HomeMy WebLinkAboutContract 39744 !;QTY S-7CRE f ARY
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MEMORANDUM OF UNDERSTANDING
This MEMORANDUM OF UNDERSTANDING (this "Memorandum") is entered into
and effective a.o by and between the City of Fort Worth, Texas, a
home-rule municipal corpor tion in Tarrant, Denton and Wise Counties, Texas ("Fort Worth")
by and through its duly authorized Assistant City Manager, Fernando Costa, and the City of
Euless, a home-rule municipal corporation in Tarrant County, Texas ("Customer") by and
through its duly authorized City Manager, Gary McKamie.
WITNESSETH:
WHEREAS, Fort Worth and Customer have entered into a,n ertain "Agreement for
Reclaimed Water Service" (the "Agreement"), dated Al , 20A9, known as Fort Worth
City Secretary Contract No. -1 and Euless 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:
F L RECORD CRETARY RTH, TX
1. Definitions
Unless otherwise specified herein, all terms shall have the same definition as described in the
Agreement.
2. Pur ose
The purpose of the MOU is to memorialize certain agreements and understandings related to
Fort Worth's application for federal stimulus funding under the American Recovery and
Reinvestment Act of 2009 to aid in the cost of constructing its Reclaimed Water System and
the Customer's payment for Reclaimed Water. If awarded such funding, in consideration of
the 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.
IN WITNESS WHEREOF, this Memorandum has been executed on this oZn d day of
200Y./()
CITY OF FORT WORTH, TEXAS CITY OF EU S, TEXAS
Fernando Costa Gary amie
Assistant City Manager City Manager
ATTEST: �,v °a° a� ATTEST:
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Marty Hendrix �d usan Crim, TC
o !City Secretary gx Ta
City
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APPROVED AS TO FORM A °°a ° o° a APPROVED AS TO FORM
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Assistant ity Attorney McFarland, ity Atto—may-
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Contract AuthorizatloD
1 -'-Ae1 09
Date
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX