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HomeMy WebLinkAboutContract 4751t 'ONTRACT FOR WATER SERVICE between the CITY OF FORT WORTH, TEXAS and the CI71 CF RICHLAND HILTS, IEYM TFE STATE OF TEXAS C OXJti" Y OF TAP2A1,3T 0 CITY SECRETARY CONTRACT OFFICIAL RECORD CITY SECRETARY FT. WORTH, TEX. THIS CONTRACT AND AGREEMEDT made and entered into this 29 day of March _ _, 15, by and between. the City of Fort Worth, a municipal corporation located in Tarrant County, Texas, acting by and through its daily authorized mayor, John Justin ®_s__s___, and the City of Richland Mills, a a.unicipal corporation located in Tarrant County, Texas, acting by and through its duly cuthorized mayor,_____` Paul_ C.Daniels W I T N E S S E T H WHEREAS, the City of Fort Worth has provided at its own expense, and now owns, open°aces and maintains facilities for proc-essing and distribu- ting a large supply of ,surface water, and at the present time is qualified to furnish and deliver treated eater, both within and without the corporate boundaries of the City of Fort Worth; and, WHEREAS, the City of Richland Hills has provided at its own Expense and nov, owns, operates and maintains an underground water supply system and a distributionsystem; and, WHEREAS, the underground supply* system of the City of Richland Hills is erected in the future: to be unable to meet the total needs of its residents; and. WHEREAS, the City of Richland Hills does not now have and cannot provide economically and within a reasonable period of time, any other source of water supply; and., WHEREAS., it is deemed to be in the best interest of both the City of Fort Worth and the City of Richland Bills that said cities do enter into a mutually satisfactory agreement by means of which the City of Richland Bills may obtain a supply of treated water at a reasonable rates and, WBEREAS9 by the execution of this contract, neither the City of Fort Worth nor the City of Richland Bills will surrender any of its rights to the ownership and operation of its present water production and distribu- tion facilities- NOW, MEFFORS9 KNOW ALL MEN BY SSE PRESEIV°TS -. That for and in consideration of the execution and performance of the mutual covenants herein set forth, the City of Fort Worth and the City of Richland Bills do hereby covenant and agree as follows-. to TERMS AND CON.0ITIONS The City of Fort Worth agrees to furnish and sell to the City of Richland Hills treated water under the normal operating pressure prevailing in the east side pressure plane of the City of Fort Worth°s water distribu- tion system at the point or points of delivery. The City of Richland Bills agrees to accept delivery of such treated water at the said point or points of delivery under the conditions of this agreement and to pay for the same in accordance with the term hereof If at any time during the term of this contract the furnishing of water by the City of Fort Worth to the City of Richland Bills shall be t�� to the detriment of water customers within the City of Fort Worth, then and in that event the quantity of water furnished to the City of Richland Hills will be reduced in proportion to the reductions in quantity of water being furnished other customers served by the east side pressure plane either in or out of the City of Fort Worth. If the. City of Fort Worth shall ration the use of water in said City or issue water conservation measures or restrict the use of water in any way, the City of Richland Hills, shall, at its option, either: 1. discontinue taking water from the City of Fort Worth under this agreement during the period of rationing, water conservation or restriction by the City of Fort Worth; or 2. institute and apply the same rationing, conservation measures or restrictions to the use of water by the customers of the City of Richland Hills, so long as any part of the total water supply of Richland Hills is being furnished by the City of Fort Worth. The City of Fort Worth and the City of Richland Hills agree that if the City of Fort Worth should enter into any future contract for supplying treated water to any municipality under more favorable terms or conditions than set forth herein, this contract may be amended to provide the same terms and conditions with respect to the sale of treated water to the City of Richland Hills. 