HomeMy WebLinkAbout80-99 RESOLUTION•
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RESOLUTION NO. 8 0 - 9 9
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A RESOLUTION APPROVING A WHOLESALE WATER
PURCHASE CONTRACT WITH THE CITY OF WEST FORK.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS -
Section 1. That the City Council hereby approves a wholesale water purchase contract
with the City of West Fork; and authorizes the Mayor and City Clerk to execute said contract. A
copy of the contract is attached hereto marked Exhibit "A" and made a part hereof.
.:PeIl AND APPROVED this 15th day of June , 1999.
ten,K�
Heather Woodruff, City C erk
APPROVE
By:
AdAvni—
red Hanna, Mayor
WATER PURCHASE CONTRACT
This Contract for the
entered into this
between the City
EXHIBIT A
sale and purchase of water, made and
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by and
of Fayetteville, Arkansas, a municipal
corporation, hereinafter referred to as the "City", and the City of
West Fork, Arkansas, a municipal corporation, hereinafter referred
to as the "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 corporate limits of Buyer and to
residents within reasonable proximity to the transmission line, and
the City desires to furnish and sell water to the Buyer for
distribution as aforesaid.
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements hereinafter set forth,
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A. The City agrees:
1. To furnish the Buyer, at the point of delivery
hereinafter specified, for distribution within its present
corporate limits and along the route of the transmission main,
during the term of this contract of any renewal or extension
thereof, potable treated water meeting applicable purity standards
of the State Board of Health, and in such quantity as may be
required by the Buyer, not to exceed 600 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 contract.
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 time 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 which the maximum
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allowable rate was exceeded. If any maximum allowable rate of
usage is exceeded on three separate occasions in any two month
period, the City may install automatic, variable rate -of -flow
controllers and charge the cost of same to the Buyer. This 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 ends at 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 "D" 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. City agrees to operate, and maintain at point of
delivery, except where noted in the contract, the necessary
metering equipment, including a meter house or pit, check valves,
shut off valves and piping, and required devices of standard type
for properly measuring the quantity of water delivered to the
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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 one and one half percent
(1.5%) 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 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. The Buyer will provide 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. A by-pass to the meter shall be
installed for use during periods of meter 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
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at the outlet side of the meter box or vault.
5. City agrees to furnish the City Clerk of the Buyer
with an itemized statement of the amount of water furnished and
other charges to the Buyer in accordance with the City's billing
policies and procedures.
6. When requested by the Buyer, the City will make
available to the Buyer any and all records used in development of
the water rates. The City further agrees to notify the Buyer at
least one month prior to the beginning of a cost of service study,
and will allow the Buyer to be a part of the Selection Committee
that selects a credible engineering firm to perform the cost of
service study. The Buyer will be allowed to vote as a part of the
Selection Committee in proportion to the total amount of water used
by the Buyer compared to the total amount of water used by the
entire system. The parameters set forth for the administration of
a cost of service study will be set by the selected engineering
firm so that the rates developed are fair and equitable to all
customer classes. Water rates for all customer classes will be
based upon a cost -of -service rate study performed by utility rate
consultants hired by the City. All cost of service studies shall
be conducted utilizing the utility cost basis of determining
revenue requirements applicable to each customer class.
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B. The Buyer Agrees:
1.a. Maximum. To 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 600 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 the 2.7 million gallons per month shall be charged at
the same wholesale water rate.
2. To pay the City not later than the due date given on
the bill (20 days following the billing date) for water delivered
in the preceding reading period, in accordance with the rates as
established by the City from time to time. If the Buyer does not
remit payment on or before the specified due date each month, a
penalty equal to ten percent (10%) 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,
the City may discontinue delivery of water to the Buyer and may
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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", 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 City users.
3. Buyer will receive the benefit of reduced demand
factor water rates illustrated by the attached schedule marked as
Exhibit "C" (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 City users) if the Buyer, in the judgment of the City, has
done the following:
(1) Provided water storage facilities that have a
combined capacity of at least 2.5 times the Buyer's
average daily usage, and;
(2) Such water storage facilities have reduced the
Buyer's maximum day demand usage to not exceed 2.0
times their average day usage. The following
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formula may be used when actual maximum day demand
usage is not known: Total Annual Usage s (Total
Amount of Storage + 2) x Number of Days in Year.
The Buyer must request such reduced demand factor water
rates from the City in writing and the City shall answer Buyer's
request within 30 days.
Daily usage demands will be periodically checked by
authorized meter personnel of the City to be sure the demand
factors are not exceeded. Standard water rates may be immediately
reinstated if demand factors are exceeded. Reduced demand water
rates may not be reinstated until additional storage is provided by
the Buyer to compensate for the violation. An exception may be
granted at the City's discretion due to extreme circumstances which
are beyond the control of the Buyer.
4. The Buyer agrees to install to the City's
specifications, within a reasonable distance of the metering point,
a backflow preventor approved by the State Health Department. The
Buyer agrees to have the backflow preventor tested at least once a
year by a certified backflow testing technician. The Buyer agrees
to maintain the backflow prevention device to the operational
standard established by the State of Arkansas.
