HomeMy WebLinkAbout2003-013-02/04/2003-AUTHORIZING THE MAYOR TO EXECUTE AN INTERGOVERNMENTAL AGREEMENT WITH THE NORTHERN COLORADO WATER CON RESOLUTION 2003-013
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE MAYOR TO EXECUTE AN INTERGOVERNMENTAL
AGREEMENT WITH THE NORTHERN COLORADO WATER CONSERVANCY DISTRICT
ACTING BY AND THROUGH THE PLEASANT VALLEY PIPELINE WATER ACTIVITY
ENTERPRISE AND THE CITY OF FORT COLLINS WATER UTILITY ENTERPRISE
FOR CONSTRUCTION OF THE PLEASANT VALLEY PIPELINE PROJECT
AND ALLOTMENT OF PIPELINE CAPACITY
WHEREAS, by Resolution 97-88 the City Council adopted the Revised Water Treatment
Facilities Master Plan; and
WHEREAS,a new raw water transmission pipeline from the Poudre River to the City's water
treatment facility is included as a part of the master plan; and
WHEREAS,the City of Fort Collins,the City of Greeley,and three local water districts have
been working together with the Northern Colorado Water Conservancy District("NCWCD")toward
the shared use of a new "Pleasant Valley Pipeline" ("PVP"), which would avoid duplication of
similar pipelines; and
WHEREAS, the parties cooperatively evaluated the feasibility of the PVP in what has been
called Phase 1 of the Project; and
WHEREAS, NCWCD has formed the "PVP Enterprise" to design, construct, own, and
operate the pipeline for the City and the other participants; and
WHEREAS,in May 1999,the City Council and the Water Utility Enterprise Board adopted
resolutions authorizing an intergovernmental agreement for Phase 2 of the Project, which included
environmental studies, design, permitting, right-of-way acquisition and related work; and
WHEREAS, the PVP Enterprise has now completed Phase 2 pursuant to that
intergovernmental agreement, and is ready to proceed with construction of the PVP; and
WHEREAS, the terms and conditions for construction of the PVP, and for payment for
construction and ongoing maintenance costs and allotment of PVP capacity are set forth in the
"Allotment Contract with the Northern Colorado Water Conservancy District, Acting By and
Through the Pleasant Valley Pipeline Water Activity Enterprise and the City of Fort Collins and the
City of Fort Collins Water Utility Enterprise For Capacity in the Pleasant Valley Pipeline," a copy
of which is attached hereto as Exhibit"A"and incorporated herein by reference(the"Agreement").
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the Council hereby approves the Agreement and authorizes the Mayor to execute the
Agreement on behalf of the City,together with any modifications or amendments thereto determined
by the City Manager,in consultation with the City Attorney,to be necessary or appropriate to protect
the interests of the City.
Passed and adopted at a regular meeting of the City Council of the City of Fort Collins this
4th day of February, A.D. 2003.
Mayor
ATTEST:
lam. S •.
City Clerk
EXHIBIT "A"
ALLOTMENT CONTRACT WITH THE
NORTHERN COLORADO WATER CONSERVANCY DISTRICT,
ACTING BY AND THROUGH THE PLEASANT VALLEY PIPELINE
WATER ACTIVITY ENTERPRISE
AND
THE CITY OF FORT COLLINS
AND
THE CITY OF FORT COLLINS WATER UTILITY ENTERPRISE
FOR CAPACITY IN THE PLEASANT VALLEY PIPELINE
This Allotment Contract dated this day of , 2003, is entered into
by and between the the City of Fort Collins, Colorado, a municipal corporation, whose address is
300 LaPorte Avenue,Fort Collins, Colorado 80521 (hereinafter called "Allottee"), and the City
of Fort Collins Water Utility Enterprise (a government-owned business within the meaning of
Article X, Section 20(2)(d), of the Colorado Constitution, organized pursuant to C.R.S. §§ 37-
45.1-101 et seq.),whose address is 700 Wood Street,Fort Collins, Colorado 80521(hereinafter
called "Allottee Enterprise"), and the Northern Colorado Water Conservancy District (a quasi-
municipal entity and political subdivision of the State of Colorado), acting by and through the
Pleasant Valley Pipeline Water Activity Enterprise (a government-owned business within the
meaning of Article X, Section 20(2)(d), of the Colorado Constitution, organized pursuant to
C.R.S. §§ 37-45.1-101 et seg. , whose address is 1250 North Wilson Avenue,P.O. Box 679,
Loveland, Colorado 80539 (hereinafter called the "PVP Enterprise") (collectively referred to
herein as the "parties"), for an allotment of capacity in the PVP Enterprise's Pleasant Valley
Pipeline under and pursuant to the following terms and conditions.
RECITALS
A. The PVP Enterprise is developing a municipal water supply conveyance system
known as the Pleasant Valley Pipeline to provide an additional raw water delivery
conduit for the City of Fort Collins,the City of Greeley,the East Larimer County
Water District,the Fort Collins-Loveland Water District and the North Weld
County Water District.
B. Capacity in the Pleasant Valley Pipeline will be allocated to users separately for
Summer and Winter delivery periods. Under normal operating conditions,water
in the pipeline will flow from the Munroe Canal Turnout toward the Fort Collins
Water Treatment Facility and Soldier Canyon Filter Plant during the Summer
delivery period, and from the Soldier Canyon Dam Outlet facilities toward the
Greeley Bellvue Water Treatment Plant during the Winter delivery period.
