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HomeMy WebLinkAbout035 - 03/06/2001 - AUTHORIZING THE MAYOR TO ENTER INTO AN IGA WITH THE FORT COLLINS/LOVELAND WATER DISTRICT FOR THE SAL ORDINANCE NO. 35, 2001 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE MAYOR TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY AND THE FORT COLLINS-LOVELAND WATER DISTRICT FOR THE SALE AND DELIVERY OF POTABLE WATER WHEREAS, the City of Fort Collins (the "City") owns and operates a water utility which acquires, treats, transmits and distributes potable water within the City; and WHEREAS, the Fort Collins-Loveland Water District (the "District"), is a special district organized and existing under Colorado law that also owns and operates a water utility which acquires, treats, transmits and distributes potable water within portions of Larimer County and the City; and WHEREAS, the City and the District have in the past entered into agreements pursuant to which the City has sold and delivered potable water to the District and pursuant to which the City and the District have exchanged potable water; and WHEREAS,pursuant to C.R.S.Sections 29-1-203(1),governmental entities in Colorado are authorized to cooperate and contract with one another to provide any function, service or facility lawfully authorized to each of the cooperating and contracting governmental facilities; and WHEREAS, the District's raw water requirements for providing water services to its customers are more costly than the City's raw water requirements because the District's primary source of water is currently Colorado Big Thompson Water ("CBT Water") which has recently greatly increased in price; and WHEREAS,the City owns more diverse water rights,so its raw water requirements have not been as adversely affected by higher CBT Water prices; and WHEREAS,the District is now in the process of developing new sources of water, so over time this should reduce the District's raw water requirements; and WHEREAS, in the meantime, the District has asked the City to enter into a proposed "Intergovernmental Agreement for the Sale and Delivery of Potable Water," a copy of which is attached hereto as Exhibit "A" and incorporated herein by this reference, (the "IGA") so that the District can more economically provide water service to its customers within certain areas of the District located within the city; and WHEREAS, under the IGA the City would sell and deliver potable water to the District to then be used by the District to provide water service to the District's customers in approved subdivisions and developments that are located solely and entirely south of Harmony Road,east of the Union Pacific Railroad tracks, west of County Road 7 and north of County Road 34 extended east (the "Service Area"); and WHEREAS,it is the expressed intent and understanding of the City and the District that the only subdivisions and developments in the Service Area that will be eligible to receive the benefit of the City'sobligations under the IGA, and for which the City will be obligated under the IGA,are those that have been annexed into the City and,if not already annexed,those that are annexed within five years of the date of the IGA, unless such five year period is extended by mutual agreement of the parties for up to two additional five year periods as provided in the IGA. NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. That the IGA is in the best interest of the City and its citizens and is necessary for the public's health, safety and welfare. Section 2. That the IGA is hereby approved. Section 3. That the Mayor be,and hereby is, authorized to execute the IGA on behalf of the City. Introduced, considered favorably on first reading, and ordered published this 20th day of February, A.D. 2001, and to be presented for final passage on the 66Lh day of March, A.D. 2001. ayor _ . A I : 'Lk q.A L..'AA City Clerk Passed and adopted on final reading this 6th day of March, A.D. 2001. Mayor ''llfttGG`` ATTEST: - 1" 1%,4. A. City Clerk INTERGOVERNMENTAL AGREEMENT FOR THE SALE AND DELIVERY OF POTABLE WATER This Agreement is made and entered into this day of , 2001, by and between the CITY OF FORT COLLINS, a Colorado municipal corporation, (hereinafter referred to as "the City"), the FORT COLLINS-LOVELAND WATER DISTRICT, apolitical subdivision of the State of Colorado, ("the District"), and the FORT COLLINS - LOVELAND WATER DISTRICT ENTERPRISE, an enterprise of the District("the District Enterprise"). WITNESSETH : WHEREAS, the City is a home rule municipality organized and existing under Colorado law that owns a water utility which acquires, treats, transmits and distributes potable water ("the City Water Utility"); and WHEREAS, the City Water Utility distributes potable water to its customers through a variety of water transmission facilities locatedwithin the City("the City's Transmission Facilities"); and WHEREAS,the District is a special district organized and existing under Colorado law that also operates awater utility which distributes potable water through avariety of water transmission facilities located within Larimer County, Colorado ("the District's Transmission Facilities"); and WHEREAS,the District Enterprise was created by the District in order to comply with the provisions of Section 20,Article X of the Colorado Constitution and Article 45.1 of Title 37 of the Colorado Revised Statutes so that the District, acting through the District Enterprise, can issue 1 revenue bonds and enter into multi-year fiscal obligations in connectionwith the District's operation of its water utility; and WHEREAS,the District Enterprise is made aparty to this Agreement solely for the purpose of