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HomeMy WebLinkAboutContract 12720 TAR.2ANT COUNTY REGIONAL WATER SUPPLY FACILITIES AMENDATORY CONTRACT THE STATE OF TEXAS CITY SECRETARY (`CV,11*�,,ACT COUNTY OF TARRANT LKZj&) THIS AMENDATORY CONTRACT (the "Contract") made and entered into as of the Is-- day at September, 1982 (the "Contract Date"), by and among TARRANT COUNTY WATER CONTROL AND !MPROVE- MENT DISTRICT NUMBER ONE (the "District") , a water control and improvement district (and a conservation and reclamation district) and political subdivision of the State of Texas, created and functioning under Article 16, Section 59, of the Texas Constitution, pursuant to the general laws of the State of Texas, including Chapter 51, Texas Water Code, and which is authorized to issue bonds under the provisions of Chapter 268, Acts of the 555th Legislature, Regular Session, 1957, as amended (collectively the "District Act") , and the following: CITY OF FORT WORTH, IN TARRANT COUNTY, TEXAS, CITY OF ARLINGTON, IN TARRANT COUNTY, TEXAS, CITY OF MANSFIELD, IN TARRANT AND JOHNSON COUNTIES, TEXAS, and TRINITY RIVER AUTHORITY OF TEXAS (collectively the "Initial Contracting Parties"). W I T N E S S E T H WHEREAS, the Cities of Fort Worth, Arlington, and Mansfield are duly created cities and political subdivisions of the State of Texas operating under the Constitution and laws of the State of Texas, including their respective Home Rule Charters; and WHEREAS, Trinity River Authority of Texas is an agency and political subdivision of the State of Texas, being a conservation and reclamation district created and oneratin(T under Chaoter 568, Acts of the 54th Leg attire, Regular Session, 1955, as amended Ithe "Author4ty Act") , pursuan�: to Artiee 16, Section 59, of the Texas ConStitlaticn; and ,-JEREAS, the Di,-4 1-rict and the _ems.sial Contracting Parties are authorized to enter into this Contract pursuant to the District Act, Vernon's Ann. Tex. Clv. St. Article 4413 32,) �_Tnterlocal Ccoperation, Act"), the Autlnorit-Y Act, a,,,,d other applicable laws� and k WHEREAS, the District presently owns and operates surface raw water supply facilities which consist primarily of Eagle Mountain Dam and Reservoir and Bridgeport Dam and Reservoir, on the West Fork of the Trinity River, and Cedar Creek Dam and Reservoir on Cedar Creek in Henderson and Kaufman Counties (the "Existing System"); and WHEREAS, the District duly issued the following described bonds which were issued to accuire and construct, or to refund bonds issued to acquire and construct, the Cedar Creek Dam and Reservoir and related facilities: Tarrant County Water Control and Improvement District Number One Combined Water Revenue and Unlimited Tax Refunding Bonds, Series 1977, dated December 1, 1-977, now outstanding in the aggregate principal amount of $44,205,000 (the "Series 1971 Bonds"), and Tarrant County Water Control and Improvement District Number One Water Revenue Bonds, Series 1979, dated March 1, 1979, in the original principal amount of $7,750,000 (the "Series 1979 Bonds"), all of which Series 1979 Bonds were refunded by part of the Series 1979-A Bonds hereinafter described; and WHEREAS, the District presently supplies and sells raw water from the Existing System to the Initial Contracting Parties under various contracts now in effect; and it is acknowledged and agreed that the Existing System is inadequate to provide known future raw water requirements, thus making contracts similar to this Contract necessary to enable the District to acquire and construct additional raw water supply facilities and make it possible for the District to supply such requirements; and WHEREAS, the existing water supply contracts with the Initial Contracting Parties recognize that the District has assumed the responsibility for providing additional water supply sources as needed by the initial Contiacting Parties, subject to suitable feasibility and and that tha payments to be made by the Init-lal Cont-ract-,ng Parties would be increased in amounts sufficient to pay such parties" pro rata share of t2lie, necessary costs of such additional sources; and Wli`EREAS the District proposes to acquire, r,;onstruct, and 'co mplette additicnall surface raw water sup ly lac il 1'tJ es including a us--, and reser=,olr on Richland and Chambers Creeks 2 in Navarro and Freestone Counties and an adjacent dam and reservoir on Tehaucana Creek in Freestone County, and all related pipelines, pumps, and other facilities to enable the District to supply raw water from such sources to Contracting Parties and to others (the "Project"); and WHEREAS, the Project is described in a report of Freese and Nichols, Inc., Consulting Engineers, Fort Worth, Texas, entitled "Tarrant County Water Control and Improvement District Number One Resort on Sources of Additional Water Supply, March, L979"; and WHEREAS, such report, including all amendments and supplements thereto made prior to the execution of acquisition and construction contracts for the Project and as changed by change orders entered after acquisition and construction contracts for the Project have been executed, is hereinafter called the "Engineering Report"; and WHEREAS, the Existing Facilities and the Project here- inafter are referred to collectively as the "System"; and WHEREAS, the District duly entered into a "Tarrant County Regional Water Supply Facilities Contract", dated as of August 29, 1979, with the Cities of Fort Worth and Mansfield (the "Base Contract"), which Base Contract is hereby adopted by reference with the same effect as if set forth in its entirety in this Contract; and WHEREAS, pursuant to the Base Contract, and in connection with the Project and the refunding of the Series 1979 Bonds, on October 10, 1979, the District duly issued and presently has outstanding the following described bonds: Tarrant County Water Control and Improvement District N-umber One Water Revenue Bonds, Series 1979-A, dated October 1, 1979, ncw outstanding in the principal amount of $342,75C,00O (the "Series _11979-A Bonds"); and WHEREAS, the Base Contract provides that the District is authorized to enter into similar contracts with additional contracting parties, prescribed the procedures therefor, and specifically recognized that Trinity River Authority of Texas and the City of Arllnlgton were expected to Itecone such 3 additional contracting parties and execute contracts similar to the Base Contract; and WHEREAS, the District and Trinity River Authority of Texas duly executed a "Tarrant County Regional Water Supply Facili- ties Supplemental Contract for Trinity River Authority of Texas", dated as of December 12, 1979 (the "Trinity River Authority Contract") which was similar to the Base Contract and complied with all requirements prescribed thereby, which Trinity River Authority Contract is hereby adopted by reference with the same effect as if set forth in its entirety in this Contract; and WHEREAS, on or about July 13, 1971, the District and the City of Arlington executed a water supply contract (the "Arlington Contract"), which Arlington Contract is hereby adopted by reference with the same effect as if set forth in its entirety in this Contract; and WHEREAS, the District and the City of Arlington now wish to enter into a contract similar to the Base Contract and the Trinity River Authority Contract, but due to the expiration of certain time limits set in such contracts for the Citv of Arlington to execute a similar contract so as to be on a parity with the Cities of Fort Worth and Mansfield and Trinity River Authority of Texas with respect to priority of water supply rights, it is necessary to obtain the approval of the Cities of Fort Worth and Mansfield and Trinity River Authority of Texas to enable the City of Arlington to have the status of an Initial Contracting Party under the Base Contract on a parity with the others; and WHEREAS, it is deemed necessary and advisable by the parties hereto to make certain modifications and amendments to the Base Contract and the Trinity River Authority Contract with respect to billing procedures and other matters, and to modify and amend the Arlington Contract to set forth additional rights, duties, and obligations of the City of Arlingtcn w J_t- respect to the System and the Bonds; and it is deemed conven- ient and advisable by the parties hereto, tln.at all of the 4 aforesaid existing water supply contracts between the parties hereto be modified and amended so that the entire relationship between the District and all of the Initial Contracting Parties with respect to the System and the Bonds will be set forth in this Contract; and WHEREAS, it is specifically represented, certified, and covenanted by the parties hereto that none of the modifications or amendments to the Base Contract, the Trinity River Authority Contract, or the Arlington Contract which will occur as a re- sult of entering into this Contract will in any way have an adverse effect on the operation of the System or the rights of the owners of the Bonds; and that this Contract will provide additional security for the owners of the Bonds by obligating the City of Arlington to make unconditional and specific addi- tional payments with respect to the System and the Bonds; and WHEREAS, the provisions of this Contract are in substance essentially the same as the provisions of the Base Contract and the Trinity River Authority Contract, and basically restate and follow the form and substance thereof except for adding the City of Arlington as an Initial Contracting Party, for certain updating, and for establishing certain billing procedures and adjustments between the parties with respect to the use of and payments with respect to certain water from the System, which billing procedures and adjustments are solely between the Initial Contracting Parties and do not affect the unconditional obligations of such parties with respect to the System and the Bonds. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the District agrees to use its beat efforts to aca—ai-re, const-ruct, and complete the Pro4ecl: in general accordance with tine Engineering Report, and to supply raw water to the Contracting Parties and others frorr the System (which includes the Existing System and the Project}, upon and subject to the terms and conditions hereinafter set forth; and sub,ject to the provisions of Sectlon 81"d) hereof� the I}-.strict and the lni-_ial Contractinq Partias agree that the Base 5 Contract, the Trinity River Authority Contract, and the Arlington Contract are hereby modified, amended, combined, and consolidated so as henceforth to be in their entirety and for all purposes, as follows, to-wit: Section 1. DEFINITION OF TERMS. The following terms and expressions as used in this Contract, unless the context clearly shows otherwise, shall have the following meanings: A. "Additional Contracting Party" means any party not defined as one of the Initial Contracting Parties with which the District makes a contract similar to this Contract for supplying raw water from the System, provided that after execution of any such contract such party shall become one of the Contracting Parties for all purposes of this Contract, unless otherwise provided herein. B. "Adjusted Annual Payment" means the Annual Payment, as adjusted during or after each Annual Payment Period, as pro- vided by this Contract. C. "Advisory Committee" means the committee to be created to consult with and advise the District with respect to the System as provided in Section 10 of this Contract. D. "Annual Payment" means the amount of money to be paid to the District by each of the Contracting Parties during each Annual Payment Period as its proportionate share of the Annual Requirement. E. "Annual Payment Period" means the period beginning on October 1 of each calendar year and ending on the last day of September of the next calendar year; provided, however, that the first Annual Payment Period under this Contract shall be the period of March 1, 1980, through February 28, 1981, and the s e c o nd An nu a I P a yzn e n t P e r i ow d u nd e r _his C o,tract s h a,_1 I "be M a r C h 1, 1981, through September 30, 1981, and all payments heretofore made by all initial Contracting Parties, including the City of Arlington, shall be revised and adjusted as if this Contract had been in effect as of March 1, 1980, subject to the prow s_Jons of Secticri 4C(b) hereof, F. "Annual Requirement" means the total amount of money required for District to pay all Operation and Maintenance Expenses of the System, to pay the debt service on its Bonds, to pay or restore any amounts required to be deposited in any special or reserve funds required to be established and/or ,maintained by the provisions of the Bond Resolutions. G. "Bond Resolution" means any resolution of the District which authorizes any Bonds. H. "Bonds" means the Series 1977 Bonds, the Series 1979-A Bonds, and all bonds hereafter issued by the District, whether in one or more series or issues, and the interest coupons appertaining thereto, to acquire, construct, complete, improve, or extend the Project, and/or to improve or extend the Existing System_and any bonds issued to refund any Bonds or to refund any such refunding bonds. I. "Contracting Parties" means the "Initial Contracting Parties", as defined in the first paragraph of this Contract, together with any other party or parties which hereafter be- comes one of the Contracting Parties by becoming an Additional Contracting Party. J. "Contracting Party" means any one of the Contracting Parties. K. "District" means the "District" as defined in the preamble to this Contract. L. "Engineering Report" means the "Engineering Report" as defined in the preamble to this Contract. M. "Existing System" means the "Existing System" as defined in the preamble to this Contract, N, "MGD" is an abbreviation for "million gallons of water per day" and means a quantity of water during a period of time expressed for convenience in terms of an average annL�al daily quantity during an Annual Payment Period. The -,.,a-7ue of two ,MGD, for example, is calculated as follows: two million gallons r ,U tipl4ec by the number of days in an Annual Payment Period, 7 0. "Operation and Maintenance Expenses" means all costs and expenses of operation and maintenance of the System, in- cluding (for greater certainty but without limiting the gen- erality of the foregoing) repairs and replacements for which no special fund is created in the Bond Resolutions, operating personnel, the cost of utilities, the amounts required to pay the U.S. Army Corps of Engineers for water storage rights in Benbrook Reservoir used by Fort Worth as permitted by Section 3A(a) and 4C(b) hereof, the costs of supervision, engineering, accounting, auditing, legal services, supplies, services, administration of the System, and equipment necessary for proper operation and maintenance of the System, and payments made by District in satisfaction of judgments resulting from claims not covered by District's insurance arising in connec- tion