5. The Buyer agrees to provide water connections only
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to those customers having adequate on-site sewage disposal systems
previously approved by the Arkansas State Health Department. 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 contract shall extend for a term of twenty
(20) years from the initial date of this contract entered into by
the City and Buyer. Thereafter this contract 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 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. 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
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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 contract by the City.
3. That this contract 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.
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
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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.
4 That the construction of the water supply
distribution system by the Buyer was financed by a loan from the
United States of America, acting through the Rural Development
Administration (formerly Farmers Home Administration) of the United
States Department Of Agriculture, and the provisions hereof
pertaining to the undertakings of the Buyer are conditioned upon
the approval, in writing, of the State Director of Arkansas, of the
Rural Development Administration. Similarly, any modifications of
the provisions of this contract, shall be conditioned upon the
prior approval, in writing, of the State Director of Arkansas, of
the Rural Development Administration.
5. That in the event of any occurrence rendering the
Buyer incapable of performing under this contract, 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 contract is to be
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furnished for distribution within the service area (as hereinafter
defined) of Buyer and an area three hundred feet (300') on each
side of the transmission line from the metering point (as defined
in Exhibit "D") to the service area of the Buyer. The Buyer shall
not extend its water main outside its service area in the
unincorporated areas without the prior written consent of the
City. The City shall have the sole discretion in determining
whether or not to consent to any such extensions and in determining
the terms and/or conditions upon which its consent shall be given.
The Buyer has the right to provide service in the area three
hundred feet (300') on each side of the transmission line and shall
have sole discretion as to whether or not it shall provide water
services in that area and the terms and conditions upon which it
shall support such service. In the event the Buyer elects not to
provide services in said area then the City may provide such
service if it desires to do so, but shall use water mains of its
own to provide such service and not the transmission line as
referred to hereinabove.
For the purpose of this instrument the phrase "service area"
of the Buyer means the present corporate limits at the time of
this contract and any lands within an area designated as the growth
area of the City of West Fork as shown and described by Exhibit "A"
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to this contract. The Buyer shall have the right under this
contract 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.
7 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.
8. Buyer agrees that it will not during the period of
this contract 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 contract.
9. 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.
However, it is understood and agreed between the parties that West
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Fork has paid a connection fee to the City which covered the cost
of an equivalent 10" line from a point on the City's water system
to the metering point as described in Exhibit "D", said line having
a nominal capacity of 600 gallons per minute. It is understood
that West Fork will not be charged an additional connection fee to
the City or be asked to pay for any line reinforcement by the City
unless the City of West Fork requires a maximum flow rate in excess
of 600 gallons per minute.
10. 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 of the parties
hereto.
IN WITNESS WHEREOF, the City and Buyer have executed these
presents by their respective Mayors and have caused their seals to
be hereto affixed and the same attested to by the City Clerk of the
parties, having been authorized to do so by appropriate ordinances
of their respective Governing Bodies.
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ATTEST:
7,A,Z,
CITY CLER
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CITY OF FAYETTEVILLE, ARKANSAS
a municipal corporation
BY
itak
MAYOR
CITY OF WEST FORK, ARKANSAS
a nicipal c j poration
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W
EXHIBIT "A"
DESCRIPTION OF WEST FORK'S SERVICE AREA
(See attached West Fork Planning Area Boundary Map which is
recorded in Book 9 Page 48 of the Circuit Clerk of Washington
County, Arkansas.)
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WEST FORK PLANNING AREA BOUNDARY
LEGAL DESCRIPTION
The following Legal Description describes all the land
the City of West Fork wishes to exercise its planning
jurisdiction in AND supercedes and replaces .all
previously tiled Planning Areo Boundary Mops for
the City of West Fork now on file in the Washington
County Circuit Clerks Office.
TOWNSHIP 15 NORTH - RANGE 29 WEST
All of Sections: 19,30 and 31.
TOWNSHIP 14 NORTH - RANGE 29 WEST
All of Section: 6,718,19 and 30.
TOWNSHIP 15 NORTH -RANGE 30 WEST
All of Sections: 20 through 22 and 25 through 36.
Part of Sections:South 3/4 of 23 and 24 and
South 1/2 of 19.
TOWNSHIP 14 NORTH -RANGE 30 WEST
All of Sections: 1 Through 30.
TOWNSHIP 15 NORTH -RANGE 31 WEST
All of Sections: 25 and 36.
Port of Sections: South 1/2 of 24 and all the lond
lying East of the Illinois River in
3,26,34 an.: 55.
TOWNSHIP 14 NORTH -RANGE 3l WEST
AII of.Sections: I through3, 10 through 15 and
22 ttrcugh 27.
Wyola•
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Hurchrns
32
WASHINGTON COUNTY
C1'CUITr r LERK
NORTH
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EXHIBIT "B"
STANDARD WATER RATES
Effective date:
11-01-97
Usage Rate
Per 1,000 Gallons
$2.70
Monthly Meter Charge
$58.20
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