HomeMy WebLinkAbout23-94 RESOLUTION•
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RESOLUTION NO. 23-94
A RESOLUTION AUTHORIZING THE. MAYOR AND CITY
CLERK TO EXECUTE THE CONTRACT MODIFICATION
WITH MT. OLIVE WATER ASSOCIATION.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the Council hereby authorizes the Mayor and City Clerk to execute
the contract modification with Mt. Olive Water Association. A copy of the is attached hereto
marked Exhibit "A" and made a part hereof.
PASSED AND APPROVED this 1st day of FehruaLy
ATTEST:
By: j/Lamas/
Sherry Thomas, City Clerk
. 1994.
APPROVED:
.%
. Ze
By.: :4. fid;. y.L
Ered Hanna, Mayor
MODIFICATION OF CONTRACT
This MODIFICATION OF CONTRACT executed this � day of Pod,
1994, by and between the City of Fayetteville, Arkansas,
hereinafter referred to as the "City" and the Mt. Olive Water
Association, hereinafter referred to as the "Buyer", WITNESSETH:
WHEREAS, the City and the Buyer have executed a contract dated
February 2, 1981,("contract"), and subsequently executed an
amendment dated June 7, 1988, a copy of both are attached hereto
and made a part hereof; and,
WHEREAS, the Buyer recognizes the City's infrastructure
requirements in maintaining the maximum level of water service, as
well as the City's reliance on the Contract in determining and
implementing it's capital improvements program; and,
WHEREAS, the Buyer has requested that the contract be modified
to allow the opportunity to explore other water purchase options;
and,
WHEREAS, the City has made every attempt to accommodate
Buyer's needs and requests; and,
WHEREAS, considering all of the above, the parties have agreed
to modify said contract.
NOW, THEREFORE , the City and the Buyer hereby agree that the
aforesaid contract shall be modified as follow:
I. Section B, Paragraph 1. is hereby amended to read as
follows:
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B. The Buyer agrees:
1.a. Maximum. To purchase water as required by the
Buyer and the consumers within the presently defined service area
of the Buyer, up to a maximum of 450 gallons per minute.
1.b. Minimum. 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 2. Any
water usage above 2.7 million gallons per month shall be charged
at the same wholesale water rate.
II. All other provisions, covenants, recitals, terms and
conditions of the contract, as amended, which are not expressly
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands
on the date above stated.
ATTEST
By:
City Clek
ATTEST
By: I
Titles:
SNn viletz .1/
orn:rater..to
CITY OFYETTEVILLE, ARKANSAS
By:
Mayor
MT. OLIVE WATER ASSOCIATION
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Title: 4, .r
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AGENDA REQUEST
For the Fayetteville City Council meeting of 2/1,0:
FROM:
Sharon Crosson
Name
Water & Sewer Services Administrative Services
Division Department
COUNCIL ACTION REQUIRED:
Approval of Mcdification of Ccntract
COST TO CITY:
N/A
Cost of this Request
N/A
Account Number
/A
Project Number
$ N/A
N/A
Category/Project Budget Category/Project Name
$ N/A N/A
Funds Used To Date Program Name
$ N/A N/A
Remaining Balance Fund
BUDGET REVIEW:
Budgeted Item Budget Adjustment Attached
i jj,xh+a„y•Y2 ••
f$7i, W
gs.,
Budget Coordinator Administrative Services Director
CONTRACT/LEASE REVIEW:
I . ./
Accounxinq meoageri Date
sr+
-; .. 1 i j'
iy Date
1
urch
"ALA
IAtetnal
GRANT APPLICATION REVIEW:
ff cer Date
1 11 i
or L Date , Internal Auditor Date
ST
RECOMMENDATION:
Bequest for approval of vocification of Contract with Mt. Olive hater Association
nd for Todification to become effective February 1, 1994.
or,' ,c)c /—/2 -9
Date
vision Head
Department Director Date
(_1791
Administrative vices Director Date
Mayor
.i
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1 1• ..Y
Date
FA ETTEVI1111E
THE CITY OF FAYETTEVILLE. ARKANSAS
TO: Members of the Fayetteville City Council
THRU: Ben Mayes, Administrative Services Director
FROM: Sharon Crosson, Water and Sewer Services Supt. (7(/
DATE: January 19, 1994
SUBJECT: Request for Approval of Modification to Water Purchase
Contract with Mt. Olive Water Association
Staff requests approval of a modification of contract between the
City of Fayetteville and Mt. Olive Water Association, and for the
effective date on the modification of contract to begin February 1,
1994. This modification allows Mt. Olive to continue to purchase
water from the City of Fayetteville, as well as purchase water from
other sources. The modification also provides for a minimum "take -
or -pay" amount, which guarantees payment to the City of
Fayetteville for a minimum of 2.7 million gallons of water per
month.
Mt. Olive is currently purchasing all of its water from the City of
Fayetteville at a rate of $2.70 per 1,000 gallons. Beginning this
month, Mt. Olive will have an opportunity to purchase water from
the Huntsville Water System. Due to the fact that they are
anticipating the addition of approximately 100 new customers to
their system (a 10% increase to their system), and the fact that
the cost for water through Huntsville is much lower than the cost
for water from Fayetteville, they have requested that we allow them
to purchase approximately 80% of their water from Huntsville. The
other 20% of their customers would remain on the Fayetteville water
system because of physical restraints of their system.
The existing water purchase contract, which expires on February 2,
2001, prohibits Mt. Olive from purchasing water from any other
source. Our proposed modification will allow them to purchase
water elsewhere, but will also guarantee that the City of
Fayetteville be paid for a minimum of 2.7 million gallons of water
per month, whether they use it or not. This provision will help to
cover most of the capital outlay that has been incorporated into
our rate structure for Mt. Olive's use of our system.
We have negotiated this issue with Mt. Olive over the past 3 years
and are happy to have finally reached an agreement. We feel that
this modification we have offered demonstrates a tremendous effort
on the City's behalf to try and be a good neighbor with Mt. Olive.
/slc
113 WEST MOUNTAIN 72701 501-521-7700
FAX 501-575-8257
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.'ATER PURCHASE CONTRACT
6/L(Gff.in.- coNtflcT)
This contract for :he sale and cu'chas✓.e KJ',
water, made and
entered into this 14..? day of /.W , , 196Y,
by and betweer the City of rayetteville, Arkansas, a municipal
corporation, hereinafter referred to as the 'City", and the
Mount Clive Water Assoc-ation, hereinafter referred to as the
"Buyer).
WITNESSETH:
W"EREAS, the City owns and ocerates a water supply distr'butior
system with a capacity currently capable of serving the present
cjstomers of the C -:y system and the estimated number of water users
to be served by the said Buyer, and,
WHEREAS, the Buyer desires tc purchase water from the C-ty for
distribut'on w-th'r the present service area of Bjyer, and the
City desires to furnish and sell water to the Buyer for distribution
as a'oresaid.
NOW, ;IICRErORE, it ccnsiderat-on of the foregoing and the mutual
agreements hereinafter set forth,
A. The City agrees:
1. To furnish the Buyer, at the point of delivery
here'nafter scecif-ed, for distribution within its present service
area, curing the term o' this cortract or any rerewal or extension
thereof, potable treated water meeting applicable purity stardards
of the State Board cf Health, and in such gJanity as may be rewired
by the Buyer, not to exceed 300 gallons per minute. The City shall
not be obligated to prov`de water to the Buyer at a rate greater than
30C gallors per minute. it the event the Buyer requires water at a
rate greater than th.rs specified, the City shall have the sale discretion
in determining whether to fdrn'sh water at a greater rate and in
deternin'ng the terns and conditiors upon which its agreement tc do
so wi-1 be given, including, but not limited to, condit-ons for
reinforcement of the 8" and 6" mains.
hereinafter referred to at the Buyer's expense in order to
increase its capacity, if the reinforement has not been
accomplished by the City prior to the time it is required by
the Buyir. Provided, the rates charged for any water, which
City may agree to supply in excess of 300 gallons per minute,
shall be the same as that charged to other customers receiving
in excess of 300 gallons of water per minute. Any such
agreement shall be in writing and duly authorized by the
governing bodies of the respective parties hereto.
It is further understood and agreed
sibility for the water ends at the meter
2. The water
that the City's respon-
tex cutlet or vault.
will be furnished at a reasonably constant
pressure ;due consideration being give: to friction loss) from
a six (6) inch water main at a point located at the site described
in Exhibit "A" attached hereto and made a part hereof.
3. City agrees to extend
water main tc point of delivery and
maintain at point of delivery the
an eight (8) and six (6) inch
to furnish, install, operate, and
necessary metering equipment,
including a meter bourse or pit, check valves, and required
devices of standard type for properly measuring the quantity of
water delivered to the Buyer, including a meter or proper size,
for a ;;imp sum water connection fee in an amount equivalent to
the total cost (including the cost of engineering and right-of-way
acquisition; of constructing six (6) inch water main from an
existing eight (8) inch 1_ne on Black Oak Road to the point of
delivery to the Mount Clive hater Association. This cost would
include the meter vault and piping. 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 nct
below 1008 accuracy shall be
more than two percent
deemed to be accurate.
(2%) above or
The previous
Reading of any meter disclosed by test to be inaccutate 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 cf water
furnished during such period shall be determined by average
readings over a period of two previous months or a like month
cf a previous year, at the City's option. The metering equipment
shall be read on a regular schedule each month.
The size of the meter shall be in keeping with anticipated
water usage and/or demand. Initially, a four inch meter will be
installed. The Buyer will provide a valve at the inlet side of
the meter tc shut off the supply and also to limit the flow of
water to the rate permitted. A by-pass to the meter shall be
installed for use during periods cf neter maintenance. The cost
for the by-pass valves, fittings, and pipe shall be borne by the
Buyer.
4. The City's responsibility for maintenance shall end
at the out_et side of the meter box or vault.
5. City agrees tc 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.
B. The Buyer Agrees:
1. To purchase water as required by the Buyer and the
consumers within the presently defined service area of the Buyer,
up to a maximum cf 300 gallons per minute. Buyer shall purchase
water from the City and not from some other scurce.
2. To 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 from
time to time that may hereinafter be established by the City
from tine to time. The rates for water and meter service charges
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charges presently in effect are illustrated by the
attached schedule marked Exhibit "B", but it is understood and
agreed that the City is in no way bound to said schedule, and
that the City in its sole discretion has the right to Increase or
decrease the rates and charges shown therefore, at any time, for
the Buyer as for other outside the City users.
3. The Buyer agrees to pay to the City a water
connection fee in an amount equivalent to the total cost (Including
the cost cf engineering and right-of-way acquisition) of
constructing a six inch (6) water main from the City's existing
eight inch (8) water main on Black Cak Road to the point cf
delivery to the Mount Clive Water Association as an agreed cost to
connect the City's system with the Buyers system. Said fee
shall he paid as construction takes place, 'rom invoices
submitted by the City of Fayetteville.
4. The Mount 0_ive Water Association will pay as a
part of this contract the cost of acquisition by the City cf
Fayetteville of a raght-of-way twenty feet (20') wide from
the City's existing 8 inch water main on Black Oak Road to the
point of delivery to enable the City of Fayetteville to install,
operate and maintain the water line on the Fayetteville side
of the metering point. The cost of such right-of-way shall
include, if necessary, all costs of condemnation, court costs,
attorney's fees and any other expense directly related to the
acquisition cf said right-of-way.
5. The Buyer agrees to install, within a reasonable
distance cf the metering point, a backflow preventor approved
by the State Health Department.