DRAFT January 24,2003
C. The purpose of this Allotment Contract is to allot to each Participant capacity in
the Pleasant Valley Pipeline and to provide the terms and conditions under which
the PVP Enterprise will design, own, construct, operate,maintain, repair and
replace the PVP Pipeline.
AGREEMENT
1. Definitions. The following definitions shall apply herein:
a. "Board" shall mean the Board of Directors of the Northern Colorado Water
Conservancy District.
b. "Contract" shall mean this Allotment Contract dated as set forth above between
PVP Enterprise and Allottee.
C. "District" shall mean the Northern Colorado Water Conservancy District, a
political subdivision of the State of Colorado, and a body corporate with all the
powers of a public or municipal corporation, organized and existing by virtue of
C.R.S. §§ 37-45-101 et_see .., which owns and controls the PVP Enterprise.
d. "District water" shall mean all water that accrues to the use of the District or its
allottees by reason of the Colorado-Big Thompson Reclamation Project.
e. "Entity" shall mean any quasi-municipal corporation, limited liability company,
municipal corporation, public corporation,joint venture,partnership,person,
mutual ditch company, water users' association or private corporation.
f. "Fiscal Year" shall mean the fiscal year of the PVP Enterprise. Currently,the
fiscal year of the PVP Enterprise begins on October 1 and ends on September 30
of the following calendar year. However,the PVP Enterprise may change the
Fiscal Year during the term of this Contract by giving written notice thereof to the
Participants.
g. "MGD" shall mean millions of gallons of water per day measured over a 24-hour
period beginning at 12 midnight and terminating at 12 midnight on the next day.
h. "Initial Participants" shall mean the Allottee and any other Entity with an
enforceable contract for an allocation of capacity in the Pipeline executed on or
before February 14, 2003. Attached hereto as Exhibit A and incorporated herein
by this reference is a list of all Initial Participants in the Pipeline,their respective
initial allotted capacities in MGD,their respective initial points of delivery from
DRAFT January 24,2003 Page 2 of 17
the Pipeline and the minimum hydraulic elevation at such delivery points.
i. "Munroe Canal Turnout" shall mean the modifications to the existing North
Poudre Supply Canal and Diversion Works, also known as the Munroe Gravity
Canal, a canal owned by the District and operated and maintained by the North
Poudre Irrigation Company,to allow continued deliveries of water through the
North Poudre Supply Canal and deliveries to the Pipeline.
j. "Participant" shall mean the Allottee and any other Entity with an enforceable
contract for an allocation of capacity in the Pipeline which Entities may change
from time to time as permitted hereunder.
k. "Pipeline" shall mean the Pleasant Valley Pipeline that has been designed, bid
and,pursuant to the terms of this Contract, constructed by the PVP Enterprise,
which shall include the Munroe Canal Turnout, and the right to receive water
deliveries from the Soldier Canyon Dam Outlet facilities of Horsetooth Reservoir
and the Munroe Canal Turnout to the Pipeline.
1. "Segment" shall mean an individual segment of the Pipeline for which the design
capacity is constant. The Pipeline is divided into a number of segments. Attached
hereto as Exhibit B and incorporated herein by this reference is a description of
each segment,including a description of the point of beginning and point of
termination of each segment and a cost allocation within each segment and the
allotted capacity in MGD in each segment for each Initial Participant.
M. "Soldier Canyon Dam Outlet facilities" shall mean the intake, valves, control
structure, and 54-inch steel outlet pipe through the Soldier Canyon Dam to a point
100 feet downstream of the control structure.
n. "Subdistrict" shall mean the Municipal Subdistrict, Northern Colorado Water
Conservancy District, a political subdivision of the State of Colorado, and a body
corporate with all the powers of a public or municipal corporation, organized and
existing by virtue of C.R.S. §§ 37-45-101 et sect.
o. "Subdistrict water" shall mean the quantity of water acquired and obtained by the
Subdistrict from the development and construction of the Windy Gap Project
pursuant to applicable state law, and which is deliverable to Subdistrict allottees.
p. "Summer delivery period" shall mean the period from April 1 to October 31,
inclusive, of each year.
q. "Winter delivery period" shall mean the period from November 1 of each year to
March 31 of the following year, inclusive.
DRAFT January 24, 2003 Page 3 of 17
2. Allocation of Capacity.
a. The Allottee shall have the perpetual, exclusive right to use 60 (Sixty)MGD of
capacity in the Pipeline during the Summer delivery period from the Munroe
Canal Turnout to its point of delivery at its water treatment plant described in
Exhibit A, upon completion of construction thereof. Allottee's water will be
delivered to Allottee by PVP Enterprise at Allottee's request during the Summer
delivery period on a continuous basis except for disruptions specifically permitted
herein and disruptions resulting from emergencies. Allottee shall not have the
right to use capacity in the Pipeline allotted to any other Participant without the
express permission of the Participant whose capacity is being utilized, except as
provided in paragraph 2.d.
b. In addition, during the Winter delivery period from the Soldier Canyon Dam
Outlet facilities to Allottees point of delivery at its water treatment plant described
in Exhibit A, Allottee shall have the perpetual, exclusive right to use 0 (zero)
MGD of capacity in the Pipeline, plus 42.5% of the capacity in the Pipeline in
excess of the 30 MGD of capacity allocated to the City of Greeley, all upon
completion of construction thereof. Allottee's water will be delivered to Allottee
by PVP Enterprise at Allottee's request during the Winter delivery period on a
continuous basis except for disruptions specifically permitted herein and
disruptions resulting from emergencies. Allottee shall not have the right to use
capacity in the Pipeline allotted to any other Participant without the express
permission of the Participant whose capacity is being utilized, except as provided
in paragraph 2.d.
