HomeMy WebLinkAboutContract 52220 CITY SECRETARY
CONTRACT NO. 5aa9 0
AGREEMENT FOR WATER SERVICE BETWEEN
` THE,C1�;Y%F FOR�WO_I�TI I,TEXAS,AND
�,,_,TEXAS
STATE OF TEXAS §
COUNTY OF TARRANT §
This Contract and Agreement ("Agreement") is made and entered into thisa,5 day of
Vocirck 200, by and between the City of Fort Worth, a municipal corporation located in
Tarrant County, Texas, acting by and through J _Ch , its duly authorized Assistant City
Manager, hereinafter called "Fort Worth," and located in pa rl�.e r
County, Texas, acting by and through L rlax _, its duly authorized (V1/L a/, . ,
hereinafter called"Customer,"and hereinaftollectively referred to as the"Parties'
WHEREAS, Fort Worth has provided at its own expense, and now owns, operates and
maintains facilities for processing and distributing a large supply of surface water, and at the present
time, is qualified to furnish and deliver treated water, both within and without the corporate
boundaries of Fort Worth;
WHEREAS, Customer has provided at its own expense and now owns, operates, and
maintains a distribution system,and furnishes water service to the customers within its boundaries;
WHEREAS, Customer does not have and cannot provide economically and within a
reasonable period of time, any other source of water supply, fully adequate to meet its present
and/or future needs or potential emergency needs;
WHEREAS,it is deemed to be in the best interest of both Fort Worth and Customer that the
Parties enter into a mutually satisfactory agreement by means of which Customer may obtain from
Fort Worth a supply of treated water at a reasonable rate;
WHEREAS, by the execution of this Agreement, neither Fort Worth nor Customer will surrender
any of its rights to the ownership and operation of its present water production and distribution
facilities;
WHEREAS, Customer desires to continue to contract for the purchase of treated water and
Fort Worth desires to continue to sell treated water to Customer;
WHEREAS Customer and Fort Worth desire to provide for reasonable wholesale contract
rates for the purchase of treated water sufficient to assure confidence in the financial soundness of
the Fort Worth utility, adequate to maintain and support the utility's credit and sufficient to
enable Fort Worth to raise the money necessary for the proper discharge of its public duties in the
provision of water service and
WHEREAS, Chapters 552 of the Texas Local Government Code and 791 of the Texas
Government Code authorize Fort Worth and Customer to enter into this Agreement.
PQ� f7E�&CIS RECORD
Q o��Q� CITY SECRETARY
�Al� FT V!l�RTI��T
NOW, THEREFORE, KNOW ALL BY THESE PRESENTS that for and in consideration
of the mutual covenants, promises and agreements contained herein, Fort Worth and Customer
do hereby covenant and agree as follows:
Table of Contents
ARTICLE1. Definitions........................................................................................................... 5
1.1 Annual Consumption.................................................................................................... 5
1.2 Average Daily Use........................................................................................................5
1.3 Calendar Day................................................................................................................ 5
1.4 Capital Improvements.......:........................................................................................... 5
1.5 Chapter 395................................................................................................................... 5
1.6 Customer's Service Area.............................................................................................. 5
1.7 Customer System..........................................................................................................5
1.8 Delivery Facility........................................................................................................... 5
1.9 Director...................................................................................................
1.10 Emergency.....................................................................................................................5
1.11 Equivalent Meters or EM.............................................................................................. 5
1.12 Facility Expansion........................................................................................................6
1.13 Fiscal Year....................................................................................................................6
1.14 Fort Worth.....................................................................................................................6
1.15 Fort Worth System........................................................................................................6
1.16 Impact Fee.....................................................................................................................6
1.17 Maximum Day Demand................................................................................................6
1.18 Maximum Hour Demand..............................................................................................6
1.19 MG and MGD...............................................................................................................6
1.20 Parties............................................................................................................................6
1.21 Rate of Use Charge.......................................................................................................6
1.22 Raw Water Charge........................................................................................................6
1.23 Return Water.................................................................................................................6
1.24 Service Charge..............................................................................................................6
1.25 Street Rental..................................................................................................................6
1.26 Stand-by Charge............................................................................................................7
1.27 System Cost..................................................................................................................7
1.28 TCEQ............................................................................................................................7
1.29 Treatment,Pumping and Transmission Charge............................................................7
1.30 Volume Charge.............................................................................................................7
ARTICLE 2. Delivery of Water...............................................................................................7
2.1 Delivery.........................................................................................................................7
2.2 Acceptance and Payment.............................................................................................. 7
2.3 Operations.....................................................................................................................7
2.4 Raw Water Contract...................................................................................................... 8
2.5 Water Use Restrictions and Conservation.................................................................... 8
2.6 Requirements of 30 Tex. Admin. Code Chapter 288.................................................... 8
2.7 Consultation with WCAC................................................................I............................ 9
Agreement for Water Service 2
ARTICLE 3. Location and Maintenance of Measuring Devices................................................9
3.1 Metered Water..............................................................................................................9
3.2 Point(s)of Delivery.......................................................................................................9
3.3 Cost of New or Additional Connections.......................................................................9
3.4 Check Meter..................................................................................................................9
ARTICLE4. Meters................................................................................................................ 10
4.1 Testing......................................................................................................................... 10
4.2 Corrections.................................................................................................................. 10
4.3 Requested Testing. ..................................................................................................... 10
4.4 Out of Service Meter................................................................................................... 10
ARTICLE 5. Meter Reading and Billing................................................................................. 11
5.1 Reading Meters........................................................................................................... 11
5.2 Records....................................................................................................................... 11
5.3 Multiple Meters........................................................................................................... 11
5.4 October Billing............................................................................................................ 11
5.5 Billing and Payment.................................................................................................... 11
5.6 Billing Disputes.......................................................................................................... 11
ARTICLE6. Rates.................................................................................................................. 11
6.1 Method of Rate Determination................................................................................... 11
6.2 Rates to be Used.......................................................................................................... 13
ARTICLE 7. Payment for Water............................................................................................ 14
7.1 Annual Payment.......................................................................................................... 14
7.2 Withdrawal Rate.......................................................................................................... 15
7.3 Monthly Payments...................................................................................................... 15
7.4 Total Annual Payments............................................................................................... 15
7.5 Rate of Use Charge...................................................................................................... 15
7.6 Applicability of Stand-by Charge................................................................................. 16
ARTICLE8. Effective Date................................................................................................... 16
ARTICLE9. Term.................................................................................................................. 16
ARTICLE10. Rights-of-Way................................................................................................... 16
ARTICLE 11. TCEQ Public Water Supply Approval............................................................... 17
ARTICLE 12. Resale of Water.................................................................................................. 17
12.1 Outside Service Area.................................................................................................. 17
12.2 Exceptions................................................................................................................... 17
ARTICLE 13. Sanitary Sewer Facilities.................................................................................... 17
ARTICLE 14. Additional Wholesale Customers....................................................................... 17
ARTICLE 15. Wholesale Customer Advisory Committee........................................................ 18
ARTICLE16. Impact Fees........................................................................................................ 18
16.1 Calculation and Payment of Impact Fees.................................................................... 18
16.2 Multiple Surface Water Providers.............................................................................. 18
16.3 Use of Impact Fees...................................................................................................... 18
16.4 Impact Fee Report....................................................................................................... 19
16.5 No Waiver................................................................................................................... 19
16.6 CIFC............................................................................................................................ 19
16.7 Capital Improvements Plan......................................................................................... 19
16.8 Dissemination of Documents...................................................................................... 19
Agreement for Water Service 3
16.9 Audited Financial Statement.......................................................................................20
16.10 Current Impact Fees....................................................................................................20
16.11 Changes to Chapter 395..............................................................................................20
ARTICLE 17. Breach,Termination and Other Remedies..........................................................20
17.1 Termination by Mutual Consent........................................................................... _ .20
17.2 Termination for Material Breach................................................................................20
17.3 Termination for Repeated Breach...............................................................................20
17.4 Material Breach........................:..................................................................................20
17.5 Notice and Cure..........................................................................................................21
17.6 Notice and Cure for Nonpayment of Impact Fees......................................................21
17.7 Notice and Cure for Breach of Water Use Restrictions and Conservation.................21
17.8 Failure to Provide Notice of Withdrawal Rate under§ 7.2........................................21
17.9 Effect of Termination..................................................................................................22
17.10 No Waiver by Fort Worth...........................................................................................22
17.11 No Waiver by Customer.............................................................................................22
ARTICLE 18. Ownership and Liability..................................................................................... 22
18.1 No Joint Venture.........................................................................................................22
18.2 Liabilities.................................................................................................................... 22
18.3 Contractors..................................................................................................................23
ARTICLE 19. Force Majeure.................................................................................................... 23
19.1 Notice and Suspension................................................................................................23
19.2 Definition.................................................................................................................... 23
ARTICLE20. Notices............................................................................................................... 23
20.1 Required Notice..........................................................................................................23
20.2 Delivery and Receipt...................................................................................................24
20.3 Change of Address Notices.........................................................................................24
ARTICLE 21. Inspection and Audit.......................................................................................... 24
ARTICLE 22. Miscellaneous....................................................................................................24
22.1 Favored Nations..........................................................................................................24
22.2 Suspension of Rate of Use Charges..............................................................................24
22.3 Water to Adjacent Areas.............................................................................................24
22.4 Subject to Laws and Permits.......................................................................................25
22.5 Entry on Customer's Premises....................................................................................25
22.6 Alternative Dispute Resolution...................................................................................25
22.7 Information.................................................................................................................26
22.8 Assignment.................................................................................................................26
22.9 No Waiver...................................................................................................................26
22.10 VENUE.........................................................................................................................26
22.11 Construction................................................................................................................26
22.12 Severability.................................................................................................................26
22.13 Use of Return Water...................................................................................................27
22.14 System Regulatory Actions.........................................................................................27
22.15 Additional Contract Terms.........................................................................................27
22.16 Exhibits....................................................................................................................... 27
Agreement for Water Service 4
ARTICLE 1. Definitions
The following definitions,when capitalized,apply throughout this Agreement:
1.1 Annual Consumption. The total quantity of water purchased under the terms of this
Agreement by Customer during the Fiscal Year as determined by the difference in the annual
October meter readings.
1.2 Average, Daily Use. The Annual Consumption divided by the member of calendar days in
the Fiscal Year year.
1.3 Calendar Day. The period from midnight of one day to 11:59 PM of the next day.
1.4 Capital Improvements. Any of the following facilities which provide utility services and
benefits common to all customers (both retail and wholesale)and that have a life expectancy of
three(3) or more years, whether such improvements are located within the jurisdictional limits
(including the extra-territorial jurisdiction)of Fort Worth or Customer,and consisting of: water
treatment facilities;metering facilities; control systems and appurtenances; storage facilities;
pumping facilities;and all mains that are sixteen inches(16")and greater in diameter. Capital
Improvements include the initial construction or the expansion of such facilities,as necessary to
serve new development.
1.5 Chapter 395. Chapter 395 of the Texas Local Government Code, as it may be amended
or re-codified from time to time.
1.6 Customer's Service Area. The area inside the Customer's boundaries and inside the
Customer's Certificate of Convenience and Necessity,as shown on Exhibit A,except that the
Customer may,with written notice to the Director,exclude a contiguous area that receives its
entire water service from provider(s)other than Fort Worth.
1.7 Customer System. All necessary Customer mains and distribution facilities on the
Customer's side of the meter from and beyond the point of delivery of treated water by Fort
Worth.
1.8 Delivery Facility. Any facility necessary for the transmission of water from the Fort
Worth System that is on the Customer's side of the point of delivery that is constructed
specifically to allow Fort Worth to serve Customer.
1.9 Director. The Director of Fort Worth Water Department or his designee.
1.10 Emergency. A situation,event or condition created by unforeseeable mechanical failure,
unprecedented high rate of treated water usage(such as might result from a major fire or a major
water main break)or circumstances beyond the Party's reasonable control.
1.11 Equivalent Meters or EM. A means of relating a large-use customer with a base
(residential)use customer. Fort Worth Water Department uses 5/8 x% inch meter capacity as an
EM. The ratio of larger meter's capacity to the 5/8 x% inch meter capacity is the number of
EMs for each meter size.
Agreement for Water Service 5
1.12 Facility Expansion. The expansion of the capacity of an existing facility that serves the
same function as an otherwise necessary new capital improvement,in order that the existing
facility may serve new development. The term does not include the repair,maintenance,
modernization, or an expansion of an existing facility to better serve existing development.
1.13 Fiscal Year. The fiscal year of Fort Worth, which is from October I"through September
30th.
1.14 Fort Worth. The City of Fort Worth,acting by and through it's duly authorized Assistant
City Manager,who may delegate to the Director.
1.15 Fort Worth System. The Fort Worth water treatment and distribution system.
1.16 Impact Fee. A capital contribution funding or recouping the cost of Capital
Improvements necessitated by and attributable to new development,subject to and as provided in
Article 16 of this Agreement.
1.17 Maximum Day Demand. The maximum quantity of water used by Customer during one
calendar day of the Fiscal Year.
1.18 Maximum Hour Demand. The quantity of water used by Customer during the one hour
of the Fiscal Year that more water passed through the meter or meters serving the Customer than
during any other hour of the Fiscal Year,multiplied by 24 hours and expressed as MGD.
1.19 MG and MGD. MG is million gallons;MGD is million gallons per day.
1.20 Parties. Fort Worth and the Customer,or each individually.
1.21 Rate of Use Charge. The charge for Maximum Day Demand in excess of Average Daily
Use and for Maximum Hour Demand in excess of Maximum Day Demand, as provided in§ 7.5
and Exhibit C.
1.22 Raw Water Charge. The rate for 1,000 gallons charged by the Tarrant Regional Water
District to Fort Worth for raw water to be sold to the Customer plus four percent(4%),
representing Fort Worth system losses of four percent(4%).
1.23 Return Water. All water that is returned to Fort Worth via discharge into Fort Worth's
wastewater system for treatment by Fort Worth's Village Creek Wastewater Treatment Plant or
another wastewater treatment plant that is owned or operated(directly or through contract)by
Fort Worth.
1.24 Service Charge. A fixed monthly charge per wholesale meter, as set forth in the annual
cost-of-service rate study,designed to include a portion of Fort Worth Water Department's cost
for wholesale customer billing and accounting.
1.25 Street Rental. The Street Rental charged to the wholesale customers of the Fort Worth
System is intended to be compensation for use of public rights-of-way. The Street Rental is
established at five percent(5%)of the revenue requirements,excluding Payment in Lieu of Taxes
Agreement for Water Service 6
(PILOT). The Street Rental can not be decreased without the consent of Fort Worth in its sole
discretion and, in the event of an increase,can only be increased in one percent(1%) increments
once every five (5)years starting on the anniversary date of this Agreement in 2016,and shall
never exceed the rate being collected from the natural gas franchised utility serving the City of
Fort Worth or the rate collected from the retail water customers of Fort Worth, whichever is less.
1.26 Stand-by Charge. The fee set forth in§ 7.1.3 and Exhibit B. The Stand-by charge is
intended to allow a wholesale customer to rely on the Fort Worth System for stand-by delivery of
water for the Customer's Emergency use only, as provided in§ 7.6.
1.27 System Cost. System Cost,as provided in §6.1.2.
1.28 TCE . The Texas Commission on Environmental Quality or its successor agency.
1.29 Treatment,Pumping and Transmission Charge. The rate,per 1,000 gallons used,
regardless of rate of use, as determined by the annual cost-of-service rate study,and which shall
include the maintenance and operation costs,and the capital facilities cost on the part of the
production and transmission system related to annual use.