2. METERS All water furnished under this agreement shall be measured by one or more suitable meters equipped with continuous flow chart -recording devices, and rate of flow control devices. All Meters, recording equip- meat, and rate of flow devices shall be installed and operated by the City of Fort Worth, with the City of Richland hills paying to the City of Fort Worth the cost of the meter and appurtenances plus the installation and maintenance cost thereof. The point or points of delivery of treated water by the City of Fort Worth shall be the meter vault connection on the customer's side of the moor, and all necessary mains and distribution facilities from and beyond said point shall be furnished, installed, owned, operated, and maintained by the customer, the City of Richland Hills. The location of' each -meter shall be mutually agreed upon by and between the parties hereto, and the meter or meters shall not be moved or relocated except by mutual consent. The location of each meter shall coincide with the Fort Worth city limit line as nearly as is reasonably possible. The meters first employed shall be located as shown on the map attached hereto marked: exhibit "A" and expressly made a part hereof. Each City shall have the right to test the meters and flow controllers at any time, by first giving the other party notice of its intention to make such a test. No meter shall be adjusted, changed or tested, in place or elsewhere, without giving notice to the other party of this intention to make such a test, and thereafter giving reasonable opportunity to the other party to have representatives participate in such test, change or adjustments For these ppa poses the meter and control equipment will be _4 - properly sealed, and the seal shall not be 'broken except in the presence of representatives of all parties or following due notice 'to all parties. The City of Richland dills or the City of Fort forth may install a check meter to check measure the volume of water passing through the master meter, provided that if such check meter is installed the same rules and regulations relative to is operation, maintenance, and reading shall apply as to the meter being tested METER READING AND BILLING The City of Fort Worth will read all meters provided for herein at monthly intervals and the parties to this agreement shall have free access to read these respective asters daily,, if either party so desires. It shall be the duty of the parties to give immediate notice, each to the other should any meter be found not functioning, and upon such notice repairs to such meter shall be made promptly. When -ever it is evident that a meter has not registered accurately for a period of time, the quantity used shall be estimated in accordance with usage under similar conditions for an equal period.. The meter readings and rates of flow shall be added together when more than one meter is in service and the sum thereof shall be used for the purpose of calculating the charges for water useda A review of water usage amounts by the customer for the past twelve (12) months shall be made during the preparation of the September bill each year. The September statement. shall be prepared so as to reflect any and all rates of use charges which have not been previously billed and paid. A copy of the rate of flow charts shoving the maximum day and the peals hour of the year shall be furnished to the customer with the September bilJLing. The City of Richland Balls agrees to appropriate annually sufficient funds to pay the monthly charge for uvat;er service. The water charge to be paid by the City of Richland Hills to the City of Fort Worth shall be deemed a current expense of the City of Richland Bills for each year of this con- 1 tract as such monthly charges become dine and payable. The monthly bill shall be dine a -rid payable at; the office of the Fort Worth City Water Department on or before the 15th day immediately succeeding the monthly billing date. 4. DEFINITIONS "Annual consumption19 is the total quantity ofwater purchased under the berms of this contract by the City of Richland Hills during the fiscal year of the City of Fort; Worth as determined by the difference in the annual September meter readings. "Average daily use" is the annual consumption divided by 365. °Maxims day uxsage9° is the maximum quantity of waterused during one calendar day of the Fiscal year of the City of Fort Worth. "M. G. Di. " is million gallons per day. "O.F.D." ie gallons per day. "T. fir. P. D." is thousand gallons per day. �6 "Maximum hour rate" or the "peak hour rate" is the quantity of water used during the one hour of the year when more water passed through the meter or meters serving the customer than during any other hour of the fiscal year of the City of Fort Worth multiplied by 24. "Commodity charge" is that part of the rate charged per 1,,000 gallons ued,, regardless of rate of use, The commodity charge shall include the maintenance and operation cost,, the capital facilities cost on the partcfthe production and transmission system related to annual use and the raw water costs. "Rage water charge" is a part of the commodity charge and represents the rate per 1.,000 gallons charged by the Tarrant County Water Control and Improvement District Nos 1 to the City of Fort Worth for raw water to be sold to the City of Richland Rills,, plus 13%O representing Fort Worth water system losses "Rate of use charge" is the fixed charge determined for the maximum day and the maximum hour rates of use "Rase rate94 is composed of1the commodity charge,, and the rate of use charge. 