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1989-031-RES WHEREAS, TENASKA III TEXAS PARTNERS REQUESTED WATER SERVICE FROM COP RESOLUTION NO. 89-03l WHEREAS, Tenaska III Texas Partners has requested water service from the City of Paris; and, WHEREAS, the City Council of the City of Paris is desirous of encouraging industrial development and cooperating with construction projects when they occur, even in the City's extraterritorial jurisdiction; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, That the form of contract for water service to Tenaska III Texas Partners, attached hereto as Exhibit A, be, and the same is hereby approved; and BE IT FURTHER RESOLVED, That the Mayor of the City of Paris, Eric S. Clifford, be, and he is hereby authorized and directed to execute on behalf of the City of Paris the contract in the form of Exhibit A attached hereto. Passed and adopted this 13th day of March, 1989. ~~~ " Eric S. C i for~ Mayor ATTEST: 'Joe~o~nt City Clerk ttorney STATE OF TEXAS ~ ~ ~ KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LAMAR WATER SERVICE CONTRACT This Agreement, made and entered into this 13th day of March, 1989, and executed in quintuple originals, each executed copy constituting an original, by and between the City of Paris, a municipal corporation of Lamar County, Texas, hereinafter referred to as CITY and Tenaska III Texas Partners, a Texas General Partnership, with its principal place of business located at 301 Lake Crook Road, Lamar County, Texas, hereinafter referred to as PARTNERSHIP, InTNESSETH: 1. Service to be furnished. 1.1 The CITY agrees to furnish and PARTNERSHIP agrees to purchase and take a supply of water in accordance with the terms and conditions hereof. Said supply of water shall be taken through a new service by means of a magnetic flow meter, 8 inch Hersey Model MFM- II Mainline Meter and a 4 inch MCT-II Bypass Meter, which includes a flow versus time recording device and a pressure versus time recording device connected to the CITY'S 33-inch potable water transmission line approximately 2.2 miles south of CITY'S Water Treatment Plant. Should PARTNERSHIP request that the meter herein -1- EXHIBIT A described be replaced by a larger meter, such replacement meter and all costs for the installation of the same shall be borne by PARTNERSHIP. If the meter herein described, or any replacement meter, shall by CITY be deemed to need replacement or repair, then the cost of such shall be borne equally by CITY and PARTNERSHIP. In either case, such meter replacement shall be accomplished without amendment to this agreement by giving notice of the manufacturer's name, model and meter number of the new meter, which notice shall be delivered to the appropriate persons as provided for in Paragraph 9.7 ante, and which shall be affixed to this agreement as an appendix. 1.2. The potable water furnished shall be used for the operation of PARTNERSHIP'S cogeneration plant. II. Quantities to be Furnished 2.1 The average daily supply of water furnished shall meet all reasonable requirements of PARTNERSHIP. The monthly consumption, is expected to be in excess of 1.8 million cubic feet. The water delivered to PARTNERSHIP shall be at a minimum pressure of seventy-five (75) pounds per square inch; the cost of delivering such pressure is included in the rate established in Article VII. PARTNERSHIP will advise the CITY of any planned changes that would significantly affect the amount of water -2- used by PARTNERSHIP for any extended period of time. III. Regulations 3.1 PARTNERSHIP may not permit any water furnished hereunder to be used to supply any other party without specific approval of the City Council of the CITY. IV. Rights 4.1 The CITY reserves the right to inspect, test, repair and replace the water meter as required. Such replacement or repair shall be charged to and paid one half by CITY and one half by PARTNERSHIP, except as provided in Paragraph 1.1. V. Water quality 5.1 The CITY shall supply PARTNERSHIP with water of quality equal to or exceeding the State of Texas water quality requirements for water supplied for public use. 5.2 The CITY shall supply, upon request, a comprehen- sive chemical analysis report monthly prepared by the CITY'S laboratory of the water supplied to PARTNERSHIP. In the event PARTNERSHIP desires a more comprehensive chemical analysis of the water supplied, then the cost of such shall be borne by PARTNERSHIP. 5.3 The CITY bears no degree of responsibility for the -3- water quality at any point beyond the meter described in Article I. PARTNERSHIP bears the responsibility for main- taining the water quality at any point beyond the meter and within PARTNERSHIP'S distribution system. 5.4 PARTNERSHIP shall notify and keep the CITY informed of persons responsible for the integrity of PARTNERSHIP'S distribution system. 5.5 Each of the parties shall immediately notify the other party's City Manager or Plant Manager, or such Manager's designee, as the case may be, of any emergency or condition which may affect the quality or quantity of water in either party's system. 