2094oRDnvANCE No. ~° gy
AN ORDINANCE TO APPROVE A WATER PURCHASE CONTRACT
BETWEEN THE CITY OF WEST MEMPHIS AND MARION FOR THE
PURPOSE OF PROVIDING A SECONDARY SOITRCE FOR UP TO ONE
MILLION GALLONS OF POTABLE WATER PER DAY FOR THE USE
OF HINO MOTORS, LTD., PROSCRIBING OTHER MATTERS
PERTAINING THERETO, DECLARING AN EMERGENCY, AND FOR
OTHER PURPOSES.
WHEREAS, West Memphis, in its governmental capacity, owns and operates its own
water treatment a~~d distribution system; and
WHERE:~S, Marion, in its governmental capacity, desires to purchase treated water from
West Memphis to provide for the potable water needs of a future industrial prospect, specifically
Hino Motors, Ltd., at the proposed location on Red Cross Road in Marion, Arkansas (the
"Location"); and
WHEREAS, the supply of water from West Memphis will only be necessary in the event
that wells drilled by >t'farion for the purpose of providing water to this industrial prospect are not
capable of provid =~y~ the quantity and quality of water as specified herein; and
WHERE.-k~S, West Memphis and Marion desire to cooperate to achieve a mutually
satisfactory agree~ient; and
WHEREAS, Arkansas law specifically authorizes cities to provide water service outside
their corporate limits where the demand for such service is sufficient to produce revenues that will
cover the cost of such service and A.C.A. § 14-2 ~4-108 specifically authorizes a city of the first
class which owns and operates a waterworks system to sell water at contractual rates to another
municipality; and
WHEREAS, West Memphis and Marion have negotiated a Water Purchase Contract in
substantially the firm as attached hereto, subject only to such minor changes or corrections as
maybe necessary or required, and the West Memphis City Council finds that it is in the best
interests of the City of West Memphis to approve the Water Purchase Contract;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF WEST MEMPHIS, ARKANSAS, THAT:
SECTION 1. The Water Purchase Contract between the City of West Memphis and the
City of Marion is hereby approved in substantially the form as attached hereto, subject only to
such minor changes or corrections as may be necessary or required.
SECTION 2. The Mayor of the City of West Memphis is hereby authorized to execute
the Water Purchase Contract on behalf of the City of West Memphis, Arkansas.
SECTION 3. EMERGENCY CLAUSE. It having been found and determined by the
City Council of the City of West Memphis, Arkansas, that the ability to provide a source of
potable water to the development of the Hino Motors Ltd., location is a necessary requirement for
the closing of the contract(s) for the development of such project and that the closing is scheduled
for May ~_, 2004, an urgent and immediate need exists to approve the Water Purchase
Contract and an emergency is hereby declared, and this ordinance being necessary for the
-.
preservation of the peace, health, safety and welfare of the citizens of West Memphis, Arkansas,
;,
shall be in full force and effect from and after the date of its passage and approval.
PASSED AND APPROVED this ~ day of May, 2004.
