Staff recommends that City Council approve the assignment and assumption of the Pretreatment Service Agreement from ExxonMobil to Par Montana, LLC.

The City entered into a Pretreatment Service Agreement with ExxonMobil Corporation on December 19, 2016. The Agreement identifies the terms and conditions to permit the ExxonMobil Corporation's refinery industrial wastewater discharge into the City's wastewater system for treatment. This includes ensuring compliance with City, State and Federal requirements, fee and rate methodology, limits on industrial loadings, and indemnification conditions.  The Agreement is effective until December 15, 2031, and has provisions for three additional six-year renewals unless either party terminates the Agreement by providing three years written notice to the other party.

Par Montana, LLC is purchasing the Billings, Montana refinery from ExxonMobil effective June 1, 2023. This Assignment and Assumption Agreement conveys all rights, interests, and obligations of ExxonMobil's Pretreatment Services Agreement to Par Montana, LLC subject to the same conditions and terms set forth in the Pretreatment Services Agreement. 

City Council may:

• Approve the Assignment and Assumption Agreement of ExxonMobil's Pretreatment Services Agreement to Par Montana, LLC; or,
• Not approve the Assignment and Assumption Agreement. If the agreement is not signed, there will not be a pretreatment agreement in place to control discharge to our sewer system.

Estimated FY24 revenues derived from the Pretreatment Services Agreement are $805,095 for FY24. There is no fiscal impact for the assignment of the Agreement.