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16-Water ManagementCITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: Originating Department: Presented By: Agenda Item No.: 06-17-2009 Council Date: City Manager Kevin Carruth 16. 06-22-2009 RECOMMENDED MOTION: Move to adopt a resolution authorizing a water service contract by and between the City of Paris and Marvin-Jennings-Clardy Water Corporation for the sale of potable water; and authorizing the City Manager to negotiate and execute all necessary documents POLICY ISSUE(S): Fiscal Management; Water Management The City of Paris has been furnishing water to Marvin-Jennings-Clardy (MJC) Water Corporation since 1990. The contract has expired and MJC has requested that the City of Paris continuing furnishing water. Although MJC pays the standard commercial/industrial class rate, TCEQ requires MJC to document that they have a guaranteed supply of water. The proposed water service contract is for a fifteen year initial term, with two five year renewal options and is for the standard contract rate. BOARD/COMMISSION RECOMMENDATION: NONE EXHIBITS: Resolution and Agreement. ACTION: BUDGET INFO: Fj Financial Report ❑ Minute Order Expense ~ Department Report Z Resolution Budgeted Amt. ❑ Presentation ❑ Ordinance yTD Actual ❑ Public Hearing ❑ Other Acct. Name Acct. Number FISCAL NOTES: None REVIEWED AND APPROVED BY: Z Administration Z City Clerk ❑ Community Development ❑ EMS/IT E Finance ❑ Fire ❑ Municipal Court E Legal ❑ Library ❑ Police E Eng./Public Works ❑ Utilities City of Paris r, Revised 2/04/08 N 000198 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, APPROVIIVG AND ACCEPTING THE TERMS AND CONDITIONS OF A WATER SERVICE COIVTRACT BY AND BETWEEN THE CITY OF PARIS AND MARVIN-JENNING-CLARDY WATER CORPORATION FOR THE SALE OF POTABLE WATER; AUTHORIZING ITS EXECUTION BY THE CITY MANAGER; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDIIVG AN EFFECTIVE DATE. WHEREAS, the City of Paris has been since 1990 furnishing water to Marvin- Jennings-Clardy Water Corporation (MJC) under the terms of a Water Service Contract; and, WHEREAS, the Water Service Contract with MJC has expired and the City Council of the Ciry of Paris did heretofore authorize the negotiation of a new Water Service Contract between the City of Paris and JMC; and, WHEREAS, upon full review and consideration of the Agreement, and all matters attendant and related thereto, the City Council is of the opinion that the terms and conditions thereof should be approved, and that the City Manager, shall be authorized to execute it on behalf of the City of Paris. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved. Section 2. The terms and conditions of the Agreement, having been reviewed by the City Council of the City of Paris and found to be acceptable and in the best inerests of the City of Paris and its citizens, are hereby in all things approved. Section 3. The City Manager, is hereby authorized to execute the Agreement and all other documents in connection therewith on behalf of the City of Paris, substantially according to the terms and conditions set forth in the Agreement attached hereto as Exhibit «A,) Section 4. This resolution shall become effective immediately upon its passage. 1 UUG19y DULY PASSED AND APPROVED this 131h day of July, 2009. Jesse James Freelen, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Kent McIlyar, City Attorney M 000200 STATE OF TEXAS § COUNTY OF LAMAR § WATER SERVICE CONTRACT That this Agreement, made and entered into this 13th day of July, 2009, and executed in quintuple originals, each executed copy constituting an original, by and between the City of Paris, A Texas home-rule a municipal corporation, hereinafter referred to as CITY and Marvin-Jennings-Clardy Water Corporation, a Texas corporation, whose mailing address is P. 0. Box 95, Pattonville, Texas 75468, hereinafter referred to as MJC. WITNESSETH: 1. Service to be Furnished 1.1 Subject to the terms and conditions contained herein, the CITY agrees to make available and MJC agrees to purchase and receive a supply of potable water for use and resale in its designated water district, as defined by its certificate of convenience and necessity on file with the Texas Commission on Environmental Quality ("TCEQ"). Said supply of water shall be furnished through a four-inch composite meter located near the intersection of FM 905 and FM 1507 at the Northeast corner of said intersection adjacent to the East right-of-way line of FM 905 ("Supply Delivery Point") 1.2 The potable water furnished shall be used exclusively for supplying residential and retail commercial customers of MJC. MJC agrees that it will not furnish or sell potable water obtained from the CITY to any wholesale or industrial customers. II. Term 2.1 The term of this Contract is for a fifteen (15) year initial term beginning on the 1st day of August, 2009, and ending on the 31s' day of July, 2024, with two (2) five (5) year renewal options. Water Service Contract - Page 1 of 8 EXHfBI?