Loading...
HomeMy WebLinkAbout5.9 Original ContractWATER SUPPLY CONTRACT 1 5. OR G NA.. THIS CONTRACT (the "Contract is hereby entered into between the City of Port Angeles, a municipal corporation, hereinafter called the "City," Daishowa America Co., Ltd., a Washington corporation, hereinafter called "Daishowa," and ITT Rayonier, Inc., a Delaware corporation, hereinafter called "ITT Rayonier." Daishowa and ITT Rayonier are also referred to collectively herein as "the Companies." AGREEMENTS In consideration of the mutual covenants herein contained, the parties agree as follows: 1. Aareement to Supply Water. The City agrees to sell to the Companies the right to receive untreated water from the Elwha River for use in the Companies' Port Angeles mills for a continuous period of thirty (30) years from the first day of January 1990, in an aggregate amount not to exceed 65 million gallons per day (MGD). Of such amounts, ITT Rayonier shall be entitled to receive an amount not exceeding 45 MGD and Daishowa shall be entitled to receive an amount not exceeding 20 MGD. 2. Delivery. The water shall be transported from the Elwha River to the Companies' mills by means of the Elwha River Water Extension Project pipeline (the "Pipeline The Pipeline and the property traversed by it shall at all times remain under the ownership of the City. The location of the Pipeline may be changed at the reasonable request of either the City, Daishowa or ITT Rayonier; provided, however, that the requesting party or parties shall pay all expenses necessary to or caused by any such change of the Pipeline location. 3. Consideration. The Companies shall pay the City for the right to such water and shall perform the other duties required in this Contract. ITT Rayonier shall pay the City $34,500.00 annually, and Daishowa shall pay the City $15,500.00 annually. Each of said annual payments shall be made in two equal, semi- annual installments, which shall fall due on the fifteenth (15th) day of May and November in each year, the first payment falling due on May 15, 1990. 4. Interruption of Sunnly and Transportation. If any event shall occur causing or resulting in any diminution, interruption or curtailment in the supply of water available to the Companies (hereinafter referred to as a "Limiting Event the Companies shall remedy and cure the Limiting Event in order to reinstate the supply and transportation of all water to which the Companies are entitled under this Contract. The City shall fully cooperate with the Companies in the Companies' efforts to remedy and cure a Limiting Event. The City's cooperation shall include the coordinated operation of the City's water and electric utility services with the Companies' repair efforts, necessary and safe street closures to facilitate Pipeline repair, and, if necessary to remedy or cure a Limiting Event, the exercise by the City of its eminent domain powers to acquire property or easements reasonably required to remedy or cure a Limiting Event, and the consideration by the City of the issuance of bonds for the purpose of financing measures necessary to cure a Limiting Event, together with a surcharge to the consideration paid by the Companies under this Contract. If, as a result of such Limiting Event, the volume of water available is reduced below 65 million gallons per day, the amounts to which the Companies are entitled pursuant to paragraph 1 shall be reduced proportionately during the pendency of the Limiting Event. The Companies waive any claims they may have against the City for any losses or damages caused by reason of a Limiting Event, provided, however, that the City shall remain and be liable to the Companies, and the Companies do not indemnify or hold the City harmless for, any losses or damages resulting from a Limiting Event caused in whole or in part by the City's negligence or willful misconduct, the City's failure to comply with any applicable statute or regulation, or the City's breach of this Contract. No party shall be liable for losses or injuries caused by force majeure and the Companies do not indemnify or hold the City harmless for any losses or damages resulting from force majeure. The term "force majeure" as used herein, means unforeseeable causes beyond the reasonable control of and without the fault or negligence of the Party claiming force majeure, including but not limited to, acts of God, labor disputes, sudden actions of the elements, and actions by the United States or agencies of the federal government, any of which may also constitute a Limiting Event. If either Party because of force majeure is rendered wholly or partly unable to perform its obligations under this Contract that Party shall be excused from whatever performance is affected by the force majeure to the extent so affected, provided that: (1) the non performing Party, within two weeks after the occurrence of the force majeure, gives the other Party written notice describing the particulars of the occurrence, provided, that