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HomeMy WebLinkAboutContract 36467ITY -AhD RA' AGREEMENT FOR SALE OF TREATED WATER 4&00*�� 001 This Agreement for Sale of Treated Water ("Aareement") is entered into by and between the City of Fort Worth, Texas (the "C"), a home -rule municipal corporation situated in Tarrant, Denton, and Wise Counties, Texas, acting by and through its duly authorized Assistant City Manager and Aqua Utilities, Inc., formerly known as AquaSource Utility, Inc., a Texas corporation ("Aqua Utilities"). ARTICLE I RECITALS A. Aqua Utilities wishes to provide retail water utility service to the land shown on Exhibit A and more particularly described in Exhibit B to this Agreement, and consisting of approximately 1,922.737 acres in Denton County, Texas (the "Development"), located entirely within the City's extraterritorial jurisdiction ("ETJ"). B. The City, Aqua Utilities, Owner and District have entered into an Agreement Regarding Water and Wastewater Utility Service ("Utility Agreement"), which sets forth certain rights and obligations of the parties with respect to the provision of retail and wholesale water and wastewater service to the Development, and provides, among other things, for the City and Aqua Utilities to enter into a contract for the provision of wholesale water service to the Development. C. The Development is located within Certificate of Convenience and Necessity No. 11151 issued to Aqua Utilities by the Texas Commission on Environmental Quality ("TCEQ"), pursuant to which Aqua Utilities is to be the retail provider of a continuous and adequate supply of water to the Development. D. Aqua Utilities, having commissioned and considered an engineering study of its various alternatives for obtaining a water supply for retail water service to the Development, has elected to seek to obtain water from the City. E. The City has obtained at its own expense, and now owns, operates and maintains facilities for processing and distributing a supply of surface water, and is authorized to furnish and deliver treated water, both inside and outside its corporate boundaries. F. The City and Aqua Utilities have reached a mutually satisfactory agreement by which Aqua Utilities may purchase a supply of treated water from the City to serve the Development. NOW, THEREFORE, for and in consideration of the mutual agreements, covenants, and conditions hereinafter set forth, the Parties contract and agree as follows: Agreement for Sale of Treated Water Page 1 ARTICLE II DEFINITIONS "Agreement" means this Agreement for Sale of Treated Water between the City and Aqua Utilities. "Annual Consumption" means the total quantity of water purchased under the terms of this Agreement by Aqua Utilities during the City's Fiscal Year as determined by the difference in the annual October Meter readings. "Aqua Utilities" means Aqua Utilities, Inc., a Texas corporation (and/or its corporate successors and assigns). "Average Daily Use" means the total Annual Consumption divided by 365 days. "City" means the City of Fort Worth, Texas, ahome-rule municipality. "City Council" means the City Council of the City. "Cure Period" means the period of time to cure a material breach, as defined in Section 9.04. "Customer S stem" means all water mains and distribution facilities (whether owned by Aqua Utilities, the District or third parties) within the Development and on Aqua Utilities' side of the Meter shown on Exhibit C, from and beyond the Point of Delivery of treated water by the City. "Development" means that certain 1,919.898-acre tract located in Denton County, Texas shown on Exhibit A and more particularly described in Exhibit B, which Development is located entirely within the ETJ of the City. "Director" means the City Water Department Director or designee. "District" means the Tradition Municipal Utility District No. 2 of Denton County and any other district created over the Development by dividing the District into one or more new Districts pursuant to the District Legislation. "District Confirmation Date" means the date on which the Board canvasses the results of the election held within any District confirming the creation of that District. "District Le islg_ation" means Act of May 23, 2007, 80th Legislature, Regular Session, Chapter 752, Special District Local Laws Code, Chapter 8189, effective September 1, 2007 creating the District. "Effective Date" means the effective date as defined in Section 9.03. "ETJ" means the extraterritorial jurisdiction of a city as defined by the Texas Local Government Code, as amended, with the City's ETJ being an unincorporated area presently extending five Agreement for Sale of Treated Water Page 2 miles from the City's corporate limits, excluding other incorporated municipalities and their respective ETJs. "Fiscal Year means the City's fiscal year from October 1 through September 30. "Fort Worth System" means the City's water treatment and distribution system. "Maximum Day Demand" means the maximum quantity of water used by Aqua Utilities during one calendar day of the City's Fiscal Year. "Maximum Hour Demand" means the maximum quantity of water used by Aqua Utilities during the one hour of the year that more water passed through the Meter(s) serving Aqua Utilities than during any other hour of the City's Fiscal Year multiplied by 24 hours. "Metering Facilities" means all facilities associated with metering the water provided hereunder, excluding Meters, and including without limitation continuous flow chart recording devices and telemetering equipment connected with the City's SCADA control center. "Meter" means any size meter required to be installed at a Point of Delivery shown on Exhibit C. "MGD" means million gallons per day. "Notice" means notice as defined in Section 11.02 of this Agreement. "Owner" means, individually and collectively, Aperion Communities, LLLP, Eladio Properties, LLLP, Drooy Properties, LLLP, and Rocksand Investments, LLLP, Arizona limited liability limited partnerships. "Parties" means all of the City and Aqua Utilities, their successors and their assigns, as permitted by this Agreement. "Party" means, individually, the City or Aqua Utilities, their successors and their assigns, as permitted by this Agreement. "Point of Delivery" means the one or more meter vault connections to Aqua Utilities' side of the any Meter installed by Aqua Utilities in accordance with Article IV, as shown on Exhibit C. "Rate of Use Charge" means the charge determined for the Maximum Day Demand in excess of Average Daily Use and the Maximum Hour Demand in excess of Maximum Day Demand rates of use. "Raw Water Charge" means the rate per 1,000 gallons for out -of -district raw water charged to the City by the Tarrant Regional Water District, as such rate may be adjusted, plus eight percent (8%) of said rate, representing the City's system losses of four percent (4%), and the street rental charge of 4%. Agreement for Sale of Treated Water Page 3 'System Cost" means the operating expense and capital related cost incurred by the City to the provide water treatment and transmission services to the wholesale class of water customers. Such costs are to be collected by the City as a component of the annual cost of providing wholesale water service. "Temporar ergency Condition" means a situation created by unforeseeable mechanical Failure or by unprecedented high rate of water usage such as might result from a major fire or a major water main break. This term does not include events that are foreseeable or preventable by the exercise of due diligence. "Treatment Pum�in and Transmission Charge" means that part of the rate charged for 1,000 gallons used, regardless of rate of use. This charge shall include the maintenance and operation costs and the capital facilities cost on the part of the production and transmission system related to annual use. "Utility Agreement" means that certain Agreement Regarding Water and Wastewater Utility Service among the City, Aqua Utilities, Owner and District, dated 20073 City Secretary Contract No. "Volume Charge" means the combined Treatment, Pumping and Transmission Charge and the Raw Water Charge. ARTICLE III WATER SUPPLY, USE AND STORAGE 3.01 Supply of Treated Water. The City agrees to furnish and sell to Aqua Utilities, at the Point of Delivery, treated water of potable quality meeting all applicable governmental standards, delivered under the normal operating pressure prevailing in that portion of the Fort Worth System. Aqua Utilities agrees to accept delivery under the conditions of this Agreement and to pay for such water in accordance with the terms herein. Aqua Utilities' sole connection(s) to the Fort Worth System shall be at the Point of Delivery. 3.02 Rate of Withdrawah Minimum Pressure. The rate at which water is withdrawn from the Fort Worth System by Aqua Utilities shall be limited by system design based on the size of each Meter installed pursuant to the Utility Agreement. In addition, Aqua Utilities shall maintain a minimum pressure of 35 pounds per square inch ("PSI") at the Meter. 3.03 [Intentionally left blank.] 