Loading...
2004-067-RES AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A WATER PURCHASE CONTRACT WITH THE CAMPBELL SOUP COMPANY RESOLUTION NO. 2004-067 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A WATER PURCHASECONTRACTWITHC~BELLSOUPCOMWANY;MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, Section 34-22(a) of Chapter 34 of the Code of Ordinances of the City of Paris, Texas, specifies that charges for water furnished by the City to certain high volume water users pursuant to a written contract shall be as established in said contract rather than as established in the City's Code of Ordinances; and, WHEREAS, Campbell Soup Company has, for an extensive number of years, purchased the high volumes of water necessary to run its processes by and through a written water contract with the City of Paris; and, WHEREAS, the City and Campbell Soup Company have completed negotiation of a new water contract to establish the rates, terms, and conditions for the future sale of water to Campbell Soup Company; and, WHEREAS, the proposed new water purchase contract allows Campbell Soup Company to establish its anticipated maximum daily demand for water use, thereby affording the company the opportunity to establish its water demands in a manner best suiting the operations of its facility in Paris, Texas; and, WHEREAS, the City Council of the City of Paris and Campbell Soup Company desire to establish methodology in the new water purchase contract that would allow the company to maximize the efficient use of water relative to the rate charged for such water; and WHEREAS, the City Council finds and determines that the proposed new water purchase contract is in the best interest of the City of Paris; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the Mayor shall be and is hereby authorized to execute and the City Clerk to attest to a new water purchase contract by and between the City of Paris and Campbell Soup Company, a copy of which is attached hereto and for all purposes incorporated herein as Exhibit A. Section 3. That this resolution shall be effective from and after its date of passage. PASSED AND APPROVED this 12th day of April, 2004. ATTEST: ~s.:. L~.._~ Mattie Cunningham, City Clerk APPROVED AS TO FORM: () I WATER PURCHASE CONTRACT STATE OF TEXAS COUNTY OF LAMAR ~ ~ KNOW ALL MEN BY THESE PRESENTS: This Agreement, made and entered into this 12th day of April, 2004, 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 Campbell Soup Company, a New Jersey corporation, with a plant located in Paris, Lamar County, Texas, hereinafter called CAMPBELL. WITNESSETH: I. Service To Be Furnished 1.1 The CITY agrees to furnish and CAMPBELL 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 the existing service by means of an 18 inch Foxboro magnetic flow tube 8300 Series, Model No. 8318- SEBA-ASJ-GCGZ, Reference No. 94281312 (or such other similar metering device as shall be appropriate for accurate measurement of the flow), and an 18 inch Foxboro magnetic flow tube M/2800 Series, Model No. 2818 SEA-TSA-G STB, Reference No. 5498649 CS-2/FN-F (or such other similar metering device as shall be appropriate for accurate measurement of the flow), connected to the CITY's 30 inch potable water transmission line approximately 1 mile North of CITY's Ground Storage and Booster pumping facility. Should the need arise to replace either meter herein described, it is agreed that such may be so replaced without amendment to this Agreement by giving notice of the name and number of the new meter as herein provided. Water Purchase Contract - Page 1 EXHIBIT .A.. 1.2 The potable water furnished shall be used exclusively for the operation of CAMPBELL's manufacturing plant on the North side of Loop 286 N. W. within the corporate limits of the City of Paris. II. Ouantities To Be Furnished 2.1 The average daily supply of water furnished shall meet all reasonable requirements of CAMPBELL, subject to such limitations and rates as are stated herein. The average monthly consumption, at this time, is in excess of eleven (11) million cubic feet. The water delivered to CAMPBELL 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. In no instance shall CAMPBELL require delivery of water under this Agreement in an amount exceeding 8 million gallons per day, or at a rate exceeding 6000 gallons per minute. 