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RES NO 01-02-1986 I- 2-Iggig CITY OF VAN BUREN, ARKANSAS RESOLUTION NO. 0 17' 1986 A RESOLUTION AUTHORIZING THE MAYOR OF THE CITY OF VAN BUREN, ARKANSAS, TO ENTER INTO A WATER CONTRACT BETWEEN THE CITY OF VAN BUREN AND THE SEQUOYAH COUNTY WATER ASSOCIATION OF OKLAHOMA. 9 WHEREAS, the City of Van Buren, Arkansas, presently has a Water and Sewer Commission which is delegated the reponsibility under Arkansas Statutes to direct the business and affairs of the Van Buren Municipal Waterworks and Sewer System; and, WHEREAS, the Sequoyah County Water Association of Oklahoma has made their desire known that it wishes to purchase water from the Van Buren Water System and that in return for such the Association will pay certain consideration; and WHEREAS, the Van Buren Water and Sewer Commission has recommended to the City Council that the City enter into such agreement in that it would be in the best interest of the City of Van Buren to do so. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VAN BUREN, ARKANSAS: THAT, the Mayor of the City of Van Buren, Arkansas, is hereby authorized to enter into the attached Water Contract; that said contract is attached hereto as Exhibit A and is incorporated herein by reference and that the City Clerk of the City of Van Buren, Arkansas, is hereby authorized to attest to the Mayor's signature on said contract. PASSED AND APPROVED this 20th day of January 1986. CITY OF VAN BUREN, ARKANSAS By( C i Mayor ATTEST:` Cify Clerk WATER CONTRACT THIS AGREEMENT made and entered into as of the day of 1986, by and between the City of Van Buren, Arkansas, hereinafter referred to as the CITY and the Sequoyah County Water Association of Oklahoma, hereinafter referred to as the ASSOCIATION. WITNESSETH: WHEREAS, the CITY owns and operates a water system consisting of supply, treatment and distribution facilities with a capacity currently capable of serving the ASSOCIATION's esti- mated number of water users in the Eastern side of Sequoyah County as shown on the plans of the system now on file in the office of the ASSOCIATION; and, WHEREAS, by Resolution Number enacted on the day of 1986, by the CITY, the sale of water to the ASSOCIATION in accordance with the provisions of the said resolution was approved, and the execution of this Contract carrying out the said resolution by the Mayor and attested by the City Clerk, was duly authorized; and, WHEREAS, by resolution of the ASSOCIATION enacted on the day of 1986, the purchase of water from the CITY in accordance with the terms set forth in the said resolution was approved and the execution of this Contract by the President, and attested by the Secretary was duly authorized: AEI NOW, THEREFORE: In consideration of the mutual agreements and covenants hereinafter set forth, the parties agree as follows: 1. Subject to the restrictions on maximum use and connections and all other restrictions contained herein, the CITY 1 agrees to supply to the ASSOCIATION an adequate supply of treated water for the users of the ASSOCIATION's water system, subject to the following conditions and restrictions: 2. For water sold and delivered to the ASSOCIATION on or after the date of this Agreement, the ASSOCIATION agrees to pay to the CITY for water delivered at the following rates: First 1,000 Gallons 30.62/M Next 4,000 Gallons 1.52 /M Next 5,000 Gallons 1.20 /M Next 90,000 Gallons 0.80 /M All Over 100,000 Gallons 0.56 /M Water for Resale All Over 1,000,000 Gallons. 0.40 /M The CITY will submit a billing during the first fifteen (15) days of each calendar month for water delivered during the preceding calendar month and such billing shall be due and pay- able by the ASSOCIATION within fifteen (15) days from the date of mailing. Any billing which is not paid by the due date shall be subject to a ten percent (10%) penalty, and the total amount of the billing, plus penalty, shall be subject to interest at the rate of ten percent (10 per annum until paid. It is agreed by the parties that, in the event the CITY adopts by Ordinance a water rate to large users such as the ASSOCIATION, the rate of payment for delivered water as set forth in this paragraph shall be subject to modification as contained in said Ordinance. Upon thirty (30) days written notice to the ASSOCIATION by the CITY of intention to adopt such an Ordinance, the rate established by the Ordinance shall become effective upon passage of same. Upon initiation of such rate increases, the CITY shall submit to the ASSOCIATION written justification of rate increases. This expla- nation shall accompany the thirty (30) day written notice to the ASSOCIATION by the CITY of intention to adopt a Rate Increase 2 Ordinance. With regard to said justification, it is agreed and understood that any future rate increase and operation and main- tenance expense incurred by the CITY in providing water to all of the users of its system, may be considered justification for an 0 increase in water rates; provided, however, that such rate in- crease shall not include increased capitalization of the CITY system. 