entering into any multi-year fiscal obligation required of the District under this Agreement; and WHEREAS,pursuantto C.R.S. Section 29-1-203(1),governmental entities in Colorado are authorized to cooperate or contract with one another to provide any function, service or facility lawfully authorized to each of the cooperating or contracting governmental entities; and WHEREAS,the purpose of this Agreement is for the City to sell and deliver potable water to the District to then be used by the District to provide water service to the District's customers in approved subdivisions and developments that are located solely and entirely south of Harmony Road,East of the Union Pacific Railroad tracks,West of County Road 7 and North of County Road 34 extended east("the Service Area");provided,however,that these subdivisions and developments in the Service Area must be annexed into the City, as hereinafter provided, before the City shall have any obligation with respect to them under this Agreement; and WHEREAS, it is the express intent and understanding of the parties that the only subdivisions and developments in the Service Area eligible to receive the benefit of the City's obligations under this Agreement, and for which the City will be obligated under this Agreement, are those that have been annexed into the City and, if not already annexed,those that are annexed within five(5)years of the date of this Agreement,unless such five(5)year period is extended by mutual agreement of the parties for up to two(2)additional five-year periods as hereinafter provided ("Eligible Subdivisions"), and 2 WHEREAS, Eligible Subdivisions will receive, for the foreseeable future, water service from the District; and WHEREAS, the District's raw water requirements for providing water services to its customers are presently higher than the City's raw water requirements because the District's primary source of water is currently Colorado Big Thompson Water ("CBT Water") which has recently greatly increased in price; and WHEREAS, the City owns more diverse water rights, so its raw water requirements have not been as adversely affected by higher CBT Water prices; and WHEREAS,the District is now in the process of developing new sources of water,so over time this should reduce the District's raw water requirements; and WHEREAS, in the meantime the City and the District have agreed to enter into this Agreement so the District can more economically provide water service to its customers in the Eligible Subdivisions; and WHEREAS,this potable water will be delivered by the City to the District at the following two delivery points: (a)the existing connection between the City's Transmission Facilities and the District's Transmission Facilities located in Fort Collins, Colorado, at the southeast corner of the intersection of Taft Hill Road and the newly relocated Harmony Road ("the Southwest Delivery Point") and(b)the existing connection between the City's Transmission Facilities and the District's Transmission Facilities located in Fort Collins,Colorado, on the west side of County Road 9, one- half mile south of Harmony Road ("the Southeast Delivery Point"); and WHEREAS, the City, the District and the District Enterprise previously entered into that certain agreementtitled"Intergovernmental Agreement forthe Sale andDelivery of Potable Water" 3 and dated January, 1999 ("the Exchange Agreement"),pursuant to which the City and the District have agreed to exchange water; WHEREAS,the City delivers its water to the District under the Exchange Agreement at the Southwest and Southeast Delivery Points; and WHEREAS,it is the intent of the City,the District and the District Enterprise that the water to be sold and delivered by the City under this Agreement to the District shall be in addition to the water that the City delivers to the District under the Exchange Agreement; and WHEREAS, subject to the following terms and conditions, the City agrees to sell and so deliver potable water to the District and the District agrees to purchase and take delivery of such potable water from the City to be used by the Company for its customers in the Eligible Subdivisions. NOW, THEREFORE, in consideration of the parties' mutual promises and agreements contained herein,and other good and valuable consideration,the receipt and adequacy ofwhich are hereby acknowledged,the parties hereto agree as follows: 1. Term of Agreement. The obligations of the parties under this Agreement shall be perpetual in duration and shall not expire unless terminated as provided in paragraph 10. or 11. below. However,the City's obligations under this Agreement shall only extend to the Eligible Subdivisions, meaning those approved subdivisions and developments in the Service Area that are currently annexed into the City or that are annexed within five (5) years of the date of this Agreement. Therefore,as to subdivisions and developments located within the Service Area that are not currently annexed into the City or are not annexed within five(5)years of the date of this Agreement,the City shall have no obligation with respect to them under this Agreement. Notwithstanding the foregoing, 4 the parties agree to meet within six (6) months before the fifth (5 ) anniversary date of this Agreement to discuss whether the term"Eligible Subdivisions," as used in this Agreement, should be amended to include subdivisions and developments within the Service Area that are annexed into the City within the next five(5)year period after the fifth(5 ) anniversary date of this Agreement. If the parties agree to such an amendment,they shall enter into a written addendum to this Agreement which so provides, and the addendum must be approved by the Fort Collins City Council. In the event that such addendum is entered into, the parties further agree to meet within six (6) months before the tenth(10')anniversary date of this Agreement to discuss again whether the term"Eligible Subdivisions"should be amended to include subdivisions and developments within the Service Area that are annexed into the City within the next five (5)year period after the tenth (10t°) anniversary date of this Agreement. If the parties agree to such an additional amendment, they shall enter into another written addendum to this Agreement which so provides,and the addendum mustbe approved by the Fort Collins City Council. Nothing herein, however, shall obligate any party to this Agreement to agree to so amend the term "Eligible Subdivisions" as described above. 