HomeMy WebLinkAboutresolution.council.043-10RESOLUTION NO.
(Series of 2010)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO
AUTHORIZING AN AMENDMENT TO THE OPERATING AGREEMENT BETWEEN
THE CITY OF ASPEN AND DUROUX DITCH COMPANY DATED NOVEMBER 1,
1996, AND PRESCRIBING DETAILS IN CONNECTION THEREWITH
WHEREAS, the City entered into an Operating Agreement with Duroux Ditch Company
on November 1, 1996, to provide for the operation, maintenance and repair of the City's Hunter
Creek Flume & Pipeline, through which the Duroux Ditch Company water rights are diverted
from Hunter Creek; and
WHEREAS, the original Operating Agreement contemplates some major repairs to the
Hunter Creek Flume & Pipeline which have not been made and are not now presently
contemplated; and
WHEREAS, the City's 15 cfs Hunter Creek Flume & Pipeline water right may be used
by the Colorado Water Conservation Board ( "CWCB ") for instream flow purposes, pursuant to a
License Agreement between the City and the CWCB; and
WHEREAS, the City and Duroux Ditch Company wish to amend the Operating
Agreement to address operations during a CWCB call; and
WHEREAS, the City and Duroux Ditch Company have negotiated an Amendment to
Operating Agreement in the form attached as Exhibit A; and
WHEREAS, the City's staff and water rights consultants have recommended that the
City Council approve the amendment to the Operating Agreement,
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ASPEN as follows:
Section One Approval of Amendment The City Council hereby approves the
Amendment to Operating Agreement, in the form attached hereto, subject to final approval by
the City Attorney.
Section Two Execution of Documents The Mayor and City Clerk are hereby
authorized and directed to execute the Amendment to Operating Agreement, in substantially the
form attached, and the Utilities Director is authorized to execute any other documents necessary
or desirable to effectuate the consummation of the Operating Agreement as amended by the
Amendment to Operating Agreement.
RESOLVED, APPROVED AND ADOPTED this day of 2010.
RECEPTION #: 572120, 07/22/2010 at
10:15:23 AM,
1 of 10, R $56.00 Doc Code
RESOLUTION
Janice K. Vos Caudill, Pitkin County, CO
CITY OF ASPEN
By: �c
Mayor fry T
ATTEST:
(SEAL)
City Clerk
AMENDMENT TO OPERATING AGREEMENT
This Amendment to Operating Agreement ( "Amendment ") is entered into as of January
1, 2010, by and between the City of Aspen, Colorado ( "the City "), the Duroux Ditch Company
( "the Company "), a mutual ditch company organized and existing under the laws of Colorado,
and its shareholders ( "Shareholders "), and amends the Operating Agreement entered into
November 1, 1996, among the foregoing parties ( "Original Agreement ").
Recitals
WHEREAS, the parties entered into the Original Agreement for purposes of allocating
among themselves the duties of operation, maintenance, and repair of the Hunter Creek Flume
and Pipeline; and
WHEREAS, the parties have determined that some provisions of the Original Agreement
should be revised or corrected,
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows.
1. Exhibit A to the Original Agreement is hereby replaced with a revised map of the Duroux
Ditch, attached hereto as Exhibit 1. Exhibit 1 is a demonstrative exhibit for purposes of
implementing this Amendment and the Original Agreement. The parties acknowledge that
Exhibit 1 may not accurately depict existing or historical conditions, and agree that it does not
modify or supplement any of the terms and conditions of the Original Agreement or this
Amendment.
2. Paragraph 5.1 is deleted in its entirety, and replaced with the following paragraph 51:
5.F Billing and Payment of Costs Operation, maintenance, minor repair and project
management costs will be itemized, and will be billed to the Company on an annual basis, during
June of the following year. The Company shall pay its share of the operation, maintenance,
minor repair and project management costs (not to exceed $10,000 per calendar year, adjusted as
described above for changes in the Consumer Price Index) in any one annual invoice period)
within ninety (90) days after delivery to the Company of the invoice. Notwithstanding the
foregoing sentence, the City represents that, in its judgment, the Company's share of operation,
maintenance, minor repair, and project management costs will not exceed $5,000 per calendar
year (adjusted as described above for changes in the Consumer Price Index) during years in
which no major repairs, rehabilitation, or replacement are undertaken. The parties will cooperate
and negotiate in good faith in resolving any differences regarding the propriety of maintenance,
minor repair and project management costs, and shall, at the request of either party, submit to
mediation of any disagreement in this regard before taking other remedy under this Agreement.
If payment is not made when due, the outstanding balance shall bear interest at the rate of 10%
per annum, and the City may, at its election, terminate carriage of the Company Water Rights
until payment in full is received by the City. If payment in full is not received within 60 days
after delivery to the Company of written notice of default, the City may, at its election, terminate
this Agreement.
