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HomeMy WebLinkAbout14- Middle Creek Water Users' Association Water Purchase Contract CONTRACT NO 91-8 LE Curt' CITY OF BOZEMAN WATER PURCHASE CONTRACT This Water Purchase Contract("Contract") is made and entered between the Middle Creek Water Users' Association ("Association"), of Gallatin County, Montana currently administered at PO Box 11634, Bozeman, MT 59719, the Department of Natural Resources and Conservation ("Department"), P.O. Box 201601, Helena, MT 59620-1601, and the City of Bozeman ("Water Purchaser"), P.O. Box 1230, Bozeman, MT 59771. The Department and the Association shall copy and send all correspondence regarding matters concerning this Contract to the Director of Public Service of the City of Bozeman at the above address. SECTION L PURPOSE. This Contract concerns the Department's Middle Creek Project ("Project"), which includes a dam and reservoir, on Hyalite Creek in Gallatin County, Montana, The Department with approval of the Association has rehabilitated the Project. As part of the rehabilitation the Project's dam height has been raised and annual water storage capacity has been increased to 10,184 acre-feet. The Department warrants that it owns the rights to the water stored by the Project prior to rehabilitation and further warrants that it has the right to store and use for beneficial purposes the additional water to be stored by the Project after rehabilitation. This Contract will make a portion of the stored water available for use by the Water Purchaser and provide a source of revenue to the Department and Association to help pay for the Project rehabilitation and annual operation and maintenance costs. SECTION 2. TERM. This Contract shall take effect on the date of the last signature and shall last for the useful life of the Project unless terminated earlier pursuant to Section 6. SECTION 3. LIAISON. All payments, notices and communications to the parties under this Contract shall be made at the above provided addresses unless a party provides written notice to the other parties that future payments, notices or communications should be sent to a new address. The liaison for the Department shall be either the current Bureau Chief or Accountant. The liaison for the Association shall be the current President. The liaison for the Water Purchaser shall be the current Director of Public Service. SECTION 4.ASSOCIATION AND DEPARTMENT OBLIGATIONS. (A.)The Association, upon completion of Project rehabilitation and depending on water availability, will annually release from the reservoir for use by the Water Purchaser, Five Thousand Seven Hundred Two (5,702) acre-feet of water from October 1 to September 30. These water quantities will be measured at the discharge point for the outlet works at the dam. (B.) If in any year there is insufficient water from the Project to fill outstanding water purchase contracts, the Water Purchaser shall be entitled to that portion of the total water available equal to the fraction that the quantity of water contracted for here bears to 10,184 acre feet, or 55.99% of available water. The release to the Water Purchaser of this portion of available water shall constitute complete performance by the Association for that year. (C.) The Department and Association will not make contracts for supplying more than 10,184 acre-feet of water from the Project annually. (D.) The Department is under no obligation to distribute water to the Water Purchaser while the Association's "Repayment and Water Marketing Contract"(Attached hereto as Exhibit A) is in effect. (E.) Annually, the Association shall provide a written report to the water Purchaser detailing and summarizing the amounts paid by the Water Purchaser for unused water pursuant to Section 5, deposited in the Association's accounts, the investment thereof, and the earnings thereon and all amounts drawn there from. (F.) At the end of the forty(40)-year payment period beginning in 1994 pursuant to Section 5., all funds paid by the Water Purchaser for unused water and any interest earnings thereon that have not otherwise been utilized to satisfy the payments and obligation of 1 CONTRACT NO 91-B SECTION 6. DEFAULT AND REMEDIES. If the Water Purchaser fails to make a payment when due or otherwise defaults, and the default continues for 30 days, the Association may at its discretion or by direction of the Department, in addition to all other remedies available in law or equity, cease to supply water to the Water Purchaser until the default and all subsequent defaults are cured or terminate the Contract. Such action shall not affect the obligations of the Water Purchaser already accrued or accruing during the period when the water is withheld. SECTION 7. PROPERTY RIGHTS. All right, title and interest in and to the Project and the associated water rights shall be and remain in the Department. The Water Purchaser shall acquire no right, title or interest in the Project or the water rights. The Water Purchaser shall acquire no rights or equities under the Contract which will in any manner prejudice the right of the Association to terminate this Contract in the event that the Water Purchaser shall be in default. SECTION 8. PRIORITY. Without regard to priority in the execution of the Contract, or priority in the use of water for