1.30 Volume Charge. The combined total of the Treatment, Pumping and Transmission
Charge plus the Raw Water Charge in effect for the current Fiscal Year.
ARTICLE 2. Delivery of Water
2.1 Delivery. Fort Worth agrees,subject to the amount of raw and treated water available to
Fort Worth,to furnish and sell to Customer treated water of potable quality meeting all
applicable governmental standards, delivered under the normal operating pressure prevailing in
the Fort Worth System at the Customer point or points of delivery mutually agreed upon, without
guarantee of a specific minimum pressure. Mutually agreed point(s)of delivery on the Effective
Date are shown on Exhibit A.
2.2 Acceptance and Payment. Customer agrees to accept delivery of and to pay for the water
in accordance with the terms and conditions of this Agreement. Customer understands and
acknowledges that Customer is responsible for maintaining water pressure in the Customer's
System,and that maintaining a certain water delivery pressure requires use of storage or pumps
on Customer's System.
2.3 Operations. Foil Worth is entitled at any and all times to install,repair, maintain, and
replace any equipment or devices in the Fort Worth System. In an Emergency, Fort Worth may
take necessary action(including reduction or cessation of water service to Customer)as
necessary or appropriate to allow Fort Worth at all times to maintain a minimum pressure as
required by law at all retail service locations directly served by Fort Worth, and Fort Worth is
excused from the requirements of§2.1 to the extent caused by an Emergency or by Force
Majeure or Fort Worth's reasonable efforts to respond to such conditions. In the event of such
service interruptions, Fort Worth shall make every reasonable effort to expedite the restoration of
service in a timely manner, and shall not unreasonably interrupt, withhold or delay service to
Customer.
Agreement for Water Service 7
r
2.4 Raw Water Contract. In accordance with the terms of Fort Worth City Secretary
Contract No. 12720 between Fort Worth,the City of Arlington,the City of Mansfield,Trinity
River Authority,and the Tarrant Regional Water District, this Agreement shall be deemed
subordinate in all respects to the water requirements of the above contracting Parties as specified
in Section 3 of that contract.
2.5 Water Use Restrictions and Conservation.
2.5.1 If Fort Worth in any way restricts,rations or conserves the use of water
throughout its CCN during an Emergency declared by the Director,then within 24
hours of being notified of the action of Fort Worth,Customer shall institute and
apply the same restrictions and/or measures as to the use of the water by the
customers of Customer.
2.5.2 If Fort Worth in any way restricts,rations or conserves the use of water
throughout its CCN as authorized by the then Fort Worth City Council and
adopted by ordinance,then Customer agrees to institute,apply and enforce the
same rationing, conservation measures,or restrictions to the use of water by the
customers of Customer for so long as any part of the total water supply of the
Customer is being furnished by Fort Worth. Customer shall submit to Fort
Worth, within sixty(60) days of the action taken by the City Council of Fort
Worth,a copy of the Customer's city council and/or governing board resolution
and/or ordinance adopting the same measures as Fort Worth.
2.5.3 If Customer fails to comply with its obligations under this § 2.5 then, in addition
to the remedies available under Article 17, Foil Worth may install or adjust any
rate of flow controllers necessary to physically achieve compliance,regardless of
whether the rate of flow controller to be installed or adjusted is on Fort Worth's or
Customer's side of the meter.
2.6 Requirements of 30 Tex. Admin. Code Chapter 288 ("Ch. 288').
2.6.1 As required by 30 Tex. Admin. Code §288.5(1)(G),this Agreement requires
Customer to develop and implement a water conservation plan or water
conservation measures using the applicable elements of Tex.Admin Code Ch.
288.
2.6.2 As required by 30 Tex. Admin. Code § 288.22(a)(8), this Agreement requires
that,in case of a shortage of water resulting from drought,the water to be
distributed shall be divided in accordance with Texas Water Code§ 11.039.
2.6.3 To the extent that Customer fails to comply with § 2.5 above or meet any
additional requirements under 30 Tex. Admin. Code Chapter 288,Customer
agrees to implement and comply with Fort Worth's water conservation plans and
measures and drought contingency plan until the Customer's own plans and
measures are brought into compliance.
Agreement for Water Service 8
2.7 Consultation with WCAC. Except when the Director determines that emergency
conditions require short-term restriction, conservation or rationing to meet all necessary water
demands, Fort Worth agrees to consult with the Wholesale Customer Advisory Committee, in
the development of any restriction,conservation,rationing, or drought contingency plans that the
Director determines may be necessary to address operational constraints, whether or not required
by any state or federal regulatory agency,or deemed advisable by the Wholesale Customer
Advisory Committee to manage long term System Costs,except where emergency conditions
may dictate short-term restriction,conservation or rationing requirements as may be determined
by the Director to meet all necessary water demands.
ARTICLE 3. Location and Maintenance of Measuring Devices
3.1 Metered Water. All water furnished tinder this Agreement by Fort Worth shall be
measured by one or more suitable meters equipped with continuous flow, chart recording
devices,and telemetering equipment connected with the Fort Worth control center. All meters,
recording devices,telemetering equipment and appurtenances(including any flow control
equipment required by§ 7.2)shall be approved and installed by Fort Worth. Customer shall pay
for the meter vault and all metering equipment, including telemetering equipment to the Fort
Worth control center,and appurtenances,plus the installation cost thereof. Fort Worth shall pay
all costs associated with the operation and maintenance of said equipment and shall pay for the
replacement of said equipment as necessary. Such costs, as well as charges for the telelink line
and microwave transmitter and the power to operate same, shall be a System Cost.
3.2 Point(s)of Delivery. The point or points of delivery of treated water by Fort Worth shall
be the meter vault connection to Customer's side of the meter, and all necessary mains and
distribution facilities from and beyond that point shall be the responsibility of Customer. The
location of each meter shall be mutually agreed upon in writing by and between the Parties and
the meter or meters shall not be moved or relocated except by mutual consent in writing by the
Parties.
3.3 Cost of New or Additional Connections. Customer shall pay the cost of each new,
enlarged or additional Customer connection to the Fort Worth System,including the cost of the
wholesale meter and the Customer's proportionate share of any improvements required for that
connection or related service to be provided at the delivery point. The Customer's cost shall be
calculated in the same manner as the"developer's cost"for special facilities, including pipelines
under Fort Worth's then-existing Water and Wastewater Installation Policy, as determined by the
Director. The Customer will pay that amount to Fort Worth before making the new or additional
connection to the Fort Worth System,and the amount shall not be a System Cost.
3.4 Check Meter. Either Party, at its own expense,may install a check meter to check or
measure the volume of water passing the master meter,provided that, if such check meter is
installed,the same rules and regulations relative to its operation,maintenance and reading shall
apply as to the master meter being tested.
Agreement for Water Service 9
ARTICLE 4. Meters
4.1 Testing. Fort Worth shall routinely test for accuracy, and service and calibrate if
necessary, the master meter at each point of delivery no less than once during each twelve(12)
month period. Copies of the results of such calibration and all related information shall be
provided to Customer. Customer shall have access to the metering facilities at all reasonable
times;provided,however, that any reading, calibration or adjustment to such metering
equipment shall be done by employees or agents of Fort Worth,or other mutually approved third
party calibration agent, in the presence of representatives of Customer and Fort Worth, if so
requested by Customer. Notification of any proposed test shall be provided to the Customer at
least seventy-two(72)hours prior to such test being conducted and Customer may observe such
test, if so desired.
4.2 Corrections. Upon any calibration of a Wholesale Customer's meter,if it is determined
that the accuracy envelope of such meter is found to be lower than ninety-five percent(95%)or
higher than one-hundred-five percent(105%) expressed as a percentage of the full scale of the
meter,the registration of the flow as determined by such defective meter shall be corrected for a
period extending back to the time such inaccuracy began, if such time is ascertainable; or, if such
time is not ascertainable, then for a period extending back one-half(1/2)of the time elapsed
since the date of the last calibration, but in no event further back than a period of six (6)months.
All meters will be properly sealed,and the seals shall not be broken unless representatives of
both Parties have been notified and given a reasonable opportunity to be present. If the meter,
after testing, is found to be in error outside the parameters established in this Agreement,the
amounts due to or due from Fort Worth shall be determined based upon the prevailing wholesale
rates which were in effect at the time the meter was determined to be malfunctioning. The
amount due to or due from Dort Worth shall be payable within thirty(30)days from the date of
receipt of the invoice for said amounts by Fort Worth or by Customer. In addition,the
Wholesale Customer's volume and rate of use records shall be corrected,as determined by the
meter testing.
4.3 Requested Testing. Customer shall have the right to request Fort Worth to test any
meter(s), but no more frequently than quarterly. Upon any such request,Fort Worth agrees to
perform its testing and calibration of the meter(s)with notice to Customer,and the Parties shall
be entitled to jointly observe any testing, calibration, and adjustments that are made to the
meter(s), in the event such modifications are necessary. For such additional testing request,Fort
Worth shall give Customer notice forty-eight(48)hours in advance of the time when that testing
will occur. Customer shall pay the cost of the additional test requested for any meter(s)if the
test shows that the meter(s) is accurate(within five percent(5%)registration), but Fort Worth
shall pay the costs of the additional test if the results indicate that the meter(s) is not accurate(in
excess of five percent(5%)registration).
4.4 Out of Service Meter. If any meter used to determine the flow of treated water to
Customer is out of service or out of repair so that the amount of water metered cannot be
ascertained or computed from reading the meter, then the water delivered during the period that
the meter is out-of-service or out of repair shall be estimated and agreed upon by the Parties
upon the basis of the best data available. The basis for estimating such flow includes,but is not
limited to,extrapolation of past patterns of flow for that metering station under similar
Agreement for Water Service 10
conditions. If the Parties cannot agree on the extrapolated estimate of water volume delivered,
then agreement on the flow volume will be determined by §22.6 dispute resolution.
ARTICLE 5. Meter Reading and Billing
5.1 Reading Meters. Fort Worth will read all meters provided for herein at monthly intervals,
and the Parties shall have free access to read these respective meters daily, if either Party so
desires. Each Party has the duty to give immediate notice to the other of any meter that it finds is
not functioning properly. Upon such notice,repairs to such meter shall be made promptly.
5.2 Records. All readings of meters will be entered into the records maintained by Fort
Worth. Customer shall have access to such records during reasonable business hours and shall
be furnished with monthly readings for each point of delivery metering facility.
5.3 Multiple Meters. If Customer has more than one point of connection to the Fort Worth
System,the sum of all meter readings and rates of flow shall be used for the purpose of
calculating the water Volume Charge and the Rate of Use Charge.
5.4 October Billing. A review of water usage amounts by Customer for the past twelve(12)
months shall be made during the presentation of the October bill each year. The October
statements shall be prepared so as to reflect any and all Rate of Use Charges for the Fiscal Year
just ended which have not been previously billed and paid. A copy of the rate of flow charts or
other records showing the Maximum Day Demand and the Maximum Hour Demand for the
Fiscal Year just ended shall be furnished to Customer with the October billing.
5.5 Billing and Payment. Bills for water service shall be rendered to Customer monthly by
Fort Worth,and shall be due and payable by Customer not more than thirty (30)days from the
billing date. The bills will show current charges,as well as past-due charges, if any. Past-due
charges shall be the total amount unpaid from all prior billings as of the current billing date.
Payments received by Fort Worth shall first be applied to the past-due charges, if any, and
thereafter to the current charges.
5.6 Billing Disputes. If Customer disputes a bill and is unable to resolve the difference
informally,Customer shall notify the Director in writing. If the Director and Customer are
unable to resolve the disputed bill, agreement on the bill will be determined by §22.6 dispute
resolution procedures. Dispute of a bill shall not be grounds for non-payment. If a bill or other
payment is not paid as specified in this Agreement,a finance charge of ten percent (10%)per
annum will be calculated from the date which the payment was required to be made. If a billing
adjustment is agreed upon or otherwise established by dispute resolution,then the amount found
to be incorrect will be credited to Customer's account together with an interest charge of ten
percent (10%)per annuin calculated from the date payment of the disputed bill was received.
ARTICLE 6. Rates
6.1 Method of Rate Determination.
6.1.1 Wholesale water rates will be based upon an annual cost-of-service rate study
with a rate study conducted every three years by an independent utility rate
Agreement for Water Service 11
consultant as provided for in § 6.1.4. The independent utility rate consultant shall
be selected by the Director from a list of five qualified firms submitted to the
Director by the Wholesale Customer Advisory Committee. The cost of any such
study shall be a System Cost. All cost-of-service studies shall be conducted
utilizing the utility cost basis of determining revenue requirements applicable to
the wholesale customer class.
6.1.2 The System Cost(i.e.,the cost-of-service for the wholesale class)shall include
allocated reasonable and necessary operation and maintenance expense;
depreciation expense;a fair and reasonable return on allocated capital facilities as
provided in §6.1.3; general and administrative costs; commodity charges
including the Raw Water Charge;the cost of treated water; transmission losses;
Street Rental (calculated as provided in§ 1.25); and Payment In Lieu of Taxes
("PILOT"calculated as provided in Exhibit D). To determine the allocation and
distribution of costs to the wholesale customer class,the independent utility rate
consultant shall consider at least the following factors: total volume,rate of flow,
metering, and customer related costs such as accounting,billing,and monitoring.
Capital related costs will consist of depreciation expense and return on original
cost rate base. The"rate base"shall consist of all allocated capital facilities,net
of depreciation and contributions,and shall include construction work in progress,
a reasonable allowance for working capital, and a reasonable inventory of
materials and supplies necessary for the efficient operation of the Fort Worth
System. The methodology shall be that used in the most recent wholesale water
rate study completed and approved by the Fort Worth City Council before the
Effective Date,which Customer acknowledges having received prior to executing
this Agreement. Records of the original cost and the accumulated depreciation of
all capital facilities shall be maintained in the Fort Worth Fixed Asset Tracking
System. These records shall be available for inspection at the Fort Worth Water
Department during reasonable business hours upon request by Customer.
6.1.3 Fort Worth shall be allowed to earn and recover in rates a rate-of-return on the
rate base as described in §6.1.2. That rate of return shall be equal to the weighted
average imbedded cost of outstanding debt plus one and one-half percent
(1-1/2%). The parties agree that this rate of return is reasonable.
6.1.4 For the Fiscal Years beginning October 1,2011,2014, 2017,2020,2023 2026 and
2029,a detailed wholesale water rate study will be performed by an independent
utility rate consultant selected by the Director in conformance with§ 6.1.1. The
same methodology used in the immediate previous rate study will be utilized by
the rate consultant so selected. In the interim Fiscal Years between detailed rate
studies,Fort Worth will adjust wholesale water rates annually,using the same
methodology as the last detailed rate study, and will utilize the actual operating
data for the twelve(12) month period ending September 301h of the prior year,
adjusted for all known and measurable changes in cost data that may have
occurred since the last audited financial statement. Such adjustments should allow
for year-end trending and the spreading of non-recurring expenses over an
appropriate benefit period.
Agreement for Water Service 12
6.1.5 Changes in the wholesale water rate methodology will be allowed if
recommended by a majority vote of the Wholesale Customer Advisory
Committee and approved by the Fort Worth City Council.For purposes of this
§6.1.5, a majority is defined as any combination of Fort Worth wholesale
customers that took more than fifty percent(50%)of the wholesale water
delivered by Fort Worth during the immediate past Fiscal Year.
6.2 Rates to be Used.
6.2.1 The rates and charges to be effective upon approval of this Agreement shall be
those calculated by the most recent cost of service study and adopted by the Fort
Worth City Council to take effect during the current Fiscal Year.
