HomeMy WebLinkAbout11849RESOLUTION NO. 11849
A RESOLUTION APPROVING A FUEL TANK AGREEMENT
BETWEEN THE CITY OF PUEBLO, A MUNICIPAL
CORPORATION, AND STEEL CITY AVIATION, LLC, AND
AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO
EXECUTE SAME
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Fuel Tank Agreement dated April 12, 2010, a copy of which is attached hereto and
made a part hereof by reference, by and between the City of Pueblo, a Municipal Corporation,
and Steel City Aviation, LLC, for the use of a fuel tank located at Pueblo Memorial Airport, after
having been approved as to form by the City Attorney, is hereby approved, subject to the
conditions as set forth in said Fuel Tank Agreement.
cFCTTnN
The President of City Council is hereby authorized to execute said Fuel Tank Agreement
on behalf of Pueblo, a Municipal Corporation, and the City Clerk shall affix the Seal of the City
thereto and attest the same.
INTRODUCED: Anril12.2010
BY: Vera Ortegon
COUNCILPERSON
APPROVED:
RESIDENT CF CITY CC) UNCIL
ATTESTED BY:
CRY CLERK
Background Paper for Proposed
RESOLUTION
AGENDA ITEM # M -6
DATE: April 12, 2010
DEPARTMENT: DEPARTMENT OF AVIATION
MARK LOVIN, DIRECTOR
TITLE
A RESOLUTION APPROVING A FUEL TANK AGREEMENT BETWEEN THE CITY OF
PUEBLO, A MUNICIPAL CORPORATION, AND STEEL CITY AVIATION, LLC, AND
AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME
ISSUE
Should the City Council approve a Fuel Tank Agreement for the use of a fuel tank at Pueblo
Memorial Airport between the City and Steel City Aviation, LLC?
RECOMMENDATION
Approval of this resolution.
BACKGROUND
Steel City Aviation will lease a 100LL fuel tank to store aviation fuel that will be used in
conjunction with their flight school. The lease is for a term of one month commencing April 12,
2010 and will automatically be renewed each month unless terminated by either party.
FINANCIAL IMPACT
Steel City Aviation will pay a fuel flowage fee of six cents ($0.06) for each gallon of aviation
fuel delivered to the fuel tank.
FUEL TANK AGREEMENT
THIS FUEL TANK AGREEMENT ( "Agreement ") is made and entered into as of April 12,
2010 between the City of Pueblo, a municipal corporation ( "Lessor ") and, individually, and Steel
City Aviation, LLC, a Colorado corporation (collectively, the "Lessee "), WITNESSETH:
WHEREAS, Lessor and Lessee entered into a Hangar ground Lease dated April 23, 2007 (the
"Lease ") for land located at the Pueblo Memorial Airport ( "Airport"), and
WHEREAS, Lessee desires to use I OOLL Tank No. 2 ( "Fuel Tank ") located within Lessor's
fuel farm located at the Airport ( "Fuel Farm ") in conjunction with its business conducted under the
Lease, and
WHEREAS, City is willing to allow Lessee to use the Fuel Tank. NOW, THEREFORE,
In consideration of the foregoing and mutual promises contained herein, Lessor and Lessee
agree as follows:
1. Fuel Tank Use Lessor leases to Lessee and Lessee hereby leases from Lessor the
Fuel Tank for the exclusive purpose of storing aviation fuel to be dispensed into Lessee's owned or
leased aircraft using the Airport in conjunction with Lessee's business conducted under the Lease,
subject to and upon the terms and conditions herein set forth.
2. Term. The term of this Agreement shall begin April 12, 2010 ( "Commencement
Date "). Said term shall automatically be renewed each month unless terminated by either party by
written notice delivered to the other party at least 30 days prior to the date of termination.
Notwithstanding any provision of this Agreement to the contrary, this Agreement may be terminated
at any time for any reason, without liability, by either Lessor or Lessee upon thirty (30) days prior
written notice given to the other party specifying the date of termination.
3. Fuel Flowage Fee For the use of the Fuel Tank, Lessee shall pay to City a monthly
fuel flowage fee of six cents ($0.06) for each gallon of aviation fuel delivered or caused to be
delivered by Lessee to the Fuel Tank. All unpaid fuel flowage fees shall accrue interest at the rate of
ten (10) percent per annum.
4. Condition of Fuel Tank THE FUEL TANK AND ACCESSORY EQUIPMENT,
INCLUDING, BUT NOT LIMITED TO, PUMP, MOTOR AND FUEL METER CALIBRATION
FOR THE TANK, ARE BEING LEASED "AS IS" "WITH ALL ITS FAULTS," WITHOUT
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR CONDITION OR USABILITY IN THEIR PRESENT
CONDITION.
5. SPCC Plan Lessor has registered the above ground storage tanks located in its Fuel
Farm with the Director of the Colorado Division of Oil and Public Safety pursuant to C.R.S. 8 -20.5-
105 and updated its Spill Prevention Control and Countermeasure (SPCC) Plan as required by law.
Lessor shall continue to maintain compliance with those requirements.
6. Ouality Control Lessee shall be responsible for quality control of fuel, loading and
unloading fuel to and from the Fuel Tank and compliance with the SPCC Plan for the Fuel Farm and
leased Fuel Tank. Lessee shall properly train its employees in the use of the Fuel Farm, Fuel Tank
and the SPCC Plan.