C. The flow direction in the Pipeline may be reversed during either the Summer or
the Winter delivery period to allow one or more Participants to make efficient use
of water supplies available to them; provided that no Participant shall be
prevented from using its full allocated capacity during any period. In the event
that the Allottee desires to reverse the direction of operation of the Pipeline during
any delivery period,it shall make a written request to the PVP Enterprise and all
other Participants describing the time at which the reversed operation is requested
to begin and end. Within five (5) days after receipt of such written request, the
PVP Enterprise and all other Participants shall either consent to or object to such
reverse operation in writing,provided that consent to such reverse operation shall
not be unreasonably withheld by the PVP Enterprise or any Participant.
Differences in the quality of water provided by the Soldier Canyon Dam Outlet
facilities and the Munroe Canal Turnout facility shall not be sufficient grounds to
object to reverse operations, except when the quality of water provided by a
facility is materially degraded from the quality of water historically provided by
such facility.
DRAFT January 24, 2003 Page 4 of 17
d. Modifications of Pipeline operations may be necessary in the event of an
emergency. Emergencies shall consist of disruptions of one or more Participant's
water supply sources for any unforeseen reason, including, but not limited to,
failure of Pipeline facilities, failure of water supply facilities, or contamination of
a Participant's water supply source. If the Allottee experiences an emergency that
may require modification of Pipeline operations, it shall immediately give notice
of the emergency to the PVP Enterprise and all other Participants accompanied by
a description of modifications to Pipeline operations requested by the Allottee.
Upon receipt of such notice, the PVP Enterprise shall immediately consult with all
Participants regarding the emergency condition and the request for modification of
Pipeline operations. After such consultation,the PVP Enterprise shall have the
authority to implement the requested modifications of Pipeline operations in
whole or in part, so long as such modifications do not limit water deliveries to any
other Participant to an extent that would cause an emergency for any other
Participant. The Allottee shall use its best efforts to correct conditions causing the
emergency and to allow resumption of normal Pipeline operations as soon as
practicable. During emergencies, Allottee shall cooperate with all other
Participants to maximize delivery of water to all Participants. Such cooperation
may consist of modifying flow direction and capacity allocations in the Pipeline,
use of alternative water supply sources, and/or cutbacks in deliveries to Allottee's
water customers for the duration of the emergency.
e. PVP Enterprise shall provide Allottee with thirty(30) days'prior written notice of
any scheduled disruption in the delivery rights of Allottee described herein. Such
thirty(30) day notice shall include the date scheduled for initiation and
termination of the disruption. Allottee shall respond within fifteen (15) days after
receipt of the thirty(30) day notice and such response shall notify PVP Enterprise
as to whether the disruption is acceptable or unacceptable. If the scheduled
disruption is unacceptable,Allottee shall state conditions under which the
scheduled disruption would be acceptable to Allottee. PVP Enterprise shall not
proceed in permitting the scheduled disruption unless and until issues raised in the
response have been addressed to reasonably assure unimpaired delivery to
Allottee's water customers.
f. In the event that the Pipeline, after completion of construction, has capacity in
excess of the initially allocated capacity("Excess Capacity"), Allottee shall have
the perpetual, exclusive right to use a pro rata share of the Excess Capacity at
Allottee's point of delivery.The Allottee's pro rata share of the Excess Capacity
shall be the Allottee's percentage of the capacity of the Pipeline allocated in this
Contract times the total amount of Excess Capacity for the Pipeline. Allottee's
perpetual, exclusive right to use Excess Capacity hereunder shall be at no
increased cost and shall be subject to Allottee's full compliance with all the terms,
DRAFT January 24,2003 Page 5 of 17
conditions and obligations hereinafter set forth.
g. In the event that the Pipeline, at any time after completion of construction, has
capacity less than the initially allocated capacity, or less than the initially allocated
capacity plus any allotted Excess Capacity, Allottee's capacity in the Pipeline
shall be reduced in the amount of Allottee's percentage of the capacity of the
Pipeline allocated in this Contract (including any allotted Excess Capacity) times
the total amount of capacity for the Pipeline (including any allotted Excess
Capacity). This adjustment shall not change Allottee's share of the costs of the
Pipeline as determined under paragraphs 5., 6. and 7.
h. It is possible in the future that the capacity of the Pipeline may be increased
through the construction of pumping plants or other means,which capacity would
be above that originally constructed and allocated in this Allotment Contract and
similar allotment contracts. All existing Participants at the time of expansion
shall have a right of first refusal to participate in the construction of the increased
capacity. It is the intention of PVP Enterprise and the Allottee that all future
participants in the project to increase capacity of the Pipeline shall pay for their
share of the cost of the Pipeline adjusted through the date of the calculation as set
forth below. Therefore, the cost of the construction of the increased capacity shall
be added to the original cost for construction of the Pipeline,including Individual
Segment Specific Costs and Non-Segment Specific Costs, plus interest on such
costs based on the Index ,from the date the funds were
expended by the Initial Participants through the date of completion of construction
of the increased capacity. The total costs for each Segment, as such Segments are
defined on Exhibit B, shall be allocated between and among the Participants in the
original Pipeline and the participants in the increased capacity project.