3.04 Backflow Prevention. Prior to the delivery of any water by the City pursuant to this Agreement, Aqua Utilities, at its sole expense, shall install and maintain a backflow prevention device approved by the Texas Commission on Environmental Quality immediately after each Meter on Aqua Utilities' side, as reflected in Exhibit C. Agreement for Sale of Treated Water Page 4 3.05 Sale and Use Within Development Only. Aqua Utilities may not sell or transfer any water furnished by the City under this Agreement to any connections or for any use outside of the Development, except that Aqua Utilities may (a) serve a maximum of 10 retail residential connections outside the Development with City's written consent and (b) serve outside the Development as provided in Section 3.08. The City is under no obligation to sell or otherwise deliver any treated water to Aqua Utilities except pursuant to all of the terms and conditions this Agreement. 3.06 Tarrant Regional Water District Contract. In accordance with the terms of City Secretary Contract No. 12720 between the City, City of Arlington, City of Mansfield, Trinity River Authority and the Tarrant County Water Control and Improvement District No. 1, a Water Control and Improvement District created under authority of Article XVI, Sec. 59 of the Texas Constitution and now named the Tarrant Regional Water District, this Agreement shall be deemed subordinate in all respects to the water requirements of the contracting parties as specified in Section 3 of that Contract No. 12720, as it may be amended from time to time. 3.07 Conservation. If the City shall ration the use of water throughout its corporate limits or issue water conservation measures or restrict the use of water in any way, the City shall notify Aqua Utilities, who shall immediately impose and enforce the same rationing, conservation measures, or restrictions to the use of water within the Development. 3.08 Delivery of Water by Aqua Utilities Outside the Development. At the request of the Director, Aqua Utilities agrees to furnish water to areas and premises situated adjacent to the Development and within the City's ETJ or its other retail or wholesale water service area. The metered quantity of water used in such area each month by the City shall be the total of all individual City retail or wholesale customer meter readings. The metered quantity of such water furnished by Aqua Utilities to the City shall be deducted from the total quantity of water withdrawn from the Fort Worth System by Aqua Utilities before the charge for water service to Aqua Utilities is computed as provided in this Agreement. No adjustment will be made to the Rate of Use Charge for water furnished pursuant to this Section 3.08, however, at the option of Aqua Utilities or the City, a master meter may be installed where practicable at the City's expense to meter and deduct from the Rate of Use Charge calculation all water used by the City under the terms of this section. ARTICLE IV METER AND METERING FACILITIES 4.01 Construction and Title. Unless otherwise agreed in writing by the Director, all water furnished by the City under this Agreement shall be measured by one or more six-inch (6") Meters located at the Point of Delivery, and equipped with continuous flow, chart -recording devices, and telemetering equipment connected with the City's control center. Aqua Utilities shall construct and install or cause to be constructed and installed each Meter, Metering Facilities and appurtenances and shall convey same to the City. All construction shall be in accordance with Article V of the Utility Agreement, which requires, among other things, that all construction of water infrastructure shall be in accordance with plans and specifications meeting City standards and shall be approved in advance by the City. All construction costs, including, but not limited to, site acquisition and preparation, design and engineering and rights of way, Agreement for Sale of Treated Water Page 5 shall be paid for by Aqua Utilities. Upon acceptance of each Meter and its Metering Facilities and appurtenances, the City shall own and have title to such equipment, along with the exclusive right to use, operate and maintain such equipment. 4.02 Operation and Maintenance. Upon acceptance of each Meter and its Metering Facilities and appurtenances, the City shall pay all costs associated with the operation and maintenance of such equipment and shall pay for the repair and replacement of such equipment as necessary, excluding upsizing of any Meter. Such costs, as well as charges for repair and replacement of the telelink line and microwave transmitter and the power to operate same, shall be a System Cost. Each Meter will be properly sealed, and the seal shall not be broken unless representatives of both Parties have been notified and given a reasonable opportunity to be present. 4.03 Service and Calibration. City shall test for accuracy, and service and calibrate if necessary, each Meter no less than once during each twelve (12) month period. Copies of the results of such calibration and all related information shall be provided to Aqua Utilities. 4.04 Access to Facilities. Aqua Utilities shall have access to each Meter and Metering Facilities at all reasonable times; provided, however, that any reading, calibration or adjustment to such equipment shall be done by employees or agents of City, or other mutually approved third party calibration agent, in the presence of representatives of Aqua Utilities and City, if so requested by Aqua Utilities. The City shall notify Aqua Utilities at least seventy-two (72) hours in advance of the date and time for any calibration and Aqua Utilities may observe the calibration. 4.05 Corrections. Upon any calibration, if it is determined that the accuracy envelope of a Meter is found to be lower than ninety-five percent (95%) or higher than one hundred five percent (105%) expressed as a percentage of the full scale of that Meter, the registration of the Row as determined by the defective Meter shall be corrected for a period extending back to the time such inaccuracy began, if such time is ascertainable; or, if such time is not ascertainable, then for a period extending back one-half (1/2) of the time elapsed since the date of the last calibration, but in no event further back than a period of six (6) months. 4.06 Out of Service Meter. If a Meter used to determine the flow of treated water to Aqua Utilities is out of service or out of repair so that the amount of water metered cannot be ascertained or computed from the reading thereof, the water delivered during the period the Meter is out of service or out of repair shall be estimated upon the extrapolation of past patterns of flow for that Meter location under similar conditions. ARTICLE V METER READING, BILLING AND PAYMENT 5.01 Meter Reading and Access. City will read each Meter at monthly intervals. City and Aqua Utilities shall have free access to read each Meter daily, if either so desires. It shall be the duty of City and Aqua Utilities to give immediate Notice, each to the other, should a Meter or Metering Facilities be found not functioning properly and, upon such Notice, City shall promptly repair such equipment. Agreement for Sale of Treated Water Page 6 5.02 Access to Records. All data obtained from Meter readings will be maintained by the City in its usual and customary manner. Aqua Utilities shall have access to such records during reasonable business hours and shall be furnished with monthly readings for each Meter. 5.03 Billing. Bills for water service shall be rendered to Aqua Utilities monthly by the City. All such bills shall be due and payable by Aqua Utilities not more than thirty (30) days from the billing date. The bills will show current charges, as well as past -due charges, if any. Past -due charges shall be the total amount unpaid from all prior billings as of the current billing date. Payments received by the City shall first be applied to the past -due charges, if any, and thereafter to the current charges. A review of water usage amounts by Aqua Utilities for the past twelve (12) months shall be made during the presentation of the October bill each year. The October statements shall be prepared so as to reflect any and all Rates of Use Charges that have not been previously billed and paid. A copy of the rate of flow charts or other records showing the Maximum Day Demand and the Peak Hour Rate of the year shall be furnished to Aqua Utilities with the October billing. 5.04 Dis utes. If Aqua Utilities disputes a bill and is unable to resolve the difference informally, Aqua Utilities shall notify the Director in writing. The Director and Aqua Utilities shall use their best efforts to resolve the disputed bill; however, dispute of a bill is not grounds for non- payment. In the event a payment is not paid as specified in this Agreement, a finance charge of ten percent (10%) per annum will be calculated from the date which the payment was required to be made. ARTICLE VI OWNERSHIP, LIABILITY AND INDEMNIFICATION 6.01 Water Quality Additional Water Sources. The City shall deliver water that meets all state and federal water quality requirements to the Point of Delivery. If Aqua Utilities obtains water from any source other than the City, the City makes no representation that the treated water to be delivered to Aqua Utilities will properly mix with water that Aqua Utilities obtains from other sources. Aqua Utilities assumes all responsibility and liability for any combining or mixing of water delivered by the City that is combined or mixed with water from Aqua Utilities' Aber sources. The City's sole responsibility is to provide to Aqua Utilities water of a quality that meets state and federal drinking water standards at the Point of Delivery. From the Point of Delivery on, Aqua Utilities is solely responsible for meeting state and federal drinking water quality standards. Aqua Utilities shall notify the Director in writing before obtaining water for the Development from any source other than the City. 6.02 No Joint Venture. 