7. Maintenance and Repair Except for structural repairs not caused by the acts or
omissions of Lessee, its officers, agents, employees, contractors, or fuel suppliers, Lessee shall be
responsible to maintain and keep in good and safe repair and working condition the Fuel Tank and
accessory equipment, ordinary wear and tear excepted. Lessee will not be responsible for any
reconstruction, remodeling, alteration or modification of the Fuel Tank or Fuel Farm required to
meet environmental standards not currently satisfied unless caused by the acts or omissions of
Lessee, its officers, agents, employees, contractors or fuel suppliers. If any such activity is required
by the Lessor or if Lessor is required to make structural or other repairs to or replace the Fuel Tank
or any other fuel tanks located at the Fuel Farm for any reason, including fire or other casualty, or if
Lessor is required to remediate or remove any contamination or hazardous materials (including
petroleum products) at or from the Fuel Farm, Lessor may, at its sole option, either (a) complete, at
its cost, the required activities, replacement, or repairs, (b) negotiate a cost - sharing arrangement with
Lessee to complete the required activities, replacement, and repairs, or (c) upon thirty (30) days prior
written notice, terminate this Agreement and Lessee's right to store aviation fuel in the Fuel Tank.
8. Lessee's Obligations Lessee shall
(a) provide copies of fuel delivery bills of lading with monthly commission
reports
(b) provide filters, hoses and nozzles required for the Fuel Tank.
(c) immediately notify the Lessor of any fuel release or spills during the loading
or unloading of the Fuel Tank or when fueling or maintaining aircraft. Lessee
shall be responsible for clean up to the satisfaction of Lessor of any such fuel
releases or spills whether caused by Lessee, its officers, agents, employees,
contractors, or fuel suppliers.
9. Lessor's Insurance Lessor shall maintain storage tank pollution liability insurance
covering the fuel tanks located within its Fuel Farm which are being used by Lessor, Lessee and
other parties. Lessee shall be named as an additional insured with respect to the Fuel Tank it leases
under this Lease. Such insurance shall be in limits of $1 million each incident, $1 million aggregate,
with a $10,000 deductible. Lessee shall pay annually to Lessor, on the anniversary date of the
Commencement Date, a proportional share of Lessor's cost for storage tank pollution liability
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insurance. Lessee's portion of such charges shall be in the ratio that the gallon capacity of the Fuel
Tank bears to the total gallon capacity of the fuel tanks in Lessor's Fuel Farm being used by Lessor,
Lessee and other parties.
10. Mobile Refuelers Lessee's mobile refuelers (fuel trucks) and Lessee's use thereof
shall meet and comply with all applicable EPA spill prevention control and countermeasure
regulations including, if required, drafting and implementing SPCC Plan therefor.
11. Access Lessee, its employees and aviation fuel suppliers shall access the Fuel Tank
upon and over such road or other City Property as they shall be designated from time to time by the
Director of Aviation.
12. Lessee's Insurance Lessee shall include the Fuel Tank, and its use, and activities
associated therewith under the liability insurance required to be maintained by Lessee under Section
11 of the Lease.
13. Indemnification Lessee shall indemnify, defend and hold Lessor, its officers and
employees harmless from and against all claims, demands, and causes of action and liabilities arising
from or growing out of the negligent acts or omissions of Lessee, its officers, agents, employees,
contractors or fuel suppliers or arising out of or resulting from any discharge or release of aviation
fuel by Lessee, its officers, agents, employees, contractors or fuel suppliers.
14. Default If Lessee defaults in the performance of any covenant or provision of this
Agreement to be performed by Lessee, and has not cured such default within ten (10) days of receipt
of written notice of such default from the Lessor, then Lessor may immediately terminate this
Agreement.
15. Assignment Lessee may not assign this Agreement nor sublet the Fuel Tank,
provided, however, Lessee may, with the consent of Lessor, assign this Agreement in conjunction
with the assignment of the Lease.
16. Notice The notice provisions set forth in Section 18 of the Lease are incorporated
herein as if set out herein in full.
17. Laws, Rules and Regulations. The Laws, Rules and Regulations set forth in Section
19 of the Lease are incorporated herein as if set out herein in full.
18. F.A.A. Lease Requirements The F.A.A. Lease Requirements set forth in Section 20
of the Lease are incorporated herein as if set out herein in full.
19. Binding g ffect This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives and successors.
20. Litigation In the event of any litigation arising under this Agreement, the court shall
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award the prevailing party its reasonable costs and expenses including, without limitation, attorney
fees. Venue for any such litigation or other proceedings arising under this Agreement shall be
Pueblo County, Colorado.
21. Waiver No waiver by Lessor of any failure by Lessee to comply with any term or
condition of this Agreement shall be or be construed to be a waiver by Lessor of any failure by
Lessee"io comply with any term or condition of this Agreement.
`•Ek&uted,at Pueblo, Colorado the day and year first above written.
`- CITY OF PUEBLO
Attest: = By
City ~ k rls esident of the City Council
STEEL CITY AVIATION, LLC
Attest:
Secretary
By
erek Genov resident
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