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HomeMy WebLinkAbout2014-303 Agrmt - Medford Water Commission WHOLESALE WATER SERVICE AGREEMENT THIS WATER SERVICE AGREEMENT (Agreement), made and entered in duplicate to commence on the first day of October, 2014, between the City of Ashland, a municipal corporation of the State of Oregon, acting as purchaser (Ashland), and the City of Medford, a municipal corporation of the State of Oregon, acting by and through its Board of Water Commissioners, acting as vendor (MWC), together referred to as the Parties. RECITALS: 1) MWC is an entity established under the Home Rule Charter (Charter) adopted by the citizens of the City of Medford, comprised of five citizens appointed by the Mayor and confirmed by the City Council, to manage the Water Fund for the purpose of supplying inhabitants of the City of Medford with water; and 2) Under Section 19 of the Charter, the MWC is authorized to sell water and/or supply facilities outside the legal boundaries of the City of Medford, only if said water and/or supply facilities are surplus to the needs of the inhabitants of the City of Medford, and meet certain conditions of MWC Resolution No. 1058; and 3) Under the Charter, the MWC is authorized to set rates for City of Medford inhabitants, and to make all necessary rules and regulations for the sale, disposition and use of water and water service from the City of Medford water system, and the MWC has adopted such rules and regulations; and 4) Per the MWC's projections, reports and plans, the MWC finds it has surplus water and supply facilities capacity available in its system to serve Ashland; and 5) Ashland desires to purchase surplus treated and transported water from MWC from October through April, and purchase surplus supply facilities treatment and transport services for Ashland's own water appropriated under Ashland's own state-issued water rights from May through September; NOW, THEREFORE, for and in consideration of the foregoing and of the mutual promises herein, the Parties mutually agree as follows: Water Service Agreement - City of Ashland Page 1 of 9 AGREEMENT: ARTICLE 1. SCOPE OF SURPLUS WATER SUPPLY AND SERVICE Subject to Article 3 of this Agreement, MWC agrees to supply surplus water up to a combined (from all connections) maximum of 1480 gallons per minute (GPM) for the months of October through April, and surplus facilities capacity to treat and transport water up to a combined (from all connections) maximum of 1480 GPM for the months of May through September. Ashland agrees to provide sufficient water storage as part of its water system to assure that the maximum rate of withdrawal in GPM by Ashland is not exceeded. Upon written request by Ashland, this Agreement may be amended to provide supplemental supply and service to Ashland if MWC determines that it has surplus capacity for Ashland's use, and Ashland agrees to reimburse MWC the reasonable cost of providing such supplemental supply and service. ARTICLE 2. ASHLAND DISTRIBUTION SYSTEM EMERGENCY Upon notice to MWC by Ashland of a distribution system emergency, MWC will use its best efforts to provide supplemental water supply or services during the emergency. For purpose of this agreement, "distribution system emergency" means: Any human or natural caused event that disables or impairs the distribution system such that its use constitutes an immediate threat to human life or health. ARTICLE 3. MWC CONNECTIONS MWC owns and is responsible for the construction, extension, maintenance, and operation of the MWC system up to the point of and including the master Ashland meter. Ashland shall pay all costs of connections to the MWC system including initial metering, initial and ongoing backflow protection, and annual testing of the backflow device, all in accordance with MWC standards. MWC shall monthly read and annually test the master meter and provide readings and test results to Ashland. Ashland's water supply is provided by the following master meter(s) with backflow connections to MWC: • 10" Rosemount Tube Mag Meter at the Talent-Ashland-Phoenix (TAP) Pump Station on Samike Drive, Medford, Oregon Water Service Agreement - City of Ashland Page 2 of 9 Temporary emergency connections to MWC with prior approval can be provided at the following location(s): N/A The following special conditions concerning connections to MWC apply: • The water supplied by MWC is an emergency source for Ashland, and is limited under this agreement to 2.13 million gallons per day (MGD), after having paid, or arranged to pay, all System Development Charges (SDCs) for that amount. In the future, Ashland can request up to a total of 3.0 MGD by paying future SDC rates on the remaining 0.87 MG. • MWC acknowledges Ashland's right to exchange and transfer water between the cities of Ashland, Talent and Phoenix, Oregon, within the total cumulative contracted GPM of all three noted cities served through TAP and their individual wholesale customer agreements with MWC. ARTICLE 4. MWC REGULATIONS Water service under this Agreement shall be in accordance with Section 30 SURPLUS WATER and Section 31 PROVISIONS RELATING TO UTILITY AND MUNICIPAL CUSTOMERS of the MWC Regulations Governing Water Service (Regulations), as now in effect or as may be amended. If there is any inconsistency between this Agreement and the Regulations, the Regulations control. Notwithstanding the foregoing, nothing herein is intended to relieve MWC of its obligation to supply surplus water in accordance with the terms of this Agreement, except as dictated by Federal/State regulations outside the control of MWC. The Parties acknowledge that implementation of this Agreement and the Regulations are subject to federal or state directives. MWC shall promptly provide Ashland a copy of any amendments to the Regulations. ARTICLE 5. URBANIZATION POLICY Water Service Agreement - City of Ashland Page 3 of 9 +v +t, rninnnr 1F CITY], vr as Vt c h s + ngbif MWE ThP GIFFeR m~rrc~rzz rrc-~rmTV-rrrn~rrr cC W F 5 e appCv ~ 1 n W CI zl - CITY] is attaehed to this AgFeemeRt as Exhibit A. [NAME OF CITY] shall PFE)FIAPtly RE) MWC ARTICLE 6. MEETING FUTURE WATER DEMANDS Water and water services provided by MWC under this Agreement are pursuant to water rights held by the MWC and Ashland. Nothing in this Agreement shall be construed to confer upon either party a legal or beneficial interest in each other's water rights, or to prevent either party from seeking additions or alterations to their water rights as deemed necessary. Ashland shall acquire and maintain such water rights as needed to meet the demand within its service area during the months of May through September. Ashland may use the MWC intake facility, located at the intersection of Table Rock Road and the Rogue River in White City, as the designated point of diversion for Ashland water rights. MWC shall cooperate in the perfection of any Ashland water rights. Ashland currently holds water rights with a diversion point on the Rogue River at the MWC Intake Facility site at the rate of NSA cubic feet per second and volume of 1000 acre feet. Delivery of such Ashland water through MWC facilities shall be subject to the same terms and conditions as delivery of surplus MWC water. MWC shall measure and record at its Robert A. Duff Water Treatment Plant the amount of water withdrawn from the Rogue River by MWC and its municipal water service customers under each of their respective water rights. In its monthly water service invoice, MWC shall provide water use data for Ashland. [NAME QF QT-Yj hall .,r„ ,i,-„ WAIC Updated '''°"'aRd "r"i""+i""` ARTICLE 7. SYSTEM DEVELOPMENT CHARGES Pursuant to Resolution No. 774, MWC has established Water System Development Charges (SDCs) and supporting methodology to finance future MWC transmission and treatment facilities expansions. SDC apply + all " °+^"'^r°, ` clod'"^ euste ""r` Of w"'" Gipal ;Afhele-sale eustemeFs seFved by MWC. [NAME OF CITY] shall celleet SDCs set by M~.AIG frn-rn RP-IN [NAME OF CITY1 eust,,,,.,,,rS MWC reviews the SDCs annually and reserves the right, in its sole discretion, to modify or replace the SDCs with a different financing mechanism for system improvements. All SDCs colleeted by [NAME OF CITY] will be held in a sepaFate aeeewnt and feFwaFded te MWG aleng with an accountiRg of the numbeF and sizes of the seFviees installed. [NAME OF CITY] shall PFOVide MWC with a copy ef the sectien 4vithim the annual [NAME OF CIT-yj -;;ud-it t-h;;t Water Service Agreement - City of Ashland Page 4 of 9 [NAME OF CITY] an annual aecounting ef all SDCs c:ellected. MWC utilizes a utility basis for determining the water usage rate it charges Ashland. Under this rate analysis, Ashland is required to pay a return on investment for its share of the facilities paid for by MWC. Facilities funded by SDCs shall not be included in the return on investment portion of the rate analysis. defend [NAME OF CITY1 agaiRst any legal aaie-n OF appeals whieh May aFise 9yeF the development, methedelegy, er knplementatien of the