AGREEMENT FOR CONTRACT OPERATION AND
MAINTENANCE OF THE CITY OF SANTA FE
WATER SUPPLY UTILITY SYSTEM
THIS AGREEMENT (this "Agreement") is made and entered into as of
this 3rd day of July 1995 (the "Effective Date"), by and between the
CITY OF SANTA FE, NEW MEXICO ("Owner"), a municipal corporation, and
PUBLIC SERVICE COMPANY OF NEW MEXICO ("Contractor"), a New Mexico
corporation.
RECITALS
WHEREAS, Owner owns a water supply utility system (the "Water
System") acquired from Contractor on July 3, 1995, pursuant to an
Agreement to Purchase and Sell dated as of February 28, 1994, as
amended, (the "Purchase Agreement"), and consisting of dams and water
storage reservoirs, water treatment and filtration facilities, water
transmission facilities, covered water storage tanks, wells, booster
station facilities, a treated water distribution system, customer
service lines and meters, water rights, easements and rights of way,
vehicles, mobile machines and equipment, a testing laboratory, a
commercial office, an operations center and warehouse, and other
equipment and facilities now existing or hereafter acquired by Owner
related to the production and delivery of water to the citizens of Santa
Fe, New Mexico and surrounding areas; and
WHEREAS, Contractor is a corporation doing business in the State
of New Mexico, experienced in the management and operation of water
utility systems, and offering professional services for the operation
and maintenance of the Water System; and
WHEREAS, Owner desires to engage Contractor for the operation and
maintenance of the Water System;
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and their mutual
agreements, promises and undertakings, and upon the terms and conditions
set forth herein, the parties hereby agree:
ARTICLE I. ENGAGEMENT
1.01 Owner hereby engages Contractor as an independent contractor
to furnish the services hereinafter described at and for the comp-
ensation herein provided, and Contractor hereby accepts said engagement
upon said terms. Contractor shall furnish the services of those of its
employees and their successors ("Contractor's Employees") employed in
Contractor's operating division known as Sangre de Cristo Water Company
("SDCW") in the operation and maintenance of the Water System on the day
immediately preceding the Commencement Date (as hereinafter defined). A
staffing table identifying the numbers and positions of Contractor's
Employees currently employed by Contractor in operating the Water
System is attached as Schedule 1.01 to this Agreement and incorporated
herein by reference. In the performance of its duties under this
Agreement, and only for the performance of such duties (except as set
forth in Section 15.02 hereof), Contractor may use and occupy the
property, facilities and equipment comprising the Water System at no
cost to Contractor on the terms and conditions set forth in this
Agreement.
ARTICLE II. TERM, FISCAL YEARS
2.01 Term. The term (the "Term") of this Agreement shall
commence at 12:01 a.m., Santa Fe time, on the Closing Date (as defined
in the Purchase Agreement) (the "Commencement Date") and expire at 12:01
a.m. on the fourth anniversary of the Commencement Date. This Agreement
is subject to termination as provided in Section 8.01.
2.02 Fiscal Year. For purposes of this Agreement, the fiscal
year of the Water System ("Fiscal Year") shall be Owner's fiscal year
which commences on July 1 and ends on June 30 of the year. The first
Fiscal Year (the "First Fiscal Year") will include the period beginning
on the Commencement Date and ending on June 30, 1995.
ARTICLE III. CONTRACTOR'S RESPONSIBILITIES
3.01 Operating Agent. Owner hereby designates Contractor as its
operating agent to operate, maintain, replace and extend the facilities
of the Water System, including those which hereafter may be constructed
or acquired by or on behalf of Owner by Contractor, all on the terms and
conditions set forth in this Agreement.
3.02 Obligation to Provide Employees. Contractor shall employ
and supervise Contractor's Employees in sufficient numbers and
possessing sufficient skills to perform the services required of
Contractor under this Agreement. Contractor shall provide proper
training for Contractor's Employees in the performance of their work
under this Agreement. Contractor shall assure that Contractor's
Employees are qualified to perform their work and to operate and
maintain the Water System in accordance with this Agreement, and
Contractor shall give due consideration to any comments of Owner with
respect to the performance of specific employees. Contractor shall
advise Owner as requested by Owner with respect to the assessment,
status and screening of potential employees of Contractor prior to their
employment by Contractor. At all times, Contractor shall comply with
all applicable federal, state and local labor laws with respect to
Contractor's Employees and with respect to Contractor's obligations
under this Agreement, including, but not limited to, ERISA, wage
withholding, social security, equal employment opportunity, age and
disability discrimination, unemployment insurance, hours of labor,
wages, working conditions, OSHA, immigration control and other
employer-employee related subjects. Contractor shall provide to Owner
copies of Contractor's salary administration plan and the job
descriptions for each of Contractor's Employees within 60 days prior to
the anticipated Commencement Date and shall thereafter provide copies of
all subsequent amendments and changes thereto.
3.03 Standard of Performance. Contractor shall provide all
services required of Contractor under this Agreement in accordance with
all applicable federal, state and local laws, regulations and
ordinances, and with sound and generally accepted water utility industry
standards and practices, including standards and practices approved by
the American Water Works Association, Contractor's customary standards
and practices, and the standards and practices reasonably required by
Owner, and those specifically required by this Agreement. Contractor
shall operate and maintain the Water System in a safe, reliable,
economical and efficient manner.
3.04 Source of Supply Systems. Contractor shall operate and
maintain Owner's various dams, reservoirs, wells, storage tanks, booster
and pipeline systems, and water treatment systems to provide the
necessary supply of water to Owner's customers.
3.05 Water Treatment Plant. Contractor shall operate and
maintain the water treatment plant on Canyon Road, and other water
treatment plants which may be added to the Water System. If abnormal
conditions occur, Contractor shall notify Owner as soon as possible and,
consistent with the Annual Budget (as defined in Section 3.09) and any
instructions of Owner, use its best efforts to correct such abnormal
conditions, prevent violations of environmental or other applicable laws
or regulations, and minimize the number and duration of such violations.
Contractor shall be responsible for the security of the Water System,
including, but not limited to, the water treatment facilities.
3.06 Water Transmission and Distribution System. Contractor
shall operate, maintain and repair Owner's water transmission and
distribution systems, including water service lines and meters.
Contractor shall respond to major water system leaks, breaks or
emergencies as soon as possible, and use its best efforts to respond
within two hours of being notified or otherwise learning of such leak or
break.
3.07 Water System Engineering and Design. Contractor shall
provide those normal and customary engineering and design services
advisable or necessary to operate, maintain and expand the Water System.
The use of outside services for the engineering and design of major
facilities will be subject to approval by Owner and shall be managed by
and through Contractor's engineering group.
3.08 Maintenance and Repair.
(a) Consistent with each Annual Budget, Contractor shall
provide normal maintenance and repair (as defined in subparagraphs (d)
and (e) hereof) of the equipment and facilities comprising the Water
System to prevent abnormal wear, tear and usage. Such maintenance and
repairs shall not include costs associated with flood, fire or other
unexpected, abnormal or extraordinary occurrences not caused by the
gross negligence or intentional misconduct of Contractor, or
circumstances not within the control of Contractor. Contractor shall
use due diligence and generally accepted industry standards to implement
a program of regular preventive maintenance and shall report to Owner
quarterly with regard to such maintenance program.
(b) Consistent with the provisions for repair and
maintenance in the Annual Budget, Contractor shall be authorized to make
expenditures for repair or maintenance up to a maximum of $20,000 per
project or occurrence without specific authorization or approval by
Owner. Owner may require that the Annual Budget set forth, on a project
basis, anticipated repairs or maintenance in excess of $5,000.
(c) Except in those circumstances in which Contractor
must act immediately to avoid or minimize significant interruption of
service or to prevent or minimize immediate risk to the public health,
welfare or safety, Contractor shall provide proposals to, and obtain
prior written authorization from, Owner for repair or maintenance
projects not set forth in the Annual Budget if the projected cost
therefor is reasonably estimated to exceed $20,000.
(d) As used herein, "maintenance" means those routine
and/or repetitive activities required or recommended by the equipment or
facility manufacturer, or by Owner or by Contractor, or customary in the
industry to maximize the useful life of property, plant, equipment or
other capital items.
(e) As used herein, "repair" means those
non-routine/non-repetitive activities required for operational
continuity, safety and performance generally due to failure or to avert
a failure of the Water System or any of its components.
(f) All fixed assets added to the Water System or
purchased in conjunction or for use with any part of the Water System
during the term of this Agreement shall be the property of Owner.
Contractor shall maintain, and provide to Owner, a perpetual inventory
of all furniture, fixtures, equipment, vehicles or other capital items
purchased, installed or constructed with Owner's funds with a value of
$500 or more.
(g) Contractor and Owner shall jointly decide whether to
replace or repair parts, equipment, or other facilities costing more
than $20,000 if the same have not been approved in the Annual Budget,
and Contractor shall prepare a repair-or-replace analysis therefor for
Owner.
(h) Consistent with the Annual Budget, Contractor shall
repair and maintain all non-disposable items of the Water System,
including, but not limited to, vehicles, tools and equipment, as well as
buildings and other fixed facilities of the Water System.
3.09 Planning and Budgeting.
(a) For each Fiscal Year Contractor shall prepare a five
year capital improvements plan (the "5-year Plan") for the Water System
and an annual operating and capital budget (the "Annual Budget") to be
submitted for Owner's review and approval in accordance with this
section. Each Annual Budget approved by Owner pursuant to subparagraph
(c) hereof, and all amendments to such Annual Budgets, shall constitute
and be deemed a part of this Agreement.
(b) Within twelve months after the Commencement Date,
Contractor shall, if requested by Owner, prepare or cause to be prepared
under Owner's direction and supervision, a Water System Master Plan (the
"Master Plan"). The Master Plan will address subjects reasonably
requested by Owner, including, but not limited to: population and
customer projections; analysis of source of supply, total water
production and peak-day capabilities; transmission and distribution
system capabilities and shortfalls, if any; storage capabilities and
future requirements; water rights status and projected needs; and
proposed future source of supply additions.
(c) For each Fiscal Year Contractor shall prepare and
submit to Owner for consideration and approval a proposed Annual Budget
in such form and detail as requested by Owner, together with the 5-year
Plan. The Annual Budget shall include expenditures budgeted for
personnel and labor (including number of employees, positions and pay
grades authorized), headquarters services, management fees, operation
and maintenance of the Water System, materials and supplies, normal
renewals and replacements, repair and maintenance, equipment and major
capital improvements or additions, inclusive of annual demand contracts,
and a reserve for emergencies and abnormal conditions. Except for the
Annual Budget for the First Fiscal Year, which shall be submitted in
accordance with paragraph (d), below, the Annual Budget for each Fiscal
Year shall be submitted to Owner by January 1 of the preceding Fiscal
Year. Owner shall review the proposed Annual Budget in accordance with
Owner's customary budgetary processes, including preliminary review and
consideration by Owner's Finance Committee at least sixty (60) days
prior to the commencement of the applicable Fiscal Year. Owner shall
provide Contractor with an Annual Budget approved by Owner's City
Council at least thirty (30) days prior to the commencement of the
applicable Fiscal Year. Except as otherwise provided by this Agreement
or authorized by Owner's Representative (appointed pursuant to Section
7.02 hereof), Contractor shall be bound by the Annual Budget so approved
and shall perform its duties and responsibilities under this Agreement
pursuant to such Annual Budget.
