Attached is the letter and contract regarding the DWSD emergency water service agreement with the City of
Flint.
xxxEND_PAGE:deq04_b577_6019_6376_315
City oF Detrorr 735 RANDOLPH STREET
WATER AND SEWERAGE DEPARTMENT Derrorr, MIcnicAn 48226-2830
Orrice oF Te Director WIWW.DETROITMI.GOY.
October 26, 2015
Dear Valued Water Customer:
Regarding: — Restoration of Emergency Water Service to City of Flint
T write to you today with a remarkable example of a collaborative and cooperative effort in difficult
times, On October 14, 2015, the Board of Water Commissioners authorized me to negotiate and,
in consultation with Board Chairman Fausone, execute an agreement to restore water service to
the City of Flint. On October 16, 2015, a final agreement to provide emergency water service to
Flint was executed and Flint began receiving water from the Detroit Water and Sewerage
Department (DWSD) system that same evening.
Here are some highlights of the agreement:
¢ The agreement has a nine (9) month term which may be extended by mutual agreement
assuming the public health risk remains, and an alternative supply source is not available.
* Flint will transfer to DWSD ten million dollars as an estimated pre-payment for the services
for the nine (9) month term, which is based on the annual volume, max day and peak hour
values stated in Exhibit B of the agreement. Two million dollars was transferred on
October 16, and the remainder was received on October 19. This estimated prepayment
does not relieve Flint from its obligation to pay for all actual charges for services.
* In addition to the estimated prepayment, Flint has agreed that DWSD bills constitute an
account stated, and will not oppose an action to collect.
e Flint agrees to defend and indemnify DWSD from any actions resulting from the provision
of water under this agreement and Flint's distribution of that water.
e As recommended by its environmental consultant, Flint will be allowed to add phosphate
to the DWSD water to coat its pipes and stem future lead leeching. DWSD and Flint will
coordinate efforts to ensure that customers are aware of this, and that there may be some
transitional water quality issues remaining after reconnection while Flint's system is fully
flushed,
e The Genesee County Drain Commissioner (GCDC) and Flint have agreed that Flint may
be served through GCDC's master meter connection to the DWSD system. GCDC has a
second meter by which GCDC will deduct from the DWSD master meter to determine the
Flint usage, and will provide DWSD with a monthly report of Flint's usage.
e The agreement may and is expected to be assigned to the Great Lakes Water Authority.
xxxEND_PAGE:deq04_b577_6019_6376_316
October 26, 2015
Page 2
Acopy of the agreement with Flint has been attached for your reference. We are pleased to provide
this emergency assistance to the City of Flint and its residents in this time of need, and hope this
information will answer any questions or concerns you may have regarding the contractual
arrangement between the parties. However, should you find you have additional questions
regarding this matter, please contact Laurie Koester, Associate General Counsel, at (313) 964-
9620.
Sincerely,
Sue F. McCormick
Director
xxxEND_PAGE:deq04_b577_6019_6376_317
WATER SERVICE CONTRACT
BETWEEN
CITY OF DETROIT
AND
CITY OF FLINT
xxxEND_PAGE:deq04_b577_6019_6376_318
TABLE.OF CONTENTS
Article 1: Definitions
Article 2: Contract Term .
Article 3: Barly Termination Costs
Article 4: Service Area
Article-5: Pressure; Maximum Flow Rate; Minimum Annual Volume
Article 6; Technical 'Advisory:Committee
Article 7; Rates
Article 8: Meters and’ Meter Facilities
Article 9: Reserved
Article 10; Reserved
Article 1:1; Force Majeure and Other Events
Article 12; Timely Payment
‘Article 13: Assignment
Article 14: Reserved
Article 15: Amendment
Article. 16: Notices
Article. 17:Water Quality
Article-18: Rights-of-Way
Atticle 19; Access to Towers and Antennas
Article.20: Relationship to Wastewater Services
Article 21; Construction Standards
Article.22; Operation of Storage
Article.23: Miscellancous
Signature Page
Exhibit A: Customer's Water Distribution Points
Exhibit B: Projected Annual Volume, Minimum Annual Volume, Pressure Range,
Maximum Flow Rate, Flow Split Assumptions, and Addresses for Notice
Exhibit C; Metering, Agreement
on An A Ww
24
28
xxxEND_PAGE:deq04_b577_6019_6376_319
WATER SERVICE CONTRACT
BETWEEN
CITY OF DETROIT
AND
CITY OF FLINT
This Water Service Contract (“Contract”) is made between the City of Detroit, a: municipal
corporation, by its Water and Sewerage Department and Board of Water Commissioners (the
“Board”), and the City of Flint, a municipal corporation (“Customer”). The Board and Customer
may be referred to individually:as “Party” or collectively as the “Partics.”