5. RATES to Method of rate determination The annual rate charged by the City of Fort Worth for rendering water service under the terms of this contract shall be based upon the functional distribution of the total annual cost Incurred in furnishing treated water to its wistorr.k.rs., :eOro-i ided that :nothing, herein shall be construed as contemplating air a7n i7 , . r .te of less °than. the :r^egulgr Amity of fort Worth water only rate, plus 10 per cent. 20 Rates to be used The annual rate to be charged for water shall include the proper proportionate parts of the maintenance and operation cost as related to the production and transmission facilities of the total Fort Worth Water System, the capital facilities cost (fixed charges) on the production and transmission plant related to the rendition of service at maximum withdrawal rates of use by the City of Richland dills and the raw water costs The charges for theinitial period of the contract which shall terminate September 30, 1967, have been computed to be as follows a. The commodity charge shall be 16� per 1,000 gallons withdrawn by the customer. bo The annual rates of use charges for maximum day usage shall be $16,000 per M.G.D. and maximum hour rate of usage in excess of the maximum day shall be $8,280 per M.G.D. co The service charge shall be $25-00 per month. 3. Adjustment of rate ao Raw water 11he amount charged for raw water shall be increased or decreased proportionately when the raw water cost paid by the City of Fort Worth for water available for treatment and sale to the City of Richland Hills is increased or decreased. At the time of execution of this 10 contract, the rate, including 13% for system losses, to the City of Richland Hills is 9� per 1000 gallons. ',the portion of the raw water charge which reflects system losses shall be adjusted in the manner set out in sub -paragraph b. below in accordance with actual experience during the preceding period. If the City of Richland Hills enters the Tarrant County Water Control and Improvement District No. 1, it is anticipated that the raw water charge to the City of Richland Hills will be reduced to per 1000 gallons. b. Commodity charge and rates of use charges. The rate shall be reviewed and adjusted every five years except that the first such review shall be based on the annual cost of operation for the fiscal years, 1965-66 and 1966-67. The cost related to the pro- duction and transmission function of distributing treated water to the Fort Worth city limits in wholesale quantities plus a service charge shall be determined in accordance with methods herein. Such costs shall be projected through the City of Fort Worth fiscal year 1970 to establish the fair rate for water to be charged during the period October 1, 1967, to September 30, 1972. The adjusted rate shall be made effective October 1, 1967. A similar review and rate adjustment shall be made for each suceeding five year period for the term of the contract. 6. PAYMENT FOR WATER. Payment of charges to the City of Fort Werth for water used by the City of Richland Hills shall be made as follows: 1. Minimum annual payment The City of Richland Hills agrees to pay to the City of Fort Worth Worth the annual rate of use charge based on a withdrawal rate of not less than 750,000 G.P.D. and the service charge. 2. Maximum rate of deli The "maximum hour rate" at which water is withdrawn from the City of Fort Worth system by the City of Richland Hills shall not exceed 1.35 times the "mmximum hour rate" of withdrawal experienced during the previous year unless the City of Richland Hills has notified the Director of the Fort Worth Water Department in writing at least six months prior to the date of the anticipated increase in "maximum hoar rate" of withdrawal and has furnished all pertinent information re- garding the proposed increase to the Director of the Fort Worth Water Department and said Director has given his written approval thereof, except that the said Director may waive all notice requirements, if, in his opinion, said notice is not necessary to protect the interest of the City of Fort Worth. 