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1979-05-30 SpM Exhibits.F • _ ?~iay 29, 1979 STATE OF NORTH CAROLIPIA rorr~r~Tm COUNTY OF NEW HAPIOVER THIS AGREEh1ENT, entered into this ~d~ day of ~~ut.,~ - 1979, by and between the CITY OF i^7ILMING"_'ON, d a body politic and corporate entity of the State of r;orth Carolina (hereinafter "City") and NETJ HANOVEF. COUNTY, a body politic and corporate entity of the State of North Carolina (hereinafter "County"), WHEREAS: There is no public water system in County, and a reserved supply of finished water is a basic need of County. County and City, acting through their respective cove=n- ing bodies, have, pursuant to the provisions of Article 1, as amended, of Chapter 162P. of the North Carolina c=eneral Statutes, organized and incorporated the T?ilr~ington-New Hanover ~^.a ter and Sewer Authority as a vehicle to assist in providing a satisfactory raw water supply for County and City. The name of the Fiil:^.ington-New Hanover r~?ater and Secrer P_uthority was later chanted to the Lower Cane ^ear ti~7ater and Surer Authority (hereinafter "Puthority") and the Counties of Bladen, Brunswick, Columbus and Fender have, >aith the approval o~ their governing bodies and the governing bodies of City, County and Authority, joined Authority. Authority has determined to construct a public water suppl:: system to make available raw crater, on reasonable demand, to t:~e members of the general public within 'the service area of such systerl. Authority has caused a report to be prepared relating to the financial feasibility of an ??uthority water systen, which report has found feasible and recommends the initial construction of a "Project" consisting of a pipeline sufficient to supply raw water to City and other potential users within County, including industrial users. City and Authority have determined to enter into an agreement whereby Authority will furnish to City a minimum number of gallons per month of raw water. County has determined to construct a "County Water System", to be financed by the issuance of general obligation bonds, (hereinafter "water system bonds") whereby finished water can be supplied to those users in County located outside of City. It is deemed to be in the best interest of County to enter into an agreement with City whereby County shall purchase from City a supply of finished water. NOW, THEREFORE, WITNESSETH THAT: In consideration of the mutual covenants, terms, con- ditions~and obligations herein undertaken, it is agreed as follows: 1. City shall furnish to County finished water in the amount of 6 million gallons per day, hereafter called the "reserved capacity"; provided, however that: 1.1 If Authority, pursuant to its agreement with City, limits the quantity of raw water f~srrished to City for reason that furnishing of the water, together with all other water furnished by Authority on reasonable demand to any member of the general public within the service area of Authority, in the sole discretion of Authority, will, unreasonably burden the efficient operation of the Project or the quantity of raw water is limited by Authority for any other reason, City may reduce or diminish the supply of finished water that it furnishes to County in an amount propor- tionate to the reduction imposed upon City by Authority; provided, that the amount of finished water to be made available by City to - 2 - County under the terms of this agreement shall not be reduced because of any limitation on the quantity of raw water furnished to City by Authority until the total amount of raw water that City receives from Authority is reduced below 10 million gallons per day; provided further, that if Authority limits the quantity of raw water furnished to City to less than 10 million gallons per day, County's reserved capacity shall not be reduced below an amount equal to 3/5 of the amount of raw water so furnished. 1.2. In the event Authority limits the quantity of raw water furnished to City and County's supply of finished water is reduced pursuant to the preceding paragraph, the sup?~ly of water to non-residential users of City's and County's water systems shall be reduced or diminished prior to reduction or diminution of water for County's residential customers. 1.3. Any reduction in the supx~ly of finished water provided to County shall not take place until Cite has consulted Keith appropriate County officials regarding said reduction. 1.4. Not:eithstanding anything to the contrary con- tained herein, City shall be obligated to provide County finished water as demanded by County in an amount not to exceed 2 million gallons per day prior to December 31, 1983, if City lacks the capacity to supply finished water to County as otherwise required herein because of City's Sweeny Plant. Following this date, City shall supply finished water to County in an amount not less than 500 gallons per day per County customer or 6 million gallons per day, whichever is less, until such time as the proposed improvements to the Sweeney t~:ater Treatment Plant have been completed. Upon completion of all i.^.:provements to the Sweene~~ Mater Treatment Plant, City shall provide finished water to County, as demanded by County, in an amount not to exceed 6 million crallons per day in accordance with the provisions of this Agreement. 