3. The ASSOCIATION agrees to provide and maintain, at its expense, appropriate vaults, regulating valves, approved back flow preventers, and proper meter for registering the flow of water at an approved site. The ASSOCIATION shall pay all costs of constructing a water transmission line and appurtenances from an existing twelve (12) inch water line approximately thirty feet (30') East of the Dora Master meter to the Oklahoma border. Transmission line size shall be ten (10 inch if contract cost is within budget. Line size shall be down graded to eight (8 inch if contract cost is larger than budget. Said transmission line will be constructed in accordance with all CITY standards and specifications (SDR 21,200 psi). That portion of the transmission line from the point of beginning to the Van Buren City limits as shown on "exhibit A" attached hereto, (plus or minus 4,000 feet) shall become the property of the CITY in lieu of a connection fee. The remaining portion including the metering vault and the pump station to the Oklahoma border shall remain the property of the ASSOCIATION. The ASSOCIATION agrees that it will allow no con- nection to the said transmission line in Arkansas other than to the CITY. The CITY shall have a maximum of four (4) master meter connections which have been agreed to by the ASSOCIATION. In the event the CITY exercises its right to make said connections, the CITY agrees to install proper meters, pump stations, storage tanks, and appurtenances at its expense to limit the CITY's withdrawal rate so as not to jeopardize the 500 gpm required by 3 the ASSOCIATION. Any subsequent extensions to said system made by customers of the CITY or by the CITY shall be the property of the CITY upon acceptance by the CITY. The CITY shall not add or allow any fireplugs on the line or lines belonging to the ASSO- CIATION or beyond the master meter that meters water sold to the ASSOCIATION. For said connections, if any, the CITY agrees to pay a connection fee to the ASSOCIATION in the amount of $200.00 per single family residential equivalent or 3/4" size meter. Such connection fee shall not be applicable to that portion of the line deeded to the CITY. In the event the CITY does exercise this right, the CITY further agrees to pay to the ASSOCIATION a pro rata share of the ASSOCIATIONS's electric bill relating to extra power cost being determined by dividing the total monthly usage of CITY meters by the total monthly master meter usage. In the event the CITY does exercise its right to connect CITY custo- mers to the ASSOCIATION's line, then subsequent billings to the ASSOCIATION will be made by subtracting CITY usage from the master meter before billing. The ASSOCIATION agrees to secure the approval of the Arkansas State Health Department for that portion of line lying in Arkansas. 4. In the event that any area served by the ASSOCIA- TION's water system is annexed to the corporate limits of the City of Van Buren, the ASSOCIATION agrees that the CITY shall have the right to acquire the facilities of the ASSOCIATION located within the area so annexed provided, however, that in the event the ASSOCIATION cannot supply water to any subsequent water users connected to the ASSOCIATIONS's water line in Arkansas, ID then the CITY shall have the right to purchase additional facilities of the ASSOCIATION to insure the CITY's customers have continuity of service, according to the following procedure, to- wit: It is agreed that the CITY may acquire such facilities by a payment to the ASSOCIATION of that portion of the then outstand- 4 ing mortgaged indebtedness of the ASSOCIATION applicable to that portion of the facilities being acquired by the CITY. Such sum shall be determined by multiplying the quantities being purchased by CITY times unit prices in improvement project as shown by bid documents used for constructing such portion of facilities being purchased, less depreciation of system using a sixty (60) year straight line depreciation method. The determination of the sum to be paid by the CITY in the event that it exercises its right to acquire such facilities is subject to the provision that the sum to be paid shall be sufficient to reduce the mortgage indebt- edness to a level that the revenues derived by the ASSOCIATION from the remaining portion of the system not acquired by the CITY are sufficient to defray all operation and maintenance costs, required depreciation costs, required reserve accounts costs, principal and interest costs and other expenses of the ASSOCIA- TION as