HomeMy WebLinkAbout82- Mystic Lake Dam Agreement
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AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of
August , 1982, by and between the CITY OF BOZEMAN, a municipal
corporation, organized and existing under the laws of the State of Montana,
hereinafter referred to as IIcityll, and KENNETH KRAFT, KATHRYN A. MOORE,
JOHN F. NASH, STEVEN P. LIEBMANN, MARIANNE C. LI EBMANN, ALVIN J.
GOLDENSTE IN, WILLIAM HOFFMAN, CHRISTIAN HOFFMAN, MARY REILLY and
NASH-SOURDOUGH PROPERTIES, all residing in Gallatin County, Montana,
hereinafter referred to as lIirrigatorsll.
WITNESSETH
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WHEREAS, these parties each own one or more shares in Bozeman Creek
Reservoi r Company; and
WHEREAS, the parties recog n i ze that Mysti c Lake Dam is in need of
substantial renovation and repair; and
WHEREAS, it is in the interest of the city to increase the storage capacity
of the reservoir at the time such renovation and repair is accomplished with the
recognition by the parties that any additional water which is available because
of the increased storage capacity will be allocated for use by the city; and
WHEREAS, it has been mutually determined that a proper method to
acquire financing for the repairs is for the city to apply for appropriate grants
from the State of Montana to complete the repairs; and
WHEREAS, the condition of successful grant applications is that the dam
and all associated structures and facilities be owned by the municipality and
used for municipal purposes; and
WHEREAS, the parties desire to establish an agreement to allow the city to
acquire all shares of stock in the Reservoi r if the grant applications are
approved.
NOW, THEREFORE, in consideration of the mutual convenants and
conditions contained herein, it is hereby agreed as follows:
1 . The city shall make application to the Department of Natural
Resources and Conservation of the State of Montana for a Renewable Resource
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Development Grant for funds to be utilized for the pu rpose of repair,
reconstruction and renovation of Mystic Lake Dam. The application shall be for
the greatest amount of money available for that purpose. It is understood by
the parties hereto that said amount may be $320,000.00.
2. The city has or shall make application to the State of Montana for a
Community Development Block Grant in the amount of $400,000.00. The
Development Block Grant funds shall also be utilized for the purpose of repair,
reconstruction and renovation of Mystic Lake Dam in the event that such grant
funds become available to the city and in the fu rther event that the city
receives a Renewable Resource Developmental Grant in an amount not less than
$320,000.00.
3. It is contemplated that additional funds in an amount of approximately
$30,000.00 shall be required to complete the repai r, reconstruction and
renovation of the dam. The city shall provide such additional funds from
whatever source it has available to it for the purpose and in amounts not to
exceed $30,000.00.
4. Each irrigator shall deliver to the Clerk of the City Commission of the
City of Bozeman, as escrow agent, the share or shares of stoc k in the
Reservoir Company which he or she holds. Additionally, each irrigator shall
deliver to the Clerk of the City Commission an executed stock power which
authorizes the Clerk to execute the share or shares of stock in the Reservoir
Company on behalf of such irrigator in accordance with the terms and
conditions of this agreement.
5. In the event that the city shall receive a Renewable Resource
Developmental Block Grant in an amount not less than $320,000.00 and receives
a Community Developmental Block Grant in an amount not less than $400,000.00
and in the further event that the contract for repai r , reconstruction and
renovation of Mystic Lake Dam shall not exceed $750,000.00, the following shall
occu r :
(a) At the time the contract for repair, reconstruction and renovation is
signed by the city the Clerk is authorized to and shall execute on behalf
of each irrigator an assignment to the city of the share or shares of stock
in the Reservoi r Company held by that irrigator. The city shall become
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the sole owner of all shares of stock in the company and through the
ownership of the shares, become the holder of all of the assets of the
Company. The city shall have the right to liquidate the Company or
undertake any other activity relating to the Company or its assets. All of
the liabilities of th e Company as well as its assets shall become the sole
responsibi lity of the city.