(d) Contractor shall submit the proposed Annual Budget
for the First Fiscal Year to Owner no later than sixty (60) days prior
to the anticipated Commencement Date. Owner shall, within forty-five
(45) days after submission, complete its review of the proposed Annual
Budget and provide Contractor with an approved Annual Budget for the
First Fiscal Year, which Contractor shall then follow.
(e) Each Annual Budget approved by Owner shall authorize
expenditures for personnel and labor, operations, maintenance and
repairs, materials and supplies, additions, extensions, renewals and
replacements during the applicable Fiscal Year sufficient to operate and
maintain a safe, efficient and reliable Water System and provide safe
and reliable service.
(f) Owner may modify any Annual Budget proposed by
Contractor after consulting with Contractor concerning the impact on
the safe, reliable, economical and efficient provision of service and
operation
and maintenance of the Water System. In no case shall Owner reduce
budgeted wage and salary rates proposed by Contractor if such rates are
in conformity with Contractor's company-wide salary administration plan.
(g) Contractor shall operate and maintain the Water
System in accordance with, and not in excess of, the approved Annual
Budget or line items set forth therein. To the extent required for the
safe, reliable, economical and efficient operation and maintenance of
the Water System by Contractor, Owner shall not unreasonably withhold
its approval of such amendments or modifications of an Annual Budget as
Contractor may reasonably request. In evaluating proposed
modifications, Owner may consider all relevant factors, including, but
not limited to,
the impact on Owner's service rates, financing capabilities, and Water
System, and any adverse impact thereto may affect Owner's approval,
except to the extent the proposed modification is required to correct an
unsafe or potentially unsafe condition of the Water System.
3.10 Capital Improvements and Additions. As part of each Annual
Budget, Contractor shall recommend to Owner, and Owner shall review and
approve as Owner deems appropriate, necessary capital improvements to
the Water System and the manner and methods of constructing the same.
Each individual capital improvement project shall be approved in writing
by Owner before construction shall commence, and Owner shall instruct
Contractor concerning the manner and methods of financing the same.
Customer extensions made in accordance with Owner's approved procedures
shall not require additional approval by Owner other than
through the Annual Budget process. Owner may reserve the right to
review and approve bids and the award of contracts to third-party
contractors. Prior to initiating any capital improvements to be
constructed by Contractor, Contractor shall submit to Owner a proposed
work order which, if agreed to by Owner, shall form the basis for
payment by Owner to Contractor, in addition to a performance bond in an
amount customary for such projects and in a form reasonably acceptable
to Owner. All work order costs shall be broken down on a per unit basis
which shall include allowances for labor, equipment, engineering, and
any other costs incurred by Contractor. All per unit costs shall be
based upon Contractor's actual cost of labor, equipment, engineering,
and other costs. Contractor's current per unit construction cost shall
be updated annually and submitted with the proposed Annual Budget and
shall be itemized with each proposed work order. All work orders shall
specify the units of property to be added and/or retired. Contractor
shall be responsible for inspecting and accepting work performed by
third-party contractors. All construction shall be in accordance with
applicable contract provisions, procedures, and generally accepted water
utility construction practices or the construction practices of Owner,
as determined by Owner where the practices conflict.
3.11 Customer Services, Rates and Rules of Service.
(a) Contractor shall perform normal and customary
customer services, including, but not limited to: customer account
service and maintenance; account inquiry work; customer assistance;
credit and collection services; cashiering; account cut-in and cut-out;
and conservation advice.
(b) Contractor shall read all customer meters monthly,
or at such other periods of time as shall be directed by Owner, and
shall, according to the schedule of rates (the "Schedule of Rates") then
in effect, render bills to all customers in the name of Owner for water
service delivered. As of the Commencement Date, the Schedule of Rates
shall be the rates and rules for service effective for SDCW on the day
preceding the Commencement Date. Thereafter, Owner may implement
changes in the rates, rules of service, regulations and procedures
comprising the Schedule of Rates by giving written notice to Contractor
not later than forty-five (45) days prior to the effective date of such
change.
(c) Pursuant to Section 8.04 hereof, Owner may assume
full responsibility for rendering customer bills in the name of Owner.
Upon the effective date of the assumption by Owner of such
responsibility, Contractor shall be relieved of all responsibilities,
duties and obligation respecting the activities and functions assumed by
Owner arising after the effective date of Owner assuming such functions.
(d) Contractor shall, during the time it is obligated
to perform customer billing under this Agreement, provide computer
processing necessary to perform customer billing in a timely and
efficient manner. Contractor shall implement any reasonable request by
Owner for modification of the customer billing format, and Owner shall
pay Contractor's reasonable, actual costs for implementing such
modifications. Owner shall pay the reasonable cost of customer billing
performed by Contractor in accordance with the Annual Budget and the
compensation provisions of this Agreement.
(e) At such time as Contractor transfers to Owner its
customer billing duties, Owner shall not be liable to Contractor for any
further costs or expenses related to customer billing services.
Contractor shall provide reasonable assistance to Owner in transferring
customer billing duties, including, but not limited to, transferring
historical records, data, and customer account information.
(f) Until Owner assumes responsibility for rendering
customer bills, Contractor shall maintain such records as Owner
reasonably requests setting forth in accurate and reasonable detail the
actual meter readings, billing determinants, charges made to Owner's
customers in accordance with the Schedule of Rates, and payments
received from each of Owner's customers. At a minimum, Contractor shall
maintain the records in a manner such that data by various customer
classifications can be readily reported on a monthly basis for the
fiscal year to date and for the most recent twelve-month period. In no
event, however, shall Contractor be required to maintain records in a
manner which would require Contractor to implement a new accounting
system, substantially modify its existing accounting system, or purchase
or install new accounting software. Contractor shall retain any records
that it is required to maintain pursuant to this subparagraph for the
term of this Agreement and shall deliver them to Owner upon Owner's
request.
(g) Contractor shall exercise due diligence to collect
all amounts due Owner for water delivered to customers or for other
services in accordance with applicable rates, tariffs and policies for
the periods in which services were provided or other monies owed to
Owner pursuant to the operation of the Water System, including, after
receiving the consent of Owner, the institution of legal proceedings in
Owner's name to collect utility billings and other monies owed Owner
related to the Water System. Until Owner assumes responsibility for
rendering customer bills, Contractor shall provide current and
historical billing information concerning customers of the Water System
to Owner monthly in such form as reasonably requested by Owner. All
monies collected by Contractor shall be deposited immediately in Owner's
"City of Santa Fe Water Utility Account" as set forth in Section 3.12.
(h) The business office of the Water System shall be
operated by Contractor and shall be open, at a minimum, during the same
hours and on the same business days as those observed by Owner or as
mutually agreed upon to reflect local custom and practice.
(i) Contractor shall provide new customer connection
services, which include customer request analysis, system design and
estimation, construction contract preparation and administration, and
on-site construction.
3.12 Fiscal Affairs, Accounting and Record Keeping.
(a) Contractor shall retain possession of operating
equipment, buildings, materials and supplies, maps, plans and
specifications, and customer billing records during the term of this
Agreement and shall duly account to Owner as a fiduciary therefor for
possession until the time Owner assumes the responsibilities relating
to the respective function for which the property was retained by
Contractor.
(b) All cash held by Contractor for the account of
Owner and all cash collected by Contractor for the account of Owner
after the Effective Date shall be deposited on each business day in bank
accounts in such bank as Owner may direct and upon such terms and
conditions as may be specified by Owner. Such deposits shall be made
as:
City of Santa Fe
Water Utility Account
Public Service Company of New Mexico
Operating Agent
(c) Contractor shall maintain Owner's water utility
books and records for those activities performed by Contractor in
general conformity with municipal utility accounting standards or such
other standards as may be mutually agreed upon between Contractor and
Owner. When requested by Owner, Contractor shall make reasonable
changes in Contractor's standard accounting practices and procedures
applied to the books and records of the Water System. All such books
and records and all supporting documents shall be available in Santa Fe
and/or in Albuquerque at reasonable times for inspection and copying by
authorized representatives and auditors of Owner.
(d) As soon as reasonably possible, but not later
than thirty (30) days after the end of the preceding calendar month,
Contractor shall deliver to Owner the following monthly financial state-
ments related to the Water System certified by an officer of Contractor.
(i) A balance sheet as of the last day of
the preceding month;
(ii) A statement of income showing in reasonable
detail as requested by Owner the revenues and expenses of the Water
System for the preceding month and the twelve months ended the last day
of the preceding month (or applicable period during the First Fiscal
Year);
(iii) A statement of cash flows for the preceding
month;
(iv) Such statistical information for the
preceding month and preceding twelve- month period then ended as may be
reasonably requested by Owner;
(v) A summary statement of the preceding
month's receipts and disbursements for each cash account maintained by
Contractor on behalf of Owner as provided within this Agreement;
(vi) A fiscal year-to-date comparison of
actual expenses and revenue to the Annual Budget; and
(vii) Any other information or statement which
is requested by Owner and which may be reasonably produced from records
maintained by Contractor in the normal course of business.
(e) The balance sheet prepared as of the end of each
Fiscal Year, and the related statements of income and cash flows for
such year shall be certified by an officer of Contractor and an
independent public accountant who is experienced in water utility system
accounting and shall be delivered to Owner within ninety (90) days after
the end of the Fiscal Year. In addition, the books and records upon
which such statements and the invoices submitted pursuant to Section
6.06 are prepared, shall be made available by Contractor to Owner for
audit by Owner or Owner's designated independent auditor for a period
not to exceed twelve (12) months, which audit may include, but not be
limited to, the proper allocation of overhead, expenses and headquarters
services between services performed by Contractor under this Agreement
and other businesses of Contractor. Upon completion of Owner's audit or
upon expiration of said twelve-month period, the statements, invoices
and records shall be deemed to be correct, provided no written protest
by Owner has been provided to Contractor. If Owner's audit establishes
that Owner has overpaid Contractor, then Contractor shall immediately
refund the overpayment to Owner with interest at 8% per annum from the
time such overpayment was made by Owner to Contractor until repaid to
Owner. If Owner's audit establishes that Owner has underpaid
Contractor, then Owner shall immediately pay Contractor the
underpayment, but no interest shall be due thereon.
(f) Contractor shall provide a fidelity bond
acceptable to Owner which covers employees involved with customer
account payments and who have access to bank accounts of Owner or other
financial assets of Owner in such form and amount as are
reasonably required by Owner.
(g) Owner may establish and maintain such special
bank accounts as may be necessary or desirable, including, but not
limited to, petty cash funds and local accounts funds, and shall
establish the rules and procedures for access to any such accounts by
Contractor and certain of its designated employees.