2.2 CAMPBELL will advise the CITY in advance in writing a minimum of sixty (60) days prior to the implementation of any planned changes that would significantly affect the amount of water used by CAMPBELL for any extended period of time. For the purpose of this Agreement, a significant effect would be a change that would cause or contribute to Campbell's water consumption varying by 10% or more on an average daily basis. For any changes such as these, the CITY will maintain the right to limit any increase in water sold to CAMPBELL if it would adversely impact the integrity of the CITY's water system. The CITY would then work with CAMPBELL, in good faith, to meet CAMPBELL's water needs. III. Reeulations 3.1 CAMPBELL may not permit any water furnished hereunder to be used to supply any other party without specific written approval of the City Council of the CITY. This shall not apply to emergency service provided to other CITY water users. Water Purchase Contract - Page 2 IV. Riehts 4.1 The CITY reserves the right to inspect, test, repair and replace the water meter(s) used to measure CAMPBELL's water consumption as required. Such replacement, calibration or repair shall be paid one half by CITY and one half by CAMPBELL. 4.2 The CITY and CAMPBELL each reserve the right, either in law or in equity, by suits, mandamus or other proceeding, to enforce or compel performance of any or all covenants herein contained. V. Water quality 5.1 The CITY shall supply CAMPBELL with water of quality equal to or exceeding the State of Texas drinking water quality requirements for drinking water supplied for public areas. 5.2 The CITY shall supply monthly, if requested by CAMPBELL, a water quality analysis report of the water supplied to CAMPBELL. CAMPBELL may request the report more frequently, but will pay the cost of analysis for any additional reports generated in excess of one per month. 5.3 The CITY bears no degree of responsibility for the water quality at any point beyond the meter(s) used to register CAMPBELL's water consumption. CAMPBELL bears the responsibility for maintaining the water quality at any point beyond the meter(s) vault and within CAMPBELL's distribution system. 5.4 CAMPBELL shall notify and keep the CITY informed of persons responsible for the integrity of CAMPBELL'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. Water Purchase Contract - Page 3 Water Purchase Contract - Page 4 accordance with paragraph 4.1. A representative of CAMPBELL will be notified in advance of any testing and/or calibration and shall have the right to witness any such testing. All testing will be performed by a factory representative or mutually agreed upon testing service. 6.4 When it is determined that a 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 or crediting CAMPBELL. The estimate shall be based upon the average of correct readings for the same or equivalent months in the preceding three (3) years, or if available and in lieu of said three (3) year average, based on such other method which would more accurately reflect the actual consumption for the period in which the meter failure occurred as mutually agreed upon by the City Manager and Plant Manager of the respective parties. 6.5 For the meter(s) to be determined as "registering incorrectly," the meter(s) must be found to be in error by plus or minus 2.5%, or greater. If the degree of error is plus or minus 2.5%, or greater, then the estimated amount of water furnished to CAMPBELL will be calculated as stated in the immediately preceding paragraph. VII. Rates 7.1 For purposes of billing under this Agreement, a day shall be that period of time beginning at 12:00 midnight and continuing through 11 :59 p.m. 7.2 CAMPBELL will be charged a two-part rate based on CAMPBELL I S treated water consumption and Maximum Day Demand. 7.3 Charges for treated water furnished to CAMPBELL during the Initial Period of this Agreement shall be from the date of execution through May 31, 2004 and have been computed as follows: Water Purchase Contract - Page 5 7.3.1 An annual demand charge per million gallons per day (MOD) of Maximum Day Demand of water delivered to CAMPBELL shall be $72,000 per MGD. 7.3.2 The volumetric charge shall be $0.45 per 100 cubic foot of treated water withdrawn by CAMPBELL from the CITY's water utility system. 