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RESO 1999-13 - Summer Place WaterRESOLUTION NO. 99-13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, AUTHORIZING CLOSING ON PURCHASE OF SUMMER PLACE VILLAGE WATER SYSTEM. WHEREAS WHEREAS WHEREAS WHEREAS WHEREAS the City of Huntsville ( "City ") is a municipal corporation of the State of Texas; and the City provides retail water service to customers within its corporate boundaries and certificated service area in Walker County, Texas; and the City has previously entered into an Agreement to Purchase and Sale of Water Facilities for the purchase of the Summer Place Village Water System from A.N.N.S. Water System on March 9, 1999 (Exhibit A); and the City and A.N.N.S. Water System have been authorized to close on the purchase and sale of the water system by the Texas Natural Resource Conservation Commission; and the City finds it is beneficial to all parties involved for the City to obtain ownership of the Summer Place Village Water System. NOW, THEREFORE, be it resolved by the City Council of the City of Huntsville, Texas, that: SECTION 1: The above recitals are true and correct. SECTION 2: SECTION 3: The City Manager is authorized to execute any and all documents approved by the City Attorney for closing on the purchase of the Summer Place Village Water System. The City Manager, City Attorney and Director of Public Works are authorized to act on behalf of the City to take all action necessary in relation to the purchase of the Summer Place Village Water System. PASSED AND APPROVED this 10th day of August, 1999. Danna Welter, City Secretary APPROVED AS TO FORM: Paul C. Isham, City Attorney THE CITY OF HUNTS LE William B. Green, Mayor AGREEMENT FOR PURCHASE AND SALE OF WATER FACILITIES This Agreement for Purchase and Sale of Water Facilities (the "Agreement ") is made and entered into by and between the City of Huntsville, Texas, a municipal corporation organized and operating under the laws of the State of Texas ( "City "), and Mary Niederhofer Lamb dba A.N.N.S. Water Systems ( "Seller ") on this </ day of 1 frLti G , 1999. RECITALS Seller owns two water utility systems known as the Piney Creek Village system and the Summer Place Village system, located in Walker County, Texas. Pursuant to an "Agreement for Purchase and Sale of Water Facilities" between Seller and the City dated December 9, 1997, Seller has previously agreed to sell both systems to the City. However, pursuant to the "Settlement Agreement Between A.N.N.S. Water System, Walker County Rural Water Supply Corporation and the City of Huntsville" attached hereto and made part hereof as Exhibit "A ", the City and Seller desire to terminate the previous agreement and execute a new agreement for the sale of the Summer Place Village system to the City, upon the terms and conditions more particularly set forth in this Agreement. AGREEMENT Now, therefore, in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 1.1 ARTICLE I. Purchase and Sale of the Utility System Sale and Conveyance of Utility Facilities by Seller. Subject and pursuant to the terms and conditions set forth in this Agreement, on the Closing Date (as defined in Section 5.1 hereof), Seller shall sell and convey to the City, and the City shall purchase and acquire from Seller, the following: a. Facilities. All of the wells, pumps, pipes, fittings, valves, equipment, and other fixtures of that portion of Seller's Utility System used to serve the Summer Place Village subdivision listed on Exhibit B attached hereto and incorporated herein for all purposes (the "Facilities "), but does not include a 1994 Isuzu pick -up truck. b. Service Area Rights and Customers. All contracts, warranties, certificates, licenses, and water service agreements of Seller that are related to the ongoing ownership and operation of and provisions of service from the Facilities (the "Service Rights "). c. Property Interests. All land, real property, easements, rights -of -way, license agreements or other interests in real property owned or held by Seller for the 0656 \05\agr990201 Ijk l Exhibit A construction, installation, use, maintenance, repair, replacement, extension or betterment of, or otherwise associated with, the Facilities, together with all and singular the rights, privileges, and appurtenances appertaining thereto, including any right, title, and interest of Seller in and to adjacent streets, alleys, or rights -of- way, together with any improvements, fixtures and personal property of Seller situated on and attached to said property interests (collectively referred to herein as the "Property Interests "), but does not include a 1.1 acre tract of land located in the City of Huntsville at 2034 Sam Houston Avenue. The Facilities, Service Rights and Property Interest are collectively referred to herein as the "Utility Assets ". 1.2 Purchase Price and Payment. The Purchase Price (herein so called) for the Seller's Utility Systems shall be fifty -eight thousand, five hundred dollars ($58,500.00). The consideration for the sale and purchase of the Utility Assets shall be the assumption by City of Seller's service obligations in the Service Area (as hereafter defined). ARTICLE II. Review Items 2.1 Review Items. Within fifteen (15) days after the Effective Date, Seller shall make available for reasonable inspection and copying (at the City's expense) by the City during normal working hours at the City office in Huntsville, Texas, such items as the City may reasonably request to allow the City to evaluate the Utility Assets (collectively, the "Review Items "). ARTICLE III. Review Period 3.1 Feasibility Review. During the period beginning on the Effective Date and continuing for forty-five (45) days thereafter (the "Review Period "), the City shall have the right during normal business hours and upon reasonable prior notice to Seller, to conduct any and all reviews, investigations or examinations of the Review Items and the Utility Assets which the City determines necessary in the City's sole and absolute discretion; provided such reviews, investigations and examinations shall not unreasonably interfere with Seller's operation of the Utility Assets. The City shall be obligated to restore the Utility Assets or any item related thereto substantially to its prior condition to the extent of the City's review, investigation or examination changed the same. Seller may, at Seller's option, accompany the City during any such inspections. 