with the operation and maintenance of the System. The term also includes the charges of the bank or banks where the Bonds are payable. The term does not include depreciation. P. "Project" means the "Project" as defined in the pre- amble to this Contract, and as provided in the Engineering Report. Q. "Series 1977 Bonds" means the "Series 1977 Bonds" as defined in the preamble to this Contract. R. "'Series 1979 Bonds" means the "Series 1979 Bonds" as defined in the preamble to this Contract. S. "Series 1979-A Bonds" means the "Series 1979-A Bonds as defined in the preamble to this Contract. T. "System" means collectively the Existing System and the Project; and the term System now means and includes and in the future shall mean and include only the water supply facili- ties of the District, and such term specifically does not mear, or include and will not mean or include any flood control facilities or other non-water sunolv facilities of the Dis- trict. Section 2. CONSULTING ENGINEERS; CONSTRUCTION OF _IROiZCT_ The Distract and the Contracting Pa ea agree that Freese and Nichols, Inc, shall he the Consulting Engineers for the Project, provided that the Consulting Engineers may be changed at the option of the District. The District agrees to use its best efforts to acquire and construct the Project, and agrees that the Project will be acquired and constructed in general accordance with the Engineering Report. It is anticipated that such acquisition and construction will be in phases and that each phase will be financed by the District through the issu- ance of one or more series or issues of its Bonds; and the District agrees to use its best efforts to issue its Bonds for such purpose. The proceeds from the sale and delivery of the Bonds will be used for the payment of all of the District's expenses and costs in connection with the Project and the Bonds, including, without limitation, all financing, legal, printing, and other expenses and costs incurred in issuing its Bonds. Section 3. QUANTITY, QUALITY, AND UNIT OF MEASUREMENT. A. QUANTITY. (a) The District agrees to sell and to deliver to each Initial Contracting Party, respectively, at the applicable Point or Points of Delivery for each Initial Con- tracting Party, as provided in Section 9 hereof, or at any other Point or Points of Delivery as may be agreed upon between the District and any Contracting Party. However, it is cove- nanted and agreed that in the future each Contracting Party shall have the sole responsibility, at its own cost and ex- pense, for providing any additional pipelines and other facili- ties required for transporting water from the System facilities to new or additional Points of Delivery. Each Contracting Party agrees to take at its Point or Points of Delivery, except as -otherwise specifically provided in this Contract, all water requ'red fcr use by such Contracti na Party during the entire term Of this Contract, for such Contracting Party's own use and for distribution to all customers served by such Contracting Party`s distribution system, whether inside or outside its boundaries. It 4.3 specifically provided, however, that after the Contract C Date, no Contraczing Party shall enter into any agreement to supply any water for use outside the boun. arles of 9 any city or other political subdivision which has entered into a written water supply contract which was in force and effect with such Contracting Party on February 28, 1980, unless each such agreement is made subject and subordinate in all respects to the water requirements of all of the Contracting Parties collectively under this Contract. For the purposes of this Section, the Cities of Lake Worth and Everman shall be deemed to have had such a contract with the City of Fort Worth in effect prior to February 23, 1980. No Contracting Party shall become a party to any contract for the sale of water which would violate or be inconsistent with the provisions of this Contract, and all such contracts shall recognize the priority of water use as provided in this Contract. It is the intention of the parties hereto that, except for the City of Mansfield's use of ground water produced from wells within its city limits as said city limits existed on the Contract Date, which it is hereby authorized to use without payment hereunder, and except for the City of Arlington's use of water from Lake Arlington and ground water produced from wells to which it is entitled, but for all of which it must pay in accordance with Section 4(C) of this Contract, and except for the City of Fort Worth's use of water from the Benbrook Reservoir on the Clear Fork of the Trinity River, Lake Worth on the West Fork of the Trinity River, and ground water produced from wells to which it is entitled, but for all of which it must pay in accordance with Section 4(C) of this Contract, the System shall be the sole and exclusive source of all raw water supply for each of the Con- tracting Parties; provided, however, that as to Trinity River Authority of Texas the aforesaid provisions shall apply only to its Tarrant Cc}irty Water Project, which supplies trea,'.8d water to the Cities of Bedford, -mess, Grapevine, North Richland .,ills, ColleyvIlle, and others. It is specifically recognized that the City of Fort Worth is located wholly within the boundaries of the Distri^t, sells water to custc,,,,iers outside of the boundaries ol the Dist, _a_. . The District will use its best-, efforts to remain in position to zurnisi% raw water sufficient for the reasonable ;errands of each Contracting 10 Party, but its obligation shall be limited to the amount of water available to it from the System. The District agrees to use its best efforts to issue its Bonds in amounts necessary to acquire, construct, maintain, improve, and extend the entire System, including the Project, so as to enable the District to furnish such water. However, in the event it becomes necessary to ration water from the System, the initial Contracting Parties shall, within the limits permitted by law, have abso- lute priority to the use of all System water over all other Additional Contracting Parties which later become Contracting Parties; and all contracts with such later Contracting Parties shall recognize such priority and be made subordinate thereto. As between the Initial Contracting Parties, if water from the System must be rationed such rationing shall-, within the limits permitted by law, be done by the District on the basis of the relative actual total amount of all water from the entire System taken by each such Contracting Party, respectively, during the last preceding Annual Payment Period in which rationing among said parties was not necessary. (b) If the District is at any time during the term of this Contract unable to supply all the raw water requirements of the Contracting Parties for any reason, or if it should become apparent that the District will become unable to supply the Contracting Parties with their raw water requirements, and any Contracting Party determines that it is necessary to pro- cure or use raw water from sources other than the District, then such Contracting Party shall give written notice to the District of its intention and desire to orocure raw water from sources other than the •istrIct. WiY.Ihin thirty (30) days from the receipt by the District of such written noz:ice, the Dis- trict shall advise the Contracting Party in writing of whether it agrees that such Contracting Party should procure raw water from sources other than the District. In the event that the District agrees that it i's necessary for such Contracting Percy to orocure raw water tom other sources, 5uch Contracting Party may proceed to procure such raw water from other sources at its 11 sole cost, and without any liability for damages accruing in favor of or against the District by reason thereof. if such Contracting Party procures water additional to that supplied by the District under this Contract, then such Contracting Party shall nevertheless continue to take from the District and pay for all raw water thereafter available to such Contracting Party from the District's System up to the full raw water requirements of such Contracting Party. If the District disagrees with such Contracting Party's written notice concern- ing the adequacy of the supply of raw water to be furnished by the District, then the District within said thirty-day period shall so advise such Contracting Party and the Advisory Com- mittee, and thereafter the Advisory Committee shall make its recommendations to the parties within sixty (60) days after receipt of such notice. All Contracting Parties shall at all times have the right to secure water from any possible source in any emergency when the District is unable to deliver water from the System because of any "Force Majeure" as defined in this Contract. B. OTHER CONTRACTS. (a) The District reserves the right to supply water from the System to Additional Contracting Parties under contracts similar to this Contract, subject to the requirements concerning "minimums" and "premiums" as pro- vided in Section 4C. hereof, and the priority of use of water as provided in Section 3A. hereof. Each contract with any Additional Contracting Party shall comply with the requirements of this Contract, shall substantially restate the essential provisions of this Contract, and shall be structured to be similar hereto to the fullest extent applicable and practi- cable, with such additions or changes as are necessary to meet the actual- zircwnstances, with the effect that each Additional Contracting Party will adopt the provisions of this Contract, as supplemented and necessarily changed by its contract. However, after the date of this Contract the District shall not oc-ligate itself to deli-ver raw water fror. tae S,ys�_em to ally future Additional Contracting Party if such obligar,_on would 12 jeopardize the District's ability 'to meet its obligation to deliver the amounts of water from the System required by prior Contracting Parties as provided in this Contract; and any such contract with a future Additional Contracting Party shal1 recognize, and be made subordinate to, the prior rights to water from the System of the Initial Contracting Parties. (b) It is recognized and agreed that the District now has System raw water supply contracts which will remain in full force and effect, in accordance with their terms and provi- sions, with the parties listed as follows: * CUSTOMER & SOURCE LAKE BRIDGE PORT Wise County Water Supply Dist. Texas Industries City of Bridgeport Lake Bridgeport Properties EAGLE MOUNTAIN Tarrant Utility Co. Community Water Supply Corp. City of Azle City of River Oaks City of Springtown Tarrant County M.U.D. #1 Texas Electric Service Co, CEDAR CREEK LAKE Ellis Water Co. City of Mabank City of Trinidad Cedar Creek Country Club SW Water Service, Inc. (Beachwood Estates) Tamarak (Cross/Tam Venture) City of Kemp Community Water Co. (Tool Plant) Community Water Co. (Woodcanyon Plant) Community Water Co. (Southwood Plant) Community Water Co. (Eastwood Plant) Community Water Co. (Cedarcrest Plant) Engel Utility Co. C-T Water Supply Co. (Carolynn Estates) Johnson Engineering Co. (Country Club) C-T Water Supply Co. (Deep 'Water Plant) C-T Water Supply Co, (Oak Shores) Southwest Water Service, inc, Texas Electric Service Cc. West Cedar Creek Municipal Utility District The District shalt the aforesaid existing raw water supply contracts and charge the maximum rates, including interest for late payment, permitted t-hereunder during the terms therecf. Upon the Pxpiral­.on of eaco, such con.tract with any party the District thereafter may sell water to such party 13 only on the basis that it is a new customer with respect to System water. It is further recognized and agreed that in the future the District may sell raw water from the System to parties which are not Additional Contracting Parties, provided that all such future sales of raw water from the System to parties which are not Additional Contracting Parties shall in all respects be subordinate to the prior rights of the Contracting Parties to raw water from the System, and all such sales and contracts relating thereto shall recognize, and be made subordinate to, such prior rights. C. QUALITY. The water to be delivered by the District and received by each Contracting Party shall be raw, untreated water from the System. Each Contracting Party has satisfied itself that such water will be suitable for its needs. The District and the Contracting Parties shall cooperate, each within its legal powers, in preventing all possible pollution and contamination of the reservoirs and watersheds from which System water is obtained. To the extent practical the District shall operate the Cedar Creek and Project components of the System so as to provide approximately equal chemical raw water quality from such sources to each Contracting Party. D. UNIT OF MEASUREMENT. The unit of measurement for water delivered hereunder shall be 1,000 gallons of water, U. S. Standard Liquid Measure. Section 4. FISCAL PROVISIONS. A. FINANCING THE SYSTEM. Sub-ect to the terms and provisions of this Contract, the District will provide and pay for the cost of the acquisition and construction of the Project and all System facillities, by using its best efforts Vc issue its Bonds in amounts which will be sufficient --n accomplish such purposes, and the District will own and ,perate the Svstem. B. -V'YU7,L REQUIREMENIT. It i a ack,7,owledged and agrees; tl�at pay me.nts to De made under th-s Contract and sinmLlar 14 tracts with Additional Contracting Parties will be the primary source available to the District to provide the Annual Require- ment, and that, in compliance with the District's statutory duty to fix and from time to time revise the rates of compensation or charges for water sold and services rendered and made available by the District, the Annual Requirement will change from time to time, and that each such Annual Requirement shall be allocated among the Contracting Parties as hereinafter provided, and that the Annual Requirement for each Annual Payment Period shall at all times be not less than an amount sufficient to pay or provide for the payment of: (a) An "Operation and Maintenance Component" equal to the amount paid or payable for all Operation and Maintenance Expenses of the System; and (b) A "Bond Service Component" equal to: (1) the principal of, redemption premium, if any, and interest on, its Bonds, as such principal, redemption premium, if any, and interest become due, less interest to be paid out of Bond proceeds or from other sources if permitted by any Bond Resolution, and all amounts required to redeem any Bonds prior to maturity when and as provided in any Bond Resolution; and (2) the proportionate amount of any special or reserve funds required to be accumulat- ed and maintained by the provisions of any Bond Resolution; and (3) any amount in addition thereto sufficient to -restore any deficiency in any of such funds recuired to be accumulated and maintained