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HomeMy WebLinkAbout2026-02-01-R RESOLUTION NO. 2026-02-01-R A RESOLUTION AUTHORIZING THE BATESVILLE WATER UTILITY TO ENTER INTO A FORMAL WATER UTILITY AGREEMENT WITH CUSHMAN WHEREAS, the City of Cushman has not produced water for its own consumers since on or about March of 2021; and WHEREAS, the City of Batesville through the Batesville Water Utility (`BWU") has produced all water distributed by the City of Cushman since on or about March of 2021; and WHEREAS, that due to the state of its infrastructure, Cushman currently loses approximately eighty percent of the water provided by BWU; and WHEREAS, due to said losses Cushman is unable to financially pay the full monthly bill; and WHEREAS, currently Cushman is paying the city the flat rate of $11,500 per month; and WHEREAS, Cushman and Batesville wish to enter into an agreement that acknowledges current deficits and sets expectations for both parties going forward; and WHEREAS, Cushman is actively repairing its infrastructure with the goal being to lower its losses to the point where said flat monthly payment will begin to address said deficit. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Batesville,Arkansas: Section 1. The City hereby authorizes the Mayor to enter into the water utility agreement with the City of Cushman, Arkansas, attached hereto as Exhibit"A." PASSED AND APPROVED this 17r' day of February,2026. APPROVED: BY: Mayor ck Elumb ATTESTED: CB o Jessica Davis,TIJ Clerk AGREEMENT KNOW ALL MEN BY THESE PRESENTS: THAT the Batesville Water Utility, an agency of the City of Batesville,Arkansas (hereinafter`BWU") and the City of Cushman,Arkansas by and through its appointed Water Board(hereinafter called"Cushman") are governmental subdivisions of the State of Arkansas and each are providers to their water users, THAT CUSHMAN has not produced water for its consumers since March 1,2021; and, THAT BWU has produced all water distributed by the City of Cushman.since March 1, 2021; and, THAT CUSHMAN water currently loses approximately eighty percent(80%) of the water provided to it by BWU due to leaks; and, THAT CUSHMAN has not been financially able to pay its full monthly water bill to BWU due to said losses; and, THAT CUSHMAN is diligently working to repair its water leaks; and, THAT CUSHMAN recognizes that it is indebted to BWU for water already provided and will continue to run deficits to BWU until leaks are repaired to an adequate level; and, THAT CUSHMAN and BWU have arrived to an agreement whereby BWU agrees to sell and CUSHMAN agrees to buy water to be utilized at Cushman to provide water to its users as follows: 1. That Cushman agrees that it shall be responsible for paying for all water provided at BWU's wholesale bulk water rate as provided by the Batesville Code of Ordinances at the time said water was provided. 2. That based on water provided to Cushman for which BWU has not been fully compensated since March 1, 2021, Cushman is indebted to BWU in the amount of$1,089,700.99 ("deficit") as of December 31, 2025. By its signature hereto Cushman acknowledges said indebtedness and promises to back said monies in full to B WU pursuant to the terms specifically set forth in this agreement. That Cushman acknowledges that the spreadsheet attached as Exhibit "A"is an accurate representation of sums paid by Cushman and debts owed for water supplied through December 31, 2025. 3. That the BWU shall provide an updated spreadsheet of said sums paid and indebtedness incurred via an email to the Cushman Mayor on a monthly basis or upon request by any elected official or waterboard member of Cushman. Said indebtedness based on the updated spreadsheet shall be deemed accepted by the Cushman as proper unless objected to by Cushman within thirty days of receipt. Said objection should post marked within said 30 days and addressed to the Mayor of the City of Batesville by Certified Mail or by hand delivery to the Mayor of Batesville. 4. That Cushman is currently paying the sum of$11,500 per month to BWU in exchange for BWU providing Cushman's water needs. 5. That BWU agrees to keep providing water on a monthly basis at the rate of $11,500 per month for the next twelve (12)months upon the following terms: a. Cushman shall be responsible for repaying all deficits accumulated and owed as well as deficits it shall accumulate for the foreseeable future to BWU pursuant to the ter specifically set forth in this agreement; b. Cushman shall continuously make repairs to the leaks within its system during the term of this agreement, and document said repairs on at least a monthly basis; C. Upon request, Cushman shall provide BWU with a report detailing repair efforts, financing, and grant opportunities for which they have applied; d. Cushman's water usage shall be stabilized(within twenty percent loss rate) or decreased based on the same month's average total metered consumption in gallons from the same months in prior years; e. Cushman agrees to increase the monthly amount payable to BWU if financially possible; f. That Cushman shall continue to pay a minimum of$11,500, even after its monthly usage bill falls below that amount. Said sums paid in excess of the monthly bill shall be applied to the indebtedness until all indebtedness is paid to BWU. Cushman's monthly minimum payment for water shall not decrease until all accumulated indebtedness to BWU has been paid in full; g. That Cushman agrees to supply BWU with a copy of their most recent audit for their water association and/or city upon request by BWU as well as its monthly billing, receipts, and expenses; and i. Regardless of the month of the term of this agreement, upon the cumulative indebtedness reaching $1,500,000, as confirmed by BWU,the length term of this contract shall become month to month in nature, unless the terms are extended or renegotiated by a written agreement approved by the parties. 6. That said indebtedness shall be interest free, so long as the terms of the agreement are complied with by Cushman and all indebtedness is paid back to BWU on a monthly basis as contemplated herein. 7. Failure of Cushman to fulfill the terms specified herein shall be grounds for default. 8. That at the end of term of this agreement, said terms of this agreement shall continue on a month-to-month basis unless renegotiated or terminated by one of the parties. Cushman's inability to repay the accumulated indebtedness during the term of this agreement shall not be grounds for B WU's refusal to either extend the current agreement or enter into negotiations for a new agreement provided that Cushman complies with all of the other terms of this agreement. 9. That this agreement and all other subsequent agreements related to the indebtedness and supplying of water to the City of Cushman by the BWU are subject to approval by the Batesville city council and the city of Cushman for the ratification of said agreement. 10. Arkansas law shall apply to this agreement, and Arkansas law shall be used to construe its terms in any legal or arbitration proceeding or other dispute arising herefrom or in any way related hereto. 11. The parties agree that the sole venue and forum for any lawsuit arising from this agreement and/or the debt(s) and/or obligation(s) incurred hereunder by either parry shall be the Circuit Court of Independence County,Arkansas. 12. This agreement may not be modified verbally. Modification hereof may only be achieved by execution of a written modification signed by both parties. 13. The parties acknowledge that this Agreement is reasonable,valid, and enforceable; however, if any part of this Agreement is held by a court of competent jurisdiction to be invalid, it is the intent of the parties that such provision be reduced in scope only to the extent deemed necessary to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected or invalidated as a result. 14. This Agreement contains all terms and conditions agreed to by the Parties. Statements or representations which may have been made by any Party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value to either Party. Only the written terms of this Agreement will bind the Parties. WITNESSED by the signature of the authorized representatives of the parties hereto. Mayor, City of Cushman Recorder/Treasurer of Cushman Mayor, City o e ow%m M(Z" ity Clerk/Treasure of Batesville Approved by legal council City of Batesville Attorney