6.2.2 The Raw Water Charge shall be increased or decreased when the raw water cost
paid by Fort Worth for water available for treatment and sale to Customer is
increased or decreased as determined by the Tarrant Regional Water District in
accordance with Fort Worth City Secretary Contract No. 12720.
6.2.3 The Parties agree that services obtained pursuant to this Agreement are essential
and necessary to the operation of Customer's waterworks facilities and that all
payments made by Customer hereunder shall constitute reasonable and necessary
operating expenses of Customer's waterworks and wastewater systems within the
meaning of§ 1502.056 of the Texas Government Code, and the provisions of any
and all ordinances of Customer authorizing the issuance of any revenue bonds of
Customer which are payable from its waterworks and wastewater systems.
6.2.4 Customer agrees,throughout the term of this Agreement,to fix and collect such
rates and charges for water service to be supplied as will produce revenues in an
amount equal to at least(i)all of operation and maintenance expenses of such
system, including specifically its payments under this Agreement; and(ii)all
other amounts as required by law and the provisions of the ordinances or
resolutions authorizing its revenue bonds or other obligations now or hereafter
outstanding, including the amounts required to pay all principal of and interest on
such bonds and other obligations.
6.2.5 Customer understands that Fort Worth City Council has the right to annually
revise the rates charged to cover all reasonable,actual, and expected costs.
Revision of rates shall be pursuant to the provisions set forth in this Agreement.
Fort Worth shall give Customer a minimum of six(6)months notice of intent to
revise rates. Fort Worth will furnish members of the Wholesale Customer
Advisory Committee a draft copy of the cost-of-service study of the proposed
rates sixty(60)days prior to Fort Worth submitting a rate increase request to its
City Council. Within thirty(30)days of receiving the draft study,the Wholesale
Customer Advisory Committee will submit its written conunents on the draft
study to Fort Worth,and Fort Worth will respond to these conunents as soon
thereafter as possible. If the Wholesale Customer Advisory Committee has not
provided its written comments within said period,the Wholesale Customer
Agreement for Water Service 13
Advisory Committee is deemed to have accepted the proposed rates contained in
the draft study, and Customer agrees that it will be bound by the rates as approved
by the Fort Worth City Council.The rates approved by the Fort Worth City
Council shall be the rates to be used in this Agreement for the succeeding Fiscal
Year.
ARTICLE 7. Payment for Water
' Payment of charges to Fort Worth for water used by Customer shall be made as follows:
7.1 Annual Payment. The annual payment will be the charges computed based on all water
delivered by Fort Worth to Customer during the current Fiscal Year at rates set pursuant to this
Agreement. For purposes of calculating the annual payment,the current year will be the Fiscal
Year during which the water usage occurred. However,the minimum annual payment will be
the greater of the following:
7.1.1 the current Fiscal Year Volume Charge times the current Fiscal Year Annual
Consumption,plus the Service Charge,plus the current Fiscal Year Rate of Use
Charges(Exhibit C,Example 1); or
7.1.2 the current Fiscal Year Volume Charge times the current Fiscal Year Annual
Consumption,plus the Service Charge,plus the current Fiscal Year Rate of Use
Charges applied to the average of the Maximum Day Demand above Average
Daily Use and the average of the Maximum Hour Demand above Maximum Day
Demand for the most recently completed three (3)Fiscal Years(to include the
current Fiscal Year)(Exhibit C,Example 2); or
7.1.3 if applicable to Customer,a Stand-by Charge equal to:
(a) twelve(12)months;
(b) times the total number of EM units for all of the Customer's
wholesale meters connected to the System;
(c) times 28,800 gallons per day;
(d) times a dollar amount equal to a three (3)year numerical average
of the Treatment,Pumping and Transmission Charge per 1,000
gallons,using the Treatment,Pumping and Transmission Charge
from most recent annual cost-of-service rate study performed by
the independent utility rate consultant as provided in § 6.1.4 and
the two years prior to the year of that study. This dollar average
will remain in effect for purposes of calculating this § 7.1.3 Stand-
by Charge until the next cost-of-service rate study is performed by
an independent utility rate consultant as provided in § 6.1.4.
Exhibit I3 presents an example calculation of the Stand-by Charge.
Agreement for Water Service 14
7.2 Withdrawal Rate. The rate at which water is withdrawn from the Fort Worth System by
Customer shall be regulated by rate-of-flow controllers,pumps,or other approved methods. The
rate of withdrawal shall be controlled so that the maximum rate shall not exceed 1.35 times the
Maximum Day Demand experienced during the previous year unless Customer has notified the
Director at least(6)months before the date of the anticipated increase in the Maximum Day
Demand; provided, however that in an Emergency such as a line break, Customer shall advise
the Director within 24 hours of the increase in the maximum rate of withdrawal. Customer shall
furnish the Director with all pertinent information regarding the proposed increase in maximum
rate of withdrawal. The Director may waive the notice requirement if, in his sole opinion,that
notice is not necessary to protect the interests of Fort Worth.
7.3 Monthly Payments. The monthly payment will be the sum of(a)plus(b)plus(c):
(a)the greater of-
(i)one-twelfth(1/12)of the amount calculated in § 7.1,or
(ii)the Volume Charge times the actual volume of water taken that month;
(b)one-twelfth(1/12)of the sum of the annual Rate of Use Charges, determined as
provided in§7.5 and Exhibit C; and
(c)one-twelfth (1/12)of the sum of the Fiscal Year Service Charge.
7.4 Total Annual Payments. The total annual payment for water delivered to Customer shall
be based on the annual and peak volumes delivered to Customer during the Fiscal Year,as
determined by meters, flow recording devices or other approved methods,and calculated as
provided in the annual payment provisions set forth above and in Exhibits B and C. The
October monthly payment for September's usage shall contain any adjustments necessary to
update the Rate of Use Charge calculations as necessary to recover the Annual Payment for the
Customer's actual withdrawals from the Fort Worth System(including Rate of Use Charges for
Maximum Hour and Maximum Day Demands)for the Fiscal Year just ended,during which the
water usage occurred. Exhibit C provides examples of the Annual Bill Calculation.
7.5 Rate of Use Charge. As provided in§§7.1, 7.3.and 7.4 and shown in Exhibit C,
Monthly Payments and the Annual Payment shall include Rate of Use Charges, unless the Stand-
by Charge applies. The Rate of Use Charges consist of:
(a)Maximum Day Rate of Use Charge,calculated by multiplying the"Excess Max Day
Charge"per MGD from the annual cost-of-service rate study, times the Maximum Day
Demand(in MGD) in excess of Average Daily Use(in MGD); and
(b)Maximum Hour Rate of Use Charge,calculated by multiplying the"Excess Max
Hour Charge"per MGD from the annual cost-of-service rate study,times the Maximum
Hour Demand (expressed as MGD) in excess of Maximum Day Demand(in MGD).
Exhibit C presents example Rate of Use Charge calculations. Rate of Use Charges are estimated
by applying the current Fiscal Year Excess Max Day and Excess Max Hour Charges to the prior
Fiscal Year's Maximum Day Demand,Maximum Hour Demand and Average Daily Use in the
October through September bills,with adjustments in the October bill as necessary to recover the
Agreement for Water Service 15
Annual Payment based on the Customer's actual withdrawals (including Rate of Use Charges for
Maximum Hour and Maximum Day Demands) for the Fiscal Year just ended,during which the
water usage occurred.
7.6 Applicability of Stand-by Charge. Customer is subject to the Stand-by Charge if the
amount of the Stand-by Charge is the greater of the Annual Payment options listed in §7.1.
Customer is a Stand-by Customer if it receives water from the System for Emergency use only,
and the Director has approved that use. A Stand-by Customer's obligations under this
Agreement include the requirements of§ 3.1 for the location, approval and installation of meters.
By execution of this Agreement and approval of the Stand-by service meter,Fort Worth agrees
to provide the wholesale Emergency service through the approved meter to the Stand-by
Customer, subject to the terms of this Agreement; however,notwithstanding§2.1,delivery of
water to a Stand-by Customer is subordinate to Fort Worth's other delivery obligations. Further,
this Agreement does not grant or imply that the Standby Customer has reserved any water
service, capacity or delivery from the System,other than for Emergency use as provided in this
§ 7.6. Any change in the Stand-by Customer's use from Emergency to non-Emergency must be
approved in writing by the Director. Unless otherwise agreed in writing by Customer and
Director,the Stand-by Customer is not required to pay the Impact Fees required by Article 16
until it requests or takes deliveries of water from the System that exceed the approved
Emergency use.
ARTICLE 8. Effective Date
The effective date and time of this Agreement for all purposes is January 1,2011 at 12:01
a.m. Upon the Effective date,the wholesale water service agreement then in effect between Fort
Worth and the Customer is terminated and superseded by this Agreement.
ARTICLE 9. Term
This Agreement expires on September 30,2031. It may be renewed on terms mutually
agreeable to the Parties.
ARTICLE 10. Riphts-of-Way
Customer shall grant,without charge to Fort Worth, such easements and rights-of-way
along public highways or other property owned by Customer, as requested by Fort Worth, in
order to construct or maintain mains or facilities within the Customer's Service Area to provide
water to Customer and to other areas. Upon notice from Customer and at Fort Worth's expense
incurred as a System Cost, Fort Worth will move such water mains or facilities located in such
street rights-of-way,or other property owned by Customer when reasonably necessary to the
performance of essential governmental duties by Customer. Fort Worth shall grant,without
charge to Customer,such easements and rights-of-way along public highways or other property
owned by Fort Worth,as requested by Customer,in order to construct and maintain water mains
or facilities within Fort Worth to provide water to Customer. Upon notice from Fort Worth and
at Customer's expense, Customer will move such water mains or facilities when located in such
street rights-of-way or other property owned by Fort Worth when reasonably necessary to
Agreement for Water Service 16
performance of essential governmental duties by Fort Worth. All work done by or on behalf of
Fort Worth under this paragraph will be performed in accordance with specifications equal to
those applying to work of a similar nature performed within Fort Worth,and the applicable Party
will use its best efforts to restore the others property to as near original condition as feasible
unless otherwise mutually agreed in writing. Fort Worth and Customer agree to coordinate the
location of the mains and/or facilities in the other's easements and rights-of-way in order to
prevent further conflicts insofar as is reasonably practicable.
ARTICLE 11. TCEQ Public Water SupplApproval
The Customer System shall be approved by the TCEQ during the life of this Agreement.
If, at any time, the Customer System is not approved by the TCEQ,or if Customer does not have
an active cross-connection control program,there shall not be any direct physical connection
between the Fort Worth System and the Customer System unless an approved backflow
prevention device has been provided and installed and this installation has been approved by the
TCEQ. All expenses to provide and install backflow prevention device(s)will be borne by
Customer.
ARTICLE 12. Resale of Water
12.1 Outside Service Area. Customer agrees that it will not share facilities for water system
use with any other governmental or corporate entity outside of Customer's Service Area without
the express written consent of Fort Worth,which consent shall not be unreasonably withheld.
Fort Worth neither recognizes nor approves any existing agreements entered into by Customer
with other governmental or corporate entities outside of Customer's Service Area, unless
expressly approved in writing by the Director before the Effective Date.
12.2 Exceptions. Only those existing connections outside of the Customer's Service Area
shown in Exhibit E may continue. Customer agrees that it will not enter into any resale or
transportation agreement other than as a part of its normal offering and supply of water to
existing and future subscribers to its Customer System without the recommendation of the
Wholesale Customer Advisory Committee and express written consent of Fort Worth.
ARTICLE 13. Santa Sewer Facilities
The Customer agrees that it will require all of its customers,who are provided water from
the Fort Worth System,to have adequate sanitary sewage facilities meeting TCEQ requirements.
ARTICLE 14. Additional Wholesale Customers
Fort Worth will use its best efforts to provide an adequate water supply for all of its
customers. Prior to the approval of additional wholesale customers,Fort Worth will obtain in
writing reasonable assurances from the Tarrant Regional Water District that the projected ten
(10)year water demands of the then-existing wholesale customers being served and any
proposed additional customers can be fiilfilled,and will charge the new customer an appropriate
connection fee pursuant to § 3.3. Fort Worth will consult with the Wholesale Customer
Agreement for Water Service 17
Advisory Committee and the Tarrant Regional Water District before contracting with additional
new wholesale water customers.
ARTICLE 15. Wholesale Customer Advisory Committee
Customer's governing body shall annually appoint a representative to be a voting member of the
Wholesale Customer Advisory Committee,whose purpose shall be to consult with and advise
Fort Worth,through the Director,on matters pertaining to conservation, wholesale planning,
improvements,grants, wholesale rate studies, administration, budgets,and additional wholesale
customers, whether same be wholesale customers of Customer or Fort Worth. The Wholesale
Customer Advisory Committee may establish bylaws governing the election of officers,meeting
dates and other matters pertinent to its functioning.
ARTICLE 16. Impact Fees
16.1 Calculation and Payment of Impact Fees. On a quarterly basis,Customer agrees to pay to
Fort Worth an Impact Fee for each new or enlarged connection for water service made within
Customer's Service Area served by the Fort Worth System. The Impact Fee to the Customer for
each such connection shall be based upon the size of water meter and shall be equal to the Impact
Fee adopted by Fort Worth and collected for the same size water meter and type of connection
within the jurisdiction of Fort Worth. The calculation of the Impact Fee shall be consistent with
the Fort Worth ordinance adopting the Impact Fee in accordance with all applicable state and
federal regulations, including Chapter 395,and shall include only those costs allowed under
§ 395.012(or its amended or successor statute)that are associated with Capital Improvements
necessary to provide service to new development. Nothing within this Agreement shall be
deemed to prevent either Fort Worth or Customer from charging their own retail customers'
Impact Fees in excess of the Impact Fee authorized by this Agreement.
16.2 Multiple Surface Water Providers. If Customer receives surface water from more than
one water provider for use by potable water customers within its Service Area,then the
Customer's impact fees due to Fort Worth shall be proportionately reduced. The charge will be a
fractional part of the Impact Fee imposed within Fort Worth for the same size of meter based on
the ratio of the annual amounts of water purchased from Fort Worth to the total annual combined
amount of surface water purchased from Fort Worth and the Customer's other surface water
provider(s). For purposes of calculating this fractional part,this ratio will be the greater of the
most recent prior annual ratio or the most recent 3 year average ratio occurring after the first
Fiscal Year after the Effective Date.
16.3 Use of Impact Fees. As required by Chapter 395, Fort Worth agrees that all money
remitted to it pursuant to this Article 16 will be placed in an interest bearing account to pay only
for the cost of constructing Capital Improvements included in the Chapter 395 capital
improvements plan,and will not be used for operation and maintenance expenses. Once
expended,such funds and all interest earned thereon will be considered a "contribution" for rate
setting purposes only. To the extent that the cost of any Capital Improvement is recovered
through Impact Fees, it shall not be included in the System Cost.
Agreement for Water Service 18
16.4 Impact Fee Report. Customer shall provide to Fort Worth information that relates to the
making of new and/or enlarged connections within its jurisdiction as may be requested by the
Director, including building permits,with each quarterly payment required in this Article 16.
16.5 No Waiver. Neither Fort Worth nor Customer shall waive any Impact Fee due from new
or enlarged connections to its respective system within its jurisdiction. However,either Fort
Worth or Customer may pay such Impact Fee into the interest bearing Impact Fee account
required by§ 16.3.
