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HomeMy WebLinkAboutRes1992-072 . . . Sponsored by: Schaefermeyer CITY OF SEWARD, ALASKA RESOLUTION NO. 92-072 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A SPECIAL RETAIL WATER SALES AGREEMENT WITH SEWARD FISHERIES WHEREAS, Title 14, Seward City Code, establishes general provisions for operation of the Seward Water Utility; and WHEREAS, Resolution No. 91-001 allows special contracts for users that consume in excess of 3.0 million gallons of water per month for at least six months during a twelve month period; and WHEREAS, such special contracts shall set a rate which will assure that the user pays its full share of the utility's fixed and variable operating and maintenance costs; and WHEREAS, a special water sales agreement has been negotiated with Seward Fisheries which proposes to pay the utility's present fixed and variable operating and maintenance costs for providing water to Seward Fisheries subsequent to July 1, 1990; and WHEREAS, it is anticipated that this negotiated rate will be adjusted in the future when necessary to assure that Seward Fisheries pays its full share of the utility's fixed and variable operating and maintenance costs; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The special retail water sales agreement with Seward Fisheries is hereby approved. Section 2. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 11th day of May, 1992. THE CITY OF SEWARD, ALASKA / . ( . .~;//I /t.. /'{ #r.-zc2bitt, C/~M. Donald W. Cripps, Mayor . CITY OF SEWARD, ALASKA RESOLUTION NO. 92-072 AYES: NOES: ABSENT: ABSTAIN: ATTEST: Bencardino, Crane, Cripps, Dunham, Krasnansky, Swartz & White None None None APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska . . (City Seal) 7~ J1./ U:t,L Fred B. Arvidson City Attorney .i " . . . i'ff.-rAlL WATER SALES AGREEMENT BETWEEN SEWARD WATER UTIUTY AND SEWARD fiSHERIES 1. Parties The parties to this agreement are the City of Seward, a municipal corporation of the State of Alaska (hereinafter called "Seward") and Seward Fisheries, a division of Icicle Seafoods, Inc., a corporation incorporated under the laws of the State of Alaska, (hereinafter called "Fisheries"). 2. Recitals 2.1 The Seward Water Utility is a publicly owned and operated water utility by the City of Seward. Tide 14, Seward City Code, establishes general provisions for operation of the utility. (Title 14 is hereinafter called "ordinance"). The rates and charges for water service are established by City of Seward Resolutions 89-055. 90-060 and 91-001. or as subsequendy amended by resolution (hereinafter called "tarifF'). Section 3 of Resolution 91.001 specifically addresses special contracts. ' 2.2 Seward produces water from a number of wells and collection of surface water from Mt. Marathon. The water is produced, tested and distributed in accordance with regulations established by the Alaska Deparunent of Environmental Conservation and is approved for distribution for domestic and industrial food processing purposes. 2.3 The retail rates for water are based on the cost of producing, processing and distributing the water. The monthly charge to the Fisheries is based on actual consumption metered at a number of service points. 2.4 The Fisheries is currently purchasing water from Seward under rates and conditions cited in the tariffs. Except as specifically noted herein, the conditions, rate and charges cited in the tariffs will continue to apply after the effective date of this agreement. 3. ~eement In consideration of the mutual covenants herein, Seward agrees to sell and the Fisheries agrees to buy water subject to the following terms and conditions. 4. Definitions The Following terms, when used in this agreement, shall have the meanings specified. 4.1 Effective Initial Date: The date that Seward signs and authenticates this agreement. 4.2 Seward's Facilities: The facilities owned by Seward to produce, process, distribute and meter water serving the Fisheries' facilities. 4.3 The Fisheries' Facilities: All facilities owned or leased by the Fisheries contiguous to the Seward Small Boat Harbor, including, but not limited to the main processing plant, dock, meal plant and support facilities north of Port Avenue, but not including the bunk house and any other temporary living quarters. . 