.~~
WILLIAM H. J SON, Mayor
ATTEST:
PHIL ,City Clerk
SPONSORED BY
~ '
WATER PURCHASE CONTRACT
This Contract for the sale and purchase of water is entered into this i~ day of
May, 2004, by and between The City of West Memphis, Arkansas, (hereinafter referred to as
"West Memphis"), and the City of Marion, Arkansas, (hereinafter referred to as "Marion"),
witnesseth that:
WHEREAS, West Memphis, in its governmental capacity, owns and operates its own
water treatment and distribution system; and
WHEREAS, Marion, in its governmental capacity, desires to purchase treated water
from West Memphis to provide for the potable water needs of a future industrial prospect,
specifically, Hino Motors, Ltd., at the proposed location on Red Cross Road in Marion, Arkansas
(the "Location"); and
WHEREAS, the supply of water from West Memphis will only be necessary in the
event that wells drilled by N~arion for the purpose of providing water to this industrial prospect
are not capable of providing, the quantity and quality of water as specified herein; and
WHEREAS, Marion agrees to make all reasonable attempts to make their wells
operational to provide the industrial prospect the quantity of water they may need; and
WHEREAS, Marion agrees to provide the West Memphis periodic updates as to the
status of the operational capabilities of the new wells, including but not limited to, copies of all
clarity reports or any other reports forwarded to the Arkansas Department of Health; and
~ WHEREAS, it is the specific intent of the parties that the water to be provided
pursuant to this agreement shall be for the purpose of supplying water to Hino Motors, Ltd., and
not to subsidize the City of Marion water supply; and
WHEREAS, the parties desire to cooperate to achieve a mutually satisfactory
agreement; and
WHEREAS, Arkansas law specifically authorizes cities to provide water service
outside their corporate limits where the demand for such service is sufficient to produce revenues
that will cover the cost of such service, and A.C.A. fi 14-234-108 specifically authorizes a city of
the first class which owns and operates a waterworks system to sell water at contractual rates to
another municipality; and
WHEREAS, this Contract has been properly authorized by ordinances adopted by the
governing bodies of West Memphis and Marion;
NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS
AND CONDITIONS HEREINAFTER SET FORTH, AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS
HEREBY ACKNOWLEDGED, WEST MEMPHIS AND MARION HEREBY
MUTUALLY AGREE AS FOLLOWS:
1. QUANTITY. West Memphis agrees to furnish Marion at the agreed upon
Point of Delivery during the term of this Contract, potable water meeting applicable purity
standards of the Arkansas Department of Health not to exceed one (1) million gallons per day.
The water supplied pursuant to this Contract is to allow Marian to provide for the potable water
needs of a firture industrial prospect, specifically, Hino Motors, Ltd., at the Location.
2. TERM. The term of this Contract shall be for a period of twenty (~0) years
from and after the date of this Contract, unless terminated at an earlier date by the parties as set
out herein:
This Contract shall automatically terminate in the event that Hino Motors, Ltd., or its
successors or assigns, cease operations at the Location. Marian may terminate this Contract by
providing thirty (30) days notice in writing to West Memphis. Upon termination of this Contract,
the water line to the Location shall be disconnected at the Point of Delivery.
;. POINT OF DELIVERY. Potable water furnished by West Memphis to
Marion will be delivered to a point along Kuhn Road at its Intersection with the city limits of
Marion (the "Point of Delivery"). West Memphis shall be responsible for obtaining any necessary
easements from its existing water distribution system to the Point of Delivery. Marion shall be
responsible for obtaining any necessary easements from the Point of Delivery to the Location.
4. WATER PRESSURE. West Memphis will deliver potable water to
Marion at a reasonable constant pressure of approximately SS static pressure.
,,, S. METERING EQUIPMENT. Marion will furnish and maintain a suitable
metering device for the purpose of measuring, in gallons, the amount of water delivered by West
Memphis. Marion, at its expense, may have the measuring device calibrated at least once per
year during the term of this Contract. In addition, either party, at its own expense, may request
that the measuring device be calibrated at any time. A measuring device which is accurate within
plus or minus 2% will be deemed accurate. Marion shall be responsible for the repair or
replacement of any measuring device that is not accurate. Marion will allow West Memphis to
read the main water meter at any time upon reasonable notice.
6. BILLING AND PAYMENT. West Memphis will read the measuring
device once per month at about the same date each month and a statement will be rendered to
Marion in accordance with established procedure of the West Memphis Utility Commission. No
notice shall be required for the regular monthly reading. In the event that West Memphis is not
able to read the measuring device at the time of any regular monthly reading, it may estimate the
quantity of water used for that billing period in accordance with the established policies of the
West Memphis Utility Commission. Marion may have its designated representative(s) read the
measuring device at the time of the regular reading, if so desired, and may request that West
Memphis re-read or re-check the device's reading if there appears to be an irregularity in the
normal reading. Marion agrees to pay each monthly statement in full by the due date specified
thereon. Failure to make timely payments may result in discontinuance of further sale of water to
Marion under this Contract or such other remedies as set out in the applicable provisions of the
Service Policy Manual. adopted by the West Memphis Utility Commission as it may be amended
from time to time and which is incorporated herein and made a part hereof by reference.
