WATER PURCHASE CONTRACT
This Contract for the sale and purchase of water is entered into as of the ____ d a y
of ,_____________ 2007, between THE CITY OF ___________ TENNESSEE, hereinafter
referred to as the "Seller", and TOWN OF _________________ TENNESSEE, hereinafter
referred to as "Purchaser."
WITNESSETH:
Whereas, the Seller is a public utility district and produces water for its use and
operates a water supply distribution system serving water users within the limits of the City
of __________ and surrounding areas; and,
Whereas, the Seller has a current capability sufficient to serve its customers and is
willing to sell water to the TOWN OF _________________, Tennessee, when it has water
available; and,
Whereas, the Purchaser is willing to purchase from the Seller, water in accordance
with the provisions of this Contract, as indicated by the signatures of its Mayor, and
attested by its Recorder, duly authorized by the Council of the TOWN OF
____________, and the execution of this Contract by the Mayor of the City of _________,
attested by its Recorder, duly authorized by the Council of the City of ____________; and,
Whereas, a certified copy of the official minutes of the TOWN OF ______________,
and a certified copy of the official minutes of the CITY OF _____________, are attached hereto
as evidence of the execution of this Contract .
Now, therefore, in consideration of the foregoing and the mutual agreements
hereinafter set forth,
1
A. THE SELLER AGREES:
1. Quality and Quantity: To furnish the Purchaser at the point of delivery
hereinafter specified, during the term of this Contract or any renewal or extension thereof,
potable treated water meeting applicable purity standards of the Tennessee Department
of Health and Environment, in such quantity as may be desired by the Purchaser, if
available, at the price hereinafter stated in paragraphs B. 1. and 2. herein.
2. Point of Delivery and Pressure:
That water will be furnished at a
reasonably constant pressure from the existing six (6) inch main supply that is located
___________, (or other mutual agreeable location). If a greater pressure than that normally
available at the point of delivery is required by the Purchaser, and if the same is available
from the system, without shortening the supply to Seller's own customers, the cost of
providing such greater pressure shall be paid by the Purchaser. Emergency failures of
pressure or supply due to main supply line breaks, power failure, flood, fire and use of
water to fight fire, earthquake or other catastrophe shall excuse the Seller from this
provision for such reasonable period of time as may be necessary to restore service.
3. Metering Equipment: To furnish and install necessary metering equipment,
including a meter house or pit, and required devices of standard type for properly
measuring the quantity of water delivered to the Purchaser, all at the expense of the
Purchaser. Thereafter Seller shall operate and maintain the metering equipment at Seller's
expense and calibrate such metering equipment whenever requested by the Purchaser,
but not more frequently than once every twelve (12) months. A meter registering not more
than two percent (2%) above or below the test result shall be deemed to be accurate.
Readings of any meter disclosed by test to be inaccurate shall be corrected for the three
(3) months previous to such test in accordance with the percentage of inaccuracy found
by such tests. Unless Seller and Purchaser shall agree upon a different amount, if any
meter fails to register for any period, the amount of water furnished during such period
shall be deemed to be the amount of water delivered in the period immediately prior to the
failure. The metering equipment shall be read on or before the 30th of each month. An
appropriate official of the Purchaser shall have access to the meter at all reasonable times
for the purpose of verifying its readings.
4. Billing Procedure:
To deliver to Purchaser at the City Hall, ________,
Tennessee, a statement dated not later than the 30th day of each month, with an
itemized statement of the amount of water furnished the Purchaser during the preceding
month.
2
B. THE PURCHASER AGREES:
1. Rates and Payment Date: To pay the Seller, not later than the 5th day of
each month, for water delivered and as shown on such itemized statement specified in
paragraph A.4. above, in accordance with the following schedule of rates:
(a) The rate shall be based on 100% of the actual cost of producing water by the Seller
as determined by certified audit each year, per 1000 gallons transferred to the
TOWN OF ______________, for the amount up to _____ million gallons per month.