` A_ W 000201 III. Quantities to be Furnished 3.1 In consideration of the terms contained herein, the CITY agrees to provide a supply of potable water to MJC to meet all reasonable daily requirements of MJC, but not to exceed a daily maximum of 300,000 gallons per day. Should additional quantities of water be required by MJC during the term of this Agreement or any renewals thereof, the parties agree to negotiate an amendment to this Agreement. The water delivered to MJC shall be at a minimum pressure of thirty-five (35) pounds per square inch as required by State law. MJC will advise the CITY of any planned changes that would significantly affect the amount of water needed by MJC for any extended period of time. MJC will advise the CITY of any plant failure, line rupture or other major water loss, that will, on an emergency basis, require a significant increase in the supply of water from CITY. IV. Regulations 4.1 MJC may not permit any water furnished hereunder to be sold or supplied to industrial or wholesale commercial customer without specific approval of the Paris City Council, and written authorization from the Paris City manager. Under emergency circumstances, MJC may provide emergency service to any other water system on a temporary basis (until emergency ends); however, CITY should immediately be notified of such emergency service being provided. V. Rights 5.1 The CITY reserves the right to inspect, test, repair and replace the water meter at the supply delivery point as necessary. The cost of all tests, inspections, repairs or replacements to the meter shall be funded and paid 50% by City and 50% by MJC. 5.2 In the event MJC desires to change it's connection or meter size, the cost of such meter and installation thereof will be funded and paid 100% by MJC. 5.3 In the event of the CITY annexes an area within its extraterritorial jurisdiction currently being served by MJC, CITY may continue to permit residences in such area to be Water Service Contract - Page 2 of 8 ■ 000202 served by MJC during the term of this Agreement, or the CITY may at its expense, extend the CITY's water system into such area and require residents who are served by CITY's wastewater system to connect to CITY's water system. VI. Water Ouality 6.1 The CITY shall supply MJC with a supply of potable water of a quality equal to or exceeding the State of Texas minimum water quality standards for water supplied for public use. 6.2 The CITY shall provide upon request, a copy of the most recent comprehensive chemical analysis report of the CITY's treated water supply. 6.3 The CITY assumes no responsibility for the water quality at any point beyond the supply delivery point described in Article I. MJC bears the responsibility for maintaining the water quality at any point beyond the supply delivery point and within MJC's distribution system. 6.4 MJC shall notify and keep the CITY informed of persons responsible for the integrity of MJC's distribution system. 6.5 The parties agree that in the event of an emergency or occurrence which may affect the quality or quantity of water in either party's system to notify the other party immediately by contacting the designated representative of the party.. 6.6 The CITY reserves the right to make inspections and to conduct tests of those MJC water treatment facilities, storage or distribution facilities which may affect the quality of the water supplied to MJC. VII. Equi,pment and Operation 7.1 MJC shall be solely responsible for maintaining in working order the valve located approximately 100 feet downstream from the supply delivery point and all lines and valves on MJC's side of the meter vault throughout its distribution system. The CITY shall also have access to operate the valve referenced above to protect the CITY's water system from contamination in the event of MJC's system becoming contaminated, or in the event the Water Service Contract - Page 3 of 8 M 000203 integriry of MJC's system is violated. MJC's valve may also be used by CITY to protect MJC's water system or to facilitate repair of CITY's water system. 7.2 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. In the event the meter is not functioning properly, the CITY may repair or replace the meter at the CITY's discretion. In the event the meter must be replaced, CITY and MJC will agree upon a replacement meter and the method of replacement. The cost of maintenance or repair of the meter shall be shared equally by MJC and the CITY in accordance with Paragraph 5.1. 