4.4 Monthly Billing: The monthly charge for the quantity of water consumed during a preceding period determined by adding together the individual monthly meter readings for the several points of delivery of water delivered to the Fisheries' facilities. 4.5 Point of Delivery. The point where Seward meters and delivers to the Fisheries the water provided under this agreement as set forth in Section 5.2 hereof. 4.6 Demand: The rate of delivery of water, normally measured in gallons of water per minute. .' " . . . 4.7 Quantity: The quan....y of water delivered over a period {,. rime usually measured in increments of 1000 gallons over a 30 day period by meters located at the point of deli very. The quantity of water consumed measured by the meters at the point of delivery is the basis for the monthly billing. 5. &pecial Provisions 5.1 Interruptible Service: Seward cannot guarantee uninterruptible water delivery, and furthermore, at times it may be necessary to require the Fisheries to reduce or cease operations in order to maintain and repair the system, serve other customers, meet demands for fire water and to protect the health and safety of the residents of the city. Therefore, the Fisheries agrees to reduce or stop operations when requested by Seward. Seward recognizes that the interruption of water delivery will adversely effect the Fisheries and will make reasonable efforts to limit such interruption. The Fisheries acknowledges receiving a favorable rate by agreeing to this condition, and will not claim compensation from Seward for any cost or damages due to interruption of water delivery. 5.2 Point of Delivery: Water is metered and delivered to Seward Fisheries by multiple points of delivery. It is the intent of the ordinance and tariff that each customer shall have a single point of deliver whenever feasible. Therefore, the Fisheries agrees to combine existing points of delivery wherever possible when constructing new or remodeling existing facilities. The Fisheries further agrees not to request new or additional points of delivery to serve their facilities, except if such will reduce the number of existing points of deliveries. 5.3 Seward's Facility: The parties agree that Seward's facility is adequate to provide sufficient water to meet the historical demand and quantity requirements of the Fisheries. Should the Fisheries have a demand or require a quantity in excess of these amounts such that Seward cannot provide the excess demand or quantity without interfering with other customers, it may be necessary to upgrade Seward's facilities. This agreeII;1ent will not be construed to require Seward to pay for the cost of upgrading Seward's facilities to meet the excess demand or provide the excess quantity of water. In the event the Fisheries increases their demand and Seward cannot meet that demand, Seward agrees to negotiate for an agreement with the Fisheries that will enable increasing Seward's production or otherwise to serve the Fisheries need. 5.4 Fisheries Facilities: The maintenance, repair and upgrade of the facilities owned or leased by the Fisheries is solely the responsibility of the Fisheries. Seward may require the Fisheries to perform maintenance, repair or upgrade of the Fisheries' facilities ifit is determined that they are in violation of Alaska Department of Environmental Conservation regulations, present a hazard to the utilities employees or the general public, result in wasting water or could cause interference or interruption of service to another customer. The Fisheries will bear the cost of such maintenance, repair or upgrade, even when directed by Seward. 5.5 Notifications: All formal notifications, notices, demands or request given or made under this Agreement shall be in writing and shall deemed properly given or made if delivered personally or by registered mail, certified mail or telegram to the person designated below: Notices to Seward: Notices to the Fisheries: Engineering and Utilities Manager City of Seward P. O. Box 167 Seward, Alaska 99664 Plant Manager P. O. Box 8 Seward, Alaska 99664 5.6 The term of this agreement shall be three years, except if extended by mutual agreement 2 -, . . . of both parties and appro~.... of the City Council. 