Whereas, the City of Detroit owns a public water supply system (“System”) operated by
the Board; and
Whereas, the Board supplies water service to numerous governmental entities in the
Board’s water service area; and
Whereas, Customer is experiencing.a public health emergency and desires to obtain water
service from the Board in order to abate this emergency; and
Whereas, the purpose of this Contract is to provide potable water to Customer on an
emergency basis; and
Whereas, because Customer shall receive water through a Board-owned master meter that
also meters water usage by the-Genesee County Drain Commissioner (“GCDC”), Customer has
eritered into a metering agreement with GCDC whereby GCDC agrees to report to the Board the
volume of water attributable to Customer; and
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
Article 1.
Definitions
1,01 The following words and expressions, or pronouns used in their stead, shall be construed
as follows:
“Adjusted Prevailing Water Rate” shall have the meaning ascribed in Article 3 herein.
“Allocation Flow Rate” shall mean the value that is established as.a result of a breach of
Section 5,03 herein and whicti value shall replace the contractual Maximum Flow Rate in
the rate caloulation process in the'event that Section 5.04(C) herein is applied by the Board,
“Annual Volume” shall mean the actual volume of water used by Customer for the period
of July 1" to June 30"as measured on bills issued from August T* through July 315.
“Board” shall mean the City of Detroit Board of Water Commissioners.
xxxEND_PAGE:deq04_b577_6019_6376_320
“City” shall mean the City of Detroit, a municipal corporation, acting through its Board of
Water Commissioners. .
“Contract” shall mean each of the various provisions and parts of this document, including
all attached Exhibits and any amendments thereto, as may be executed and approved by
Customer’s governing body and the Board of Water Commissioners.
“Contract Term” shall have the meaning ascribed in Article 2 herein.
“Customer” shall mean the Party that enters into a contract with the City of Detroit by way
of this Contract, whether an authority, city, township, village or other municipal
corporation recognized by the State of Michigan.
“Customer Maximum Day Demand” shall mean the: Customer’s recorded water usage on
the DWSD Maximum Day. Customer Maximum Day Demand shall, in conjunction with
Customer Peak Hour Demand, be a component of its Maximum Flow Rate.
“Customer Peak Hour Demand” shall mean the Customer’s recorded water usage during
the DWSD Peak Hour, Customer Peak Hour Demand, in. conjunction with Customer
Maximum Day Demand, shall be a component of its Maximum Flow Rate.
“DWSD” shall mean the City of Detroit Water and Sewerage Department.
“DWSD. Maximum Day”.shall mean the maximum reported water produotion.day for the
System during. any twenty-four hour period as measured from 12:00 a.m, Eastern Standard
Time in any given calendar year, as determined by DWSD in reviewing water production
and storage reports,
“DWSD Peak. Hour” shall mean the hour during the DWSD.Maximum Day in which the
most, water is delivered to: the System, measured. from top-of-the-hour to top-of-the-hour
(e.g. 7:00 aim. to 8:00:a.m.), and as determined by DWSD in-reviewing water production
and pumping reports, In calculating the DWSD Peak Hour, the time period from. 13:00
PM to 5:00 AM Eastern Standard Time (EST) shall not be considered provided, however,
that if Customer has an approved Filling Schedule,.the time period specified in the Filling
Schedule shall supersede the time period of 11:00 PM to 5:00 AM EST,
“Early Termination Costs” shall have the meaning ascribed in Article 3 herein.
“Filling Schedule” shall-have the meaning ascribed in Article 22 herein,
“Maximum Flow Rate” shall mean the aggregate amount of water usage that ‘Customer
commits not to exceed, as determined by the Customer Maximum Day Demand and ithe
Customer Peak Hour Demand, collectively.
‘Meter Facilities” shall mean a location in which a water meter is housed including,
without limitation, meter pits and meter vaults.
xxxEND_PAGE:deq04_b577_6019_6376_321
2.01
2.02
2.03
“Minimum Annual Volume” shall mean fifty percent of Customer’s Projected Annual
Volume,
“Notices” shall mean.all notices, consents, approvals, requests. and other communications
required to be given under the tenns of this Contract.
“Pressure Problem” shall have the meaning ascribed in Article.5 herein.