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, and Aqua Utilities' payments (whether past, present, or future) shall not be construed as granting Aqua Utilities partial ownership of, pre -paid capacity in, or equity in the Fort Worth System. 6.03 Indemnity. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS AQUA UTILITIES AGREES TO INDEMNIFY AND DEFEND THE CITY, ITS OFFICERS ELECTED OFFICIALS, Agreement for Sale of Treated Water Page 7 EMPLOYEES, AGENTS, ATTORNEYS, CONSULTANTS, CONTRACTORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, "INDEMNITEES") WITH REGARD TO ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES, LIENS, FINES, SUITS, JUDGMENTS, ADMINISTRATIVE PROCEEDINGS, REMEDIATION OR CORRECTIVE ACTION REQUIREMENTS, ENFORCEMENT ACTIONS, AND ALL COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH (INCLUDING, BUT NOT LIMITED TO, REASONABLE ATTORNEYS' FEES, COSTS OF INVESTIGATION AND EXPENSES, INCLUDING THOSE INCURRED BY CITY IN ENFORCING THIS INDEMNITY), DIRECTLY OR INDIRECTLY ARISING OUT OF, CAUSED BY OR RESULTING FROM (IN WHOLE OR IN PART) ANY BREACH OF THIS AGREEMENT OR ANY CONNECTION OF THE CUSTOMER SYSTEM TO THE FORT WORTH SYSTEM (COLLECTIVELY, "LIABILITIES'), EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED TO STRICT LIABILITY OR TO THE SOLE OR CONCURRENT NEGLIGENCE OF ANY INDEMNITEE. ARTICLE VII REPORTS AND AUDIT 7.01 Required Records. Aqua Utilities shall provide the following data to the City on January 31 of each year and upon 30 days' Notice by the City: A. Actual number of customer accounts consuming directly or indirectly from the Customer System; B. Classification of domestic and nondomestic accounts within the Development by number and percentage of accounts consuming directly or indirectly from Customer System; and C. Aqua Utilities' water usage from all sources other than the Fort Worth System, including, but not limited to, ground water, other surface water, and water supply agreements with other entities. 7.02 Inspection and Audit. The City and Aqua Utilities shall maintain all records and. accounts related to this Agreement for a period of five (5) years. Each Party shall at all times, upon Notice, have the right at reasonable times to examine and inspect said records and accounts during normal business hours; and further, if required by any law, rule or regulation, make said records and accounts available to federal and/or state auditors. ARTICLE VIII RATES AND CHARGES 8.01 Rates Charged Pursuant to this Agreement. The Parties agree that the rates charged pursuant to this Agreement will be calculated using the methodology set forth in Exhibit D, which also serves as the basis for the wholesale water rates that the City charges to each municipality that is a wholesale water customer of the City, pursuant to each of their separate contracts. The majority of the City's contracts with its municipal wholesale customers will expire in 2010 and the City expects to enter into negotiations for new wholesale contracts with such customers. The City shall provide Aqua Utilities at least ten (10) days prior Notice of the commencement of the negotiations between the City and the Water System Advisory Committee. If this Agreement is renewed Agreement for Sale of Treated Water Page 8 pursuant to Section 9.02(A), and if the renegotiated contracts with the City's wholesale customers who are municipalities include a rate methodology that differs from Exhibit D, then Aqua Utilities and the City expressly understand and agree that for the renewal term of this Agreement the rate methodology described in Exhibit D will be automatically superseded and replaced with a new Exhibit D that adopts the same rate methodology used to calculate the rates for those wholesale customers of the City who are municipalities, and such Exhibit D will then be used to calculate rates charged pursuant to this Agreement. 8.02 Initial Rate. The initial rates for this Agreement shall be those adopted by the City Council and effective on October I, 2007, which are as follows: Treatment, Pumping and Transmission Charge Raw Water Charge Annual charge per MGD of Maximum Day Demand in excess of Average Daily Use $0.6377 per 1,000 gallons withdrawn by Aqua Utilities $0.6742 per 1,000 gallons $103,581 per MGD Maximum Hour Demand in excess $29,13 8 per MGD of the Maximum Day Demand Service Charge $25.00 per month per meter 8.03 Annual Payment. The annual payment to the City for water used by Aqua Utilities will be computed based on all water delivered by the City to Aqua Utilities during the current Fiscal Year using rates charged pursuant to this Agreement. The annual payment does not begin until water is first delivered pursuant to this Agreement. For purposes of calculating the annual payment, the current year will be the Fiscal Year during which the water usage occurred. However, the minimum annual payment will be the greater of the following: (a) The charges calculated by applying the current Volume Charge to Annual Consumption, the appropriate Meter readings and billing charge, and the Rate of Use Charge for the current Fiscal Year; or (b) The current Fiscal Year Volume Charge, the appropriate Meter reading and billing charge, and the current Fiscal Year Rate of Use Charge applied to the average of the Maximum Day Demand above Average Daily Use and the average of the Maximum Hour Demand above Maximum Day Demand for the most recently completed three Fiscal Years. The most recently completed three Fiscal Years will include the current Fiscal Year; or (c) Twelve thousand dollars ($12,000). 8.04 Monthly Payment. Except as provided for in Section 8.05 below, the monthly Agreement for Sale of Treated Water Page 9 payment will be the greater of either one thousand dollars ($1,000) or a sum equal to the Volume Charge for the actual volume of water taken plus one twelfth (1/12) of the sum of the estimated Rate of Use Charges and the appropriate Fiscal Year charges for meter reading and billing. For purposes of estimating the rate of use payments, the current Fiscal Year Rate of Use Charges will be applied to the prior Fiscal Year's Maximum Day Demand, Maximum Hour Demand and Average Daily Use. 8.05 Adjustment of Rates. Aqua Utilities agrees that the City shall have the right to unilaterally adjust the rates charged for the water services provided pursuant to this Agreement, from time to time, so long as the adjustment is based on the agreed methodology set forth in Exhibit D and in effect pursuant to Section 8.01, and otherwise in compliance with this Agreement. Aqua Utilities' agreement that the City has the right to unilaterally adjust the rates charged pursuant to this Agreement is an essential part of the consideration given by Aqua Utilities in exchange for the City's entering into this Agreement to provide wholesale water service to the Development, which is in the City's ETJ and in Aqua Utilities' CCN, and without which consideration the City would not have provided wholesale water service to Aqua Utilities, either by entering into this Agreement or otherwise. Furthermore, in exchange for the City's right to unilaterally adjust the rates charged hereunder, in addition to other rights under this Agreement, should Aqua Utilities object to any unilateral rate adjustment, Aqua Utilities shall have the right to terminate this Agreement with one year's Notice and the following rate relief. Upon any rate adjustment pursuant to this Article VIII and Exhibit D, Aqua Utilities has the following options: A. Agree to pay the adjusted rate; or B. Give Notice (i) that it wishes to terminate this Agreement one year after the effective date of the proposed rate adjustment and (11) that it rejects the rate change, in which case the City wi11 continue to charge Aqua Utilities the contract rates that were in effect immediately prior to the proposed rate adjustment. If Aqua Utilities elects to terminate this Agreement under this Section then the Agreement will expire at the earlier of the one-year Notice period or the Section 9.01 expiration date. If Aqua Utilities continues to accept delivery of treated water and has not disconnected the Customer System from the Fort Worth System on the date this Agreement is to expire pursuant to this Section 8.05, then the Agreement shall not expire pursuant to this Section 8.05 and Aqua Utilities shall immediately pay the City the difference between the amount that would have been charged pursuant to this Agreement under the rate Aqua Utilities rejected, and the amount actually charged to Aqua Utilities during the preceding year, with interest, and subject to any other rate adjustment, past or future, pursuant to this Article VIH and Exhibit D. Aqua Utilities agrees that the remedy provided by this Section 8.05 provides its sole and exclusive remedy, in law and equity, for any rate adjustments pursuant to this Agreement, and that it will not pursue a wholesale rate appeal of such rates at any regulatory agency. 