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C ounty of f Monroe
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BOARD OF COUNTY COMMISSIONERS
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Mayor George Neugent, District 2
The Florida. Ke Se
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Mayor Pro Tern David Rice, District 4
Danny L. Kolhage, District I
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
County Commission Meeting
May 17, 2017
Agenda Item Number: J.1
Agenda Item Summary #2913
BULK ITEM: No DEPARTMENT: Solid Waste
TIME APPROXIMATE: STAFF CONTACT: Will Thompson (305) 292 -4432
No
AGENDA ITEM WORDING: Discussion and Direction on Status of Yard Waste Processing
Services
ITEM BACKGROUND: This agenda item is placeholder in the event that E3 does not cured the
events of default as described below on or before May 7 and the County needs to secure a
contractor for yard waste processing services and/or as a placeholder in the event that County staff
needs to seek additional direction from the BOCC. Staff is seeking direction from the BOCC at its
May 10 budget meeting, so this item may or may not be needed depending upon the
status /discussion at the May 10 meeting. County staff will provide the Board with a current update
at the meeting and will seek direction and potential authorization from the Board on securing an
interim contractor for yard waste processing services.
The County entered into a Waste Supply and Processing Agreement (Agreement) with Energy3,
LLC (E3) on March 23, 2016. The Agreement provides for progress reports to be provided to the
County on a monthly basis and sets forth a scheduled date for completion of certain milestones. On
March 31, 2017, the "Construction Financing Close" Milestone was to be completed by E3. Upon
review of the documentation by county staff and the County's outside consultant, it was determined
that the documents provided by E3 were deficient. It was also been brought to the County's
attention, through the monthly progress reports, that the Chinook/Rodecs® technology was no
longer going to be used by E3 and rather an alternative technology that had not been vented by the
County was anticipated to be used. In response to this information, the County, through the Solid
Waste Director, issued a letter of default to E3 on April 6, 2017 setting forth the Events of Default
(attached). The default letter was delivered and received by E3 on April 7 2017. As per the
contract, E3 has 30 days to cure the Event(s) of default. If E3 fails to cure the events of default
within 30 days, the County may terminate the Agreement by notifying E3 in writing of its decision
to terminate and the effective date of the termination. E3 provided a letter in response to the
County's default letter on April 21, 2017 and the County res onded to their letter on April 28, 2017.
The County will have a Meet and Confer session on May 15 with E3.
PREVIOUS RELEVANT BOCC ACTION:
2/19/14: presented options for yard waste incineration demonstration. BOCC directed Staff to
proceed with Request for Proposals (RFP) for processing of yard waste.
5/21/14: Presented Climate Change Advisory Committee recommendations as to evaluation criteria
for the RFP
6/11/14: Approval to issue an RFP for processing of the County's Yard Waste
10/17/14: Approval to conduct further research and enter into negotiations with E3 for a proposed
gasification project.
12/10/14: Update on research of gasification technology and E3. BOCC directed staff to expedite a
contract for the interim processing of the yard waste.
2/18/15: Approval of an interim yard waste processing contract, to allow continuation of the due
diligence process
10/17/15: Brief update of status of the work being performed under the interim contract and ongoing
gasification project negotiations.
1/20/16: Presentation on progress status by E3, and staff update on the technical and financial due
diligence process for Energy3 gasification facility project. BOCC directed staff to prepare a no -risk
contract
2/23/17: Approval of Waste Supply and Processing Agreement with E3
5/10/17: Discussion and Direction from BOCC on yard waste processing services
CONTRACT /AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION:
DOCUMENTATION:
FINANCIAL IMPACT:
Effective Date: N/A
Expiration Date:
Total Dollar Value of Contract:
Total Cost to County:
Current Year Portion:
Budgeted:
Source of Funds:
CPI:
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: If yes, amount:
Grant:
County Match:
Insurance Required:
Additional Details:
N/A
REVIEWED BY:
Will Thompson
Completed
04/21/2017 8:58 AM
Christine Limbert
Completed
04/21/2017 5:14 PM
Budget and Finance
Completed
04/24/2017 8:35 AM
Maria Slavik
Completed
04/24/2017 9:18 AM
Kathy Peters
Completed
04/24/2017 12:56 PM
Board of County Commissioners
Pending
05/17/2017 9:00 AM
17/
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.1 AY A. HFRSHOFF
JAMES S. C.LPINo
Rt'sSF.I.I. A. YAGFI.
JESSICA RoMENBFRG
ROBERT C. STOBER
BRITTAN) N. MILLFR
ANNA FERNANDEZ
OF COFNSF.I.
AISLY'NN THONIAS- MCDONALD
HLNAY
Hershoff, Lupino & Yagel, LLP
Attomcvs At Law
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ALL CORRLSPONDENCE 10
90130 OLD I11GI MAY
TAVLRNILR, FLORIDA 33070
1305)852 -8440 FAx (305) 852 -8848
Via Email Transmission ONLY
Bob Shillinger, Esq.
County Attorney
Monroe County, Florida
1111 12 Street
Suite 408
Key West, FL 33040
May 16, 2017
MIAMI OFFICE
9350 S DLxIF HIGHWAY', StF L 1470
MIAMI, FLORIDA 33156
(305) 670 -7546 FAx (305) 514 -0639
Christine M. Limbert- Barrows, Esq.
Assistant County Attorney
Monroe County, Florida
1111 12 Street
Suite 408
Key West, FL 33040
Re: Energy3, LLC - Yard Waste Processing for Monroe County
Dear Mr. Shillinger and Ms. Limbert- Barrows:
First, we want to thank you, County staff, and Commissioner Kolhage for taking the time
to meet with Energy3, LLC ( "E3") and their attorneys yesterday to discuss the current
situation between Monroe County and E3.
After further discussion regarding the meeting and the comments made therein, we do
not believe that E3 can put together an adequate package regarding the proposed
substitute technology before tomorrow's meeting. Based upon experience, we further
believe any effort to do so would be detrimental to the present efforts to move forward.
We believe the viability of the technology is better addressed as part of the due diligence
process that will occur if the County agrees to our proposal regarding a stand -still
agreement.
We request you communicate the following proposal to the BOCC:
(1) The parties enter into a stand -still agreement which effectively stays further
action under the present contract, without waiver or prejudice to any claims,
defenses or positions. The length of the agreement shall be determined by
the needs of the County's consultants to perform due diligence concerning
the proposed substitute technology;
(2) E3 will bear the cost of having the County's experts perform due diligence
into the new proposed technology and facility; and
(3) E3 will agree to match the per ton rate provided for in the back -up contract
for yard waste hauled during the period in which the stand -still agreement is
in place.
With respect to the back -up contract, as you will recall, we have maintained all along that
the back -up contract was the result of an improper second submission and the County
cannot benefit from that improper conduct. As we advised yesterday, we believe that
many, if not most, of the current problems arise from conduct in connection with both the
RFP (overstatement of material to be disposed of) and the improper second proposal
which gave rise to the back -up contract, which as evidenced by the discussion regarding
same yesterday, continues to taint the current contract. Accordingly, in order for E3 to
agree to provide the reduced rate during the stand -still agreement, the scope of the
stand -still agreement would have to cover any claims related to the procurement process
and back -up contract (e.g., we reserve all rights and claims related thereto).
If you have any questions, please do not hesitate to contact the undersigned.
With best regards, we are
Very truly yours,
RUSSELL A. YAGEL, ESQ.
RAY /kf
cc: Client