16.6 CIFC. The Wholesale Customer Advisory Committee created pursuant to Article 15
shall select five(5)of its members to a subcommittee to be known as the Customer Impact Fee
Committee("CIFC"). As required by Texas Local Government Code §395.052,at least every
five(5) years, beginning June,2014, or sooner, Fort Worth will update the land use assumptions
and capital improvements plan upon which the Fort Worth Impact Fees are based, or make the
determination under Chapter 395 that no update is required. Fort Worth shall submit a copy of
the annual report of Fort Worth Impact Fee projects and expenditures to the Wholesale Customer
Advisory Committee Rate Subcommittee. In June 2014 and at least every five years thereafter,
the CIFC shall submit a list of five qualified engineers or planning consultants to the
Director. The Director shall select a consultant from such list to assist Fort Worth in developing
land use assumptions, identifying capital improvements,and formulating capital improvement
plans and Impact Fees. The consultant shall be responsible to Fort Worth and its citizen's
advisory committee,but shall also report to the CIFC.The cost of the consultant shall be deemed
a System Cost,except to the extent that such cost is recovered through Impact Fees. If the CIFC
fails to submit a list of five consultants to Fort Worth,Fort Worth shall select the consultant.
16.7 Capital Improvements Plan. Fort Worth agrees that only the Capital Improvements as
defined in§ 1.4 shall be included in the capital improvements plan for the purpose of
determining Impact Fees; provided however,Fort Worth may include other capital
improvements for the purpose of determining Impact Fees to its own retail customers. Fort
Worth shall not be required to include all of its capital improvements in its Chapter 395 capital
improvements plan. The CIFC shall be responsible for working with Fort Worth and its
consultants to determine the Capital Improvements to be included in the calculation of any
Impact Fees. The CIFC shall recommend to the Wholesale Customer Advisory Committee
which Capital Improvements should be included in the calculation of any Impact Fees. The
CIFC shall also meet with Fort Worth's citizen advisory committee as such citizen's advisory
committee reviews and considers land use assumptions, the capital improvements plan and
Impact Fees.
16.8 Dissemination of Documents. Prior to the adoption of any land use assumptions,capital
improvements plan, or Impact Fees assessed by Fort Worth, the CIFC shall be furnished a copy
of the proposed land use assumptions,capital improvement plans or Impact Fees at least thirty
(30)days prior to any scheduled hearing thereon. Any revised Impact Fee adopted pursuant to
such updated capital improvements plan shall not take effect for a period of at least ninety (90)
days after adoption by Fort Worth.
Agreement for Water Service 19
16.9 Audited Financial Statement. Upon request,Fort Worth shall make available to the
Wholesale Customer Advisory Committee the most recent audited financial statement of the Fort
Worth Water Department's records.
16.10 Current Impact Fees. Customer agrees to pay Impact Fees in the amounts determined
pursuant to this Article 16. On the Effective Date,those impact fees are the Impact Fees most
recently adopted by the Fort Worth City Council before the Effective Date. Thereafter the
Impact Fees are those in effect by Fort Worth ordinance at the time the new or enlarged
connection is made.
16.11 Changes to Chapter 395. Fort Worth and Customer agree that the methodology for the
calculation of Impact Fees required by this Agreement shall be consistent with the methodology
prescribed by Chapter 395. If that statutory methodology is amended or replaced by a new
statute, the Wholesale Customer Advisory Committee may engage legal counsel to work with
Fort Worth to propose amendments to this Agreement to conform it to such amendment or new
statute. The reasonable cost of such legal counsel shall be a System Cost.
ARTICLE 17. Breach Termination and Other Remedies
17.1 Termination by Mutual Consent. This Agreement may be terminated in whole or in part
by the mutual consent of Customer and Fort Worth. Fort Worth's decision on whether to
consent to termination remains within it's sole discretion; however, before consenting to
termination, Foil Worth shall consult with WCAC regarding the circumstances of the proposed
termination.
17.2 Termination for Material Breach. Notwithstanding anything in this Agreement to the
contrary, any material breach by either Party to perform any of its duties or obligations under this
Agreement, or to faithfiilly keep and perform any of the terms,conditions and provisions of this
Agreement, shall be cause for termination of this Agreement by the non-breaching Party in the
manner set forth in this§ 17.2. Upon such breach,the non-breaching Party may notify the
breaching Party of the non-breaching Party's intention to terminate this Agreement if the
breaching Party fails to cure such breach within ninety(90)days from the date of the notice. The
notice must include a reasonable description of the breach. The non-breaching Party shall notify
the breaching Party in writing upon acceptance of the cure of any breach. If by the ninetieth
(90th)day the breaching Party fails or refuses to cure such breach pursuant to the terms and
conditions of this Agreement,then the non-breaching Party shall have the right to terminate this
Agreement with six months additional notice to the breaching Party.
17.3 Termination for Repeated Breach. Upon a second (or any repeated) breach of a similar
nature by a Party and irrespective of any cure of such breach,the non-breaching Party may,after
six(6)months notice to the breaching Party,terminate this Agreement. That notice must be
provided within a reasonable time after the repeated breach that is the basis for the termination.
17.4 Material Breach. The following breach,default or failure to perform a duty or obligation
under this Agreement is a material breach:
Agreement for Water Service 20
a. Failure to comply with §§ 2.5 or 2.6 requirements regarding rationing,
conservation measures or restrictions;
b. Failure to pay any bill, charge, or fee as required by this Agreement,
including fees required under Article 16;
C. Making any connection to the Fort Worth System at any point except as
provided in§3.2;
d. Failure to correct any potentially hazardous connection in accordance with
the terms of Article 11,after notice delivered by certified mail;
e. Failure to provide Fort Worth ingress and egress for purposes of operation
and maintenance of any metering facility;
f. Failure to provide Fort Worth rights-of-way as required herein; or
g. Failure to provide Fort Worth an Impact Fee report as required in Article 16.
All other breaches are deemed to be non-material.
17.5 Notice and Cure. In the event of a material or non-material breach, default or failure to
perform a duty under this Agreement,the non-breaching Party may send a notice of such default
to the breaching Party. The notice must include a reasonable description of the breach. If the
breaching Party fails to cure the breach,default or failure within 60 days of that notice,then the
non-breaching Party may give the breaching Party a second notice of its failure to cure the
breach. Failure to cure the breach within 30 days after the second notice shall constitute a
repeated breach, and may result in termination of this Agreement as provided in§ 17.3 for
repeated breach. Fort Worth may, upon breach by a Customer, surcharge the Customer an
amount developed and calculated by Fort Worth intended to reimburse Fort Worth for any
damages each month, including 10% interest,until Customer cures that breach. Because failure
to perform obligations under this Agreement cannot be adequately compensated in money
damages alone,the Parties shall have available to them the equitable remedy of specific
performance in addition to any other legal or equitable remedy as may be provided by law.
17.6 Notice and Cure for Nonpayment of Impact Fees. If the breach is based on the non-
payment or underpayment of Impact Fees,then the Customer shall pay Fort Worth the amount of
the non-payment or under-payment within 60 days of the notice required by §§ 17.2 or 17.5,plus
interest at a rate of 10%of the amount owed,accruing from the time at which the payment was
due. An additional charge of$500.00 will be added if no Impact Fee report was filed.
17.7 Notice and Cure for Breach of Water Use Restrictions and Conservation. If Customer
breaches §§2.5 or 2.6,then the§ 17.2 notice provisions do not apply and the Director,in his
sole discretion,may, in writing, set such time in which the Customer shall cure the breach. If
Customer fails or refuses to cure the breach within the stated time, then Fort Worth shall have the
right to declare this Agreement terminated after six(6)months additional notice to Customer.
17.8 Failure to Provide Notice of Withdrawal Rate under§ 7.2. Failure to provide§ 7.2
notice,provided the Director did not waive notice requirements,will be considered a non-
material breach of the Agreement and, in addition to other remedies available under this
Agreement,shall result in an automatic surcharge in the amount specified in § 17.5 for such non-
material breaches of the Agreement,without further notice requirements.
Agreement for Water Service 21
17.9 Effect of Termination. Upon termination of this Agreement under this Article 17, all
rights,powers,and privileges of Customer and Fort Worth under this Agreement shall cease and
terminate,and neither Party shall make any claim of any kind whatsoever against the other Party,
its agents or representatives, by reason of termination or any act incident to termination, if the
terminating Party acted reasonably and the termination was not unreasonable, or arbitrary and
capricious. If this Agreement is not renewed before it expires, and the Parties are negotiating in
good faith regarding the provisions of a new agreement,then the Parties may extend the date for
termination, in writing that refers to this§ 17.9 and is signed by both Parties. If this Agreement
is not renewed, or if the Agreement is terminated by one of the Parties pursuant to this Article
17,then, as authorized by Texas Water Code § 11.036, this Agreement requires the Customer to
develop alternative or replacement supplies before the expiration or termination of this
Agreement; this requirement may be enforced by the equitable remedy of specific performance,
sought by court order, in addition to any other legal or equitable remedy as may be provided by
law. No continuation of the service obligation exists or will be implied after expiration or
termination.
17.10 No Waiver by Fort Worth. Any failure by Fort Worth to terminate this Agreement,or the
acceptance by Fort Worth of any benefits under this Agreement, for any period of time after a
material breach,default or failure by Customer shall not be determined to be a waiver by Fort
Worth of any rights to terminate this Agreement for any subsequent material breach, default or
failure.
17.11 No Waiver by Customer. Any failure by Customer to terminate this Agreement,or the
acceptance by Customer of any benefits under this Agreement, for any period of time after a
material breach, default or failure by Fort Worth shill not be determined to be a waiver by
Customer of any rights to terminate this Agreement for any subsequent material breach,default
or failure.
ARTICLE 18. Ownership and Liability
18.1 No Joint Venture. No provision of this Agreement shall be construed to create any type
of joint or equity ownership of any property, any partnership or joint venture,nor shall same
create any other rights or liabilities and Customer payments(whether past,present, or future)
shall not be construed as granting Customer partial ownership of,pre-paid capacity in,or equity
in the Fort Worth System.
18.2 Liabilities. Liabilities for damages arising from the proper treatment,transportation and
delivery for all water provided hereunder shall remain with Fort Worth to the point of delivery
and, upon passing through the meter, liability for such damages shall pass to the Customer, save
and except that Fort Worth's sole responsibility is to provide to Customer water of a quality
which meets state and federal drinking water standards. Each Party agrees to save, release and
hold harmless the other Party from all claims, demands, and causes of action which may be
asserted by anyone on account of the quality,transportation and delivery while water is in the
control of such Party. This covenant is not made for the benefit of any third party. Fort Worth
takes the responsibility as between the Parties for the proper treatment,quality,transportation,
and delivery of all such water provided by it to the point of delivery.
Agreement for Water Service 22
18.3 Contractors. Agreements made and entered into by either Customer or Fort Worth for the
construction,reconstruction or repair of any Delivery Facility shall include the requirement that
the independent contractor(s)must provide adequate insurance protecting both the Customer and
Fort Worth as co-insured. Such Agreement must also provide that the independent contractor(s)
covenant to indemnify,hold harmless and defend both the Customer and Fort Worth against any
and all suits or claims for damages of any nature arising out of the performance of such
Agreement.
ARTICLE 19. Force Majeure
19.1 Notice and Suspension. If by any reason of force majeure either Party shall be rendered
unable,wholly or in part, to carry out its obligations under this Agreement,other than the
obligation of the Customer to make payments required under the terms hereof, then if such
Parties shall give notice and full particulars of such force majeure in writing to the other Party
within a reasonable time after the occurrence of the event or cause relied on,the obligation of the
Party giving such notice, so far as it is affected by such force majeure, shall be suspended during
the continuance of the inability then claimed,but for no longer period,and such Party shall
endeavor to remove or overcome such inability with all reasonable dispatch.
19.2 Definition. The term "force majeure," as employed herein, shall mean acts of God,
strikes, lockouts or other industrial disturbances,acts of public enemy, orders of any kind of the
government of the United States or the State of Texas,or any civil or military authority,
insurrection,riots,epidemics,landslides, lightning,earthquake, fires, hurricanes,storms,floods,
washouts,droughts,arrests,restraints of government and people,civil disturbances, explosions,
breakage or accidents to machinery,pipelines or canals,partial or entire failure of water supply,
and inability on the part of Fort Worth to deliver water hereunder or the Customer to receive
water hereunder on account of any other cause not reasonably in the control of the Party claiming
such inability.
ARTICLE 20. Notices
20.1 Required Notice. Except in the case of an Emergency, ariy notice or other
communication that is required,given or provided for under this Agreement shall be in writing,
and addressed as follows:
To Fort Worth: Water Director
City of Fort Worth
1000 Throckmorton Street
Fort Worth,TX 76102
To Customer: Mayor
City of! _
Address
Texas 7_
Agreement for Water Service 23
With an additional copy to be given to a Customer representative, if designated in writing by
Customer.
20.2 Delivery and Receipt. Notice shall be either(a)delivered personally,(b)sent by United
States certified mail,postage prepaid,return receipt requested, (c)placed in the custody of a
nationally recognized overnight carrier for next day delivery,or(d)sent via telecopy or facsimile
(fax)transmission. Notice shall be deemed given when received if delivered personally or sent
via telecopy or facsimile transmission with written confirmation of receipt; forty-eight(48)hours
after deposit if sent by mail; and twenty-four(24) hours after deposit if sent by nationally
recognized overnight carrier for next day delivery.
20.3 Change of Address Notices. Each Party shall provide notice in writing, as provided in
§ 20.1 of any change in its address.
ARTICLE 21. Inspection and Audit
Complete records and accounts required to be maintained by each Party shall be kept for
a period of five(5)years. Each Party shall at all times,upon notice,have the right at reasonable
times to examine and inspect said records and accounts during normal business hours; and
further, if required by any law,rule or regulation,make said records and accounts available to
federal and/or state auditors. The responding Party shall make the records available promptly
upon request.
ARTICLE 22. Miscellaneous
22.1 Favored Nations. Fort Worth and Customer agree that if Fort Worth should enter into
any future Agreement for supplying treated water to any municipality under more favorable
terms or conditions than set forth herein,this Agreement shall be amended to provide the same
terms and conditions with respect to the sale of treated water to Customer.
22.2 Suspension of Rate of Use Charges. During an Emergency it may be necessary that water
be withdrawn from the Fort Worth System at a rate of usage in excess of the Customer's
contractually established Maximum Daily Demand and Maximum Hour Demand. It is agreed
that extra Rate of Use Charges that would normally be applicable shall not apply for such bona
fide emergency withdrawals provided that Fort Worth is notified in writing within forty-eight
(48) hours of the occurrence of the Emergency. In any event,the normally applicable Rate of
Use Charges the Customer would have incurred had it not been an Emergency,plus the Volume
Charges for all water delivered,shall be due and payable as described elsewhere in this
Agreement.
22.3 Water to Adjacent Areas. At the request of the Director,Customer agrees to furnish
water to areas and premises situated adjacent to the boundary of Customer and within the
boundaries of Fort Worth, subject to the Texas Water Code and TCEQ regulations regarding
service areas. The metered quantity of water used in this area each month by Fort Worth shall be
the total of all individual customer meter readings. At the option of Customer or Fort Worth, a
master meter may be installed where practicable at the expense of Fort Worth to meter all water
used by Fort Worth under the terms of this§ 22.3. The metered quantity of water furnished by
Agreement for Water Service 24
Customer to Fort Worth shall be deducted from the total quantity of water withdrawn from the
Fort Worth System by Customer before the charge for water service to Customer is computed in
accordance with the payment computations set forth and based on the Volume Charge,the
quantity of water so withdrawn from the Fort Worth System and,if the meter serving those
customers has been equipped to measure it, Maximum Day Demand and Maximum Hour
Demand.