2. Count~~ acrees to pay City for the reserved capacity a monthly "demand charge" ~.,Thich shall be equal to one-twelfth (1/12th) of the sum of County's proportionate part of (a) the annual debt service of revenue bonds issued by Authority that is borne by City and (b) the cost of maintenance and operation of authority's water system: as reflected by its annual budeet and as adjusted by Authority and Cit=y at the end of each year. The - ~ - demand charge shall be determined annually, such determination to be effective July 1 of each year, and predicated on County's and City's reserved capacities existing on January 2 prior thereto. County's proportionate part of Authority's annual debt service and maintenance and operating costs shall be that portion of Authority's total annual debt service and maintenance and operating costs (as adjusted at the end of each year) that is borne by City multiplied by that percentage arrived at by dividing the reserved capacity of County by the reserved capacity of City. The reserved capacity of City shall be defined and set forth in the agreement between City and Authority (hereafter "City-Authority Agreement"). 3. The demand charge shall be payable on the first day of the first month in which City is obligated to pay a demand charge to Authority under City-Authority Agreement and shall be payable on or before the first day of each and every month thereafter until and including the last month in which this agreement termi- nates. The demand charge shall be payable notwithstanding that County is unable or unwilling to accept delivery of all of or any part of its reserved capacity for any reason or that less than the reserved capacity is delivered to County by reason of disruptions in service caused by lack of water supply, breakdown or damage to equipment, or any other reasons. County's obligation to pay the demand charge shall beyabsolute and unconditional and shall not be subject to diminution by setoff, counterclaim, abatement or other- wise; provided, however, that effective 60 days after the due date of the initial demand charge under this agreement County's obliga- tion to pay said demand charge shall be suspended or reduced pro- portionately from the last day of the month following the month in which the City becomes totally or partially incapable of deliver- ing to County its reserved capacity until the first day of the first month in which such capability is re-established partially or completely. - a - Notwithstanding anything to the contrary contained herein; County's demand charge shall not be reduced prior to December 31, 1983, by reason of the lack of capability of City's Sweeney Plant to supply finished water to County as otherwise required herein, and after said date such lack of capability shall reduce County's demand charge to the extent finished water supplied to County is less than 500 gallons per day per County customer, such proportionate adjustment to be effective from the last day of the month following the month in which such lack. of capability occurs until the first day of the month in which such capability is existent. The capability of City's Sweeney Plant to supply finished water shall not be deemed affected, reduced or impaired by City's use, sale or consumption of finished water therefrom in excess of 18 million gallons per day. 4. County shall pay City for all finished water supplied by it to County. County's payment therefor shall be a suer, equal to the aggregate of charges to County's individual customers in accordance with City's then prevailing rate schedule for inside City customers. In determining City's then prevailing rate schedule for inside City customers, County's demand charge shall not be included as a factor. The amount of finished water supplied to County shall be the aggregate amount used by County customers as reflected by their meter readings for the billing period involved. 4. 1. In determining the rate to be paid by County customers, County shall add to City's then prevailing rate schedule for inside City customers all charges which it deems necessary and appropriate. Such charges shall include but not be limited to, amounts to compensate County for County's demand charge, debt service on bonds issued to finance construction of Countv's water system and sharing of debt service with City on bonds issued to finance improvements to Sweeney Water Treatment Plant. 4.2. County will be responsible for installing all initial service connections to County Water System. Following the initial constructior_ of ar.~~ ohase of the syster^, all f~.~t~~re service connections will ?~e ir_stalled by the City and *~aid for by - ~ - the County or applicant for such service at existing rates which City charges its inside-City customers for such installation. 4.3. City shall provide all customer service for the County water system, including, but not limited to, recording, accounting, billing and collection services, meter readings and maintenance, and all other ordinary and reasonable services requested by customers of the County Water System. Billing and collection services shall be oerformed by the City in the same manner in which the services are conducted for City accounts. 