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HomeMy WebLinkAbout40-23 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 40-23 File Number: 2023-359 10 YEAR WATER PURCHASE AGREEMENT BETWEEN THE CITY OF FAYETTEVILLE AND THE CITY OF ELKINS: A RESOLUTION TO APPROVE A 10 YEAR WATER PURCHASE AGREEMENT BETWEEN THE CITY OF FAYETTEVILLE AND THE CITY OF ELKINS TO ALLOW THE CITY OF FAYETTEVILLE TO FURNISH WHOLESALE POTABLE WATER TO THE CITY OF ELKINS 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 Elkins; and WHEREAS, the City of Elkins 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 Elkins 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 Elkins; and WHEREAS, Staff recommends approval of the 10 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 Jordan to sign the attached 10 year Water Purchase Agreement between the City of Fayetteville and the City of Elkins to allow the City of Fayetteville to furnish wholesale potable water to the City of Elkins and its residents. PASSED and APPROVED on February 21, 2023 Page 1 CITY OF W41iFAYETTEVILLE ARKANSAS MEETING OF FEBRUARY 21, 2023 TO: Mayor Jordan and City Council THRU: Susan Norton, Chief of Staff FROM: Timothy Nyander, Utilities Director DATE: SUBJECT: Elkins Water Purchase Agreement RECOMMENDATION: CITY COUNCIL MEMO 2023-359 Staff recommends approval of a Water Purchase Agreement between the City of Fayetteville and the City of Elkins to allow the sale of wholesale water to the City of Elkins. BACKGROUND: The City of Fayetteville owns and operates a water supply distribution system with a capacity capable of serving its citizens as well as the City of Elkins. The City of Elkins currently purchases wholesale water from the City of Fayetteville for distribution within its present service area. DISCUSSION: The current agreement with the City of Elkins to furnish them with 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 Elkins. The agreement outlines that the City of Elkins shall purchase water as required by its citizens up to a maximum of 130 million gallons per year and a maximum of 350 thousand gallons per day. The City of Fayetteville's water system has ample capacity to serve this need. The City of Elkins shall maintain a backflow prevention device at the point of delivery so that the City of Fayetteville's water supply is protected in the event of a backflow occurrence in the City of Elkins' water system. The term of this agreement shall extend for a term of ten (10) years from the date of the signature, and may be renewed for further terms as agreed upon by both Cities. Staff recommends approval of the Water Purchase Agreement. BUDGET/STAFF IMPACT: Elkins will continue to be billed for its wholesale water purchases through the City of Fayetteville's Billing Office. The current rates are presented in Exhibit B of the agreement, but are subject to change by ordinance of the city council based on an approved rate study. ATTACHMENTS: SRF Elkins Water Purchase Agreement, Water Purchase Agreement 2023 revised city attorney Mailing address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 - Legislation Text File #: 2023-359 Elkins Water Purchase Agreement A RESOLUTION TO APPROVE A 10 YEAR WATER PURCHASE AGREEMENT BETWEEN THE CITY OF FAYETTEVILLE AND THE CITY OF ELKINS TO ALLOW THE CITY OF FAYETTEVILLE TO FURNISH WHOLESALE POTABLE WATER TO THE CITY OF ELKINS 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 Elkins; and WHEREAS, the City of Elkins 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 Elkins 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 Elkins; and WHEREAS, Staff recommends approval of the 10 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 Jordan to sign the attached 10 year Water Purchase Agreement between the City of Fayetteville and the City of Elkins to allow the City of Fayetteville to furnish wholesale potable water to the City of Elkins and its residents. Page 1 Tim Nyander Submitted By City of Fayetteville Staff Review Form 2023-359 Item ID 2/21/2023 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 1/27/2023 WATER SEWER (720) Submitted Date Division / Department Action Recommendation: Staff recommends approval of a Water Purchase Agreement between the City of Fayetteville and the City of Elkins to allow the sale of wholesale water to the City of Elkins. N/A Account Number 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: Budget Impact: N/A Fund N/A 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 Z +" day of , 20n by and between Fayetteville of Fayetteville, Arkansas (CTayetteville") and the of Elkins, Arkansas ("Elkins") witnesseth: WHEREAS, Fayetteville owns And operates a water supply distribution system with a capacity currently capable of serving the present customers of Fayetteville system and the estimated number of water users to be served by Elkins; and WHEREAS, Elkins desires to purchase water from Fayetteville for distribution within the present service