22.4 Subject to Laws and Permits. This Agreement is subject to all applicable federal and
state laws and any applicable permits,amendments,orders,or regulations of any state or federal
governmental authority having or asserting jurisdiction,but nothing contained herein shall be
construed as a waiver of any right to question or contest any such law,order,rule or regulation in
any forum having jurisdiction. Customer agrees to abide by any changes in this Agreement
made necessary by any new,amended,or revised state or federal regulation;however the Parties
may not enact rules or laws that conflict with this Agreement.
22.5 Entry on Customer's Premises. Upon prior notice by the Director,Customer shall allow
any duly authorized employee of Fort Worth who presents proper credentials to access any
premises located within Customer's Service Area or served by Customer as may be necessary for
the purpose of inspections and observation,measurements,sampling and testing and/or auditing,
in accordance with the provisions of this Agreement. Customer may elect to accompany the Fort
Worth representative. To the extent permitted by law, Fort Worth agrees to be responsible to
Customer for any damage or injury to person or property caused by the negligence of such duly
authorized employee while such employee is in the course and scope of their employment.
22.6 Alternative Dispute Resolution.
22.6.1 The parties shall endeavor, but only to the extent permitted by applicable law and
at no additional cost to Customer, to settle all disputes arising out of or relating to
this Agreement by amicable negotiations.
22.6.2 Any and all disputes arising out of or relating to this Agreement that cannot be
resolved informally will be submitted to mediation. The place of mediation shall
be in Tarrant County,Texas. A mediator shall be jointly agreed to by both
Parties, and the mediator selected shall have expertise in the sale and supply of
treated water. Either Party may apply for injunctive relief until the mediation
decision is rendered or the controversy is otherwise resolved. Either party may,
without waiving any remedy under this Agreement, seek from any court having
jurisdiction any interim or provisional relief that is necessary to protect the rights
or property of that Party,pending the mediator's determination of the merits of
the controversy. Each Party shall initially bear its own costs and expenses;
however,unless otherwise agreed in mediation,Fort Worth's costs in mediation,
including expenses,reasonable attorneys' fees and other costs, shall be a System
Cost. Nothing occurring during mediation shall be considered evidence in court.
22.6.3 If mediation is not successful,either Party may commence litigation to resolve the
dispute. Fort Worth's litigation costs shall be a System Cost.
Agreement for Water Service 25
22.7 Information. If requested by the Director, Customer shall provide quarterly the following
data or information:
22.7.1 Actual number of customer accounts consuming directly or indirectly from the
Customer System within Customer's Service Area;
22.7.2 Classification of domestic and nondomestic accounts within its Customer's
Service Area by number and percentage of accounts consuming directly or
indirectly from Customer System within its Customer's Service Area;
22.7.3 Customer water usage from all sources other than the Fort Worth System,
including ground water, other surface water,and water supply agreements with
other entities; and
22.7.4 Additional data which may assist Fort Worth and/or Customer in developing
methodology for cost of service studies,planning studies for analyzing federal
grants,and Impact Fees;provided,however,that neither Party shall request data
that will require either Party to incur unreasonable expenses in providing such
data.
22.8 Assignment. Customer may not assign this Agreement without the prior written consent
of Fort Worth. Fort Worth may not assign this Agreement without the prior written consent of
Customer,except that if Fort Worth's water utility is designated as a regional water agency by a
duly authorized regulatory body,or if Fort Worth elects to contract with or assign this
Agreement to a regional water authority or utility to provide all or part of the services covered by
this Agreement,the Customer hereby agrees and grants Fort Worth the right to assign this
Agreement under the following conditions. The regional water authority or utility shall assume
and receive the same obligations,responsibilities and benefits as Fort Worth, and Fort Worth or
the regional authority or utility will notify the Customer of such assignment at least ninety(90)
days prior to its effective date.
22.9 No Waiver. No waiver by either Party of any term or condition of this Agreement,or
failure to give notice of any breach, shall be deemed or construed to be a waiver of any other
term or condition or subsequent waiver of the same term or condition.
22.10 VENUE. THE PARTIES AGREE THAT THIS AGREEMENT IS PERFORMABLE IN TARRANT
COUNTY,TEXAS AND THAT THE COURTS OF TARRANT COUNTY ARE A PROPER FORUM FOR THE
DETERMINATION OF ANY DISPUTE ARISING UNDER THIS AGREEMENT.
22.11 Construction. As used in this Agreement,the term "including"means "including without
limitation,"the words "shall"and"will"are mandatory and the word"may"is permissive,and
the term "days" means calendar days,not business days. Wherever required by the context,the
singular shall include the plural, and the plural shall include the singular.
22.12 Severability. If any term or provision in this Agreement is held to be invalid or
unenforceable by any legislative act or court of competent jurisdiction,and the extent of such
invalidity or unenforceability does not cause substantial deviation from the underlying intent of
the parties as expressed in this Agreement,then such invalid or unenforceable provision shall be
Agreement for Water Service 26
deemed severed from this Agreement without invalidating the remainder of this Agreement,and
a new provision shall be deemed substituted in lieu of the provision severed,which new
provision shall,to the extent possible,accomplish the intent of the parties as evidenced by the
provision severed, and without affecting any other term or provision in this Agreement.
22.13 Use of Return Water. Customer agrees that Fort Worth has the right to own and to use or
sell any Return Water. Customer will not seek or receive any compensation,credit, or offset
from Fort Worth for making the Return Water available to Fort Worth through discharges into
Fort Worth's wastewater collection and treatment system(s),and agrees that it will not provide
water service under any ordinance or agreement that conflicts with Fort Worth's rights under this
§ 22.13.
22.14 System Regulatory, Actions. Customer agrees,upon the request of Fort Worth,to give
reasonable consideration to supporting Fort Worth,and shall not oppose Fort Worth, on any
permit applications or governmental approvals related to the Fort Worth System.
22.15 Additional Contract Terms. Additional contract terms that apply to the Customer, but not
Fort Worth's other wholesale customers,are contained in Exhibit F "Additional Terms."
22.16 Exhibits. All exhibits attached to this Agreement are incorporated into this Agreement by
reference, for all intents and purposes of this Agreement, as follows:
Exhibit A Customer Service Area and mutually agreed point(s)of
delivery on the Effective Date.
Exhibit B Stand-by Charge(Example Calculation)
Exhibit C Example of the Annual Bill Calculation
Exhibit D Calculation of PILOT and Cost of Service Revenue
Requirement to Recover the Cost of Pilot
Exhibit E Map of Existing Connections Outside Customer's Service
Area[if any].
Exhibit F Additional Terms [if any]
[THIS SPACE INTENTIONALLY BLANK]
Agreement for Water Service 27
e
IN TESTIMONY WHEREOF,after proper action by the respective governing bodies of the Parties,
this Agreement has been executed in quadruplicate copies, each of which is considered to be an
original.
�F F01?r�
Arr T - ` ITY OF F T'WORTH
ity Se eta ty o o h ss:istant City Manager
ity of Fort Worth
APPROVED AS TO FORM AND LE
City Attorne , Worth
Date:
APPROVAL RECOMMENDED:
Director
City of Fort Worth Water Department
vl ILLO�
O� .d
ATT 'ST: � CU ME y
Secretary
APPROVED AS TO FORM AND LEGALITY: TEXAS
Attorney
Date:
APPROVAL RECOMMENDED:
Print Name:
Title:
OFFICIAL RECORD
CI�lf SECRETARY
Agreement for Water Service 28 FT WORTH, TX
CONTRACT COMPLIANCE MANAGER:
By signing I acknowledge that I am the person
responsible for the monitoring and administration
of this contract, including ensuring all performance
and reporting requirements.
By:By: G //
Name: Chris Harder
Title: Water Director
EXHIBIT A
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EXHIBIT B
SECTION 7.1.3
Stand-by Charge Example Calculation
1)Stand-by Charge Calculation Inputs:
• 10 inch meter=210 EMs
• 1 EM=20 Gal per Minute X 60 Minutes per Hour X 24 Hours per
Day or 28,800 Gallons per Day
• Does not include Cost of Raw Water
3-Year Average Treatment,Pumping and Transmission Charge($/1,000 Gals)Calculation:
FY05 FY06 FY07
$0.5398 $0.6829 $0.6291
Three Year Average $0.6173
2)Stand-by Charge Calculation:
Monthly Standby Charge = 28,800 Gallons per Day X 210 EM X $0.6173 per
1,000 Gallons or$3,733 per Month.
Annual Standby Charge= 12 Months X$3,733 per Month or$44,801.
STANDBY CHARGE
ASSUMPTION AND DEFINITIONS:
The Minimum Standby Charge is based on the maximum amount of water a connection
could draw in a 24-hour period.
The calculation assumes that any usage would be temporary and of an emergency basis.
The calculation is also based on the number and size of each connection.
The Transmission Charge is the 3-year average for that charge as calculated in the most
recent independent cost-of-service study.
Reserved Capacity is defined as the maximum amount of water a connection could draw
in a 24-hour period.
"Equivalent Meters"or"EM"is a means of relating a large-use customer with a base
(residential)use customer. Fort Worth uses 5/8 x 3/4 inch meter capacity as an EM. The
ratio of larger meter's capacity to the 5/8 x 3/4 inch meter capacity is the number of
EMs for each meter. The ratios can be found in the AWWA Standard C700-02.
I EM delivers 20 Gallons per Minute.
1 EM delivers 28,800 Gallons per Day(20 GPM * 60 Minutes/Hour * 24 Hours/Day).
Maximum Reserved Emergency Usage equals EM * 28,800
EXHIBIT C
SECTION 7.4 Total Annual, Monthly and Rate of Use Example Calculations
The calculations shown below assume a customer drawing water from one metering station.
The volumes, peaks,rates and charges in this Exhibit C are for demonstration
purposes only and are not based on adopted rates or on actual usage for the Customer.
The annual Volume Rate is charged as a rate per 1,000 gallons. The Annual Payment also
includes the monthly service charge.
Volume Rate of
Month Gallons Rate Volume Service Use Total
$/1,000 Charges Charges Charges*
Gallons
Oct 1,000,000 $1.43 $1,430 $25 $2,209 $3,664
Nov 11000,000 $1.43 $1,430 $25 $2,209 $3,664
Dec 1,000,000 $1.43 $1,430 $25 $2,209 $3,664
Jan 1,000,000 $1.43 $1,430 $25 $2,209 $3,664
Feb 1,000,000 $1.43 $1,430 $25 $2,209 $3,664
Mar 2,000,000 $1.43 $2,860 $25 $2,209 $5,094
Apr 3,000,000 $1.43 $4,290 $25 $2,209 $6,524
May 3,000,000 $1.43 $4,290 $25 $2,209 $6,524
Jun 3,000,000 $1.43 $4,290 $25 $2,209 $6,524
Jul 3,000,000 $1.43 $4,290 $25 $2,209 $6,524
Aug 4,000,000 $1.43 $5,720 $25 $2,209 $7,954
23,000,000 $32,890 $275 $24,299 $57,464
Sep 3,000,000 $1.43 $4,290 $25 $7,021 $11,336
26,000,000 $37,180 $300 $31,320 $68,800
* Example calculation for Rate of Use Charges is on Page 2 of 4.
1 of 4
EXHIBIT C
SECTION 7.4 Total Annual Payment Example Calculation(con't)
Example Calculation for monthly Rate of Use Charges
Gallons
Average Daily Use for the prior year 60,000
Maximum Day Demand for the prior year 175,000
Maximum Hour Demand for the prior year 480,000
(converted to gallons per day)
Maximum Day Demand above Average Daily Use(Max Day-Avg Day) 115,000
Maximum Hour Demand above Maximum Day Demand(Max Hour-
Max Day) 305,000
Monthly Excess Maximum Day and Excess Maximum Hour Payment Calculation:
Excess Max
MGD Charges/MGD* Total
Max Day Above Avg Day 0.115 $135,000 $15,525
Max Hour Above Max Day 0.305 $36,000 $10,980
$26,505
Monthly Rate of Use Charge Payment(Total Divided by 12) $2,209
*The Excess Max Charges/MGD are the Excess Max Day Charge and the Excess Max Hour
Charge,each in$/MGD,taken from the current Fiscal Year annual cost-of-service rate
study
As shown,the monthly Rate of Use Charges are calculated using the prior year's Average
Daily Use,Maximum Day Demand and Maximum Hour Demand,times the current Fiscal
Year Excess Max Charges/MGD. The final Annual Payment required by Article 7 is
calculated using the current Fiscal Year Average Daily Use,and the Maximum Day
Demand and Maximum Hour Demand for the current Fiscal Year or for the average of the
most recent three(3)Fiscal Years,whichever is greater(as provided in§7.1 and shown in
the following Examples 1 and 2),times the current Fiscal Year Excess Max Charges/MGD.
2of4
EXHIBIT C
SECTION 7.4 Total Annual Payment Example Calculation (con't)
Example 1 —Current year exceeds the average of the most recent three Fiscal Years
Gallons
Average Daily Use for the year 71,233
Maximum Day Demand for the current year 215,000
Maximum Hour Demand for the current year 545,000
(converted to gallons per day)
Maximum Day Demand above Average Daily Use 143,767
Maximum Hour Demand above Maximum Day
Demand 330,000
Fiscal Year Average of Most Recent Three Years
Current FY FY
Average FY 2008 2007
Max Day Above Avg Day
(MG) 129,178 143,767 115,000 128,766
Max Hour Above Max Day
(MG) 318,333 330,000 305,000 320,000
Annual Payment Calculation
Volume Rate
Gallons $/1,000 Gallons Total
26,000,000 x $1.43 — $37,180
Service Charge Months
$25 x 12 = $300
Max Day Above Excess Max
Avg Day(MGD) Charges/MGD
0.144 x $135,000 — $19,440
Max Hour
Above Max Day Excess Max
(MGD) Charges/MGD
0.330 x $36,000 — $11,880
Total Annual Payment Due $68,800
Previous Billings for October through August Usage $57,464
October Billing for September Usage $11,336
3 of 4
EXHIBIT C
SECTION 7.4 Total Annual Payment Example Calculation(con't)
Example 2—The average of the most recent three Fiscal Years exceeds Current year.
Gallons
Average Daily Use for the year 71,233
Maximum Day Demand for the current year 190,000
Maximum Hour Demand for the current year
(converted to gallons per day) 500,000
Maximum Day Demand above Average Daily Use 118,767
Maximum Hour Demand above Maximum Day Demand 310,000
Fiscal Year Average of Most Recent Three Years
CURRENT FY FY
Average FY 2008 2007
Max Day Above Avg Day
(MG) 120,844 118,767 115,000 128,766
Max Hour Above Max Day
(MG) 311,667 310,000 305,000 320,000
Annual Payment Calculation
Volume Rate
Gallons $/1,000 Gallons Total
26,000,000 x $1.43 — $37,180
Service Charge Months
$25 x 12 — $300
Max Day
Above Avg Day Excess Max
(MGD) Charges/MGD
0.121 x $135,000 = $16,335
Max Hour
Above Max Excess Max
Day(MGD) Charges/MGD
0.312 x $36,000 = $11,232
Total Annual Payment Due $65,047
Previous Billings for October through August Usage $57,464
October Billing for September Usage $7,583
4 of 4
EXHIBIT D
Calculation of PILOT and
Cost of Service Revenue Requirement to Recover the Utility's Cost of PILOT
DESCRIPTION
A payment in lieu of taxes ("PILOT") assessed against the Water Operating Fund is an annual
assessment to offset the ad valorem taxes lost, due to the non-profit status of the Water System.