(b) The city shall, at no expense to any irrigator, commence and
complete within a reasonable time the repair, reconstruction and renovation
of Mystic Lake Dam in accordance with the specifications and requirements
of the United States Forest Service and in such further manner as the city
shall determine is proper and desirable.
(c) The city and each irrigator shall negotiate a contract wh ich shall
provide for delivery by the city to the irrigator of seventy (70) acre feet
of water from Mystic Lake Reservoi r for each share of stock that the
irrigator held in the Company. The delivery shall be at such times as the
irrigator shall demand the water during each irrigation season from and
after the date of completion of the repai r, reconstruction and renovation of
the dam. The water shall be delivered at the rate of fifty (50) miner1s
inches of flow for a period of twenty-eight (28) days or increments
thereof. The delivery and measurement of the water by the city shall be
at those p I aces along Sourdough Cree k at which such del ivery and
measurement have historically been made.
In the event of drought, earthquake or other unforeseen natural
occurrence resulting in the maximum amount of water which is actually
stored in the reservoi r in the year of the occurrence, when added
together with any amounts of water delivered to anyone or more irrigators
prior to the time when the maximum amount of water within the reservoir
is reached during that year, being less than the maximum storage capacity
of the reservoir, each irrigator shall receive, as his pro rata share of
such water, a percentage amount which is equal to the percentage of such
water as compared to the total storage capacity. The reduction in the
amou nt of water delivered to each irrigator shall not be allowed if the
reduction in the amount of water in storage occurs as a result of any
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deliberate or negligent act or any deliberate or negligent omission on the
part of the city in its control of the dam and reservoir.
In the event of reduction of delivery of water by the city to any
irrigator for the reasons set forth above, the irrigator shall not be
required to pay assessment for water not delivered by the city and
therefore, not received by him.
(d) Each irrigator shall pay to the city an annual assessment for the
water he or his successor in interest shall receive or is entitled to
receive. During the first five years after initial receipt of water the rate
shall be $5.50 per acre foot for each acre foot the irrigator receives.
However, should the quantity of the water in the dam be insufficient to
provide the 70 acre foot req u i rement per irrigator, then each irrigator
shall pay only for the water actually received by him. Commencing on the
fifth annual anniversary date of receipt of the water and continuing on
every fifth year thereafter the assessment per acre foot shall be adjusted
to reflect the increased cost of operation and maintenance of the dam
during the preceding five years. The average increase or decrease in the
cost of operation and maintenance of the dam and associated structures and
facilities over the fi rst five years shall be determined by computing the
annual percentage increase or decrease in cost for each year, adding those
figures together and dividing by five. That figure shall be multiplied by
the base assessment of $5.50. The resultant product shall be added to the
base rate and such figure shall be the new base rate for the succeeding
five years. Payment shall be made by the irrigator each year in cash
within th i rty (30) days after receipt of a statement of account from the
city.
In computing the cost of operation and maintenance of the dam and
associated structu res and facilities no amount shall be included which
represents a capital expenditure.
I n no event, however, shall the increase or decrease in the amount of
the assessment on any adjustment date be greater than 20% of the
assessment rate for the previous five-year period.
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The date in each year from which computations are to be made shall
be the anniversary date of the first statement of account mailed by the
city to each irrigator.
6. The contractual right of each irrigator to receive water shall be
freely assignable, subject only to the right of first refusal hereinafter
described.
I n the event any irrigator shall / at any time, receive a bona fide offer to
purchase his or her contractual right to receive water from Mystic Lake
Reservoi r , or any part thereof, and in the further event that the irrigator
shall decide to sell the same for the amount and on the terms set forth in the
offer, then in that event, the irrigator must, before selling such right,
promptly give the city actual notice in writing of the terms of the offer and of
irrigator's willingness to sell for the price and on the terms offered, and the
city shall have a first right of refusal to purchase the contractual right at the
price and on the terms contained in the offer. I n the event any such right of
first refusal is not exercised within sixty (60) days from the date of receipt of
such offer by certified mail or the delivery of such written offer in person,
then the irrigator shall be free to sell the contractual right on the same or
better terms than those offered, but shall not be free to sell on any lesser
terms than those offered to the city.