7.4 For the Initial Period, CAMBELL's Maximum Day Demand shall be established at 6.0 MOD. 7.5 Each twelve (12) month period following the Initial Period, beginning June 1 and ending May 31 of the following year, shall be defined as a "Rate Year." 7.6 For cost of service studies following the Initial Period, and except for data associated with the Maximum Day Demand, historical data accumulated during each twelve-month period ending September 30 of the prior year, hereafter referred to as the "Test Year," shall be used. 7.7 Prior to the end of the Initial Period, a detailed Cost of Service Study will be performed by an independent utility rate consultant chosen by the CITY, such study to be performed in accordance with the methodology described in that excerpted portion of the Reed, Stowe & Yanke, LLC study, March, 2003, attached as Exhibit 1. The Cost of Service Study shall be developed on an actual historical cost test year basis (for the Test Year) allowing for reasonable and necessary expenses of providing such water service and allowing for known and measurable adjustments, including satisfying the City's obligations under current and future bond covenants. Thereafter, on an annual cycle, a detailed Cost of Service Study shall be performed by an independent rate consultant chosen by the CITY, again using the same methodology as the excerpted portion of the Study in Exhibit 1, unless and until a different methodology is mutually agreed upon in writing by CAMPBELL and the CITY. CAMPBELL shall pay one-half ('h) the cost of each annual Cost of Service Study, payable within thirty (30) days of CAMPBELL's receipt of invoice from the CITY. Water Purchase Contract - Page 6 7.8 During the Initial Period and any given Rate Year, should CAMPBELL I S actual Maximum Day Demand exceed the Maximum Day Demand used in the most recent Cost of Service Study, Campbell's will be assessed an excess demand charge of 1.5 times the Annual Demand Charge (per MGD) times the Excess Demand. Payment of the Excess Demand Charge shall be due thirty (30) days within receipt of invoice from the CITY. Beginning the month after this event, this event will also immediately change CAMPBELL's current Maximum Day Demand and Monthly Demand Charge for this Agreement to the new actual Maximum Day Demand and adjusted Monthly Demand Charge. AS AN EXAMPLE, ADJUSTMENTS FOR AN INCREASE FROM A MAXIMUM DAY DEMAND OF 6.0 MGD TO A MAXIMUM DAY DEMAND OF 6.5 MGD ARE CALCULATED IN THE EXAMPLE GIVEN BELOW. Example: Maximum Day Demand Annual Demand Charge (per MGD) Total Initial Annual Demand Charge ($72,000 x 6 MGD) Monthly Demand Charge ($432,000/12 months) 6MGD $ 72,000 $432,000 $ 36,000 Actual demand recorded Excess Demand (6.5 MGD - 6 MGD) 6.5 MGD 0.5 MGD Excess Demand Charge ($72,000 x 1.5 x 0.5 MGD Excess Demand) Additional amount due CITY in thirty (30) days $ 54.000 $ 54,000 Annual Demand Charge (Per MGD) Adjusted Total Annual Demand Charge ($72,000 x 6.5 MGD) Adjusted Monthly Demand Charge ($468,000/12 months) $ 72,000 $468,000 $ 39,000 Should the new Maximum Day Demand again be exceeded during a given Rate Year, similar calculations and a designation of a new Maximum Day Demand for the Rate Year shall be made. Water Purchase Contract - Page 7 The highest Maximum Day Demand in a given Rate Year that exceeds the current Maximum Day Demand shall be used as the Maximum Day Demand in the subsequent year's cost of service study, unless a higher Maximum Day Demand is requested by CAMPBELL and accepted by the CITY. Example: Maximum Day Demand (initial estimate) Maximum Day Demand (Actual) Maximum Day Demand for subsequent cost of service study 6.0 MGD 6.5 MGD 6.5 MGD If a higher Maximum Day Demand than actually experienced is requested by CAMPBELL, and accepted by the CITY, CAMPBELL I s Total Annual Demand Charge will be the Annual Demand Charge (per M GD), calculated using the actual Maximum Day Demand for the subsequent cost of service study, times the requested Maximum Day Demand. 7.9 CAMPBELL I s volumetric rate shall be based on CAMPBELL I S treated water consumption during the twelve-month prior Billing Year, adjusted for any known and measurable changes. 7.10 The following example illustrates the calculation of CAMPBELL's Annual Demand Charge (per MGD) and volumetric rate under this Agreement. Example: CAMPBELL I s Extra Capacity costs CAMPBELL's Maximum Day Demand (MGD) CAMPBELL's Annual Demand Charge (per MGD) $ 432,000 -:- 6.0 $ 72,000 CAMPBELL I S Base and Customer costs CAMPBELL I S water consumption (CCF) CAMPBELL I s volumetric rate (per CCF) $ 540,000 -:- 1.200.000 $ 0.45 VIII. Payment of Charees 8.1 Rates under Article VII of this Agreement, for CAMPBELL I S treated water consumption, shall be billed by the CITY on a monthly basis with such billing being rendered on or about the same day each month. CAMPBELL's monthly payment shall consist of the volumetric charge for actual water Water Purchase Contract - Page 8 taken plus one-twelfth of the Annual Demand Charge, plus any additional amount due as calculated under Article VII of this Agreement for an adjustment to the Maximum Day Demand. In the event