3. The parties acknowledge that the major repairs, rehabilitation and replacement projects to
be undertaken in the years 1996 - 1999, and after 1999, as described in paragraphs 6.A and 6.13
of the Original Agreement were not completed as described in those paragraphs, and are not
presently contemplated. Paragraph 6 is therefore deleted in its entirety, and replaced with the
following paragraph 6:
6. Cost Allocation for Major Repairs
A. Definition A "major repair" is defined as any repair, rehabilitation
project or replacement expected to cost $1,500.00 or more, provided, however, that for each
calendar year commencing January 1, 1997, the $1,500.00 threshold for a "major repair" will be
adjusted by the percentage increase or decrease over the preceding year in the United States
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers.
B. Procedure for City- Initiated Major Repairs The City will advise the
Company in advance of its intention to undertake any major repair of the Hunter Creek Flume
and Pipeline, and the Company may provide input to the City regarding such major repair. The
City shall, in its reasonable discretion, determine the scope, extent, cost and timing of all major
repairs of the Hunter Creek Flume and Pipeline.
The Company will reimburse the City for 26.83% of the costs, if any, incurred by the
City during each calendar year for major repairs of the Hunter Creek Flume and Pipeline,
provided, however, that the City shall not undertake any major repairs in one calendar year in
excess of a total of $10,000 (adjusted as described above for changes in the Consumer Price
Index), without first obtaining the prior written consent of the Company. The parties will
cooperate and negotiate in good faith in resolving any differences regarding the propriety of
repairs in excess of $10,000 (adjusted as described above for changes in the Consumer Price
Index), and shall, at the request of either party, submit to mediation of any disagreement in this
regard before taking other remedy under this Agreement.
C. Major Repairs Requested by the Company In the event the Company
desires that major repairs be made, but the City is unwilling or unable to make such major
repairs, the parties agree to negotiate in good faith to resolve their differences regarding such
Company- requested major repairs, and shall, at the request of either party, submit to mediation
of any disagreement in this regard before taking other remedy under this Agreement. If they are
unable to resolve their differences through mediation if undertaken, or otherwise within a
reasonable time, this Agreement shall terminate, and each party shall have whatever rights and
obligations it would otherwise have under Colorado law with respect to the use, operation,
maintenance, and repair of the Hunter Creek Flume and Pipeline.
D. Billing and Payment During June of each year, the City shall provide to
the Company an invoice setting forth an itemization of all repair costs incurred since the
previous annual invoice, and setting forth the Company's proportionate share, which shall not
exceed $2,683 (adjusted for changes as described above in the Consumer Price Index) in any one
annual invoice period without the prior written consent of the Company. The Company shall
pay its share of the repair costs within 90 days after delivery to the Company of the invoice. If
payment is not made when due, the outstanding balance shall bear interest at the rate of 10% per
annum, and the City may, at its election, terminate carriage of the Company Water Rights until
payment in full is received by the City. If payment in full is not received within 60 days after
delivery to the Company of written notice of default, the City may, at its election, terminate this
Agreement.
4. Paragraph 11 of the Original Agreement is deleted in its entirety, and replaced with the
following paragraph 11:
11. Operation and Administration of Water Rights
A. Instream Flow Call. The City's Hunter Creek Flume & Pipeline water
right may be used for instream flows by the Colorado Water Conservation Board
( "CWCB ") pursuant to the decree in Case No. 80CW061 (Water Division No. 5)
( "Change Decree "). The parties acknowledge that the CWCB may place a call for
said water right, as authorized by the Change Decree. The parties further
acknowledge that differences have arisen between them regarding the effect on
the Company's water rights of a CWCB call under the Change Decree. While
neither party hereby waives or intends to waive any legal rights or legal positions
in the event this Agreement is terminated, the parties have agreed to the following
procedure during the term of this Agreement if the CWCB places a call for the
Hunter Creek Flume & Pipeline water right for instream flow purposes pursuant
to the Change Decree. When such a call is placed by the CWCB, the City will
also place a call for 1.0 cfs of its Hunter Creek Flume & Pipeline water right to be
used for municipal purposes, with said water being delivered to the Company. If,
when the call is administered, there is less than 15 cfs in Hunter Creek at the
Hunter Creek Flume and Pipeline, the City will advise the state administrative
officials that the City and the CWCB should be allocated the available water as
follows:
i. the City will receive and divert to the Company 1.0 cfs of the
legally and physically available supply at the Hunter Creek Flume and
Pipeline at such times when the flow in Hunter Creek is 15.0 cfs or less
but at least 7.5 cfs, with the remaining flow being allocated to the
CWCB's call pursuant to the Change Decree;
ii. the City will receive and divert to the Company 0.75 cfs of the
legally and physically available supply at the Hunter Creek Flume and
Pipeline at such times when the flow in Hunter Creek is less than 7.5 cfs
but at least 1.5 cfs, with the remaining flow being allocated to the
CWCB's call pursuant to the Change Decree; and
iii. the City will receive and divert to the Company 50 percent of the
legally and physically available supply at the Hunter Creek Flume and
Pipeline at such times when the flow in Hunter Creek is less than 1.5 cfs,
with the remaining flow being allocated to the CWCB's call pursuant to
the Change Decree;
iv. The Company will accept cessation of delivery of water during any
period when the amount diverted by the City for delivery to Company
under this paragraph is insufficient to physically deliver water to Company
shareholders on Placer Lane, as measured at the "Check Point" located at
the inlet of a splitter box dividing the Duroux Ditch into two ditches
separately delivering water to the West and Bluhm parcels on Placer Lane,
as shown on Exhibit 1. The parties will cooperate in determining when
such conditions are present.