“Pressure Range” shall have the meaning ascribed in Article 5 herein.
“Projected Annual Volume” shall mean the projected annual water sales to Customer as
set forth in Exhibit B,
“Service Area” shall mean the mutually agreed upon area. where Customer is permitted to
distribute water received from the Board under the terms of this Contract which (a) may be
entirely within the corporate limits of Customer or may-exceed the corporate. limits of
Customer and.(b) which mayor may not include the entire. geographical area within the
Customer’s corporate limits.
“System” shall mean the public water works system owned and operated by the City of
Detroit, acting through its Board of Water Commissioners and its Water and Sewerage
Department.
“Technical Advisory Committee” shall: mean the committee consisting of representatives
of'the Detroit Water and Sewerage Department, wholesale water customers.of the Detroit
Water and Sewerage Department and their respective representatives, and shall include its
successor or replacement if altered or discontinued,. The Technical Advisory Committee
‘or its successor shall remain in existence for a minimum term of January 1, 2008. until
December 31, 2038 unless the committee determines otherwise,
“Water Distribution Points” shall have the meaning ascribed in Article 4 herein,
Article 2.
Contract Term
Term, The Board shall sell and supply water {o Customer from the System in accordance
with the terms of this Contract for a period of nine months from the effective date of this
Contract (the “Contract. Term”), subject. to Article 3 herein. The effective date of this
Contract shall be the date that this Contract is approved by the Customer’s governing body
or the Board whichover is later.
Extension of Term. Should-the concern for public health continue beyond ‘the initial
Contract Term and a reasonable alternative to the temporary service provided by the Board
does not readily exist, the Contract Term may be extended for any mutually agreeable
period through a letter which sets forth the emergent circumstances signed by the Parties.
Reserved.
/
xxxEND_PAGE:deq04_b577_6019_6376_322
3.01
3.02,
3,03
3.04
401
Article 3.
Early Termination Costs
Barly Termination Costs; In addition to any othor remedies provided for by law or by the
temis of this: Contract, Customer shall be liable.to. the Board for the payment of any costs
incurred by the Board related to providing water to Customer in the event Customer
terminates this Contract before the conclusion of a Contract Term (“Early Termination
Costs”), unless Customer terminates this. Contract for cause in accordance with Article 10;
provided, however, that payment of such Early Termination Costs by Customer shall not
entitle Customer to receive water service from the Board.
Calculation of Costs, ‘Payment of Early Termination Costs will be calculated by applying
the Adjusted Prevailing Water Rateito the Minimum Annual Volume requirements.for the
remainder-of the Contract Term, The Adjusted Prevailing Water Rate shall be the rate
charged by the Board to.Customer as of Customer’s effective termination date, adjusted
annually to reflect projected inflationary increases utilizing a locally based wholesale price
index, The Parties may agree upon another standardized price index, The Board may seck
a recommendation from the Technical Advisory Committee on the amount of the Early
Termination Costs.
Specifically Constructed Facilities. If the Board has constructed facilities specifically for
the benefit of Customer, additional costs may be included in the calculation of the Early
Termination Costs,: provided that any such facilities shall be identified in a written
agreement between the Board and Customer at-or near the time of construction.
Formation of Water Authority. Customer may join with another authority, city, township,
village or other municipal corporation recognized by the State of Michigan to form a water
authority for the:sole purpose of collectively contracting for water service from the Board,
The exercise of this right shall not be construed as an early termination of this Contract and
this Contract shall be voided upon the approval of a new water service contract by
Customer’s governing body and the Board.
Customer Annéxation or Consolidation. In the event the territory of Customer is, annexed
or consolidated with another Michigan municipal corporation and if said municipal
corporation is aicurrent customer of the Board, then such:an annexation or consolidation
shall not be construed as an‘early termination. of this Contract and this. Contract shall! be
voided upon the approval of a new. or amended water service contract with the annexing or
consolidating municipal corporation,
Article 4.
Seryice Arca
Delivery Location, Water shall be delivered by the Board to Customer at the location(s)
identified in Exhibit A (collectively, the “Water Distribution Points”), and at other
locations. as may be mutually agreed upon in writing by the Board and Customer. The
Board shall not require Customer to pay any fee to recontiect to the System, The Customer
Shall bear any and all actual costs, including without limitation capital and labor cosis,
associated with any work required to reconnect Customer to the System,
|
/
xxxEND_PAGE:deq04_b577_6019_6376_323
4,02
4.03
4.04
4.05
4.06
5.01
Limit of Responsibility, The Board shall have no responsibility for distributing, operating,
repairing, replacing and maintaining any portions of the Customer's water supply system
downstream of the Water: Distribution Points shown in Exhibit A, provided, however, that
this Section 4:02 does not prevent the application of the provisions of Section 11.02 herein.