4.4. In accordance with accented practices of governmental fund accounting, the City will establish a separate fund known as "the County taater Fund," to record all financial transactions of monies collected by the City. 4.5. City will collect and record as revenues all monies paid to it by users of the County ~~later System on behalf of the County. City will remit to County daily all revenues received at the close of the previous business day. City will bill County monthly for: (a) Cost of finished water (City will also provide a statement of water used by Counts customers as reflected by the meter readings for that month); (b) County's demand charge for ensuing month; (c) County's share of the debt service on bonds issued for upgrading of the Sweeney Treatment Plant; (d) Any differences in maintenance costs of County water system incurred in accordance with the pro- visions of Paragraph 5 of this Agreement; (e) All other amounts and charges which County is required to pay to City under the provisions of this Agreement. 4.6. City shall not be liable for the bad debts of County customers, but City's obligation to remit such sums as are collected by it shall be absolute and unconditional and shall not be subject to diminution by setoff, counterclair, abatement, or otherwise. Records relating to such sums shall be available to County, its agents and employees, at all reasonable tir..es. County - F - may provide, at its .own expense, for the auditing of such records. City shall convey and assign to County, or cause to be executed in County's favor, employee fidelity bonds for all City employees who shall participate in any manner in the billing and collecting services performed by City for customers of the County water system. City shall furnish to County on or about October 1 of each year a report for the fiscal year immediately preceding, setting forth the record of usage of the County water system, the billings and collections made by City for use of the County water system, and the status of all funds held by City for operation and maintenance of the County water system, including a statement of any excesses or deficits in receipts over expenditures for the year for which the report was furnished. 4.7. At the close of the fiscal year, actual costs of maintenance of the County Water System will be compared with that portion of revenues from the County water system allocated to operation and maintenance plus any additional payments made by County as such allocation and additional payments are established in Paragraph 5 of this Agreement. If the actual costs of operation and maintenance of the County irlater System exceed the percentage allocated from County Water System revenues plus additional payments as referenced above, the County will pay such excess to City within 30 days of County's receipt of City's statement of the amount due. In the event the actual costs of maintenance and operation do not exceed twenty percent (20$) of revenues as established by Paragraph 5 of this Agreement, and in the event County has made additional payments to City over and above the twenty percent (20$) of revenues, such additional payments over and above the 20~ of revenues allocated for maintenance and opera- tion of the County Water System as established in Paragraph 5 of this Agreement shall be~refunded by City to County within 30 days of City's receipt of the amount of refund due. 5. City shall maintain and operate, or cause to be maintained and operated, the County water system, and City shall prescribe and be responsible for water treatment standards. - 7 - Twenty percent (20$) of revenues paid by County to City in accordance with the provisions of Paragraph 4 of this Agreement (County's payment for finished water at City's then prevailing rate schedule for inside City customers) shall be utilized by City for meeting the cost of operation and maintenance of County water system, as such costs are hereinafter defined. In the event that twenty percent (20$) of such revenues is not sufficient to meet the costs of operation and maintenance of the County water system, County shall pay City all additional amounts expended by City over such 20$ in operating and maintaining the County system. Operation and maintenance costs of the County system shall be those costs as defined in Annex A of this Agreement. Any expense incurred by the County water system not listed in Annex A shall not be considered a cost of operation and maintenance and County shall be solely responsible for such expense. City will supply County monthly reports describing maintenance and service performed on County's water system. 6. County's reserved capacity of finished water shall not exceed nor shall it be reduced or diminished below 6 million gallons per day except as provided in Paragraphs 1, 7 and 8 herein. 7. Extensions of water service outside of City may be made by City without the approval of County. If City supplies finished water to new customers in County who are located outside of City's limits after the effective date hereof, County shall have the option to effect a reduction of County's reserved capacity in an amount equal to tine water so furnished. 