by the provisions of any Bond Reso- lution. C. PAYMENTS FOP, SERVICES, (a) For the water supply to be provide= to the Contracting Parties under this Contract, each of the Lontracting Parties agrees to pay, at --he t me and 15 in the manner hereinafter provided, its proportionate share of the Annual Requirement, which shall be determined as hereafter described and shall constitute a Contracting Party's Annual Payment. Each of the Contracting Parties shall pay its part of the Annual Requirement for each Annual Payment Period directly to the District, in approximately equal monthly installments to the extent that equal installments are practicable, on or be- fore the 10th day of each month. (b) For each Annual Payment Period each Contracting Party's proportionate share of the Annual Requirement shall be the amount calculated by estimating each Contracting Party's total annual water use during such period (and, for Fort Worth, the estimated portion of such total usage that will be attributable to its sale of water to its customers outside the boundaries of the District) , all as determined by the District in consultation with each of the Contracting Parties, and by multiplying the number of thousands of gallons so estimated to be used by each Contracting Party times the sum of the rate of x and the applicable premium per thousand gallons, with x and the applicable premium per thousand gallons to be calculated for such Contracting Party in accordance with paragraph (d) , below. Fort Worth's use of Benbrook Reservoir water, Lake Worth water, and ground water produced from wells and Arlington's use of all Lake Arlington water and ground water produced from wells shall be included and deemed to be the use of System water for all purposes of this Contract, but Mansfield's use of ground water produced from wells within its city I limits as said city limits existed on the Contract Date shall be excluded and shall not be paid For. All such Payments each Painual Payment Period shall be made In accordance with a schedule of payments for the appropriate Annual Pavmrent Period .which will be supplied to each c4 the Contracting Parties by the District. At the close of each Annual Payment Period the District shall determine the actual measured number of thousands 1. Iris of raw wat-r taken by earn, Contracting Party duriniq said period, each Party's Adjusted 16 Annual Payment shall be the amount calculated by multiplying the number of thousands of gallons so taken by such Contracting Party times the sum of the rate of x and the applicable premium per thousand gallons, with x and the applicable premium to be calculated in accordance with paragraph (d) , below. The difference between each estimated Annual Payment pursuant to which each Contracting Party has made payments and the actual Annual Payment, if any, when determined, shall be applied as a credit or a debit to each Contracting Party's account with the District and shall be credited or debited in one-twelfth in- crements to each Contracting Party's next twelve monthly pay- ments, or as otherwise agreed between the District and the affected Contracting Party, provided that all such credits and debits shall be made in a timely manner within the next Annual Payment Period. It is recognized, however, that the Contract Date is within the third Annual Payment Period, and that the payments which would have been due prior to the Contract Date must be adjusted among the Initial Contracting Parties as if it had been in full force in effect on March 1, 1980. Therefore, notwithstanding the other provisions of this Contract, any adjusted amounts due by any Initial Contracting Party with re- spect to the first two Annual Payment Periods, and for that part of the third Annual Payment Period to the Contract Date, shall be paid, in addition to the monthly payments required for the remainder of the third Annual Payment Period and each Annual Payment Period thereafter, in approximately equal month- ly installments over the five year period following the Con- tract Date, and any party to this Contract entitled to a credit because of such ad-i-astinents shall be credited in approximately equal monthly installments d-uring such five-year period. (c) Notwithstanding the provisions of paragraph (b) , above, and as an exception thereto, It is agreed that during any Annual Payment Period, any Ccntracting Party, for any re-aeon whatsoever, actual-ly takes or uses less than the ir:11n.U-num amoun fl- pre sc ibed fD_- i t as nere inafter prov de th.'s paraqr3pn (c) , such Ccntrac-­J1nnQ Par ".evertholess shall 17 pay its share of each Annual Requirement as if it had actually taken and used such minimum amount; provided that if any such party takes and uses an amount equal to or in excess of such minimum amount, its share of each Annual Requirement shall be calculated on the basis of estimated and actual use as orovided in paragraph (b), above. All contracts with Additional Con- tracting Parties shall provide for equitable minimums similar to those provided for below. Such minimums shall be fixed in amounts at least sufficient, as determined by the District, to assure an initial annual payment by such Additional Contracting Party for not less than the amount of its estimated use of raw water during the first year of service under such contract. All such contracts further shall provide for an equitable premium or surcharge to be paid by each Additional Contracting Party (using methodology similar to that expressed in paragraph (d), below, to the extent applicable and practical) so as to cause equitable treatment of all Contracting Parties to the end that each Additional Contracting Party will pay a fair share of previous capital expenditures with respect to the System as it then exists, including a fair share of the Bond Service Component previously paid by the Contracting Parties, all as determined by the District. For the purpose of calculating the minimum amount of each Annual Requirement for which each Contracting Party is unconditionally liable, without offset or counterclaim (also see Section 7), each Contracting Party, during each Annual Payment Period, shall be deemed to have taken and used the minimum annual average daily amount of System water (regardless of whether or not such amount is or was actually taken or used) specified for such Contracting Party above and as follcws, (1) for each of the Initial Contracting Parties, as an initial minimum amount during each of the Annual Payment Periods within the period commenc- ing March 1. 1980, and ending September 30, 1984. City of F rt Worth 43.28 MIGD City of Arlington: 30,00 MGD 18 City of Mansfield: 1.3 MGD Trinity River Author- ity of Texas: 5.5 INIOD; and (2) during the Annual Payment Period commencing October 1, 1984, and during each Annual Payment Period thereafter, an amount for each Contract- ing Party, expressed in MGD, equal to the greater of: (i) the initial minimum amount fixed for such Contracting Party '(being for each of the Initial Contracting Parties the amount fixed for it in clause (1), above), or (ii) the average annual MGD actually taken from the System by such Contracting Party during the period of the immedi- ately preceding five consecutive Annual Payment Periods; provided, however, that for the purposes of this clause (ii) all System water up to (but not in excess of) 61.6 MGD taken by Fort Worth for sale to its out-of-District customers during each Annual Payment Period shall be deducted from the amount actually taken by Fort Worth during such Annual Payment Period and shall be disre- garded in calculating the average annual MGD taken from the system by Fort Worth under this clause (ii). The Operation and Maintenance Component and the Bond Service Component of each Annual Requirement shall be calculated on the basis of estimated and actual use, as provided in paragraph (b), above, except for, and subject to, the foregoing minimums, which shall be applicable as provided hereir, (d) Each Contracting Fa_­ey's share of each Annual Re- <Tjirement shall be calculated as nrovided in paragraphs (a), (b), and (c), above, The applicable rate of x cents per thousand gallons of raw water shall be calculated as provided In this paragraph (d), which rate includes certain premiums prescribed below, for 9aC1,, T.,,4tial ContractJng Part y_ In 19 calculating the rate of x cents per thousand gallons, the term x shall be determined by the following formula; Fi (x) * FO (x + Pfo) I A (x + ?a) • T (X + Pt) + M (x + Pm) + C (x • Pc) = E - R Where: Fi = Fort Worth's total water taken for use within the District expressed in thousands of gallons Fo = Fort Worth's total water taken for sale to its out-of-District customers expressed in thousands of gallons A = Arlington's total usage of water expressed in thousands of gallons T = Trinity River Authority's total usage of water expressed in thousands of gallons M = Mansfield's total usage of water (other than ground water produced from wells within its city limits) expressed in thousands of gallons C = Total usage of water by each Additional Con- tracting Party expressed in thousands of gallons (there may be more than one C (x + Pc) terms in the equation depending upon the number of Addi- tional Contracting Parties) Pfo = Premium per 1000 gallons applicable to water taken by the City of Fort Worth for sale outside of the District as specified below Pa = Premium per 1000 gallons applicable to City of Arlington as specified below Pt = Premium per 1000 gallons applicable to the Trinity River Authority as specified below Pm = Premium per 1000 gallons applicable to the City of Mansfield as specified below Pc = Premium per 1000 gallons applicable to each Additional Contracting Party as specified below E = Annual Requirement R = All revenues of the System excluding (i) revenues derived by the District from the Contracting Parties, (ii) revenues derived by the District from the production of oil, gas, and other minerals owned by the District, and the revenues derived from the granting, sale, or lease of the right to explore for and prodace same, and (iii) tlhe royalties, rentals, license fees, and other ncome (other than from water sales) derived by the District from (a) lands and assets owned by the District as flood control facilities and (b) property of the District at Eagle YMountain Dam and Reservoir and Bridgeport Dam and Reservoir on the West Fork of the Trinity River. The premiums referred to in the preceding portion of this paragraph (di shall be, respectively, as follows,: 20 (i) For the City of Arlington, 7.00 cents per thousand gallons for the period March 1, 1980 - February 28, 1981; 6.825 cents per thousand gallons for the period March 1, 1981 - September 30, 1981; 6,65 cents per thousand gallons for the period October 1, 1981 - September 30, 1962, and shall be reduced for each successive twelve-month period by an addition- al 0.175 cents per thousand gallons. (ii) For Trinity River Authority and the City of Mansfield, and for raw water taken by Fort Worth and sold to its out-of-District customers, 12.00 cents per thousand gallons for the period March 1, 1980 - February 28, 1981; 11.70 cents per thousand gallons for the period March 1, 1981 - September 30, 1981; 11.40 cents per thousand gallons for the period October 1, 1981 - September 30, 1982, and shall be reduced for each successive twelve-month period by an additional 0.30 cents per thousand gallons. Fort Worth shall keep records, which shall be available for inspection during all reasonable busi- ness hours to the District and each Contracting Party, showing its sales of water to its out-of-District customers. After each initial Contracting Party's premium specified above shall have been reduced to zero by the application of the reductions as so provided, each Initial Contracting Party shall make the foregoing payments due under this Contract calculated with a premium of zero. (e) It is further specifically provided, however, not- withstanding the foregoing provisions of this Contract, that during each Annual Payment Period from October 1, 1982, through September 30, 1995, each Contracting Party's share of each Annual Requirement shall be further adl',asted as follows: the District shall make a surcharge per thousand gallons for raw water taken by the City of Arington, Trinity River Authority, the City of Mansfield, any Additional Contracting Parties, and for raw water taken by the City of Fort Worth and sold to its out-of-District customers, with such curcharge to he equal to the nu=er of cents which, when mmilliplied by the aggregate -un-Joer of thousandz of gallons of -water so taken, will produce 21 the sum of $282,000, and said sum shall be applied to the payment of each such Annual Requirement, and the amount which otherwise would be due from the City of Fort Worth under this Contract in payment of its share of each such Annual Require- ment shall be reduced by said sum. (f) it is specifically covenanted among the parties to this Contract that the payment of the premiums and surcharges set forth above will constitute an agreed method of adjusting the ecruities of the initial Contracting Parties with respect to the Existing Facilities, and will result in placing such Initial Contracting Parties on a substantial parity in connec- tion therewith. (g) Each Contracting Party's share of the Annual Require- ment shall be redetermined, after consultation with each of the Contracting Parties, at any time during any Annual Payment Period, to the extent deemed necessary or advisable by the District, if: (i) The District commences supplying System water to an Additional Contracting Party or Parties; (ii) Unusual, extraordinary, or unexpected expendi- tures for Operation and Maintenance Expenses are required which are not provided for in the Dis- trict's Annual Budget for the System or in any Bond Resolution; (iii) Operation and Maintenance Expenses are substan- tially less than estimated; (iv) The District issues Bonds which require an in- crease in the Bond Service Component of the Annual Payment; or OV) Tne District receives either significantly more or significantly less revenues or other amounts than those anticipated, (h) During each Annual Payment Period the revenues of the System described and defined as constituting "R" under the formula set forth in paragraph (d), above. sha-11, be credited to, and be used f,­,: paying part of the Annual Requirem.ent, with 22 the result that such credits shall reduce, to the extent of such credits, the amounts which otherwise would be payable by the Contracting Parties pursuant to the methods prescribed in paragraphs (b) , (c) , and (d) , above. The District shall estimate all such credits which it expects to make during each Annual Payment Period in calculating each Annual Payment. W As soon as practicable after the execution of this Contract, and on or before June 15 of each calendar year there- after, the District shall furnish each Contracting Party with a tentative schedule of the aggregate monthly payments to be made by such party to the District for