only verbal notice is required of the duration if the force majeure is less than twelve (12) hours; (2) the suspension of performance is of no greater scope and of no longer duration than is required by the force majeure; (3) the non performing Party uses its best efforts to remedy its inability to perform. This subparagraph shall not require the settlement of any strike, walkout, lockout or other labor dispute on terms which, in the sole judgment of the Party involved in the dispute, are contrary to its interest. It is understood and agreed that the settlement of strikes, walkouts, lockouts or other labor disputes shall be at the sole discretion of the Party having the difficulty. It is further understood that in the case of a force majeure which is also a Limiting Event, it shall be the Companies' duty to remedy and cure the Limiting Event in order to reinstate the delivery of all water to which the Companies are entitled under this Contract, subject to the City's duty to cooperate as provided for herein. 5. Covenant to Preserve Riahts. The City shall defend against and attempt to prevent any reduction, diminution or restriction in the City's rights to take water from the Elwha River, as granted by the State of Washington, or in the City's ability to perform this Contract, including but not limited to appearing as a party in any administrative or judicial proceeding 4 and opposing any reduction, diminution, restriction, reallocation, adjustment or other determination that may adversely affect the City's water rights, provided that the Companies are not in material breach of their obligations under this Contract. The City shall give the Companies notice of any potential reduction, diminution or restriction in the City's rights to take water from the Elwha River. Further, the City shall give the Companies notice of any administrative or judicial action or proceeding in which the City is required to defend its water rights and shall keep the Companies advised of development in any such matter. The Companies shall have the right to assist in defending the City's water rights in any such proceeding. 6. Assianment. Either of the Companies may assign its rights and obligations under this Contract, in whole or in part, to the other or to any other responsible corporation or person; provided that any such assignment shall be subject to the prior approval of the City, which approval shall not be unreasonably withheld. 7. Maintenance of Delivery System. The Companies hereby agree to maintain, repair, and replace, as necessary in order to provide for the delivery of the amount of water contracted for herein, all water lines and other facilities that comprise the system for delivering water from the Elwha River to the Companies' mills in a manner that provides for the structural and operational viability of said system, the avoidance of wasteful practices, and the beneficial use of the water resource for manufacturing purposes. The Companies' maintenance, repair and replacement responsibilities shall consist of the following activities to be accomplished periodically as required to meet the Companies' obligations under this contract: surveys, inspections, reports regarding the location of significant leaks and down time to be coordinated between the Companies when both mills shall be shut down and the necessary maintenance, repair and replacement activities shall be accomplished. The Companies shall give thirty (30) days' notice to the City prior to commencement of the periodic survey and inspection and the City may participate in the periodic survey and inspection of the water delivery system. Following such periodic surveys and inspections, the City may request that the Companies report in writing on the periodic survey and inspection. Specifically, the maintenance, repair and replacement responsibilities shall include those tasks set forth in the attached Exhibit A, which is incorporated herein by this reference, and other necessary tasks as may be revealed from time to time by survey, inspection, or other means. When it is economically feasible, the Companies will attempt to coordinate periodic shutdown of their mills for purposes of the necessary maintenance, repair and replacement activities with any anticipated low flows in the Elwha River. The Companies shall annually budget and spend sufficient money for the necessary maintenance, repair and replacement program that is specified herein and in Exhibit A. The City shall be given prior notice of all maintenance, repairs and replacement performed on the water delivery system and such maintenance, repairs and replacement shall not be undertaken without prior approval from the City and compliance with all applicable laws; provided, however, that all activities set forth in Exhibit A, except those involving major structural repair or replacement, are hereby deemed to have City approval. The Companies shall provide an annual report to the City containing a detailed description of all maintenance, repairs, and replacement performed during the preceding year. 8. Conservation and Wastage. Daishowa and ITT Rayonier hereby agree to comply with the legal requirements of the Washington Water Code regarding the avoidance of wasteful practices and the beneficial use of the water resource for manufacturing purposes, and to use economically reasonable efforts to conserve the water to which the right has been purchased under this Contract. The Companies further agree to allow representatives of the City to inspect the Companies' facilities for compliance with this provision. 