3. Minimum monthly charge The minimum monthly charge shall be one -twelfth of the minimum annual charge,and for the first period of the contract the minimum monthly charge shall be $1,025 for which payment the City of Richland Hills shall be entitled to withdraw water at the rate of 0.75 million gallons per day from the Fort Worth system. -10- 4, Monthly payment The monthly paymentshall include the minimum charge plus the commodity charge multiplied by the quantity of water withdrawn from the Fort Worth system during the month. For example, the monthly charge for the use of 22,500,000 gallons in July, 1964, would be computed as follows: Minimum charge $1,025v00 22,500 x .16 1,600000 July Billing $4,625.00 5. Annual payment The actual total annual payment for water by the City of Richland Hills shall be related to the annual and peak volumes used by the customer during the City of Fort Worth's fiscal year as determined by meters, flow recording devices or other approved methods, The September bill shall reflect any necessary adjustment in the annual payment due to the actual rates of withdrawal being larger than the rate paid for each month under the minimum charge. Method of computation for determining the total annual payment and the September bill is shown in the two examples as follows: -11- Example '"'l September usage 0 gallons .:annual usage 8,0001000 Maximum day (Minimum) 750,000 Annual Payment 12 x 1025 $12,300 .16 x 8000 _ 1,28o TOTAL $13,58o Less Previous Payments 11 x 1025 = $11,275 .16 x Woo _ 1,28o -$12,555 September Billing _ $ 1,025 Example -i,12 September usage 20,000,000 gallons Annual usage 180,000,000 " Maximum day (minimum) 750,000 Maximum day- actual 800,000 nnnual Payment 18o,000 x .16 $28,800 16,000 x o8 12,800 25 x 12 300 Total $41, 90o Less Previous Payments 16o,000 x .16 $25,600 1,025 x .11 11 275 - 36 875 September Billing 5,025 -12- 7• EFFECTIVE DATE OF .CONTRACT FOR BILLING It will be necessary for the City of Fort Worth to construct a water transmission main to its approximate corporate limits and to con- struct a meter installation to serve the City of Richland Hills. The City of Fort Worth will proceed expeditiously to do all things to implement this contract. The effective date of this contract for billing purposes shall be the fifteenth (15th) day of the month in which the transmission main and the meter installation are placed in service by the City of Fort Worth. In no event shall the said effective date be prior to May 15, 1964. If said main and installation are placed in service subsequent to May 15, 1964, the rate of use charge in the billing for the first month will be prorated according to the number of days of actual service included in said billing. LIFE OF CONTRACT The life of this contract shall be for thirty (30) years from the date of execution hereof, and may be renewed upon terms mutually agree- able to the parties hereto. 9• RIGHTS OF WAY The City of Richland Hills shall grant to the City of Fort Worth such easements and rights of way along public highways or other property owned by the City of Richland Hills as are appropriate to construct and maintain water mains and facilities within the City of Richland Hills to -13- furnish water to the City of Richland Hills and to transmit water for use in other areas outside the boundaries of the City of Richland Hills* The City of Fort Worth will move such water mains when reasonably necessary upnn notice from the City of Richland Hills at no cost to the City of Rich- land Hills. All work done by or on behalf of the City of Fort Worth under this paragraph will be performed in accordance with specifications equal to those applying to work of a similar nature performed within the City - of Fort Worth. 1161M MUNICIPALITY MAY BECOME PART OF THE TARRANT_ COUla'1'Y WATER CONTROL AND IMPROVEMENT DISTRICT NUMBER OTE The City of Richland Hills has determined not to be a part of the Tarrant County Water Control and Improvement District Number One at this time but is in no way precluded by this contract from becoming a part of the District at any time in the future. If the District levies an additional ad valorem tax to finance water supply facilities, the City of Richland Hills will pay to the City of Fort Worth an additional amount for treated water equivalent to the estimated water district tax that would have been levied on property located within the City of Richland Hills had the City of Rich- land Hills been a part of the District, which amount will be related to the payment by the City of Fort Worth to the District based on the value of property located within the City of Richland Hills. -14 - 11. STATE HE,AL` H DEPARlIMT1 APPRO111,L The water system of the City of Richla-rlHill.s shall be approved by the Texas State Department of Health, during the life of this contract. If at any time the water system of the City of Richland Rills is not approved by the Texas State Department of Health, there shall not be any direct physical. connection between the Fort Worth Water System and. the Richland. Hills Water System. 