the ensuing Annual Payment Period. As soon as practicable after the date of this Con- tract, and on or before October 1 of each calendar year there- after the District shall furnish each Contracting Party with a final estimated schedule of the monthly payments to be made by such party to the District for the ensuing Annual Payment Period, together with supporting budgetary or proposed budget- ary data showing the basis for arriving at such schedule. Each Contracting Party hereby agrees that it will make such payments to the District on or before the 10th day of each month of such Annual Payment Period. If any Contracting Party at any time disputes the amount to be paid by it to the District, such complaining party shall nevertheless promptly make such payment or payments, but if it is subsequently determined by agreement or court decision that such disputed payments made by such complaining party should have been less, or more, the District shall promptly revise and reallocate the charges among all Contracting Parties in such manner that such complaining party will recover its overpayment or the District will recover the amount due it. All amounts due and owing to the by each Contracting Party or due and owing to any Contracting Party by the District shall, if not paid when due, bear inter- est at the rate of ten (10) percent per annum from the date when due until paid. The Dist--ict shall, to the extent permitted by law, suspend delivery of water --r-In the Systenrl to anv Contracting Party which -emains delinquent in any payments 23 due hereunder for a period of sixty days, and shall not resume delivery of water while such Contracting Party is so delin- quent. It is further provided and agreed that if any Contract- ing Party should remain delinquent in any payments due here- under for a period of one hundred twenty days, and if such delinquency continues during any period thereafter, such Con- tracting Party's minimum amount of MOD as described in (c) above, shall be deemed to have been zero MOD during all periods of such delinquency, for the purpose of calculating and rede- termining the percentage of each Annual Payment to be paid by the non-delinquent contracting Parties. However, the District shall pursue all legal remedies against any such delinquent Contracting Party to enforce and protect the rights of the District, the other Contracting Parties, and the holders of the Bonds, and such delinquent Contracting Party shall not be relieved of the liability to the District for the payment of all amounts which would have been due hereunder, in the absence of the next preceding sentence. It is understood that the foregoing provisions are for the benefit of the holders of the Bonds so as to insure that all of the Bond Service Component of each Annual Requirement will be paid by the non-delinquent Contracting Parties during each Annual Payment Period regard- less of the delinquency of a Contracting Party. If any amount due and owing by any Contracting Party to the District is placed with an attorney for collection, such Contracting Party shall pay to the District all attorneys fees, in addition to all other payments provided for herein, including interest. (j) If, during any Annual Payment Period, any Contracting Party's Annual Payment is redetermined as provided in (g), above, the Distr-_,ct will promptly furnish such Contracting Party with an updated schedule of monthly payments reflecting such redetermination, Section S. SPECIAL PROVISIONS. A. The District will contintiously operate and maintain the Systemt in an etfficient manner and in ac_,crdanc.a with go"d business and eangineerl_nq practices, and at reasonable cost and 24 expense. By executing this Contract the Contracting Parties waive any and all claims, as against each other, to any prefer- ential right or entitlement to the capacity or use of specific water sources of the District. The District recognizes its right and duty to operate the various facilities of the System in the most prudent and economical manner for the benefit of all the Contracting Parties. B. The District agrees to carry fire, casualty, public liability, and other insurance on the System for purposes and in amounts which ordinarily would be carried by a privately owned utility company owning and operating such facilities, except that the District shall not be required to carry liabil- ity insurance except to insure itself against risk of loss due to claims for which it can, in the opinion of the District's legal counsel, be liable under the Texas Tort Claims Act or any similar law or judicial decision. Such insurance will provide, to the extent feasible and practicable, for the restoration of damaged or destroyed properties and equipment, to minimize the interruption of the services of such facilities. All premiums for such insurance shall constitute an Operation and Mainte- nance Expense of the System. C. It is estimated that the Project will be placed in operation in 1990. Tt is expressly understood and agreed, however, that any obligations on the part of the District to acquire, construct, and complete the Project and to provide raw water from the Project to the Contracting Parties shall be (i) conditioned upon the District's ability to obtain all necessary permits, material, labor, and equipment, and upon the ability of the District to finance the cost of the Project through the actual sale of the District's Bonds and (ii) subject to all present and future valid laws, orders, rules, and regulations of -he United States of America, the State of Texas, and any regulatory body having jurisdiction. D. Title to all -water supplied hereunder to each Con- t-ractiog Party sha-'I be in the up to each Point of Delivery, at which point title shall pass to the receiving 25 Contracting Party. Each of the parties hereto hereby agrees to save and hold each other party hereto harmless from all claims, demands, and causes of action which may be asserted by anyone on account of the transportation and delivery of said water while title remains in such party. E. The District shall never have the right to demand payment by any Contracting Party of any obligations assumed by it or imposed on it under and by virtue of this Contract from funds raised or to be raised by taxes, and the obligations under this Contract shall never be construed to be a debt of such kind as to require any of the Contracting Parties to levy and collect a tax to discharge such obligation. E. Each of the Cities of Fort Worth, Arlington, and Mansfield, respectively, represents and covenants that all payments to be made by it under this Contract shall constitute reasonable and necessary "operating expenses" of its combined waterworks and sewer system, as defined in Vernon's Ann. Tex. Civ. St. Article 1113, and that all such payments will be made from the revenues of its combined waterworks and sewer System. The obligation of Trinity River Authority of Texas to make payments under this Contract shall constitute reasonable and necessary "operating expenses" of its Tarrant County Water Project, which supplies treated water to the Cities of Bedford, Euless, Grapevine, North Richland Hills, Colleyville, and others, and such payments shall be made from the revenues received by Trinity River Authority of Texas from said Tarrant County Water Project. Each of the Contracting Parties, re- spectively, represents and has determined that the water supply to be obtained from the System, inclu=ding the Project, is 3cso lute ly necessary and essential to 'she present and fu tore operation of its water system and is the only available and adequate source of supply of water therefor, and, accordingly, all payments required by this Contract to be made by each Contracting Party shall constitute reasonable and necessary operating expenses of its respective sys--em or sy-swarns as described above with the affect that the :;bllgatlon to snake 26 such payments from revenues of such system or systems shall have priority over any obligation to make any payments from such revenues, whether of principal, interest, or otherwise, with respect to all bonds heretofore or hereafter issued by such Contracting Party. G. Each of the Contracting Parties agrees throughout the term of this Contract to continuously operate and maintain its combined waterworks and sewer system or water system, as the case may be, and to fix and collect such rates and charges for water and sewer services or water services to be supplied by its combined waterworks and sewer system or water system as aforesaid as will produce revenues in an amount equal to at least (i) all of its payments under this Contract and (ii) all other amounts as required by the provisions of the ordinances or resolutions authorizing its revenue bonds or other obliga- tions now or hereafter outstanding. "Section 6. FORCE MAJEURE. If by reason of force majeure any party hereto shall be rendered unable wholly or in part to carry out its obligations under this Contract, other than the obligation of each Contracting Party to make the payments required under Section 4C. of this Contract, then if such party shall give notice and full particulars of such force majeure in writing to the other parties within a reasonable time after 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 any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Maeure" as employed herein shall mean acts of God, strikes, lookouts, 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, hum- canes, stor-ma, floods, washouts, droug=ts, arrests, restraint of govern-mient and people, disturbances, explosi=ons_ 27 breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply, and inability on the part of the District to deliver water hereunder for any reason, or on account of any other causes not reasonably within the control of the party claiming such inability. Section 7. UNCONDITIONAL OBLIGATION TO MAKE PAYMENTS. Recognizing the fact that the Contracting Parties urgently require the facilities and services of the System, and that such facilities and services are essential and necessary for actual use and for standby purposes, and recognizing the fact that the District will use payments received from the Contract- ing Parties to pay and secure the Bonds, it is hereby agreed that each of the Contracting Parties shall be unconditionally obligated to pay, without offset or counterclaim, its propor- tionate share of each Annual Requirement, as provided and determined by this Contract (including the obligations for paying for "minimums" as described in Section 4C. hereof), regardless of whether or not the District actually acquires, constructs, or completes the Project or is actually delivering water from the System to any Contracting Party hereunder, or whether or not any Contracting Party actually receives or uses water from the System whether due to Force Majeure or other- wise, regardless of any other provisions of c_his or any other contract or agreement between any of the parties hereto. This covenant by the Contracting Parties shall be for the benefit of the holders of the Bonds. Section 8. TERM OF CONTRACT; MODIFICATION; NOTICES; STATE OR FEDERAL LAWS, RULES, ORDERS, OR REGULATIONS. A. TER14 OF CONTRACT, (a) This Contract shall be effective as of March 1, 1980, and this Ccnntract shall continue in force and effect unt:.., all Bonds and all interest coupons appertaining thereto steal have been paid, and thereafter shall continue in force and affect during the entire useful life of the System. The requirement fc-r making the Annual Paytents as bed in Section 4 of this Contract shaL' conmenc prescr, e March 1, 28 (b) It is recognized that the District issued the Series 1919-A Bonds after the date of the Base Contract and before the first Annual Payment Period, but that no payments of principal of or interest on such Bonds were required prior to the first Annual Payment Period under the Base Contract. (c) It is specifically agreed and understood that this Contract, as of its date, will supersede all of the contracts, agreements, and arrangements between each of the parties hereto with respect to the System and the water therefrom and the Bonds, and that this Contract, as of March 1, 1980, will com- pletely amend and supersede all such contracts, agreements, and arrangements with respect to the System and the water therefrom and the Bonds, and will constitute the sole agreement between the parties hereto or any of them with respect to the System and the water therefrom and the Bonds; and all such previous contracts, agreements, and arrangements shall be void and shall be of no force or effect, except for liabilities accrued thereunder prior to March 1, 1980, and except as provided in subsection (d), below. Notwithstanding and regardless of the foregoing provisions of this subsection (c) it is specifically agreed and understood that all rights of the District and of each of the initial Contracting Parties which existed and accrued under any contract or agreement described in this Contract shall continue to exist, be preserved, and be fully enforceable with respect to and against any entity which is not an Additional Contracting Party or a party to this Contract, the same as if such contract or agreement were in full force and effect for all purposes, and all legal and equitable remedies with respect to such rights shall be available and may be pursued against any entity which is not ar, Additional Contracting Party or a party to this Clontract- (d) it is recognized by the parties to this Contract that an executed copy of the Base Contract and the proceedings relating thereto were submitted to the Honorable Mark White, Attorruey General of Texas, aLong with the Set-.es 1979-A Bonds, as provided by the District Act, and that the Attorney General, 29 in his certificate and opinion dated October 9, 1979, found specifically that the Base Contract had been made in accordance with the Constitution and laws of the State of Texas and that the Base Contract was valid and enforceable in accordance with its terms and provisions; and further the Attorney General approved the 1979-A Bonds and the Base Contract, with the effect that pursuant to the provisions of the District Act the Base Contract "shall be valid and binding and shall be incon- testable for any cause". In order to protect the rights of the owners of the Bonds and the parties to this Contract, it is specifically agreed and understood by the parties to this Contract that, any provisions of this Contract to the contrary notwithstanding, if for any reason whatsoever this Contract, or any part of this Contract significantly affecting the rights of the owners of the Bonds,should be held to be invalid or uncon- stitutional, or in contravention of any law or any constitu- tional provisions, then the Base Contract, the Trinity River Authority Contract, and the Arlington Contract shall be con- strued and deemed to be and to have been in full force and effect at all times to the extent required to protect the rights of the owners of the Bonds and the parties to such