8.06 Minimum Revenue Collection. Aqua Utilities agrees, throughout the term of this Agreement, to fix and collect such rates and charges for water service to be supplied as will produce revenues in an amount equal to at least all of its operation and maintenance expenses of the Customer System, including specifically its payments and obligations under this Agreement. Agreement for Sale of Treated Water Page 10 ARTICLE IX TERM AND RELATED PROVISIONS 9.01 Term of Agreement. This Agreement shall expire upon the sooner %J (i) termination in accordance with this Article IX or (ii) December 31, 2011. In addition to expiration pursuant to this Section 9.01(i) and 9.01(ii), this Agreement shall also expire, with respect to that portion of the Development covered by a District, on the sooner of (a) the date that Aqua Utilities ceases to be the retail water provider for such District, (b) the date two years after the District Confirmation Date if no mutually acceptable lease agreement is reached between Aqua. Utilities and the District for the operation and maintenance of the water Infrastructure within that District as required by the Utility Agreement; or (c) the date five years after the District Confirmation Date if the District does not own any water Infrastructure capable of providing retail water service to the District. 9.02 Extension. Where expiration of this Agreement occurs pursuant to Section 9.01(ii), the City will offer to continue to sell wholesale water to Aqua. Utilities under one of two options, to be chosen by the City in its sole discretion: A. A renewal of this Agreement, in its entirety, amending Section 9.01(ii) to state "December 31, 2035," and to add "(iii) with respect to that portion of the Development covered by a District, the date 17 years after the first connection to retail water or wastewater utility service within such District, or (iv) the expiration date of the renegotiated contracts with the City's wholesale customers who are municipalities. In the event the Development is not divided into any new District, then this Agreement shall expire pursuant to subsection (iii) above only for each "portion of the Development covered by a separate service plan (submitted to and approved by the City pursuant to Section 3.02 of the Utility Agreement) on the date 17 years after the first connection to retail water or wastewater utility service within the portion of the Development covered by that service plan." Also, Section 8.02 shall be amended to state initial rates that are those in effect on the first day of the renewal term for the City's wholesale customers who are municipalities. B. A wholesale water agreement with terms that are the same as the terms of the renegotiated contracts with the City's wholesale customers who are municipalities whose contracts now expire in 2010, and subject to all the terms and conditions of those contracts, except that the expiration date of the wholesale agreement with Aqua Utilities will be the sooner of (i) the expiration date of the renegotiated contracts with the City's wholesale customers who are municipalities, (ii) December 31, 2035, or (iii) with respect to that portion of the Development covered by a District, the date 17 years after the first connection to retail water or wastewater utility service within such District, and in addition shall remain subject to termination pursuant to Section 9.01(i) & (a) - (c) of this Agreement. In the event the Development is not divided into any new District, then the agreement shall expire pursuant to (iii) above only Agreement for Sale of Treated Water Page 11 for each portion of the Development covered by a separate service plan (submitted to and approved by the City pursuant to Section 3.02 of the Utility Agreement) on the date 17 years after the first connection to retail water or wastewater utility service within the portion of the Development covered by that service plan. The City will advise Aqua Utilities of the City's selected option A. or B. above by providing Notice one hundred eighty (180) days before the Section 9.01(ii) expiration date. Aqua Utilities can then either (i) agree to accept the option offered by the City in its Notice, in which case Aqua Utilities and the City will execute the documents necessary to formalize the terms of such agreement within 60 days of Aqua Utilities' receipt of Notice; or (ii) elect not to continue to purchase water from the City, in which case this Agreement terminates on the Section 9.01(ii) expiration date and thus the City shall have no further service obligation thereafter. If the City's wholesale customers' 2010 expiration dates are extended, then the Section 9.01(ii) expiration date of this Agreement will be extended for the same number of years or months, but in no event beyond December 31, 2025. 9.03 Effective Date. This Agreement, together with all terms and conditions and covenants, shall be effective December 1, 2007 (the "Effective Date"). 9.04 Termination. In addition to termination pursuant to this Article IX and Section 8.05, this Agreement may be terminated in whole or in part by the mutual consent of Aqua Utilities and the City, and the Agreement shall expire on any such mutually agreed date. Notwithstanding anything contained herein to the contrary, any material breach by Aqua Utilities in the performance of any of the duties or the obligations assumed by Aqua Utilities hereunder, or to Faithfully keep and perform any of the terms, conditions and provisions hereof, shall be cause for termination of this Agreement by the City in the manner set forth in this Section 9.04. If Aqua Utilities commits a material breach, then, except as provided in Sections 9.06 and 9.07, the City shall deliver to Aqua Utilities ninety (90) days' Notice of its intention to terminate this Agreement, including in such Notice a reasonable description of the breach. Aqua Utilities shall commence curing such breach within fourteen (14) calendar days after receipt of such Notice and shall diligently pursue and complete such cure without unreasonable cessation of activities within ninety (90) days from the date of the Notice; however, if the breach is not reasonably susceptible to cure by Aqua Utilities within such ninety (90) day period, the City agrees that it All not terminate this Agreement so long as Aqua Utilities has diligently pursued such cure within the foregoing ninety (90) days and diligently completes the work, without unreasonable cessation, within a reasonable time thereafter. The time authorized by this Agreement to cure the breach is the "Cure Period." If Aqua Utilities shall fail or refuse to cure such material breach to the satisfaction of the City within the Cure Period, then and in such event, the City shall have the right with additional sixty (60) days advance Notice to Aqua Utilities and without any liability whatsoever on the part of the City to declare this Agreement terminated, and the Agreement will immediately expire at the end of such Notice period. The City shall give Notice to Aqua Utilities immediately upon acceptance of the cure of any breach. A material breach of this Agreement includes, but is not limited to: (a) Failure to pay any bill, charge or fee as provided for in this Agreement; Agreement for Sale of Treated Water Page 12 (b) Making any connection to the Fort Worth System at any point except the Point of Delivery; (c) Failure to provide City ingress and egress for purposes of operation and maintenance of any Metering Facility; (d) Failure to comply with Sections 3.02, 3.05, 4.01, or 8.05; and (e) Failure to comply with Article X. 9.05 Nonmaterial Breach. In the event of any non -material breach, default or failure to perform duties under this Agreement, the City shall deliver to Aqua Utilities a Notice of such default. If Aqua Utilities fails to cure such breach, default or failure within sixty (60) days, then the City shall give Aqua Utilities Notice of such failure to cure and may surcharge Aqua Utilities Five Thousand Dollars ($5,000) per month until such time as Aqua Utilities cures such non -material breach. 9.06 Failure to Impose Conservation Measures. If the City rations the use of water throughout its corporate limits, issues water conservation measures or restricts the use of water in any way pursuant to Section 3.07, and Aqua Utilities fails or refuses to impose and enforce the same rationing, conservation measures or restrictions, Aqua Utilities shall be in material breach of this Agreement. The 90-day Notice provision contained in Section 9.04 shall not apply and the Director, in his or her sole discretion, shall provide Notice to Aqua Utilities of the deadline For curing such breach. If Aqua Utilities fails or refuses to cure such breach within the stated time, the City shall have the right, with six (6) months additional advance Notice to Aqua Utilities, and without any liability whatsoever on the part of the City, to declare this Agreement terminated, and the Agreement will immediately expire at the end of such Notice period, notwithstanding the expiration or rescission of the rationing, conservation measures or restrictions during such six-month period. The City shall give Notice to Aqua Utilities immediately upon acceptance of the cure of any breach. 