8. Upon City's annexation of an area that is supplied with finished water from the County ttiTater System, the reserved capacity of County., at County's option, shall be reduced effective on the date of annexation by the monthly average of finished water supplied to the annexed area for the year ending prior to the month in which annexation is consummated. - 8 - 9. Upon City's annexation of an area that is supplied from the County Water System, City shall acquire ownership of that portion of the County water System which services the annexed area. The following method shall be utilized in determining the amount the City shall pay County in the event of annexation: (a) City and County shall determine annual revenues derived from water usage in the annexed area. (b} City and County shall determine that part of said revenues that is allocated to payment of the annual debt service requirements of the initial bond sale for Phase I of the County 'later System. (c) City and County shall- determine the percentage that such revenues derived from the annexed area which are allocated to payr.:ent of debt service repre- sent of the annual debt service requirements of the initial bond sale for Phase I of the County dater Syster.. The percentage of the annual debt service requirements so determined shall be the amount that City pays annually to County. (d) The percentage of the annual debt service paid by City to County shall be adjusted administratively annually. (e} The payment to be made by City to County shall be made ten (10) days before County is required to make an installment payment upon its debt service requirements of the initial bond sale for Phase I of the County ~~later Syster.. 10. City shall allocate in accord with generally accepted accounting principles operation and maintenance costs for the County Water System and shall each year set forth in its proposed budget the amount so allocated. City shall provide to County - 9 - quarterly statements which reflect the relationship of expenditures to revenues and which contain a projection as to whether expenditures will remain within the budget. 11. County, in its sole discretion, shall determine the rate that will be charged to its customers for water service, to include those charges over and above the amount paid by County to City for all finished water as set forth in Paragraph 4 of this Agreement; provided, however, that in no event shall the rate established by County be lower than the rate charged by City to its customers during the same time period. After City has established the rate that it shall charge its customers, County shall review and determine the rate that it shall charge its customers for water service. 12. All water treatment and transport facilities pre- sently owned by City shall remain in the ownership and control of City. All water trea+..ment and transport facilities presently owned or hereafter constructed by County shall. remain in the ownership of County until any part thereof is annexed by the City as pro- vided herein, but shall be in the control of City to the extent and in the manner set forth in this P.gree~^,ent. 13. The City and County shall jointly select and employ an impartial private consultant for the purpose of developing minimum standards and specifications for use in construction of the County j~~Iater System. The consultant selected shall: (a) Possess considerable working knowledge and experience in design, construction and installation of plastic, metal and other pipe materials; (b) Possess a thorough knowledge of the technological pros and cons associated with the use of various pipe materials, to include plastic-type pipe versus the use of a metal-type Wipe; (c) Have work experience involving soil and land conditions existing in the Southeastern L'.S. Coastal Plains area. - 10 - All costs associated with the employment of the consultant selected shall be shared equally by City and County. City and County shall have the right to provide all information each considers appropriate to the consultant to assist the consultant in developing these standards. 'fhe progress made by the consultant shall be.reviewed periodically by City and County at times mutually agreed upon by City and County. City and County agree that the minimum standards developed by the consultant shall be the minimum standards for construction of the County Plater System. City and County agree that the system to be constructed by County shall strictly adhere to all standards as developed by the consultant; provided, however, that nothing contained herein shall prevent the County from utiliz- ing equipment and materials generally ackno~oledged in the engineering field to be superior to those developed by the consultant: 14. County shall provide all necessary funds for the construction of the County [eater System and, through its organization or by designated agent, shall accomplish all initial construction and subsequent expansion of the utility system. 