any reason, the Water Purchaser under this Contract shall have no preference or priority entitling the Water Purchaser to receive water from the Project before other water purchasers who have entered into water purchase contracts for water from the Project. All water purchasers have an equal and ratable right to water in accordance with the respective amounts to which they are entitled under the water purchase contracts. SECTION 9. SUCCESSORS AND ASSIGNS. The provisions of this Contract shall apply to and bind the successors and assigns of the respective parties,but the Water Purchasers shall make no assignment of the Contract without the written consent of the Association and the Department. SECTION 10. VENUE AND INTERPRETATION. Venue for any court action arising under this Contract shall be in the First Judicial District in and for Lewis and Clark County, Montana. This Contract shall be interpreted according to the laws of Montana. SECTION 11. ENTIRE AGREEMENT AND MODIFICATION. This Contract is the entire agreement between the parties on the subject matter of this Contract; statements, promises, or inducements made by either party, which are not contained in this Contract, are not valid. No modification, enlargement, or alteration of the Contract is valid except upon writteli agreement signed by the parties to this contract. SECTION 12. FORCE MAJEURE. Any prevention, delay or failure to supply water under this Contract due to strikes, walkouts, labor disputes, acts of God, inability to obtain labor, materials or reasonable substitutes, government restrictions, controls or regulations, enemy or hostile government action, civil commotion, fire, earthquake, drought or any other causes beyond the reasonable control of the Association or Department shall not be a breach of this Contract. SECTION 13. SUPERSEDURE. This Contract supersedes all existing water purchase contracts between the Water Purchaser and the Department. SECTION 14. EXECUTION. Each party has full authority to enter into and perform this Contract, and the person signing this Contract on behalf of each party acknowledges that he has read this Contract, understands it and agrees to its terms. MIDDLE CREEK WATER USERS' ASSOCIATION ATTEST: BY: -" DATE: ���jy Secretary DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION BY: - 3 CONTRACT NO 91-B SUBSCRIPTION AND PLEDGE AGREEMENT n ,� This agreement dated as of the 8th day of September,2014 between City of Bozeman,hereinafter called the"Water Purchaser," and the MIDDLE CREEK WATER USERS' ASSOCIATION,a corporation duly organized and existing under and in pursuance of the laws of the State of Montana,hereinafter called the"Association," WITNESSETH WHEREAS,simultaneously with the execution hereof,the Water Purchaser has entered into a water purchase contract(herein called the"water purchase contract")with the Association and the Department of Natural Resources and Conservation(herein called the"Department")for the purchase of the privilege of obtaining certain water from the Project therein described; and WHEREAS,the Water Purchaser desires to subscribe for stock in the Association and to pledge said stock as security for his obligations hereunder and under his water purchase contract, NOW THEREFORE,in consideration of the premises and of the mutual terms,covenants and conditions hereof,it is mutually covenanted and agreed as follows: Section 1. The Water Purchaser hereby agrees to take,and does hereby subscribe for 5,702 shares of capital stock in the Association,said Association having total authorized capital stock of Ten Thousand Dollars ($10,000),divided into Ten Thousand (10,000)shares of the par value of One Dollar($1.00)each, and further agrees to pay to the Association the amount of Five Thousand Seven Hundred Two Dollars ($5702.00),for said shares upon call and demand by the directors of the Association. This obligation is made and entered into in conformity with the laws of Montana,the Articles of Incorporation and the By-Laws of said Association. The amount of this subscription shall not become due and shall bear no interest until such call or demand is made for payment and thereafter only such amount as is called or demanded shall be due and same shall bear interest at the rate of six percent (6%)per annum, if the Water Purchaser does not pay for said shares within 45 days upon call and demand to pay. Section 2. The Water Purchaser hereby assigns,transfers and sets over to the Association all his right, title and interest in and to the aforesaid shares of stock,said Association to have and to hold said shares of stock for its own use and benefit forever,for the purpose of securing the performance and observance by the Water Purchaser of the terms,covenants and conditions of this agreement, and the water purchase contract. In the event that the Water Purchaser is in default in the performance of any of his obligations under the water purchase contract,and such default shall continue for a period of forty-five(45)days,then and in any such event the Association may immediately, without demand for payment,and without advertising,and without notice to the Water Purchaser,each and all of which is,and are hereby,expressly waived: (a)forfeit the shares of stock subscribed for and apply the payments previously made by the Water Purchaser on his stock