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HomeMy WebLinkAbout278-25 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 278-25 File Number: 2025-2432 A RESOLUTION TO APPROVE A 15 YEAR WATER PURCHASE AGREEMENT BETWEEN THE CITY OF FAYETTEVILLE AND THE CITY OF WEST FORK TO ALLOW THE CITY OF FAYETTEVILLE TO FURNISH WHOLESALE POTABLE WATER TO THE CITY OF WEST FORK AND ITS RESIDENTS WHEREAS, the City of Fayetteville owns and operates a water supply distribution system with a capacity capable of serving its residents as well as the City of West Fork; and WHEREAS, the City of West Fork currently purchases wholesale water from the City of Fayetteville for distribution within its present service area; and WHEREAS, the current agreement with the City of West Fork to supply potable water is expired, and City staff recently drafted a new Water Purchase Agreement that has been agreed to and signed by the City of West Fork; and WHEREAS, Staff recommends approval of the 15-year Water Purchase Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Rawn to sign the attached 15 year Water Purchase Agreement between the City of Fayetteville and the City of West Fork to allow the City of Fayetteville to furnish wholesale potable water to the City of West Fork and its residents. PASSED and APPROVED on December 2, 2025 Approved: Attest: =v� FAYETTEVILLE•X— Molly Rawn, Mayor Kara Paxton, City Clerk Treasurer. 9 5. ,d V, /jj//1111 I0IIA����` Page 1 CITY OF FAYETTEVILLE ARKANSAS MEETING OF DECEMBER 2, 2025 TO: Mayor Rawn and City Council THRU: Keith Macedo, Chief of Staff FROM: Tim Nyander, Utilities Director SUBJECT: City of West Fork - Water Purchase Agreement RECOMMENDATION: CITY COUNCIL MEMO 2025-2432 Staff recommends approval of a fifteen -year Water Purchase Agreement between Fayetteville and West Fork to furnish potable treated water at one point of delivery for distribution within its present service area. BACKGROUND: Fayetteville has furnished the City of West Fork with potable water for over 30 years. The current water purchase agreement has expired, and both entities desire to continue the water purchase agreement. DISCUSSION: The City agrees to operate and maintain the water mains up to the point of delivery to West Fork's water distribution system, furnish water at a reasonably consistent pressure, and provide the Manager of the buyer with an itemized statement of the amount of water furnished and other charges to the Buyer in accordance with the City billing policies. West Fork agrees to remit payment to the City for a minimum of 2.7 million gallons of water per month (commonly referred to as "take -or -pay"), maintain a backflow prevention device approved by the City and the Arkansas Department of Health, and restrict water connections to those customers having adequate on -site sewage disposal systems. These items were contained in the previous agreement and are unchanged. This item was presented to the Water & Sewer Committee on November 13, 2025, with a unanimous vote to forward it to the City Council with a recommendation for approval. BUDGET/STAFF IMPACT: The rates will be in accordance with the City's water & sewer rate study, which is conducted every five years. ATTACHMENTS: 3. Staff Review Form, 4. Water Purchase Agreement Mailing address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 - Legislation Text (479)575-8323 File #: 2025-2432 A RESOLUTION TO APPROVE A 15 YEAR WATER PURCHASE AGREEMENT BETWEEN THE CITY OF FAYETTEVILLE AND THE CITY OF WEST FORK TO ALLOW THE CITY OF FAYETTEVILLE TO FURNISH WHOLESALE POTABLE WATER TO THE CITY OF WEST FORK AND ITS RESIDENTS WHEREAS, the City of Fayetteville owns and operates a water supply distribution system with a capacity capable of serving its residents as well as the City of West Fork; and WHEREAS, the City of West Fork currently purchases wholesale water from the City of Fayetteville for distribution within its present service area; and WHEREAS, the current agreement with the City of West Fork to supply potable water is expired, and City staff recently drafted a new Water Purchase Agreement that has been agreed to and signed by the City of West Fork; and WHEREAS, Staff recommends approval of the 15-year Water Purchase Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Rawn to sign the attached 15 year Water Purchase Agreement between the City of Fayetteville and the City of West Fork to allow the City of Fayetteville to furnish wholesale potable water to the City of West Fork and its residents. Page 1 Tim Nyander Submitted By City of Fayetteville Staff Review Form 2025-2432 Item ID 12/2/2025 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 11/13/2025 WATER SEWER (720) Submitted Date Division / Department Action Recommendation: Staff recommends approval of a fifteen -year Water Purchase Agreement between Fayetteville and West Fork to furnish potable treated water at one point of delivery for distribution within its present service area. Budget Impact: N/A N/A Account Number Fund N/A N/A Project Number Budgeted Item? No Does item have a direct cost? No Is a Budget Adjustment attached? No Purchase Order Number: Change Order Number: Original Contract Number: Comments: Project Title Total Amended Budget $ - Expenses (Actual+Encum) $ - Available Budget Item Cost $ - Budget Adjustment $ - Remaining Budget V20221130 Previous Ordinance or Resolution # Approval Date: WATER PURCHASE AGREEMENT This Agreement, made and entered into on this 2nd day of December , 2025, by and between the City of Fayetteville, Arkansas ("City") and the City of West Fork, Arkansas ("Buyer") witnesseth: WHEREAS, the City owns and operates a water supply distribution system with a capacity currently capable of serving the present customers of the City system and the estimated number of water users to be served by the said Buyer; and WHEREAS, the Buyer desires to purchase water from the City for distribution within the present service area of the Buyer, and the City desires to furnish and sell water to the Buyer for distribution within its present service area. NOW, THEREFORE, the City of Fayetteville, Arkansas and the City of West Fork, Arkansas agree as follows: A. The City of Fayetteville, Arkansas agrees to: 1. To furnish the Buyer, at the point of delivery hereinafter specified, for distribution within its present service area, during the term of this agreement of any renewal or extension thereof, potable treated water meeting applicable purity standards of the Arkansas Department of Health, and in such quantity as may be required by the Buyer, not to exceed 800 gallons per minute. The City shall not be obligated to provide water to the Buyer at a rate greater than the amount aforesaid. Total usage exceeding the amount aforesaid shall be cause for renegotiation of this agreement. In the event the Buyer requires water at a rate greater than thus specified, the City shall have the sole discretion in determining whether to furnish water at a greater rate and in determining the terms and conditions upon which its agreement to do so will be given, including, but not limited to, conditions for reinforcement of the 12-inch main hereinafter referred to at the Buyer 's expense in order to increase its capacity, if the reinforcement has not been accomplished by the City prior to the tune it is required by the Buyer. Provided, however, that if any maximum allowable rate of usage specified is exceeded, an excess demand charge of 10% may be added to the bill for each month during the maximum allowable rate was exceeded. If any maximum allowable rate of usage specified is exceeded, an excess demand charge of 10% may be added to the bill for each day during which the maximum allowable rate was exceeded. If any maximum allowable rate of usage is exceeded, the City may install automatic, variable rate -of -flow controllers and charge the cost of same to the Buyer. The City may install such rate of flow controllers at any time at the City's expense. The excess demand charge shall not apply if the excess usage was beyond the control of the Buyer. However, all customer usage is considered as being within the control of the Buyer, as is system loss which is not promptly corrected by the Buyer. It is further understood and agreed that the City's responsibility for the water ends at the meter box outlet or vault and the Buyer agrees to indemnify and hold harmless the City from any and all liability incurred past the meter box outlet or vault. 2. The water will be furnished at a reasonably constant pressure (due consideration being given to friction loss) from an existing twelve -inch (12") water main at a point located at the site described in Exhibit "C" attached hereto and made a part hereof. If a greater pressure than that normally available at the point of delivery is required by the Buyer, the cost of providing such greater pressure shall be borne by the Buyer. 3. Operate and maintain the water mains up to the point of delivery and maintain at point of delivery the necessary metering equipment, including a meter pit, check valves, and required devices of standard type for properly measuring the quantity of water delivered to the Buyer, including a meter of proper size. The cost of maintenance and operation of the metering facility shall be borne by the City. The responsibility for testing and calibrating the meter rests solely with the City. A meter registering not more than two percent (2%) above or below 100% accuracy shall be deemed to be accurate. The previous reading of any meter disclosed by test to be inaccurate shall be corrected for the two (2) months previous to such test in accordance with the percentage of inaccuracy found by such tests. If any meter fails to register for any period, the amount of water furnished during such period shall be determined by average readings over a period of two previous months or a like month of the previous year, at the City's option. The metering equipment shall be read on a regular schedule each month. An appropriate official of the Buyer at all reasonable times shall have access to the meter for the purpose of verifying its reading. The size of the meter shall be in keeping with anticipated water usage and/or demand. Currently, a four (4) inch meter is installed at the point of delivery. The Buyer currently has a valve at the inlet side of the meter to shut off the supply and also to limit the flow of water to the rate permitted. The Buyer also currently has a by-pass to the meter installed for use during periods of meter maintenance. The by-pass shall not be operated without express knowledge and consent of the City. 4. The City' s responsibility for maintenance shall end at the outlet side of the meter box or vault. 