V. The parties agree that the Company's performance hereunder, and
payment of the City's operation and maintenance costs associated with
delivery of water by the City pursuant to this paragraph I I .A, is full and
adequate consideration for delivery of water by the City pursuant to this
paragraph II.A.
vi. The parties acknowledge that neither of them is responsible for
any decisions by state administrative officials regarding the administration
of any call the City places pursuant to this paragraph, and they agree to
cooperate to encourage such officials to administer the City's Hunter
Creek Flume and Pipeline water rights as provided herein. If the City and
the Company are unsuccessful in such efforts, neither one of them shall be
deemed to have waived any rights it may have to seek administration of
their respective water rights.
B. Measurement and Administration of the Parties' Water Rights
Neither party shall have responsibility for administration of the water rights
belonging to the other. Each party is responsible, at its own cost, for compliance
with any applicable State of Colorado administrative requirements regarding
measurement, accounting and reporting in connection with its own water rights
and water use. Upon the City's request, the Company will provide the City with
access to its flume in order to allow the City to install, calibrate, operate and
maintain telemetry for the automation of operations and to measure flows in the
Company flume. Notwithstanding the foregoing, the City shall have no
obligation to install any such telemetry, or to install, operate, or maintain any
measurement or recording devices required by the state administrative officials
for administration of the Company Water Rights.
C. Water Court Action or Other Proceeding If any water court action or
other proceeding is required to confirm or change the Company Water Rights or
the City Water Rights, such actions or proceedings shall be the sole responsibility
of the party seeking such confirmation or change.
5. Paragraph 12 is amended by deletion of the last sentence.
6. Paragraph 17 is deleted in its entirety, and replaced with the following paragraph 17:
17. Delivery of Notice. All notices hereunder shall be given in writing, delivered either in
person or by first class United States mail, postage prepaid, properly addressed to the party to
whom directed at its address shown below or at such other address as may be given by notice
pursuant to this paragraph. Delivery of any notice hereunder shall be effective upon receipt by
the person to whom personal delivery is made or upon posting in the United States mail as
provided herein.
City of Aspen
c/o City Manager
130 South Galena Street
Aspen, Colorado 81611
cc: Cynthia F. Covell, Esq.
Alperstein & Covell, P.C.
1600 Broadway #2350
Denver, Colorado 80202 -4923
Duroux Ditch Company
Duroux Ditch Company
P.O. Box 10542
Aspen, Colorado 81612
cc: Christopher Geiger, Esq.
Balcomb & Green, P.C.
P.O. Drawer 790
Glenwood Springs, Colorado 81602
7. The description of the City Water Right contained in the third recital in the Original
Agreement is amended to read as follows:
"That water right evidenced by decree to the Hunter Creek Flume and Pipeline, Ditch No.
203, Priority No. 284, decreed on August 25, 1936 and August 25, 1949 in CA 3723, for
15 cfs from Hunter Creek, with a priority date of June 10, 1886, for the purposes of
supplying water to the town of Aspen and environs for domestic purposes."
8. The Original Agreement defines and distinguishes between "maintenance and minor
repair costs" and "major repairs" by reference to specific dollar amounts. The Original
Agreement also establishes specific limits for the parties' financial obligations in connection
with operation, maintenance and minor repairs, and also major repairs, by reference to specific
dollar amounts. In every instance, those specified dollar amounts are subject to adjustment for
changes in the United State Bureau of Labor Statistics Consumer Price Index for All Urban
Consumers (CPI) as provided within the Original Agreement.
Within this Amendment, paragraphs 51 and 6 modify and replace portions of the Original
Agreement that contain some of those specific dollar amounts that are subject to CPI adjustment.
The specific dollar amounts contained in paragraphs 5.F and 6 of this Amendment are unchanged
from the Original Agreement; this Amendment does not reflect the CPI adjustments effective
since execution of the Original Agreement. Therefore, the specific dollar amounts specified in
paragraphs 5.F and 6 of this amendment, and any specific dollar amount specified in the Original
Agreement and subject to CPI adjustment, will be adjusted for CPI as provided in the Original
Agreement from January 1, 1997 to the date of determination.
9. This Amendment, together with the Original Agreement and Exhibit 1, will be recorded
by the Company, at its cost, promptly following execution of this Amendment by all parties.
10. Except as herein amended the Original Agreement remains in full force and effect.
11. Authority of Signatories. By signing this Amendment, the parties acknowledge and
represent to one another that all procedures necessary to validly contract and execute this Agreement
have been performed and that the persons signing for each party have been duly authorized to do
so ; the Company shareholders voted to authorize the Company to enter this Amendment during
a special meeting held May 6, 2010.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year
first above written.
CITY OF ASPEN
Q�10
Mayor
DUROUX DITCH COMPANY
III �
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Attest:
ity Clerk
Vice- President,
acting as Secretary
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