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HomeMy WebLinkAbout03103 ORD - 07/31/1951AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE A ' CONTRACT WITH REYNOLDS METALS COMPANY, A CORPORATION, FOR THE SUPPLYING OF WATER IN SPECIFIED QUANTITIES, AT SPECIFIED RATES, PROVIDING CERTAIN FRANCHISE RIGHTS IN THE USE OF PUBLIC LANDS AND STREETS FOR THE LAYING OF PIPE In=, PROVIDING FOR RENEGOTIATION OF THE PRICE OF WATER, PROVIDING FOR CERTAIN OP- TIONS IN THE CITY OF CORPUS CHRISTI, PROVIDING FOR ASSIGHIMENT BY THE REYNOLDS METALS COMPANY OF THE RIGHTS UNDER SAID CON- TRACT UNDER CERTAIN CONDITIONS OR WITH THE APPROVAL OF THE CITY OF CORPUS CHRISTI BY ITS CITY COUNCIL, SAID CONTRACT BEING SET OUT IN THIS ORDINANCE AND AS SHOWN BY ITS TERMS TO RUN FOR A PERIOD OF THIP.TY YEARS WHEREAS, at an election held in the City of Corpus Christi on _ July ly, 1951, the majority of the qualified electors voting at such election voted to authorize the City Council to cause to be executed a contract on behalf of the City with Reynolds Metals Company, a corpora- tion, for the Supplying of water in specified quantities, at specified rates, providing certain franchise rights in the use of public lands and streets for the laying of pipe lines, providing for renegotiation of the 4 price of water, providing for certain options in the City of Corpus Christi, providing for assignment by Reynolds Metals Company of the rights under said contract under certain conditions or with the ap- proval of the City Council, said contract being set out in this ordi- nance and as shown by its terms to run for a period of thirty years, and NDW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS; SECTION 1. That the City Manager is hereby authorized and di- rected for and on behalf of the City to execute a contract with Reynolds metals Company, a corporation, for the supplying of water in specified - quantites at specified rates, providing for certain franchise rights in the use of public lands and streets for the laying of pipe lines, pro- viding for renegotiation of the price of water, providing for certain ' options in the City of Corpus Christi, providing for assignment by the Reynolds Metals Company of the rights under said contract under certain conditions or with the approval of the City council, said contract being set out in this ordinance and as shown by its terms to run for a period of thirty (30) years, a copy of which contract is attached hereto and made a part hereof. THE STATE OF TEE [ Comm OF NUB= WMF=B, the City of Corpus Christi, Texas, a municipal corporation, is now the owner of a water distribution system originating out of and from the Hue - cea River and is engaged in supplying water for industrial and domestic purposes, said City of Corpus Christi having constructed a dam and reAervoir to impound and regulate the flow of water in said river near Mathis, Texas and the point on said river from.which said water is so taken by said City of Corpus Christi being lo- cated at or near Calallen, Texasy and WHPREd3, the said City of Corpus Christi, Texas is desirous of furnish- ing and selling to Reynolds Metals CcmpazW, a corporation, treated water to be used by it, its successors and assignee NON, THEMCBE, this contract and agreement this day made and entered into by and between the City of Corpus Christi, acting by and through its duly authorized officers, hereinafter called "City", and Reynolds Metals CompwW, act- ing by and through its duly authorized officers, hereinafter called 'Reynolds",' _ - WIT NES SETH: In consideration of the premises, the 'sum of Ten ($10.00) Dollars cash in hand paid to City by Reynolds, the receipt of which is hereby acknowledged, the benefits arising to said City by reason of the sale of water to Reynolds, its suc- cessors and assign, and the mutual covenants and agreements of the parties herein contained, it is agreed as follows: 1. TYPE OF WATER AND PRICE: City agrees to sell treated water to Reynolds to be delivered, at the option of Reynolds, to be exercised within sixty (60) daps from the date hereof, at either of the following points of service, and upon the conditions hereinafter set forth: (a) If the point of service in at or near the Calallen filtration plant, the quantity of water shall be not to exceed a maximum amount of 12,000,OOO. gallons per day, as shall be demanded by Reynolds, the rates shall be 9¢ per 1,000 gallons for the first 60,000,000 gallons used per month and 7¢ per 1,000 gallons for all water over and above 60,000,000 gallons used per month and delivered by City to Reynolds under and during the period covered by this contract and the pressures to be maintained by City in each of the mains at the point of service shall be: Min Minimum Pressure Maximum Pressure Nominal Operating Pressure 30e 65# per sq. in. 95# per sq. in. 70# to 8Op per sq. in. 360 40# par sq. in. 95# per sq. in. 70# to 80# per sq. in. Provided, however, that the rate specified above of 70 per 1,000 gal- lons for all water aver and above 60,000,000 gallons used per month shall apply only so long as the City has existing contracts under which the sale of untreated water is made at the price of 2¢ per 1,000 gallons. In the event that the cost of untreated water in the said existing City contract is redetermined and the price of maid water increased, then it is agreed that the 70 per 1,000 gallons priced to Reynolds