6. The Buyer agrees to restrict water connections
tc these customers having adequate on-site sewage disposal
systems. For purposes of this contract, all on-site disposal
systems previously approved by the Arkansas State Health
Department shall be deemed adequate New on-site systems shall
be deemed adequate if the system is approved by the Arkansas
State Health Department. New on-site disposal systems on
lots contained within a subdivision of five or more lots shall
be considered adequate for one single family residence if:
11) The State Health Department approves the system,
and,
(2) if the lots in the subdivision average 1.5 acres in
size.
New on-site disposal systems cn platted lots or lots platted
after the effective date of this ccntract shall be considered
adequate for multi -family housing if:
(.) The State Health Department approves the system, and,
(2) The lot meets the following minimum size requirements:
1.5 acres fcr the first living unit plus .75 acres
for each additional living unit. The Board of
Directors of the City may grant a variance from the
minimum lot size requirements for multi -family
dwellings upon a showing that the public health, safety
and welfare will be protected.
The term "platted lot" shall mean a lot within a subdivision,
the plat of which is on file in the County Courthouse.
Water use for any use other than agricultural or
residential shall require the approval cf the Board of Directors
of the City.
Buyer shall be responsible for enforcement of the minimum
lot size requirements prescribed by this paragraph and shall
keep proper records evidencing such enforcement. The City
shall have the right to inspect such records at any reasonable
time.
C. It is further mutually agreed between the City and
the Buyer as follows:
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1: That this contract shall extend for a term of
20 years from the date of the initial delivery of any water
by the City to the Buyer. Thereafter this contract may be
renewed for such term, or terms, as may be agreed upon by
the City and Buyer.
2. That 30 days prior to the estimated date of
completion cf construction of the Buyer's water supply line,
the Buyer will notify the City in writing the date for the
initial delivery of water.
3. When requested by the Buyer, the City will make
available to the contractor at the point of delivery, cr other
pcint reasonably close thereto, water sufficient for testing,
flushing, and trench filling the supply line of the Buyer
during construction, irrespective of whether the metering equipment
has been installed at that time, at a flat charge cf $ 400.00,
which will be paid in advance by the contractor, or , on his
failure to pay, by the Buyer.
4. That the City will, at al: tines, operate and
maintain its system in an efficient manner and will take such
action as may be necessary to furnish the quanitities of water
required by the Buyer, up to the maximum amount of 300 gallons
per minute as provided in Paragraph A. 1. 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. Provided, however, 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 nct 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 f±re fighting or other emergency situation; nor shalt
such failures of water supply and/or discontinuance or reduction
of water sales and service be construed as a breach of this contract
by the City.
5. That this contract :s subject to such rules,
regulations, or laws as may be applicable to similar agreements
:n 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.
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.
6. That the construction of the water supply distribution
system by the Buyer is being financed by a loan from the United
States of America, acting through the Farmers Home Administration
of the United States Department cf Agriculture, and the provisions
hereof pertaining to the undertakings of the Buyer are conditioned
upon the approval, in writing, of the State Director of Arkasnas,
and the Farmers Home Administration.
7. That in the event of any occurance rendering the
Buyer incapable of performing under this contract, any successor
of the Buyer whether the result of legal process, assignment, or
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otherwise, shall succeed to the rights cf the Buyer hereunder.
8. It is understocd and agreed that the water to be
supplied by the City to the Buyer under this contract is to be
furnished for distribution within the Mount Olive Water Association
service area. The Buyer shall nct extend its water main outside
its defined service area without the prior written consent of
the City. The City shall have the sole discretion in determining
ther terms and/or conditions upon which its ccnsent shall be given.
9. 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 cf the City.
10. Buyer agrees that it will not
of this contract or any renewal thereof levy
occupation tax, or any other tax of any form
during the period
any franchise tax,
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 contract.