S^Cs [NAME OF CITY] shall eeeperate and suppert MWC= in the defense, but shall Ret be obligated to *RGUF any FnenetaFy 9131ffigatiGA sueh defense. Upon termination of this Agreement, the following refund policy shall apply: (a) MWC shall return to Ashland its prorated share of the unexpended balance of the SDCs fund. This prorated share shall be based upon the actual unexpended SDCs collected by Ashland for the specific facilities funded by the SDCs, plus the interest earned. (b) MWC shall return to Ashland a prorated share of the depreciated plant value of the specific MWC facilities funded by the SDCs and already installed. The prorated share shall be a percentage based upon the total amount of SDCs paid by Ashland divided by the total SDCs collected and used to fund the facility, not including interest earned during the years in which the SDCs were collected. (c) In order to avoid a financial hardship, MWC shall develop a reasonable schedule of up to five (5) years for repayment of the depreciated value of the specific MWC facilities funded by the SDCs. (d) At the request of Ashland, the MWC shall provide an accounting of the refunds made pursuant to this section. ARTICLE 8. PAYMENTS TO MWC Ashland shall pay monthly for all water and services provided by MWC at MWC's scheduled wholesale rates then in place. Payment shall be made within ten (10) days after the meeting of the Ashland's Council following receipt by Ashland of a statement of charges from MWC. MWC reserves the right, in its sole discretion, to change (with prior written notification of a rate study review) said rate at any time upon sixty (60) days written notice to Ashland, following rate procedures and protocols in the MWC Regulations. Water Service Agreement - City of Ashland Page 5 of 9 ARTICLE 9. TERM OF AGREEMENT This term of this Agreement shall be two (2) years from its commencement. Ashland may, at its option, extend the term for three additional five-year periods, which periods would run through October of 2021, 2026, and 2031 respectively. Extensions shall be subject to the same terms and conditions as this Agreement. Written notice of the election to exercise a five-year extension of this Agreement must be given to MWC not later than January 1st of the year in which the Agreement would otherwise expire. If Ashland fails to provide MWC such notice, this Agreement shall be deemed canceled at the end of the term then in effect. MWC shall continue service for a reasonable period, determined in MWC's sole discretion, to allow Ashland to secure other sources of water. Provided, however, Section 19 of the Charter of the City of Medford limits the term of water service contracts to 20 years and, therefore, the obligations of MWC under this Agreement, including renewal periods, shall not exceed that period of time. ARTICLE 10. ASSIGNMENTS Ashland shall make no assignment of this Agreement without written permission from MWC. Any approved assignee or successor shall agree to be bound by the terms and conditions of this Agreement. ARTICLE 11. WATER CURTAILMENT PLAN During periods of drought or emergency, Ashland shall be subject to the MWC Water Curtailment Plan, per MWC Resolution No. 1345, unless Ashland has in effect a state-approved and adopted Water Curtailment Plan at least as stringent as that of MWC. In the event of a conflict between the Ashland plan and the MWC plan, the MWC plan shall control. The MWC shall give Ashland as much advance warning as possible prior to curtailment of water supplies. The level of curtailment shall be determined by MWC based on the severity of the anticipated shortage. Ashland shall be responsible for enforcing the MWC curtailment plan or the above mentioned Ashland plan in its service area. MWC will require and apply emergency curtailment of water use in an equitable, fair, and consistent manner consistent with Resolution 1345. Continued service during periods of emergency shall neither be construed as a waiver nor limitation of any kind on any water rights held by MWC, or a waiver or curtailment of any water rights held by Ashland, nor as affecting any other terms in this Agreement. Water Service Agreement - City of Ashland Page 6 of 9 ARTICLE 12. ANNUAL WATER QUALITY REPORTING MWC will gather annual water quality data and prepare informational reports as required under state Consumer Confidence Reporting (CCR) rules. These CCR reports will include water quality information for MWC and all participating municipal water customers. ARAWaI tS hilled sepaFately