9.07 Failure to Prevent Backflow. The Notice and cure provisions set out in Section 9.04 do not apply to a breach of Section 3.04. The City shall have the right to terminate this Agreement without further Notice if Aqua Utilities commits a breach of Section 3.04 and fails to cure such breach after reasonable Notice and opportunity to cure. 9.08 Obligation to Develop Alternative Sources. Aqua Utilities shall develop alternative or replacement water supplies prior to the expiration (including expiration by termination) of this Agreement. 9.09 Effect of Termination. In event of termination of this Agreement, except to the extent provided in Section 9.10, all rights, powers, and privileges of Aqua Utilities hereunder shall cease and immediately terminate upon the expiration date, and Aqua Utilities shall not assert any claim of any kind whatsoever against the City, its agents, or representatives, by reason of such termination or any act incident thereto, provided City acted reasonably and such termination was not unreasonable, arbitrary and capricious. Agreement for Sale of Treated Water Page 13 9.10 Surviving Provisions. As part of, or in addition to, survival rights to which the Parties may be entitled in law or equity, the following provisions shall survive following termination or expiration of this Agreement for any reason: (a) any payment obligation of any Party under the terms of this Agreement; (b) Section 6.03 (Indemnity); (c) Article VII (Reports and Audit); (d) Section 9.11 (Continuation of Service; Alternative Supplies); (e) Article X (Construction Standards) and (f) Article XI (Miscellaneous). 9.11 Continuation of Service; Alternative Supplies. Parties agree that this Agreement sets forth explicit expiration provisions and that no continuation of the service obligation will be implied beyond the expiration of this Agreement. Unless Aqua Utilities will no longer be the operator or has a new wholesale water contract with the City then, as provided in Section 11.036(c) of the Texas Water Code, Aqua Utilities shall develop alternative or replacement supplies prior to the expiration of this Agreement. ARTICLE X PERFORMANCE PURSUANT TO UTILITY AGREEMENT This Agreement is executed pursuant to, and shall be performed consistent with the terms of the Utility Agreement. Accordingly, all construction, operation and maintenance activities undertaken pursuant this Agreement shall be performed in compliance with the Utility Agreement, including the standards for construction, operation and maintenance set forth in Article V of the Utility Agreement. ARTICLE XI MISCELLANEOUS 11.01 Governing Law' Jurisdiction and Venue. THIS AGREEMENT MUST 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. 11.02 Notice. Any notices, approvals, 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 Agreement for Sale of Treated Water Page 14 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 Parry as provided in this section. To the City0 City of Fort Worth, Texas 1000 Throckmorton Street Attn: City Secretary Fort Worth, Texas 76102 FAX: (817) 392-6196 City of Fort Worth, Texas 1000 Throckmorton Street Attn: City Manager Fort Worth, Texas 76102 FAX: (817) 392-6134 City of Fort Worth, Texas 1000 Throckmorton Street Attn: Water Director Fort Worth, Texas 76102 FAX: (817) 392-2398 To Aqua Utilities: 1421 Wells Branch Pkwy., Ste. 105 Pflugerville, TX 78660 Attn: Vice President FAX: (512) 989-9891 Al West Lancaster Ave. Bryn Mawr, Pennsylvania 19010 Attn: Chief Legal Officer FAX: (610) 520-9127 11.03 Consent Required for Assignment and Binding on Successors and Assigns. All of the terms of this Agreement shall be binding upon, shall inure to the benefit of, and shall be severally enforceable by and against each Party to this Agreement, individually, and such Party's respective personal representatives, successors, trustees, receivers, and assigns. However, no Party shall assign this Agreement without the written consent of each of the other Party. It is specifically intended that this Agreement and all terms, conditions and covenants herein shall survive a transfer, conveyance or assignment occasioned by the exercise of foreclosure of lien rights by a creditor or a Party hereto, whether judicial or non judicial. Agreement for Sale of Treated Water Page 15 11.04 Amendment. This Agreement may be amended only with the written consent of all Parties and with approval of the governing body of the City. 11.05 No Waiver. Any failure by a Party to insist upon strict performance by the other Parry of any material provision of this Agreement shall not be deemed a waiver thereof, and the Parry 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 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. 11.06 Severability. The provisions of this Agreement are severable and, in the event any word, phrase, clause, sentence, paragraph, section, or other provision of this Agreement, or the application thereof to any person or circumstance, shall ever be held or determined to be invalid, illegal, or unenforceable for any reason, and the extent of such invalidity or unenforceability does not cause substantial deviation from the underlying intent of the Parties as expressed in this Agreement, then such provision shall be deemed severed from this Agreement with respect to such person, entity or circumstance, without invalidating the remainder of this Agreement or the application of such provision to other persons, entities or circumstances, and a new provision shall be deemed substituted in lieu of the provision so severed which new provision shall, to the extent possible, accomplish the intent of the Parties as evidenced by the provision so severed. 11.07 Captions. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of the Agreement. 11.08 Interpretation. The Parties acknowledge that each Party and, if it so chooses, its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting parry shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. As used in this Agreement, the term "including" means "including without limitation" and the term "days" means calendar days, not business days. Wherever required by the context, the singular shall include the plural, and the plural shall include the singular. Each defined term herein may be used in its singular or plural form whether or not so defined. 11.09 Conspicuous Provisions. The Parties acknowledge that the provisions of this Agreement that are set out in bold, CAPITALS (or any combination thereof) satisfy the requirements for the express negligence rule and/or are conspicuous. 11.10 No Third Party Beneficiary. This Agreement is solely for the benefit of the Parties, and neither the City nor Aqua Utilities intends by any provision of this Agreement to create any rights in any thir&party beneficiaries or to confer any benefit upon or enforceable rights under this Agreement or otherwise upon anyone other than the City and Aqua Utilities. Agreement for Sale of Treated Water Page 16 11.11 Force Maj eure. No Party shall be considered to be in default in the performance of any of the obligations hereunder (other than obligations of either Party to pay costs and expenses) if such failure of performance shall be due to an uncontrollable force beyond the control of the Parties, including, but not limited to, the failure of facilities, flood, earthquake, tornado, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, or restraint by a court order or public authority, which by the exercise of due Isis and foresight such Party could not have reasonably been expected to avoid. Either Party rendered unable to fulfill any obligation by reason of an uncontrollable force shall exercise due diligence to remove such inability with all reasonable dispatch. In the event the proper operation of the Fort Worth System, as a result of the above, requires the City to temporarily interrupt all or part of the services to Aqua Utilities, no claims for damage shall be made by Aqua Utilities against the City. 11.12 Emer eg ncies. In the event of a Temporary Emergency Condition, it may be necessary for Aqua Utilities to withdraw water from the Fort Worth System at a rate of usage in excess of that required for Aqua Utilities' usual peak requirements. If a Temporary Emergency Condition occurs and Aqua Utilities provides Notice to the Director within 48 hours of the onset of the Temporary Emergency Condition describing the unforeseeable mechanical failure or unprecedented high rate of water usage, obtains the Director's written concurrence that the situation constitutes a Temporary Emergency Condition, and exercises due diligence in ending the Temporary Emergency Condition, then the City shall not consider the Rate of Use Charge established during the Temporary Emergency Condition for billing purposes. Volume charges for all water delivered during the Temporary Emergency Condition shall be due and payable as described elsewhere herein. 11.13 Applicable Laws. This Agreement is subject to all applicable federal and state laws and any applicable permits, amendments, orders, or regulations of any state or federal governmental authority having or asserting jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, order, rule or regulation in any forum having jurisdiction. 