for water used in excess of 60,000,000 gallons per month shell be in- creased accordingly and in the same amount, but in no event shall the price charged to Reynolds be in excess of 90 per 1,000 gallons. - (b) If the point of service is at or near Market Street, North Beach, the quantity of water shall be not to exceed 2,500,000 gallons per day, as shall be demanded by Reynolds, the rates shall be 1* per 1,000 gallons for the first 60,000,000 gallons used per month and 8}¢ per 1,000 gallons for all water over and above 60,000,000 gallons used per month and delivered by City to Reynolds under and during the period covered by this contract, and the City shall deliver such water at its distribution system pressure at the point of service. Provided, however, that the rates specified above of 40 per 1,000 gal- lons for all water over and above 60 ,000,000 gallons used per month shall apply only mo long as the City has existing contracts under which the sale of untreated water is made at the price of 2¢ per 1,000 gallons. In the event that the cost of untreated water in the said existing City contract is redetermined and the price -2- of said water increased, then it is agreed that the 81,¢ per 19000 gallons priced to Reynolds for water used in excess of 60,000,000 gallons per month shall be increased accordingly and in the same amount, but in no event shall the price charged to Reynolds be in excess of 100 per 1,000 gallons. 2. REDETERMINATION OF PRICE AND QUANTITY: (a) PRICE: City and Reynolds agree that at the and of each five (5) year period of this contract, except as is hereinafter providedp the prices at which City shall sell treated water to Reynolds shall, if requested by either party, be redetermined, said redetermined prices to be based upon the cost of water to the City at that time or the projected cost of water to City in the immediate future. It is agreed and understood that said redetermined price shall be without profit to City and without subsidy to Reynolds. Provided, however, that should the Oakville Dam, or any similar source capable of sup- plying the amount of water contemplated in connection with the Oakville Dam, be established then the price which Reynolds will pay City for the before- mentioned treated water will at that time be redetermined on the basis of the cost of the water to City, and without pro- fit to City or subsidy to Reynolds. (b) QUANTITY: City and Reynolds agree that at the end of each five (5) year period of this contract, the quantity of treated water reserved for Reynolds@ use shall, if requested by either partyp be rodetermined# said re- determined quantity to be based upon the actual and projected future requirements of Reynolds# and, subject to the provisions hereinafter contained, taking into consideration other users served by the line; but in no event shall the total quantity of water per day subject to demand by Reynolds be less than the amount of 12 million gallons, if required, as specified in paragraph 1(a) hereof, subject, however, to the provisions of paragraph 12. Provided, however, that City shall not be obligated at any time to furnish Reynolds with more than three million gallons of water per day in excess of that which is required per day by Reynolds for use in its operations. 3. TERM OF CONTRACT: The obligations of the parties hereto shall be binding from October 1, 1951, and ending on September 30, 1981. 4. SERVICE CONNECTIONS: City agrees to supply the connection or connections at the sole cost and expense of City and Reynolds agrees to supply all other pipes, valves and fit- tings of whatever nature required to complete the connection. 5. LAYING OF LINE AND INSTALLATION OF EQUIPMENT: Reynolds contemplates the —3—. laying of a pipe line from the point of delivery to its plant near Gregory, Texas for the purpose of transporting the water sold hereunder, and the City hereby grants and conveys to Reynolds an easement extending for the term of this contract upon, over, through and across any streets and other lands owned by Cith which ad- joins the point of delivery, for the purpose of laying, constructing, operating and maintaining azy pipe line or pipe lines desired to be laid by Reynolds for the purpose of transporting water sold hereunder; provided, however, that the location of such line across streets or lands owned by City must first be approved by City. The location of said pipe line along or across the streets and other lands of City are subject to relocation upon order of City. The entire cost of construction, relocation, operation and maintenance of said pipe line or pipe lines shall be borne by Reynolds, at its sole cost and expense. 6. TTTLEs Title to and possession of the water deliverable hereunder by City shall be deemed to pass and shall pass to Reynolds at the point of delivery, as set out hereinabove. In connection herewith, it is agreed by City and Reynolds that each shall indemnity and forever hold harmless the other against each and every claim, demand or cause of action which may arise while the water is in its possession. 