Board: Responsibility, The Board owns and is-responsible for operating and maintaining
all parts of its System: upstream from Customer’s Water Distribution Points. Should the
Board. fail to maintain its Meter Facilities and/or any Board owned and maintained
equipment within the Meter Facilities, Customer shall provide written notice to the Board
which. describes the objectionable condition of ithe Meter Facility and/or the equipment
within, and its-intent to take reasonable steps:to maintain the condition and charge the
reasonable cost of doing soto the Board. Upon:receipt of the notice and subject to Section
11.01, the Board shall have thirty: calendar days to repair the condition. specified in the
notice, unless a force majeure event-prevents the repair within the thirty-day period, If the
Board has not repaired the condition at the conclusion of the thirty-day period and has not
provided a written explanation. to Customer explaining the reason for the delay. (e.g.
necessary parts are on order.or occurrence of a force majeure event-specified in Section
11.01), then Customer may take reasonable steps to'maintain the specified condition and
charge the reasonable cost of doing so to the Board.
Extension of Service Area, Customer’s distribution of water supplied by the Board shall
be limited to the Service Area stated in Exhibit A. The Parties agree that situations may
arisé. in which Customer. desires to. extend its. Service Aréa, either temporarily or
permanently, beyond its.corporate limits, Should such a situation arise, Customer shall
provide written notice to the Board explaining the nature, duration and extent of the
requested Service Area extension. The.Board shall have the option, which it may exercise
atany time, of requiring:4 written amendment to this Contract to accommodate the change
in Service Area, Should the Board detérmine that an immediate amendment is required,
the Parties shall, within thirty calendar. days of Customer’s request, meet to negotiate
mutually agreeable terms for the extension of the Service Area. The Board shall not
unreasonably detiy a request to extend the Service Area.
Change or Addition of Water Distribution Points. Water Distribution Points may be added
or changed only by the express written agreement of the Board and Customer and shall be
embodied in:a written amendment to. this Contract.
Sole Supplier. Except as provided in Article 17 herein, the Board shall be the sole'supplier
of public potable water to Customer’s Service Area,
Article 5,
Pressure; Maximum Flow Rate; Minimum Aunya) Volume
Pressure Range, The Board shall use its best efforts to deliver water at the Water
Distribution Points at a pressure range (“Pressure Range”) adequate to. meet the reasonable
requirements of Customer. For purposes.of evaluating this effort, water pressure shall be
determined by reviewing the average hourly pressure measured from top-of-the-hour to
top-of-the-hour (e.g. 7:00'a.m. to-8:00:a.m,). The Pressure Range. to be provided by the
Board to Customer’s Water Distribution Points. is specified in Exhibit B, The location at
7
xxxEND_PAGE:deq04_b577_6019_6376_324
which the water pressure-will be measured shall be specified in Exhibit A and identified as
point“P”, A Pressure. Range.will not be established for water meters that are not located
ona DWSD transmission main, or which are located on a DWSD transmission main and
are downstream of and subject to the flow demands of.a water meter for another Board
customer.
Remedy for Non-Compliance with Pressure Range.. If the water pressure at Customer’s
Water Distribution Points is ‘above or below the Pressure Range, at Customer's request the
‘Parties shall meet within thirty calendar days to.discuss the reasons for the non-compliance
and, if‘agreed necessary, develop.and implement a mutually agreeable written corrective
action plan within sixty: calendar days of the meeting, or as otherwise agreed. The
corrective. action plan shall includé a timetable for resolution of the non-compliance
issue(s).
A. Tf it is determined that another customer’s exceedance of the rates of flow
established by that customer’s Maximum Flow Rate caused or contributed to the
Board’s inability to meet its Pressure Range agreement with Customer, then. the
corrective action plan shall provide for the resolution of the issue.
B, If Customer is exceeding the rates of flow established by its Maximum Flow Rate
on a day other than the DWSD Maximum. Day at the time Customer experiences a
variation from the Pressute Range, then the Board shall be relieved from its
obligation to provide water to Customer within the Pressure Range for that period
of time during which Customer is. exceeding the rates of flow established by its
Maximurmn Flow Rate.
Maximum Flow Rate. Customer’s Maximum Flow Rate is specified in Exhibit B.
