewhere In Me city limits of Bangor; and 10) Me City and Citizens shall each dismiss all claims in the Lawsuit against the other. The Settlement Agreement shall also include a provision Mat Me City and Citizens will cooperate in pursuing claims against Mintl pardes provided Citizens bears Me costs for such efforts, and shall cooperate to reach an agreement on the terns of a Consent Decm with Me DEP and Me State of Maine, provided further that Me settlement by and between the City and Clowns shall be contingent upon a Consent Decree reasonably acceptable M Citizens, but with the City retaining the sole right M negotiate Me remedy with DEP. Department Head Arrigoeda Couxil«Teirisgtou In 1 Fehzvary 1Z, ]OOT CITY OF BANGOR (TITLE.) ORDER,AuthorizingN Executlonofa SettlemeMAgreemeMwith Citizens Communications Company WHEREAS, in November 2002, the City of Bangor filed suit against Citizens Communications Company (Citizens) alleging that Citizens contributed to pollution of the Penobscot River; and WHEREAS, the District Court established a three-phase procedure for trying the issues to be litigated in the Lawsuit underwhich Phase I would address liability as between the City and Citizens, Phase II would address selecting the method of clean up for the pollutlon in the Penobscot River, and Phase III would address the potential liability of additional third parties named by Citizens in the Lawsuit; and WHEREAS, after the Phase I trial, the Court found that Citizens was 60% liable for the remediation of the pollution In the Penobscot River and that the City was 40% liable; and WHEREAS, Phase If (remedy selection) and Phase III (third -party liability) remain to be tried by the Court; and WHEREAS, the parties have the right to appeal the decisions of the Trial Court after the end of Phase III, which appeals could present considerable risks and expenses for both the City and Citizens; and WHEREAS, the City and Citizens have reached a compromise to resolve all issues as between those parties, including allocation of costs of the environmental dean up, their rights to appeal Phase I, their rights to try and appeal Phase It of the Lawsuit, and their rights against the third parties; NOW THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT the City Manager Is hereby authorized to execute a settlement agreement with Citizens Communications Company ("Citizens') in the matter of City of Bangor v. Citizens Communications Company, et al., Civil Action 02-183-B-5 (D.C. Me), provided that under the definitive settlement agreement 1) Citizens shall pay the sum of $7.625 million into an escrow account that may be Invested In a prudent manner at the City's direction; 2) the City will perform the remedy for the pollution In the Penobscot River as finalized with the Department of Environmental Protection (DEP), provided the City shall have the sole right to complete remedy negotiations with the DEP and to manage IN CITY COUNCIL February 12, 2001 Motion Made and Seconded for Passage Motion Made and Seconded to Amend by Subsituoion Passed Motion Made and Seconded for Pa�aage As Amended Pagaad I — CITY MPAM: p 07-087 OPUBR (TITLE) Authorizing the Execution of a Settlement Agreement with Citizens Communications Company Assigned to Counudlor PAftAINGTON f Budget Approval: Legal Legal Approval: 0, 1 City S Ilcltor —X Passage _ FIM Reading Page 1 oF_ Rehrml AecigoeA to Councilor Famnigtoo 07487 �Yner's. February 12, 2007 K' CITY OF BANGOR (TITLE.) ORDER, Authorizing the Execution of a Settlement Agreement win Citizens Communications Company WHEREAS, In November 2002, the City of Bangor filed suit against Citizens Communications Company (Citizens) alleging that Citizens contributed to pollution of the Penobscot River; and WHEREAS, the District Court established a three-phase procedure for trying the issues to be litigated in the Lawsult underwhich Phase I would address liability as between the City and Citizens, Phase II would address selecting the method of clean up for the pollution in the Penobscot River, and Phase III would address the potential liability of additional third parties named by Citizens in the Lawsuit and WHEREAS, after the Phase I trial, the Court found that Citizens was 60% liable for the remediation of the pollution In the Penobscot River and that the City was 40% liable; and WHEREAS, Phase II (remedy selection) and Phase III (third -party liability) remain to be tried by the Court; and. WHEREAS, the partles have the right to appeal the decisions of the Trial Court after the end of Phase RI, which appeals Could present considerable risks and expenses for both the City and Citizens; and WHEREAS, the City and Citizens have reached a compromise to resohre all issues as between those parties, including allocation of costs of the environmental clean up, their rights to appeal Phase I, their rights to try and appeal Phase II