7. MMUREBUT OF WATIRs Measurement of the treated water deliverable here- under sball be measured by a suitable water meter or meters of standard make and acceptable to City. Reynolds shall furnish said meter and install same, and City shall keep same in repair. Checks as to the accuracy of the meter or meters shall be made semi - annually, and City shall notify Reynolds in writing ten (10) days in advance of all semi- annual checks and tests in order that Reynolds msy have a re- presentative present as a witness. Semi-annual tests as to the accuracy of the meter or meters shall be at the expense of City. If either City or Reynolds at amy time shall notify the other that it desires a special test of any meter, the parties shall cooperate to secure an immediate determination of the accuracy thereof, and shall make joint observations of auy adjustments. If upon such special tests any such meter is found to be less than 2% high or law, the cost of such test shall be paid by the party requesting it, otherwise by the other party. Each party shall give to the other written notice of the time of any and all such tests in advance of the holding of same within a reasonable length of time in order that the other party may have a representative present. If upon any test the meter tested is found to be not more than 2% high or low, previous readings shall be considered correct in computing the volume of water delivered by the City to Reynolds, but such meter shall be at once adjusted to record as accurately as possible. If on any teat the meter tested shall be found to be inaccurate by an amount exceeding 2% then any previous readings of such meter shall be corrected for any period of inaccurate measurement thereby which is definitely known or agreed upon, but no such correction shall extend back over a period beginning more than fifteen (15) days prior to the time when such inaccuracy was first made known by either party to the other. If for any reason the meter or meters are out of service so that the volume of water delivered hereunder cannot be ascertained or computed from meter readings thereof, the water delivered during the period such meter or meters are out of service shall be estimated and agreed upon by the parties hereto upon the basis of the beat data available. B. PAMMTSs Payments for any and all water sold by City to Reynolds shall be paid monthly at the office of the City Water Department of Corpus Christi, Texas, and all bills therefor shall be paid on or before the 20th dap of the suc- ceeding month after same accrued. Statements shall be mailed to Reynolds at P. 0. Box 109, Corpus Christi, Texas, on or before the 10th day of each month showing the volume of water delivered and the sum due City therefor by Reynolds hereunder during the preceding month. Upon failure to pay ary bill due hereunder before delinquency, City may -5- give notice of such delinquency, and, if all bills due and unpaid are not paid in ` full within fifteen (15) days after the mailing of such notice, then City shall be authorized to discontinue further water service until all bills due or past due have been paid in full.. 9. INORESS 9RD EMMS: The right of ingress and egress is hereby granted by City to Reynolds, or its agents, employees or representatives, across emy premises or lands owned by City at any points from which water is delivered under this contract for the purpose of laying its mains and pipe lines and for the in- stallation of such other equipment as may be necessary for Reynolds to obtain de- livery of water from City hereunder. 10. FIXED MIUM M OBLIMICHs This contract imposes no obligation upon Reynolds to purchase amy minimum amount of water in any calendar month throughout the period of this contract, but Reynolds shall pay to City during the life of this contract the minimum amount of Fifty ($50.00) Dollars per month, regardless Of whether any water is used or not, same to be payable on or before the 20th day of each month for the preceding calendar month; provided, however, if the volume of water consumed by Reynolds during any calendar month amounts to more than Fifty ($50.00) Dollars then such fixed monthly sum of Fifty ($50.00) Dollars shall be credited upon the amount due. However, if the volume of water consumed by Reynolds during any calendar month amounts to less than the fixed aim of Fifty' ($50.00) Dollars, then, in sedition to the payment for such water, Reynolds shall pay the difference between the amount due City for the water actually consumed and the sum of Fifty ($$0.00) Dollars. Such alma shall be payable at the time and place hereinbefore provided. - 11. FORCE MAJEUREs If City should be prevented, wholly or in part, from .6- fulfilling its obligations under this contract by reason of an act of God, nn- avoidable accident, acts of enemy, strikes, fires, floods, governmental restraint or regulation, or any other case of force majeure then the obligations of City to deliver eater to Reynolds, as hereinafter provided, shall be temporarily sus- pended during the continuance of such force majeure. No damage shall be recover- able by Reynolds from City by reason of the temporary suspension of delivery of eater due to any of the causes above mentioned. If the City's obligation shall be affected by any of such causes City shall promptly notify Reynoldg in writing, giving full particulars of such force majeure as soon as possible after occurrence of the cause or causes relied upon. 12. PRICRITffia This contract is entered into and the sale of Crater here- under is made subject at all times to the prior rights of domestic and industrial . consumers within the City Limits of the City of Corpus Christi, Texas, to the sup- ply of water in the Nueces River, and in the event at any time the supply of water in the Nneces River shall be so diminished as to jeopardize the then supply of water to such consumers, then in such event, this contract shall became sus- pended during the period of time when such supply of water in said river is so diminished, but immediately upon the - supply of water in said river becoming again sufficient for the use of domestic and industrial consumers within the City Limits of the City of Corpus Christi, this contract shall again become effective immediately to the extent of the excess of such sufficiency. 