(h) Contractor shall retain physical possession of
all maps, plans and specifications, and records pertaining to the Water
System in the possession of Contractor on the Commencement Date. During
the term of this Agreement, Contractor shall continue to maintain such
maps, plans and specifications, and records in accordance with
Contractor's customary practices prior to the Commencement Date, or in
such manner as Owner shall require. At the expiration of this Agreement
or at such time that Owner assumes the functions requiring the same,
Contractor shall transfer to Owner all maps, plans and specifications,
and records pertaining to the Water System in its possession at that
time. Notwithstanding Contractor's possession of such maps, plans and
specifications, and records, Contractor acknowledges that the same
remain and are the property of Owner.
(i) If Owner elects to assume any of the duties
described in Section 8.04 of this Agreement, Owner shall furnish
Contractor data associated with such assumed duties to enable Contractor
to comply with the record keeping duties of this Section.
3.13 Reports/Permits.
(a) As reasonably requested by Owner, Contractor shall
prepare appropriate reports concerning matters reasonably related to the
operation of or planning for the Water System, including, but not
limited to: source of supply production; water quality; sales and
volumes of water consumed by customers; environmental requirements and
compliance; snow pack and expected production of the Canyon area.
(b) Contractor shall identify for Owner, and assist
Owner in the preparation and filing of, all reports and permits which
may be required by any governmental agency having jurisdiction, and
shall provide record copies to Owner.
(c) In the event this Agreement is terminated,
Contractor will furnish to Owner, at such time as the Water System or
components thereof are returned to the control of Owner, all information
and computer software, if transferrable, which was used in the
preparation of reports and other data necessary for Owner to operate the
Water System.
3.14 Inventory Control. Contractor shall, in consultation with
and with approval of Owner, establish a policy for maintaining an
appropriate inventory of equipment, spare parts, materials and supplies,
including the implementation and documentation of an inventory control
program. Contractor shall comply with the materials and supplies policy
approved by Owner, and purchase and store inventory in a manner
consistent with the Annual Budget. No later than June 30 of each year,
Contractor shall complete a physical inventory of the equipment, spare
parts, materials and supplies and reconcile the same with the inventory
assets carried on the balance sheet and provide the information to
Owner.
3.15 Fixed Assets Control.
(a) Within 90 days after the Commencement Date, Owner and
Contractor shall complete a fixed assets inventory of all items with
an original acquisition cost of more than $500 and a remaining useful
life of greater than one year.
(b) Annually, no later than the end of each Fiscal
Year, Contractor shall provide to Owner a list of all additions and
deletions of capital equipment and improvements from the inventory set
forth in subparagraph (a), with detail as requested by Owner for
maintenance of these records.
(c) Annually, no later than the end of each Fiscal
Year, Contractor shall work with Owner to complete a physical inventory
of all capital equipment.
(d) Contractor shall not dispose of, trade or sell
any fixed assets without Owner's prior written approval.
(e) Contractor shall forward all titles with
appropriate documents for transfer of title for vehicles or other
equipment to Owner within 30 days after the Commencement Date. All
additional vehicles and equipment shall be purchased in the name of
Owner and title shall be so issued. As additional vehicles or other
equipment are acquired by Contractor for Owner, Contractor shall forward
all titles to Owner within 30 days.
3.16 Insurance .
In connection with the preparation of each Annual Budget
(including the Annual Budget for the First Fiscal Year), Contractor
shall consult with and advise Owner regarding appropriate hazard,
casualty and liability insurance coverage for the Water System and
activities associated with the performance of this Agreement, the
conduct of the water utility business and the operation of the Water
System, including types of coverage, costs, limits and appropriate
deductible or retention levels. As and when requested or authorized by
Owner, and to the extent available, Contractor shall purchase the
following insurance coverage for itself and for Owner (as the named
insured or as an additional insured as appropriate or directed by
Owner):
(a) Workers compensation and employers liability;
(b) Commercial general liability insurance, or the
equivalent, with a combined single limit of not less than One Million
Dollars ($1,000,000) each occurrence/aggregate, including coverage for
personal injury, bodily injury, broad form property damage, blanket
contractual, products/completed operations, owners and contractors
protective liability, and coverage for the hazards commonly referred to
as XCU;
(c) Business auto liability, or the equivalent, with a
combined single limit of not less than One Million Dollars ($1,000,000)
each occurrence with respect to Contractors' vehicles whether owned,
hired, or non-owned;
(d) Excess liability insurance with a limit of not less
than Thirty Five Million Dollars ($35,000,000) aggregate;
(e) All risk property insurance, written at replacement
cost, including earthquake, flood, boiler and machinery, covering all
building, contents and equipment of the Water System; and
(f) Fidelity and crime insurance with employee theft
coverage of not less than Five Million ($5,000,000).
Contractor shall furnish Owner with satisfactory proof of
all such insurance so purchased by Contractor. Each policy
shall require 90 days' prior written notice to be given
Owner and Contractor before any change or cancellation may
take effect. All policies to be purchased by Contractor for
the First Fiscal Year shall be in effect as of the
Commencement Date. Contractor shall, in any event, be
entitled to purchase and maintain as a reimbursable direct
expense such insurance coverage as is reasonable and prudent
for Contractor's protection against losses, claims,
liabilities and damages related to Contractor's activities
and performance of services under this Agreement; provided
that such coverage shall not duplicate insurance coverage
otherwise purchased and maintained by Owner for Contractor's
benefit.
3.17 Warranties.
(a) Contractor shall maintain and enforce any warranties
or guarantees on any facilities, vehicles, equipment or other items
owned by Owner or purchased on behalf of Owner and used by Contractor in
carrying out this Agreement, and shall not, by act or omission,
invalidate in whole or part such warranties or guarantees.
(b) Contractor represents that Contractor's Employees
shall be qualified to perform their duties and responsibilities to Owner
using reasonable care and satisfying standards that meet or exceed those
customary in the industry.
(c) Owner shall neither seek nor be entitled to
consequential damages for events or occurrences which result in damage
or loss to Owner's systems which are the result of error or omission of
Contractor's employees, subcontractors or agents, unless the same
results from the gross negligence or willful misconduct of such
employees, subcontractors or agents.
3.18 Technical Assistance. Contractor may contract for the
services of outside consultants, suppliers, manufacturers, or experts
pursuant to the limits of expenditure described in this Agreement or as
provided in Annual Budgets, provided that Contractor shall remain
responsible for the performance or omissions of the same.
3.19 Subcontractors. Contractor shall not delegate or
subcontract any of its duties or responsibilities under this Agreement
if the subcontractor thereof shall be entitled to compensation in excess
of $20,000, or if the term of the contract is greater than one year,
without the prior written approval of Owner. Contractor shall remain
responsible for the acts or omissions of its subcontractors, and shall
obtain such performance bonds as are customary or reasonably requested
by Owner. Contractor shall advise Owner as requested by Owner with
respect to the assessment, status, and screening of potential
subcontractors prior to entering into the contract.
3.20 Plant Additions or Modifications.
(a) Additions to plant or facilities will normally be
recommended by Contractor at the time of presentation of the Annual
Budget for Owner's review and approval. If unusual or unexpected
circumstances arise requiring plant additions or modifications outside
of the normal budget process, Contractor shall prepare a written recom-
mendation for Owner's consideration in its reasonable discretion.
(b) To the extent possible, construction or modification
of Owner's facilities shall not interrupt the business or the
performance of Contractor's duties and responsibilities under this
Agreement.
3.21 Labor Relations.
(a) Owner acknowledges that certain of Contractor's
Employees are organized and represented by the International Brotherhood
of Electrical Workers. Contractor shall maintain a current strike plan
to minimize the effect on service resulting from labor action.
(b) Except as set forth on Schedule 3.21, Contractor is
not, with respect to Contractor's Employees, a party to or bound by any
contract with any labor organization, and has not recognized, agreed to
recognize or been required to recognize any union or other collective
bargaining unit. Except as set forth on Schedule 3.21, no union or
other collective bargaining unit has been certified as representing any
of Contractor's Employees nor has Contractor received any written
request from any party for recognition as a representative of such
employees for collective bargaining purposes. To the best knowledge of
Contractor, none of Contractor's Employees is engaged in organizing
activity with respect to any labor organization. During the term of
this Agreement, Contractor shall comply with all terms of any collective
bargaining agreements covering Contractor's Employees, and shall
indemnify and hold harmless Owner from Contractor's breach of any such
agreements, including damages and costs and expenses of defense,
including attorneys' fees. Contractor shall promptly notify Owner of
any breach or event which with the passing of time or giving of notice
would be a breach under such agreements or any events which may
materially adversely affect Contractor's labor relations.
In addition, Contractor shall promptly notify and keep Owner informed
during the course of any negotiations with any unions or collective
bargaining unit representing Contractor's Employees and shall solicit
and consider Owner's comments with regard to the effects of any changes
in Contractor's collective bargaining agreements on the operation of the
Water System. Contractor represents and warrants that there are no
breaches or events which with the passage of time or giving of notice
would be a breach of its collective bargaining agreements with respect
to Contractor's Employees. Contractor further represents and warrants
that there are no labor controversies pending or, to the knowledge of
Contractor, threatened by any employees of Contractor which would impede
or impair Contractor's performance under the Agreement or result in
actual or potential liability to Owner.
(c) If Contractor has knowledge that any actual or
potential labor dispute is delaying or threatens to delay the timely
performance of this Agreement, Contractor shall immediately give notice
with all relevant information to Owner.
3.22 Purchase of Equipment, Materials and Services. Consistent
with each Annual Budget, Contractor shall arrange for the purchase or
rental for the account of Owner of equipment, materials, and supplies
and services which are not purchased directly by Owner or other items
necessary to properly operate and maintain the Water System and to
maintain the records of Owner, and to make such additions and extensions
to the Water System, all as may be required from time to time by Owner.
Any information systems software acquired or developed by Contractor for
the performance of this Agreement shall be deemed to be the property of
Owner and shall be transferred or assigned to Owner upon termination of
this Agreement or Owner's earlier assumption of responsibility for the
functions to which the software relates. During and after the term of
this Agreement, Owner shall, nevertheless, allow Contractor to use such
software for purposes other than the performance of this Agreement to
the extent that such use is otherwise permitted by the terms of the
applicable license for such software. Any contracts let by Contractor
shall be in conformity with competitive bidding laws or regulations
applicable to Contractor, and no such contract shall extend for a term
greater than one year without the prior authorization of Owner.
3.23 Other Services.
(a) Contractor shall timely pay all bills related to
the Water System which it has authority to pay and shall assure that, to
the extent within Contractor's control, no mechanic's liens are filed
against any portion of the Water System.
(b) Consistent with the Annual Budget, Contractor shall
maintain the aesthetic appearance of the facilities comprising the Water
System and shall keep the same free and clear of all trash and debris.
(c) Contractor shall attend meetings of Owner, customers
of Owner, suppliers of Owner and others as reasonably requested by
Owner.