contracts, with the Base Contract at the time of execution thereof constituting the underlying security for the Series 1979-A Bonds. It is further agreed and understood by the parties to this Contract that this Contract is amendatory in nature and is not intended to abrogate the rights of the owners of the Bonds or to affect adversely in any way the security therefor, but is intended to increase the security therefor, substantially restate, carry forward, and update the provisions of the Base Contract and add additional, parties thereto as permitted thereby. " B. MODIFICATICN. No change or modification of this Contract shall be made which will affect adversely the prompt payment when -due of all moneys required to be paid by each Contracting Party under the terms of thIs Contract and no such 30 change shall be effective which would cause a violation of any provisions of any Bond Resolution. C. ADDRESS AND NOTICE. Unless otherwise provided herein, any notice, communication, rec,,iest, reply, or advice (herein severally and collectively, for convenience, called "Notice") herein provided or permitted to be given, made, or accepted by any party to any other party must be in writing and may be given or be served by depositing the same in the United States mail postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by prepaid telegram when appropriate, addressed to the party to be noti- fied. Notice deposited in the mail in the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise stated herein, from and after the expiration of three days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the ad- dresses of the parties shall, until changed as hereinafter provided, be as follows: If to the District, to: Tarrant County Water Control and Improvement District Number One P. 0. Box 4508 Fort Worth, Texas 76106 If to the initial Contracting Parties, as follows: City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 City of Arlington 200 West Abram P. O. Box 231 Arlington, Texas 76010 City of Mansfield 100 E, Broad Street Mansfield, Texas 76063 Trinity River Authority of Texas P. O. Box 10 Arlington, Texas 76010 Tne parties hereto s1hall have uhe -tight from time to time and at any time to charge their resnecz�i�,e add woes and eac-li shall have the right to specify as its address any other address by 31 at least fifteen (15) days' written notice to the other parties hereto. D. STATE OR FEDERAL LAWS, RULES, ORDERS, OR REGULATIONS. This Contract is subject to all applicable Federal and State laws and any applicable permits, ordinances, rules, orders, and regulations of any local, state, or -federal governmental au- thority having or asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule, or regulation in any forum having jurisdiction. Section 9. POINTS OF DELIVERY; MEASUREMENT; OPERATION OF FACILITIES. A. CITY OF FORT WORTH FACILITIES. (a) The City of Fort Worth, hereinafter in this Section 9A called the "City", receives raw water from the District at three points of de- livery. Water from Lake Bridgeport and Eagle Mountain Lake (the "West Fork System") is delivered to the City by releases from Eagle Mountain Lake into Lake Worth, and the City withdraws water from Lake Worth as needed through pipelines leading to the City's Holly Filtration Plants. Water from-Cedar Creek Reservoir and Richland-Tehuacana Reservoir will be delivered to the City at the Rolling Hills Filtration Plant. Water is also delivered to the City by deliveries from Lake Benbrook into the Clear Fork of the Trinity River. For purposes of Section 9A of this agreement, the point of discharge of the Eagle Mountain Dam outlets into the upper end of Lake Worth shall be known as the "Northwest Point of Delivery", the point of entry of raw water into the Rolling Hills Filtration Plant shall be known as the "Southeast Point of Delivery", and the point of discharge at the Be rook Dam outlet shall be known as the "Benbrook Dam Point of DeJ4,jery. (b) The City, at its sole cost, and without credits or reimbursements from the District or other Contracting Parties, shall maintain and operate the Lake Worth reser,,roir, dam, ,p? way, and appurtenances and a!- operations and inciuding pipelines, used to transcort and aeli,ier water frora 32 the Clear Fork of the Trinity River to the Fort Worth Holly water treatment plant. The District shall have the right, but not the obligation, to notify the City of maintenance or repair work deemed necessary by District, and the City agrees to take appropriate steps to effect that identified maintenance and repair work, and in the event that such work is not done and performed by the City, to diminish or withhold deliveries of water at the Point of Delivery until such work is accomplished. In the event of measurable and preventable leakage of raw water from any of the facilities to be maintained by the City, the City shall pay the District for such raw water losses as if it had taken and used same from the System. The District shall make releases from Eagle Mountain Dam sufficient to maintain the water surface of Lake Worth at or above elevation 590.0. The City agrees to limit its annual diversions from the exist- ing System facilities on the West Fork of the Trinity River to not more than 100,000 acre-feet per year whenever the combined contents of Lake Bridgeport and Eagle Mountain Lake total 250,000 acre-feet or more. At such times as the combined contents of Lake Bridgeport and Eagle Mountain Lake total less than 250,000 acre-feet, the City agrees to limit its annual diversions from Lake Worth to not more than 46,000 acre-feet, beginning with the next Annual Payment Period. For purposes of determining the volume of water available for diversion by the City from Lake Worth in any given month, the contents of Lake Bridgeport and Eagle Mountain Lake as of the first day of the month shall be considered to apply for the full month. it is recognized that the City's requirements vary seasonally, and the City shall be entitled to vary the monthly di,,rerslons from Lake Wor th In accordance with the normal pattern of its season- a! requirements provided the annual rate of diversion is kept within the above stated limits. The District shall have the right to pass water through Lake Worth for District's use or sale to the City of River Oaks and to Texas Electric Service Company, and other water custome-s of 'he District, 33 (c) The City shall be entitled to receive, and the Dis- trict shall be obligated to deliver, raw water at the North- west, Benbrook, and Southeast Points of Delivery as necessary to supply the City's raw water needs, subject to 'limitations as set out elsewhere herein. (d) (i) The City shall provide, operate, maintain and read meters which shall record water taken by the City to the extent such metering is practicable. The principal points of measurement for water taken by the City under this Contract shall be at the City's water treatment plants by standard totalizing-indicating-recording meters which shall measure the volume of water with an accuracy between the limits of 98 percent and 102 percent of true volume. Other raw water taken by the City shall be measi4red through a conventional type of approved meter wherever practicable or by other approved method of measurement or estimate where the use of conventional meters is not practicable. In general, the City shall measure the water supplied under this Contract by the most accurate devices and methods practicable for use by the City. (4i) The City shall keep accurate records of all the measurements of water required under this Contract, and the measuring devices and such records shall be open to inspection of the District at all times. The District shall have access to the metering equipment at all reasonable times, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the City. For the purpose of this Contract the original record or reading of the meter or meters shall be the journal or other record book of the City in its office in which the records of tile employees or agents of the City who take the readings are or may be transcribed. Upon written retest of the District, the City will gi%re the Dis- trict a copy of such journal or record book, or permit the District to have access to the same in the office of the City during reasonable business hours. (ili) Not mere than once in each calendar mont"n, on a date as near the end of such calendar month as pract.-c-all , the 34 City shall calibrate its raw water meters at the City's water treatment plants if requested in writing by the District to do so, in the presence of a representative of the District, and the parties shall jointly observe any adjustments which are made to the meters in case any adjustments shall be necessary. If the District shall in writing request the City to calibrate its raw water meters at the City's water treatment plants, the City shall give the District notice of the time when any such calibration is to be made and if a representative of the Dis- trict is not present at the time set, the City may proceed with the calibration and adjustment in the absence of any represen- tative of the District. (iv) If upon any test of the raw water meters at the City's treatment plants, the percentage of inaccuracy of such metering equipment is found to be in excess of two (2) percent, registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable. If such time is not ascertainable, then for a period extending back one half (1/2) of the time elapsed since the last date of calibration, but in no event further back than a period of six (6) months. If any meters are out of service or out of repair so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered through the period such meters are 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. For such purposes, the best data available shall be deemed to be the registration of high service pump station meter or meters at the City's water treatment plants, if the same have been installed and are accurately registering, to whichn registration the filter plant losses between the raw water meters and the high service meters shall be added based on a mutually agreed estimate of such losses. Otherwise, the amount of water delivered during such period may be estimated by (a) Correcting the error if ,he percentage of the error is ascer'ainahle y calibration tests or 35 mathematical calculation, or (b) Estimating the quantity of delivery by deliver- ies during the preceding periods under similar conditions when the meter or meters were regis- tering accurately. Similarly, the District shall have the right to make checks, at its expense but with the cooperation of the City of all other measuring devices required under this Contract and to check the computations or estimates of unmetered raw water used to meet the requirements of the City under this Contract. Any neces- sary corrections of such meter readings, estimates, or deter- mination of use shall comply as far as practicable with the methods set forth in the foregoing paragraph. Monthly readings of the totalizing meters at the City's treatment plants shall be made by the City, and by the District if it so elects, at a regular hour on the morning of the Ist day of each month. Other meter readings and determinations of water used during a monthly period shall be made in accordance with the customary practice of the City, but in no case later than the 15th day of each month. B. CITY OF ARLINGTON FACILITIES. (a) The City of Arlington, hereinafter in this Section 9B. called the "City", uses Lake Arlington (the "Lake") as a source of raw water supply and as a storage reservoir, and owns 56 per cent of the conservation capacity and safe yield of the Lake, with the re- maining 44 per cent being owned by the Texas Electric Service Company under the terms of an Agreement with the City dated June 29, 1955. The City presently receives delivery of water from the District at the Lake (the "Lake Arlington Point of Delivery"). Deliveries at the Lake Arlington Point of Delivery shall be sufficient to permit all of the raw water requirements of the City to be diverted from the lake until the new South- west Arlington treatment plant is operational. The District shall provide an additional Point of Delivery at a ccnnect,-on on the Cedar Creek ipeline, or, at the City's option, at the District's balancing reservoir on such n4pp—ne, to sup ly the 36 new Southwest Arlington water treatment plant to be located at Eden Road and U.S. Highway 287 ("Southwest Arlington Point of Delivery"), such connection at the Southwest Arlington Point of Delivery to be completed and ready to deliver water when that plant is operational, and the District shall thereafter make available from its System at the Lake Arlington Point of Delivery and at the connection at the Southwest Arlington Point of Delivery all of the raw water requirements of the City. All facilities required to transport water from the connection on the Cedar Creek pipeline to the Southwest Arlington treatment plant shall be acquired, constructed, owned, and maintained by the City at its sole cost. (b) The District shall release water from the Cedar Creek and/or Richland Chambers pipelines into Village Creek, or shall otherwise deliver water into the Lake, in amounts which will maintain the Lake water surface at or above Elevation 531. All water taken by the City from the Lake shall be deemed to be System water, and shall be paid for as such in accordance with the provisions of this Contract, regardless of the actual source of such water. (c) The District shall have the right to utilize the Lake for the storage of water up to its full capacity and shall have the right to divert water from the Lake for District's use or sale to others when the Lake level is above Elevation 545, or when the Lake level is below Elevation 545 provided the Dis- trict replaces an amount of water equal to the diversion as soon as feasible. (d) The City, at its sole cost, and without credits or reimbursements from the District, shall maintain and operate --he Lake reserva.'r, dam, spi_'Iways and appurtenances. The District shall have the right, but not the obligation, to notify the City of - -intenan--e or repai:: work deemed necessary by District, and in the event that such work is not done and performed by the City, to diminish or withhold dell*veries of water at the Point of Oeliver-,, unitil such work in accomp'—shed, Tn the event of measurable and preventable leakage of raw water 37 so, in the presence Of a representative of the District, and the parties shall jointly observe any adjustments which are ,made to the meters in case any adjustments shall be necessary. If the District shall in writing request the City to calibrate its raw water meters at the City's water treatment plants, the City shall give the District notice of the time when any such calibration is to be made and if a representative of the District is not present at the time set, the City may proceed with the calibration and adjustment in the absence of any representative of the District. (iv) If upon any test of the raw water meters at the City's treatment plants, the percentage of inaccuracy of such metering equipment is found to be in excess of two (2) per cent, registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable. If such time is not ascertainable, then for a period extending back one half (1/2) of the time elapsed since the last date of calibration, but in no event further back than a period of six (6) months. If any meters are out of service or out of repair so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered through the period such meters are out of service or out of repair shall he estimated and agreed upon by the parties hereto upon the basis of the best data available. For such purposes, the best data available shall be deemed to be the registration of high service pump station meter or meters at the City's water treatment plants, if the same have been installed and are accurately registering, to which regis- tration the filter plant losses between the raw water meters and the high service meters shall be added based on a nutuallY, aareed estimate of such !