Customer shall not exceed the Maximum Flow Rate specified in Exhibit B, as measured in
million galions-on the DWSD Maximum Day and during the DWSD Peak Hour.
A, The Board shall notify all customers in writing on or before October 1 of each
calendar year if Customer or any other wholesale customer is. alleged to have
exceeded its Maximum Flow Rate in-a given calendar year. The notice shall state
the. day and/or hour that Customer or any other wholesale water customer is alleged
to have exceeded its Maximum Flow Rate,
B. If Customer is alleged to. be in breach of its. obligations under this Section 5,03, the
Board and Customer shall endeavor to meet before November 1 of the. current
calendar year, ot as soon as practicable, for the purposes of validating the breach,
reviewing and analyzing the causes, and to negotiate a possible remedy pursuant to
Sections:5.04 and 5.05 herein.
Cc, The Technical Advisory Committes’s Analytical Work Group, or its successor
shall review any alleged breach of this Section 5.03.
i, The, Analytical Work Group shall meet once, at a minimum, on of before
Noyember 1 of each calendar year to review the alleged breaches, if any,
xxxEND_PAGE:deq04_b577_6019_6376_325
5.04
and:may thereafter schedule subsequent meetings as necessary to. conclude
its review,
ii. The Board will seek a recommendation from the Analytical Work Group on
(1) an Allocation Flow Rate, if any, and/or (2) concurrence with the remedy
tentatively negotiated between Customer and the Board, ifany. Customer
and ‘the Board shall have the right to present any information related tothe
alleged breach a Party deems necessary to the deliberations.
iii, | Any recommendation submitted by the Analytical Work Group shall be
received by the Board on or before December 1 of each calendar year,
Remedy for Non-Compliance with Maximum Flow Rate. The Board has no obligation to
supply to Customer more than the Maximum Flow Rate. If Customer exceeds its
Maxirnum Flow Rate.on the DWSD Maximum Day or duritig the DWSD Peak Hour, the
Board-arid Customer may, as needed, take. one or more of the following actions set forth in
this Section’5.04. The applicability of any particular action shall be evaluated by the Board
on.a case-by-case basis.
A.
The Board may require that.Customer take all reasonable steps to reduce its
consumption to the Maximum Flow Rate. Such steps may include water
conservation measures, outdoor-water use restrictions, water loss studies and
remediation, and an internal system operation evaluation.
The Parties may meet-to-negotiate a new Maximum Flow Rate. If so negotiated,
Customer shall pay the rate associated with the new Maximum Flow Rate in the
subsequent rate year,
For ratemaking and cost allocation purposes only, the Board may recalculate
Customer’s rate for the current and/or subsequent fiscal years utilizing a revised
cost allocation formula as-follows:
i The Board shall, as. set forth below, establish an Allocation Flow Rate to
replace the contractual! Maximum Flow Rate in the rate calculation process,
ii, The Allocation Flow Rate shall be. applied from no earlier than the first
exceedance date forward,
iii. The Allocation Flow Rate will be at least equal to the flow rate
denionstrated by Customer on the DWSD Maximum Day, and may be
higher than the actual flow rate demonstrated by Customer.
iv, Pursuant to Section 5,03(C), if the Board receives a recommendation on the
Allocation. Flow Rate to be. applied from the Analytical Work Group and
the recommendation is higher than twice the amount by which the
demonstrated flow.rate exceeded the original Maximum Flow Rate, then the
Board shall be limited to establishing an Allocation Flow Rate that is at Icast
equal to the flow rate demonstrated by Customer on the DWSD Maximum
9
xxxEND_PAGE:deq04_b577_6019_6376_326
5.05
3.06
vi.
vii,
Day and no higher than the recommendation provided by the Analytical
Work Group.
Tf no recommendation on the Allocation Flow Rate to be applied is received
by the Board, or if the Board receives a recommendation and the
recommendation is less.than twice the amount by which the demonstrated
flow rate: exceeded the original Maximum Flow Rate, then the Board shall
be limited to establishing an Allocation Flow Rate that is at least equal to
the flow rate demonstrated by Customer on the DWSD Maximum Day and
ho higher than twice the. amount by which the demonstrated flow rate
exceeded the original Maximum Flow Rate.
The Allocation Flow Rate will continue to be applied to each subsequent
year’s rate calculation process until the Maximum Flow Rate is
renegotiated,
If'a rate has been approved for the subsequent fiscal year (July 1 to June
30") but ‘the rate has: not yet been applied, the Board may modify
Customer’s rate for that subsequent fiscal year to account foran exceedance
of its Maximum Flow Rate.