Participants in the increased capacity project shall make reimbursement to each of
the original Pipeline Participants of the amounts necessary to adjust the
contributions of the original Pipeline Participants and the increased capacity
Participants based upon the new allocation by Segment so that all participants
will have paid the same amount per unit of capacity per Segment.
i. The right of first refusal set forth above shall require PVP Enterprise to offer to
each of the Participants the opportunity to participate in the construction of the
increased capacity on terms and conditions substantially similar to all others
requesting to participate in such project. Allottee shall have sixty(60) days from
the receipt of the final terms and conditions of the participation to respond in
writing with regard to its desire to participate. Allottee's right of first refusal shall
terminate only as to those contracts for increased capacity which are completed
upon terms substantially similar to those offered to Allottee and to which Allottee
did not respond with its desire to participate within the sixty-day period. Unless
previously terminated pursuant to this paragraph, Allottee's right of first refusal
DRAFT January 24,2003 Page 6 of 17
shall terminate on the last day of the 90th year after execution of this Allotment
Contract.
j. In addition to the allotment of capacity in the Pipeline set out above, Allottee shall
have the perpetual right, in combination with other Participants, to utilize
reasonable amounts of capacity in the North Poudre Supply Canal to deliver water
from the Cache la Poudre River to the Pipeline to the extent that such capacity is
not necessary for delivery of water for the North Poudre Irrigation Company under
and pursuant to the rights granted to the North Poudre Irrigation Company in the
Petition to Northern Colorado Water Conservancy District for Allotment of Water
dated December 5, 1945.
3. Use of Capacity and Water.
a. Pipeline capacity allotted herein shall be used only for the transmission of: (i)
District water or Subdistrict water from Horsetooth Reservoir; (ii) any other water
deliverable from Horsetooth Reservoir with the specific approval of the Board and
the approval of the Secretary of the Interior of the United States of America or his
designee (if Secretarial approval is required by law or contract); (iii) water
diverted from the Cache la Poudre River at the North Poudre Supply Canal
Diversion Works and conveyed through the North Poudre Supply Canal; or(iv)
any other water with the specific approval of the Board; all for the use of Allottee,
its customers or other Entities permitted hereunder. All water introduced into the
Pipeline from sources other than Horsetooth Reservoir or the Cache la Poudre
River shall be of a quality at least equal to the water in Horsetooth Reservoir or
the Cache la Poudre River.
b. Water delivered through the Pipeline shall only be beneficially used, whether the
use is by direct diversion, by exchange or otherwise, in accordance with the terms
of this Contract; the Water Conservancy Act of Colorado, C.R.S. §§ 37-45-101 et
set,_;C.R.S. § 37-83-106; the rules,regulations and policies of the Board; and the
Colorado-Big Thompson Project Repayment Contract between the District and the
United States of America dated July 5, 1938, if applicable; or as otherwise
allowed with the Board's consent.
4. PVP Enterprise Ownership, Operation and Maintenance.
a. The PVP Enterprise shall own, design, construct, operate, maintain,repair and
replace the Pipeline, subject to the Allottee's perpetual, vested right to use of that
portion of the capacity of the Pipeline allotted herein. To this end the PVP
Enterprise shall be responsible for all planning, scheduling,right-of-way
acquisition, construction and engineering contracts relating to the Pipeline; any
required permits, impact statements and other procedural or substantive matters
necessary for completion of the Pipeline; and all operation, maintenance,repair
and replacement of the Pipeline. The PVP Enterprise may assign daily operation
DRAFT January 24,2003 Page 7 of 17
and routine maintenance of the Pipeline to one or more of the Participants with
the written consent of all Participants.
b. The PVP Enterprise shall design, construct, operate, maintain,repair and replace
the Pipeline in good faith for the benefit of the Allottee and the other Participants.
The PVP Enterprise's financial obligations to design, construct, operate,maintain,
repair and replace the Pipeline under this Contract shall be payable solely out of
the assets and revenues of the PVP Enterprise. In no event shall the PVP
Enterprise be required to expend any money from taxes which is in violation of
Section 20(4) of Article X of the Colorado Constitution in the performance of its
obligations under this Contract or which would cause PVP Enterprise to lose its
enterprise status as such status is defined in the Colorado Constitution. In
addition, the PVP Enterprise shall not be required to expend any funds of the
District or Subdistrict in the performance of its.obligations under this Contract,
except for the funds provided to the PVP Enterprise by Allottee and other
Participants pursuant to paragraphs 6. and 7.
C. All rights-of-way acquired in connection with the Pipeline shall belong to the PVP
Enterprise subject to the obligation of PVP Enterprise to make reimbursement to
the Participants for future use of the rights-of-way as set forth herein. Use of these
rights-of-way by any Participant for any purpose other than the Pipeline is at the
sole discretion of the Board; except that all Participants shall have the right to use
the Pipeline rights-of-way at no increased cost to connect to the Pipeline and
obtain delivery of water at their respective points of delivery described in Exhibit
A, and to cross the Pipeline rights-of-way with their own utility lines so long as
such utility lines do not unreasonably interfere with the operation,maintenance,
repair and replacement of the Pipeline. Except as provided above, all Entities shall
be required to pay the Participants for use of the rights-of-way in an amount equal
to the appraised value of the right to so use the Pipeline rights-of-way at that time.