-cases. Ot�-erwise, the amount of water delivered during such period T.av be estimated by: (a) Correcting the error if the percentage of the error is ascertairiablc b,,, calibration tests or mathematica I can Or 39 from any of the -facilities to be maintained by the City, the City shall pay District for such raw water losses as if it had taken and used same from the System. (e) (i) The City shall provide, operate, maintain, and read meters which shall record water taken by the City to the extent such metering is practicable. The principal points of measurement for water taken by the City under this Contract shall be at the City's water treatment plants by standard totalizing-indicating-recording meters which shall measure the volume of water with an accuracy between the limits of 98 per cent and 102 per cent of true volume. Other raw water taken by the City shall be measured through a conventional type of approved meter wherever practicable or by other method of measurement or estimate where the use of conventional meters is not practicable. In general, the City shall measure the water supplied under this Contract by the most accurate devices and methods practicable for use by the City. (ii) The City shall keep accurate records of all the measurements of water required under this Contract, and the measuring devices and such records shall be open to inspection of the District at all times. The District shall have access to the metering equipment at all reasonable times, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the City. For the purpose of this Contract the original record or reading of the meter or meters shall be the journal or other record book of the City in its office in which the records of the employees or agents of the City who take the readings are or may be transcribed. Upon written request of the Di-strict, the City will give the Dis- trict a copy of such Journal or -re-cord book, or permit the District to bave access to the same in the office of the City during reasonable business hours, (iii) Not more than once in each calendar month, on a date as near the end of such calendar month as practical, the City shall calibrate it raw water re ors a- the City's water treat-ment plants if re sue st-add in writing by the r�Str4 C- t, 4o 38 (b) Estimating the quantity of delivery by deliver- ;as during the preceding periods under similar conditions when the meter or meters were reais- tering accurateiv. Simillarlv, the District shall have the right to make checks, at its expense but with the cooperation of the City of all other measuring devices required under this Contract and to check the computations or estimates of unmetere6 raw water used to meet the requirements of the City under this Contract. Any necessary corrections of such meter readings, estimates,mates, or determination of use shall comply as far as practicable with the methods set forth in the foregoing paragraph. Monthly readings of the totalizing meters at the City's treatment plants shall be made by the City, and by the District if it so elects, at a regular hour on the morning of the Ist day of each month. Other meter readings and determinations of water used during a monthly pe- riod shall be made in accordance with the customary practice of the City, but in no case later than the 15th day of each month. C. CITY OF MANSFIELD FACILITIES. (a) Subject to the following provisions hereof, the District shall release water from the existing System pipeline into a Point of Delivery at the existing pipeline constructed by the City of Mansfield, hereinafter in this Section 9C. called the "City", in amounts which shall be sufficient to permit City to divert all of its raw water requirements from the System under this Contract. The City at its sole cost shall maintain and operate the connecting pipeline and appurtenances. The District shall have the right, but not the obligation, to notify City of maintenance or repair work deemed necessary by _-dstrict, and in the event that such work -is not done and nerformed by Citv, to, imini sh o_ de-liveries of water to City until such work is accomplished. In the event of measurable and preventable leakage of raw water from any o f the facilities to he m a. ntaincd by the City, the City shall. pay District 4or mu�_n raw water losses as if it had n. taken, and used same fron-, the System. 40 (b) (i) The City shall provide, operate, maintain, and read meters which shall record water taken by the City to the extent such metering is practicable. The principal points of measurement for water taken by the City under this Contract shall be at the City's water treatment plants by standard totalizing-indicating-recording meters which shall measure the volume of water with an accuracy between the limits of 98 per cent and 102 per cent of true volume. Other raw water taken by the City shall be measured through a conventional type of approved meter wherever practicable or by other approved method of measurement or estimate where the use of conventional meters is not practicable. In general, the City shall measure the water supplied under this Contract by the most accurate devices and methods practicable for use by the City. (ii) The City shall keep accurate records of all the measurements of water required under this Contract and the measuring devices and such records shall be open to inspection of the District at all times. The District shall have access to the metering equipment at all reasonable times, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the City. For the purpose of this Contract the original record or reading of the meter or meters shall be the journal or other record book of the City in its office in which the records of the employees or agents of the City who take the readings are or may be transcribed. Upon written request of the District, the City will give the Dis- trict a copy of such journal or record book, or permit the District to have access to the same in the office of the City during reasonable business hours. (iill Not more than once in each calendar month, on a date as near the end of such calendar month as practical, the City shall, calibrate its raw water meters at the City's water treatment plants if requested in writing by the District to do so, in the presence of a representative of the Distr4�ct, and _he parties shall Jointly observe any adjustments wlhich are made to the meters In case any adjustments shall be necessary, ji 41 If the District shall. in writing r=_quest the City to calibrate its raw water meters at the City's water treatment plants, the City shall give the District notice of the time when any such calibration is to be made and if a representative of the District is not present at the time set, the City may proceed with the calibration and adjustment in the absence of any representative of the District. (iv) if upon any test of the raw water meters at the City's treatment plants, the percentage of inaccuracy of such metering equipment is found to be in excess of two (2) per cent, registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable. if such time is not ascertainable, then for a period extending back one half (1/2) of the time elapsed since the last date of calibration, but in no event further back than a period of six (6) months. If any meters are out of service or out of repair so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered through the period such meters are cut of service or out of repair shall be estimated and agreed upA by the parties hereto upon the basis of the best data available. For such purposes, the best data available shall be deemed to be the registration of high service pump station meter or meters at the City's water treatment plants, if the same have been installed and are accurately registering, to which regis- tration the filter plant losses between the raw water meters and the high service meters shall be added based on a mutually agreed estimate of such losses. Otherwise, the amount of water delivered during such period may be estimated by: (a) Correcting the error if the percentage of the error is ascertainable by calibration tests or mathematical calculation, or (b) Estimating the quantity of delivery by de74-,,er_ ies during the precedi;7ig periods under simil-ar cor.dl t-,,ons when the meter ot meters were req:,s- tering accurately. 42 Similarly, the District shall have the right to make checks, at its expense but with the cooperation of the City of all other measuring devices required under this Agreement and to check the computations or estimates of unmeterad raw water used to meet the requirements of the City under this Contract. Any necessary corrections of such meter readings, estimates, or determination of use shall comply as far as practicable with the methods set forth in the foregoing paragraph. Monthly readings of the totalizing meters at the City's treatment plants shall be made by the City, and by the District if it so elects, at a regular hour on the morning of the 1st day of each month. Other meter readings and determinations of water used during a monthly period shall be made in accordance with the customary practice of the City, but in no case later than the 15th day of each month. D. TRINITY RIVER AUTHORITY OF TEXAS FACILITIES. (a) Trinity River Authority of Texas (the "Authority") is entitled to receive raw water from the System for the sole purpose of treating such water to provide potable water from its facilities known as the "Tarrant County Water Project", to serve areas described as "Potential service Areas" of the District or the Authority in the North Central Regional Water Supply Study dated November, 1974. The Authority agrees that it will not serve any other areas with water derived from the System. (b) The District will release raw water from the System into Village Creek (which shall be the Point of Delivery to the Authority) in such amounts as are required by the Authority under this Contract, The Authority at its sole cost shall make such arrangements and provide such facilities as are necessary to divert its System water from Lake Arlington and transport same to its treatment plan". The District shall have the right, but not the obligation, to notify the Authority of Leaeonable maintenance or repair work deemed necessary by the Dlstrlct to the Au thority5s intake facilities.. anA 4c Ile t e%r e such work is not done and performed by the Authority, to 43 diminish or withhold deliveries of water to the Authority until such work is accomplished. In the event of measurable and preventable raw water leakages from the intake facilities, the Authority shall pay the District for such raw water losses as if it had taken and used same from the System. (c) (i) The Authority shall provide, operate, maintain, and read meters which shall record water delivered to the Authoritv. The principal measurement points for water taken by ,;he Authority under this Contract shall be the Authority's intake facilities at Lake Arlington and the water treatment plant of its Tarrant County Water Project. Measurement will be by standard totalizing-indicating- recording meters which shall measure the water volume with an accuracy between the limits of 98 per cent and 102 per cent of true.volume, with a type mutually agreed upon by Authority and District. Authority shall measure the water supplied under this Contract by the most accurate devices and methods practicable for use by the Authority. (ii) The Authority shall keep accurate records of all measurement of water required under this Contract and the measuring devices and such records shall be open to inspection of District during reasonable business hours. The District shall have access to the metering equipment at all reasonable times, but the reading, calibration, and adjustment thereof shall be done only by employees or agents of the Authority. The original record or reading of meter(s) shall be the journal or other record book of the Authority in its office in which the records of the employees or agents of the Authority who take the readings are transcribed. Upon written request of the District, the Authority will give the District a copy of such journal or record book, or permit the District to have access to same in the Authority's office during reasonable business (iii) Not more than once each calendar month, on a date as near the end of auch calendar month as praa:ticai, the Authority shah calibrate itz raw ,;star meters in the presence 44 of a District representative, if requested in writing by the District to do so. The parties shall jointly observe any adjustments which are made to the meters at the Authority's intake facilities and water treatment plant. The Authority shall give the District notice of the time when any such calibration is to be made and if a District representative is not present at the time set, the Authority may proceed with the calibration and adjustment. (iv) If upon any test of r.he raw water meters, the percentage of inaccuracy is found to be in excess of two (2) per cent, registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable. If such time is not ascertainable then back one half (1/2) of the time elapsed since the last date of calibration, but in no event further back than a period of six (6) months. If any meters are out of service or out of repair so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered during the period such meters are 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. For such purposes, the best data available shall be deemed to be the registration of high service pump station meter(s) at the Authority's water treatment plant, if same have been installed and are accurately registering, to which registration of treatment plant losses between the raw -water meters and the high service meters shall be added based on a mutually agreed estimate of such losses. Otherwise, the amount of water delivered during such period may be estimated by: (a) Carrecting