2. Amount of Water to be Sold and Delivered by the City to the District. As the Eligible Subdivisions are developed,when a lot owner applies to the City for a building permit,the lot owner shall be required at that time to pay the City's applicable water plant investment fee as established in Division 4 of Article III of Chapter 26 of the City Code. The lot owner shall also be required to satisfy the City's applicable raw water requirements as established in Division 5 of Article III of Chapter 26 of the City Code. When a lot owner pays the City's water plant investment fee and satisfies the City's raw water requirements,as such fee and requirements are determined pursuant to paragraph 6 below,the City agrees to sell and deliver to the District in each fiscal year thereafter an 5 amount of potable water equal to the raw water requirement satisfied by such lot owner in the Eligible Subdivision divided by a factor of 1.92. (When used in this Agreement, "fiscal year" shall mean November 1"of a year to October 3 I"of the following year). Therefore,as lots are developed in the Eligible Subdivisions and the City's raw water requirements are satisfied by these lot owners, the annual volume of potable water that the City will sell and deliver under this Agreement to the District shall increase accordingly. 3. Delivery of Water to the District. The City shall deliver to the District in each fiscal year, beginning November 1, 2001, the total amount of potable water established pursuant to paragraph 2. above and the City shall deliver such water to the District at the Southwest Delivery Point and/or at the Southeast Delivery Point. These deliveries will be in addition to the potable water delivered to the District by the City in accordance with the Exchange Agreement. The maximum total amount of water that can be delivered daily and during any fiscal year under this Agreement and under the Exchange Agreement shall be as set forth in paragraph 3.C. of the Exchange Agreement. 4. Compensation for Water Delivered. For the potable water delivered by the City to the District under this Agreement,the District and the District Enterprise shall pay the City for the fiscal year beginning November 1, 2001, $1.36 per thousand gallons of water delivered under this Agreement. After the fiscal year beginning November 1, 2001, the City may annually review this rate and revise it based upon the City's then existing costs of service. The City shall give the District and the District Enterprise at least sixty(60)days prior written notice of any change in this rate. The City shall determine by November 15,2001, and by November 15'of each fiscal year thereafter,the total potable water to be delivered for the next fiscal year and the resulting charge under this paragraph. This charge shall be divided by twelve(12)months and the City shall bill the charge to 6 the District thereafter in equal monthly installments. The District shall pay the City the charges assessed under this paragraph within thirty(30)days after receiving a monthly billing from the City. 5. Water Delivered Excluded from Transmission Charge Owed under Exchange Agreement. Under paragraph 5 of the Exchange Agreement,the District and the District Enterprise are required to pay each fiscal year to the City an annual transmission charge based on the number of gallons of water delivered to the District on the day of the highest peak delivery for that fiscal year. With respect to the water delivered under this Agreement, such water shall not be included in the total number of gallons used to calculate the transmission charge as assessed in paragraph 5 of the Exchange Agreement. Consequently, in order to determine the total number of gallons of water delivered for which a transmission charge will be assessed under paragraph 5 of the Exchange Agreement, the number of gallons delivered under this Agreement on the day of highest peak delivery in any given fiscal year shall be subtracted from the total number of gallons delivered on that day under both this Agreement and the Exchange Agreement. To determine the number of gallons delivered under this Agreement that are to be subtracted from the total number of gallons delivered on the day of highest peak delivery, it shall be assumed that the percentage of water delivered under this Agreement during that day is equal to the percentage that the total number of gallons sold under this Agreement during that fiscal year is to the total amount of water delivered under this Agreement and the Exchange Agreement during that fiscal year. Byway of illustration, if during a fiscal year the total amount of water delivered to the District by the City under the Exchange Agreement and this Agreement is One Hundred Million(100,000,000)gallons and,of this total, ninety percent (90%), or Ninety Million (90,000,000) gallons, was delivered under the Exchange Agreement and ten percent (10%), or Ten Million (10,000,000) gallons, was delivered 7 under this Agreement, it shall be assumed that of the total number of gallons delivered on the day of highest peak delivery, ten percent (10%) of such water was delivered under this Agreement. Therefore, if the amount of water on the day of highest peak delivery is Nine Million (9,000,000) gallons,ten percent(10%), or Nine Hundred Thousand(900,000) gallons, shall be subtracted from the Nine Million(9,000,000)gallons,and the transmission charge underparagraph 5 ofthe Exchange Agreement shall be assessed based on Eight Million One Hundred Thousand (8,100,000) gallons. 