are required by law and /or its agreement with any finan- cial institution or governmental agency holding a mortgage on the system. In the event that the holder of any mortgaged indebted- ness of the ASSOCIATION will not agree to a release of the facil- ities being acquired from the security of such holder of indebt- edness, it is agreed that the payment due the ASSOCIATION by the CITY to the ASSOCIATION shall be made directly to the holder of the mortgaged indebtedness. In such situation, the ASSOCIATION convenants that it shall not assume any further indebtedness against the acquired portion of the system subsequent; to the acquisition, that all tie -on fees and other revenues from the acquired system shall, after the time of acquisition, belong to the City of Van Buren and that the ASSOCIATION shall make no collections thereof except with the prior consent of the CITY, and the ASSOCIATION further covenants it will maintain sufficient rates for water sold and delivered through its system to meet any commitments of indebtedness against its system so as to prevent any holder of the indebtedness to foreclose against that portion 5 :..d »,:J......: _..:.K:...�.t�t of the system acquired by the CITY. 5. In consideration of the efforts of the City of Fort Smith to continue to provide a source of treated water supply for the Western Arkansas Eastern Oklahoma area, and for the benefit of this Agreement, it is agreed and understood between the City of Van Buren (Van Buren Water and Sewer Commission) and the Sequoyah County Water Users Association that, at such time as the City of Fort Smith has a treated water line facility in the immediate area of the point of connection established by this Agreement for the ASSOCIATION'S connection to Van Buren's Water Works system, and should the necessary construction, as specified in Paragraph 1 of the Water Contract dated February 25, 1983, be initiated, the ASSOCIATION may request permission to make the connection to said water line facility of the City of Fort Smith, and if such permission is granted by City of Fort Smith, the ASSOCIATION may, at no cost to the City of Van Buren, disconnect its water service line from the Van Buren system and connect to the water line facility so provided by the City of Fort Smith. However, this Agreement by the CITY should in no way be con- strued or interpreted as a waiver of Van Buren's right to serve residents of Van Buren and the five mile planning jurisdiction of the City of Van Buren as set out in Paragraph 3, Fourth of the Agreement between the City of Fort Smith and the City of Van Buren, Arkansas, dated February 25, 1983. On Fort Smith's fur- nishing water rather than Van Buren, all customers, improvements or lines heretofore having been deemed as the property of the City of Van Buren shall remain the property of Van Buren. In the event the CITY does exercise its right to con- e nect to the ASSOCIATIONS's line and the ASSOCIATION is subse- quently served by the City of Fort Smith, such agreement between the two parties shall in noway impede the CITY's ability to continue water service to its customers in Arkansas. Specifical- ly, in the event a subsequent water purchase agreement is made 6 between the ASSOCIATION and Fort Smith, the CITY will relinquish it s rights to sell the ASSOCIATION water provided such agreement stipulates that Fort Smith will not attempt to sell water within the CITY's five mile jurisdiction other than to the CITY. 6. It is understood by the parties that the treated water being delivered to the ASSOCIATION is considered to be that not presently needed by the consumers of the water system of the City of Van Buren. If, at any time, the CITY does not have a sufficient supply of water to meet the needs of the consumers of the water system of the CITY from City of Fort Smith, the CITY shall have the right to terminate this Agreement and discontinue the sale of water to the ASSOCIATION upon thirty (30) days writ- ten notice to the ASSOCIATION. Otherwise, and unless the Agree- ment is terminated by breach of one of the parties, this Agree- ment shall have a term of forty (40) years commencing with the date first set forth above. 