The Water Operating Fund pays the amount of the assessment into the General Fund.
PILOT assessed against the Water Operating Fund is calculated by applying the most recently
adopted property tax rate per $100 assessed value to the net book value of the applicable assets.
These assets are limited to the assets classified as Plant and Property (in the specific NARUC
accounts listed on the next page), and do not include Transmission Mains, Connections,
Collection Structures and Meters.
The PILOT is a component of the Water Operating Fund Cost of Service. The Cost of Service
Revenue Requirement that is necessary to recover PILOT is allocated between Retail and
Wholesale customer classes according to the volume usage in the most recently completed fiscal
year,prorated between the two customer classes.
The Wholesale Cost of Service component of PILOT is then allocated amongst the wholesale
customers according to each wholesale customer's percentage of the wholesale customer class's
volume usage in the most in the most recently completed fiscal year.
EXAMPLE
The following example further explains the calculation of the City's PILOT, the related revenue
requirement, and its recovery through rates. The methodology applied in this example will
remain in effect for the life of the Agreement; however, the specific dollar figures, volumes and
other numerical values used in the following example will be updated from the sources identified
below for each fiscal year that the contract is in effect.
NET 1300K VALUE CALCULATION FOR PILOT ASSESSMENT
PILOT assessed against the Water Operating Fund is calculated by applying the most recently
adopted property tax rate per$100 assessed value to the net book value of the applicable assets,
calculated as:
Historical Cost of Water System Assets at most recent audited year end;
LESS Historical Cost of Non-Plant and Non-Property Water System assets defined by
NARUC (National Association of Regulatory Utility Commissioners)codes:
316 Raw Water Conduit and Valves
343 Transmission Mains
345 Service Connections
346 Meters
347 Meter Installation
348 Hydrant
372 Structures& Improvements/Collection
(If any of these account codes are amended,the equivalent code will be substituted.)
LESS Accumulated Depreciation on Plant and Property at most recent audited year end;
PLUS Construction Work in Progress on Plant and Property at most recent audited year end;
Example calculation:
NET BOOK VALUE CALCULATION
LESS
Historical Cost
Total of Non-Plant LESS PLUS
Historical and Non- Life-to-Date Construction EQUALS NET
Cost of Water Property Accumulated Work In BOOK
System Assets Depreciation Progress VALUE
$982,385,273 ($655,261,618) ($105,793,316) $26,990,180 $248,320,519
(Dollar figures from most recent Cost of Service Study.)
NET BOOK VALUE ALLOCATION BETWEEN RETAIL AND WHOLESALE
The Cost of Service Revenue Requirement necessary to recover PILOT is allocated between
Retail and Wholesale customer classes according to the volume usage in the most recently
completed fiscal year,prorated between the two customer classes.
Example Retail/Wholesale allocation calculation:
Volume(MG)
Total Annual Volume(MG) 66,917
Wholesale Volume(MG) 21,639
Wholesale Allocation 32.34%
Retail Allocation 67.66%
(Dollar figures and percentages from most recent Cost of Service Study.)
Total Net Book Value Base $248,320,519
Wholesale Net Book Value Base $80,299,602
CALCULATION OF WHOLESALE REVENUE REQUIREMENT
(PILOT COST OF SERVICE COMPONENT)
FY 2010 Tax Rate per$100 Value $0.8550
Total PILOT Cost of Service $2,123,140
Wholesale Allocation 32.34%
Wholesale PILOT Cost of Service $686,562
Exhibit "E"
Not Applicable
EXHIBIT F
ADDITIONAL TERMS
Section 22.15 of this Agreement allows for the Parties to mutually agree upon additional contract terms
and conditions which may deviate from the standard language in the body of the Agreement itself. If
there is a conflict between the body of this Agreement and these Additional Terms,these Additional
Terms shall prevail.
1. Agreement for Funding, Construction and Maintenance of Water Supply Facilities:The City of
Willow Park and The City of Hudson Oaks have entered into an Agreement for Funding,
Construction and Maintenance of Water Supply Facilities as shown in Exhibit G for which this
Agreement for the provision of treated water is premised. If either party terminates the
Agreement shown as Exhibit G, Fort Worth shall have the right to terminate this Agreement.
2. Wholesale Billing Meter: The size of the wholesale billing meter shall be as determined by the
Customer as part of the design of the billing meter station. The largest mechanical (turbine)
meter is a 10"with sustained maximum rating of 4,000 gpm. Should the Customer elect to
install a smaller meter initially,and then upsize the meter in the future, Customer shall be
responsible for those future costs to increase meter size, piping,valves,and fittings through the
meter vault. As part of the design of the meter station, Customer shall incorporate provisions to
test the billing meter,to include a downstream isolation valve and fire hydrant assembly.
3. Operation and Maintenance of Wholesale Billing Meter: The wholesale meter used to bill the
combined usage of Hudson Oaks and Willow Park will be considered part of the Fort Worth
water system, along with the SCADA equipment, antenna and tower used to transmit meter
flow, pressure upstream of the rate of flow controller, rate of flow controller set point,tank
level,and chlorine residual information to Fort Worth's SCADA system. The sub-meter
necessary to meter Hudson Oaks water usage will not be considered a part of the Fort Worth
System. Customer shall be responsible for costs associated with electrical power to the
wholesale billing meter facility,to include power for the Fort Worth SCADA equipment.
4. Rate of Flow Controller: A rate of flow controller shall be installed on the Customer side of the
wholesale meter and shall be monitored so that the rate of flow does not exceed 6.73 MGD.
5. System Buy-In: A system buy in charge will be assessed prior to making connection to the Fort
Worth water system in accordance with the following Table
Customer City Asset Assessment Associated Cost
Hudson Oaks WS IV 30" Water Main Capacity Charge (6.73 MGD x $3,283,271
and Willow Park $487,856 per MGD)
WS V 36"Water Main Capacity Charge (6.73 MGD x $386,733
$57,464 per MGD)
TOTAL BUY IN COST $3,670,004
1
6. Impact Fees: Impact fees will be assessed by the Customer, beginning on the date of connection
to the Fort Worth water system, in accordance with Article 16.
7. Approach Water Transmission Main Ownership and Maintenance—The Customer is responsible
for costs associated with the design,easement acquisition, construction and inspection of the
approach main from the wholesale billing meter up to the connection with the Fort Worth 36"
water main parallel to Farmer Road. The portion of this line from the wholesale billing meter to
the Fort Worth isolation valve at the ET1 line will be owned and maintained by the Customer.
Pipe line easements for this portion shall be dedicated to the Customer. The portion of the line
from the Fort Worth isolation valve at the ETJ line east to the connection point with the existing
36" line along Farmer Road will be owned and maintained by Fort Worth,with title passing to
Fort Worth upon acceptance of the construction project by the Customer. Pipeline easements
for this portion shall be dedicated to the City of Fort Worth, using Fort Worth standard
easement documents.
8. Pipeline Construction Warranty Claims—Any defects identified by Fort Worth for the portion of
pipeline to be transferred to Fort Worth by the Customer shall be rectified as part of a warranty
claim. Warranty claims by Fort Worth to the Customer shall be in writing and will be limited to
two years from the date of final acceptance. It will be Customer's responsibility to follow up
with the Contractor,or their bonding company,to ensure the defects identified as part of the
warranty claim are resolved.
9. Approach Main Design Review and Inspection: The Customer shall be required to submit plans
and specifications to Fort Worth,through the IPRC process,for review and approval of the
approach main. The Customer shall pay for all costs associated with this review,to include an
inspection fee for the portion of line to be owned and maintained by Fort Worth.
10. Wholesale Billing Meter Station Design Review and Inspection: The Customer shall be required
to submit plans and specifications for the wholesale billing meter station for approval. It is
anticipated this review will not go through the IPRC process, and that there will not be any
review or inspection fees associated with this design review or inspection from Fort Worth. I&E
staff from the Plant Operations Division will be responsible for review of shop drawings and
inspection of equipment associated with flow metering and instrumentation providing data
through the Fort Worth SCADA system. Review and inspection comments by Fort Worth staff
will be transmitted to the Customer's project manager for action.
11. Approach Main Oversizing: Should Fort Worth elect to oversize the portion of the approach
main to be owned and maintained by Fort Worth, Fort Worth shall notify the Customer in
writing of this intent, and Customer shall bid the construction project with a bid alternative that
includes the oversized pipe,valves, and fittings. Fort Worth will cost participate in the oversized
approach main for the difference in the amount of the base bid and the bid alternate. Should
Fort Worth elect to oversize the pipeline, Fort Worth City Council approval will be required to
appropriate the funding. Payment for the oversizing costs shall be made to Hudson Oaks upon
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Fort Worth City Council approval of funding and within 30 days from receiving an invoice from
Hudson Oaks.
12. Water Main Leak Detection and Repairs: The approach main located between the wholesale
billing meter and the Fort Worth isolation valve located at the ETJ line will be owned and
maintained by the Customers, in accordance with the Agreement for Funding, Construction and
Maintenance of Water Supply Facilities shown in Exhibit G . Fort Worth will have the option of
performing leak investigations on this portion of the approach main. Fort Worth shall notify
Customer prior to performing a leak investigation. Should repairs be needed to eliminate the
leaks that are identified as part of the investigation, Fort Worth will notify the Customer to
determine whether those repairs are to be made by the Customer, or whether the repairs are to
be made by Fort Worth and billed to the Customer.
13. Leak Detection and Repairs Billing and Payment: Fort Worth will bill Hudson Oaks for leak
investigation activities only if leaks are identified on the portion of the approach main owned by
the Customer. For leak investigation and pipeline repairs, Fort Worth shall be eligible to bill
Customer for materials, equipment, and staff time. Bills for leak detection or repair activities
shall be billed to Hudson Oaks. Hudson Oaks agrees to bill, and Willow Park agrees to pay,their
portion of the costs for leak assessments and repairs per the Agreement for Funding,
Construction and Maintenance of Water Supply Facilities shown in Exhibit G.
14. Disinfection Notification—Fort Worth utilizes chloramines for disinfection of potable water. In
accordance with TCEQ requirements,the Customer shall notify its customers at least 14 days
prior to transitioning to chloramines. Notification language is found in Appendix H of Chapter
290.47 of the TCEQ Rules and Regulations for Public Water Systems.
15. Water Supply Billing and Payment: Fort Worth will bill Hudson Oaks for the for the amount of
water utilized by both Willow Park and Hudson Oaks through the wholesale billing meter.
Hudson Oaks shall pay to Fort Worth for the cost of the combined usage of Willow Park and
Hudson Oaks, in accordance with payment terms included in Article 5 and Article 7. Hudson
Oaks shall bill Willow Park,and Willow Park shall pay to Hudson Oaks,for Willow Park's water
consumption in accordance with the terms of the Agreement for Funding, Construction and
Maintenance of Water Supply Facilities shown in Exhibit G. If Hudson Oaks fails to pay Fort
Worth in accordance with the terms of this Agreement, Fort Worth shall notify Willow Park of
the breach and allow Willow Park to cure the breach.
16. Fort Worth shall not be responsible to enforce the terms and conditions included in the
Agreement for Funding, Construction and Maintenance of Water Supply Facilities shown in
Exhibit G.
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Exhibit "G"
Agreement For Funding Construction
And Maintenance of Water Supply Facilities
AGREEMENT FOR FUNDING, CONSTRUCTION
AND MAINTENANCE OF WATER SUPPLY FACILITIES
BETWEEN
THE CITY OF WILLOW PARK, TEXAS
AND
THE CITY OF HUDSON OAKS, TEXAS
DATED AS OF MARCH 28, 2019
INTERLOCAL AGREEMENT FOR FUNDING, CONSTRUCTION AND
MAINTENANCE OF WATER SUPPLY FACILITIES
STATE OF TEXAS' §
COUNTY OF PARKER §
This Interlocal Agreement for Funding, Construction and Maintenance of Water Supply
Facilities (the "Agreement") is made and entered into on this 281 day of March, 2019, by and
between the City of Hudson Oaks, Texas ("Hudson Oaks"), and the City of Willow Park, Texas
("Willow Park"),sometimes jointly referred to as the"Parties".
RECITALS
WHEREAS, Hudson Oaks and Willow Park are political subdivisions of the State of
Texas and are authorized to enter into Agreements with each other relative to governmental
functions and services by the Interlocal Cooperation Act,Texas Government Code, Chapter 791;
and
WHEREAS, Hudson Oaks and Willow Park each own, operate and maintain a water
distribution system and furnish water service to customers within their respective city limits and
services areas;and
WHEREAS, Hudson Oaks and Willow Park each have entered"into a wholesale water
purchase agreement(the"Wholesale Water Purchase Agreements")with the City of Fort Worth,
Texas ("Fort Worth")to supply the treated water necessary to serve the capacity of each City's
respective systems,attached hereto as Exhibits Al and A2 respectively;and
WHEREAS,Fort Worth currently has water transmission infrastructure approximately 1.5
miles to the east of Willow Park,located generally at FM 1187 and I-20;and
WHEREAS, Hudson Oaks and Willow Park desire to design, construct and maintain a
water transmission line to bring water service from.Fort Worth's existing water supply line to
Willow Park and fixther to Hudson Oaks,including necessary storage facilities,pumping stations,
and other appurtenances;and
WHEREAS, Hudson Oaks and Willow Park desire to enter into this Agreement to
document the financing, design, construction,operation,and maintenance of such Water Supply
Facilities;and.
WHEREAS,the governing bodies of Hudson Oaks and Willow Park find that the Project
is to their mutual benefit and to the benefit of the health, safety and welfare of their respective
citizens,that the performance of this Agreement is in the common interest of both Parties,and that
the division of costs provided for constitutes adequate consideration to each ofthe Parties.
NOW,THEREFORE,in consideration of the foregoing,and on the terms and conditions
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hereafter set forth, the Parties, for good and valuable consideration, specifically the mutual
promises and agreements contained herein,hereby contract,covenant and agree as follows:
1. PURPOSE AND EFFECTIVE DATE.
1.1. The purpose of this Agreement is to provide for the funding, ownership,
construction,operation and maintenance of the Water Supply Facilities.
1.2. The effective date of this Agreement is the date the Agreement is entered
into as set forth in the introductory paragraph.
2. DEFINPTIONS.
2.1 Capital Improvements means any of the following facilities which provide
utility services and benefits common to all customers and that have a life expectancy of three or
more years, whether such capital improvements are located within the jurisdictional limits of
Willow Park or Hudson Oaks: water metering facilities, control systems and appurtenances,
storage facilities, pumping facilities and all water transmission mains sixteen inches (16'� and
greater in diameter.
2.2 Construction Costs .means the cost of design, legal, consulting and
engineering fees, permitting, land and easement acquisition and construction costs, including
procurement of all necessary materials,for the Water Supply Facilities,metering facilities,control
systems,and appurtenances,pumping facilities and water Izimsmission mains,the Cost of Capital,
and the System Buy-In Charge,of approximately$3,670,000 assessed by Fort Worth pursuant to
the Wholesale Water Purchase Agreements.
2.3 Cost of Capital means all costs and expenses, debt service, principal,
interest and other common debt service costs,included like fees,closing costs, engineering fees,
bond costs and legal expenses,and lender or bank fees associated with each such financing.
2.4 Hudson Oaks Interconnection Facility means the interconnection point
and related facilities at which the Waxer Supply Facilities deliver treated water to the Hudson Oaks
System,located generally just East of Farm to Market Road 5 as shown on Exhibit A3.