7. PR1CE. It is hereby agreed that Marion will pay West Memphis at an
initial rate of One and 25/100 Dollars ($1.2.5) for each one thousand (1,000) gallons or portion
thereof during the Contract. The rate for each succeeding year of this Contract shall be the then
current rate as established by the West Memphis Utility Commission for industrial customers in
effect on the most recent anniversary date of this Contract. Marion agrees that the water supplied
pursuant to this Contract shall be made available to Hino Motors, Ltd., or its successors or
assigns, at a rate that shall not exceed the rate charged by West Memphis. .
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8. CONDITIONS OF SELLER (WEST MEMPHIS). West Memphis agrees
to operate and maintain its water system in an efficient manner and will take such action as is
necessary to furnish Marion with the quantity and quality of water as set forth herein. Emergency
failures of system pressure or supply due to water supply line breaks, power failures, floods, fires,
earthquakes, or other catastrophes shall excuse West Memphis from this provision for such
reasonable period of time as may be needed to restore service.
9. APPLICABLE RULES AND REGULATIONS. West Memphis
and
Marion covenant and agree that they will each abide by all federal, state and local laws, and all
rules, regulations and specifications of the Arkansas Department of Health, the United States
Environmental Protection Agency, and the Arkansas Department of Environmental Quality,
applicable to the promotion and safety of thepublic water supply. Noncompliance with any of
said laws, rules, regulations and specifications shall be grounds for discontinuance of further sale
of water to Marion. under this Contract or such other remedies as set out in the applicable
provisions of the Service Policy Manual adopted by the West Memphis Utility Commission as it
maybe amended from time to time and which is incorporated herein and made a part hereof by
reference.
10. INDEMNIFICATION. The parties mutually covenant and agree that they
will indemnify the other for any reasonable costs to repair damages to the respective water
distribution system and/or attorneys fees and costs expended by said entities in separate defense of
any litigation arising from alleged negligent acts or omissions by the other party or its agents or
employees in the operation and maintenance of the parties' respective water distribution facilities.
The parties mutually covenant and agree that they will indemnify the other for any
reasonable costs associated with compliance of health department regulation violation due to the
respective parties' negligent acts. The costs are specifically limited to costs assessed by the
Arkansas Department of Health to correct said violations. Nothing in this section shall be
considered a waiver of any statutory immunity to which either party may otherwise be entitled
1 1. SUCCESSORS AND ASSIGNS. This Contract shall be binding upon the
parties hereto, their successors, or assigns. Neither party shall make an assignment of this
Contract without the express, written consent of Xhe other party. In the event of any occurrences
rendering either party incapable of performing under this Contract, any successor whether by
result of legal process, assignment or otherwise, shall succeed to the rights and obligations of such
party under this Contract.
12. COMPLETE AGREEMENT. It is agreed that neither party hereto is
relying upon any oral or written information or representations made by the other party to the
signing of this Contract unless expressly provided herein, and that this Contract constitutes the
entire aV=reement between the parties and same shall not be hereafter amended or modified unless
reduced to writing and signed by the parties hereto.
13. SEVERABILITY. If any phrase, clause, sentence or paragraph of this
Contract shall be declared invalid by the judgment or decree of a court of competent jurisdiction,
such invalidity shall not affect any of the remaining sentences, paragraphs or clauses of this
Contract.
IN WITNESS WWHEREOF, West Memphis and Marion have executed these presents
by their respectively authorized representatives, having been authorized to do so by appropriate
ordinance.
CITY OF WEST MEMPHIS, ARKANSAS
By:
WILLIAM H. JOHNSON, MAYOR
Attest:
PHILLIP PARR, CITY CLERK
CITY OF MARION, ARKANSAS
By:
FRANK FOGLEMAN, MAYOR
Attest:
M ~
ANGIE TROTTER, CITY CLERK