HomeMy WebLinkAboutContract 47016 Ul °l : 5 y
COONTRACT NO,
SETTLEMENT AGREEMENT
FOR ALEDO RIDGE CCN APPLICATION
..� .. This Settlement Agreement is made and entered into by and between Palo Duro
Service Company, Inc., a Texas corporation ("Palo Duro") and the City of Fort Worth,
Texas ("City"), a home-rule municipal corporation acting by and through its duly
authorized Assistant City Manager (Palo Duro and the City each being a "Party", or
jointly "Parties").
WHEREAS, on February 9, 2015, Palo Duro filed an application with the Public
Utility Commission of Texas ("PUC") to amend its Certificate of Convenience and
Necessity ("CCN") No. 12200 in Parker County to add the 33-acre Aledo Ridge
subdivision tract ("Aledo Ridge") to its certificated retail water service area ("the
Application"); and
WHEREAS, on June 25, 2015 the City timely filed with PUC an objection to, and
a request for hearing on, the Application; and
WHEREAS, the City's request for hearing has been docketed as PUC Docket No.
43832 and referred for an administrative hearing to the State Office of Administrative
Hearings ("SOAH") under SOAH Docket No. 473-15-4782.WS (which dockets are
jointly refereed to herein as the "Case"); and
WHEREAS, Palo Duro and the City desire to resolve all disputes and
disagreements between them regarding this Case so as to avoid the costs and uncertainty
of litigating this Case at SOAR.
NOW, THEREFORE, in consideration of the premises, representations,
acknowledgments and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by the
Parties, Palo Duro and the City agree as follows:
1. Submission of Water Utility Service Plan. Palo Duro shall submit a Water
Utility`Service Plan ("WUSP") for review and approval by the City Water Department
prior to Palo Duro's installation'of any Aledo Ridge water infrastructure. The WUSP
shall demonstrate compliance with all applicable City water utility standards, adequacy of
water supplies, and compatibility of meters, valves, meter boxes, and distribution lines
with City water system requirements (except to the extent such standards are expressly
waived by the City Water Department Director), provided however, no fire protection
flow rates and pressures shall be required. The City Water Department shall review and
comment on the Aledo Ridge WUSP within 30 days of Palo Duro's submission of a
WUSP. Palo Duro shall fully address any City comments on the WUSP in accordance
with normal City practices for approval of otherwise applicable water infrastructure
projects within the City.
2. Prequalified Contractors. Palo Duro shall use one or more City prequalified
construction contractors for the installation of A ,'.,do itlge tit"-i es, meter
OFFICIAL
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Aledo Ridge Settlement Agreement N dY S C y R A U rp
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connections and other infrastructure, except that the water wells and other associated
water plant facilities and equipment shall be installed by a qualified licensed water well
driller.
3. Access. Palo Duro shall allow the City and its duly authorized employees,
inspectors and representatives reasonable access to view and inspect any Aledo Ridge
water infrastructure during and after construction. Palo Duro may utilize third party
water infrastructure inspectors with the advance written approval by the City.
4. Option to Purchase Water Infrastructure. Palo Duro hereby grants the City an
option to purchase whatever Aledo Ridge water lines and other water infrastructure as
may be requested by the City. Such option shall be exercisable by the City any time after
the earlier to occur of(i) the City's annexation of Aledo Ridge, or (ii) 17 years after the
date of the first Aledo Ridge water meter installation. Palo Duro shall donate to the City
any water line easements within thirty (30) days following the City's exercise of its
option to purchase. Palo Duro acknowledges that the City has paid $100 to Palo Duro as
separate and additional consideration for the granting of the option to purchase Aledo
Ridge water infrastructure. The City shall bear all costs imposed by any governmental
entity associated with annexation of Aledo Ridge and any costs of exercising its option to
purchase Aledo Ridge water infrastructure. The City shall give at least six months
advance written notice by certified mail to Palo Duro of the City's intention to exercise
its option to purchase Aledo Ridge water infrastructure.
5. Acquisition Price. Upon exercise of the City's option to purchase as described
in Section 4, Palo Duro agrees to sell the Aledo Ridge water lines and any other water
infrastructure as requested by the City "as is" for the then-existing net depreciated book
value; provided however, Palo Duro has the right to take and remove any or all of the
storage tanks and booster pumps at its sole cost within 60 days after the City exercises its
option. The net depreciated book value of water infrastructure purchased by the City
shall be based on Palo Duro's use of straight-line depreciation over the useful life of the
water infrastructure. By way of example, if the useful life (as specified by the
manufacturer) of the water lines to be acquired by the City is 30 years and the City
acquires the water lines 20 years after installation, the City would pay Palo Duro for
33.3% of the installed cost of water lines.