5.6 The CITY reserves the right to make inspections of those facilities which may affect the quality of the water supplied to PARTNERSHIP and perform required tests. VI. Equipment and operation 6.1 PARTNERSHIP shall provide tap and all lines and valves beginning with the tap on the CITY'S 33-inch potable water transmission line. CITY shall maintain tap at CITY'S expense and shall maintain the' valve nearest the tap at PARTNERSHIP'S expense. PARTNERSHIP shall maintain the 12 inch service line beginning at the valve nearest the tap, the valves on either side of the meter and all other lines and valves on PARTNERSHIP'S side of the valve nearest the -4- CITY'S 33-inch potable water transmission line. PARTNERSHIP shall maintain at all times, in working order all the valves on its side of the valve nearest the tap, which valves can be used for protecting the CITY'S system from contamination in the event of PARTNERSHIP'S system becoming contaminated, or in the event the integrity of PARTNERSHIP'S system is violated. PARTNERSHIP'S valves on its side of the valve nearest the tap may be used by CITY to protect PARTNERSHIP'S system, to facilitate repair or replacement of meter, or to facilitate repair of CITY'S system. 6.2 The CITY'S representative will regularly inspect the meter measuring the supply of water furnished and will report when the same is known or suspected to be registering incorrectly. The meter shall be repaired by the meter manufacturer's factory service representative. In the event the meter must be replaced, CITY and PARTNERSHIP will agree upon a replacement meter and the method of replacement. The cost of maintenance or repair will be distributed in accordance with Paragraph 4.1. 6.3 When it is determined that the water meter has registered incorrectly, an estimate of the amount of water furnished through the faulty meter shall be prepared by CITY'S Director of Finance for the purpose of billing PARTNERSHIP. The estimate shall be based upon the average of correct readings for the same or equivalent months in the -5- preceding three (3) years or such other method which would most accurately reflect the actual consumption for the period in which the meter failure occurred as can be mutually agreed upon by the City Manager and Plant Manager of the respective parties. VII. Rates 7.1 Charges for water furnished to PARTNERSHIP beginning on the date PARTNERSHIP designates to begin accepting water service through its 8 inch water meter through September 30, 1991, shall be as follows: (1) For all water received from the date PARTNERSHIP designates to receive water through its 8 inch meter through September 30, 1989, PARTNERSHIP shall be charged at a rate of 95<:: per 100 cubic feet. (2) Beginning October 1, 1989, through September 30, 1991, PARTNERSHIP shall be charged at a rate of 55<:: per 100 cubic feet, and in the event that in any month PARTNERSHIP does not use in excess of 1,800,000 cubic feet of water, PARTNERSHIP shall be charged a minimum amount for such month of $10,000.00, unless the failure to take 1,800,000 cubic feet of water was caused by CITY'S inability to deliver. -6- (3) The rate for water usage after October 1, 1991, shall be as determined by the cost of service study as described in Section 7.2. 7.2 Every three (3) years, a detailed revenue requirement shall be developed on an actual historical cost test year basis allowing for reasonable and necessary expenses of providing such water service and allowing for known and measurable adjustments. Such adjustments shall allow for year-end trending and the spreading of non-recurring expenses over an appropriate benefit period. CITY shall be allowed an adequate opportunity to .recover all of its cost of service. The first test year shall be October 1, 1989, through September 30, 1990, and the first detailed cost-of-service study shall be performed by an independent utility rate consultant engaged by CITY during the first two (2) calendar quarters of 1991 based on audited data for the immediate past six (6) months ended September 30, 1990. On a three (3) year cycle thereafter, a complete detailed rate study will be performed with the same methodology used in the previous rate study by an independent utility rate consultant engaged by CITY, except that the study shall be based on the entire test year rather than the last six (6) months. In the interim period between complete detailed rate studies, this contract water rate shall be adjusted by CITY using the same methodology adopted -7- at the time of the last complete detailed rate study, utilizing the actual operating data for the twelve month period ending September 30th of the prior year, adjusted for known and measurable changes in cost data which may have occurred since the last audited statement. VIII. Payment of Charges 8.1 User Charges under Article VII of this Agreement shall be billed by the CITY on a monthly basis with such billing being rendered on or about the same day each month. All such charges shall be due and payable on the tenth day following the billing date and shall become delinquent after the expiration of twenty-one (21) days following the billing date. In the event PARTNERSHIP shall fail to make any payment required by this Agreement wi thin twenty-one (21) days following the billing date, the CITY may suspend water service authorized by this Agreement after providing PARTNERSHIP five (5) working days written notice of its intention to suspend service. It is agreed that this section shall supersede Sections 34-29 and 34-30 of the Code of Ordinances of the City of Paris, to the extent that they concern water service, as well as any other Code of Ordinances provisions with which it may conflict. -8- IX. Legal 9.1 It is agreed that in the event and to the extent that fire, explosion, accident. war, act of God or the public enemy or any natural disaster prevents the per- formance of either party hereto, such party shall be relieved of the consequences thereof, ,and there shall be no liability for payment on the part of PARTNERSHIP or for failure to deliver potable 'water on the part of the CITY, notwithstanding any other provision of this Agreement, so long as and to the extent that performance is p~evented by such cause; provided, however, that the parties shall use all due diligence in their efforts to resume performance at the earliest practical time. 9.2 This Agreement shall be in force and effect through September 30, 2005. 