If more than _____ million gallons per month are needed by the Purchaser, then such
usage shall be on terms and conditions agreed to between the parties, and if no
agreement between the parties, then on the terms set forth herein.
The purchaser shall be charged for a minimum of _________ Gallons per month.
(b) For the year ending December 31, 2008, the actual cost of producing water shall
be defined as $______ per gallon.
(c) The water shall be metered at point of delivery.
(d) The Seller shall furnish to the Purchaser for examination, a copy of its certified audit
each year for the fiscal year ending on June 30, prepared by a certified public
accountant, showing the cost of production of water, and all details and factors used
in ascertaining the same. Purchaser may at its expense, employ its own certified
public accountant to examine the books and records of Seller, and Seller agrees to
make all records material to the determination of cost of production of water
available to Purchaser or its representative to verify or contest said audit.
(e) All rate adjustments will be as of the last day of December of each year, based on the
Seller's cost of production of water for the Seller's preceding fiscal year ended June 30.
2. Cost of Meter Installation at Point of Delivery: To pay to the Seller the
Cost incurred by the Seller to install the necessary metering equipment required to furnish
water to purchaser as set forth in paragraph A. 3, hereof.
3
C. IT IS FURTHER MUTUALLY AGREED BETWEEN THE SELLER AND THE
PURCHASER AS FOLLOWS:
1. Term of Contract:
This Contract shall extend for a term of TEN (10) years
from the date of execution of this contract, and thereafter may be renewed or extended for
such term or terms as may be agreed upon by the Seller and Purchaser. If no agreement
is reached, then this contract shall continue and may be terminated by either party upon
12 months written notice to the other party.
2. Delivery of Water:
When Purchaser desires to commence purchasing water
from the Seller, it shall give notice to the Seller at City Hall, __________ Tennessee, and all
connections to secure water by the Purchaser from the Seller shall be installed by an agent
of the Seller and paid for by the Purchaser. The Purchaser will notify the Seller in writing
of the date for the initial delivery of water.
3. Failure to Deliver:
The Seller will, at all times, operate and maintain its
system in an efficient manner and will take such action as may be necessary with
reasonable efforts to furnish the Purchaser with quantities of water required by the
Purchaser. Temporary or partial failures to deliver water shall be remedied with all possible
dispatch. In the event of an extended shortage of water, or the supply of water available
to the Seller is otherwise diminished over an extended period of time, the supply of water
to Purchaser's consumers shall be reduced or diminished in the same ratio or proportion
as the supply to Seller's consumers is reduced or diminished.
4. Modification of Contract:
The provisions of this Contract may be modified
only upon mutual agreement of the parties during the term hereof.
5. Regulatory Agencies: This Contract is subject to such rules, regulations,
or laws as may be applicable to similar agreements in this State, and the Seller and
Purchaser will collaborate in obtaining such permits, certificates, or the like, as may be
required to comply therewith.
6. Successor to the Purchaser: In the event of any occurrence rendering the
Seller incapable of performing under this Contract, any successor of the Seller, whether
the result of legal process, assignment, or otherwise, shall succeed to the rights of the
Seller hereunder.
7. Assignment as Collateral:
The TOWN OF _____________ and THE CITY
OF ________, Tennessee expressly agree that this Contract may be assigned as security
for the benefit of any creditor, including bond holders to secure any loans made to THE
CITY OF ______________, Tennessee, by any creditor or bond holder.
4
In witness whereof, the parties hereto, acting under authority of their respective
governing bodies, have caused this Contract to be duly executed in three counterparts,
each of which shall constitute an original.
Seller:
CITY OF _______________, TENNESSEE
By_________________________________
Mayor
Attest:
__________________________________
Recorder
Purchaser:
TOWN OF _________________, TENNESSEE
By__________________________________
Mayor
Attest:
___________________________________
Recorder
5