12 RESALE OF WATER The City of Richland Hills does hereby covenant and. agree not to sell water to any user located within its city limits at a rate lower than the equivalent Fort Worth rate charged a similar customer located within the City of Fort Worth. The City of Richland Hills agrees to furnish the City of Fort Worth Water Department a complete rate schedule for all City of Richland Hills water sales. The City of Richland, Hills will, not make any extension of water lines beyont the city limits of the City of Richland Hills as its boundaries now exist or may hereafter exist, nor permit any connections for water out- side its city limits, without the approval of the City of Fort Worth. Sn the event the City of Fort Worth agrees to an extent' ion by the City of Richland Hills of its water service outside its boundaries, the rates to be charged its customers by the City of Richland Hills and the compensation to be paid by it to the City of Fort Worth shall be determined: and fixed at the time such action is taken. -1.5_ 13. EMERGENCY RATES OF USE During a temporary emergency condition created by an unforeseeable mechanical failure or by unprecedented high rate of water usage such as might result from a major fire or a major break, it may be; necessary that water be withdrawn from the Fort Worth system at a rate of usage in excess of that required to meet the usual peak requirements of the City of Rich- land Hills. It is agreed that extra rate of use charges that would normally be applicable shall not apply for such emergency withdrawals. However, the commodity charge for such water shall be payable. It is further agreed that if Fort Worth experiences such similar temporary emergency water supply conditions, water may be released to Fort Worth from the Richland Hills system upon request by the Director of the Fort Worth Water Department. The quantity of water used by Fort Worth during such emergency conditions shall be paid for at the commodity charge rate. 14. FORCE MAJEURE If by reason of force ma�eure, either party hereto shall be rendered unable, wholly or in part, to carry out its obligations under this agree - meet other than the obligation of the City of Richland Hills to make payments required under the terms hereof, then if such party shall give notice and full particulars of such force ma,jeure in writing to the other party within a reasonable time. after the occurrence of the event or cause relied on, the -16 - obligation of the party giving such notice, so fRr as it is affected by such force majeure, shall be suspended during the continuance of the inability then claimed, but for no longer period, and such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure", as employed herein, shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the Unites States or the State of Texas, or any civil or military authority, insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, wash- outs, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipe lines or canals, partial or entire failure of water supply, and. inability on the part of the City of Fort Worth to deliver water hereunder or the City of Richland Hills to received water hereunder on account of any other causes not reasonably within the control of the party claiming such inability. IN TESTIMONY WHEREOF, after proper action by the respective governing bodies for the parties hereto, we have caused these presents to be executed in quadruplicate copies, each of which is considered to be an original,, and the seals of the respectible parties to be hereto affixed on the date above written. _1°�_ ATTEST: C y cretary- APPROVED AS TO FORM AND LEGALITY: City Attorney APPROVAL; RECONZ ENDED: rec r, Fo Vorth City Water Department ATTEST: City etary ME CITY OF FORT WORTH CITY OF RICHLAND DILLS r Mayor s OL March 18, 1968 Honorable Paul C. Daan l 0 s , Mayor City of Richland bills 320i DIAna Drive Fart Worth, Taxes Pet Amendment to W'atear Contrect No. 47,51 for Water Service Ceeir Mayor 0,snleis; The, contrast between the City of fort Worth and the Tarrant Counter Water Control and Improvement District Nu. 1 which relates to the construction of Cedar Creek dam, reservoir, pipeline, and lather feci 1 i tles and to the supplying of r�1w water therefrom to the City of Fort, Worth has been amended, she amendment eilminat.es the doable rrw water charge provision of Contract No. 4200 effective Jaanuery 1, 1968, end will subst,l tutu therefor 1 g per 1000 gal loni additional payment for treated wester sold by the City under term c ntr t is for use outside the City and District boundaries. The amendment also provides that -'if the District It required to levy ad valorem taxes to support the CedAr Creek project, or eddi t ionol raw water supplies, that users of treated water out'sido the boundaries of District should pay an additional raw water charge equivelent to their proportion of the revenue defiwlency''. The present and the proposed ratty schedules for water purchased from the water District by the City of Fort Worth for resole outside the district is; Poyment by City to District In Cents per 1000 ti,Mons for raw Water No Change In .. greeted Wooer .