3.24 Plans.
(a) Contractor represents and warrants that all its
Plans (as hereinafter defined) affecting or related to the Contractor's
Employees or Contractor's performance of this Agreement are listed on
Schedule 3.24. During the term of this Agreement, Contractor shall not
contribute to, or be required to contribute to, any "multi-employer
plan" (as defined in Section 4001(a)(3) of ERISA). During the term of
this Agreement, Contractor shall not, with respect to Contractor's
Employees, have any liability (including withdrawal liability) under any
multi-employer plan. During the term of this Agreement, Contractor
shall not (i) incur in connection with the termination of any Plan, any
liability to the Pension Benefit Guaranty Corporation ("PBGC"),
(ii) terminate any Plan in a manner which might result in the imposition
of an encumbrance, lien or other charge on the Water System, (iii) incur
any "accumulated funding deficiency" (as defined in Section 302 of
ERISA) with respect to any Plan, whether or not waived, or (iv) be
subject of a "reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan, as to which a report or notice would be
required to be filed with the PBGC. During the term of this Agreement,
each Plan shall be administered so that (i) no prohibited transaction
under Section 4975 of the Code or Section 406 of ERISA will or could
result, (ii) no breach of fiduciary duty or violation of Part 4 of
Title I of ERISA will or could result, and (iii) no liability of
Contractor or any affiliate of Contractor pursuant to Title IV or ERISA
will or could result. There is no litigation, arbitration, governmental
or other proceeding, investigation or claim pending, or to the knowledge
or Contractor, threatened, with respect to any Plan or with respect to
any fiduciary, administrator or sponsor (in its capacity as such) of any
Plan (other than routine claims for benefits). During the term of this
Agreement, Contractor shall make full payment or accrual of all amounts
which Contractor is required, under the terms of any fully insured
employee plans which are "welfare plans" as defined in Section 3(1) of
ERISA, to have paid as contribution or premiums with respect to such
Plans.
As used herein, "Plan" means any bonus, deferred compensation,
profit sharing, pension or retirement, stock bonus, stock option, stock
purchase, stock appreciation right, performance share, bonus, savings,
severance, death benefit, disability, medical, hospitalization, life or
other insurance and any other incentive or fringe benefit plan, program,
arrangement or practice, formal or informal, oral or written, and
whether covering one person or entity or more than one person or entity,
providing employee or executive benefits, including, but not limited to,
any "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA) and any "employee pension benefit plan" (as defined in Section
3(2) of ERISA).
(b) Contractor shall promptly give notice to Owner of any
default under any Plans, or event which with the passage of time or
giving of notice would be a default under any Plan and shall not permit
or suffer an event by Contractor which with the passage of time or
giving of notice would be a default under any Plan.
3.25 Cooperation and Coordination with Owner.
(a) Contractor shall work closely with, and cooperate
with, Owner in the execution of all construction projects, whether such
projects are initiated by Owner or Contractor, in order to assure
continued traffic flow and unimpeded response by public police and fire
protection services. In the event Contractor's construction projects
would, in the sole opinion of Owner, interfere with traffic flow or
response by public police and fire protection services, Owner may upon
written request to the Contractor, require Contractor to submit its
traffic control plans for the duration of a construction project for
review and approval by Owner, said approval to be provided in advance of
any construction. Contractor may, however, upon notifying Owner's
designated representative in a manner agreed upon by both parties, be
authorized to undertake immediate construction, including provision for
traffic control, in emergencies where a dangerous condition exists or
where it is necessary to restore service which has been interrupted.
(b) Owner is responsible for providing fire protection
service to the citizens of the City of Santa Fe. The installation,
inspection and maintenance of fire hydrants are a necessary part of the
requirements to enable Owner to provide this service. Contractor
acknowledges that fire hydrants are an integral part of the Water System
and shall be installed and maintained by Contractor.
Owner shall be responsible for determining the proper
spacing and location of fire hydrants within the water system.
Contractor shall install fire hydrants within the water system at
locations designated by Owner.
Contractor and Owner agree to undertake inspection of each
of Owner's fire hydrants. Owner shall conduct an annual inspection and
Contractor shall conduct an annual inspection in such a manner that each
fire hydrant is inspected approximately every six months. Owner shall
submit written reports to Contractor, detailing any maintenance
requirements or needed repairs found by its inspection. Contractor
shall submit written reports to Owner detailing results of its annual
inspection.
Contractor shall undertake maintenance and repair of fire
hydrants as may be indicated by Owner's or Contractor's inspection
reports, such maintenance and repair to be undertaken upon Contractor's
receipt of the inspection reports. Upon completion of maintenance or
repair work performed on any hydrant, Contractor shall notify Owner's
designated representative in a time and manner to be agreed upon by
Contractor and Owner. Written reports describing maintenance and repair
work required shall be provided to Owner in a time and manner to be
agreed upon by Contractor and Owner.
(c) Contractor shall cooperate with Owner regarding the
relocation of water facilities within the boundaries of any right-of-way
or easement for any street, avenue, alley, highway, sidewalk, bridge or
other structure or place owned or controlled by Owner, where relocation
may be required because of any specific regrading, rerouting, improving
or widening within that right-of-way or easement, or when the relocation
of water facilities is required to accommodate the construction,
reconstruction, removal or relocation of utilities owned and operated by
Owner or of utilities authorized by Owner through a franchise agreement.
3.26 Performance Bond. As security for performance of its
obligations under this Agreement, and not as liquidated damages or in
full payment of any damages caused by Contractor's breach of this
Agreement, Contractor shall, if requested by Owner, provide Owner with a
performance bond in an amount equal to the Annual Budget minus the
approved capital requirements in a form and from an insurer reasonably
acceptable to Owner. Contractor shall, as requested by Owner, maintain
such performance bond through the term of this Agreement. The premium
for such bond shall be a direct cost reimbursable in accordance with
Section 6.03.
3.27 Performance, Assignability of Contracts. Contractor shall
pay and perform all of Contractor's material obligations and duties
under all contracts for products and services made by Contractor in
connection with Contractor's operation and management of the Water
System, including Service Agreements (as defined in the Purchase
Agreement) in effect on the Effective Date, and except as expressly
provided herein all such duties and obligations shall be those of
Contractor and not of Owner. All such contracts shall, however, be
assignable to Owner upon termination of this Agreement or upon Owner's
assumption of responsibility, pursuant to Section 8.04, for the
functions to which the contracts relate.
ARTICLE IV. OWNER'S RESPONSIBILITIES
4.01 Policies, Procedures and Rates
(a) Owner shall have sole authority to establish a
manual of policies and procedures related to the operation, maintenance
and expansion of the Water System. Owner shall complete a policies and
procedures manual within six (6) months after the Commencement Date.
Until Owner completes such a policies and procedures manual, the
policies and procedures of SDCW in effect immediately prior to the
Commencement Date shall be used in the operation of the Water System.
In establishing and maintaining such policies and procedures, including
the Schedule of Rates, Owner shall follow and apply generally accepted
and sound practices in order to permit the prudent, safe, efficient and
reliable operation and maintenance of the Water System and the provision
of safe and reliable water service in accordance with all applicable
federal, state and local laws, regulations and ordinances.
(b) Owner shall have sole authority for adopting and
implementing water rates. Prior to the adoption of each Annual Budget,
Owner shall perform a review of the adequacy of the water rates and
shall establish and, in conjunction with the adoption of an Annual
Budget, implement new water rates in a timely manner if a change in
rates is necessary to insure the financial integrity of the Water System
or to maintain adequate, safe and reliable service. Notwithstanding the
foregoing sentence, Owner shall have the right at any time and in its
sole discretion to change the water rates. Contractor shall provide
such information as reasonably requested by Owner to assist Owner in
setting such rates.
(c) Within 90 days after the Commencement Date, Contractor
shall submit to Owner for its written approval procedures, policies and
practices and subsequent amendments for:
1. Preventive Maintenance Program - Buildings and
Fixed Equipment
2. Preventive Maintenance Program - Vehicles and
Mobile Equipment
3. Financial Procedures and Internal Control
4. Safety Manual
5. Inventory Control.
Upon written requests from Owner, Contractor shall cause such
procedures, policies and practices to be amended to reflect changes
reasonably requested by Owner. Contractor shall follow the approved
submitted procedures, policies and practices in its operations.
Complete records shall be maintained to verify compliance with these
procedures, policies and practices. Owner has the right to inspect and
test to the extent practicable at all places and times, in a manner that
will not unduly delay services or disrupt the work areas. If compliance
is found to be inadequate, Owner may require compliance by a set date
and require assurance that future performance conforms to these
requirements.
4.02 System Planning. Notwithstanding the preparation of the
Master Plan by Contractor as described in Section 3.09, Owner shall
prepare, as it deems necessary, master expansion plans and comprehensive
municipal capital improvement programs. Owner may update its plans and
programs as it deems necessary, and such plans and programs will form
the basis for the system improvements, replacements, and expansions
undertaken by Contractor pursuant to each Annual Budget. Contractor
also shall use Owner's plans and programs in formulating Contractor's
proposed Annual Budget.
4.03 Periodic Performance Review. Owner shall cause to occur a
periodic review and examination of the operations of the Water System.
The review shall focus on the performance of Contractor and other areas
deemed important in the discretion of Owner to the operation of the
Water System. The reviews shall be performed by an independent third
party, and will be done no more frequently than annually, and no less
frequently than once each three (3) years. Each review shall include,
but not be limited to, an examination of Contractor's compliance with
the terms and conditions of the Agreement, the adequacy of Contractor's
operation, repair and maintenance practices, the condition of the Water
System, operation and maintenance expense levels, reliability of water
service, and other factors deemed pertinent by Owner to the successful
long-term operation of the Water System. The review may provide
recommended modifications to practices, procedures or policies, and
Owner shall consider such recommendations and may require their
implementation, as appropriate, by Owner and Contractor.
4.04 Owner's Direct Payments. Owner may, at Owner's option,
elect to pay directly charges for utility services, insurance,
assessments and charges by the United States Bureau of Reclamation for
water delivered through the San Juan-Chama Project, and similar
substantial and recurring expenses of operating the Water System. Owner
shall designate the expenses to be so paid by Owner in the Annual Budget
and shall arrange for all statements and billings related thereto to be
submitted to Owner rather than Contractor. Contractor shall have no
responsibility to Owner to review, audit, pay or otherwise account for
the expenses so designated by Owner, and such expenses shall not
constitute "direct expenses" or Reimbursable Costs (as hereinafter
defined) for purposes of determining Contractor's Compensation (as
hereinafter defined) or the Fixed Fee (as hereinafter defined) pursuant
to Article VI of this Agreement.
4.05 Right of Way Agent. Owner shall designate an agent for
purposes of giving, taking, vacating and licensing all rights of ways,
easements and other property interests which Contractor may be required
to transfer, acquire, terminate or amend in the course of Contractor's
operation under this Agreement. Said agent shall be duly delegated the
authority to bind Owner upon execution of such documents and shall
execute such documents in a timely and expeditious fashion so as to
facilitate Contractor's performance of its duties under this Agreement.