If the Board’has built capital facilities based upon Customer's negotiated
Maximum Flow Rate and Customer consistently exceeds its Maximum
Flow Rate, then the Board may re-calculate the amount.of Customer’s
percentage of the capital cost of such facilities
Procedure for.Non-Compliance with Maximum Flow Rate. In addition to the remedies
specified in Section 5.04, if Customer has failed in its obligations under Section 5.03, the
Parties shall meet to. discuss the reasons for the non-compliance and if agreed necessary,
develop a mutually agreeable written corrective action plan by December 31 of the year in
which the non-compliance occurred, or-as:otherwise agreed. Any corrective action plan
required under this Section 5.05 shall include.a timetable for resolution of the non-
compliance issue(s).
A. If the Parties determine that a corrective action plan is not required and an incident
of non-compliance occurs in the subsequent calendar year, the Parties shall meet to
develop a mutually agreeable written corrective action plan by December 31 of the
year in which the non-compliance occurred, or as otherwise agreed.
B. In the event the reason for Customer’s non-compliance under Section 5,03 is due
to a-Customer water main: break, fire or meter calibration performed by DWSD,
these events will be taken into consideration in determining (1) whether a corrective
action plan is warranted and (2) the-extent to which, if any, the steps specified in
Section 5.04 should apply.
Minimum Annual Volume, Customer shall purchase from the Board not less. than the
Minimum Annual Volume of water specified in Exhibit B. If Customer’s Annual Volume
is less than the Minimum Annual Volume, Customer shall pay to the Board an amount
19
xxxEND_PAGE:deq04_b577_6019_6376_327
computed by: applying the current rate to the Minimum Annual Volume less any amounts
already billed to the-Customer by.the Board.
Periodic ‘Review. For Customer and. System planning purposes and, with regard to: the
Minimum Annual Volume, enforcement of the provisions of Article. 3, a Maximum Flow
Rate, Pressute Range, Projected Annual. Volume and Minimum Annual Volume shall be
established by mutual agreement for the Contract Term. If the Contract Term exceeds. {wo
years, a contractually binding Maximum Flow Rate, Pressure Range, Projected Annual
Voluine-and Minimum Annual Volume shall be established by mutual agreement for first
two years of the Contract Term. If the Contract Term exceeds two-years, not later than the
second year of the Contract Term, the Board and.Customer shall negotiate a contractually
binding Maximum Flow Rate, Pressure Range, Projected Annual Volume and Minimum
Annual Volume for the:succeeding three years of the Contract Term. Ifthe Contract Term
exceeds five-years, not later than the fifth year of the Contract Term, and-every five years
thereafter, the Board and Customer shall negotiate a contractually binding Maximum Flow
Rate, Pressure Range, Projected Annual Volume and Minimum Annual Volume for the
succeeding five years of the Contract Term. If the Parties do not negotiate new or revised
Maxinium Flow Rates, Pressure Ranges, Projected Annual Volumes and Minimum Annual
Volumes according to the. aforementioned schedule, then the figures established for
planning. purposes (as shown in italicized type in Exhibit B) shall become contractually
binding for the then-current three or five year term.
Remedy for Excessive Rate(s) of Flow Causing Pressure Problem(s). Customer
acknowledges that Customer’s rates of flow may cause and/or contribute to the. Board’s:
inability to. meet its Pressure Range agreements with Customer and/or the:Board’s other
oustomiers. (hereinafter, “Pressure Problem”), The Board may review or monitor
Customer’s daily rates of flow:if a Pressure Problem occurs and the Board’s Pressure
Range agreement with Customer and/or another customer of the Board is alleged to have
been breached. The approximate rate of flow by individual meter location used to establish
the Pressure Range and: Maximum Flow Rate is specified in Exhibit B. Ifa. Pressure
Problem occurs, the Parties shall.meet to discuss the reasons for the Pressure Problem and
‘develop and implement.3 mutually agreeable written corrective action. plan within sixty
calendar days of the Pressure Problem,.or as otherwise agreed, The corrective action plan
may require one or both of the following steps:
A, The Board may require that Customer take all reasonable steps to reduce ils
consumption to the rate of flow established by the Maximum Flow Rate, Such
steps.may indlude water conservation measures, outdoor water use restrictions,
water loss studies and remediation, and an internal system operation evaluation. In.