�old by City by Contract Payment for Water Outside the Water District Sold In the District Present Contra'ct Contract, Amendmont 1967 to 8 5 After Pipeline 8 16 9 W,i,ter Service Contract No. 4751 between the City Leif Fort Worth and the City of Richland Hills provides th8t the crudity charges and rates of use : hargaas shall OFFICE OF THE CITY MANAGER 0 CITY HALL ■ FORT WORTH, TEXAS 76102 ■ ED 2-7241 Ponorabie Paul C. Daniels, Mayor March 18, 1968 Page be reviewed and adjusted every five years but the first rate adjustment shall be made effective October I, 1967. The contract also provides that the charges for raw water shall be increased or decreased proportionately when the raw water cost peid by the City of Fort Worth is increased or decreased. The current charges have been reviewed in accordance with the procedure specified in the contract and the ;�djusted new rates were approved by the Fort Worth City Council or March 11, 1968. The present rates and the adjusted rates are tabuleted Ps follows: 'resent Adjusted Rates Rates Ccxnnodity Charge, cents per 1000 gallons Used In the hater District li.a 13.2 Used out of the Slater District 16.0 14.4 Maximiur duy per 1.0 M.G. $16,000 S15,810 P,aximum hour rate in excess of mk.ximum day per 1.0 M.G.D. $ R,780 $ 7,070 Service ch<,rge per meter per month $ 25 $ 25 By way of comparison, last year the City of Richland Mills paid $13,864.05 to the Fort Worth hater Dep, rtme.nt under the Terms of Contract No. 4751. tinder the new rates the annual payment would h.,ve been $13,565.14, or a reduction of $298.91. In accordance with the amendment to the Cedar Creek contract between the City of Fort Worth and the Tarrant County Dater Control and Improvement District Number One, section Ili, zentract No. 4751 is amended to read as follows: 10. R v The City of Richland dills has determined not to be r� pert of the Tarrant County Suter Control and Improvement District Number I at this time but is in no way precluded by this contract from becoming a part of the Dis- trict et any time in the future. It is understood and agreed that this contract is made subject to the terms of the Cedar Creek project contract between Tarrant County Water Control and improvement District No. I and the City of Fort Worth as it now exists or may hereafter be amended. If that Tarrant County Water Control and Improvement District No. I Is required to levy ad valorem taxes to support its Ceder Creek project or other additional raw water supplies, the City of Richland Mills shall pay to the City of Fort. Worth for water purchased under this contract cn additicnal raw water charge on such basis as the Tarrant County Water Control and Improvement District No. I end the City of Fort north shall determine to be ratable, considering the proportion of raw water sold by the Tarrant County Water Control and Improvement District No. I for use outside the boundaries of said district and for use inside such boundaries., The additional raw water charge For water purchased hereunder during the Honorable Paul C. Danlels, Meyor March 18, 1968 Page 3 calendar year shall be ref 1 erctee on the December bill from the City of Fort Worth to the City of Richland Hills and shall be paid with the December bill. The City of Fort Worth igrees to transmit such additional raw water payment to the lorrant County 'Wzte , Control Pnd Improvement District No. 1. We will be ,glad to dI%_:uss the charges in rates with you or your representative at your convenience. If agreeable; with you, the change in rates will `;: made retro- active to October 1, 1967 with the April 15, 1968 billing. In accordance with the terms of contract No. 4751 it 1s not €•e_ 3ssar; to ammnd the contract to Rdjust the: rates. The required revisions can !ja made by letter. After your review of the revisions outlined above, please return one signed copy of this letter for our files and retain ona copy for your flies. HDH :bb Ity a Richland Hills Very truly yours',, ' N,/// H. 0. McMehan City Manager Date LINE MORPHIS GRAHAM HARDY Citay. ®f ' Fort Worth, Texas Mayor and Council Communication DATE REFERENCE SUBJECT: PAGE NUMBER Review and Adjustment of 3/11/68 G-1202 Wholesale Water Rates iof 3 Water service contracts with suburban communities provide that the water rates be reviewed and adjusted every five years and that the first such review will be effective October 1, 1967, based upon actual operating and maintenance costs of the past two fiscal years and projected to fiscal year 1970. The current charges have been reviewed in accordance with the procedures specified in the contract, and the present and proposed rates are tabulated as follows: Present Proposed Rates Rates Commodity Charge, cents per 1000 gallons Used in the Water District 11.5� 13.2q, Used out of the Water District 16.0�,% 14.4p, Maximum day per 1.0 M.G. $16,000 $15,810 Maximum hour rate in excess of maximum day per 1.0 M.G.D. $ 8,280 $ 7,070 Service charge per meter per month $ 