The payment shall be divided among the Participants based upon their
contributions to the original cost of the Pipeline rights-of-way determined on a
Segment-by-Segment basis as established in the percentages set forth on Exhibit
B.
d. Allottee shall not construct pipelines,hydroelectric power generating facilities, or
any other facilities which may interfere with the hydraulic characteristics or
operations of the Pipeline, or otherwise potentially damage the Pipeline without
first obtaining prior technical approval for such facilities in writing from the PVP
Enterprise. Should the Allottee's generation of hydroelectric power or operation
of any other facilities which are hydraulically connected to the Pipeline interfere
with the intended operation of the Pipeline, Allottee shall cease operation of those
facilities upon receiving written notification of interference by the PVP Enterprise
until modifications can be made to eliminate any interference. Allottee shall not
modify facilities whichmay interfere with the hydraulic characteristics or
operations of the Pipeline, or otherwise potentially damage the Pipeline,
first obtaining prior technical approval for such modifications in writing from the
DRAFT January 24, 2003 Page 8 of 17
PVP Enterprise.
5. Cost Allocation Methodo All costs for planning, permitting, design, right-of-
way acquisition, construction, administration, operation,maintenance, repair and replacement of
the Pipeline will be divided into two categories: Individual Segment Specific Costs, and Non-
Segment Specific Costs.
a. Individual Segment Specific Costs will be those costs which relate only to an
individual specific Segment of the Pipeline including,but not limited to, costs for
right-of-way,pipeline materials and installation, appurtenances, and electrical and
instrumentation facilities. There will be a Segment Specific Cost category for
each Segment of the Pipeline. Individual Segment Specific Costs will be
allocated based upon each Participant's share of the capacity during each delivery
period for each individual Segment allocated to all Participants as set forth on
Exhibit B.
b. Non-Segment Specific Costs will be those costs which relate to the Pipeline, but
cannot be specifically related to an individual Segment. Non-Segment Specific
Costs include,but are not limited to,permitting, environmental, design,
engineering, administration and SCADA control system costs and will be
allocated to each Segment of the Pipeline based on the length of that Segment as a
proportion of the total length of the Pipeline. The percentages established for the
sharing of these costs for each Segment are as set forth on Exhibit B.
C. Allottee's Construction Costs shall be a collective reference to the amounts
determined to be due hereunder from Allottee after calculating the Allottee's share
of Individual Segment Specific Costs and Non-Segment Specific Costs, minus
pre-construction costs, as defined herein (excluding any costs for operation,
maintenance,repair or replacement).
6. Charges and Costs.
a. Allottee has previously paid its pro rata share of the Pipeline preconstruction costs
incurred for administration, preliminary and final design, environmental
evaluations,permitting and other necessary items for the Pipeline in the amount of
$1,422,344.
b. In return for the perpetual, exclusive allocation and use of Pipeline;capacity as
described in this Contract, subject to the terms and conditions of this Contract and
as provided in C.R.S. §§ 37-45-101 et sect., Allottee shall pay to the PVP
Enterprise Allottee's Construction Costs in the total amount of
$ upon execution of this Contract.
i. Upon payment of Allottee's Construction Costs, Allottee shall also pay the
DRAFT January 24,2003 Page 9 of 17
PVP Enterprise five percent (5%) of the Allottee's Construction Costs to
be used by the PVP Enterprise to pay for additional preconstruction costs
not included in the payments set forth in paragraph 6.a., if any, and to pay
for change orders under the construction contracts made necessary by
changed or unforeseeable conditions, delays or other claims by the
contractors. The PVP Enterprise shall refund to the Allottee any portion
of Allottee's Construction Costs and the five percent (5%)paid to the PVP
Enterprise that is not used, when construction of the Pipeline has been
finally completed, all contractors have been finally paid and all claims
have been settled.
ii. At such time that it appears that the five percent (5%) fund provided in
paragraph 6.b.i. will be depleted, the PVP Enterprise shall give at least
fifteen (15) days advance written notice to all Participants accompanied by
reasonable information regarding past change orders and the possible need
for additional change orders, and may request additional contributions
from the Participants. Within thirty(30) days after the PVP Enterprise's
written request, Allottee shall pay the PVP Enterprise such additional
funds as are necessary to complete construction of the Pipeline. In the
event that the Participants do not timely provide the funds necessary to
complete construction of the Pipeline, the PVP Enterprise shall be under
no further obligation to complete the Pipeline,may terminate the contract
for construction of the Pipeline and may convey to Allottee, as a tenant in
common with all other Participants, a pro rata interest in all real and
personal property acquired by the PVP Enterprise for the Pipeline with
funds provided under this Allotment Contract or similar allotment
contracts with other Participants. Upon such conveyances,the PVP
Enterprise shall have no further liability or obligations to the Allottee with
respect to the Pipeline and this Allotment Contract shall automatically
terminate.
iii. The PVP Enterprise shall deposit all funds provided by the Allottee
pursuant to paragraphs 6.b., 6.b.i., and 6.b.ii.in an interest bearing account
and shall deposit the interest earned on said funds in the account described
in paragraph 6.b.i.