2.5 Hudson Oaks System means the Hudson Oaks water distribution system.
2.6 MGD means million gallons per day.
2.7 Operation and Maintenance Costs means the costs incurred to operate and
maintain the Water Supply Facilities, and/or portions of the Water Supply Facilities and related
Capital Improvements including, but not limited to, direct expenses, personnel and personnel
related expenditures, utilities, and all other costs required to operate and maintain the foregoing
facilities.
2.8 Wdlow Park Interconnection Facility means the interconnection point and
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related facilities at which the Water Supply Facilities deliver treated water fo the Willow Park
System,located generally at Tricia Lane as shown on Exhibit A3.
2.9 Willow Park System means the Willow Park water distribution system.
2.10 Willow Park Water Transmission Pipeline means the sixteen inch (16")
water transmission pipeline from the Shared Water.Supply Facility to the connection to the existing
12"Willow Park water line as shown on Exhibit A3.
2.11 Shared Water Supply Facility means the wholesale metering station, the
ground storage tank and two (2) pump stations, as more particularly described in Detail A of
Exhibit A3.
2.12 Shared Water Transmission Line shall mean the sixteen inch (16")
transmission line from the Shared Water Supply Facility to the Hudson Oaks Interconnection
Facility and connecting to Willow Park System for distribution as shown on Exhibit A3. The
Shared Water Transmission Line shall provide Hudson Oaks up to 3.23 MGD water capacity.
2.13 Water Supply Facilities shall mean the totality of all water supply
transmission lines,storage.facilities,pumping stations,and other appurtenances necessary to bring
treated ground water supply from Fort Worth's existing water supply line to Willow Park and
Hudson Oaks, and specifically includes the following components, as described and depicted in
Exhibit A3:
❑ 18" water transmission pipeline from Fort Worth's existing water
transmission line to the Shared Water Supply Facility;
❑ Shared Water Supply Facility;
❑ Willow Park Water Transmission Pipeline; ,
❑ Shared Water Transmission Line;
❑ Willow Park Interconnection Facility; and
❑ Hudson Oaks Interconnection Facility.
3. CONSTRUCTION OF WATER SUPPLY FACILITIES.
3.1 Construction,Ownership and Maintenance. The Water Supply Facilities to
be constructed shall consist of the following, as more particularly described and depicted in the
attached Exhibit A3:
3.1.1 An eighteen inch (18") water transmission pipeline from Fort
Worth's existing water transmission line located generally at FM 1187 and I-20 to the Shared
Water Supply Facility. This pipeline shall be designed for a capacity of 6.73 MGD. The maximum
capacity allowed by each party under this Agreement from the Water Supply Facilities shall be as
follows:
Willow Park—3.5 MGD
Hudson Oaks—3.23 MGD.
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The portion of the pipeline from Fort Worth's existing-Water transmission line to a valve located
at the Fort Worth extraterritorial jurisdiction boundary as indicated. on Exhibit A3 shall_be
dedicated to, owned, operated and maintained, by Fort Worth, at its sole cost and expense once
constructed and dedicated to Fort Worth.The portion of the pipeline from the valve located at the
Fort Worth extraterritorial jurisdiction boundary to the Shared Water Supply Facility shall be
owned by both Willow Park and Hudson Oaks, with Willow Parking owning 52% and Hudson
Oaks Owning 48%of the pipeline.
3.1.2 The Shared Water Supply Facility shall consist of a wholesale
metering station, a 38 foot diameter, 250,000 gallon ground storage tank, and two pump stations
to further distribute water to the Hudson Oaks System,and the Willow Park System. The Shared
Water Supply Facility shall be owned by both Willow Park and Hudson Oaks, with Willow
Parking owning 52%and Hudson Oaks Owning 48%of the Facility.
3.1.3 The Willow Park Water Transmission Line shall consist of a sixteen
inch(16")Water transmission pipeline from the Shared Water Supply Facility to the connection
to the existing 12" Willow Park water line. This pipeline shall be solely owns.operated and
maintained by Willow Park,at its sole cost and expense.
3.1.4 A sixteen inch (16") Shared Water Transmission Line and
distribution pipeline from the Shared Water Supply Facility to the Hudson Oaks Interconnection
Facility. This pipeline shall be designed for a capacity of 5 MGD. The sixteen inch(16)Shared
Water Transmission Line will be owned by both Hudson Oaks and Willow Park,with Willow Park
owning 52%and Hudson Oaks owning 48%of the pipeline. Willow Park and Hudson Oaks shall
be entitled to connect water distribution lines into the Shared Water Transmission Line for
development. Willow Park shall be limited to three(3)twelve inch(ITT water distribution line
connections into the Shared Water Transmission Line,and each such connection by Willow Park
shall have a meter to measure water utilized by such connection for Willow Park; provided
however,that such connections and water usage by Willow Park shall not impede Hudson Oaks
ability to utilize up to 3.23 MGD from the Shared Water Transmission Line. Charges relating to
such usage shall be detailed in this section below. Construction,operation and maintenance of any
distribution line connected to the Shared Water Transmission Line shall be the sole cost and
responsibility of the city connecting to the Shared Water Transmission Line.
3.1.5 The Hudson Oaks Interconnection Facility or Facilities shall consist
of a metering station. The Hudson Oaks Interconnection Facility or Facilities shall be solely
owned,operated and maintained by Hudson Oaks,at its sole cost and.expense.
3.1.6 The Willow Park Interconnection Facility or Facilities shall consist
of metering stations at each-connection point to the Shared Water Supply Facilities,the Willow
Park Transmission Line, ,and/or to the Shared Water Transmission Line. The Willow Park
Interconnection Facility or Facilities shall be solely owned, operated and maintained by Willow
Park,at its sole cost and expense.
3.2 Construction Costs and Responsibilities.
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3.2.1 The estimated Construction Costs of the Water Supply Facilities is
$13.7 Million Dollars. The final Construction Costs of the Water Supply Facilities shall not be
established until after the construction contract is awarded for the Water Supply Facilities and shall
include any change orders on the construction contract. Hudson Oaks shall approve the final
construction contract, in writing, promptly after its receipt, and any change orders issued by
Willow Park during the construction of the Water Supply Facilities.
3.2.2 The Parties hereto agree that services obtained pursuant to this
Agreement are essential and necessary to the operation of each cities water works facilities, and
that all payments made by the parties hereunder shall constitute reasonable and necessary operating
expenses of that city's water works system witbin the meaning of Chapter 1502, Texas
Government Code, and the provisions of any and all ordinances of either city authorizing the
issuance of any revenue bonds which are payable from its water works system.
3.2.3 Willow Park shall be responsible for bidding and/or seeking
competitive proposals for the engineering/desiga of the Water Supply Facilities, and for bidding
the construction contract for the Water Supply Facilities, in accordance with state procurement
laws. Willow Park and Hudson Oaks agree that the selection of all consultants and contractors
shall be mutually agreed upon between Willow Park and Hudson Oaks,to the extent consistent
with the state procurement laws.
3.2.4 Willow Park shall issue debt for the entire Construction Costs for
the Water Supply Facilities. The Parties agree to pay the debt service responsibilities for the entire
Construction Costs(less any Construction Costs for the Willow Park Water Transmission Pipeline)
as those debt service obligations become due and payable in accordance with the following
percentages:
Willow Park—52%
Hudson oaks—48%.
Notwithstanding the foregoing, Willow Park shall be solely responsible for the payment of the
portion of the Construction Costs for the Willow Park Water Transmission Pipeline.Willow Park
shall send Hudson Oaks an invoice semiannually(or as debt payments may be due pursuant to the
terms of the debt instrument) for their share of the debt service responsibilities for the entire
Construction Costs sixty(60)days before such debt service responsibilities become due. All such
bills shall be due and payable by Hudson Oaks to Willow Park within thirty(30) calendar days
from the billing date. In the event a payment is not paid as specified herein, a late fee of One
thousand dollars ($1,000) shall be imposed together with a finance charge of ten percent(10 %)
per annum from the date that payment was required to be made.If Hudson Oaks fails to pay their
share of debt service obligations after 30 days of billing by Willow Park,Hudson Oaks shall be in
breach of this Agreement and Willow Park may disconnect Hudson Oaks Interconnection
Facilities from the Shared Water Transmission Line and the Shared Water Supply Facility, and
notify Fort Worth to bill Willow Park for the water being supplied under the Fort Worth
agreements and/or take any action as authorized by Section 7, subsections 7.1 thru 7.5 and/or
applicable State law. Service to Hudson Oaks will not be reconnected until all payments owed to
Willow Park are current.The disconnection of Hudson Oaks from the Shared Water Transmission
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Line arid/or the Shared Water Supply Facility shall not alleviate Hudson Oaks payment obligations
for its portion of the Construction Costs as specified herein.
3.2.5 Willow Park and Hudson Oaks shall approve all plans,
specifications,construction documents,and change orders(if any)for the Water Supply Facilities.
3.2.6 Willow Park shall be responsible for the Water Supply Facilities'
construction oversight,inspection and acceptance of the Water Supply Facilities.
3.2.7 Division of assets and liability:For the purpose of tracking fixed assets and
debt liabilities for the Parties Certified Annual Financial Reports,the Parties agree to take on a pro
rata share of the fixed assets and debt liabilities associated with the Shared Water Supply Facility
and the Shared Water Transmission Line per the following percentages:
Hudson Oaks 48%
Willow Park 521/ro
This provision is intended to allow both entities to depreciate their share of the fixed assets and
properly account for each City's obligations of the contract.
3.3 Operation and Maintenance Costs. All Operation and Maintenance Costs
.associated with the Shared Water Supply Facility, the portion of the 18 inch pipeline from the
valve located at the Fort Worth extraterritorial jurisdiction boundary to the Shared Water Supply
Facility,and the Shared Water Transmission Line shall be shared as follows:
Willow Park—52%
Hudson Oaks—48%.
3.3.1 Peak Hour/Peak Day Both Parties will each be solely responsible
for their share of Peak Hour/Peak Day charges for the Fort Worth water contract(s).Willow Park
agrees to pay Peak Hour/Peak Day charges to Hudson Oaks based on the billed Fort Worth amount.
To determine Willow Park's share of this charge,Hudson Oaks will identify the peak day and peak
hour responsible for the charge and pass through the ratio of use during those periods for Willow.
Park. For Example;,if Willow Park Interconnection Facilities meter 60%of the water metered at
the Fort Worth meter during the peak day period,Willow Park will be responsible for 60%of the
Peak Day fee assessed by Fort Worth.
3.3.2 Both Hudson Oaks and Willow Park operationally agree to work
together to establish recommended plant and tank operations and levels to ensure minimum
peaking charges and maximum operational efficiency for both systems. Both Hudson Oaks and
Willow Park agree to keep each Party informed if excessive use/pumping will be needed within
their system.
3.3.3 Based on monthly usage, the Parties agree to split the cost of
electricity based on each Parties share of electricity.For example,if Hudson Oaks uses 40%of the
water that passes through the Fort Worth Meter in a single month, then Hudson Oaks will be
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responsible for 40%of the electricity cost of that month.Willow Park agrees to manage the electric
service at the Shared Water Supply Facility. Willow Park shall send Hudson Oaks an invoice
monthly for their share of the electricity. All such bills shall be due and payable by Hudson Oaks
to Willow Park within thirty(30)calendar days from the billing date.In.the event a payment is not
paid as specified herein,a late fee of ten percent(10%)of the unpaid bill shall be imposed together
with a finance charge of ten percent(10%)per annum from the date that payment was required to
be made.
3.3.4 The Parties agree that water loss will occur and the amount of water
billed at the Fort Worth meter may be larger than the flow through their respective Facilities.
Willow Park agrees to pay a prorated share of water loss based on their ratio of the water used
from the Fort Worth meter during that same period. For example, if Fort Worth bills 1 Million
Gallons of Water,and the Facility meters of the respective parties only show 900,000 gallons,and
Willow Park recorded 60%of the 900,000 gallons;Willow Park will pay for 60%of the remaining
100,000 gallons of unmetered water from the Parties Facilities meters.
3.4 Wholesale Water Billims and Payments.
3.4.1 Pursuant to the wholesale water purchase agreements with Fort
Worth, Fort Worth will only bill Hudson Oaks for the amount of water utilized by both Willow
Park and Hudson Oaks through the Water Supply Facilities. Hudson Oaks agrees to bill, and
Willow Park agrees to pay to Hudson Oaks,for Willow Park's actual water consumption, as set
forth in this section. Hudson Oaks shall then be responsible to pay Fort Worth for water purchased
under the wholesale water agreements with Fort Worth.
3.4.2 Hudson Oaks shall bill Willow Park monthly for Willow Park's
consumption of wholesale water purchased from Fort Worth, based upon the Water Supply
Facilities water metering readings. The bill shall indicate the meter readings and water
consumption amounts/usage.
3.4.3 All such bills shall be due and payable by Willow Park to Hudson
Oaks within thirty(30) calendar days from the billing date. If Willow Park disputes:a bill and is
unable to resolve the difference informally,Willow Park shall notify Hudson Oaks in writing. If
Hudson Oaks and Willow Park are unable to resolve the disputed bill,agreement on the bill will
be determined by a third party mediator, as hereinafter provided. Dispute of a bill shall not be
grounds for non-payment, except for the amount of the bill in dispute. In the event a payment is
not paid or disputed as specified herein,a late fee of ten percent(10%)of the unpaid bill shall be
imposed together with-a finance charge of ten percent(10%)per annum from the date that payment
was required to be made. In the event that a billing adjustment is agreed upon or established by
mediation,the amount found to be incorrect will be credited to Willow Park's account. If Willow
Park fails to pay within 60 days of billing by Hudson Oaks,Hudson Oaks may disconnect service
to the Willow Park Interconnection Facilities.
3.4.4 The Parties agree,throughout the term of this Agreement,to fax and
collect such.rates and charges for water service to be supplied to its customers as will produce
revenues in an amount equal to at least:
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1. All of operation and maintenance costs of its water system,
include specifically its payments under this Agreement;'and
2. All other amounts as-required by law and the provisions of
the ordinances or resolutions authorizing its revenue bonds or other obligations now or
hereafter outstanding,including the amounts required to pay all principal of and interest on
such bonds and other obligations.
3.5 IMPACT FEES
3.5.1 Hudson Oaks and Willow Park each shall be solely responsible for
payment of any and all impact fees-to Fort Worth and the submission of impact fee reports
to Fort Worth,as required by the Wholesale Water Purchase Contracts.
4. LOCATION AND MAINTENANCE OF MEASURING DEVICES.
4.1. All water furnished under this Agreement shall be measured by one or-more
suitable meters acceptable to Fort Worth("master meters") equipped with continuous flow chart
recording devices,and telemetering equipment connected with Willow Park's and Hudson Oaks'
control centers. All meters,recording devices,telemetering equipment and appurtenances shall be
owned and operated by Hudson Oaks. All charges for water usage as measured through the master
meters shall be paid by Hudson Oaks directly to Fort Worth.
4.2. Willow Park shall be responsible for contracting with an engineering firm
to design and prepare construction documents for the installation of any meter for a new point of
connection into the Shared Water Transmission Line that may be required during the term hereof.
Equipment-included in the design must meet AWWA standards. Willow Park shall pay for the
meter vault and all metering equipment, including telemetering equipment, and.appurtenances,
plus the installation cost thereof. Telemetry transmitting to Hudson Oaks shall be installed at the
time of construction at the expense of Willow Park.These costs described in this paragraph shall
be part of the Construction Costs.
4.3. Each parry shall pay all Operation and Maintenance Costs associated-with
the operation and maintenance of its metering and telemetry devices as required by Fort Worth
and this Agreement,and shall pay for the replacement of said equipment as necessary. Such costs,
as well as charges for the telelink line and microwave transmitter and-the power to operate same,
shall be considered an Operation and Maintenance Cost.