11.14 Access to Facilities. Upon prior Notice to Aqua Utilities by the City, any employee of City bearing proper credentials and identification shall be given access to the Development as may be necessary for the purpose of inspections and observation, measurements, sampling and testing and/or auditing, in accordance with the provisions of this Agreement. Aqua Utilities may elect to accompany the City's representative. 11.15 Incorporation of Exhibits by Reference. All exhibits attached to this Agreement are incorporated into this Agreement by reference for the purposes set forth herein, as follows: Exhibit A Map of the Development Exhibit B Legal Description of the Development Exhibit C Map showing the Development's Point(s) of Delivery into the Fort Worth System Exhibit D Rate Methodology Agreement for Sale of Treated Water Page 17 Each Party has caused this Agreement to be executed by its duly authorized representative in multiple copies effective as of the Effective Date. ATTEST: Marty Hendrix City Secretary APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney ATTEST: Corporate Secretary CITY OF FORT WORTH By: (print name) Title: AQUA UTILITIES, INC., a Texas Corporation By: Print Name: Title: Agreement for Sale of Treated Water Page 18 Exhibit A Map of the Development Exhibit A to Agreement for Sale of Treated Water Page 1 Exhibit B Legal Description of the Development BEING a 1,919.898 acre tract of land in the G. Cardinas Survey, Abstract U. 214, the James Chesier Survey, Abstract No. 225, the W.D. Reed Survey, Abstract No. 1125, the W.C. Brookfield Survey, Abstract No. 34, and the W.A. Ferris Survey, Abstract No. 419 situated in Denton County, Texas and being a combination of a portion of those tracts conveyed to Aperion Communities, L.L.L.P. (Aperion Tract One -A and Aperion Tract One-B), by deed recorded under County Clerk's File No. 200441913 of the Real Property Records of Denton County, Texas (RPRDCT), that tract conveyed to Nancy Talley Reynolds, et al, by deed recorded in Volume 2301, Page 223 RPRDCT, a portion of that tract conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2003-190652 RPRDCT (Aperion Tract Two), that tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT and those tracts recorded in Volume 5128, Page 3102 and Volume 5119, Page 715, RPRDCT and being more particularly described as follows: TRACT ONE COMMENCING at a capped 5/8" iron pin found, said iron pin also being on the north right-of- way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCE N OOE32'36" W along the west line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 3701.24 Feet to a 3/8" iron pin found; THENCE N 89E39'59" E along the north line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 1826.89 feet to a 1/2" iron pin found, said iron pin also being on the west line of said Aperion Tract One -A; THENCE N OOE22'44" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 1294.80 feet to a capped 1/2" iron pin set, said capped iron pin set also being on the west line of said Nancy Reynolds Talley, et al tract, said iron pin also being the POINT OF BEGINNING of the herein described tract; THENCE N OOE2244" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 102.53 Feet to a capped 1/2" iron pin set THENCE N 57E4629" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, the east line of a tract conveyed to Peggy Jeannine Eaton and Betty Marie McIntyre by deed recorded under County Clerk's File No. 2003-203215 and the west line of said Nancy Reynolds Talley, et al tract, a distance of 253.45 feet to a 1/2" iron pin found; THENCE N OOE21'32" E along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Nancy Reynolds Talley, et al tract, a distance of 1364.27 Feet to a railroad spike found, said railroad spike also being on a west line of said Aperion Tract One -A, said railroad spike also being in Sam Reynolds Road; THENCE N OOE1220" W along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a Exhibit B to Agreement for Sale of Treated Water Page 2 distance of 2791.88 feet to a railroad spike found; THENCE S 89E52'16" W along the north line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a distance of 1909.29 feet to a 5/8" iron pin found, said iron pin also being on the east line of Indian Trails Phase I. an addition to Denton County, Texas as recorded in Cabinet G, Page 311 of the Plat Records of Denton County, Texas (PRDCT); THENCE N OOE09' 15" W along the west line of said Aperion Tract One -A, the east line of said Indian Trails Phase 1, the east line of a tract conveyed to Avondale Ranch by deed recorded in Volume 5289, Page 4253 RPRDCT and in Sam Reynolds Road, a distance of 1437.47 feet to a 60d nail in asphalt found, said 60d nail also being the southwest corner of a tract conveyed to Milton High by deed recorded in Volume 501, Page 248 RPRDCT; THENCE N 76E15'28 E along the west line of said Aperion Tract One -A and the south line of said High tract, a distance of 381.87 feet to a 1/2" iron pin found; THENCE N OOE18'58" W along the west line of said Aperion Tract One -A and the east line of said High tract, a distance of 307.76 feet to a 1/2" iron pin found; THENCE S 89E55'09" W along the west line of said Aperion Tract One -A and the north line of said High tract, a distance of 370.41 feet to a 60d nail found, said 60d nail also being on the east line of said Avondale Ranch tract and in Sam Reynolds Road; THENCE N OOE12'09" W along the west line of said Aperion Tract One -A, the east line of said Avondale Ranch tract, the east line of a tract conveyed to W.E. Wilkerson by deed recorded in Volume 960, Page 35 RPRDCT, the east line of a tract conveyed to Edward Zelnik, et ux Janet by deed recorded in Volume 4062, Page 1905 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 271 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 275 RPRDCT, the east line of a tract conveyed to Gary Lynn Barksdale, et ux Toni Gayle by deed recorded in Volume 1545, Page 427 RPRDCT, the east line of a tract conveyed to Bobby J. Henry by deed recorded in Volume 5028, Page 3683 RPRDCT, and in Sam Reynolds Road, a distance of 3495.34 feet to a railroad spike found, said railroad spike also being on the south line of a tract conveyed to Margaret DiNapoli, et al, by deed recorded in Volume 4522, Page 2063 RPRDCT; THENCE S 89E57'51 E along the west line of said Aperion Tract One -A and the south line of said Margaret DiNapoli, et al tract, a distance of 509.83 feet to a 5/8" iron pin found, said iron pin also being on the west line of a tract conveyed to Archie Eddleman by deed recorded in Volume 2322, Page 824 RPRDCT; THENCE S OOE14'31" E along the west line of said Aperion Tract One -A and the west line of said Eddleman tract, a distance of 226.43 feet to a 1/2" iron pin found; THENCE N 89E05'10" E along the west line of said Aperion Tract One -A and the south line of said Eddleman tract, a distance of 870.61 feet to a 5/8" iron pin found, said iron pin also being the southwest corner of a tract conveyed to Ricky Iverson by deed recorded in Volume 4718, Page 362 RPRDCT; THENCE N 88E48'54" E along the west line of said Aperion Tract One -A and the south line of said Iverson tract and the south line of a tract conveyed to Carol Theis by deed recorded in Volume 1038, Page 887 RPRDCT, a distance of 1598.77 feet to a 1/2" iron pin found; Exhibit B to Agreement for Sale of Treated Water Page 3 THENCE N OOE24'54" W along the west line of said Aperion Tract One -A and the east line of said Theis tract and the east line of a tract conveyed to S.R. Harper by deed recorded in Volume 1726, Page 31 RPRDCT, a distance of 907.14 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of a tract conveyed to Roy Chastain by Contract of Sale recorded under County Clerk's File No. 97-R0021328 RPRDCT; THENCE N OOE43'24" W along the west line of said Aperion Tract One -A and the east line of said Chastain tract, a distance of 423.43 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of said Aperion Tract Two; THENCE S 88E53'01" W along the south line of said Aperion Tract Two and the north line of said Chastain tract, a distance of 1193.21 feet to a capped 1/2" iron pin found, said iron pin also being on the east line of a tract conveyed to Wayne Harris by deed recorded in Volume 976, Page 42 RPRDCT; THENCE N OOE35'15" W along the west line of said Aperion Tract Two and the east line of said Harris tract, the east line of a tract conveyed to John McCurry by deed recorded in Volume 971, Page 697 RPRDCT, the east line of a tract conveyed to Samuel Haynes by deed recorded in Volume 962, Page 43 RPRDCT, and the east line of a tract conveyed to Howell Choate by deed recorded in Volume 924, Page 921 RPRDCT, a distance of 2336.13 feet to a 1/2" iron pin found, said iron pin also being the southwest corner of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 525 RPRDCT; THENCE S 88E03'05 E along the north line of said Aperion Tract Two and the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT, a distance of 1190.05 feet to a 1/2" iron pin found, said iron pin also being on the north line of Aperion Tract One -A; THENCE N 89E00'24" E along the north line of said Aperion Tract One -A, the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT and the south line of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 521 RPRDCT, a distance of 1146.79 feet to a 1/2" iron pin found, said iron pin also being on the southerly