9.3 No officer, official or agent of the CITY has the power to amend, modify or alter this agreement or waive any of its conditions or to bind the CITY by making any promise or representation not contained herein. 9.4 No officer, official or agent of the PARTNERSHIP has the power to amend, modify or alter this agreement or waive any of its conditions or to bind the PARTNERSHIP by making any promise or representation not contained herein. 9.5 This Agreement, except by operation of law, shall -9- not be assigned or transferred by either party, without the prior written consent of the other party; however, that PARTNERSHIP shall have the right to pledge or mortgage its rights hereunder as security for its indebtedness without approval of the CITY. 9.6 The CITY will not be responsible in damages for / any interruption or failure to supply water and shall be saved and held harmless from all damage of any kind, nature and description which may arise as a result of making this agreement and furnishing water hereunder, except where the CITY has the ability to supply the water and refuses so to do, or where the CITY has failed to abide by any of its obligations under this Agreement. 9.7 Any written notice required or permitted under the terms of this Agreement shall be given and be deemed to have been duly served if either (1) delivered in person, or (2) deposited certified mail, return receipt requested, postage prepaid in the United States mail, addressed to the desig- nated representative of the respective parties which are designated as follows: TENASKA III TEXAS PARTNERS CITY Plant Manager Tenaska III Texas Partners 301 Lake Crook Road P. O. Box 932 Paris, TX 75461 City Manager City of Paris P. O. Box 9037 Paris, TX 75461-9037 -10- With a copy to: Managing General Partner Tenaska III Texas Partners 407 North 117th Street Omaha, NE 68154 With a copy to: City Clerk City of Paris P. O. Box 9037 Paris, TX 75461-9037 9.8 If any term or provision of this Agreement shall be declared unconstitutional or void by any court of com- petent jurisdiction, the constitutionality and validity of the remainder of said Agreement shall not be affected thereby, and to this end the terms and provisions of said Agreement are declared to be severable. 9.9 Nothing contained in this Agreement shall be deemed or construed to create the relationship of principal and agent, partnership, joint venture, landlord and tenant, or any relationship or association whatsoever between CITY and PARTNERSHIP, other than as expressly set forth herein. 9.10 This Agreement sets forth the entire understanding between the parties, and any other understandings or agree- ments shall be cancelled and superseded by this Agreement upon the date of execution hereof. None of the terms of this Agreement shall be waived, discharged, altered or modified in any respect, except by an Agreement in writing signed by both parties and specifically referring to this Agreement. The captions in this Agreement are included for convenience only and shall not be taken into consideration in any construction or interpretation of this Agreement or any of its provisions. This Agreement shall be governed by, -11- construed and enforced in accordance with the laws of the State of Texas. The provisions of this Agreement shall apply to, bind and inure to the benefit of the CITY and PARTNERSHIP, and their respective successors, representatives and permitted assigns, if any. legal X. City's Authority to Contract 10.1 (a) The parties recognize and agree that Section 34-2 of the Code of Ordinances of the City of Paris requires that consumers or purchasers desiring water at minimum delivery pressure, particular flow rate, volume in excess of 1.5 million cubic feet per month, or which require con- struction of oversized additions to the City's distribution system, be delivered water pursuant to a written contract upon such terms, conditions and at such rate as may be fixed by the City Council of the City of Paris. (b) This Agreement is such a written contract. CITY OF PARIS Eric S. Clifford, Mayor ATTEST: Joe McCollum, Assistant City Clerk -12- APPROVED AS TO FORM: T. K. Haynes, City Attorney TENASKA III TEXAS PARTNERS, By Tenaska III Partners, Ltd., Managing General Partner By Tenaska III, Inc., Managing General Partner By: Howard L. Hawks, President ATTEST: Ronald N. Quinn, Secretary STATE OF TEXAS ~ COUNTY OF LAMAR ~ BEFORE ME, the undersigned authority, on this day personally appeared Eric S. Clifford, Mayor of the City of Paris, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of , 1989. . . Notary Public, State of Texas Printed Name: My Commission Expires: -13- STATE OF ~ ~ COUNTY OF BEFORE ME the undersigned authority, on this day personally appeared Howard L. Hawks, President of Tenaska, III, Inc., known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this , 1989. day of Notary Public, State of Texas Printed Name: My Commission Expires: -14-