6. Determination of City's Water Plant Investment Fees and Raw Water Requirements. When the owner of a lot in the Eligible Subdivision requests a building permit from the City, the City's determination of the appropriate amount for the water plant investment fee and the amount of cash or water rights needed to satisfy the raw water requirements imposed by the City on such lot owners, r shall be made by the City's utilities staff as part of the City's normal development review/building permit process. Such raw water requirements shall be satisfied using one or more of the following options: (a)cash at the City's then current cash in-lieu-of rate; (b)shares of stock from the following companies at the City's then current conversion factors for Arthur Irrigation Company, Larimer County Canal No. 2, New Mercer Ditch Company, North Poudre Irrigation Company, Pleasant Valley and Lake Canal Company,Warren Lake Reservoir Company,and Northern Colorado Water Conservancy District (Colorado Big Thompson Units); (c) City of Fort Collins water certificates (green originals)at face value; and(d)Josh Ames City of Fort Collins water certificates on the basis of.5625 acre feet per certificate. 7. Water Quality. All potable water delivered to the District by the City under this Agreement shall meet or exceed all quality standards for potable water that are required by the Environmental Protection Agency (the EPA"), required by the Colorado Department of Public Health and 8 Environment(hereinafter referred to as "the CDPHE"),and that are set forth in Exhibit"A" attached hereto and incorporated herein by reference ("the Water Quality Standards"). Responsibility for ensuring that the Water Quality Standards are met for water delivered under this Agreement shall rest upon the City up to the point of delivery and rest upon the District after receiving the water at the point of delivery. 8. Meterine. In order to accurately account for the potable water delivered under this Agreement,metering,recording and telemetry devices shall be installed and maintained at the points of delivery specified in this Agreement. Responsibility for furnishing, installing and maintaining such devices at the Southwest Delivery Point and the Southeast Delivery Point shall be as provided in paragraph 7 of the Exchange Agreement.. , 9. Maintenance and Repairs. If the City anticipates that any scheduled maintenance or repair of its facilities could significantly interfere with the delivery of potable water under this Agreement, the City shall give the District,if reasonably practicable, at least seven(7) days prior written notice of the scheduled maintenance or repairs. Also,when reasonably practicable, the City shall attempt to schedule such maintenance and repairs during periods of low demand by the other party for potable water under this Agreement. If,however, an unscheduled interruption of service under this Agreement occurs and in order to restore such service it is necessary to make repairs to the affected facilities, the City shall promptly notify the District of the problem and proceed with due diligence to make the needed repairs. 10. Termination for Breach. Both the City and the District may terminate this Agreement upon a material breach by the other party of any term or condition of this Agreement if such breach continues for a substantial and unreasonable period of time, but in any event if the breach has 9 continued for a period of thirty(30)days after receipt by the breaching party from the non-breaching party of a written notice of the existence of such breach. Notwithstanding any provision contained herein to the contrary,in no event shall the City or the District terminate this Agreement if the party at fault proceeds, after receiving said notice, with due diligence to correct or rectify the material breach regardless of the duration of such breach. Termination of this Agreement shall not,however, be the sole remedy of either party and any exercise of this right to terminate shall not preclude the pursuit of any other remedy available in law or in equity to the non-breaching party. 11. Early Termination by the District. At any time and for any reason,the District may terminate this Agreement upon giving the City at least sixty(60)days prior written notice of such termination. The written notice shall state the specific date upon which such termination shall be effective. If the District terminates this Agreement pursuant to this paragraph,the District and the District Enterprise shall not be entitled to reimbursement of any previously paid water plant investment fees or to the return of any money or water rights previously provided to the City to satisfy raw water requirements under this Agreement. Further, the District and the District Enterprise agree to defend, indemnify and hold harmless the City, and its officers and employees, from any and all claims and causes of action brought against the City, and its officers and employees, by the developers of the Eligible Subdivisions,lot owners in the Eligible Subdivisions,the District's customers, and any other person or entity who may sue the City as a direct or indirect result of the District terminating this Agreement under this paragraph. In addition,the District and the District Enterprise agree to indemnify the City for all costs and expenses related to defending such claims and causes of action, including, but not limited to,litigation costs and attorneys fees,whether or not any such claims or causes of actions are groundless, frivolous, false or fraudulent. 