the error if the percentage of the error is ascertainable by calibration tests or mathematical calculation, or (b) Estimating the quantity delivered during pre- ceding periods under similar conditions when meter(s) Were registering accirately, 45 Similarly, the District shall have the right to make checks, at its own expense but with the cooperation of the Authority, of all other measuring devices required under this Contract and to check the computation or estimates of unmetered raw water used to meet the requirements of the Authority under this Contract. Any necessary corrections of such meter readings, estimates, or determination of use shall comply as far as practicable with the methods set forth in the foregoing paragraph. Monthly readings of the totalizing meters at the Authority's treatment plants shall be made by the Authority, and by the District if it so elects, at a regular hour on the morning of the first day of each month. Other meter readings and determinations of water used during a monthly period shall be in accordance with the Authority's customary practice, but in no case later than the 15th day of each month. Section 10. A. ADVISORY COMMITTEE: The governing body of each of the Initial Contracting Parties (but no other Contracting Party) annually shall appoint one of the members of its governing body or one of its officers as a voting member of the Advisory Committee for the System, which Advisory Committee is hereby created and established. Additionally, the Board of Directors of the District annually shall appoint to serve as a voting member of the Advisory Committee one of the members of said Board of Directors or one of the officers of the District. The Advisory Committee, at its first meeting, shall elect a Chairman, a Vice Chairman, and a Secretary. The Advisory Committee may establish bylaws governing the election of officers, meeting dates, and other matters pertinent to the functioning of the Advisory Coi=ittee. The Adviscry Committee shall consult with and advise the Dist'rict, through its General Manager, with regard to the following zmatterrs pertaining to the System: (i) The issuance of Bonds; tii) The operation and maintenance of the System; (iii) Additional Contracting Partles and the ta,_-ns and conditions of the contracts wi--h such 46 parties, consistent with the provisions of this Contract; (iv) Sales of water to entities which are not Additional Contracting Parties, and the prices, terms, and conditions of such sales, consistent with the provisions of this Con- tract; (v) The District's Annual Budget, prior to its submission by the District's General Manager to the District's Board; (vi) Review of the District's Annual Audit; (vii) All other pertinent matters relating to the management of the System; and (viii) improvements and extensions of the System and the providing of any additional source of water supply. Said Committee shall have access to and may inspect at any reasonable times all physical elements of the System and all records and accounts of the District pertaining to the System. A copy of the minutes of the meetings of the Advisory Committee and all other pertinent data, shall be provided to the Dis- trict's President. B. The term of membership on the Advisory Committee shall be for twelve (12) months, beginning on March I of each year. A member may serve more than one (1) term if so appointed by the governing body represented. All expenses of the Advisory Committee in discharging its duties under this Sect'-on shall be considered as an Operation and Maintenance Expense of the System. Section 11. SEVERABILITY. The pa_­� es 'here-to zpecifi- cally agree that in case any ore or more of the sections, sub- sections, provisions, clauses, )r words of this Contract or the application of such sections, subsections, provisions, clauses, or words to any situation or circunstan.ce should be, or should be held to be, for any reason, ir:valid or uncon-Atitut-ional, under the laws or constitutions of the State of Texas or the 47 United States of America, or in contravention of any such laws or constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other sections, subsections, provisions, clauses, or words of this Contract or the applica- tion of such sections, subsections, provisions, clauses, or words to any other situation or circumstance, and it is in- tended that this Contract shall be severable and shall be construed and applied as if any such invalid or unconstitu- tional section, subsection, provision, clause, or word had not been included herein, and the rights and obligations of the parties hereto shall be construed and remain in force accord- ingly. Section 12- REMEDIES UPON DEFAULT. It is not intended hereby to specify (and this Contract shall not be considered as specifying) an exclusive remedy for any default, but all such other remedies (other than termination) existing at law or in equity may be availed of by any party hereto and shall be cumulative. Recognizing however, that the District's under- taking to provide and maintain a supply of water hereunder is an obligation, failure in the performance of which cannot be adequately compensated in money damages alone, the District agrees, in the event of any default on its part, that each Contracting Party shall have available to it the equitable remedy of mandamus and specific performance in addition to any other legal or equitable remedies (other than termination) which may also be available. Recognizing that failure in the performance of any Contracting Party's obligations hereunder could not be adequately compensated in money damages alone, each Contracting Party agrees in the event of any default on its part that the District shall have available to it the equitable remedy of mandamus and specific performance in addition to any other Legal or equitable remedies (other than termination) which may also be available to the District. notwithstanding anything to the contrary contained in this Contract, any right or re�medy or any default het'eunder excopt the _�ight of the Distric't to recei,,,e the Nanual Pwy-ner.t which 48 shall never be determined to be waived, shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years plus one (1) day after the occurrence of such default. No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto or of performance by any other party of any duty or obligation hereunder shall be deemed a waiver thereof in the future, nor shall any such waiver or waivers be deemed or construed to be waiver of subsequent breaches or defaults of any kind, character, or description, under any circumstances. Section 13. VENUE. All amounts due under this Contract, including, but not limited to, payments due under this Contract or damages for the breach of this Contract, shall be paid and be due in Tarrant County, Texas, which is the County in which the principal administrative offices of the District and of each of the Initial Contracting Parties are located. It is specifically agreed among the parties to this Contract that Tarrant County, Texas, is the place of performance of this Contract; and in the event that any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Tarrant County, Texas. IN WITNESS WHEREOF, the parties hereto acting under au- thority of their respective governing bodies have caused this Contract to be duly executed in several counterparts, each of which shall constitute an original, all as of the day and year first above written, which is the date of this Contract. TARRANT COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NUMBER ONE P esi, rr�- Boar, of rectors ATTEST. Secretary, Board of Directors APPROVED AS TO-TORM"PI-ND LEGALIT'Y/: Attor-Heys-for --he Distrgot (L-ISTRTC-T SEAL) 49 CITY OF ARLINGTON, TEXAS BYi s _ Mayor l ATTEST: Cit Secret y APPROVED AS TO FORTM AND LEGALITY: City Attorney (CITY SEAL) CITY OF FORT WORTH, TEXAS City Manager ATTEST: APPRMT M ,._ <i-- .-UNCSL W �.s �3'r� City Secretary irt_7 APPROVED AS TO FORM AND LEGALITY: City Attorney (CITY SEAL) CITY OF MANSFIELD, TEXAS SY Mayor ATTEST: f ` tj Se Ci Secretary :PPRC u AS TO M ANll LEGALITY: r City Attorney f r` (CITY SEAL.) 1 �' TRINIT R ALFr Y OF TEXAS BY Cene I 5o ATTESTED AND APPROVED AS TO FORM AND LEGALITY: Secret y, Board of Directors, and StaffZttorney for the Authority (AUTHORITY SEAL) LAW C)r'F�CFS BOOTH,LLOYD AND SIMMONS A PROFESSIONAL CORPORATION �r 302 SAN JACINTO BUILDING 9TH&SAN JACINTO AUSTIN,TEXAS 76701-2554 FRANK R.BOOTH 512-476..9506 T v�.} C „x,0.;„1 E ROBERT H.LLOYD LUTGHER 8.SIM9,4oNS PAUL G.GOSSELINK I r SKIP NEtusoM July 21, 1982 J1 PATRICK W. LINDNER BRENT W. RYAN DOUGLAS G.CAROOM DONALD N.WALKER Mr. Ben Hickey General Manager Tarrant County Water Control and Improvement District No. 1 Box 4508 Fort Worth, Texas 76106 RE: Arlington Rate Case Dear Ben: Enclosed for your file are certified copies of the following: 1. Settlement Agreement; 2. Trinity River Authority Intervention Petition with Commission Order designating TRA as a party; and 3. Final Order of Dismissal. Pursuant to Texas water Code 55.351, an appeal from a final order of the Texas Water Commission must be filed in a district court of Travis County within 30 days after the effective date of the order appealed. Our courts have held the 30 day requirement to be jurisdictional. Therefore, in our opinion, the effective date of the Final Order of Dis- missal is June 25, 1982, and in accordance with the Texas Rules of Civil Procedure, the Order will become final and non-appealable after July 26, 1982, unless an appeal is filed. Pursuant to TEX. REV. CIV. STAT. ANN. art. 6252-13a (Administrative Procedure and Texas Register Act), 516 (Vernon 1976), the parties to the case were required to file a motion for rehearing on or before July 12, 1982, as a pre- requisite to an appeal. our courts have held this provision to be mandatory. Therefore, it is our further opinion that no party to the case can successfully appeal at this date. In accordance with Article II of the Settlement Agree- ment, each party to the agreement is obligated to execute the Amendatory Contract within 30 days from July 26, 1982, providing I July ZI, 1982 page two no appeal is filed. Since the Amendatory Contract relates to the issuance of bonds, we recommend that you consult with Paul Horton concerning the formalities needed for each party's signing the Amendatory Contract. You should consider the Settlement Agreement as well as the Amendatory Contract, since the Settlement Agreement con- tains representations and actions required of the district and other parties as a part of the settlement. we shall advise you on July 27, 1982, whether any appeals were filed. Kindest personal regards. Very truly yours, Frank�k e. 'h� FRB/ckk Enclosures cc w/encls: Warren Brewer James Strawn George Christie Paul Horton SETTLEMENT AGREEMENT This settlement agreement ("the Settlement Agreement") by and among the Tarrant County Water Control and Improvement District No. 1 (the "District") , the City of Arlington ("Arlington"), the City of Fort Worth ("Fort Worth") , the City of Mansfield ("Mansfield") and the Trinity River Authority ("TRA") (hereinafter sometimes collectively referred to as "the Parties") , witnesseth: WHEREAS, the District presently owns and operates surface raw water supply facilities which consist primarily of Eagle Mountain Dam and Reservoir, Bridgeport Dam and Reservoir, and Cedar Creek Dam, Reservoir and Pipeline (the "Existing System"), and WHEREAS, the District proposes to acquire, construct and complete certain additional surface raw water supply facilities, including a dam and reservoir on Richland and Chambers Creeks in Navarro and Freestone Counties and an adjacent dam and reservoir an Tehuacana Creek in Freestone County and related facilities to enable the District to supply raw water from such sources to its customers (the "Project"); and WHEREAS, the Existing System and the Project herein- after are referred to collectively as the "System"; and WHEREAS, the District has under study the question of whether it would be prudent and economical for the benefit of all its customers to build, as a part of the Protect, a pLpeline between Benbrook Reservoir and the Cedar Cr=�ek pipeline (the "Bain crock Project") to provide terminal storage. WHIE'REAS, Arlington, Fort Worth, Mansfield and TRA obtain raw water from. the System under separate contracts with the District, specifically, under the Tarrant County Regional Water Supply Facilities Contract entered into August 29, 1979 for the Cities of Fort Worth and Mansfield, a similar contract entered into December 12, 1979 with the the Trinity River Authority (both hereinafter referred to as the "1979 Contract") , and under a contract dated July 1, 1971 for the City of Arlington (the "1971 Arlington Con- tract"); and WHEREAS, a dispute has arisen and resulted in liti- gation before the Texas Water Commission over the desires of the District, Fort Worth, Mansfield and TRA that Arlington sign a contract similar to the 1979 Contract, over the District's obligation to supply water to Arlington under the 1971 Arlington Contract, and over the allocation of the operations and maintenance and debt service costs incurred to perform the water supply functions of the Existing System and to be incurred in connection with the Project; and WHEREAS, the Parties have reached a compromise and settlement of their dispute whereby they have agreed to a single contract specifying a uniform rate computed by prorating such costs over all water delivered by the Dis- trict and applicable to all water delivered by the District, adjusted through (1) payment of certain equitable premiums in addition to such rate for water used outside the boundaries of the District and a schedule of elimination of such premiums, and (2) surcharges and reductions related to taxes levied for System -water supply purposes, all of which the Parties agree operate together to fully cornponsate all equiti,es and which the Parties further, agree operate together to fully reflect the costs of providing raw water service thereby fairly and properly apportioning the District's water supply costs among its customers over the life of the System; -2- WHEREAS, the Parties desire to implement such agreement upon appropriate approval by the Water Commission of the State of Texas ("the Commission"); NOW, THEREFORE, the Parties mutually agree and covenant as follows: Scope I. The Settlement Agreement involves three elements: (1) The Parties agree upon a contract among them, in the form of an amended version of the 1979 Contract, fixing terms of raw water service by the District, including terms for the calculation of rates to be charged for such service, effective March 1, 1980 (the "Amendatory Contract"); (2) the Parties agree upon the amounts owed by each, pursuant to the terms of the Settlement, for service rendered from March 1, 1980 to the present, and for repayment of such amounts over a five-year period; and (3) the Parties' agreement is con- ditional upon and subject to entry by the Commission of an appropriate