3.2 City's Feasibility Determination. The City, by delivering written notice thereof to Seller on or before the expiration of the Review Period, may elect to accept the Utility Assets and to thereafter consummate the purchase of the same as hereafter provided. The failure of the City to timely deliver written notice of election to accept the Utility Assets to Seller shall be deemed a termination of this Agreement by the City in which event this Agreement shall terminate and neither party shall have any further rights or obligations under this Agreement. 0656 \05\agr9902011jkl x ARTICLE IV. Representations and Covenants 4.1 Representations and Warranties of City. The City represents and warrants to Seller that the following (City's Representations) are true, accurate and complete as of the Effective Date and that the same will continue to be true, accurate and complete through the Closing Date: a. The City is a home rule municipal corporation, validly existing and in good standing under the laws of the State of Texas and is authorized to purchase the Utility System. b. Each person executing this Agreement for the City is duly authorized to do so. The City has the full right and authority to enter this Agreement and to consummate the transaction described in this Agreement subject to the approval of the Texas Natural Resource Conservation Commission ( "TNRCC "). This Agreement is a valid and legally binding obligation of the City and is enforceable against the City according to its terms. Neither the execution nor delivery of this Agreement nor the performance of the City's obligations under this Agreement violates, or will violate, any contract or agreement to which the City is a party or by which the City is otherwise bound. 4.2 Representations and Warranties of Seller. The Seller represents and warrants to the City that the following (Seller's Representations) are true, accurate and complete as of the Effective Date and that the same will continue to be true, accurate and complete through the Closing Date except as set forth on any Statement of Changes (as hereafter defined): a. Each person executing this Agreement for Seller is duly authorized to do so. The Seller has full right and authority to enter this Agreement and to consummate the transaction described in this Agreement. This Agreement is a valid and legally binding obligation of Seller and is enforceable against Seller according to its terms. Neither the execution nor delivery of this Agreement nor the performance of Seller's obligations under this Agreement violates, or will violate, any contract or agreement to which Seller is a party or by which Seller is otherwise bound. b. None of the Customers has given or received any notices, demands, consents or requests under or in respect to its service agreement and no default exists, and no events have occurred which, with the giving of notice or the lapse of time, or both, would constitute a default, under the service agreements. c. Seller has not previously assigned, pledged or encumbered its interests in the Utility Assets except as previously stated in the Recitals to this Agreement, and has full right, power and authority to sell and convey the same to the City under, and according to, the terms of this Agreement., The only notice, consent or approval that is required for the sale and conveyance of the Utility Assets to City is TNRCC approval of an Application for Sale, Transfer or Merger of the Seller's Utility System from Seller to City and for the area served by the Utility Assets 0656\ 05\agr9902011jk1 (the "Service Area ") (the "Required Consent "); and, provided such "Required Consent" has been obtained, the sale and conveyance of the Utility System to Buyer and the closing of the transactions hereunder shall not breach, violate or cause a default or an event of default or give rise to a right of termination of any of the Service Rights or Property Interests. Seller is not aware of the existence of any fact that would prevent the City from using the Utility Assets to meet the Service Commitments. Seller has the authority to convey to the City and the City shall succeed at the Closing to, the Utility Assets free and clear of any liens, encumbrances, violations, restrictions, claims charges or interests. d. Seller will provide the City within fifteen (15) days after the Effective Date "as- built" plans and specifications for the Utility Assets, and a description of the public rights -of -way or Property Interests where the Utility Assets are located and that are to be transferred to the City at Closing. The public rights -of -way or Property Interests for the Utility Assets are owned by Seller, not subject to any liens, claims or encumbrances and are merchantable and suitable for constructing, installing, operating, repairing, maintaining and replacing the Utility System. e. Seller will provide the City within fifteen (15) days after the Effective Date a true, correct and complete list of all utility service commitments binding on the Utility Assets (the "Service Commitments ") showing: 1) the name of the entity entitled to the Service Commitment; 2) the amount or level of service committed by the Seller; 3) the amount of money or other