5. The City agrees to furnish the Manager of the Buyer with an itemized statement of the amount of water furnished and other charges to the Buyer in accordance with the City billing policies and procedures. B. The City of West Fork, Arkansas agrees to: 1. Purchase water as required by the Buyer and the consumers within the present corporate limits of the Buyer, and a service area along the transmission line as determined in Section C, Paragraph 6 hereof, up to a maximum of 800 gallons per minute. 2. Buyer agrees to remit payment to the City for a minimum of 2.7 million gallons of water per month (commonly referred to as " take -or -pay"). Such take -or -pay minimum shall be chargeable at the current wholesale water rate, as amended from time to time as set forth in Section B, Paragraph 3. Any water usage above the 2.7 million gallons per month shall be charged at the same wholesale water rate. 3. Pay the City not later than the due date given on the bill for water delivered in the preceding reading period, in accordance with the rates as established by the City. If the Buyer does not remit payment on or before the specified due date each month, a penalty equal to ten percent (10°/u) of the total payment amount due shall be added to such payment, and if not paid within thirty (30) days following the due date in which the original billing is due or the aggrieved party has not submitted a claim for arbitration as specified in Section 4, the City may discontinue delivery of water to the Buyer as a last resort and may continue to deny delivery to the Buyer until the Buyer pays the total amount due. The rates for water and meter service charges presently in effect are illustrated by the attached schedule, marked Exhibit `B". It is mutually understood and agreed among the parties that the City may immediately pass along to the buyer any increases or decreases in rates imposed upon by the City by the Beaver Water District, its successors or assigns. The rates shall be adjusted to the Buyer in the same amount as the increase or decrease from said water district. 4. Maintain a backflow prevention device approved by the City and the Arkansas Department of Health. The backflow prevention device shall be inspected annually and maintained in accordance with Fayetteville City Code §51.146 — Backflow Prevention. The backflow prevention device must be located above ground, outside and downstream of the meter pit. The Buyer agrees to provide water connections only to those customers having adequate on- site sewage disposal systems previously approved by the Arkansas Department of Health. New on- site systems shall be deemed adequate if the system is approved by the Arkansas State Health Department and inspected by a Plumbing Inspector licensed by the State of Arkansas, who is employed by the Buyer. C. It is further mutually agreed between the City and the Buyer as follows: 1. That this agreement shall extend for a term of fifteen (15) years from the initial date of this agreement entered into by the City and Buyer. Thereafter this agreement may be renewed for such term, or terms, as may be agreed upon by the City and Buyer. 2. That the City will, at all times, operate and maintain its system in an efficient manner and will take such action as may be necessary to furnish the quantities of water required by the Buyer, up to the maximum amount as specified in Section A, Paragraph I hereof. Temporary or partial failures to deliver water caused by the failures or difficulties in the City' s system shall be remedied with all possible dispatch. The City reserves the right, in the event of acute shortage of water, to limit or discontinue water sales and service to the Buyer. Any reduction or discontinuance of water sales and service for this reason shall not render the City liable for damages of any kind, it being understood between the parties that the City' s primary obligation is to furnish water and water services to the citizens of the City of Fayetteville, Arkansas. The City shall not be responsible for any damages to the Buyer or its consumers by reason of emergency failures of water supply due to water main breaks, power failure, flood, fire, earthquake and other acts of God, or catastrophe, acts of war, insurrection or rebellion, acts of a public enemy, acts of any unauthorized person, firm, or corporation, or acts of the Buyer, or during any periods of water reduction or discontinuance by reason of fire -fighting or other emergency situation; nor shall such failures of water supply and/ or discontinuance or reduction of water sales and service be construed as a breach of this agreement by the City. That this agreement is subject to such rules, regulations, or laws as may be applicable to similar agreements in the State of Arkansas and the City and Buyer will collaborate in obtaining such permits, certificates, or the like, as may be required to comply therewith. 4. It is expressly understood and agreed that the sale of water herein provided for from the City to the Buyer, is a sale for resale, and the Buyer agrees to secure a sales tax permit as required by the Arkansas Stats. Ann. Section 84- 1904 (I) 84- 1913, and any subsequent amendments thereto) and agrees that it will collect and pay over to the Commissioner of Revenues of the State of Arkansas, any and all sales tax now or hereafter imposed upon the resale of said water to the Buyer' s consumers. 