ARTICLE V. CONTRACTOR'S EMPLOYEES
5.01 General.
(a) Contractor's Employees shall be employees of
Contractor, not Owner, and Contractor shall retain sole and absolute
discretion over hiring, terms and conditions of employment, and
termination of Contractor's Employees.
(b) Contractor also shall be responsible for the
performance of all leased employees employed by it.
5.02 Owner's Obligations to Employ Contractor's Employees.
(a) Upon termination of this Agreement, and provided that
Cause for Termination (as defined by Section 8.02) does not exist
against Contractor, Contractor is not in "Default under any Plan" (as
defined below), and there is no event which, with the passage of time or
the giving of notice, would be a Default under any Plan, Owner shall
employ each of Contractor's Employees who wishes to become an employee
of Owner pursuant to Owner's applicable ordinances, resolutions,
policies, personnel rules, regulations, salary administration plans,
benefit plans and applicable state and federal law. Owner shall also
employ each of Contractor's Employees who is eligible and wishes to
become an employee of Owner in accordance with Section 8.04, provided
that Contractor is not in Default under any Plan and there is no event
which, with the passage of time or the giving of notice, would be a
Default under any Plan. Upon Owner providing notice to Contractor of
its intent to terminate this Agreement, Owner shall have the right to
communicate with Contractor's Employees. Upon request, Contractor shall
also make available to Owner the personnel records of Contractor's
Employees. Contractor shall cooperate in scheduling and coordinating
any meetings between Owner and Contractor's Employees. Owner and
Contractor shall cooperate with and assist each other in effecting the
orderly transition of Contractor's Employees to the employment of Owner,
and Contractor shall transfer to Owner all personnel records, job
descriptions, training records, compensation and efficiency studies and
other pertinent information relating to Contractor's Employees. For
purposes of this subparagraph (a), "Default under any Plan" means
Contractor's failure to pay or perform any obligation which Contractor
is required to pay or perform under the terms of a Plan with respect to
Contractor's Employees and which could result in a liability to Owner or
any encumbrance or other charge against any assets of Owner, including
the Water System.
(b) Notwithstanding paragraph (a), above, any of
Contractor's Employees who is scheduled to retire within the Term of
this Agreement may retire under Contractor's retirement system.
Contractor shall preserve the accumulated retirement benefits of any of
Contractor's Employees who subsequently become employees of Owner.
Contractor's Employees who are eligible to retire and receive early
retirement benefits may elect to do so at the time of transfer of
employment or at any time thereafter.
(c) Whenever Owner is required under this Agreement to
offer employment to any of Contractor's Employees, Owner shall, for
purposes of determining such employee's eligibility and entitlement to
participate in Owner's employee benefit plans and annual and sick leave
accrual plans, credit the employee for time of service in the employment
of Contractor as though it were time of service in the employment of
Owner; provided that with respect to pension benefit plans, such credit
will be determined in accordance with the Public Employees Retirement
Act and any other applicable retirement benefit statutes, ordinances,
resolutions, contracts or policies. As to Contractor's Employees, Owner
shall, in addition, waive any waiting periods and pre-existing condition
limitations applicable to eligibility for and participation in Owner's
employee benefit plans. Owner shall not be required to contribute to
any purchase of credited service under the Public Employees Retirement
Act. Owner shall comply with any applicable requirements of the Public
Employees Bargaining Act as to unionized Contractor's Employees. In the
event that said unionized Contractor's Employees become Owner's
employees and in the event that the City of Santa Fe enacts and
implements the City of Santa Fe Labor-Management Relations Ordinance
(Ord. #1993-2) (the "City Ordinance"), Owner shall not be required to
comply with the Public Employees Bargaining Act, but instead shall
comply with the applicable requirements of the City Ordinance.
(d) Owner shall reimburse Contractor for severance
benefits payable by Contractor pursuant to Contractor's company-wide
employee retention plan only with respect to any of Contractor's
Employees whom Owner is obligated to employ pursuant to this Agreement.
Reimbursement by Owner to Contractor for severance benefits shall be
made under the following conditions:
(i) In the event Owner offers employment at a level
of 90% or more of the employee's current base
wage or salary, Owner shall not be responsible
for any severance benefit without regard to the
employee's acceptance or refusal of employment
with Owner;
(ii) In the event Owner offers employment at a level
below 90% of the employee's current base wage or
salary, Owner shall be responsible for the
severance benefit only if the employee refuses
employment with Owner.
(e) Contractor shall be liable for and shall indemnify
Owner and hold Owner harmless for employment claims and benefits
accruing, arising or relating to Contractor's Employees prior to
termination of this Agreement. Owner shall be liable for and shall
indemnify Contractor and hold Contractor harmless against claims and
benefits first accruing as to Contractor's Employees from and after
their employment by Owner.
VI. CONTRACTOR'S COMPENSATION
6.01 Contractor's Compensation. In consideration for the
services to be provided hereunder by Contractor to Owner, Owner shall
pay to Contractor an amount as determined in this Article VI
("Contractor's Compensation") at the times and subject to the conditions
set forth in this Article VI. Contractor's Compensation shall equal
(a) the Fixed Fee (as hereinafter defined), plus (b) the difference
between the Reimbursable Costs (as hereinafter defined) less the Fixed
Fee (the "Remaining Compensation"). Owner shall, in addition,
reimburse Contractor for gross receipts tax applicable to Contractor's
Compensation and payable by Contractor. The Fixed Fee and Remaining
Compensation shall be paid pursuant to Section 6.06 hereof.
6.02 Fixed Fee. As part of each Annual Budget approved pursuant
to Section 3.09(c) hereof, Contractor and Owner shall agree on a fixed
fee to be paid by Owner to Contractor for the next fiscal year, which
amount shall be 75% of the Reimbursable Costs estimated for such Fiscal
Year to be paid by Owner to Contractor. Such agreed upon annual fixed
fee shall be divided by 12 and such resulting monthly amount shall be
the monthly "Fixed Fee" for the next Fiscal Year. Subject to Section
6.06(e), in the event that the Annual Budget is amended in any Fiscal
Year, the Fixed Fee shall remain equal to 75% of the Reimbursable Costs
estimated in such amended Annual Budget.
6.03 Reimbursable costs.
(a) As used in this Agreement, "Reimbursable Costs" means those
Direct Costs (as defined in Section 6.04) set forth in the Annual Budget
to reimburse Contractor in connection with:
(i) the operation and maintenance of the Water System;
(ii) the billing and collecting of customer accounts and
the keeping of the Water System's records and books of accounts;
(iii) any engineering work performed by Contractor in
connection with the Water System;
(iv) any construction work performed by Contractor or third
parties acting at the direction of Contractor in connection with the
Water System;
(v) the actual cost of all equipment, materials, supplies
and services and other items purchased, rented or leased for the account
of Owner and used or useful in the operation and maintenance of the
Water System or in connection with professional services or construction
of extensions to the Water System or in the maintenance of system
records;
(vi) the reimbursement of Contractor of such other amounts
associated with the operation, maintenance, renewal, and extension of
the Water System as may be directed by formal resolution of the City
Council of Santa Fe; and
(vii) the Management Fee (as hereinafter defined).
(b) As used in this Agreement, "Management Fee" means an amount
equal to ten percent (10%) of all Direct Costs associated with clauses
(i), (ii), (iii), (v) and (vi), and clause (iv) when work is
performed by Contractor's employees, and an amount equal to five percent
(5%) of all Direct Costs associated with clause (iv) when work is
performed by persons or agents other than Contractor's employees. The
Management Fee shall not be applied to any gross receipts tax paid by or
to Contractor.
(c) In no event shall Reimbursable Costs include amounts paid by
Owner pursuant to Section 4.04 of this Agreement.
6.04 Direct Costs. As used in this Agreement, "Direct Costs"
means:
(i) The labor cost of Contractor's Employees when such
labor is performed specifically to benefit the Water System. The labor
cost shall include any payroll additives normally assigned by Contractor
as part of the cost of labor in its regular labor distribution
accounting process, including, but not limited to, FICA taxes, leave
accrual, holiday accrual, workers' compensation and group life insurance
premiums, health and dental insurance premiums, pension and other
benefits where such cost is normally allocated on labor charges. As
part of the Annual Budget, Contractor shall submit to Owner for approval
the assumptions underlying the total labor costs to which the Annual
Budget relates. These assumptions will include total number of
employees, payroll, and benefits loadings.
(ii) The cost of materials and supplies issued from a
Contractor-owned storeroom and used in conjunction with work performed
specifically to benefit the Water System. The cost of Contractor's
materials and supplies shall include such reasonable handling charges as
Contractor normally adds to its stores issues in its regular materials
distribution accounting process. As part of the Annual Budget,
Contractor shall submit to Owner for approval the assumptions underlying
the total materials and supplies costs to which the Annual Budget
Relates. These assumptions will include explanation of any materials
and supplies carrying, handling or processing charges or similar
loadings. In no event shall materials and supplies be issued from a
Contractor-owned storeroom and the costs thereof be included as a Direct
Cost if such materials and supplies are available in Owner's Water
System storeroom or from Owner.
(iii) The cost of Contractor transportation and mobile
equipment, when used in conjunction with work performed specifically to
benefit the Water System, which cost is to be calculated in the same
manner as Contractor calculates the cost of such equipment in its
regular vehicle distribution accounting process. As part of the Annual
Budget, Contractor shall submit to Owner for approval the assumptions
underlying the total vehicle maintenance and repair costs to which the
Annual Budget relates. These assumptions will include maintenance,
repairs and fuel costs and usage rates for any leased vehicles used in
Contractor's Agreement.
(iv) The reasonable costs and expenses incurred by
Contractor in conjunction with work performed specifically to benefit
the Water System, as may be directed by Owner.
(v) The Costs set forth in Section 6.05 hereof.
In no event shall Direct Costs include amounts paid by Owner pursuant to
Section 4.04 of this Agreement.
6.05 Headquarters Services. Direct Costs shall include the
pro-rated overhead costs incurred by Contractor in connection with the
matters set forth in Section 6.04 (i-iv), including, labor costs and
appropriate overhead charges for office space, utilities, machines,
equipment, computer services, and the like, which are provided by
Contractor's headquarters staff and systems. Contractor shall identify
the services so provided in the Annual Budget and shall include detailed
supporting information for all costs associated with such services.
Without limiting the foregoing sentence, as part of the Annual Budget,
Contractor shall submit to Owner for Owner's approval the financial
assumptions underlying the proration of overhead for the Fiscal Year to
which the Annual Budget relates.
6.06 Payment of Contractor's Compensation.
(a) Fixed Fee Payment. On the first business day of each
calendar month of each Fiscal Year during the Term, Owner shall tender
to Contractor an amount equal to the Fixed Fee for the preceding month
plus applicable gross receipts tax as provided in Section 6.01.