toward the payment of any sums due under his water purchase contract;or(b)acquire the absolute title to any and all of said shares of stock (free from any right or equity of redemption by the Water Purchaser,such right or equity of redemption being hereby expressly waived and released)by the crediting the Water Purchaser with the par value of said stock at the time of said acquisition of absolute title;or(c)sell any or all of said shares of stock (free from any right or equity of redemption by the Water Purchaser,such right or equity of redemption being hereby expressly waived and released)at public or at private sale,it being expressly understood and agreed that the Association may itself be a purchaser at such sale of the whole or any part of said shares of stock. The proceeds of any sale or acquisition(pursuant to(b)or(c)of this Section)of said stock,or any part thereof,by the Association shall be applied,so far as needed,first toward the payment of the full indebtedness under this agreement; and,second,to the payment of any sums due under said water purchase contract; and,third,to the payment of any balance remaining to the water purchaser. In the event that the Water Purchaser is in default in the payment of any amount due on his subscription for said stock,the Association may forfeit the stock subscribed for in the manner provided by statute or otherwise. Section 3. The right to vote the stock covered by this agreement at any and all meetings of stockholders of the Association is hereby reserved to the Water Purchaser,and may be exercised by him unless and until said stock is purchased by the Association pursuant to its option or is sold by the Association in accordance with the provisions hereof. The Water Purchaser agrees to be bound by any and all provisions of the Articles of Incorporation and By-Laws of the Association, including all amendments and supplements hereafter made thereto with the approval of the Department. Section 4. The provisions of this agreement shall apply to and bind the successors and assigns of the respective parties hereto,but the Water Purchaser shall make no assignment of his right,title or interest in the stock covered by this contract until first offering said stock to the Association at the par value thereof,the Association to have the right and option to purchase said stock at the par value thereof at any time within ten(10)days from the personal service of written notice upon the Association of its intention to sell, transfer or assign its rights in the stock covered by this agreement;provided,however,that the Association shall have no such option in the event that such stock is to be sold,transferred or assigned by a water purchaser to an assignee of his water purchase contract who,after such assignment,will hold only one(1)share of stock for each acre foot of water,which he is obligated to purchase annually under a water purchase contract with the Association and the Department. IN WITNESS WHEREOF,City of Bozeman has hereunto set his hand and seal,and the Middle Creek Water Users' Association, pursuant to authority from its Board of Directors,has caused this Agreement to be executed in its corporate name by its President or Vice President,and attested by its Secretary or its Assistant Secretary,and its corporate seal to be affixed hereto,all on the day and year first above written. Witness to Signature of Subscriber: �— (Chris Kukulski,Bozeman City Manager) Water Purchaser � L � ( ) Water Purchaser Attest: MIDDLE CREEK WATER USERS'ASSOCIATION B4(G � nberry) President (Becky rn r Secretary CONTRACT NO 91-B Request for Release and Transfer FILE COPY The undersigned, a party to a Water Purchase Contract No. 81-A-1-A-1-A-1 made with the Middle Creek Water Users'Association and the Department of Natural Resources and Conservation for the purchase of the privilege to the use of Twenty Five(25) acre feet of water annually from the Middle Creek Project, and Subscription and Pledge Agreement with, and a shareholder in, the Association to the extent of Twenty Five (25) shares, requests the Association to be released from the Contract and be permitted to surrender my Subscription and Pledge Agreement for stock in the Association. The undersigned submits the name of City of Bozeman, who is the grantee or successor in interest to the land upon which the contract water is appurtenant and who has offered to enter into a Water Purchase Contract to purchase the identical rights and privileges and assume the obligations to be released by the undersigned, and to subscribe to the purchase of stock in the Association in the number of shares now held by us or me. In submitting this Request it is understood that there is no obligation upon the part of the Association or the Department of Natural Resources and Conservation to accept this Release, until the undersigned has fulfilled all obligations under the Water Purchase Contract. ,y,4- I Dated this S day of o 20 l�( (Tracy Froole, Member True North Partners, LLC) RELEASE AND TRANSFER accepted this lv—h day of �_ 1vt 20� ASSOCIATION MIDDLE CREEK WATER USERS' B4(Gerry ATTEST: enberry) resident ILmilt (Becky Tu r) Secretary RELEASE AND TRANSFER accepted this I uVia day of or-V.P ez 20 DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION By Chief, S Water Projects Bureau Water Resources Division