9. Several Obliaations. Except where specifically stated in this Contract to be otherwise, the duties, obligations and liabilities of the Parties are intended to be several and not joint or collective. Nothing contained in this Contract shall ever be construed to create an association, trust, partnership, or joint venture or impose a trust or partnership duty, obligation or liability on or with regard to any Party. Each Party shall be individually and severally liable for its own obligations under this Contract. 10. Breach. If either party shall materially breach any of the covenants undertaken herein or any of the duties imposed upon it by this 7 Contract, such material breach shall entitle the other party to terminate this Contract, provided that the party desiring to terminate for such cause shall give the offending party at least sixty days' written notice, specifying the particulars wherein it is claimed that there has been a violation hereof, and provided further that the party desiring to terminate has first obtained from the Superior Court of Washington in and for Clallam County a judgment finding that the offending party has materially breached this Contract. If at the end of such time and after such a judgment has been obtained, the offending party has not cured the material breach, then the termination of this Contract shall be deemed complete, provided, however, that in the event such breach is of a nature that cannot reasonably be cured within sixty days, the offending party shall not be in breach hereunder if the offending party commences such cure within said sixty -day period and diligently prosecutes such cure to completion as soon thereafter as reasonably possible. 11. Notices. All notices, except those required by Section 8 of this Contract, shall be in writing and shall be deemed to have been given if hand delivered or mailed, certified mail, return receipt requested, postage prepaid to the address set forth below. Notice shall be deemed to be received upon the third day after the date mailed, or if hand delivered, on the date of delivery. a. If to the City, to: City Manager City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 2019. b. If to Daishowa, to: Mill Superintendent Daishowa America Co., Ltd. P.O. Box 271 Port Angeles, WA 98362 c. If to ITT Rayonier, to: Mill Superintendent ITT Rayonier P.O. Box 191 Port Angeles, WA 98362 12. Waiver. Any waiver at any time by any party of its rights with respect to a default under this Contract, or with respect to any other matters arising in connection with this Contract, shall not be deemed a waiver with respect to any subsequent default or other matter. 13. Amendment. No amendment of this Contract shall be binding or enforceable unless it is made in writing and executed by a duly authorized representative of each Party. 14. Authority. Each of the Parties represents that it has full power and authority to enter into this Contract and that this Contract constitutes the binding obligation of each Party, respectively. Further, the City represents that it has a fully perfected, valid and enforceable right to withdraw water in an amount sufficient to allow the City to fully perform its obligations under this Contract. 15. Expiration. This Contract shall expire on December 31, IN WITNESS WHEREOF, this Contract has been executed in trip- licate by the authority of the Port Angeles City Council and by the 9 authority of the respective Boards of Directors of the Companies. CITY O PORT ANGELES lulu.. MAYOR Date Michella Kaike, City Clerk DAISHOWA AMERICA C LTD. B y �t� Executive V' /e 'reident ATTEST: Sccrotary zregtobs ,eLp. ITT RAYONIER, INC. By: -li l X.�1./. 