final, non- appealable order (the "Commission Order") on or before October 1, 1982. The lumendator_X_C.ontract is attached hereto as Ex- The Amendatory Contract bibit A. Each of the Parties agrees to execute the Amen- datory Contract within thirty days following the date that the Comm—'ss'Lon Order becomes final and non-ap-pealable, Tne Parties agree and represent the following concerning the Amendatory Contract: (1) The District intends, to the maximum extent feasible, to pay System expenses itself and to do so out of revenues from sources other than taxes. However, in some instances it may be necessary for the District to rely on payment by a particular customer of a System expense or to rely on tax revenues to pay certain System expenses. Whenever this happens, suitable adjustments will be made for the sharing of such System expenses among all of the customers who are parties to the Amendatory Contract, in a manner consistent with the rights of the owners of the District's bonds. Section 4,C,(e) of the Amendatory Contract provides for such an adjustment with respect to taxes used to pay the water supply portion of the debt service on the District's 1965 and 1965 Second Series bonds until such bonds are paid off in 1995. In the event that payment of such debt service by taxes shall reduce or cease, the surcharge provided in Section 4,C, (e) of the Amendatory Contract shall be adjusted accordingly. (2) The District undertakes to make a prompt decision on the prudence and. economics of the Benbrook Project. If the District determines that the Benbrook Project would be prudent and economical for the benefit of all its customers, the District will undertake the Benbrook Project as a part of the Project, by securing an appropriate and timely amendment or supplement to the 'Engineering Report on the Vroject, and the Benbrook Project, will become a part of the System for all purposes antler the Amendatory Contract. (3) Exhibit B illustrates the intended application of the terms of the Amendatory Contract for the period October 1, 1932 -- September 30, 1963 andthcreafter, using hypothetical expenaes and volumes of water. -4- Settle-up Payments and Contract Rate Illustration Calculations of adjustments to reflect the amounts that each of Arlington, Fort Worth, Mansfield and Trinity River Authority would have paid through September 30, 1982, pursuant to the terms of the settlement, but did not pay, are attached as Exhibit C ("Settle-up Amounts"). Settle-up Amounts shown for the periods March 1, 1980 - February 28, 1981 and March 1, 1981 - September 30, 1981 are as shown on Exhibit C. For the period October 1, 1981 - September 30, 1982, Settle-up Amounts will be calculated following the close of that period using the same method used in Exhibit C for the two prior periods. The Parties agree that each such customer will pay the District or receive from the District its Settle-up Amounts in equal monthly installments over a five-year period commencing on the first billing date following the Contract Date as that term is defined in the Amendatory Contract. IV, The Commission Order This Settlement Agreement is contingent upon the entry by the Commission of the Commission Order substantially in the form attached hereto as Exhibit D. No Party to the Settlement Agreement is bound by the terms of this Settlement Agreement unless the Conunission Order becomes final and non-appealable as provided in Part 1, (3). V. Un(te�,��takinqs J tne _parties A. Each Party to this Settlement Agreement undertakes to support and defend the Settlement Agreement, the kmon- daLo,ry Contract and the Colnurliissit.,n 0-rdpr at all t es and in. all forums as necessary to implement and enforce the Set- tlement Agreement, the Amendatory Contract or the Commission Order. In particular, without limitation, each Party to this Settlement Agreement agrees to permit the entire record, including the prefiled exhibits filed by each party to the proceeding (including the Commission Staff) and including the Settlement Agreement, to be admitted in evidence by stipulation and waives its right to cross- examine the sponsoring witnesses of those exhibits. B. Each Party expressly agrees and represents that the Settlement Agreement, the Amendatory Contract and the Com- mission Order together provide a reasonable, comprehensive and final compromise resolution of all claims that have heretofore been made, or that might have been made, by any party to this Settlement Agreement concerning the provision of raw water by the District to the other Parties and the rates charged to the Parties by the District for raw water, including without limitation the claims of Fort Worth and Arlington to equity investments in certain District facili- ties, the claim of Arlington concerning responsibility for the costs of delivering raw water to its treatment plant, and the claims of the District, Fort Worth and Arlington concerning the extent of their respective rights and duties under all prior contractual agreements. C. This Settlement Agreement is a negotiated com- promise. The Parties hereto do not agree that any rate- making principles usderlyirig this Settlement Aqreez aent, or believed to underlie it, -would be reasonable or appropriate for any other set of facts and circumstances. V1. Effective Date and Term --------------__­­ I— ­-1--l- Sub'Ject to the provisions of 'Part IVI, this Settlement Agreeinent becors,s binding as soon as it has been approved by the City Councils of Arlington, Fort Worth and Mansfield and the Boards of the District and TRA. Its effective date will be March 1, 1980, and its term will extend through the life of the System. IN WITNESS WHEREOF, the parties hereto acting under authority of their respective governing bodies have caused this Settlement Agreement to be duly executed in several counterparts, each of which shall constitute an original. TARRANT COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. O By ✓of Dire-c-t-o—rs Arcs* ent, Boa of -Secretary, Board of Directors APPROVED AS TO FORM AND LEGALITY: (DISTRICT SEAL) Tt—torney, for the District -7- THE CITY OF ARLINGTON, TEXAS City Pianager ATTEST: !/j z4y""Y /' :y Sectary APPROVED AS TO FORM AND LEGALITY: (CITY SEAL) City At orne CITY OF F T WORTH TEXAS By y anag ATTEST: City Secretary APPROVED AS TO FORM AND LEGALITY: (CITY SEAL) C}ty Attorney G 2L a i i I i 9— CITY OF JTA.,SFIELD, T },AS By ;or� ATTEST: City Secretary APPROVED AS TO FORh AND LEGALITY: (CITY SEAL) City Altorney ney TRINITY R AUTI f- Y TRINITY By General Ma a er ATTEST: Secrpary, Board of Directors APPROVED AS TO FORM AND LEGALITY: (CORPORATE SEAL) Booth, Lloyd & Simmons, P.C. by Frank R. Booth General Counsel for the Authority TEXAS DEPARTMENT OF WATER RESOURCES TEXAS WATER COILMISSION In The Matter of The Complaint Filed by The City of Arlington v. The Tarrant County Water Control and Improvement District No. I FINAL ORDER OF DISMISSAL It appears to the Commission, and the Commission so finds, that a Settlement Agreement has been entered into between the Tarrant County Water Control and Improvement District No. 1, the Cities of Arlington, Fort Worth and Mansfield, and the Trinity River Authority ("the parties") resolving this entire matter upon reasonable terms and conditions, and copies of the Settlement Agreement and its attachments and of the prefiled exhibits of the parties having been filed with the Commission, it appears to the Commission and the Commission so finds that this matter should be dismissed in its entirety, with prejudice, upon the terms and subject to the conditions agreed to by the parties. It is therefore ordered that this matter be dismissed in its entirety, with prejudice, upon the terms and subject to the conditions agreed to by the parties. Signed and entered into this day of 1982. TEXAS WATER COPT-11ISSION Lee-3--.----14-.--Biggart, Chairman Fel-i-k-M&D-0-n—ald,—Commissioner ATTEST: M,-ry inn a aer J 0 h 41 5. 5 t 0 V rT =,l s c r,e,r Chief Clerk 1"XiiTBIT D TO SETT1 •,JP*,NT AGREEMENT STATE OF TEXAS X X COUNTY OF TRAVIS X ,T, Mary Ann Hefner, Chief Clerk of the Texas Water Commission of the Department of Water Resources, do hereby certify that the attached and foregoing is a true and correct copy of a Settlement Agreement between Tarrant County Water Control and Improvement District No. one, Fort Worth, Arlington, Mansfield and Trinity River Authority filed with the Commission in the case entitled IN RE: CITY OF ARLINGTON, TEXAS VS. TARRANT COUNTY WCID NO. 1 CONCERNING THE RATES TO BE CHARGED ARLINGTON FOR RAW WATER FURNISHED BY THE DISTRICT, the original of which was filed with the Commission on June 25, 1982, and is now in the permanent records of the Department. Given under my hand and the seal of the Texas Water Commission, this the 25th day of June, 1982. MM-a�ysA7fl�C—f�-nW-6emrm,iChi67 Cle:aF—k-- at� r Co ssi Texas ater Commissi IN RE: CITY OF ARLINGTON, § BEFORE THE TEXAS VS. TARRANT COUNTY WCID NO. 1, CONCERNING THE § TEXAS WATER COMMISSION RATES TO BE CHARGED ARLINGTON S FOR RAW WATER FURNISHED BY IN AUSTIN, TEXAS THE DISTRICT INTERVENTION PETITION OF THE TRINITY RIVER AUTHORITY OF TEXAS TO THE HONORABLE TEXAS WATER COMMISSION: NOW COMES petitioner Trinity River Authority of Texas requesting leave to intervene in the above-entitled proceeding and for designation as a party for the limited purpose of joining the Settlement Agreement pending before the Commission for reasons as follows: 1. Trinity River Authority has obtained a raw water supply from Tarrant County WCID No. 1 since 1973 in accordance with a 1971 and, later, a 1979 contract. 2. Trinity River Authority has reviewed the proposed amended 1979 contract between the district, Fort Worth, Arlington, and Mansfield and desires to amend its 1979 contract with the district by signing the amended contract. WHEREFORE, PREMISES CONSIDERED, petitioner Trinity River Authority prays that the Commission grant its petition for leave to intervene and designate petitioner a party to the hearing. Respectfully submitted, BOOTH, LLOYD AND SIMMONS, P.C. 302 San Jacinto Building Austin, Texas 78701 FRANK P. BOOTH General Counsel Attorneys for Petitioner Trinity River Authority of Texas Date- 3une, 25, 1982 ORDER On this the 25th day of June 1982, petitioner. Trinity River Authority of Texas appeared before the Texas Water commission in open hearing and filed the above-entitled Intervention Petition. After considering the petition and no objection to granting the same being made by any party, IT IS ORDERED that Trinity River Authority of Texas is hereby granted leave to intervene for the limited purpose of joining the Settlement Agreement proposed by some of the parties and Trinity River Authority of Texas is hereby designated a party to these proceedings. C_ha_1'L.m&2_a1_1.�_9g__gart Ca .issioner ohn D. Stover Attest: STATE OF TEXAS X COUNTY Or TRAVIS X I, Mary Ann Hefner, Chief Clerk of the Texas Water Commission of the Department of Water Resources, do hereby certify that the attached and foregoing is a true and correct copy of the Intervention Petition of the Trinity River Authority of Texas in the proceeding styled City of Arlington, Texas Vs. Tarrant County Water Control and Improvement District No. 1, concerning the rates to be charged Arlington for raw water furnished by the District, together with the order of the Commission entered June 25, 1982, designating Trinity River. Authority as a party to the proceedings, the original of which is on file in the office of the Commission. Given under my hand and the seal of the Texas Water Commission, this the 30th day of June, 1992. y -�k i�ary �Chif---�-(C*17E��' Mary Commission TEXAS DEPARM TMENT OF WATER I RESOURCES TH WAIER IMNW11 ra COUNTY OF TRAVIS X IN THE MATTER OF THE X C014PLAINT FILED BY THE CITY OF ARLINGTON V. THE TARRANT COUNTY WATER CONTROL AND IMPROVEMENT STATE OF TEXAS X DISTRICT NO. I FINAL ORDER OF DISSQISSAL On June 25, 1982 came on to be considered before the Texas Water Commission the Motion to Dismiss the rate complaint action filed by the City of Arlington on March 26, 1980 with the Texas Department of Water Re-sources. All parties to this matter appeared and stated that all matters in controversy relating to this complaint had been settled, compromised and agreed upon. NOW, THEREFORE, BE IT ORDERED BY THE TEXAS WATER COMMISSION THAT the rate complaint filed by the City of Arlington is in all things dismissed, with prejudice. Entered and ordered this the 25th day of June, 1982. TEXAS WATER COMMISSION i cner ATTEST- -k rI f,-1 f r,e Cler STATE OF TEXAS X X COUNTY OF TRAVIS X 1, Mary Ann Hefner, Chief Clerk of the Texas Water Commission of the Department of Water Resources, do hereby certify that the attached and foregoing is a true and correct copy of the Final Order of Dismissal in the matter of the complaint filed by the City of Arlinaton v. the Tarrant County Water Control and Improvement District No. 1 dated June 25, 1982, the original of which is on file in the office of the Commission. Given under my hand and the seal of the Texas Water Commission, this the 30th day of June, 1982. C1erlt Texa7. 7"er Commission LAQ 'If Fowt 1,Av"orth, hwas X111yor and Council -CE a F---,-E uasf CT----T **C. ------ On june 22, 1982 &K C-6369) , tin My GouLcil authorized ths City Moaamer !,In execute a Setrienent AgreEment to end the dispuLe couLury:ng jnw wacer to charged by The Tarrant County .a.t.y Qatral and Wrov,wInn. DIPIrfet No. ("District"), By executing the Settlement AZreemnnt, the My of FoiL Kcrth agreed to the terms of a proposed raw warer rontrArr with the Discrict, whisk will replace the existing 1979 water contract with Eta McKay Mry SccyntmT-y Contract No. 10611). Final execution of We new contract document us continpcnt an acceptance of the Lei ms by the other parties to the contra,--,z �',Iansfield, Arlington, the SUM— a— the Trinity River AuthoriLy) in ordpr Qat a pendina boi-L More Eke TaxaF Water Rights Commission ("CommiRston") W AlywKqsed, The Cunmission received the proposed Sptclsmow Agreement , contract and uLher docnments on Jane 27, 1982,and prn-video a 10-0v ieview and enmment ppriod prlo-r to the settlement suit being dismisacd. The 30-day neriod has passed with no adverse comments and the suit before the Commission has been disminsel. it !-a now approprime for the contracting nartles to adopt crdivances approvi ng the new contract. The law firm of MWIL, Parkhurst and Horton, bond coutusc! for the District, has prepared an ordinance for adoption by the contracting parties which will pintc=l future bond issues of the Distfict, After each of the c0-.tract -g par cia,s have Wanted orlinnnceq or regoinVan,z authorizing execution of the new contriat , uich ronrra�tlnlg party will nvocate "he comracc. Recommendation it is recomnended that We City COUDVII XQ-PL ?h- ALrached oudwaave anthori-1-1 ard directing rhe City Ma rz o4on,vo tho sr�irr CqunK RPRWnp! Wizat Supolir Facijitles AncrIdarory Conz,wat ," a_ .w ruplAr-s City SocnAary twornc'' No!'16631. Attachment J ho NICE sy ORMMAIMG DrPAPTOMENT HEAD COMM 4100Y CONTACT, Sawpv M. 020 DWE