5.7 Termination by Seward: Seward has the right to terminate this agreement in accordance with the Seward City Code applicable at the time of termination, the Seward Water Utility tariff applicable at the time of termination, and as elsewhere provided in this agreement. 5.8 Termination by the Fisheries: The Fisheries may terminate this agreement by giving Seward three months notice of its intent to terminate, and paying all unpaid charges and fees which may include reimbursement for capital expenditures by Seward for improvement to Seward Facilities that were built specifically to meet the demand and quantity requirements of the Fisheries.. 5.9 Billing Period: The billing period will be based on a monthly period as established by Seward in accordance with the Seward City Code and tariffs. 5.10 Changes in Rates: The rates may be changed from time to time by the Seward City Council in accordance with applicable ordinances and tariffs. The rates will also be reviewed each time the City Council considers a general revision to the tariff or when it is determined the cost of service to provide water to the Fisheries exceed the payments by the Fisheries. 6. Rates for water supply: The applicable rates are shown in Attachment A to this agreement. 7. General Terms and Conditions 7.1 Public Health and Safety: The Fisheries shall design, operate and maintain its facilities in accordance with accepted utility practice, and applicable codes and regulations to assure there can be no possibility of contaminating the public water system by cross-connection, backfeed or any other means. 7.2 Changes to Facilities. 7.2.1 The Fisheries shall not make changes to its facilities or operate its facilities in a manner that will cause Seward to make expenditures which would be otherwise unnecessary. Seward's expenditures caused by the Fisheries in this regard and occasioned by a violation of this provision shall be paid by the Fisheries. 7.2.2 Seward will inform the Fisheries before making any changes in Seward's facilities or operations that may require Seward fish to operate in a different manner or increase their cost of operations. If it is determined Seward's changes will adversely effect the Fisheries and increase their cost of operations, the Fisheries may request a revision to the tariff or other means to offset the additional cost. 7.2.3 The Fisheries will submit plans to Seward before making any changes in their facilities that effect the internal use and distribution of water or could possible result in a cross connection or backfeed to Seward facilities. 7.3 Uncontrollable Forces: 7.3.1 An"U ncontrollable Force" shall mean an act of God, act or omission of government, failure of or threat offailure of facility, unscheduled maintenance and repair, labor or material shortage, strike, lockout or other industrial disturbances, act of the public enemy, war, blockade, insurrection, riot, epidemic, landslide, avalanche, earthquake, fire, storm, lightning, flood, washout, civil disturbance, restraint by court order or public authority, action or nonaction by 3 .. . . . or inability to obtain nece.-iry authorization or approval from a.o, governmental agency or authority, and any act or omission similar to the kind herein enumerated. Strikes, lockouts, and other labor disturbances shall be considered Uncontrollable Forces and nothing in this Agreement shall require either party to settle a Labor dispute against its best judgment. 7.3.2 In the event either party, by reason of an U ncontroUable Force, is rendered unable, wholly or in part, to perform its obligations under this Agreement (other than its obligations to pay money), then upon said party giving notice and particulars of such Uncontrollable Force, its obligation to perform shall be suspended during the continuance ofany inability so caused, but for no longer period, and the effect of such cause shall, so far as possible, be remedied with all reasonable dispatch; provided, however, that the settlement oflabor disputes shall be considered wholly within the discretion of the party involved. The affected party shall not be responsible for its delay in performance under this Agreement caused by an Uncontrollable Force, nor shall such Uncontrollable Force give rise to a claim for damages of any type or constitute default. 