13. OPTION TO PURCHASE-. At any time during the life of this contract City, at its option, may purchase the water transportation line contemplated being installed by Reynolds, extending from its connection with pipe lines of City to the property line of Reynolds, including all of the valves, connections, and property used in connection with the maintenance and operation of said line between the said properties. If City elects to exercise its option aforesaid, the fair and reasonable value of such property shall be determined by calculating the actual investment in said pipe line and accessories above mentioned, less an -7- amount equal to depreciation (not including the cost oftsepair and maintenance thereon) from date of installation to the date of exercise of such option and completion of pur- chase on the basis of thirty (30) year life with a minimum residual value or option price of 25% of the original investment. ' In the event Reynolds assigns its rights under this contract to anyone other than an operator of its San Patricio plant, or to a subsidiary of Reynolds, as provided in paragraph 15 hereof, City's option under this paragraph shall become null and void. The governing body of City may release or waive its option under this paragraph, in whole or in part' at any time during the term of this agreement. In the event City exercises this option, City shall be obligated to deliver water to Reynolds at the property line of Reynolds' San Patricia plant in the quantities and at the prices specified in paragraph 1 hereof for delivery at Calallen or North Beach, as the case may be, plus the City's ac- tual cost of transporting such water through the pipe line acquired by the exercise of such option or a substitute pipe line, including all operational, maintenance, replace- ment and amortization coats, prorated among all useraof water served by such pipe line. In the event that Reynolds receives a bona fide offer to purchase said water transportation line, and wishes to accept such offer, and to sell to ajch Third Party R4 thereby terminate the option of the city to purchase, Reynolds shall notify the city of such offer. Unless within sixty days after the giving of such notice to the city, the city elects to ixeroiee its option to purchase under this paragraph, and within the same sixty days so notifies Reynolds of such election to purchase, Reynolds W within an additional period of ninety days accept such offer and sell said water Transportation line free of the option to purchase of City. In the event the City elects to exercise its option to purchase the City shall have six months from the date of notice of the intent to exercise its option to complete the purchase. 111. ALTL>AATICNS AND REPAIRSt It is expressly recognized by Reynolds that City may be compelled to make neceseary alterations, repairs, or installations of new or addi- tional pumps, motors, valves, or equipment from time to time during the life of this contract, and any suspension of delivery to Reynolde due to such operations shall not be cause for claim for damages on the part of Reynolds, provided all reasonable ef- fort is by the City used to provide Reynolds plant with water. —8- 15. ASSIOH031ITY: Except for assignments to ary person operating Reynolds San Patricia plant, or to augr subsidiary of Reynolds, or to asp duly conatitnted district created by law for the distribution of water, the rights of Reynolds under this contract may be assigned only with the written consent and approval of the governing body of City, but this contract shall be binding upon the parties hereto as well as their successors and assigns. 16. OAHCELLATION. This contract may be cancelled at ary time with the mutual consent of Reynolds and the governing body of City. IN WITNESS WHMMOF, the parties have hereto caused these presents to be dally executed this day of 1951. CITY OF CORPUS CHRISTI ATTFSTs BY beoretar7 Manager APPROVED AS To LEGAL FORM. MY Attorney ATTEST s REYNOLDS )MAIS CoHPAHY -9- c es en The foregoing Ordinance was read the first time and passed to the second reading on theff—,day of July, /1951 by the following vote: Leslie Wasserman Jack deForreat - Barney Cott Sydney E. Herndon George L. Lowman The foregoing Ordinance was read for the second time and passed to rA the thirdcTeading on the 2 9 !4y of July, 1951, by the following vote: Leslie Wasserman G� Jack DeForrest Barney Cott Sydney E. Herndon �vr George L. Lowman_�� The foregoing ordinance was read t�hee, third t1�//�mme aQd passed and ordered approved by the Mayor, on the /'_r'dgy of &4&:K !/) , 1951, by the following vote: - ': Leslie Wasserman Tack DeForrest acre , Barney Cott Sydney E. Herndon George L. Lowman APPROVED This the) day of i 1951. ANVU,HRISTI, TESAS A APP VED AS Ta LEGAL FORM: City Attorne 2 10 S