(b) Third Party Construction Costs. On the first business
day of each week, Contractor may deliver to Owner an invoice for all
Direct Costs for construction work performed by third parties pursuant
to Section 6.03(a)(iv) hereof ("Third Party Construction Costs")
incurred, due and owing for the preceding week plus applicable gross
receipts tax as provided in Section 6.01. Such invoices shall be in a
form agreed to by Owner and Contractor, and shall include an itemized
statement of the services rendered, goods purchased or rented, or such
other costs which are approved or attributable to such construction
work. Subject to the Annual Budget, Owner shall pay the undisputed
portion of such invoice within one week after receipt thereof. Any such
invoice shall not include the Management Fee attributable to such Third
Party Construction Costs.
(c) Final Remaining Compensation Payment. By the tenth
business day of each month, Contractor shall submit to Owner an invoice
(certified by an officer of Contractor) of the Reimbursable Costs for
the preceding month (which invoice shall reflect as an offset or debit
the Third Party Construction Costs and the Fixed Fee which have been
paid for such month) plus applicable gross receipts tax as provided in
Section 6.01, all in a form mutually agreed by Owner and Contractor.
Subject to the limitations in an Annual Budget and this Agreement, Owner
shall pay to Contractor the amount set forth in such invoice by the
first business day of the month following the month in which it is
received; provided, however, that the payment deadline shall be extended
one Business Day for each Business Day that the invoice is submitted
after its due date.
(d) Past Due Payments. Any undisputed invoices pursuant
to this Section 6.06 not paid within 10 business days after the due date
will be considered past due. Payments received on undisputed amounts
after the past due date shall accrue a late charge at the rate of 1.5%
per month from the past due date.
(e) Limitation on Variable Payment. In no event shall the
Fixed Fee paid to Contractor in any Fiscal Year be less than 50% of the
actual Reimbursable Costs in any Fiscal Year.
VII. ADMINISTRATION
7.01 Owner's Employees. Owner shall have the right to select,
employ and supervise such personnel as it may require in connection with
any activities of Owner, which activities are not herein specifically
assigned to Contractor. Contractor shall have no control over or
responsibility for Owner's personnel or the activities in which they are
engaged. Any costs incurred in connection with Owner's personnel or
activities shall be the sole responsibility of Owner.
7.02 Owner's Representative. Owner shall designate in writing
prior to the Commencement Date an employee of Owner ("Owner's
Representative") who shall be the representative of Owner in all matters
pertaining to this Agreement insofar as Contractor is concerned, and
such person shall act as the official representative from whom
Contractor will receive communication from Owner and to whom Contractor
will deliver communication to Owner. Contractor may rely upon the
written directions of Owner's Representative in any action taken by
Contractor under this Agreement. Information delivered by Contractor to
Owner's Representative shall be considered as information delivered to
Owner. The provisions of this section are for the sole purpose of
identifying the party who may act for and on behalf of Owner in
connection with this Agreement, but the parties acknowledge that the
action of Owner's Representative shall be limited by the provisions of
this Agreement and do not in any way place Owner's Representative in the
position to give instructions relative to the activities which are
herein specifically assigned to Contractor. Any remuneration, salary,
or expenses of Owner's Representative shall be the responsibility of
Owner.
7.03 Contractor's Representative. Contractor shall designate in
writing an employee of Contractor ("Contractor's Representative") who
shall be the representative of Contractor in all matters pertaining to
this Agreement insofar as Owner is concerned, and such person will act
as the official representative from whom Owner will receive
communications from Contractor and to whom Owner will deliver
communications to Contractor. Owner may rely upon the written
directions of Contractor's Representative in any action taken by Owner
under this Agreement. Information delivered by Owner to Contractor's
Representative shall be considered as information delivered to
Contractor. The provisions of this section are for the sole purpose of
identifying the party who may act for and on behalf of Contractor in
connection with this Agreement, but the parties acknowledge that the
action of Contractor's Representative shall be limited by the provisions
of this Agreement and do not in any way place Contractor's
Representative in the position to give instructions relative to
activities which are herein specifically assigned to Owner. Any
remuneration, salary, or expenses of Contractor's Representative shall
be the responsibility of Contractor.
7.04 Designees. Owner's Representative and Contractor's
Representative may designate in writing to each other for a period not
to exceed 30 calendar days a designee who shall, for all purposes of
this Agreement, be treated as the Owner's Representative or Contractor's
Representative, as appropriate.
7.05 Duties of Representatives. Communication by either party to
the other done through either party's representative shall be delivered
to the representative's normal place of work either orally in person or
in writing. In the case that response and/or instruction from the other
party is required by the circumstances, such response or instruction
shall be delivered within a period of time determined by the
circumstances, but in no case shall that period be longer than
twenty-four (24) hours from the time communication was delivered. If no
response is received in a reasonable time after communication is
delivered, the party originating the communication shall be released to
take whatever action is necessary using reasonable care and judgment.
7.06 Representatives to Meet. At the request of either party and
after reasonable prior notice, Contractor's Representative and Owner's
Representative shall meet concerning matters pertaining to the
operations of the Water System or relating to business affairs of the
Water System, including, but limited to:
(i) Customer related activities;
(ii) Updates on any authorized work;
(iii) Service rules and regulations;
(iv) Reports on any major interruption of service;
(v) Water rationing or conservation activities; and
(vi) Construction activities.
ARTICLE VIII. TERMINATION, CAUSE FOR TERMINATION, REMEDIES
8.01 Termination. This Agreement may be terminated:
(a) By Owner as of the third anniversary of the
Commencement Date or any date thereafter by giving notice in writing to
Contractor of Owner's intention to so terminate at least twelve months
prior to the effective date of termination as specified in the notice.
(b) By Owner when Owner has Cause for Termination pursuant
to Section 8.02.
(c) By Contractor, when Contractor has Cause for
Termination pursuant to clauses (a) through (d) of Section 8.02.
(d) By Contractor, by giving notice in writing 180 days
prior to the proposed termination date, if Contractor shall conclude, in
its discretion, that by reason of Owner's exercise of rights of direct
payment pursuant to Section 4.04 and/or rights of substitution pursuant
to Section 8.04, further performance of this Agreement by Contractor is
uneconomic or impractical.
8.02 Cause for Termination. A party (the "Non-Defaulting Party")
shall have cause for termination ("Cause for Termination") upon the
occurrence of any of the following events:
(a) The other party (the "Defaulting Party") shall fail to
timely pay to or on behalf of the Non-Defaulting Party any monetary
obligation owed the Non-Defaulting Party under this Agreement and such
failure shall continue uncured for a period of ten (10) days after the
date on which written notice demanding such payment shall have been
given to the Defaulting Party by the Non-Defaulting Party; provided that
the foregoing shall not apply to disputed amounts, if written notice of
the grounds of the dispute has been given to the other party pursuant to
Section 15.06 and all amounts not in dispute, together with applicable
late charges, if any, have been paid.
(b) The Defaulting Party shall fail to duly observe or
perform any duty or obligation, other than the payment of money,
required of the Defaulting Party under this Agreement, and such failure
shall continue uncured for a period of thirty (30) days after the date
on which written notice of such failure and demand for cure shall have
been given to the Defaulting Party by the Non-Defaulting Party;
provided, however, that if the Defaulting Party at the end of such
thirty-day period is diligently pursuing the cure of such default and it
is likely that such default can be cured by the continued diligent
efforts of the Defaulting Party, the Non-Defaulting Party shall allow
the Defaulting Party such additional time as is reasonably necessary to
complete the cure, but in no event shall the Non-Defaulting Party be
required to allow more than 10 additional days without the written
agreement of the Non-Defaulting Party.
(c) The entry of a decree or order by a court of competent
jurisdiction adjudging the Defaulting Party a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Defaulting Party under the Federal Bankruptcy Code or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, or sequestrator (or other similar official) of the Defaulting
Party or of any substantial part of the Defaulting Party's property, or
ordering the winding up or liquidation of the Defaulting Party's
affairs, and the continuation of any such decree or order unstayed and
in effect for a period of thirty consecutive days.
(d) The institution by the Defaulting Party of proceedings
to be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Code or any other similar
applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of the
Defaulting Party or of any substantial part of the Defaulting Party's
property, or the making by the Defaulting Party of any assignment for
the benefit of creditors, or the admission by the Defaulting Party in
writing of its inability to pay its debts generally as they become due.
(e) With regard to Contractor's duties or obligations
under, or performance of, this Agreement:
(i) Contractor shall have criminal penalties imposed
against it by a governmental body;
(ii) Contractor shall have civil penalties or
sanctions imposed against it by the New Mexico Public Utilities
Commission.
(iii) Contractor shall have entered against it
monetary judgments of more than $1,000,000 in aggregate which remain
unsatisfied for more than 90 days; or
(f) Owner sells substantially all of the assets comprising
the Water System.
8.03 Surrender of Water System to Owner. Upon termination of
this Agreement, Contractor shall return possession to Owner of the Water
System, including, but not limited to, the Water System's facilities,
real property, books and records, materials and supplies, and any other
properties of Owner at that time held by Contractor under this Agree-
ment. Contractor shall, in addition, assign to Owner and Owner shall
assume all contracts then in effect for products and services related to
the operation and management of the Water System; except that Owner
shall not be obligated to accept, assume or perform any contract under
which Contractor is in default or under which any other party is in
default, or under which an event has occurred which, with the passage of
time, the giving of notice or both would place Contractor or another
party to the contract in default. Upon termination of this Agreement,
Contractor shall, at Owner's request and at Owner's expense, take all
steps reasonably necessary to put Owner in a position to operate the
Water System, including providing transitional assistance for a period
of sixty (60) days.
8.04 Substitution of Service Provider
(a) At least one hundred twenty days before commencement
of the applicable Fiscal Year, Owner may give notice to Contractor that
Owner intends to assume responsibility for performing any of the
functions listed in this paragraph. If Owner desires to assume such
responsibility, Owner shall give written notice to Contractor of the
function or functions to be assumed, and the Fixed Fee and estimated
Reimbursable Costs for such upcoming Fiscal Year shall not take into
account the costs of such functions. Owner shall assume such functions
as of the first day of the upcoming Fiscal Year. The functions which
Owner may assume are:
(i) Purchasing and warehousing of all materials,
supplies and equipment;
(ii) Meter reading, billing, collection and
customer account services;
(iii) Accounting and record keeping;
(iv) Engineering design;
(v) Motor vehicle maintenance;
(vi) Acquisition of land, easements, and
rights-of-way;
(vii) Building and grounds security; and
(viii) Custodial services and grounds maintenance.
(b) In the event of such a transfer of functions, Owner
shall offer each of Contractor's Employees performing such or similar
functions employment with Owner in accordance with Section 5.02 in order
to permit each such employee to continue performing the same functions
for Owner upon the effective date of the transfer of responsibility.
(c) As of the first day of the upcoming Fiscal Year, Owner
shall assume full and complete responsibility for the function or
functions specified in the notice, and Contractor shall be relieved of
all responsibility, duties and obligations with respect thereto arising
after such date; provided that Contractor, at Owner's expense, shall
take all steps reasonably necessary to put Owner in a position to
operate the function, including providing transitional assistance for a
period of sixty (60) days beyond the date specified in the notice.