7.4. Responsibility: 7.4.1 Except as provided in Section 7.1, each party shall assume all responsibility on its respective side of the Point of Delivery for the water service supplied and taken, as well as for maintenance of any apparatus used in connection therewith. 7.4.2 Each party shall save the other harmless from and against all claims for injury or damage to persons or property occasioned by or in any way resulting from the water service or the use thereof on its respective side of the Point of Delivery. 7.5 Metering: Seward shall provide for and maintain in accordance with the ordinance and tariff. The Fisheries may at its option and at its own expense install check meters. 7.5.1 Seward (i) may at its own expense make or provid~ for periodic tests and inspections of all Seward meters in order to maintain a commercial standard of accuracy, (ii) shall restore to a condition ofaccuracy, any meters found to be inadequate, and (iii) shall advice the Fisheries promptly of the results of any such test which shows any inaccuracy 2% slow or fast. The Fisheries shall be permitted to have representatives present at such test and inspections. Seward shall make or provide for additional tests of Seward meters at the request of the Fisheries and in the presence of the Fisheries's representatives. The cost of any additional test requested by the Fisheries shall be borne by Seward if such test shows a meter inaccurate by more than 2% slow or fast. If at any time a meter should fail to register, or its registration should be so erratic as to be meaningless, the estimated correct registration for billing purposes shall be based upon the best available data. 7.6 Waiver: The failure of either party to insist upon strict performance of any of the provisions hereof, or the acceptance by either party of the payment for all or part of the obligations hereunder shall not be deemed a waiver of any right or remedy by either party. 7.7 Billing and Payment: 7.7.1 Seward shall render bills to the Fisheries on or before the 5th day of each calendar month for services furnished during the preceding billing month. In such bills Seward may designate certain items as being estimated due to unavailability of final underlying data, in which event adjustments to the correct amounts, when amounts are determined, shall be included in a bill for the subsequent month. The amount of adjustment will be determined by recomputing the preceding estimated bill(s) using actual consumption during each billing period as determined by the Fisheries production records or other acceptable means and applying the charge or credit to the current bill. 4 " . 7.7.2 Payment by the Fish... .es shall be due on the 20th day of eae.. ~alendar month for service furnished during the preceding billing month. Payment shall be mailed, or may be paid in person, to the Seward Utility Department. Amounts not paid on or before the due date shall be payable with interest accrued at the rate of .875% per month (or the maximum legal rate if it is less) from the due date to the date of payment. 7.7.3 In the event any portion of any bill is disputed, the disputed amount may be paid or may be withheld. In any event, the Fisheries shall provided Seward with a detailed written explanation of why the amount is in dispute, If the disputed portion is paid and later found to be incorrect, Seward shall refund the Fisheries any overpayment, including interest at the rate of .875% per month to the date the overpayment is refunded by Seward. If the disputed portion is withheld and later found to be owed, the Fisheries shall pay Seward the amount owed, including interest at the rate of .875% per month from the due date of payment. 7.8 Special Contract: This Agreement shall be treated as a special contract, pursuant to City of Seward Resolution No. 91-001. 7.9 Assignment: This Agreement shall be binding on and shall be for the benefit of the successors and assigns of the parties. 8. Credit for Overpayment: Attachment B provides a credit for overpayment by Fisheries' subsequent to adoption of Seward Resolution No. 90-060. .................................................................................... ........................