CAMPBELL shall fail to make any payment required by this Agreement within twenty-one (21) days following the billing date, the CITY may suspend water service authorized by the Agreement after providing CAMPBELL five (5) working days written notice of its intention to suspend service. It is agreed that this paragraph 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 Ordinance provisions with which it may conflict. IX. Force Majeure and Contract Administration 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 performance of either party hereto, such party shall be relieved of the consequence thereof, and there shall be no liability for payment on the part of CAMPBELL or for failure to deliver potable water on the part of the CITY, notwithstanding any other provision of the Agreement, so long as and to the extent that performance is prevented 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 subject to and in all things governed by Article V, Chapter 34 of the Code of Ordinances of the City of Paris, dealing with Drought Contingencies, or any other similar provisions as the same shall be adopted by the City dealing with water conservation, water curtailment, or drought contingencies. 9.3 This Water Purchase Contract will replace in its entirety the Water Purchase Contract dated October 1, 1993, entered into between the CITY and CAMPBELL, and this Agreement shall be in force and effect for a period of three (3) years in addition to the Initial Period as defmed in Paragraph Water Purchase Contract - Page 9 7.3 hereof, ending May 31, 2007. Thereafter such Agreement shall be automatically renewable for additional one (1) year terms, unless either party provides written notice to the other party of intent to negotiate a new contract, such notice to be given at least ninety (90) days prior to the end date of the then current term. Thereafter, a new service contract will be negotiated, provided this Agreement shall remain in full force and effect for a period not to exceed twelve (12) months or until a new contract is negotiated, whichever event occurs first. If a new contract is not negotiated as provided herein, the rate charged for water shall be as established in the CITY's current rate ordinance for non-residential customers. 9.4 No officer, official or agent of the CITY or CAMPBELL, has the power to amend, modify or alter this Agreement or waive any of its conditions or to bind the CITY, or CAMPBELL, by making any promise or representation not contained herein. 9.5 This Agreement, except by operation of law, shall not be assigned or transferred by either party, without the prior written consent of the other party. 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 to do so 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 the Agreement shall be given and be deemed to have been duly served if either (1) delivered in person (including reputable overnight courier service), or (2) deposited certified mail, return receipt requested, postage prepaid in the United States mail, addressed to the designated representative of the respective parties which are designated as follows: Water Purchase Contract - Page 10 CAMPBELL Vice President, Southwest Region Campbell Soup Company P. O. Box 116 Paris, TX 75461-0116 CITY City Manager City of Paris P.O. Box 9037 Paris, TX 75461-9037 With a copy to: Secretary Campbell Soup Company P. O. Box 391 Camden, New Jersey 08101 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 competent jurisdiction, the constitutionality and validity of the remainder of said Agreement shall not be affected hereby, 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 CAMPBELL, other than as expressly set forth herein. 9.10 This Agreement sets forth the entire understanding between the parties, and any other understandings or agreements 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, 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 CAMPBELL, and their respective successors, legal representatives and permitted assigns, if any. Water Purchase Contract - Page 11 X. Authority to Contract 10.1 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 construction of oversized additions to the CITY's 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. This Agreement is such a written contract. EXECUTED by the City of Paris, Texas this _ day of , 2003. CITY OF PARIS, PARIS, TEXAS Curtis Fendley, Mayor ATTEST: Mattie Cunningham, City Clerk EXECUTED by Campbell Soup Company this _ day of , 2003. CAMPBELL SOUP COMPANY , Vice President - Mfg., Paris Operations ATTEST: , Secretary Water Purchase Contract - Page 12