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
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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
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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.
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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
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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
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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.
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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.
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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
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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.
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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
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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
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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.
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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
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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
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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.