Village of Chittenango, NY Water Lease Agreement

Beginning when the connection between the village water system and the Authority's main is complete and the water is turned on or June 1, 1975, whichever date is sooner, the village hereby leases to the Authority for the term hereinafter specified the entire village water system (except the present wells and pump house owned by the village) located or to be located in the village and in the Town of Sullivan outside of the village, including water storage tanks, hydrants, distribution mains, valves, meters and appurtenances, together with any replacements, additions, betterments and improvements which may hereafter be furnished and installed in or by the village during the term of this lease agreement.

The Authority agrees to operate, maintain and repair at its own cost and expense the entire village water system and to sell water and water service to the customers of the village water system in accordance with the customer rules of the Authority as they may be from time to time amended during the term of this lease agreement; provided, however, that the rates to be charged for water shall be substantially the same as the rates set forth in Schedule A attached hereto and made a part hereof, subject only to such increases as deemed necessary by the Authority to reflect similar increases in the future in rates charged by the Authority in Onondaga County until December 31, 1999, and then starting on January 1, 2000, shall be substantially the same as the then current scheduled Authority rates for water within Onondaga County, plus $0.05 per thousand gallons. The Onondaga County Water Authority hereby agrees as part of the lease between the village and the Authority, and notwithstanding any other provisions of the lease, to assume the obligations of the village to John J. Benson, Sr., and John J. Benson, Jr., under the terms of the agreement between the village and the Bensons for the site of the water storage tank dated October 23, 1964.

[Amended 11-12-1974]

The Authority agrees to pay to the village as rental payments beginning June 1, 1975, and in each succeeding year, an amount equal to the debt service, including principal and interest as it becomes due, until all of the water debt of the village presently outstanding shall have been paid. Such moneys may be paid by the Authority to the village or may be paid directly to the duly authorized paying agent or agents of the village bonds. It is understood and the village represents that as of the date of this lease, first, there is outstanding one issue of bonds with $13,000 in unpaid principal which finally matures in 1981; second, there is outstanding another issue of bonds with $258,000 in unpaid principal which finally matures in 1995; and, third, there is outstanding $100,000 in temporary notes which will be funded into a serial issue which will be sold in 1974 or 1975 and will finally mature in not less than 25 years nor more than 30 years.

§ A151-2 Replacements, additions, betterments and improvements.

Replacements, additions, betterments or improvements may be made by the village in its sole discretion and at its own cost and expense, and when so made by the village, legal title to such shall be and remain in the village.

The village, however, shall not at any time be obligated to make replacements, additions, betterments or improvements at its own cost and expense.

The Authority may, in its sole discretion and at its own cost and expense, make replacements, additions, betterments or improvements when the Authority deems such to be economically feasible in order to provide an adequate supply of water at proper pressure to customers of the village water system, to future extensions of the system or to other systems. The village agrees that such replacements, additions, betterments or improvements may be installed at such locations as the Authority may determine and may be connected and interconnected with the village water system and extensions of the system or other systems in such manner as the Authority shall determine. Legal title to such replacements, additions, betterments and improvements installed by the Authority at its own cost and expense shall be and will remain in the Authority unless and until reimbursement therefor shall have been made pursuant to § A151-7A hereof.

The village agrees that the Authority may use the facilities of the village water system, without imposition of any additional rental or charge therefor other than as stated herein, to serve areas located outside of and beyond the limits of the village water system and extensions thereof or other systems during the term of this lease agreement and subsequent thereto, and that this clause shall survive the termination date of this lease agreement. The Authority agrees that such use by it of the facilities of the village water system shall not reduce below accepted standards the supply of water or pressure of water then being furnished by the Authority to customers of the village water system, any extension thereof or other systems.

In the event the village shall make any extensions or improvements of the village water system, said extensions or improvements shall be made, subject to the following terms and conditions:

(1)

Such facilities shall be installed without cost to the Authority.

(2)

The plans and specifications for all construction of any extensions or improvements shall be subject to approval of the Authority and the Authority may inspect the work during construction.

(3)

Upon completion of any such extension or improvement, the extension or improvement shall become subject to the terms of this lease agreement.

§ A151-3 Service connections.

During the term of this lease agreement, all service connections shall be made by the Authority in accordance with the customer rules of the Authority as they may be from time to time amended.

§ A151-4 Hydrants.

Upon receipt of a certified copy of a resolution of the village requesting installation of hydrants after the effective date of this lease agreement and specifying the locations where the same are to be placed upon the mains of the village water system or any extensions thereof or other system, the Authority will at its own initial cost and expense, subject to reimbursement by the village as hereinafter provided, place and install the hydrants and hydrant connections.

Legal title to the hydrants and hydrant connections installed by the Authority at its own initial cost and expense shall be and remain in the Authority until reimbursement therefor has been made. The Authority will bill the village for hydrants and hydrant connections made within the village limits at the actual installed cost thereof to the Authority, and the village will reimburse the Authority in the amount billed therefor on or before the close of the village's fiscal year in which such bill was rendered, provided that such funds are available in the budget of such fiscal year. If the reimbursement by the village cannot be made within the said fiscal year, the village agrees to provide funds therefor in the budget for the following fiscal year and will reimburse the Authority for said unpaid bills within 90 days after the commencement of the village's fiscal year.

