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
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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
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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
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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
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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
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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.
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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
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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
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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
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