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MEMORANDUM OF UNDERSTANEM; SECRETARY
CONTRPtCT rt
This MEMORANDUM OF UNDERSTANDING (this "Memorandum") is en ere in o
and effective August 18, 2009, by and between the City of Fort Worth, Texas, a home -rule
municipal corporation in Tarrant, Denton and Wise Counties, Texas ("Fort Worth") by and through
its duly authorized Assistant City Manager, Fernando Costa, and the City of Arlington, a home -rule
municipal corporation in Tarrant County, Texas ("Customer") by and through its duly authorized
Deputy City Manager,
WITNESSETH0
WHEREAS, Fort Worth and Customer have entered into a certain "Agreement for
Reclaimed Water Service" (the "Agreement"), dated May 22, 2009, known as Fort Worth City
Secretary Contract No. 3 �14[ and City Secretary Contract
No. , whereby Fort Worth agreed to furnish and sell Reclaimed Water to Customer
under the terms and conditions therein; and
WHEREAS, the Customer agreed to purchase and pay Fort Worth for Reclaimed Water at
the annual Rate set pursuant to the Agreement based on a System -wide cost -of -service rate study to
be performed by an independent utility rate consultant as more fully described in Section 7 of the
Agreement;
WHEREAS, upon entering into the Agreement, Fort Worth forecasted the issuance of debt
to construct the Reclaimed Water System used to deliver Reclaimed Water to Customer,
WHEREAS, the Agreement provides for the debt service for the construction of the
Reclaimed Water System to be used in determining the annual Rate set pursuant to the Agreement
For payment for Reclaimed Water Service,
WHEREAS, on February 17, 2009 the President of the United States signed into effect the
American Recovery and Reinvestment Act of 2009 making available federal stimulus funds for
qualified and accepted projects; and
WHEREAS, Fort Worth has made application to receive federal stimulus funds to help with
the cost of building its Reclaimed Water System infrastructure.
NOW THEREFORE, for and in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the parties hereto agree as follows:
1. Definitions
Unless otherwise specified herein, all terms shall have the same defmition as described in the
Agreement.
2. Purpose
The purpose of the MOU is to memorialize certain agreements and understandings related to
Fort Worth's application for federal. stimulus funding under the Ame can Recoa
Reinvestment Act of 2009 to aid in the cost of constructing its Reclaimed MtWfWK1tR1
Customer's payment for Reclaimed Water. If awarded such funding, in cUTZ'e£EGRETAN
FT: WORTH, TX
original customers' support of such funding, it is Fort Worth's intention to reduce and/or not
issue debt to the extent that it receives federal funding for the construction of the Reclaimed
Water System infrastructure, as described below. If Fort Worth is not awarded federal
stimulus funding, then this MOU shall have no effect. Furthermore, upon receipt of such
funds, if awarded, both parties agree to negotiate in good faith an amendment to the Agreement
with the terms and conditions contained herein.
3. Capital Recovery Fee
If Fort Worth receives federal stimulus funding to fund any or all of the construction of the
Reclaimed Water System, Fort Worth intends for the contract rate to include a Capital
Recovery Fee amount that is based on the debt service avoided, and reserved for future capital
expenditures on the Reclaimed Water System. That annual Capital Recovery Fee shall be
calculated by multiplying that portion of the infrastructure costs for the Reclaimed Water
System paid for with federal stimulus funding by two percent (2%). Other components of the
rate include Fort Worth's franchise fee, and future capital recovery fees that may be included in
the contract rates from time to time, consistent with the terms of Article VII of the Agreement.
4. Cost of Service Rates
Fort Worth acknowledges that if federal stimulus funds are received, Fort Worth may not need
to subsidize the system cost or may only be required to subsidize a portion thereof. Therefore,
the parties agree that the fixed rates per § 7.3.1 of the Agreement would not be applicable if the
§ 7.2 cost -of -service rates are less than the contractual fixed rates.
5. Debt Financed System Expansion
If Fort Worth incurs debt to fund System capital costs within the first 10 years of the
Agreement, and the resulting cost -of -service rates are more than $1.50 per thousand gallons,
then the fixed rates under § 7.3.1 will apply, and will be extended to provide for a fixed rate of
$1.50 for the years 2015 through 2019, and thereafter rates will be subject to the § 7.3.2 annual
5% increase, capped by the § 7.4 Maximum Rate. Further, when Fort Worth incurs debt to fund
System capital costs, the Capital Recovery Fee in paragraph 3 above will no longer be included
as a component of the cost -of -service contract rates.
6. Wholesale Water Rate
If awarded the federal stimulus funding, Fort Worth agrees to normalize the Wholesale Water
Rate over a three (3) year period.
7. Miscellaneous
Nothing contained herein shall be deemed to amend or modify the Agreement. In the event of a
conflict between the terms of this MOU and the Agreement, the terms of this Agreement shall
control.
OFFICIAL RECORD
CITY SEGRETARY
T.
WORTH, TX
Memorandum of Understanding
Reclaimed Water Agreement Payment
050140 V
IN WITNESS WHEREOF,
200plat
Fernando Costa
Assistant City Manager
ATTEST:
Marty Hendril
City Secretary
this Memorandum has been executed on this:�ia day of
pjItM\i Y3APPROVEDII��AS TO FORM AND LEGALITY:
IL�
ssistan City AttorAey
Cc�r�t.vact P,uthorizatiON&
Date
Memorandum of Understanding
Reclaimed Water Agreement Payment
05.14.09v3
Fiona M. Allen, P.E.
eputy City Manager
T:
Karen Barlar
City Secretary
APPROVED AS TO FORM AND. LEGALITY:
OFFICIAtRECORD
CITY SECRETARY
FT: WORTH, TX