addition, the Board may xequire that Customer adjust its rate of flow at individual
meters, including the establishment of a not-to-exceed flow rate for individual
meters,
B. The Parties may meet:to negotiate a new Maximum Flow Rate. Ifso negotiated,
Customer shall pay the rate associated with the new Maximum Flow Rate in the
subsequent rate year.
xxxEND_PAGE:deq04_b577_6019_6376_328
5.09
5,10
6.02
6.03
If the Parties determine that a corrective action plan is not required and a subsequent
Pressure Problem occurs, the Parties shall meet to develop and implement 4 mutually
agreeable. written corrective. action plan within sixty calendar days of the subsequent
Pressure Problem, or as otherwise agreed. Any corrective action plan required under this
Section 5,08: shall include a timetable for resolution of the Pressure Problem, In the event
the reason for the Pressure Problem is due to.a Customer water main break, fire or meter
calibration performed by DWSD, these events will be taken into consideration in
determining (1) whether.a corrective action plan is warranted and (2).the extent to which,
if any, the steps specified above in this Section 5.08 should apply.
Board Costs. for Corrective Aotion Plan. If at any time the Board is required under the
terms of this. Article 5 to develop and implement a corrective action plan and the plan
involves incurring capital costs, the Board will determine whether the costs will be charged
as.a System. cost or whether the cost will be borne by a specific. customer or customers. If
the Board determines that all or part of the costs should be bore by a specific customer or
customers, the Board will seek a recommendation from the Technical Advisory Committee
on the assessment of the costs.
Customer Costs for Corrective Action Plan, If at any time Customer is required under the
terms of this Article.5 to develop and implement a corrective action plan, Customer shall
be so informed in. writing and Customer will-pay all costs related to the corrective action
plan.
Article 6.
Technical Advisory Committee
Establishment. The Technical Advisory Committee is formed to facilitate a cooperative
working parmership between the Board and its wholesale water customers by facilitating
the development of recommendations regarding System planning and supply to DWSD
management and:the Board. The Technical Advisory Committee shall maintain bylaws
that govern the way it conducts its business. In the event of a conflict between the terms
of the bylaws adopted by the Technical Advisory Committee and the terms of this Contract,
the terms of this Contract shall control.
General Responsibilities. The Technical Advisory Committee shall periodically review
and evaluate the rates, rate methodology, and performance of the System, The Technical
Advisory Committee shall review and evaluate flow rates, pressures and Annual Volumes
for the System at 4 minimum of every five years to assist the Board in its System planning
effort. The Technical Advisory Committge shall have the opportunity each year to review
‘the Capital Improvement Program as prepared. by DWSD, prior to its adoption by the
Board, The Technical Advisory Committee may consider Customer proposals for
improving the operation of Customer’s water system:and/or the System. The Board will
supply the Technical Advisory Committee with information the Board deems reasonably
flecessary to. accomplish the general responsibilities defined in this Section 6.02.
Annual Report by Board, The Board will present an annual report to the Technical
Advisory Committee which shall consist of (1) all instances.of non-compliance with the
Parties’ obligations contained in Article-5 herein, inchiding Customer and Board responses
12
xxxEND_PAGE:deq04_b577_6019_6376_329
6.04
6.05
6,06
6.07
7.02
7,03
thereto; (2) a genéral report: on System operation and maintenance; and (3) a report that
lists those contracts, if any, that have been entered. into by the Board and another
customer(s) where the terms:of the contract(s) invoke the application of Article 14 herein,
Notification of Rates, The Board shall provide Customer and the Technical Advisory
Committee with notice of the proposed rates for each fiscal year‘as early as possible before
the implementation of the rates.
Disclosure of Rate Information by Board, Each year, the Board will disclose to Customer
andthe Technical Advisory:Committee information related to wholesale rates,
isclosure of Rate mation ustomer, Each year, Customer will disclose to its
customers information related to its retail rates and other charges, and information
regarding what portion of those costs is related to charges from DWSD and/or other major
service providers,
Work Groups.. The Technical. Advisory Committee may create work groups to address
specific issues facing the System. The work groups in-existence as of January 1, 2008 are
the Analytical Work Group, the Best Practices Work Group, the Contract Work Group, the
Customer Service Work Group, the Emergency Preparedness: Work Group, and the Rates
Work Group. Any reference to a particular work group in this Contract shall include its
successor or replacement if altered: or discontinued.
Article 7.