7. (a) On failure by the ASSOCIATION to pay any billing for water delivered by the date thereof, the CITY shall have the right, after giving ten (10) days written notice by registered mail to the ASSOCIATION, to cut off the water supply to the ASSOCIATION by means of the valves installed at any point of connection or by any other means; (b) The ASSOCIATION agrees and convenants that it will limit its level of consumption of water from the Van Buren Water System so that the maximum level of consumption at any time shall not exceed 500 gallons per minutes and shall not exceed a maximum daily consumption of 500,000 gallons during any twenty four (24) hour period. In the event the ASSOCIATION exceeds any one of the maximum limits set forth in this subsection, the CITY shall have the right, at its option, to take any of the following actions: 1. Immediate reduce the flow of water to the ASSOCIATION by any reasonable means, includ- ing the force pumping of water past points of connection or physically adjusting the valves 7 at points of connection; or, 2. On ten (10) days written notice by regis- tered mail to the ASSOCIATION, cut off the water supply to the ASSOCIATION. (c) In the event that the governing body of the CITY determines that there is a shortage of water to be supplied to the users of the CITY's water system and declares the imposi- tion of certain "water savings" conditions on the supply of water to substantially all of the CITY's contract sales of water to large users such as the ASSOCIATION, the ASSOCIATION covenants that it will impose and enforce such conditions on all users of its water system. In the event of a breach of this provision of the Agreement, the CITY shall have the rights set forth in the immediately preceding sub paragraph of this paragraph; (d) Upon completion of construction of additional water supplies, as described in Paragraph 1 of the Water Contract dated February 25, 1983, between the Cities of Fort Smith and Van Buren, the ASSOCIATION may request allocation of additional water supply and rate of flow over that stated in Part B of this section; (e) The ASSOCIATION agrees and covenants that it shall not deliver water to any users of its water system for a new structure not plumbed in accordance with the provisions of the appropriate state plumbing code and inspected by a licensed inspector. 8. It is expressly agreed that the CITY shall not be responsible to the ASSOCIATION, or its inhabitants or owners of property, or to customers of the ASSOCIATION's Water System, for any property damage or personal injury resulting from the sup plying of impure water or a failure to furnish water under this contract. It is expressly recognized that the water supply may be temporarily discontinued in conjunction with required mainte- nance activities or with reference to the construction of im- provements or additional to the CITY's water production, treat 8 ment, and /or distribution system. The CITY shall give written or verbal notice to the ASSOCIATION's office or operation's manager prior to the discontinuation of services, when possible. Twenty four hours prior notice shall be given for scheduled maintenance. It is agreed that the ASSOCIATION will defend and hold the CITY harmless against, and indemnify the CITY for, any claim, action or judgment which might be brought or obtained against the CITY by reason of any negligent act on the part of the ASSOCIATION in the operation, construction, or maintenance of the ASSOCIATION's water system or by reason of the failure of the CITY to furnish water resulting in property damage or personal injury to any user of the ASSOCIATION's system. 9. This Agreement shall be binding upon the successors and assigns of the parties hereto. It is agreed that in the event of any occurrence rendering the ASSOCIATION incapable of performing under this contract, any successor of the ASSOCIATION, whether the result of legal process, assignment, or otherwise, shall succeed to the rights of the ASSOCIATION hereunder. 10. The ASSOCIATION agrees that it will comply with the provisions of Title VI of the Civil Rights Act of 1964 (P. L. 88 -352) and in accordance with Title VI of that Act, no person in the United States shall, in the grounds of race, color and na- tional origin, be otherwise subjected to discrimination under any program or activity conducted by the ASSOCIATION and that the ASSOCIATION will immediately take any measures to effectuate this portion of this Agreement. 11. The express listing of any right of action by either party in the event of a breach of any provision contained herein shall not be construed as a waiver of or a limitation on the right of such party to take any other lawful action or exer- cise any other lawful remedy by reason of such breach. 12. Unless a construction contract for the transmis- sion facilities by Sequoyah County Water Association has been 9 1 awarded within a period of one year from the date of execution thereof, this Contract shall become null and void. IN WITNESS WHEREOF, the parties, pursuant to resolu- tions of their respective governing bodies, have caused this Agreement to be executed as of the first date set forth above by the Mayor and City Clerk, and the President and Secretary of the ASSOCIATION. CITY 0 VAN BUREN, ARKANSAS be By: fitY4 Mayor ATTE .1 ,t_ -.Ste City Clerk SEQUOYAH COUNTY WATER ASSOCIATION By: 4/»44lit} Lim .f CX President ATT. r APPROVED: FARMERS HOME ADMINISTRATION By: s 10