The Authority, during the term of this lease agreement, will make its books, records and accounts available for examination by the village with respect to the actual cost of any hydrants installed by the Authority and billed to the village.

Hydrants may be also installed at the request of the village upon the same terms and conditions as set forth in the customer rules of the Authority as they may be from time to time amended for the installation of hydrants, and any hydrants so installed shall be and remain the property of the Authority.

Hydrants may also be installed as a part of main extensions made under main extension agreements as provided for in the customer rules of the Authority.

Hydrants in existence at the date of this agreement and hydrants which are installed thereafter without cost to the Authority shall be maintained in service by the Authority at the same charge made for hydrants in use for a period in excess of 30 years in accordance with the customer rules of the Authority as they may from time to time be amended. Hydrants which are installed and maintained at the cost of the Authority will be charged for in accordance with the customer rules as they may be from time to time amended.

§ A151-5 Supplying of water by the Authority.

On and after the effective date of this lease agreement, the Authority will furnish and supply water and water service to all those customers now being served by the village water system and to such other persons or corporations as shall apply to the Authority, all pursuant to the customer rules of the authority as they may be from time to time amended during the term of this agreement.

It is expressly understood and agreed that the furnishing of water and water service by the Authority shall be in accordance with the terms of this agreement and the customer rules of the Authority as they may be from time to time amended.

It is understood and agreed that the Authority makes no guaranty to anyone as to the pressure of water in the pipes or as to the supply of water in the pipes of the village water system or any extensions thereof or other systems and shall not, under any circumstances, be held liable for loss or damage from a deficiency or failure in the supply of water, whether caused by shutting off water in case of accident or for alterations, extensions, connections or repairs or for any other cause whatsoever.

§ A151-6 Obligation of village.

It is expressly understood and agreed that the village shall read all meters and bill its customers for water sold up to the effective date of this agreement. The Authority assumes no responsibility for the collection of such accounts or liability for the same other than as specified herein.

It is further agreed that prior to the effective date of this agreement, the village shall furnish the authority with the following information:

(1)

An accurate map of the water system, showing the location and size of any and all water mains and extensions thereto with identification as to the kind of pipe, location of existing valves, location of hydrants, location of services and location of all other appurtenances.

(2)

An itemized schedule showing all parcels of land, rights-of-way, structures, equipment and all other property presently used or to be used in the operation of the village water system and to be leased to the Authority pursuant to this lease agreement.

It is further agreed that upon certification by the Authority that any water bill remains unpaid six months after original billing by the Authority, the village will add the amount of such bill to the tax bill of the owner of the property in accordance with § 11-1118 of the Village Law and, upon payment, will forward such amount to the Authority.

It is further understood and agreed by the village that the connection of the village water system to the system of the Onondaga County Water District and the receipt of water indirectly from said system will result in a requirement that the village furnish the Metropolitan Water Board of the County of Onondaga annually with certain required assessment information and pay directly to the said Metropolitan Water Board annually an amount equal to the tax that would be levied against such village if the village boundaries were within Zone 3 of the Onondaga County Water District and/or such other amounts as may become due or payable to the said Metropolitan Water Board by the village as an external customer of the Onondaga County Water District.

§ A151-7 Term of lease agreement.

The term of this lease agreement shall be for a period of 40 years, commencing as set forth in § A151-1A of this agreement and terminating on the last day of June 2014. If this lease agreement is not renewed at the end of such term or any renewal thereof or is terminated for any cause whatsoever prior to the expiration of said term or any renewal thereof, the village may, if it determines it to be in the public interest, acquire from the Authority any replacement, addition, betterment or improvement installed pursuant to § A151-2C hereof during the lease period by the Authority at its own cost and expense for the sole benefit of the village water system hereby leased. Value of any such capital improvement shall be computed at original cost less depreciation as such original cost and depreciation shall appear upon the books and records of the Authority. If the village elects not to acquire such improvements upon termination as set forth in this section, the Authority may, at its option, remove such capital improvement from the village water system hereby leased or may, if both parties agree, lease such capital improvement to the village under such terms and conditions as may be mutually agreed upon by the parties hereto. The Authority during the term of this agreement will make its books, records and accounts available for examination by the village with respect to the actual cost and depreciation of replacements, additions, betterments or improvements installed pursuant to § A151-2C hereof. Furthermore, in the event that this agreement is not renewed at the end of such term or any renewal thereof or is terminated for any cause whatsoever prior to the expiration of said term or any renewal thereof, the village agrees to reimburse the Authority for any and all sums paid or credits made by the Authority to the village, if any, pursuant to the terms hereof without interest.

§ A151-8 Conditions precedent.

It is understood and agreed that this lease agreement is subject to the following conditions precedent before the same shall become binding upon the Authority:

Approval by Stone & Webster as Consulting Engineers of the Authority.

Approval by the County of Onondaga (Metropolitan Water Board), if required by law.

Approval by the Bureau of Water Regulation, Division of Resource Management Services of the New York State Department of Environmental Conservation, if required by law.