C. Allottee shall pay its share of reasonable annual charges and costs incurred by the
PVP Enterprise in the administration, operation, maintenance, repair, and
replacement of the Pipeline, and such other reasonable annual costs as may arise
from and be attributable to the operation of the Pipeline pursuant to the
procedures set out in paragraph 7.
d. Allottee shall pay its share of such reasonable amounts as the Board shall
determine to be necessary to establish and maintain an operating and maintenance
reserve fund equal to eighteen months' operating and maintenance charges and
costs pursuant to the procedures set out in paragraph 7.
DRAFT January 24,2003 Page 10 of 17
e. All money paid to the PVP Enterprise by the Allottee under this Contract shall be
kept in separate interest-bearing accounts from all other accounts of the PVP
Enterprise or the District and shall be used only for Pipeline purposes as specified
in this Contract.
7. Payment of Charges.
a. Payment of the costs for administration, operation,maintenance, repair and
replacement of the Pipeline shall be the responsibility of the Participants and shall
be allocated on the same percentages used to determine each Participant's
Construction Costs, including the Allottee's Construction Costs, as set forth on
Exhibit B. No later than three (3)months prior to the completion of construction
of the Pipeline,the PVP Enterprise shall issue a billing statement to Allottee
requiring payment of the anticipated annual charges and costs to be incurred for
administration, operation, maintenance,repair and replacement of the Pipeline:for
the remainder of that Fiscal Year and to establish reserve funds, pursuant to
paragraphs 6.c. and 6.d. In succeeding years, a statement of estimated annual
charges shall be issued on or before October 15 of each year for the current Fiscal
Year. A billing statement for annual charges shall be issued on or before January
15 of each year for the current Fiscal Year. Charges and costs for administration,
operation, maintenance, repair and replacement of the Pipeline shall be allocated
either as Individual Segment Specific Costs or Non-Segment Specific Costs as
described in paragraphs 5.a. and 5.b. Each billing statement provided to Allottee
by the PVP Enterprise shall be accompanied by reasonable supporting
documentation showing the basis and derivation of costs and charges shown in the
billing statement. Except for the first year, the total estimated charges and costs
for administration, operation, maintenance, repair and replacement shall be based
on the anticipated level of use of the Pipeline;for the current Fiscal Year using the
costs of administration, operation, maintenance, repair and replacement for the
prior Fiscal Year,plus any positive and negative adjustments necessary to account
for differences between the estimated and actual costs for the prior year and
anticipated differences in the current year. These costs shall be allocated among
the Participants using the same percentages that were used to determine each
Participant's Construction Costs. The PVP Enterprise will reconcile the Allottee's
payment with the actual costs incurred for each Fiscal Year and shall either apply
a credit or impose an additional charge on the following year's billing statement.
Allottee shall pay the charges shown on the first year's billing statement within
sixty(60) days after receipt. Allottee shall pay the net charges shown on billing
statements for subsequent years by March 15. Any interest earned by the PVP
Enterprise on funds paid by the Allottee before being expended by the PVP
Enterprise shall be credited against the succeeding year's Non-Segment Specific
Costs. Allottee shall have the right to annually audit, at its expense, the books and
records of the PVP Enterprise relating to the Pipeline.
b. The obligations of Allottee to pay the costs for administration, operation,
DRAFT January 24, 2003 Page 11 of 17
maintenance,repair and replacement of the Pipeline shall be special, limited
obligations of Allottee and shall not constitute a debt or indebtedness, a pledge or
grant of any interest or security in any property of, or a multiple fiscal year
obligation of Allottee or Allottee Enterprise, within the meaning of any
constitutional, charter or statutory provision or limitation; nor shall such
obligations be interpreted in such a manner as to constitute the same, nor to
constitute or be held to be a violation of any applicable constitutional, charter or
statutory provision or limitation, or a general obligation of Allottee or Allottee
Enterprise. If the costs for administration, operation, maintenance, repair and
replacement of the Pipeline are not paid by the Allottee in accordance with this
Contract, the PVP Enterprise shall give the Allottee written notice of default
hereunder and Allottee shall have ninety(90) days after receipt of the notice to
cure the default. In the event that the Allottee does not fully cure the default
within said ninety(90) day period, the Allottee shall automatically lose a portion
of its allotted capacity("Lost Capacity") determined by the PVP Enterprise to be
equal in value to the amount of charges and costs not paid and the Allottee shall
have no further obligation to pay administration, operation, maintenance, repair
and replacement charges and costs of the Pipeline related to the Lost Capacity.