7.3 When it has been determined that the water meter has registered incorrectly, an estimate of the amount of water furnished through the faulry meters shall be prepared by CITY's Director of Finance for the purpose of billing MJC. The estimate shall be based upon the average of correct readings for the same or equivalent months in the preceding year 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 MJC's President or designated representative of the respective parties. VIII. Rates 8.1 For the water received under this contract, MJC agrees to pay CITY the Commercial/Industrial Class rate, as provided in Section 34-22 of Chapter 34 of the City of Paris Code of Ordinances, as amended. The parties further agree that this rate may be amended annually by the Paris City Council based upon the results of the Water and Sewer Cost of Service Study. This rate includes a base charge for the first 100,000 cubic feet of water supplied and a service charge for each additiona1100 cubic foot of water supplied. IX. Payment of Charges 9.1 User Charges under Article VIII 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 Water Service Contract - Page 4 of 8 1 Q0UG6~ become delinquent after the expiration of twenty-one (21) days following the billing date. In the event MJC 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 this Agreement after providing MJC five (5) working days written notice of its intention to suspend service. It is agreed that this section shall supersede Section 34-30 of the Code of Ordinances of the Ciry of Paris, as well as any other City Ordinances that may conflict with this section. X. Force Majeure 10.1 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 parry shall be relieved of the consequences thereof, and there shall be no liability for the CITY's failure to deliver potable water during the force majeure event or for MJC's failure to meet its contractual requirements during the force majeure event; provided, however, that the parties shall use all due diligence in their efforts to resume performance at the earliest practical time. 10.2 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 without action by the Paris City Council. 10.3 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. 10.4 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. 10.5 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 designated representative of the respective parties which are Water Service Contract - Page 5 of 8 - 0Of!20,15 designated as follows: MLC President Marvin-Jennings-Clardy P. 0. Box 95 Pattonville, TX 75468 With a copy to: Secretary Marvin-Jennings-Clardy P. 0. Box 95 Pattonville, TX 75468 CITY City Manager City of Paris P. 0. Box 9037 Paris, TX 75461-9037 With a copy to: City Clerk City of Paris P. 0. Box 9037 Paris, TX 75461-9037 10.6 If any term or provision of this Agreement shall be declared unconstitutional or void by any court of competent jurisdiction, the constitutionaliry 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. 10.7 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 MJC, other than as expressly set forth herein. 10.8 This Agreement sets forth the entire understanding between the parties, and any other understandings or agreements shall be canceled 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. 10.9 This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas, and it is performable in Lamar County, Texas. The parties further agree that exclusive venue shall lie in Lamar County Texas. Although this Agreement is drafted by the City should any part be in dispute, the parties agree the Agreement shall not be construed more favorable for either party. Water Service Contract - Page 6 of 8 w 00li2')6 XI. Citv's Authority to Contract 11.1 (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 construction 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 Ciry Council of the City of Paris. (b) This Agreement is such a written agreement. 11.2 The provisions of this Agreement shall apply to, bind and inure to the benefit of the CITY and MJC, and their respective successors, legal representatives and permitted assigns, if any. CITY OF PARIS, TEXAS Kevin Carruth, City Manager ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: W. Kent McIlyar, City Attorney MARVIN-JENNINGS-CLARDY WATER CORPORATION Wally Kraft, President ATTEST: Monda Fults, Secretary Water Service Contract - Page 7 of 8 . co0z0"i THE STATE OF TEXAS } COUNTY OF LAMAR } BEFORE ME, the undersigned authority, in and for said County, Texas, on this day personally appeared Kevin Carruth, City Manager 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 2009. Notary Public, State of Texas THE STATE OF TEXAS } COUIVTY OF LAMAR } BEFORE ME, the undersigned authority, in and for said County, Texas, on this day personally appeared Wally Kraft, President, Marvin-Jennings-Clardy Water Corporation, 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 , 2009. Notary Public, State of Texas Water Service Contract - Page 8 of 8