25 $ 25 A detailed explanation of the determination of the wholesale rates for treated water is attached. The wholesale rate is based on the average cost of operation and fixed charges on the facilities used to produce and transport water to the Fort Worth City limits in large quantities. The contracts with other cities provide for a review and adjustment every -five years and the new rate is based on the projected cost for the third year of the next five- year period. The proposed rates are therefore in accordance with the estimated costs for 1970. The commodity charge includes payments to the Water District for raw water, the average cost of maintenance and operation of the production and transmission part of the Fort Worth water system, and the cost of the capital facilities that are related to the total average annual usage of water. The charges for maximum day and maximum hour uses represent the capital fac-ilities cost (fixed charges) on the production and trans- mission plant;;which is required to provide water service at maximum rates of use by the wholesale customer. The $25 charge per month per meter is a service charge related to customer billing cost, reading, adjusting, and maintaining the metering facilities used by the customer city. The commodity charge increase of 1.7 cents per 1000 gallons results from increased operating cost plus an increase in the allowance for system losses based on recent experience. DATE PAGE REFERENCE SUBJECT: Review and Adjustment 6f NUMBER 2 °f 3 3/11/68 G-1202 Wholesale Water Rates The decrease in charges per million gallons for water used on maximum day and maximum hour results from an increase in the actual peak uses generated by the Fort Worth Water System without a proportionate increase in value of plant required to meet the maximum demands. As actual peak uses increase such reductions in fixed charges to meet the peak demands are anticipated. The policy adopted in 1961 by the City Council calls for the actual price to suburban communities to be related to average and peak volumes required by each municipality. The structure of the wholesale rate schedule enables the suburbs to take water in the manner best suited to meet their needs and at the same time, provides that the City will recover its cost of fur- nishing water under varying conditions. Two cities, Westover Hills and Edgecliff Village, purchase all of their water supply from Fort Worth and do not operate pumps and storage reservoirs which would reduce the peak withdrawal rates from the Fort Worth system. The other five cities utilize existing well supplies, pumps and storage reservoirs so that water can be withdrawn at a more uniform rate during the summer months. However, these cities usually buy water mainly during the peak summer usage,and the annual price paid for water per 1000 gallons varies widely. For example, last year the price paid for treated water per 1000 gallons varied from $0.31 to $1.42 per 1000 gallons. The adopted policy and each treated water contract provides that under no circumstances will water be sold to the suburban city at a price less than the regular Fort Worth water rate plus 10 per cent. The wholesale customer will pay at least 10 per cent more than the inside -City customer using an equal volume of water. Water purchased by contract cities last year is shown in the attached tabu- lation to be 466,341,000 gallons. The payment received was $199,634.40, which resulted in an average price of $0.43 per 1000 gallons. Also shown are the maximum rates of use and the ratios of maximum day to average day and maximum hour to maximum day. Existing contracts will need to be amended in accordance with the new wholesale rates. Summary Contracts with other cities for the sale of treated water provide for a review and adjustment in rates effective October 1, 1967. The cost of operation of the Fort Worth system, maximum usage rates and capital improve- ments have been reviewed and adjusted to anticipated conditions in 1970. New wholesale rates for treated water have been determined in accordance with existing contract provisions and the existing policy of the City for DATE NUMBERCE SUBJECT: Review and_ Adjustment of PAGE 3/11/68 G-1202 Wholesale Water Rates 3 0f 3_ the sale of treated water. Amendments to existing contracts are necessary to reflect the new rate schedule and the amended Cedar Creek project con- tract between the City and the Water District. Recommendation It is recommended that the new wholesale water rate for water sold by con- tract be approved effective October 1, 1967, and that the City Manager be authorized to execute amendments to existing contracts for the sale of treated water to outside -City customers to reflect the revised rate schedules. HDM:ms Attach. SUBMITTED BY: DISPOSITIOW'BY COUNCIL ;VW © APPROVED PROCESSED BY O OTHER (DEURI9E) '1 S RLTARY CITY MANAGER