6. Due Diligence. The City shall have the right to perform a due diligence review
of all Aledo Ridge water infrastructure prior to acquisition, including pressure and
chlorine testing of water lines at no cost to Palo Duro.
7. Dual or Single Certification. Following the City's exercise of its option to
purchase as described in Section 4, the City may elect to file an application at the PUC
for single or dual certification of Aledo Ridge. Palo Duro agrees to support any such
application at no expense to Palo Duro.
8. Equipment and Infrastructure Removal Costs. The costs of properly plugging
and abandoning the Palo Duro water wells serving Aledo Ridge, as well as the costs of
decommissioning and removing any water well equipment, will be paid by the City.
Aledo Ridge Settlement Agreement 2
9. Customer Notices. Palo Duro shall provide annual water bill inserts notifying
all customers that at some point in the future Aledo Ridge may be annexed by the City,
and that the City may become the retail water provider for Aledo Ridge.
10. Plat Approval. The City agrees that a CCN plat note will not be required to
be included in an Aledo Ridge preliminary plat or final plat provided that the plats
conform to the City's Subdivision Ordinance and all other applicable regulations. The
City will not provide water or sewer service to Aledo Ridge unless and until a final plat is
approved for Aledo Ridge.
11. Withdrawal as a Party. Within three (3) days of the Parties' execution of this
Agreement, the City shall submit a written request to the PUC and SOAR to withdraw its
hearing request in this case. The City will support any request by Palo Duro or the PUC
staff that this case be remanded by SOAR to the PUC for administrative processing as an
uncontested matter.
12. Notices. Any notices or other communications required to be given by one
Party to another under this Agreement (a "Notice") shall be given in writing addressed to
the Party to be notified at the address set forth below and shall be deemed given: (a)
when the Notice is delivered in person to the person to whose attention the Notice is
addressed; (b) when received if the Notice is deposited in the United States Mail,
certified or registered mail, return receipt requested, postage prepaid; (c) when the Notice
is delivered by Federal Express, UPS, or another nationally recognized courier service
with evidence of delivery signed by any person at the delivery address; or (d) five
business days after the Notice is sent by FAX (with electronic confirmation by the
sending FAX machine) with a confirming copy sent by United States mail within 48
hours after the FAX is sent. If any date or period provided in this Agreement ends on a
Saturday, Sunday, or legal holiday, the applicable period for calculating the Notice shall
be extended to the first business day following the Saturday, Sunday, or legal holiday.
For the purpose of giving any Notice, the addresses of the Parties are set forth below.
The Parties may change the information set forth below by sending Notice of such
changes to the other Party as provided in this section.
To the City:
City of Fort Worth, Texas
Attn: Water Director
1000 Throckmorton Street
Fort Worth, Texas 76102
Fax: (817) 392-2398
Aledo Ridge Settlement Agreement 3
To Palo Duro:
Palo Duro Service Company
Attn: Richard Micheletti
3505 Williams Road
Fort Worth, Texas 76116
Tel: 817-244-2248
13. City Consent and Approval. In any provision of this Agreement that provides
for the consent or approval of the City, such consent or approval may be withheld or
conditioned by the City staff or City Council at its sole discretion.
14. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective legal representatives, corporate
affiliates, successors and assigns.
15. Construction of Agreement. The Parties acknowledge that each Party and its
counsel have reviewed and revised this Agreement and that the normal rules of
construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or exhibits hereto.
16. No Prior Agreements. This Agreement constitutes the sole agreement of the
Parties with respect to the subject matters hereof and supersedes any prior understandings
or written or oral agreements among the Parties concerning the subject matter hereof.
This Agreement may be modified only by a written instrument executed by the Parties
hereto.
17. Governing. This Agreement shall be construed and enforced in
accordance with the laws of the state of Texas, as they apply to contracts performed
within the state of Texas and without regard to any choice of law rules or principles to the
contrary. The Parties acknowledge that this Agreement is performable in Tarrant County,
Texas and hereby submit to the jurisdiction of the courts of Tarrant County, and hereby
agree that any such court shall be a proper forum for the determination of any dispute
arising hereunder.
18. No Third Party Beneficiary. This Agreement is solely for the benefit of the
Parties, and their permitted successors and assigns, and neither the City nor Palo Duro
intends by any provision of this Agreement to create any rights in any third-party
beneficiaries or to confer any benefit upon or enforceable rights under this Agreement or
otherwise upon anyone other than the City and Palo Duro.