right-of-way line of Farm4o-Market Road No. 407 (F.M. 407) (90' ROW); THENCE S 50E10'01 E along the north line of said Aperion Tract One -A and the southerly right-of-way line of F.M. 407, a distance of 682.19 feet to a capped 1/2" iron pin set, said iron An also being the Point of Curvature of a circular curve to the left having a radius of 617.96 feet, a central angle of 39E44'46" and being subtended by a chord which bears S 70E02'24" E, 420.13 feet; THENCE along said curve to the left and the north line of said Aperion Tract One -A and the southerly right-of-way line of F.M. 407, a distance of 428.68 feet to a capped 1/2" iron pin set, THENCE S 89E54'47" E tangent to said curve and along the north line of said Aperion Tract One -A and the southerly right-of-way line of F.M. 407, a distance of 458.09 feet to a point on the east line of the City of Fort Worth ETJ line and the west line of the Town of Northlake ETJ line; THENCE S OOE00'00" W, departing the north line of said Aperion Tract One -A and the southerly right -of --way line of said F.M 407, along the east line of the City of Fort Worth ETJ line and along the west line of the Town of Northlake ETJ line, a distance of 2998.33 feet to a point on the north line of a tract conveyed to Patricia Malloy by deed recorded in Volume 769, Page 965 RPRDCT; Exhibit B to Agreement for Sale of Treated Water Page 4 THENCE S 88E57'42" W along the east line of said Aperion Tract One -A and the north line of the north line of said Patricia Malloy tract, a distance of 802.46 feet to a 5/8" iron pin found, THENCE S OOE10'33" E along the east line of said Aperion Tract One -A and the west line of said Patricia Malloy tract, a distance of 3748.38 feet to a 5/8" iron pin found, said iron pin also being the northwest corner of Riggs Place, an addition to Denton County, Texas as recorded in Cabinet E. Page 359 PRDCT; THENCE S OOE17'37" E along the east line of said Aperion Tract One -A, the west line of said Riggs Place and the west line of a remainder tract conveyed to James Riggs, Jr., et ux Deborah, by deed recorded in Volume 870, Page 444 RPRDCT, a distance of 4211.11 feet to a 1/2" iron pin found, said iron pin also being in Sam Reynolds Road; THENCE N 89E56'15" E along the east line of said Aperion Tract One -A, the south line of said James Riggs, Jr. remainder tract, the south line of said Riggs Place, the south line of Sunflower Meadows, an addition to Denton County, Texas as recorded in Cabinet O, Page 122 PRDCT, the south line of Sage Meadows, Phase One, an addition to Denton County, Texas as recorded in Cabinet M, Page 208 PRDCT; the south line of a tract conveyed to Locust Thorn, L.P., by deed recorded in Volume 4009, Page 321 RPRDCT, the south line of Foxbane Estates, an addition to Denton County, Texas as recorded in Cabinet H, Page 24 PRDCT and in Sam Reynolds Road, a distance of 3409.24 feet to a capped 1/2" iron pin set, said iron pin also being the original northwest corner of Peyton Place, Phase One, an addition to Denton County, Texas as recorded in Cabinet M. Page 266 PRDCT; THENCE S OOE15'21" E along the east line of said Aperion Tract One -A, the west line of said Peyton Place, Phase One and the west line of Peyton Place, Phase Two, an addition to Denton County, Texas as recorded in Cabinet P, Page 50 PRDCT, a distance of 1482.19 feet to a 1/2" iron pin found, said iron pin also being the northeast corner of a tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT; THENCE S OOE03'07" E along the east line of said Rocksand Investments tract, a distance of 503.35 feet to a 1/2" iron pin found, said iron pin also being on the northwesterly line of a tract conveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93-R0020408 RPRDCT; said iron pin also being the Point of Curvature of a non -tangent circular curve to the left having a radius of 5829.65 feet, a central angle of 19E15'23" and being subtended by a chord which bears S 54E00'43" W , 1950.06 feet; THENCE along said curve to the left and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1959.27 feet to a 1/2" iron pin found; THENCE S 44E23'02" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 27.66 feet to a 5/8" iron pin found; THENCE N 45E36'58" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 50.00 feet to a 5/8" iron pin found; THENCE S 44E23'02" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1446.37 feet to a 5/8" iron pin found, said iron pin being on the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract; THENCE N OOE07'20" W along the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract, a distance of 857.55 feet to a capped 1/2" iron pin set; Exhibit B to Agreement for Sale of Treated Water Page 5 THENCE N 90E00100" W, departing the east line of said Apenon Tract One -A and the west line A said Rocksand Investments tract, a distance of 773.31 feet to a capped 1/2" iron pin set; THENCE N 65E58'36" W, a distance of 1029.92 feet to a capped 1/2" iron pin set; THENCE N 44E08103" W, a distance of 999.82 feet to a capped 1/2" iron pin set; THENCE N 52E34122" W. a distance of 867.86 feet to a capped 1/2" iron pin set; THENCE N 86E14127" W, a distance of 222.13 feet to the POINT OF BEGINNING and containing 59,664,159 square feet or 1369.701 acres of land, more or less. TRACT TWO BEING a 550.197 acre tract of land in the W.C. Brookfield Survey, Abstract No. 34, situated in Denton County, Texas and being that same tract of land as described in deeds rcorded in Volume 5128, Page 3102 and Volume 5119, Page 715 of the Real Property Records of Denton County, Texas (RPRDCT) and being more particularly described as follows: BEGINNING at a point in the north line of F.M. 407 at the southeast corner of the herein described tract of land, said point lying in the west line of a tract of land as described in deed to Bill Pennington, recorded in Volume 572, Page 131, RPRDCT; THENCE along the north line of said F.M. 407, as follows: Northwesterly, along a curve to the left, having a radius point that bears S 18E06128" W, 624.31 feet, an arc distance of 204.03 feet, a central angle of 18E43'31 and being subtended by a chord which bears N 81EI5'18" W, 203.13 feet; S 89E22'57" W, a distance of 1876.49 feet; S 89EI8'36" W, a distance of 1931.01 feet; THENCE N OOE04103" W, departing the north line of said F.M. 407, a distance of 2834.59 feet; THENCE N OOE00'51" E, a distance of 1161.59 feet; THENCE N OOE04'13" E, a distance of 1244.99 feet to the northwest corner of the herein described tract of land; THENCE, being adjoined to the north by a tract of land as described in deed to Orville Rogers, recorded in Document No. 94-R0029773, RPRDCT, along the north line of the herein described tract of land, as follows: S 89E37'03" E, a distance of 5409.41 feet; S OOE32'35" W, a distance of 352.79 feet; N 89E46156" E. a distance of 651.45 feet; THENCE S OOE44'37" E, being adjoined to the east by a tract of land as described in deed to Laura Carter Johnson, recorded in Volume 3 03 8, Page 713, RPRDCT, a distance of 1372.47 feet; THENCE N 85E16140" W, a distance of 2099.00 feet; THENCE S OOE24'45" E, being adjoined to the east by the aforementioned Pennington tract, a distance of 3642.68 feet to the POINT OF BEGINNING and containing 550.197 acres, more or less. Exhibit B to Agreement for Sale of Treated Water Page 6 Exhibit C Map Showing the Development's Point(s) of Delivery into the Fort Worth System, Meter, and Backflow Prevention Device Exhibit C to Agreement for Sale of Treated Water Page 1 Exhibit D Wholesale Rate Methodology 1. Wholesale water rates will be based upon cost -of -service rate studies performed by independent utility rate consultants. The independent utility rate consultant shall be selected by the Director from a list of five qualified firms submitted to the Director by the Fort Worth "Water System Advisory Committee." The cost of such studies shall be a System Cost. All cost -of -service studies shall be conducted utilizing the utility cost basis of determining revenue requirements applicable to the wholesale customer class. 2. A detailed wholesale cost -of -service water rate study was performed by an independent utility rate consultant for the Fiscal Year beginning October 1, 2005. An additional detailed wholesale cost -of -service water rate study will be performed in accordance with this Exhibit E for the Fiscal Year beginning October 1, 2008, using the same methodology of the previous rate study, subject to modifications recommended by a majority of the Water System Advisory Committee and approved by the Fort Worth City Council. In the Fiscal Years between detailed rate studies, the City will perform a wholesale water rate study using the same methodology as the last detailed rate study, and will utilize the actual operating data for the twelve month period ending September 30th of the prior year, adjusted for all known and measurable changes in cost data that may have occurred since the last audited financial statement. Such adjustments should allow for year-end trending and the spreading of non -recurring expenses over an appropriate benefit period. 