Rates
Rates. Customer-agrees to-pay for all water supplied by the Board at such rates as the
Board may establish. Rates shall be reasonable in relation to the costs incurred’ by. the
Board for the supply of water and shall conform to Public Act 34 of 1917,.Michigan
‘Compiled Laws, Sec. 123,141, et seq., as amended, The Board shall give written notice of
any: changes in the rates. Notice shall be made in accordance with Section Se of Public Act
279 of 1909, Michigan Compiled Laws, Sec. 117.5e, as amended, (“Act 279”).
Notification of Rates, As soon as possible in the ratemaking process, the Board shall
provide information on proposed .rates and the draft data and information used in the
calculation of proposed rates in a format that will enable Customer to assist in the
ratemaking process, Not less than thirty calendar. days prior to the hearing required by Act
279, the Board shall provide Customer with written notice ofa proposed rate and the
underlying data used to caloulate the rate, The Board’shall meet with Customer to review
the rate and the data,
Estimate of Usage, In the event thatthe Board-owned master meter known.as GN-OI fails
to cotrectly measure the quantity of water supplied to Customer for any period of time, the
Board shall provide a reasonable estimate of the quantity of water supplied to Customer
for stich period provided that there is a teasonable basis for the estimate. Customer and
the Board shall, either through their respective. technical representatives and/or the
Technical Advisory Committee, seek agreement upona method to estimate such quantities,
Inthe event the Parties are unable to agree upon a method to estimate such quantities, the
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8.03
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Board’s determination of'a method shall be-conclusive and the Customer agrees to accept
the estimate established by the Board.
Rate.Methodology. The Board agrees to provide to Customer a description of the current
methodology for rate- making in the form of the “Rates: 101” document produced by the
Technical Advisory Committee, as may be periodically updated. The “Rates 101”
document, entitled DWSD Rates: Understanding DWSD Wholesale Water Rates, and any
updates thereto shall be provided to. Customer via posting on the DWSD website.
Article 8,
Meters and Meter Facilities
Metering Requirement. All water fumished.by.the Board to Customer shall be measured
by water meters installed in Meter Facilities at Customer’s. Water Distribution Points
unless, in the Board's determination, it is not feasible to install water meters due to the
configuration of Customer’s water system. Customer’s water usage shall be measured’ by
the. Board-owned master meter known as.GN-01. Because GN-01 also-measures the water
usage of GCDC, Customer has:a separate metering agreement with GCDC (attached as
Exhibit C) whereby. GCDC will report to Customer.and the Board ona monthly: basis:the
volume of water attributable to Customer through the GN-01 master meter. Customer shall
ensure that GCDC provides the monthly meter information, specifying the unit of
measurement sed, on or before the 5" day of each calendar month, Customer shall ensure
that the Board has.the right at any time to audit the metering information provided by
GCDC.
Existing Distribution Points. As of the effective date of this Contract, the Board shall own,
operate and maintain all water meters and. Meter Facilities for all existing Water
Distribution Points, unless specifically indicated otherwise in Exhibit A.
Customer Maintenance Responsibilities. Customer shall be responsible for maintaining at
its Water Distribution Points any and all appurtenances as may be designated as Customer’s
responsibility in Exhibit A, Should Customer fail to maintain the appurtenances shown in
Exhibit A, the Board may take reasonable steps to maintain the appurtenances and charge
the reasonable cost of doing so to Customer. Prior to the Board taking action to maintain
the appurtenances, the Board shall give Customer thirty days written notice to complete
the required maintenance, Notice to the Customer shall not be required if, in the Board's
deterntination, there exists an emergency condition affecting the operation of the System
or ifthe health, safety and welfare of the general public may be jeopardized.
New. Distribution Points, For. any new Water Distribution Points that may be constructed
or installed after the effective date of this Contract, Customer shail furnish at Customer’s
expense, a water meter. and Meter Facility that meets the Board’s specifications.
Thereafter, the Board. shall. fiirnish any replacement water meters for new Water
Distribution Points andthe. expense shall-be recovered through the Board’s rates as a
System. cost. The Board shall own, operate and maintain all water meters and Meter
Facilities after construction, installation or replacement, unless specifically indicated
otherwise in Exhibit. A.
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Meter Repair and Replacement. If the Board initiates a meter repair or meter replacement,
the cost shall be recovered through the Board’s rates as a System cost. If Customer requests
a meter replacement for reasons other than malfunction or disrepair, Customer shall pay
the.cost of the replacement, ‘
Pressure Regulating Facilities. After the effective date of this Contract, all newly installed
Customer-owned pressure regulating facilities shall be inistalled in a facility that is separate