area of Elkins, and Fayetteville desires to furnish and sell water to Elkins for distribution within its present service area. NOW, THEREFORE, the City of Fayetteville, Arkansas and the City of Elkins, Arkansas agree as follows: 1. The City of Fayetteville, Arkansas agrees to: A. Furnish Elkins, at the point of delivery hereinafter specified, for distribution within its present service area, during the term of this agreement or 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 Elkins, not to exceed 130 million gallons per year, and a maxiinum of 350 thousand gallons per day. Fayetteville shall not be obligated to provide water to Elkins at a rate greater than the amount(s) aforesaid. Total usage exceeding the amounts) aforesaid shall be cause for renegotiation of this agreement. In the event Elkins requires water at a rate greater than heroin provided, Fayetteville agrees, upon 30 days written notice from Elkins, to negotiate in good faith to provide for increased water volumes upon Elkins showing increased growth sufficient to warrant such increase. In determining the terms and conditions upon which such increase may be granted, Fayetteville may take into consideration any reinforcement of the eight (8) inch main(s) hereinafter referred to made necessary by the increase in volume if the reinforcement has not been accomplished by Fayetteville prior to the time it is required by Elkins. Elkins shall bear only that portion of those costs which are incurred as a result of Elkins's increase in volume. 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, Fayetteville may install automatic, variable rate -of -flow controllers and charge the cost of same to Elkms. Fayetteville may install such rate of flow controllers at anytime at Fayetteville's expense. The excess demand charge shall not apply if the excess usage was beyond the control of Elkins. However, all customer usage is considered as being within the control of Elkins, as is system loss which is not promptly corrected by Elkins. It is further understood and agreed that Fayetteville's responsibility for the water ends at the meter box outlet or vault and Elkins agrees to indemnify and hold harmless Fayetteville from any and all liability incurred past the meter box outlet or vault. B. Furnish water at a reasonably constant pressure (due consideration being given to friction loss) from an existing eight (8) inch water main at a point located at the site described in Exhibit "A" attached hereto and made a part hereof If a greater pressure than that normally available at the point of delivery is required by Elkins, the cost of providing such greater pressure shall be borne by Elkins. C. 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 Elkins, including a meter of proper size. The cost of maintenance and operation of the metering facility shall be borne by Fayetteville. The responsibility for testing and calibrating the meter rests solely with Fayetteville. 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 a previous year, at Fayetteville's option. The metering equipment shall be read on a regular schedule each month. An appropriate official of Elkins 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. Elkins 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. Elkins 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 Fayetteville. The maintenance cost for the by-pass valves, fittings, and pipe shall be borne by Elkins. D. Fayetteville's responsibility for maintenance shall end at the outlet side of the meter box or vault. 2 E. Fayetteville agrees to furnish the Manager of Elkins with an itemized statement of the amount of water furnished and other charges to Elkins in accordance with Fayetteville billing policies and procedures. 2. The City of Elkins, Arkansas agrees to: A. Purchase water as required by Elkins and the consumers within the presently defined service area of Elkins, up to a maximum of 130 million gallons per year and 350 thousand gallons per day. B. Pay Fayetteville 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 Fayetteville. If Elkins 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 or the aggrieved party has not submitted a claim for arbitration as specified in Section 4, Fayetteville may discontinue delivery of water to Elkins as a last resort and may continue to deny delivery to Elkins until Elkins 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 Fayetteville may immediately pass along to Elkins any increases or decreases in rates imposed upon by Fayetteville by the Beaver Water District, its successors or assigns. The rates shall be adjusted to Elkins in the same amount as the increase or decrease from said water district. Elkins also understands and agrees that rates may be increased or decreased following the adoption of any rate study approved and adopted by the Fayetteville City Council. C. Maintain a backflow prevention device approved by Fayetteville 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. D. Restrict water connections to those customers having adequate on -site sewage disposal systems. For purposes of this agreement, all on -site disposal systems previously approved by the Arkansas Department of Health shall be deemed adequate. New on -site systems shall be deemed adequate if the system is approved by the Arkansas Department of Health. 