15. Upon the cor,.pletion of construction of facilities that are a program increment to the County Water System, City, accompanied and assisted by representatives of County, shall inspect the finished facilities to assure their completeness and conformity to the approved design plan specifications. LTpon a mutual agreement by City and County that the facilities as installed are completed in accordance with and conform to the approved stan- dards and specifications for construction of the County T^~ater System as established under the provisions of Paragraph 13 of this Agree- ment, City shall accept the facilities for operation and maintenance and shall provide not less than the same level of service to those connected to the County ~Jater System. as is provided to City's - 11 - customers. In the event City and County are unable to mutually agree as to whether any part of the facilities are completed in accordance with and conform to the approved standards and specifications referenced above, the consultant employed under Paragraph 13 of this Agreement, or another consultant mutually agreed upon by City and County, will arbitrate the dispute. Such consultant shall determine whether the facilities are completed in accordance with and conform to the approved standards and specifications referenced above, and if not, shall determine addi- tional steps necessary to complete the facilities. Once such additional work, if required, is completed, the consultant shall be utilized to arbitrate any remaining disputes. The decision of the consultant so selected shall be binding on City and County. Any costs associated with employment 'of the consultant shall be shared equally by City and County. 16. City has determined to make certain imprcvements and additions to its Sweeney 4later Treat^tent Plant, to be financed by the issuance of City's bonds (hereinafter "Sweeney bonds"). County agrees to pay the following percentage of the cost of the items enumerated below: Item Description (a) Alum sludge disposal City's Share 75$ County's Share 25~ (b) High lift pump station (c) Increase to 24 million gallons per day 75$ 50~ 25~ 50$ In the event County's reserved capacity is reduced under the provisions of Paragraph 7 or 8 of this Agreement, County's percentage share of the ir~provemerts listed above shall be reduced as follot,~s (i) Percentage for ite*-~s (a) and (b) shall be that percentage determined by dividing County's - 12 - reduced reserved capacity stated in millions of gallons per day by 24,000,000; (ii) Percentage for item (c) shall be that percentage determined b_v dividing County's reduced reserved capacity stated in millions of gallons per day by 12,000,000. Any increase in County's reserved capacity shall result in an increase in County's percentage share of the improvements listed above. Such increased percentage shall be calculated as set forth in (i) and {ii), except that the numerator for nur~oses of deter- mining the percentage shall be County's increased reserved capacity stated in millions of gallons per day. Any increase or reduction in County's percentage share of the improvements shall be effective from and after the date County's reserved capacity is increased or reduced. There shall be no adjustment made or rebates paid as a result of any payments made by County for said improvements prior to the date County's reserved capacity is altered. 17. County shall not be obligated to levy or pledge or cause to be levied or pledged any taxes whatsoever or to make any appropriation or expenditures from tax proceeds in meeting the obligations of this Agreement. Nothing contained herein shall prevent County from making any appropriations or expenditures from tax proceeds in meeting the obligations or this Agreement in a manner permitted by law. 18. she terr:s and conditions of this Agreement shall not be binding upon the parties hereto for a period beyond forty (40) years from the first month in ~~~hich City is capable of supply- ing County with its reserved capacity, subject to the provisions of Paragraphs 1.4 and 3 of this Agreement. - 13 - 19. In the event of bankruptcy of either City or Authority, this Agreement shall terminate immediately, and the terms and conditions contained herein shall be null and void. County immediately shall have the option to operate its own water system. 20. The terms and conditions of this Agreement between City and County shall not be valid and binding upon either party hereto until each of the following conditions shall have been satisfied: (a) An agreement between City and Authority has been consummated. (b) The citizens of New Hanover County have passed a bond referendum authorizing the issuance of the necessary general obligation bonds for the construction of the County Water System. (c) The citizens of the City of Wilmington have passed a bond referendum authorizing the issuance of the necessary general obligation bonds for the improvement of City's Sweeney Water Treatment Plant. (d) Authority has received the written approval of the State Director of the Farmers Home Administration, United States Department of Agriculture, for the Project and the under- taking necessary to initiate and complete the Project. (e) City has begun to receive raw water from Authority. 