3. The cost -of -service for the wholesale class shall include allocated reasonable and necessary operation and maintenance expense, depreciation expense and a fair and reasonable return on allocated capital facilities. To determine the allocation and distribution of costs to the wholesale customer class, the independent utility rate consultant shall consider at least the following factors: total volume, rate of flow, metering, and customer -related costs such as accounting, billing, and monitoring. Capital -related costs will consist of depreciation expense and return on original cost rate base. The rate base shall consist of all allocated capital facilities, net of depreciation and contributions, and shall include construction work in progress, a reasonable allowance for working capital, and a reasonable inventory of materials and supplies necessary for the efficient operation of the Fort Worth System. Records of the original cost and the accumulated depreciation of all capital facilities shall be maintained in the Fort Worth Fixed Asset Tracking System. These records shall be available for inspection at the City's Water Department during reasonable business hours upon request by Aqua Utilities. 4. The City shall be allowed an adequate opportunity to earn a reasonable rate of return. The return shall be sufficient to assure confidence in the fmancial soundness of the City's utility, shall be adequate to maintain and support its credit, shall enable it to raise the money necessary for the proper discharge of its public duties, and shall be equal to the weighted average imbedded cost of outstanding debt plus one and one-half percent (1-1/2%). 5. The Raw Water Charge shall be equal to the rate per 1,000 gallons for out -of -district raw water charged to the City by the Tarrant Regional Water District, plus eight percent (8%) Exhibit D to Agreement for Sale of Treated Water Page 1 of 5 of said rate, representing the City's system losses of four percent (4U/o) and the street rental charge of four percent (4%), and shall be charged for the amount of water furnished by the City at the Point(s) of Delivery. Adjustments to the Raw Water Charge shall made whenever the rate per 1,000 gallons charged to the City is adjusted by the Tarrant Regional Water District. 6. The rates set forth in Article 8.02 shall be automatically adjusted to equal those adopted by the City Council based on the foregoing rate studies, and shall become effective on the effective date as determined by the City Council. 7. The total annual payment for water by Aqua Utilities shall be related to the annual and peak volumes used by Aqua Utilities during the Fiscal Year, as determined by the sum of all Meter(s), flow recording devices or other approved methods, subject to the annual payment provisions set forth above. The October bill for September usage shall reflect any necessary adjustment to the annual payment due to actual rates of withdrawal from the Fort Worth System. Exhibit D to Agreement for Sale of Treated Water Page 2 of 5 Page 1 of 3 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 12/18/2007 -Res. No. 3568-12-2007 DATE: Tuesday, December 18, 2007 LOG NAME: 06TRADITION2 REFERENCE NO.: C-22589 SUBJECT: Authorize Execution of the Consent Resolution, Development Agreement, Buy -Out Option Agreement, Impact Fee Agreement, Utility Agreement, Wholesale Wastewater Service Agreement, and the Agreement for the Sale of Treated Water and Approve the Form of the Strategic Partnership Agreement for Tradition Municipal Utility District No. 2 of Denton County RECOMMENDATION: It is recommended that the City Council: 1. Adopt a resolution consenting to the creation of Tradition Municipal Utility District No. 2 of Denton County ("District"); 2. Authorize the City Manager or a designee to execute the following contingent upon receipt of necessary executed documents from Aqua Utilities: a. A Development Agreement between the City and Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP; b. A Buy -Out Option Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; c. An Impact Fee Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; d. A Utility Agreement between the City and Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; e. A Wholesale Wastewater Service Agreement between the City and Aqua Utilities; f. An Agreement for the Sale of Treated Water between the City and Aqua Utilities; and 3. Authorize the City Manager or a designee to bring forth the Strategic Partnership Agreement for approval after the formation of the Municipal Utility District. DISCUSSION: Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, (AEDR) are Arizona limited liability partnerships that own and are developing approximately 2,663 acres in Fort Worth's and Northlake's extraterritorial jurisdiction as a mixed -use development to be known as Tradition. The property is in Denton County and is located north of Highway 114 and west of Highway 156! On December 13, 2005, (M&C C-21198) the City Council authorized the City Manager to enter into contracts for the first 431 acres of this development known as Tradition Municipal Utility District No. 1 of Denton County. The district was confirmed by the voters on May 12, 2007. nri nt Page 3 of 3 City funds. Any effect on expenditures and revenues will be budgeted in future fiscal years. TO Fund/Account/Centers Submitted for City Manager's Office bar: Originating Department Head: Additional Information Contact: FROM Fund/Account/Centers Dale Fisseler (6140) Fernando Costa (8042) Susan Alanis (8180) nrtc/m Page 1 of 2 Tidwell, Allison From: Sent: To: Cc: Gray, Allison M. Wednesday, August 19, 2009 11:10 AM Gonzales, Ronald; Alanis, Susan Fullenwider, Sarah; Burghdoff, Dana; Hendrix, Marty; Cole, Tennie; Madison, Menique; Otis, Sarah; Seidel, Nicole M.; Tidwell, Allison; Tinker, Marlena; Knight, Beth Subject: RE: MUD Contracts Ron, I have contacted Marcella Olson, the attorney for the Municipal Utility District and she has spoken to the representatives of the district. The contracts that we received and were partially executed were picked up and returned to the District for their execution and recording. The contracts required that the documents be executed within 60 days of the confirmation of the district. Due to the economy and some personnel changes with the property owner the district has not yet been confirmed. There is not a date certain for that district confirmation. So Ron, the contracts are in the possession of the Municipal Utility District and have not been fully executed yet. The property owner believes that someone will purchase the property, confirm the district, execute the contracts and move forward. Unfortunately, I can't tell you when we will get fully executed contracts returned to us. If you have any questions or need further information please let me know and I will tell you what I can, Allison From: Gonzales, Ronald Sent: Thursday, August 13, 2009 3:31 PM To: Alanis, Susan; Gray, Allison M. Cc: Fullenwider, Sarah; Burghdoff, Dana; Hendrix, Marty; Cole, Tidwell, Allison; Tinker, Marlena Subject: RE: MUD Contracts Tennie; Madison, Menique; Otis, Sarah; Seidel, Nicole M.; It' tli<� j�r��i.��ti���� ��aa�uot lm �;tt5tx�udc�d thc�il ����� r����ounuc�ii�l t����o ��ohi��s ��f tli�� ��ontr<i��t h<� pro��i�l���l �Por nuinlxl�riit . �V�� «gill lua,iufa�i�i �i� �°oj�r� lu��r�� for the of�l'i<�ia1 r����or�l ��ai�l r��turii ouo� to �-on for full. ��sccntio�i. 'hha�nk ��ou �utix�u acid �111i5oii. From: Alanis, Susan Sent: Thursday, August 13, 2009 3:08 PM To: Gonzales, Ronald; Gray, Allison M. Cc: Fullenwider, Sarah; Burghdoff, Dana Subject: Re: MUD Contracts Ron: I will find out why you haven't received it and resolve that if possible. It will not be possible to suspend this practice altogether due to the cross-referencing in them. It has always been anticipated that there could be a long gap before final execution because some cannot be signed until formation of the separate governmental entities. With the slowdown in development, they may be slowed even further. It makes sense to me for your office to have the official record even though they are partially executed so they are available for public inquiry. Allison: Please see what is going on with these in particular. 8/19/2009 Page 2 of 2 Thanks, Susan From: Gonzales, Ronald To: Gray, Allison M. Cc: Burghdoff, Dana; Alanis, Susan Sent: Thu Aug 13 14:59:23 2009 Subject: MUD Contracts flllisoll, I have bean inforlued that our office has assigned 14 contract nnnlbers for l��ILTD contracts for whlell eve have Tlot recelve(1 the fllllj' eSecllted C10('lllnent. The ('011tra,et Illilllbel'S al'e as fo110«'S: 3G200, 36201, 36202, 364(i2, 364C3, 30464, 3646�, 36466, 364G7, 36468, 3713G, 37137, 37138, 37139 and 37140 Irl the past, Nla,l•t}� had agreed to issue contra�•t nllmbers for the 1VIUD contra�c�ts as we were advised that we wonlcl receive the etecnted contract for processing and ma�intena,nce npoll all signatures being obta,illecl. Since we have not received the csecated copies for the above 1VIUD contra�c°ts, Marty has clirect�ed that effective today we arc not too issue contra�c�t nnlnbers for any 1VIUD colltra�c•:t that 1s not flllly czecllted. 11t ,your ca,rliest opporttulity, please provide the elecnted copies of the above 1VIUD contracts for onr records, if a�va,ilable.. If they are not available, please advise �vho eve llla,y contact to obtain the copies. Thank yon. Ron Gonzales �ssista,ut Git�- Secreta,rj; Clitj� of Fol•t Wol�h Ronald Gonzale5(ir)fortwortllgov.org 817.3cJ2.61G4 - "With fhrr 1'c= ��c��l� the �c� Worlr�" 8/19/2009