4.4. The point or points of delivery of treated water shall be the meter vault
connection to Willow Park's side of the meter at the Willow Park Interconnection Facility,and the
meter vault connection to Hudson Oaks' side of the meter at the Hudson Oaks Interconnection
Facility; and all necessary mains and distribution facilities from and beyond said point are not
covered by this Agreement and shall be the responsibility of each party. The location of each
meter shall be mutually agreed upon in writing by and between the parties hereto and the meter or
meters shall not be moved or relocated except by mutual consent in writing by the parties hereto.
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4.5. Either parry, at its own expense, may install a check meter to check or
measure the.volume of water passing the master meter, provided that, if such check meter is
installed, the same rules and regulations relative to its operation, maintenance and reading shall
apply as to the master meter being tested.
5. METERS AND METER READING.
5.1. Each party shall routinely test for accuracy and service and calibrate if
necessary,their respective master meters no less than once during each twelve(12)month period.
Copies of the results of such calibration and all related information shall be provided to each party.
Each parry shall allow the other access to its meter vault, for inspection and monthly readings if
either party requests such access for this purpose.
5.2. Upon any calibration,if it is determined that the accuracy envelope of such
meter is found to be lower than ninety-five percent(95%)or higher than one hundred five percent
(105%) expressed as a percentage of the full scale of the meter, the registration of the flow as
determined by such defective meter shall be corrected for a period extending back to the time such
inaccuracy began, if such time is ascertainable; or, if such time is not ascertainable, then for a
period-extending back one-half(1/2) of the time elapsed since the date of the last calibration,but
in no event further back than a period of one year All meters will be properly sealed,and the seals
shall not be broken unless representatives of both parties have been notified and given.a reasonable
opportunity to be present.
5.3. If any meter used to determine the flow of treated water to Willow Park or
Hudson Oaks is out of service or out of repair so that the amount of water metered cannot be
ascertained or computed from the reading thereof,the water delivered during the period such meter
is out of service or out of repair shall be estimated and agreed upon by the parties hereto upon the
basis of the best data available. The basis for estimating such flow includes,but is not limited to,
extrapolation of past patterns of flow for said metering station under similar conditions. In the
event the parties hereto cannot agree on the extrapolated estimate of water volume delivered,
agreement on the flow volume will be determined by third party mediation, as hereinafter
provided,before suit is filed.
5.4. It shall be the duty of the parties to give immediate notice,each to the other,
should any meter be found not functioning properly, and upon such notice repairs to such meter
shall be made promptly.
6. RIGHTS-OF-WAY.
6.1. Each party shall grant, without charge to the other party, such easements
and rights-of-way along public highways or other property owned by such party, as requested by
the other party,in order to construct or maintain water transmission mains or facilities within the
service area of either party to provide water under this Agreement. Each party agrees to assist the
other in acquiring any additional easements or rights-of-way necessary for the construction or
maintenance of these facilities,including exercising the power of eminent domain, if necessary.
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6.2. The Parties agree to coordinate the location of the mains and/or facilities in
the other's easements and rights-of-way in order to prevent further conflicts insofar as it is
reasonably practicable.
7. TERMINATION.
7.1 This Agreement may be terminated in whole or in part by the mutual
consent of the Parties. Notwithstanding anything contained herein to the contrary, any breach by
either party hereto to perform any of the duties or the obligations assumed by such.party hereunder
or under the Wholesale Water Purchase Agreements(the terms of which are incorporated herein
as though set out in full) or to faithfully keep and perform any of the terms, conditions and
provisions hereof or under the Wholesale Water Purchase Agreements shall be cause for
termination of this Agreement by either party,after providing thirty(30) days prior written notice
and opportunity to cure, except that in an event of nonpayment the notice period shall be reduced
to five (5) days. If within such notice period, the defaulting party fails or refuses to cure such
breach to the satisfaction of the non-defaulting party, the non-defaulting party may declare this
Agreement terminated. In addition to, and/or in lieu of, the right of termination, each non-
defaulting Party shall have the right of setoff for any amounts due the other Party.
7.2 In the event of termination, each party shall pay the other for all amounts
owing under this Agreement through the date of termination, and each party shall assume
responsibility and/or pay-for their proportionate share ofthe unamortized debt ofthe Water Supply
Facilities
7.3 -The Parties agree that the provision of water is necessary to the continued
health and safety of their respective communities and each Party agrees to not interrupt the
availability of water through the Shared Water Supply Facility or the.Shared Transmission Line
except for non-payment in accordance with Section 3.2 or 3.4.
7.4 Waiver of Sovereign or Governmental Immunity. Willow Park and Hudson
Oaks hereby agree that this Agreement constitutes an agreement for providing services to each
other,which is subject to the provisions of Subchapter I of Chapter 271,Texas Local Government
Code and any successor statute(s). "In accordance with Sections 271.152 and 271.153 of the Texas
Local Government Code, and only to the extent limited by the provisions of this section of the
Agreement,Willow Park and Hudson Oaks hereby waive any constitutional,statutory or common
law right to sovereign or governmental immunity from liability or suit for purposes of adjudicating
a claim for breach of contract. In addition,each Party shall have the equitable remedy of specific
performance arising out of any breach of this Agreement or for breach of the Wholesale Water
Purchase Agreements.
7.5 Right of Setoff. In addition to,and/or in lieu of,the right of termination as
set forth above, each non-defaulting Party shall have the right of setoff for any amounts due the
other Party pursuant to this Agreement.
8. LIABILITY FOR DAMAGES.
Page 10
8.1 Liabilities for damages arising from the treatment, transportation and
delivery of water provided hereunder shall be borne by and remain with each city according to its
proportionate share of the costs as provided in Section 3. In the event of a claim for capacity in
the Water Supply Facilities,Willow Park and Hudson Oaks shall share equally in the responsibility
for defending the claim,and for the costs of any settlement or judgment resulting from the claim.
1. To the extent permitted by law, each party hereto agrees to save and hold
the other party harmless from all claims, demands, and causes of action that may be asserted by
anyone on account of the quality,transportation and delivery while water is in the control of such
party. This covenant is not made for the benefit of any third party.
2. Contracts made and entered into by either Willow Park or Hudson Oaks for
the construction, reconstruction or repair of any Water Supply Facility shall include the
requirement that the independent.contractor(s) must provide adequate insurance protecting both
Willow Park and Hudson Oaks as co-insureds. Such contract must also provide that the
independent contractor(s) agree to indemnify, hold harmless and defend both Willow Park and
Hudson Oaks against any and all suits or claims for damages of any nature arising out of the
performance of such contract.
9. FORCE MAJEURE.
9.1. If by any reason of force majeure, either party hereto shall be rendered
unable, wholly or in party, to carry out its obligations under this Agreement, other than the
obligation to make payments required under the terms hereof,then if such parties shall give notice
and full particulars of such force majeure in writing to the other party within a reasonable time
after the occurrence of the event or cause relied on,the obligation of the party giving such notice,
so far as it is affected by such force majeure, shall be suspended during the continuance of the
inability then claimed, but for no longer period, and such party shall endeavor to remove or
overcome such inability with all reasonable dispatch.
9.2. The term "force majeure", as employed herein, shall mean acts of God,
strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the
government of the United Stages or the State of Texas, or any civil or military authority,
insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms,floods,
washouts, other natural catastrophe, restraints of government and people, civil disturbances,
explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of
water supply, or other similar cause not reasonably in the control of the party claiming such
inability.
10. NOTICE.
10.1 All notices, requests and communications under this Agreement shall'be
given in writing,addressed to Willow Park or Hudson Oaks at their respective addresses set forth
below and either(i)hand delivered, (ii)a nationally recognized overnight courier service,,or(iii)
mailed.by registered or certified mail,return receipt requested,postage prepaid.
Page I I
To Willow Park: City of Willow Park,Texas
516 Ranch House Road '
Willow Park,Texas 76087
Attn: City Manager
To Hudson Oaks: City of Hudson Oaks
210 Hudson Oaks Drive
Hudson Oaks,Texas 76087
Attn: City Administrator
Any notice under or pursuant to this Agreement and given in accordance
with this Section shall be deemed received upon the earlier of (1) actual•receipt, (2) if mailed,
three(3)days after deposit in an official depository of the United States Postal Service,and(4)if
sent by a nationally recognized overnight courier service,the day following the mailing. Any party
may change its address for notice purposes by sending the other party a notice of the new address.
11. MEDIATION.
11.1 The parties agree to submit any dispute relating to this Agreement to:non-
binding-mediation. The party requesting mediation shall serve on the other party a request in
writing that such matter be submitted to mediation.The parties shall mutually agreedn writing on
the selection of any mediator and the date and location of such mediation. The decision of the
mediator shall not be final,but shall be a condition precedent to filing suit.All costs of mediation
shall be shared equally between the Parties.
12. INSPECTION AND AUDIT.
12.1 Each party hereto shall keep complete records and accounts pertaining to
this Agreement for a period of five years. Each party shall at all times,upon notice,have the right
at reasonable times to examine and inspect said records and accounts during normal business
hours; and'further, if required by any law, rule or regulation, make said records and accounts
available to federal and/or state auditors.
13. MISCELLANEOUS.
13.L This Agreement is subject to all applicable federal and state laws and any
applicable permits, amendments, orders, or regulations of any state or federal governmental
authority having or asserting jurisdiction, but nothing contained herein shall be construed as a'
waiver of any right to question or contest any such law, order, rule or regulation in any forum
having jurisdiction.
13.2. Upon prior notice by either party, any authorized employee or
representative of such parry bearing identification shall notify the other party of need for access to
any premises located within the other party's service area or served by the other party as may be
Page 12
necessary for the purpose of inspections and observation, measurements, sampling and testing
and/or auditing, in accordance with the provisions of this Agreement. The other party may elect
to accompany the requesting party's representative. To the extent permitted by law,the requesting
party agrees to indemnify the other party for any damage or injury to person or property caused by
the negligence of such duly authorized employee while such employee is in the course and scope
of his employment.
13.3. In addition to any other remedy as may be provided by law,this agreement
shall be specifically enforceable by the parties hereto. Venue for any action shall be in Parker
County,Texas.
13.4. It is agreed that,in the event any term or provision herein contained is held
to be invalid by any court of competent jurisdiction,the invalidity of such term or provision shall
in no way affect any other term or provision contained herein; further,this Agreement shall then
continue as if such invalid term or provision had not been contained herein.
13.5 Neither party may assign this Agreement without the prior written consent
of the other party.
14. INDEMNIFICATION.
14.1. To the extent permitted bylaw,Willow Park agrees to indemnify and save
and hold Hudson Oaks harmless from all claims,liabilities,demands,and causes of action arising
from any negligent act or omission of Willow Park relating to this Agreement. This covenant is
not made for the benefit and shall not inure to the benefit of any third party.
14.2. To the extent permitted bylaw,Hudson Oaks agrees to indemnify and save
and hold Willow Park harmless from all claims,liabilities,demands,and causes of action arising
from any negligent act or omission of Hudson Oaks relating to this Agreement. This covenant is
not made for the benefit and shall not inure to the benefit of any third party.
15. AMENDMENT.
15.1 This Agreement may only be amended, altered, or revoked by written
instrument signed by the Parties.
16. WAIVER.
16.1. The failure of either party to this Agreement to complain of any action,non-
action,or default of the other party shall not constitute a waiver of any of such party's rights under
this Agreement.
16.2. Waiver by either party to this Agreement of any right for any default of the
other party shall not constitute a waiver of any right for either party for a prior or subsequent
default of the same obligation or for any prior or subsequent default of any other obligation.
Page 13
16.3. No right or remedy of either party under this Agreement or covenant,duty,
or obligation of either party under this Agreement shall be deemed waived by the other party to
this Agreement unless such waiver is in writing and signed by the waiving party.
17. PARTIES AND SUCCESSORS.
17.1 Subject to the limitations and conditions set forth elsewhere herein, this
Agreement shall bind and inure to the benefit of the respective heirs, legal representatives,
successors,and assigns of the parties hereto.
18. CAPTIONS.
18.1. The captions in this Agreement are inserted only as a matter of convenience
and for reference and they in no way define, limit,or describe the scope of this Agreement or the
intent of any provision hereof.
19. NUMBER AND GENDER.
19.1 All.genders used in this Agreement shall include the other genders, the
singular shall include the plural, and the plural she include the singular, whenever and as often
as may be appropriate.
20. ENTIRE AGREEMENT.
20.1 This Agreement, including all exhibits which may be attached hereto
(which exhibits are hereby incorporated .herein by reference) contains the entire agreement
between the Parties with respect to the subject matter hereof.Further,the terms and provisions of
this Agreement shall not'be construed against or in favor of a party hereto merely because such
party or its counsel is the drafter of this Agreement.
21. NO.WANER OF Rv.IlylUNITY OR DEFENSES.
21.1. This Agreement is made pursuant to Chapter 791 of the Texas Government
Code. It is expressly understood and agreed that in the execution of this Agreement,neither city
waives nor shall be deemed hereby to waive any immunity or defense that would otherwise be
available to it against claims arising in the exercise of governmental powers and functions, or any
damage limitation or other protection provided to municipalities under any applicable law,except
as provided in paragraph 7.4. This section shall be liberally construed to carry out the intent of the
city councils of Hudson Oaks and Willow Park and the cities do hereby invoke said governmental
immunity to the extent possible under the law.
22. NO THIRD PARTY BENEFICIARIES.
22.1 It is understood by the parties that this Agreement is entered into for the
mutual convenience and purposes of the cities which are parties hereto,and it is the parties' intelit
Page 14
that no other parties shall be construed as beneficiaries of this Agreement, including the owners,
residents, or operators of property located in either city, regardless of whether such persons are
anticipated to be customers under this Agreement.
23. AUTHORITY.
23.1 This Agreement was authorized by the Hudson Oaks City Council at its
regular meeting on the 28a'day of March,2019,the Willow Park City Council at its special called
meeting on the 25 h day of March,2019.
24. MUTUAL ASSISTANCE.
24.1 The parties hereto agree to take all reasonable measures which are necessary
or appropriate to carry out the terms and provisions of this Agreement and to aid and assist each
other in carrying out such terms and provisions.
25. ATTORNEY'S FEES.
25.1 In.the event either party defaults in the performance of any of the terms,
agreements or conditions contained in this Agreement and the enforcement of this Agreement, or
any part thereof, is placed in the hands of any attorney who files suit upon the same, the non-
prevailing party shall pay the reasonable attorneys'fees,expenses and costs ofthe prevailing party.
26. REPRESENTATIONS.
26.1. By execution of this Agreement,each party represents,to the other that:
26.1.1 In performing its duties and obligations hereunder, it will be
carrying out one or more governmental functions or services.which it is authorized to perform;
26.1.2 The undersigned officer or agent of the party has been properly
authorized by that party's governing body to execute this Agreement and that any necessary
resolutions extending such authority have been duly passed and are now in effect;
26.1.3 All payments required or permitted to be made by a party will be
made from current revenues available to the paying party; and
26.1.4 All payments provided to be made hereunder by.one party to the
other shall be such amounts as to fairly compensate the other party for the services or functions
performed hereunder.
EXECUTED as of the date hereinabove first set forth.
Page 15
CITY OF WILLOW PARK,TEXAS CITY OF HUDSO\ OAKS, TEXAS
Mayor Mawr
AT T T: — ATTEST:
_ i-
City Secretary City Secretai
kjoso
Page 16
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