19. No Waiver. Any failure by a Party to insist upon strict performance by the
other Party of any material provision of this Agreement shall not be deemed a waiver
thereof, and the Party shall have the right at any time thereafter to insist upon strict
performance of any and all provisions of this Agreement. No provision of this
Agreement may be waived except by writing signed by the Party waiving such provision.
Any waiver shall be limited to the specific purposes for which it is given. No waiver by
Aledo Ridge Settlement Agreement 4
any Party hereto of any term or condition of this Agreement shall be deemed or construed
to be a waiver of any other term or condition or subsequent waiver of the same term or
condition.
20. Section 13.248 Agreement. The Parties agree that the designation under this
Agreement of areas and customers to be served by water and wastewater utility providers
is valid and enforceable and may be submitted to the PUC for approval at the appropriate
time pursuant to Section 13.248 of the Texas Water Code regarding contracts designating
areas to be served by retail public utilities.
21. No Joint Venture or Partnership. No provision of this Agreement shall be
construed to create any type of joint or equity ownership of any property or any
partnership or joint venture.
22. Counterpart Originals. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original.
Wherefore, premises considered, the Parties hereto have executed this Settlement
Agreement on the dates shown beside the signature of the Party.
Palo D o Se , ompany, 1, c.
By: I. Date:
Rtchkrd Ivh letti
President
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APPROVED AS TO FORM AND
LEGALITY:
Assistant City Attorney'`` d„
CITY SEC(MEUIMOF
Aledo Ridge Settlement Agreement 5
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CITY COUNCIL AGENDA 1'ORTORTFI
COUNCIL ACTION: Approved on 9/15/2015
DATE: 9/15/2015 REFERENCE NO.:**C-27457 LOG NAME: 60ALEDO RIDGE
SUBDIVISION CCN
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Approval of a Settlement Agreement with Palo Duro Service Company, Inc., Regarding Its
Application to the Public Utility Commission for a Water Certificate of Convenience and
Necessity Application in the Aledo Ridge Subdivision Within the City's Extra-Territorial
Jurisdiction (ADJACENT TO COUNCIL DISTRICT 3)
RECOMMENDATION:
It is recommended that the City Council execute a Settlement Agreement with Palo Duro Service Company,
Inc., regarding its application to the Public Utility Commission for a Water Certificate of Convenience and
Necessity Application in the Aledo Ridge Subdivision within the City's Extra-Territorial Jurisdiction.
DISCUSSION:
On February 9, 2015, Palo Duro Service Company, Inc. (Palo Duro), filed an application with the Public
Utility Commission (PUC) to amend its Certificate of Convenience and Necessity (CCN) No.12200 in Parker
County to add a 33 acre subdivision named Aledo Ridge. Subsequently, the City filed an objection and
request for hearings on the application because the City Water Department believed it to be in the City's
best interests to secure the CCN in its ETJ, either jointly with Palo Duro or at a later time when the City was
able to serve the subdivision.
The City was granted status to object in Palo Duro's CCN application currently pending before the PUC and
has negotiated a settlement with Palo Duro to satisfy its concerns.
The Settlement Agreement provides for resolution of issues concerning costs and procedures and provides
for a mechanism for the City to acquire the CCN to the 33 acres in Aledo Ridge at a time of its choosing.
The basic terms of the settlement are:
Palo Duro will submit its utility plan for review and approval by the City Water Department prior to
installing the water infrastructure and shall use City prequalified contractors;
The City shall have the right to purchase the water lines and water infrastructure at the time of
annexation or 17 years after Palo Duro's first installation at the net depreciated book value;
Palo Duro agrees not to object to the City's application to the PUC for single or dual certification, of
which the City may choose in its sole discretion; and
The City shall pay the cost to plug and abandon the water wells, including the decommissioning and
removal of equipment at the time it exercises its option.
The Water Department seeks to acquire the right to acquire the CCN for Aledo Ridge because it is
consistent with its policy to be the water service provider when the property is annexed.
FISCAL INFORMATION/CERTIFICATION:
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The Financial Management Services Director certifies that approval of this recommendation will have no
material effect on City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by: Jay Chapa (6122)
Originating Department Head: John Carman (8246)
Additional Information Contact: Wendy Chi-Babulal (8242)
ATTACHMENTS
60AkkRdgg_Lpqgjgn Ma p.pdf
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