The failure of the city to accept any such offer shall not con stitute a
waiver by the city of its right of first refusal on any other contractual right to
receive water from Mystic lake Reservoir. It is the intention of the parties
hereto that this right of first refusal shall be binding on each irrigator, his
heirs, successors and assigns.
7. It is understood and agreed that in the event any irrigator shall have
no need for the use of any or all of the water which he is entitled to receive
from the city from Mystic lake Reservoi r in anyone year / the irrigator may
give notice to the city that he does not desire to receive such water and the
city shall not deliver the water to him but may use the water for its own
pu rposes. The irrigator shall then have the obligation to pay an assessment
for that year of $1.00 per acre foot for the water which he is otherwise entitled
to receive but did not elect to receive.
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8. In the event that the city shall receive a Renewable Resource
Development Block Grant in an amount less than $320,000.00 or shall receive no
such grant at all, or in the event that the city shall receive a Community
Developmental Block Grant in an amount less than $400,000.00 or shall receive
no such grant at all, or in the further event that the contract for repair,
reconstruction and renovation of Mystic Lake Dam shall exceed $750,000.00, the
city may elect to receive the shares of stock in the Reservoi r Company which
are held in the escrow account and undertake all responsibilities and obligations
of this agreement and receive the benefits of th i s ag reement. Alternatively,
the city may terminate this ag reement and direct the Clerk of the City
Commission to return the share certificates and accompanying stock powers held
in the escrow account to the owners of the certificates. In the event of such
termination, all rights and responsibilities of any party hereunder shall cease
and no pa rty shall be fu rther bound by the terms and provisions of th i s
ag reement.
It is recognized, understood and ag reed that the repai r, recon struction
and renovation of Mystic Lake Dam will probably prevent the storage of water
during the construction period. The city shall have no obligation to deliver
water to any irrigator if it is prevented from doing so because of such
construction activity and no irrigator shall have any obligation to pay an
assessment for water during the construction period when the city is unable to
make delivery of water to the irrigator.
9. During the term of the escrow, the Bozeman Creek Reservoir
Company shall continue in existence and shall remain the owner of Mystic Lake
Dam and its associated structures and facilities. During the term of the escrow
each present shareholder shall have the right to vote his or her shares in the
Company at all Company meetings in accordance with the Company By-Laws and
shall have all of the responsibilities resulting from the ownership of the stock.
Furthermore, each shareholder shall have the right to use the water
rep resented by his or her shares of stock as though such shareholder held
physical possession of the shares.
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10. All covenants and agreements herein contained shall extend and be
obligatory upon the heirs, personal representatives or assigns of the respective
parties hereto.
IN WITN ESS WH ER EOF, the parties hereto have signed and sealed this
agreement the day and year first above written.
CITY OF BOZEMAN: IRRIGATORS:
BY:~~dfY ~~
" Kenneth Kraft .
ATTEST: ~Y!~ t(, ~
(1U- "-tj F ?1J'tJ 0.,. , Kathryn . Moore ,
I ("oj ~ "-' Jj /}fuvn ./ ~ -"4 / ~__________
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S te v..__......e n. P. L..:?7Z<<n.
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J 0 h 'n F. N ash
State of Montana) ~~""^ 0 G ~M'^
: ss. arianne C: Liebmann . ,
County of Gallatin) Gol ens e n B others by
I, the undersigned, hereby Alvin Goldenstein
certify that the above, Alfred M. ,~ 0:. ~
Stiff, did place his signature with ~~~ ~
an attestation by Robin L. Sullivan, IIllam Hoffman
in my presence, this 5th day of t.L ~ . ~ --r./~
August, 1982. ~11n~ (q'
Christian Hoffman
~~,.j (?, x/~ 7n~ G?,/'~
Notary Public for Mary Illy , ~
State of Montana .
Residing at Bozeman, Montana Nash-Sourdough Properties
My Commission expires 4-30-85 . ~ . '~ iJ
BY." /'1/1 .t{ .
(Notary Seal)
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