4„/ Secretary C.WAT Its o�i�fr ,4' f ATTEST: j Date /g Date /3/5 o f f Date ac. 3 /?X Inspection /Monitorinc7 Monitor condition of inlet screen and remove debris as required on a daily basis except Sundays and Holidays Monitor security of the screen house and access gates to the waterline on a daily basis except Sundays and Holidays Monitor waterline pressure readings at key stations on the system on a weekly basis Monitor air purge systems for proper operating condition on a weekly basis Perform external inspection of entire delivery system from the diversion dam to the Daishowa and ITT Rayonier mills to include "walking" buried sections every two months Perform internal surveys of the waterline tunnels during coordinated mill shutdowns Monitor any known waterline leaks for evaluation of flow changes on a daily basis except Sundays and Holidays Maintenance Place additional rip rap on the Elwha diversion dam and along the beach from the Ocean View Cemetery to the base of Ediz Hook as required to maintain system integrity Repair pipeline trestles and support saddles as required to maintain system integrity Perform brush and tree control along pipeline as required to prevent damage from roots and falling trees Repair known waterline leaks during coordinated mill shutdowns whenever necessary to provide for the structural and operational viability of the delivery system, the avoidance of wasteful practices and the beneficial use of the water resource for manufacturing purposes Repair screen house and maintain screens as required to provide reliable operation Provide fill material over buried portion of system as necessary to protect the integrity of said system Replacement EXHIBIT A Maintenance, Repair and Replacement Responsibilities Industrial Water System Replace sections of the waterline or components of the delivery system when the maintenance activities set forth herein are insufficient to provide for the structural and operational viability of said system, the avoidance of wasteful practices and the beneficial use of the water resource for manufacturing purposes FIRST AMENDMENT OF WATER SUPPLY CONTRACT This First Amendment of Water Supply Contract "First Amendment is dated effective the 1st day of January, 1998, by and between Rayonier Inc., a North Carolina corporation (hereinafter "Rayonier the City of Port Angeles, a municipal corporation of the State of Washington (hereinafter "City and Daishowa America Co., Ltd., a Washington corporation (hereinafter "Daishowa RECITALS A. Rayonier, the City, and Daishowa entered into a Water Supply Contract executed December 5, 1989 "the Water Supply Contract wherein the City agreed to sell to Rayonier and Daishowa, and Rayonier and Daishowa agreed to purchase from the City, untreated water from the Elwha River for use in Rayonier's and Daishowa's respective mills located in Port Angeles. B. Rayonier has ceased its mill operations in Port Angeles and desires to terminate its obligations under the Water Supply contract, and the City and Daishowa are willing to release Rayonier of its obligations thereunder. AGREEMENTS The parties hereto mutually agree as follows: 1. Upon execution of this First Amendment by all parties hereto, Rayonier shall pay the sum of $200,000.00 to the City in consideration of the release of Rayonier from all its obligations under the Water Supply Contract. 2. All of Rayonier's obligations and rights under the Water Supply Contract shall terminate effective as of the date first written above, except that Rayonier shall be entitled to continue to utilize water for its fire suppression system at its mill site in Port Angeles until such time as Daishowa installs a surge tower (over pressure protection device) on the Pipeline (as such term is defined in the Water Supply Contract) downstream of the point at which Daishowa takes water from the Pipeline. As of the effective date of this First Amendment, the City shall assume Rayonier's obligations under Section 7 of the Water Supply Contract, subject to the City's right to receive from Daishowa reimbursement for all costs for pipeline maintenance services from the Daishowa Mill upstream to the point of diversion, provided that in the event the City uses the Pipeline to serve other customers, the costs shall be shared between Daishowa and such other customers on a pro rata basis according to water entitlement. 3. Rayonier hereby grants the City a license for access over and across Rayonier's property to the extent reasonably necessary for the City to exercise its maintenance 1 5.9 5.19 responsibilities under Section 7 of the Water Supply Contract. 4. The City and Daishowa hereby release Rayonier, and Rayonier hereby releases the City and Daishowa, of all obligations, claims or liabilities for performance under the Water Supply Contract as of the date first written above, provided, however, that nothing contained herein shall release the City from its obligations to Daishowa under the Water Supply Contract, nor shall anything contained herein, unless otherwise provided, release Daishowa from its obligations to the City under the Water Supply Contract. 5. Except as otherwise provided in this First Amendment, the City's and Daishowa's obligations and rights shall remain as set forth in the Water Supply Contract until it expires or is terminated. 6. The laws of the State of Washington shall govern this First Amendment. IN WITNESS WHEREOF, the parties have executed this agreement by the undersigned, duly authorized representatives. RAYONIER, INC. By: C Its: l /,,..e e Dated: ili DAISHOWA AMERICA CO., LTD. A: \WATERCON Its: H 4 Dated: Ai, 3,/ 9 E 2 CITY OF PORT ANGELES By: C a Its:1/1/1, L.,01 Dated: d q i„ 9 B