Contractor shall, in addition, assign to Owner and Owner shall assume
any contracts then in effect for products and services related to the
functions for which Owner is assuming responsibility; except that Owner
shall not be obligated to accept, assume or perform any contract under
which Contractor is in default, under which any other party is in
default or under which an event has occurred which, with the passage of
time, the giving of notice or both would place Contractor or another
party to the contract in default.
(d) Owner shall grant Contractor access to and provide to
Contractor information and records concerning functions assumed by Owner
and allow Contractor use of facilities and equipment related to such
functions as reasonably necessary to enable Contractor to perform its
remaining duties under this Agreement.
8.05 Remedies Cumulative. Whenever a Non-Defaulting Party has
Cause for Termination, the Non-Defaulting Party may exercise its right
of termination pursuant to Section 8.01, in addition to all other rights
and remedies at law, equity or otherwise to which it may be entitled.
All rights and remedies of each of the parties to this Agreement shall
be cumulative, and the exercise of one or more rights or remedies will
not preclude the exercise of any other right or remedy available under
the Agreement or applicable law.
ARTICLE IX. INDEPENDENT CONTRACTOR
9.01 Contractor is contracting with Owner under this Agreement as
an independent contractor, and Contractor's Employees shall be employees
of Contractor and not of Owner. Nothing contained in this Agreement
shall constitute or be construed to be or create a partnership or joint
venture between Contractor and Owner.
ARTICLE X. ASSIGNMENTS
10.01 Contractor may assign this Agreement and its rights
hereunder to any corporation controlled by or under common control with
Contractor; provided, however, that no such assignment shall relieve
Contractor from liability for the performance of Contractor's duties and
obligations under this Agreement. Except as permitted by the preceding
sentence, Contractor may not assign this Agreement or its rights
hereunder without the prior written consent of Owner, which consent will
not be unreasonably withheld, and any such attempted assignment shall be
null and void.
ARTICLE XI. INDEMNIFICATION
11.01 Contractor shall indemnify Owner and hold Owner harmless
from damages, claims, losses and judgments, and for costs and expenses
incident thereto, including attorney fees, caused by the gross
negligence or intentional misconduct of Contractor (whether through acts
or omissions) or its employees, agents or subcontractors, except to the
extent such damages, claims, losses and judgments, and costs and
expenses incident thereto are caused by the gross negligence or
intentional misconduct of Owner or its employees or its agents.
Contractor specifically shall be responsible for paying, and
indemnifying Owner for the payment of, any fines and legal fees
resulting from Contractor's grossly negligent operation of the Water
System. Owner shall indemnify Contractor and hold Contractor harmless
from damages, claims, losses and judgments, and for costs and expenses
incident thereto, including attorney fees, caused by the gross
negligence or intentional misconduct of Owner or its employees, except
to the extent such damages, claims, losses and judgments and costs and
expenses thereto are caused by the gross negligence or intentional
misconduct of Contractor. Neither party intends by this Agreement to
shift or transfer to the other any part of its legal liability for its
own grossly negligent or intentional misconduct or the gross negligence
or intentional misconduct of its employees and persons acting under its
direct supervision and control.
ARTICLE XII. ARBITRATION
12.01 All claims and controversies, except for issues arising
from labor disputes otherwise governed by the Public Employee Bargaining
Act or, if adopted, the City Ordinance, between Owner and Contractor
concerning this Agreement or arising out of the performance of this
Agreement shall be submitted to binding arbitration in accordance with
the New Mexico Uniform Arbitration Act, NMSA 1978, Section 44-7-1 et
seq., and the rules of the American Arbitration Association applicable
to commercial disputes. The arbitration shall be conducted before a
panel of three arbitrators. Owner and Contractor shall each appoint one
arbitrator and the two arbitrators so appointed shall select the third.
The decision of the majority of the arbitrators so appointed shall be
binding and conclusive upon Owner and Contractor. Either Owner or
Contractor shall be entitled to confirmation of any award of the
arbitrators and to judgment thereon from any court of competent
jurisdiction of New Mexico in accordance with the aforementioned act.
ARTICLE XIII. FORCE MAJEURE
13.01 The term "Force Majeure" as used herein shall mean acts of
God, strikes, or other industrial disturbances (not including market or
similar economic conditions), acts of public enemies, wars, blockages,
insurrections, riots, arrests and restraints of rulers and people, civil
or military disturbances, explosions, sabotage, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, inability of
either party to obtain necessary materials, supplies or permits due to
existing or future rules, orders and laws of governments or courts,
present and future orders of any regulatory body having jurisdiction,
breakage or accident to plant or equipment (except that caused by the
gross negligence or intentional misconduct of the party on whom the
obligation rested), or other unforeseen operational problems or any
other cause (not including market or similar economic conditions),
whether of the kind herein enumerated or otherwise, which is not
reasonably within the control of the party claiming Force Majeure. In
the event either party is rendered unable, wholly or in part, by Force
Majeure to carry out its obligations under this Agreement, such party,
upon giving notice describing in full the circumstances of the Force
Majeure to the other party, shall be excused from the performance of its
obligations under this Agreement insofar as such performance is affected
by the conditions of Force Majeure and for so long as such conditions
shall continue; provided, however, that such party shall not be relieved
of such obligation if caused by its own gross negligence or intentional
misconduct and during the course of such Force Majeure such party shall
exercise reasonable efforts and diligence in remedying the conditions of
Force Majeure.
ARTICLE XIV. NON-APPROPRIATION
14.01 Owner reasonably believes that funds can be obtained
sufficient to make all payments due Contractor under this Agreement.
Owner hereby covenants that it shall do all things lawfully within its
power to obtain and maintain funds from which such payments may be made.
Nevertheless, in the event that Owner is unable to obtain funding
sufficient to pay its obligations under this Agreement, Owner shall have
the right to terminate this Agreement by giving written notice to
Contractor and this Agreement shall terminate on the date specified in
such notice. Owner shall not be obligated to make payments after the
effective date of any such termination; provided, however, that Owner
shall make payment to Contractor for obligations incurred prior to such
effective date.
ARTICLE XV. MISCELLANEOUS
15.01 Confidentiality. Any information pertaining to
Contractor's services under this Agreement, or Contractor's Employees or
business interests, shall remain Contractor's property and under
Contractor's control and custody until this Agreement lapses, is
terminated, or Owner assumes certain functions pursuant to Section 8.04
of this Agreement. Unless one of those actions occurs, said information
shall remain confidential and shall not be released by Owner to any
other party without Contractor's written approval unless required to do
so by law or the order of any court or governmental authority or for
financial reporting. Any information provided by, or developed by Owner
shall not be made available by Contractor to any other party without the
prior, written approval of Owner, unless disclosure is required by law
or the order of any court or governmental authority. Contractor shall
not be considered an agent, officer, or employee of Owner for purposes
of the New Mexico Inspection of Public Records Act.
15.02 Conflict of Interest. Contractor presently has no
interest, and shall not acquire any interest, that would directly
interfere with its performance of services as required under this
Agreement. Contractor shall not provide to any other party services
similar to, or of the same nature as the services required to be
provided to Owner pursuant to Agreement, if such other party is
providing or is ready to provide water utility services in competition
with the water utilities services being provided by Owner to its
citizens. Contractor shall promptly notify Owner of any pending request
to provide services in Owner's water utility service area similar to, or
of the same nature as, the services required to be provided to Owner
pursuant to this Agreement. Subject to Contractor's compliance with the
limitations and restrictions set forth in this Section, and provided
that (i) Owner is reasonably compensated therefor (including, but not
limited to, a reallocation of headquarters services pursuant to
Section 6.05 hereof), (ii) such use does not in any material manner
interfere with Contractor's performance of this Agreement or with the
operation or business of the Water System, and (iii) such use imposes no
additional burden, risk or expense on Owner, Owner shall not
unreasonably refuse or deny permission to Contractor to use and occupy
the office space and necessarily related and integrated office equipment
(such as furniture, telephones, photocopiers and the like) of the Water
System in connection with Contractor's performance of agreements with
third parties similar in nature to this Agreement.
15.03 Amendment. This Agreement shall not be altered, changed or
amended except by instrument in writing executed by the parties hereto.
15.04 Representations and Warranties. Contractor hereby warrants
that it is in compliance with the Americans with Disabilities Act of
1990 (Pub.L. 101-336; 42 U.S.C.Section 12101 et seq.).
15.05 Parties Obligated and Benefitted. Subject to the
restrictions set forth in this Agreement on Contractor's rights of
assignment, this Agreement shall be binding upon and enforceable against
Owner and Contractor and their respective assigns and successors in
interest and shall enure solely to the benefit of Owner and Contractor
and their respective assigns and successors in interest, and no other
person shall be entitled to any of the benefits conferred by this
Agreement.
15.06 Notices. Unless otherwise expressly provided, any notice,
request, demand, waiver or other communication required or permitted to
be given under this Agreement shall be in writing and shall be deemed to
have been duly given only if delivered in person or by first class,
prepaid, registered or certified mail or sent by courier, or, if receipt
is confirmed, by telecopier to the receiving party at the address or
telecopy number set forth below:
If to Contractor:
Public Service Company of New Mexico
Attn: Corporate Secretary
Alvarado Square
Albuquerque, New Mexico 87158
Telecopy Number (505) 848-2368
If to Owner:
City of Santa Fe
Attn: City Manager
200 Lincoln Avenue
Post Office Box 909
Santa Fe, New Mexico 87504-0909
Telecopy Number (505) 984-6683
Either party may change the address to which notices are required to be
sent by giving notice of such change in the manner herein prescribed to
the other party. All notices will be deemed to have been received on
the date of delivery or on the third business day after mailing in
accordance with this section, except that any notice of a change of
address will be effective only upon actual receipt.
15.07 Attorney's Fees. In the event of any arbitration, action
or
suit based upon or arising out of the interpretation or enforcement of
this Agreement or any alleged breach by either party of any
representation, warranty, covenant or agreement contained in this
Agreement, the prevailing party will be entitled to recover, in addition
to any other amounts owing, reasonable attorneys' fees and other costs
of such action or suit from the other party.
15.08 Waiver. This Agreement or any of its provisions may not be
waived except in writing. The failure of any party to enforce any right
arising under this Agreement on one or more occasions will not operate
as a waiver of that or any other right on that or any other occasion.
15.09 Captions. The section captions of this Agreement are for
convenience only and do not constitute a part of this Agreement.
15.10 Choice of Law. This Agreement and the rights of the
parties hereunder will be governed by and construed in all respects in
accordance with the laws of the State of New Mexico, without regard to
the conflict of laws rules thereof.
15.11 Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes all prior oral and written
agreements and understandings with respect to the subject matter. This
Agreement may not be amended or modified except by a writing signed by
or on behalf of all the parties affected by such amendment or
modification.
15.12 Severability. Any term or provision of this Agreement
which is invalid or unenforceable will be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining rights of the person intended to be
benefitted by such provision or any other provisions of this Agreement.