The PVP Enterprise's determination of value of the Lost Capacity shall be based
upon the price of at least three recent sales of capacity in the Pipeline, suitably
adjusted for inflation and other relevant factors. If three recent sales have not
occurred, the PVP Enterprise's determination of value of the Lost Capacity shall
be based upon the original cost of the Pipeline (including all planning, design,
permitting, land acquisition, construction and other costs) suitably adjusted based
upon depreciation, inflation, interest rates and other relevant factors. Other
Participants shall have the right to purchase such Lost Capacity within ninety(90)
days after the PVP Enterprise gives notice that it is available for purchase at the
value determined by the PVP Enterprise, plus any costs that the PVP Enterprise
incurs in performing its duties under this paragraph. If there are more Participant
purchasers than Lost Capacity available for sale,it shall be allocated based upon
each Participant's previously allotted capacity in the Pipeline as set forth on
Exhibit A. If not all of the Lost Capacity is purchased by the other Participants
within the ninety(90) day period, the PVP Enterprise may sell the Lost Capacity
to any Entity eligible to use Pipeline capacity hereunder at the price at which it
was offered to the Participants. After any such sale, any amount in excess of the
unpaid charges and costs plus interest and any costs that the PVP Enterprise incurs
in performing its duties under this paragraph shall be refunded to the Allottee. If
the PVP Enterprise is unable to sell the Lost Capacity within ninety(90) days after
it is offered for sale to any Entity eligible to use Pipeline capacity hereunder, the
PVP Enterprise shall have the right to terminate deliveries to the Allottee. After
such termination of delivery, the PVP Enterprise shall continue to offer the Lost
Capacity for sale at the price at which it was offered to the Participants and water
deliveries to Allottee shall be resumed (for capacity for which payments are
current and which has not been sold) upon sale of the Lost Capacity to Allottee or
any other eligible Entity. Unpaid operating and maintenance expenses shall be
drawn from the reserve fund. The reserve fund shall be replenished by the
DRAFT January 24,2003 Page 12 of 17
Participants annually. This paragraph shall provide the PVP Enterprise's
exclusive remedy for recovering administration, operation,maintenance, repair
and replacement costs in the event that Allottee does not appropriate funds or pay
those costs as provided in paragraph 7.a. above.
8. Completion Date. Attached hereto as Exhibit C and incorporated herein by this
reference is a time line for construction and completion of the Pipeline. The time line may be
modified for good cause. The PVP Enterprise shall complete construction of the Pipeline in
good faith in accordance with the time line as modified, subject to force majeure events, failure
of the Allottee or other Participants to make required payments under this or similar contracts
and delays beyond the PVP Enterprise's reasonable control or caused by the construction process
or the construction contractors. In addition, the completion date is subject to change based upon
mutual agreement of all of the Participants, as conditions and available information warrant.
9. Limitations on Rights of Allottee. In addition to all the other terms, conditions
and covenants contained herein,it is specifically understood and agreed by and between the
parties hereto that the rights of the Allottee hereunder are subject to the following terms,
conditions and limitations, which are incorporated herein by this reference:
a. The Water Conservancy Act of Colorado, C.R.S §§ 3745-101 et_ seg.; and
b. The rules,regulations and policies of the Board as the same may be adopted or
amended from time to time,provided that to the extent that such future rules,
regulations and policies adversely affect the Allottee's rights hereunder or its
rights to use the capacity contracted for in any lawful manner, such future rules,
regulations or policies shall not be enforceable against Allottee.
10. Transfer of Allotment. Allottee shall have the right to lease, assign, transfer or
encumber all or any part of its allotment of capacity hereunder, for such consideration as Allottee
in its sole discretion may establish, subject to the terms and conditions of this Contract,to
another Entity that is financially able to perform this Contract,with the prior written consent of
the Board, which consent shall not be unreasonably withheld. This Contract is made for the
exclusive benefit of the Allottee and shall not inure to the benefit of any successors or assigns of
said Allottee except pursuant to the terms of this Contract.
11. Advisory Committee. The PVP Enterprise shall call and conduct, at least every
three calendar months,periodic meetings of a Pleasant Valley Pipeline Advisory Committee (the
"Committee"), which shall consist of a representative of each of the Participants in the Pipeline.
Unless otherwise agreed by the Committee members,the meetings shall be held at the
Headquarters Building of the PVP Enterprise. At each Committee meeting,representatives of
the PVP Enterprise shall report to the Committee members on the status of the Pipeline,the
finances of the PVP Enterprise and on any other matter affecting the Pipeline that any member of
DRAFT January 24, 2003 Page 13 of 17
the Committee requests to be addressed. The Committee may make non-binding
recommendations to the Board of the PVP Enterprise regarding any matter affecting the Pipeline
that may come before the Board. Allottee, all other Participants, and the Advisory Committee
shall have the right to consult with the Board of Directors of the PVP Enterprise before such
Board takes any action materially affecting the Pipeline.
12. No Limitation of Remedies. The duties and obligations imposed by this Contract
and the rights and remedies available hereunder to the parties hereto are in addition to, and are
not to be construed in any way as a limitation of, any rights and remedies available to them which
are otherwise imposed by law or regulation, and the provisions of this paragraph will be as
effective as if repeated specifically in the Contract in connection with each particular duty,
obligation,right, and remedy to which they apply.
13. Legal Ability to Perform. PVP Enterprise and Allottee, respectively,warrant and
represent as follows:
a. The PVP Enterprise hereby warrants and represents to Allottee that PVP
Enterprise is validly organized and has the power and authority to enter into this
Contract and to allot to Allottee the rights described herein.
b. Allottee hereby warrants and represents to PVP Enterprise that Allottee is validly
organized and has the power and authority to enter into this Contract and to accept
the allotment described herein and perform all of its obligations hereunder.
14. Non-Waiver of Immunity. Neither party hereto waives any immunity to liability
provided by statute or otherwise.
15. Force Majeure. Notwithstanding anything contained herein to the contrary, and
except for the obligation to pay money, 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 either 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 either party to this Contract,
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.
16. Governing Law and Enforceability. This Contract 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 them by the constitution, statutes, and rules and
regulations of the State of Colorado and of the United States, and imposed upon them by their
respective governing statutes, charters, ordinances,rules and regulations, and that, subject to such
DRAFT January 24,2003 Page 14 of 17
constraints, the parties intend to carry out the terms and conditions of this Contract.