*......**.....**..........*..............*****.............. . CITY OF SEWARD r:d!'~ ~ ~ /'?-92- 'f?~~-O DATE 64" /".??AA-/~~ TITLE / FISHERIES r - to.( _1S- DATE II,~ f4f'(~ (~'II",,",O"'> TITLE ATTEST; APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska ~f1f~ Fred B. Arvidson City Attorney (City Seal) . 5 ATTACHMENT A TO RETAIL WATER SALES AGREEMENT BETWEEN SEWARD WATER UTILITY AND THE FISHERIES WHEREAS, Title 14, Section 14.01.040 of the Seward ~i~y- Code requires that water rates and charges be set by resolution; and {~ WHEREAS, Resolution No. 91-001 of the City of Seward City Council authorized negotiation of a special contract with a water user that consumes in excess of 3.0 million gallons of water per month for at least six month during a 12 month period, and that such contracts will set a rate which will assure the user pays its full share of the utilities fixed and variable operating and maintenance cost, and that all such special contract shall be approved by resolution of the city council; and WHEREAS, Resolution No. Fisheries; and ~'z - o~z approved a special contract with the WHEREAS, Resolution No. ~Z' ' ~ 7 ~--adopted the following rate structure to be charged to the Fisheries under provisions of a special contact: BASIS FOR MONTHLY FEE CONSUMPTION PER MONTH First 50,000 gallons ~ Next 500,000 gallons Next 1,000,000 gallons next 2, 000, 000 gallons All additional gallons COST PER 1,000 GALLONS 2.50 2.00 1.50 1.25 0.30 NOTE: This fee applies only to water consumption. All other fees and charges remain as shown in applicable ordinances and tariffs. A-1 6 . . . ATTACHMENT B ro RETAIL WATER SALES AGREEMENT BETWEEN SEWARD WATER UTILITY AND THE FlSHERIES WHEREAS, the effect of Resolution 90-060 was to increase the average unit price of water be sold to the Fisheries by a greater amount than the overall average unit price charged by Seward, and WHEREAS, Fisheries understood at the time Resolution 90-060 was adopted that their average price would be increased in an amount nearly equal to that of the overall average unit price charged by the utility, and WHEREAS, the Fisheries appealed to Seward for relieffrom the higher rate in 1991 and Seward agreed to reconsider the rate, and Resolution 91-001 was passed to allow combining meters and to enable a special contract for large consumers, and WHEREAS, Seward cannot make the reimbursement in a lump sum, but can reimburse the Fisheries over a period of time as a credit to the Fisheries monthly bills: 1. Seward agrees to reimburse Fisheries $~lllY. is- as settlement of any claim by Fisheries that it was overcharged for water following the adoption of Resolution 90- 060. 2. Reimbursement will be made by reducing each monthly payment of the Fisheries by giving the Fisheries a credit of 35% of the current monthly bill. 3. The credit will continue until a total amount of $ 1./1. /If./-J'.r has been credited to the Fisheries. Thereafter, no credit shall be given and the monthly payment will be as computed under the rate set forth in Attachment A ~EWARD FI~HERIES WATt:.A RATE COMPARISON 'j !6i\'~{~Ij;lt Itt.6.i~;;;W' rts.:'" ' PER NEW . ", :-::.~.: :' :~'.::~:~!~;:;h~:-\\::':"~,:; .~:~.::':::.~.; ').-.. ,", . ~ [tft;' ~ONTRAcr QiF.,f:Ea~Nt1li ,L, flu AUG '90 21,231 ,900 $16,215.95 $10,429.57 $5,786.38 SEP '90 20,290,175 $15,745.09 $10,147.05 $5,598.04 OCT '90 4,200,250 $5,775.25 $5,320.08 $455.17 NOV '90 1,703,400 $2,816.75 $2,816.75 $0.00 DEC '90 2,786,600 $4,170.75 $4,170.75 $0.00 JAN '91 925,000 $1,687.50 $1,687.50 $0.00 FEB '91 1,305,100 $2,257.65 $2,257.65 $0.00 MAR '91 4,669,600 $6,244.60 $5,460.88 $783.72 APR '91 9,996,100 $10,459.58 $7,058.83 $3,400.75 MAY '91 9,893,900 $10,382.93 $7,028.17 $3,354.76 JUN '91 19,129,100 $15,164.55 $9,798.73 $5,365.82 JUL '91 11,987,350 $11,593.68 $7,656.21 $3,937.47 AUG '91 17,745,550 $14,472.78 $9,383.67 $5,089.11 SEP '91 20,621,950 $15,910.98 $10,246.59 $5,664.39 OCT '91 2,352,850 $3,628.56 $3,628.56 $0.00 NOV '91 887,800 $1,631.70 $1,63~ .70 $0.00 DEC '91 723,200 $1,384.80 $1.384.80 $0.00 JAN '92 1,261,300 $2,191.95 $2,191 .95 $0.00 FEB '92 3,020,900 $4,463.63 $4,463.63 $0.00 MAR '92 3,905,200 $5,480.20 $5,231.56 $248.64 APR '92 5,618,000 $7,176.00 $5,745.40 $1,430.60 .