15.13 Construction. This Agreement has been negotiated by Owner
and Contractor and their respective legal counsel, and legal and
equitable principles that might require the construction of this
Agreement or any provision of this Agreement against the party drafting
this Agreement will not apply in any construction or interpretation of
this Agreement.
EXECUTED as of the date first above written.
APPROVED AS TO FORM: CITY OF SANTA FE
By
---------------------------------- ------------------------------
City Attorney Mayor
ATTEST:
----------------------------------
City Clerk
PUBLIC SERVICE COMPANY OF
NEW MEXICO
By
------------------------------
Its
------------------------------
SCHEDULE 1.01
Contractor's Staffing Levels - 06/28/95
1 Director
1 Staff Assistant
1 Manager, Engineering, Transmission and Distribution
1 Senior Engineer
1 Senior Engineering Technician
3 Engineering Technicians
1 Senior Drafting Technician
1 Drafting Technician
1 Staff Assistant
1 Senior Engineer, Special Projects
1 Manager, Customer Services
1 Senior Customer Account Representative
4 Customer Service Representatives (1 vacant)
1 Cashier (vacant)
1 Staff Assistant
2 Senior Customer Service Representatives
1 Crafts Supervisor, Transmission and Distribution
1 Working Foreman
5 Journeyman Pipefitters
3 Journeyman, Equipment Operator
1 Cut-In/Cut-Out Service Technician
1 Warehouseman (vacant)
2 Helpers
1 Manager, Source of Supply
1 Working Foreman
1 Senior Treatment Plant Operator
2 Journeyman Pipefitter
2 Equipment Journeyman
3 Class IV Operators (1 vacant)
1 Senior Accountant
1 Accounting Technician
48 TOTAL COMPLEMENT
4 VACANCIES
SCHEDULE 3.21
Contracts or Agreements with Collective
Bargaining Unit, Union or Labor Organization
Agreement between Public Service Company of
New Mexico and International Brotherhood of
Electrical Workers Local Union No. 611 Effective
October 2, 1991 through April 1, 1994.
SCHEDULE 3.24
Contractor's Employee Benefit Plans
Sangre de Cristo Water Company ("SDCW") employees are employed by
Public Service Company of New Mexico.
Salaries and wages of SDCW employees are contained in PNM's
Administrative and Regular Salary Plans, Results Pay Program and in the
Agreement between Public Service Company of New Mexico and the
International Brotherhood of Electrical Workers, Local Union No. 611.
These data are incorporated herein by reference.
The benefits enjoyed by SDCW employees are described in the PNM's
Human Resources Manual and Benefits Book. This Manual, Book and the
detailed Benefit Plan features, are also incorporated herein by
reference. Important Plan Facts are as follows:
ERISA TYPE TYPE OF PLAN PLAN
BENEFIT OF PLAN ADMINISTRATION TRUSTEE ID. NO.
Benefits My Way Welfare- Self None 514
Cafeteria
Group Medical & Welfare Self Robert F. Curtis 504
Dental Insurance Duane G. Dimas
Plan Alexander J. Ivey
Lee Rougemont
Judy Zanotti
Jack Winters
Eugene Long
HMO Medical Plan Welfare Insured Claims Adminis- 513
trator,
Lovelace Health
Plan, 1st Nat'l
Bldg., Alb.,
NM 87125
HMO Medical Plan Welfare Insured Claims Adminis- 513
trator,
Health Plus
Plan
Group Term Life Welfare Insured CIGNA 501
Insurance Plan
Service Group Term Welfare Insured CIGNA 505
Life Insurance Plan
Management Term Welfare Insured CIGNA 506
Life Insurance
Plan
Master Employee Defined Self The Vanguard 005
Savings Plan Contribution Group
Pension 1400 Morris Drive
Wayne, Pennsylvania
Employee Stock Defined Self Mitch Marzec 003
Option Plan Contribution Zan James
Pension
Employment Option Welfare Self Ellen Wilson 507
Plan Barbara Barsky
Asset Sales Non-ERISA Self Barbara Barsky N/A
Incentive Plan Incentive Tom Sategna
Plan Al Lujan
Employee Assistance Welfare Self 525
Program
Voluntary Term Welfare Insured CIGNA 516
Life Insurance
Plan
Accidental Death Welfare Insured CIGNA 501
and Dismemberment
Insurance Plan
Voluntary Welfare Insured CIGNA 517
Accidental Death
and Dismemberment
Insurance Plan
Health Care Welfare Self None 514
Spending Account
Plan
Day Care Spending Welfare Self None 514
Account Plan
Long-Term Welfare- Insured Metropolitan 502
Disability Plan Disability Life Insurance
Company
Travel Accident Welfare- Insured Hartford 503
Death and Accident Accident and
Dismemberment Indemnity
Insurance Plan Company
Retirement Plan Defined Self Retirement 001
Benefit Committee:
Pension Robert Wilson
Don Sevieri
Mitch Marzec
Barbara Bursky
Robert Grossarth
Employee Welfare- Self PNM 511
Retention Severance
Plan Pay
Dependent Group Welfare- Insured Equitable Life 515
Life Insurance Life Assurance
Plan Society of the
United States
Non-Union Welfare Self N/A 512
Severance Pay
Plan
Educational Welfare Self N/A 509
Reimbursement
Plan
Performance NM-ERISA Self N/A N/A
Stock Plan Plan
Full payment or accrual has been made of all amounts which Seller is required,
under the terms of any fully-insured employee plans (labeled "Insured" above)
which are "welfare plans" as defined in Section 3(1) of ERISA, to have been
paid as contributions or premiums with respect to such employee plans; all
material liabilities relating to any self-insured welfare plans (labeled
"self" above) have been accrued by Seller.
TABLE OF CONTENTS
Page
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I. ENGAGEMENT. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. TERM, FISCAL YEARS . . . . . . . . . . . . . . . . . . 2
2.01 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III. CONTRACTOR'S RESPONSIBILITIES . .. . . . . . . . . . . 2
3.01 Operating Agent . . . . . . . . . . . .. . . . . . . . . . . 2
3.02 Obligation to Provide Employees . . . .. . . . . . . . . . . 2
3.03 Standard of Performance . . . . . . . .. . . . . . . . . . . 3
3.04 Source of Supply Systems. . . . . . . .. . . . . . . . . . . 3
3.05 Water Treatment Plant . . . . . . . . .. . . . . . . . . . . 3
3.06 Water Transmission and Distribution System.. . . . . . . . . 3
3.07 Water System Engineering and Design . . . .. . . . . . . . . 3
3.08 Maintenance and Repair. . . . . . . . . . .. . . . . . . . . 4
3.09 Planning and Budgeting. . . . . . . . . . .. . . . . . . . . 5
3.10 Capital Improvements and Additions. . . . .. . . . . . . . . 6
3.11 Customer Services, Rates and Rules of Service .. . . . . . . 7
3.12 Fiscal Affairs, Accounting and Record Keeping .. . . . . . . 9
3.13 Reports/Permits . . . . . . . . . . . . . . . .. . . . . . . 11
3.14 Inventory Control . . . . . . . . . . . . . . .. . . . . . . 12
3.15 Fixed Assets Control. . . . . . . . . . . . . .. . . . . . . 12
3.16 Insurance . . . . . . . . . . . . . . . . . . .. . . . . . . 12
3.17 Warranties. . . . . . . . . . . . . . . . . . .. . . . . . . 14
3.18 Technical Assistance. . . . . . . . . . . . . .. . . . . . . 14
3.19 Subcontractors. . . . . . . . . . . . . . . . .. . . . . . . 14
3.20 Plant Additions or Modifications. . . . . . . .. . . . . . . 14
3.21 Labor Relations . . . . . . . . . . . . . . . .. . . . . . . 15
3.22 Purchase of Equipment, Materials and Services .. . . . . . . 16
3.23 Other Services. . . . . . . . . . . . . . . . .. . . . . . . 16
3.24 Plans . . . . . . . . . . . . . . . . . . . . .. . . . . . . 16
3.25 Cooperation and Coordination with Owner . . . .. . . . . . . 17
3.26 Performance Bond. . . . . . . . . . . . . . . .. . . . . . . 19
3.27 Performance, Assignability of Contracts . . . .. . . . . . . 19
ARTICLE IV. OWNER'S RESPONSIBILITIES . . . . . . . . . . . . . . . . 19
4.01 Policies, Procedures and Rates. . . . . . . . . . . . . . . . 19
4.02 System Planning . . . . . . . . . . . . . . . . . . . . . . . 20
4.03 Periodic Performance Review . . . . . . . . . . . . . . . . . 20
4.04 Owner's Direct Payments . . . . . . . . . . . . . . . . . . . 21
4.05 Right of Way Agent. . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V. CONTRACTOR'S EMPLOYEES. . . . . . . . . . . . . . . . . . 21
5.01 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.02 Owner's Obligations to Employ Contractor's Employees. . . . . 22
VI. CONTRACTOR'S COMPENSATION. . . . . . . . . . . . . . . . . . . . 23
6.01 Contractor's Compensation . . . . . . . . . . . . . . . . . . 23
6.02 Fixed Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.03 Reimbursable costs. . . . . . . . . . . . . . . . . . . . . . 24
6.04 Direct Costs. . . . . . . . . . . . . . . . . . . . . . . . . 25
6.05 Headquarters Services . . . . . . . . . . . . . . . . . . . . 26
6.06 Payment of Contractor's Compensation. . . . . . . . . . . . . 26
VII. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . 27
7.01 Owner's Employees . . . . . . . . . . . . . . . . . . . . . . 27
7.02 Owner's Representative. . . . . . . . . . . . . . . . . . . . 27
7.03 Contractor's Representative. . . . . . . . . . . . . . . . . 28
7.04 Designees . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.05 Duties of Representatives . . . . . . . . . . . . . . . . . . 28
7.06 Representatives to Meet . . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII. TERMINATION, CAUSE FOR TERMINATION, REMEDIES . . . . . 29
8.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.02 Cause for Termination . . . . . . . . . . . . . . . . . . . . 29
8.03 Surrender of Water System to Owner. . . . . . . . . . . . . . 31
8.04 Substitution of Service Provider. . . . . . . . . . . . . . . 31
8.05 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX. INDEPENDENT CONTRACTOR . . . . . . . . . . . . . . . . . 33
ARTICLE X. ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XI. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XII. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIII. FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIV. NON-APPROPRIATION . . . . . . . . . . . . . . . . . . . 35
ARTICLE XV. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 35
15.01 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 35
15.02 Conflict of Interest . . . . . . . . . . . . . . . . . . . . 35
15.03 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . 36
15.04 Representations and Warranties . . . . . . . . . . . . . . . 36
15.05 Parties Obligated and Benefitted . . . . . . . . . . . . . . 36
15.06 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
15.07 Attorney's Fees. . . . . . . . . . . . . . . . . . . . . . . 37
15.08 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
15.09 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 37
15.10 Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . 37
15.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 37
15.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . 37
15.13 Construction . . . . . . . . . . . . . . . . . . . . . . . . 37
EXHIBIT A"
SCHEDULE 9.8
OPERATING AGREEMENT
(See Agreement Section 9.8)