Notwithstanding any other provision of this Contract to the contrary, in no event shall either of
the parties exercise any power or take any action which shall be prohibited by applicable law.
Whenever possible, each provision of this Contract shall be interpreted in such a manner so as to
be effective and valid under applicable law.
17. Notice. Whenever written notice is required or permitted to be given under this
Contract by one party to the other, it shall be given by hand delivery or by mailing the same by
certified U.S. Mail,return receipt requested, addressed to the other party at the following
addresses:
If to the Allottee:
City of Fort Collins Utilities
700 Wood Street
P.O. Box 580
Fort Collins, CO 80522-0580
Attention: Brian Janonis
If to the PVP Enterprise:
Northern Colorado Water Conservancy District
1250 N. Wilson Ave.
P.O. Box 679
Loveland, CO 80539
Attention: Jeff Drager
Either party hereto may at any time designate a different person or address for purposes of
receiving notice by so informing the other party in writing. Notice shall be deemed effective
upon actual receipt thereof.
18. Waiver. No waiver by either party hereto of any term or condition of this
Contract 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 Contract be deemed to constitute a waiver of any
subsequent breach of the same provision of this Contract.
19. Construction. This Contract shall be construed according to its fair meaning and
as if it was prepared by both 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
Contract or the subject matter hereof, unless set forth in writing and signed by both parties
hereto. Paragraph headings in this Contract are for convenience only and shall in no way define,
DRAFT January 24,2003 Page 15 of 17
limit or prescribe the scope or intent of any provision of this Contract.
20. Severability. If any provision of this Contract, or the application of such
provision to any person, entity or circumstance, shall be held invalid, the remainder of this
Contract, or the application of such provision to persons, entities, or circumstances other than
those in which it is held invalid, shall not be affected.
21. Binding Effect. This Contract shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and assigns.
DRAFT January 24,2003 Page 16 of 17
The authorized representatives of PVP Enterprise and Allottee have executed this
Contract the day and year first set forth above.
NORTHERN COLORADO WATER
CONSERVANCY DISTRICT, ACTING BY AND
THROUGH THE PLEASANT VALLEY
PIPELINE WATER ACTIVITY ENTERPRISE
By:
General Manager
THE CITY OF FORT COLLINS, COLORADO
A Municipal Corporation
By:
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
Deputy City Attorney
CITY OF FORT COLLINS WATER UTILITY
ENTERPRISE
An Enterprise of the City
City Manager
ATTEST:
City Clerk
DRAFT January 24,2003 Page 17 of 17
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Exhibit B
Definition of Pipeline Segments and Cost Allocation Percentages
Segment Soldier Canyon
Segment No. Segment Description Length ft Fort Collins Filter Plant Greeley
Individual Se ment Specific Costs '
1 Munroe Canal Turnout to Greeley Turnout(Station 330+19) 12,589 50.0% 50.0% 0.0%
2 Greeley Turnout(Station 330+19)to End(Station 0+95) 32,924 42.5% 42.5% 15.0%
3 Greeley Connection to 54-inch Soldier Canyon Outlet n/a 0.0% 0.0% 100.0%
4 Greeley Bellvue Turnout n/a 0.0% 0.0% 100.0%
5 Soldier Canyon Filter Plant Turnout n/a 0.0% 100.0% 0.0%
6 Cathodic Protection on Fort Collins 27-inch Pipeline n/a 100.0% 0.0% 0.0%
Non-Se ment Specific Costs 2
G Non-Segment Specific Costs n/a 37.94% 37.94% 24.11%
Notes:
1 Individual Segment specific costs will be those costs which relate only to an individual specific Segment of the Pipeline,
including,but not limited to costs for right-of-way,pipeline materials and installation,appurtenances,and
electrical and instrumentation facilities.
2 General costs will be those costs which relate to the Pipeline,but cannot be specifically related to an
individual specific Segment of the Pipeline,including,but not limited to permitting,environmental,design,
engineering,administration,and SCADA control system costs.
Examples of Cost Allocation Formulas:
Segment Specific Costs
Segment 1:
Soldier Canyon Percent=QSO/(QFc+Qsc)
Segment 2:
Fort Collins Percent=(QFc x tFc)/((QFc x tFc)+(QSC x tSC)+(Qa x ta))
Where: QFc,QSC,QG=Fort Collins,Soldier Canyon,and Greeley flow rates
tFc,tSC,QG=Fort Collins,Soldier Canyon,and Greeley operating time(number of days)
Non-Segment Specific Costs
Greeley Percent=(Segment 1 Length/Total Length)x Segment 1 Share+(Segment 2 Length/Total Length)x Segment 2 Share
Non-segment specific shares:
Participant Segment 1 Segment 2
Fort Collins 50% 33%
Soldier Canyon 50% 33%
Greeley 0% 33%
•
EXHIBIT C
Timeline for Construction of Pleasant Valley Pipeline
December-02 Complete Pipeline Design
January-03 Finalize Construction Cost
February-03 Federal Permit Approval
Complete Right-of-Way Acquisition
Award Construction Contract
Order Pipe and Materials
March-03 Begin Construction
February-04 Complete Construction
March-04 Start-up and Testing
April-04 Pipeline In Service