10 12. Force Maieure. Notwithstanding anything contained herein to the contrary,it is agreed that in the event and to the extent that fire, flood, earthquake, natural catastrophe, explosion, accident, war, illegality, act of God, or any other cause beyond the control of any party hereto, or strikes or labor troubles (whether or not within the power of the party affected to settle the same)prevents or delays performance by any party to this Agreement,such party shall be relieved of the consequences thereof without liability, so long as and to the extent that performance is prevented by such cause; provided,however, that such party shall exercise due diligence in its efforts to resume performance within a reasonable period of time. 13. GoverningLaw and Enforceability. This Agreement shall be construed in accordance with the laws of the State of Colorado. In addition, the parties hereto recognize that there are legal constraints imposed upon the City, the District and the District Enterprise by the constitutions, statutes, and rules and regulations of the State of Colorado and of the United States, and imposed upon them by the City Charter and City Code,and that,subject to such constraints,the parties intend to carry out the terms and conditions of this Agreement. Notwithstanding any other provision of this Agreement to the contrary,in no event shall any of the parties hereto exercise any power or take any action which shall be prohibited by applicable law. Whenever possible, each provision of this Agreement shall be interpreted in such a manner so as to be effective and valid under applicable law. 14. Assignment. This Agreement shall not be assigned by any of the parties hereto without the prior written consent of all the other parties hereto. 15. Notices. Other than invoice billings which may be sent by first class mail,whenever written notice is required or permitted to be given hereunder by on e party to another, it shall be given effect 11 by hand delivery or by mailing the same by certified mail,return receipt requested, to the party to whom given. Notices shall be addressed as follows: If to the City to: With a copy to: Fort Collins Utilities Fort Collins City Attorney Attn: Utilities General Manager City of Fort Collins 700 Wood Street 300 LaPorte Avenue Fort Collins, CO 80521 Fort Collins, CO 80521 If to the District and to the District Enterprise to: With a copy to: Fort Collins-Loveland Water District Attn: District Manager 5150 Sneed Drive Fort Collins, CO 80525 Any party hereto may at any time designate a different person or address for purposes of receiving notice by so informing the other parties in writing. Notice by certified mail shall be deemed effective upon actual receipt thereof or three (3) days after being deposited in the United States mail, whichever first occurs. 16. Waiver. No waiver by any of the parties hereto of any of the terms and conditions of this Agreement shall be deemed to be or shall be construed as a waiver of any other term or condition, nor shall a waiver of any breach of this Agreement be deemed to constitute a waiver of any subsequent breach of the same provision of this Agreement. 17. Construction. This Agreement shall be construed according to its fair meaning and as if it was prepared by all the parties hereto and shall be deemed to be and contain the entire agreement between the parties hereto. There shall be deemed to be no other terms, conditions, promises, understandings, statements or representations, expressed or implied, concerning this Agreement, unless set forth in writing and signed by all of the parties hereto. Paragraph headings in this 12 Agreement are for convenience of reference only and shall in no way define, limit or prescribe the scope or intent of any provision of this Agreement. 18. Severability. If any provision of this Agreement,or the application of such provision to any person, entity or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons, entities or circumstances other than those in which it was held invalid, shall not be affected. 19. Attorney's Fee. In the event that any of the parties hereto shall default in any of their covenants or obligations contained herein so as to require any other party to this Agreement not in default to commence legal or equitable action against the defaulting party, the defaulting party expressly agrees to pay all of the non-defaulting parties' reasonable expenses in said litigation, including a reasonable sum for attorney's fees. 20. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. IN WITNESS HEREOF THE PARTIES HERETO have executed this Agreement as of the date and year first above written. THE CITY OF FORT COLLINS, COLORADO, A Municipal Corporation ATTEST: By: Mayor City Clerk 13 APPROVED AS TO FORM: Deputy City Attorney CITY OF FORT COLLINS WATER UTILITY ENTERPRISE, An Enterprise of the City ATTEST: By: President City Clerk FORT COLLINS-LOVELAND WATER DISTRICT, A Political Subdivision of the State of Colorado ATTEST: By: John Weitzel, President Michael D. DiTullio, Secretary FORT COLLINS - LOVELAND WATER DISTRICT ENTERPRISE, An Enterprise of the District ATTEST: By: John Weitzel, President Michael D. DiTullio, Secretary 14