to ea [NAME OF CITY] te MWG no later thai; ApFil ist ef each yeaF. if bulk mailing is the i feF [NAME OF CITY] in the event that [NAME OF CITY] Fer=eives wateF iRtE) its system that is supplied by an entit 9theF than MWC, the compesite MWC FePGFt fE)F that yeaF Will net inelude data f0F [NAME OF CT)- Ashland shall be responsible for preparation of its own annual CCR, and MWC will provide MWC data by April 1st of the delivery year. MWC maintains water quality test points throughout the MWC system and one specifically at the master meter location(s) of Ashland. These test points are used to collect water samples for meeting required state water quality parameters on a weekly, monthly, and annual basis. All information collected is of public record and is accessible through state or MWC databases. Responsibility for water quality is transferred to Ashland at the point of the master meter location(s), except where water quality problems are attributable to MWC. ARTICLE 13. MUTUAL INDEMNITY To the extent allowed by law, Ashland and MWC shall each defend, indemnify and hold the other, and their officers, employees, and agents harmless from any and all claims, suits, actions, or losses arising solely out of the acts and omissions of the Party's own officers, employees, or agents while acting under this agreement. ARTICLE 14. PARTIAL INVALIDITY If any term, covenant, condition, or provision of this Agreement is found by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in force and effect, and shall in no way be affected, impaired, or invalidated thereby. Water Service Agreement - City of Ashland Page 7 of 9 ARTICLE 15. INTEGRATION This Agreement represents the entire understanding of MWC and Ashland as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered herein. This Agreement may not be modified or altered except in writing signed by both parties. ARTICLE 16. DEFAULT For purposes of this Agreement "default" means failure to comply with any of the terms of this Agreement. If either party determines that a default has occurred, it shall provide the other party written notice of the default, which such party shall have thirty days in which (a) to cure the default, (b) show that the default is of such a nature that it cannot be reasonably cured within thirty days, or (c) show that no default occurred. MWC and Ashland will work in good faith to amicably resolve the default. If after thirty days of the notice of default, MWC determines, in its sole discretion, that Ashland is unable or unwilling to cure the default within a reasonable time, MWC may impose escalating penalties as follows: (a) ten percent surcharge for a period of thirty days; (b) twenty percent surcharge for the next thirty days; and (c) termination of this Agreement. Such penalties are in addition to any other remedies at law or equity that may be available to MWC. Failure to issue notice of default or to enforce its remedies under this Article 16 shall not preclude MWC from taking such action for future defaults. If after thirty days, Ashland determines, in its sole discretion, that MWC is unable or unwilling to cure the default within a reasonable time, Ashland may terminate this Agreement and pursue any other remedies at law or in equity that may be available to Ashland. ARTICLE 17. FORCE MAIEURE Neither party hereto shall be liable for delays in performance under this Agreement by reason of fires, floods, earthquakes, acts of God, wars, strikes, embargoes, necessary plant repairs or replacement of equipment, of any other cause whatsoever beyond the control of such party, whether similar or dissimilar to the causes herein enumerated. This clause does not include causes related to water supply and demand planning or failure to engage in such planning. ARTICLE 18. DISPUTE RESOLUTION If a dispute arises out of or relates to this contract, and if the dispute cannot be settled through negotiation, the parties agree first to try to settle the dispute by non-binding mediation before resorting to litigation or other process. The parties agree to share equally the costs of mediation. Water Service Agreement - City of Ashland Page 8 of 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their proper officers on the dates noted below. THE CITY OF MEDFORD THE CITY OF ASHLAND BY AND THROUGH ITS BOARD OF WATER COMMISSIONERS ason Anderson, Chair Jo n rorhberg, Mayor Karen Spoonts, Deputy City Recorder Barbara Christensen, City Recorder /a/ w/ I A/ Date Date Water Service Agreement - City of Ashland Page 9 of 9