5. That in the event of any occurrence rendering the Buyer incapable of performing under this agreement, any successor of the Buyer whether the result of legal process, assignment, or otherwise, shall succeed to the rights of the Buyer hereunder. 6. It is understood and agreed that the water to be supplied by the City to the Buyer under this agreement is to be furnished for distribution within the Buyer's service area. The Buyer shall not extend its water main outside its defined service area, as identified in Exhibit "A", without the prior written consent of the City. The City shall have the sole discretion in determining the terms and/or conditions upon which its consent shall be given. 7. The Buyer shall provide the City with a copy of all Sanitary Surveys of its water system within thirty (30) days of completion of the Sanitary Survey by the Arkansas Department of Health. For the purpose of this instrument the phrase "service area" of the Buyer means the present corporate limits at the time of this agreement and any lands within an area designated as the growth area of the City of West Fork as shown and described by Exhibit "A" to this agreement. The Buyer shall have the right under this agreement to extend main and water service into such area without the prior consent of the City. The Buyer shall have the right to sell water to the Washington Water Authority for use in the Washington Water Authority service area. 8. In the event a portion of the Buyer' s water mains are constructed within the corporate limits of the City, the Buyer is not permitted to serve consumers within the corporate limits of the City without prior written consent of the City. 9. Buyer agrees that it will not during the period of this agreement or any renewal thereof levy any franchise tax, occupation tax, or any other tax of any form whatsoever, by whatever name it may be called, upon the City, the City water system and appurtenances thereto, or the operations called for by this agreement. 10. No provision of this agreement shall be construed to create any type of joint or equity ownership of any property, and partnership or joint venture, nor shall same create any other rights or liabilities and Customer payments (whether past, present, or future) shall not be construed as granting Customer partial ownership of, pre -paid capacity in, or equity in the City' s system. 11. This agreement may be terminated by either Buyer or the City upon breach by the other of any of the covenants or agreements contained herein, and the failure of the party in breach to remedy such breach within thirty (30) days after receipt of written notice of the existence of such breach. Written notice shall be sufficient, if sent by certified mail, return receipt requested, postage prepaid, to the respective mayor or chairman of the parties hereto. 12. Remedies If either party to this agreement concludes that there is a breach of any terms of this contract, that party shall notify the other party by electronic mail and certified mail of the breach. After notification, the party in breach shall remedy the breach within thirty (30) days of receipt of the notice of breach. If the party claiming breach is not satisfied that the breach has been cured, then that party may pursue specific enforcement of the terms of this agreement through the Circuit Courts of Washington County, Arkansas. Prior to the filing of any action in the Circuit Courts, the parties should attempt to mediate any claims before a mutually agreeable mediator, the cost of which shall be shared equally by the parties to this agreement. A decision reached in circuit court or in mediation will in no way limit Fayetteville's or West Fork's power to enforce requirements directly against customers located in West Fork, nor will it preclude Fayetteville or West Fork from seeking other remedies including, but not limited to, specific performance. 13. Severability The sections, paragraphs, sentences, phrases, and clauses of this agreement are severable, and should any section, paragraph, sentence, phrase, or clause be declared invalid by the lawful decree of any court of competent jurisdiction, such invalidity shall not affect any other portion of this agreement. IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE, WE SIGN BELOW: CITY OF WEST FORK, ARKANSAS By: HEITH CAUDLE, Mayor ATTEST: By: ANN UPTON, V Clerk CITY OF FAYETTEVILLE, ARKANSAS V':�1 i�0w �ti MOLLY RAWN, Mayor ATTEST: KARA PAXTON, City Clerk Treasurer EXHIBIT "A" WEST FORK' S DEFINED WATER SERVICE AREA GIN\SE z 0 A CAMPBELL COMM BLDG ,O yo F WEST FORK = WATERWORKS J J w m EL U I��TF z _ LU PERRY p v J w z O Q WEBBER v Z T LU N GI ors 1Z OI- DOLLY x i PARR z 1\�W HAYES , CRAIG � w ANN 7z UF- w BLOYD � U KE-L-LEY . c,j) �� y 4 AO J Co 2 2 _ OWL HOLLOW LU w c7 co co U RED . DAVIS C ELKINS N� k m DAMS a \ 4/VN4 GREEN Exhibit A N 0 450 900 1,800 2,700 3,600 West Fork Water Service Area W+E Feet g EXHIBIT "B" STANDARD WATER RATES Effective date: 01-01-2025 Usage Rate Per 1, 000 Gallons $3.50 Monthly Meter Charge $126.13 EXHIBIT "C" Location of Water Meter and Meter Vault RALPH PHELPS HARRISON ` � M o 0 N ETTEVILLE WATERWORKS �M] 6492 S Hwy 71 (4 inch meter) MOWN I WEST FORK WATERWORKS = J Q 2025 Imagery EagleView Technologies Surdex Corporation Exhibit C 6492 S Hwy 71 0 50100 200 300 400 West Fork, AR Feet (4 inch meter)