11. This agreement may be terminated by either Buyer
or the City upon breach by the other of any cf the covenants
or agreements contained herein, and the failure of
in breach to remedy such breach within thirty (30)
receipt of written notice of the existence of such
the party
days after
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. The approval and execution of this Water Purchase
Contract by the City shall be contingent upon the Buyer receiving
approval of Farmers Home Administration Loan and/or grant within
a one (1) year period from date of execution by the
and/cr grant approval is not secured within the one
period, this contract shall be null and void.
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City. If loan
(1) year
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IN WITNESS WrEREOF, the City and Buyer have executed these
Presents by their respective Mayors and President and have caused
their seals to be hereto affixed and the same attested to by the
C-ty Clerk and chairman of the parties, having been authorized to
do so by appropriate orcinances of their respective Governing
Bodies.
ATTEST:
CITY CLERK
ATTEST:
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CITY OF rAYETTEVILLE, ARKANSAS
a municipal corporation
MCON— OLIVE WATER ASSOCIATION
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MODIFICATION OF CONTRACT
This MODIFICATION OF CONTRACT executed this rie day of
/G/ rill , 1988, by and between the City of Fayetteville,
Arkansas j� hereinafter referred to as the "City" and the Mt. Olive
Water Association, hereinafter referred to as the "Buyer".
WHEREAS, the City and the Buyer have executed a contract
dated February 2, 1981, a copy cf which is attached hereto and
made a part hereof; and
WHEREAS, the City and the Buyer desire to modify said
contract.
NOW, THEREFORE, the City and the Buyer hereby agree that the
aforesaid contract shall be modified as follows:
1. Section. A, Paragraph 1 is hereby amended to read as
follows:
A. The City agrees:
1. To furnish the Buyer, at the two points of delivery
hereinafter specified, for distribution within its present
service area, during the term of this contract or any renewal
or extension thereof, potable treated water meeting appli-
cable purity standards of the State Board of Health, and in
such quantity as may be required by the Buyer, not to exceed
450 gallons per minute total for both delivery points. The
City shall not be obligated to provide water to the Buyer at
a rate greater than 450 gallons per minute. Delivery rates
at the individual metering points shall be 300 gallons per
minute at the Black Oak Road metering point and 150 gallons
per minute at the Wallen Mountain Road metering paint (see
Exhibit "C" attached hereto). 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, at the Buyer's expense
in order to increase their capacity, if the reinforcement has
not been accomplished by the City prior to the time it is
required by the Buyer. Provided, the rates charged for any
water, which the City may agree to supply in excess of 450
ga::ons per minute, shall be the same as that charged to
other customers receiving in excess of 450 gallons of water
per minute. Any such agreement shall be in writing and duly
authorized by the governing bodies of the respective parties
hereto.
It is further understood and agreed that the city's
responsibility for the water ends at the meter box cutlet or
vault.
2. Section B, Paragraph 1 is amended to read as follows:
B. The Buyer agrees:
1. To purchase water as required by the Buyer and the
consumers within the presently defined service area of the
Buyer, up to a maximum of 450 gallons per minute. Buyer
•shall purchase water from the City and not from some other
source.
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3. Section C, Paragraph 4 is amended to read:
4. That the City will, at all times, operate and
maintain its system in an efficient manner and will take such
acticn as may be necessary to furnish the quantities of water
required by the Buyer, up to the maximum amount of 450
gallons per minute as provided in Paragraph A.1. hereof.
Temporary or partial failure to deliver water caused by the
failures or difficulties in the City's system shall be
remedied with all possible dispatch. Provided, however, 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 cf 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
emergendiscontinuancecsituation; n or reduction of or shall such failures watersalesof wandrservice
and/or
be construed as a breach of this contract by the City.
ATTEST
Byl
et
Clerk
ATTEST
Title:
CITY OF FAYETTEVILLE, ARKANSAS
HYyos /9P-kt"..---1
MT. OLIVE WATER ASSCCIATION
By: 1.-t-er-ica /% G�
TJ.tle: l%..o yce+t:i'L-
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