21. Prior to the date on which the terms and conditions of this Agreement between City and County become valid and binding on either party hereto as set forth herein, City agrees to provide on demand to County up to 2,000,000 gallons per day of finished water at the then prevailing City rate, subject to the applicable terms and conditions of this Agreement. City shall have the absolute right, in its sole discretion, to reduce or terminate the amount of finished water so furnished to County at any time prior - 14 - to the date on which the terms and conditions of this Agreement become valid and binding upon either party hereto, as set forth herein. 22. In the event of any occurrence rendering County incapable of performing under this Agreement, any successor of County, whether the result of legal process, assignment or other- wise, shall succeed to its rights, liabilities and obligations hereunder. In the event of any occurrence rendering City incapable of performing under this Agreement, any successor of City, whether the result of legal process, assignment or otherwise, shall succeed to its rights, liabilities and obligations hereunder. 23. This Agreement is subject to such laws, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body as may be applicable to similar agreements in the State of 2dorth Carolina, and County and City agree to cooperate in obtaining such permits, certificates or the like, as may be required to comply therewith. 24. This Agreement shall be construed and enforced in accordance with the laws of the State of North Carolina. CITY OF WILMINGTON, NORTH CAROLINA (CORPORATE SEAL) BY: ~'~~ Ben B. Halterman ATTEST• Mayor of the City of Wilmington ~~~~Ut-~ City Cler. NEW HANOVER COUNTY, NOP.TH CAROLINA ~~ `--`~ ( CO~~t ORATE-'S•E~AL ) BY : ~_,~~~C,l ~ ~ ~,C~~~-~~.-cJ . _ - ~_ Ellen C. ti~lilliams, Chairperson -ATTEST• ~ ~- New Hanover County Board • - of Commissioners -f~~~'~unfy Clerk - 15 - ANNEX A - CITY-COUNTY WATER CONTRACT MAINTENANCE OF COUNTY WATER SYSTEM The City will perform the following maintenance items: A. Water Meters 1. Stopped meters and other meters defective, in the City's judgment, will be replaced with new or rebuilt meters. 2. The City is currently attempting to replace each meter approximately every ten years with a new or rebuilt meter. The City will continue this effort with the County system. 3. The City will repair meter leaks on an emergency or reguldrly scheduled basis as necessary.. 4. The City will raise meters and meter boxes con- sidered to be too low for reading meters, iri the City's judgment. 5. The City will relocate meters and meter boxes as necessary at the expense of property owners. Where meters or meter boxes are relocated at County or State request, County shall pay all costs associated with such relocation. B. Service Lines 1. The City will repair leaks or other service line problems as necessary on an emergency or scheduled basis. 2. The City will conduct pressure tests for customers with low pressure or low volume complaints. The City will relay any service line which, in the judgment of the City, cannot be satisfactorily repaired. 3. Upon receipt of application, the City will install all service lines, including meters, in sizes from 3/4 inch to 12 inches. 4. Upon application, the City will install all fire line connections, including detector check, through 12 inches in size. 5. The City will be responsible for the proper abandonment of a service line when the City or County determines that the line is no longer needed. C. Fire Hydrants 1. The City will inspect and paint where required each County fire hydrant annually and make necessary repairs. 2. The City will inspect and repair any hydrant reported defective by a member of any fire depart- ment or any other person, but shall not be held liable for failure to do so. •' ! ANNEX A (Cont'd) - D. Valves 1. The City will inspect and operate each valve in the County system annually and make necessary repairs. 2. The City will repair or replace leaking or defective valves as necessary. 3. The City will adjust valve boxes to proper grade as necessary. 4. .The City will repair or replace valve boxes and lids as necessary. E . 6Vater Mains 1. The City will repair water main leaks and breaks on ' an emergency basis or when, in the opinion of the City, such repairs are extensive, the City may request the County to employ private contractors to make the repairs at the County's direct expense. 2. The City will make all necessary taps for hydro- static testing of new main installations and will operate valves necessary to activate the system. 3. The City will conduct and witness sterilization of all new mains, whether they~are installed by the City or the County. F. Maintenance of Elevated Tanks in the County If there are elevated tanks in the County water system, maintenance of these tanks will be as follows: 1. County will provide: {a) All painting of metal surfaces of elevated tanks. (b) All major repairs to elevated tanks. (c) All major additions of equipment. 2. City will maintain, but not replace, the following: (a) Cathodic protection systems for elevated tanks where provided. (b) Altitude valves. (c) Level recorders. (d) Valve and equipment houses or structures. (e) Mowing of site. {f) Protective fencing and security lighting. (g) Driveways and walks.