of the Lawsuit, and their rights against the third parties; NOW THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT the CM Manager is hereby authorized to execute a settlement agreement with Citizens Communications Company ("Citizens') in the matter of City of Bangor v. Citizens Communications Company, et al., Civil Action 02-183-8-5 (D.C. Me), provided that under the definitive settlement agreement: 1) Citizens shall pay the sum of $7.625 million into an escrow account that may be Invested In a prudent manner at the Ciws direction; 2) the City will perform the remedy for the pollution In the Penobscot River as finalized with the Department of Environmental Protection (DEP), provided the City shall have the sole right to complete remedy negotiations with the DEP and to manage the clean up project; 3) the City will be permitted to use the parties! joint environmental consultant to the extent it desires; 4) the City will be allowed to draw down on the escrow account to pay the costs of constructing the remedy and shall retain any remaining escrow funds after the remedy is completed; 5) In the event the escrow fund Is depleted prior to completion of the remedy, the City will pay any remaining costs; 6) any recovery from third party defendants in the pending litigation shall, after reimbursement of expenses incurred from the date of execution of the settlement agreement forward, be divided two-thirds to Citizens and one-third to the escrow fund; 7) to the extent allowed by law, the amounts due from Citizens to the escrow fund will be reduced by 213rds of the amount of the clean up performed pursuant to a federal appropriation, if any; 8) Citizens shall protect the City against any claims, losses, costs or expenses resulting form Citizens claims against third parry defendants; 9) the City shall provide an indemnity to Citizens against any claims arising out of or related to the tar contamination In the Penobscot River or elsewhere in the junediction city limits of Bangor; and 10) the City and Citizens shall each dismiss all claims in the Lawsuit against the other. Said Settlement Agreement shall also Include a provision that the City and Citizens will cooperate In pursuing claims against third parties, provided Citizens bears the costs for such efforts. Said agreement may aim include provisions making It contingent on the parties reaching an agreement with the DEP and the State of Maine on a Consent Decree reasonably acceptable to Citizens, provided that the City shall retain the sole right to negotiate the remedy with DEP notwithstanding any such Consent Decree. Said definitive settlement agreement to be executed by the City Manager shall be In a final form as approved by the City Solicitor or Assistant City Solicitor consistent with, or more favorable to the City than, the foregoing. AMEPCED 07-087 the clean up project; 3) the City will be permitted to use the parties' joint environmental consultant to the extent it desires; 4) the City will be allowed to draw down on the escrow account to pay the costs of constructing the remedy and shall retain any remaining escrow funds after the remedy is completed; 5) In the event the escrow fund is depleted prior to completion of the remedy, the City will pay any remaining costs; 6) any recovery from third party defendants in the pending litigation shall, after reimbursement of expenses incurred from the date of execution of the settlement agreement forward, be divided two-thirds to Citizens and one-third to the escrow fund; 7) to the extent allowed by law, the amounts due from Citizens to the escrow fund will be reduced by 2/3rds of the amount of the clean up performed pursuant to a federal appropriation, if any; 8) Citizens shall protect the City against any claims, losses, costs or expenses resulting from Citizens claims against third parry defendants; 9) the City shall provide an indemnity to Citizens against any claims arising out of or related to the tar contamination in the Penobscot River or elsewhere in the jurisdiction city limits of Bangor; and 10) the City and Citizens shall each dismiss all claims in the Lawsuit against the other. Said Settlement Agreement shall also include a provision that the City and Citizens will cooperate in pursuing claims against third parties, provided Citizens bears the costs for such efforts. Said agreement may also include provisions making it contingent on the parties reaching an agreement with the DEP and the State of Maine on a Consent Decree reasonably acceptable to Citizens, provided that the City shall retain the sole right to negotiate the remedy with DEP notwithstanding any such Consent Decree. Said definitive settlement agreement to be executed by the City Manager shall be in a final form as approved by the City Solicitor or Assistant City Solicitor consistent with, or more favorable to the City than, the foregoing.