3. It is further mutually agreed between Fayetteville and Elkins as follows: A. That this agreement shall extend for a term of ten (10) years from the date of the signature on this agreement. Thereafter this agreement may be renewed for such term, or terms, as may be agreed upon by Fayetteville and Elkins. 3 B. That Fayetteville 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 Elkins, up to the maximum amount as specified in Paragraph I (A) hereof. Temporary or partial failures to deliver water caused by the failures or difficulties in Fayetteville's system shall be remedied with all possible dispatch. Provided, however, Fayetteville reserves the right, in the event of acute shortage of water, to limit or discontinue water sales and service to Elkins. Any reduction or discontinuance of water sales and service for this reason shall not render Fayetteville liable for damages of any kind, it being understood between the parties that FayettevilIe's primary obligation is to furnish water and water services to the residents of Fayetteville, Arkansas. Fayetteville shall not be responsible for any damages to Elkins 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 Elkins, 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 Fayetteville. C. That this agreement is subject to such rules, regulations, or laws as may be applicable to similar agreements in the State of Arkansas and Fayetteville and Elkins 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 Fayetteville to Elkins, is a sale for resale, and Elkins agrees to maintain a sales tax permit as required by the State of Arkansas 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 Elkins's consumers. D. That in the event of any occurrence rendering Elkins incapable of performing under this agreement, any successor of Elkins whether the result of legal process, assignment, or otherwise, shall succeed to the rights of Elkins hereunder. E. It is understood and agreed that the water to be supplied by Fayetteville to Elkins under this agreement is to be furnished for distribution within Elkins's service area. Elkins shall not extend its water main outside its defined service area, as identified in Exhibit "C", without the prior written consent of Fayetteville. Fayetteville shall have the sole discretion in determining the terms and/or conditions upon which its consent shall be given. 4 F. Elkins shall provide Fayetteville 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. G. In the event a portion of Elkins's water mains are constructed within the corporate limits of Fayetteville, Elkins is not permitted to serve consumers within the corporate limits of Fayetteville without prior written consent of Fayetteville. H. Elkins 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 for whatsoever, by whatever name it may be called, upon Fayetteville, Fayetteville water system and appurtenances thereto, or the operations called for by this agreement. I. No provision of this agreement shall be construed to create any type of joint or equity ownership of any property, or 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 Fayetteville's system. J. This agreement may be terminated by either Elkins or Fayetteville 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 a 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. 4. 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 Elkins' power to enforce requirements directly against customers located in Elkins, nor will it preclude Fayetteville or Elkins from seeking other remedies including, but not limited to, specific performance. 5. Severabihty 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 TEILNIS AND CONDITIONS ABOVE, WE SIGN BELOW: CITY OF ELKINS, ARKANSAS u� By: UY REED, Mayor ATTEST: By:, Z�'942, DELTA FOSTER, City Cleric CITY OF FAYETTEVILLE, ARKANSAS -E R K By: C� KARA PAXTON, Ci le c- Trim ur6py' �- 7e'v•n 1 v,.7 ti 1() € EXHIBIT A City of Elkins Point of Delivery of Wholesale Water HuNTSV,<<FRo e w ate�,��ne O 0 $ yea 0 1800 S Van Hoose Dr WC 139 (4-inch meter) 8" waterline 1 O c Y l6 i� N Exhibit A 1800 S Van Hoose Dr w E WC 139 150 75 0 150 Feet s Winch meter) EXHIBIT B Wholesale Water Rates Rate per 1,000 gallons of water $2.96 Fixed Monthly Meter Fee 4" meter on Van Hoose Dr. $115.62 Rates will automatically increase by 3% on January 1" of each year. A rate study is in progress that could affect the currently published rates. EXHIBIT C City of Elkins Defined Water Service Area =,4N..�N.O.WTED N—M-57 =M -M-11VI wa IN —M.N- Service Area Boundary I JOB NO,: 11111111 DATE: SEPT. 2018 DESIGNED BY CRB DRAWN BY: O.C.