consideration paid to Seller for the Service Commitment; 4) the location of the Service Commitment; 5) a description of the Facilities or other parts of the Utility Assets for which the money or other consideration was obligated to be used; 6) a description of the Facilities or other parts of the Utility Assets constructed or acquired to serve the Service Commitment; and 7) a description of the Facilities or other parts of the Utility Assets needed to be constructed or acquired in the future to serve the Service Commitments along with the status of any construction or acquisition efforts and the current estimated costs to complete the same. In Seller's reasonable judgment, the Utility Assets are adequate and capable of providing service to the Service Commitments. f. Seller will provide the City within fifteen (15) days after the Effective Date a true, correct and complete list of all facilities used and useful to serve the utility service commitments in the Summer Place Village subdivision. Upon review and approval by the City, the list shall be attached to this Agreement as Exhibit B and used for the purpose of identifying the facilities as defined in this Agreement. g. There are no notices, violations, disputes, orders, investigations, actions, suits, proceedings, arbitrations, decrees or judgments (pending or threatened) against Seller relating to any conditions, matters or things affecting the Utility Assets, Seller's right, title, estate or interest therein, thereto or thereunder, or the City's reasonably anticipated use thereof. 0656 \O5\agr990201Ijkl 67 h. There are no unpaid or outstanding taxes or assessments, any tax exemptions or abatements or any other payments or liabilities, including rollback taxes or assessments or debt issues affecting or relating to the Utility Assets, or the ownership, development, operation or use thereof, or interest therein, which are due or payable, or which because of the contemplated transactions would become due or payable. i. No portion of the Utility Assets is located in a flood hazard area as shown on a map of the United States Department of Housing and Urban Development or any state, county or other governmental authority. J. No person or entity has or would have, upon notice or the passage of time, or both, any right, pursuant to a service agreement, Service Commitment or otherwise, to use or possess the Utility Assets or any portion thereof. k. At Closing, Seller will refund all security deposits to the current Service Commitments and provide the City proof of the same. 1. The Utility Assets are not adversely affected by: 1) access of the Utility System to a public road, 2) compliance by Seller and/or the Utility Assets with any laws, rules, ordinances, or regulations of any applicable governmental authority, including zoning and other land use regulations, or 3) the habitability, merchantability, marketability, suitability or fitness of the Utility Assets for a particular purpose. m. There are no pending or threatened condemnation or eminent domain proceedings or proceedings in the nature or in lieu thereof affecting all or any part of the Utility Assets. n. No person or entity has any right or option to acquire the Utility System or any portion thereof or interest therein other than the City pursuant to this Agreement. The City may rely upon the Seller's Representations set forth in this section notwithstanding any independent investigation made by or on behalf of the City. 4.3 Covenants. In addition to Seller's and the City's other agreements and undertakings hereunder, Seller and the City hereby covenant and agree with each other that: a. Notices Received. Seller, at its sole cost and expense, will promptly deliver to the City copies of any written notices or promptly inform the City of any other notices received or of which Seller gains actual knowledge alleging the occurrence of any default or alleged default under any of the Contracts, or any violation or alleged violation of any law, regulation, order or other requirement of any governmental authority having jurisdiction over the Utility System. 0656 \05\agr990201Ijkl 5g b. Operation. Seller, at its sole cost and expense, shall continue to operate, manage and maintain the Utility System in substantially the same manner that Seller has heretofore operation, managed and maintained and operated the Utility System through Closing. Should Seller desire to change the operation, management or maintenance of the Utility System in some extraordinary way including but not limited to incurring any additional debt or contractual obligations for which the City might be liable. terminating or amending any Contract, entering into any additional service or sale contract or pledging all or any part of the Utility System as security for any obligation, Seller shall notify the City in writing before the taking of any such action or making such change. Should the City disapprove of such action or making such change, the City shall notify Seller within ten (10) days of the City's specific objection and Seller may, notwithstanding such disapproval, undertake such action or make such change, and shall notify the City in writing of such action or change following its completion. The City may terminate this Agreement by delivery of written notice of Seller within thirty (30) days of the City's receipt of notice from Seller of such action or change having been taken and this Agreement shall terminate and neither party shall have any further rights or obligations under this Agreement. The City's failure to timely object or terminate shall constitute a waiver, respectively, of the City's right to object to the same or terminate because of the same anytime thereafter. c. Notice to Texas Natural Resource Conservation Commission. The City, at the City's sole cost and expense, shall deliver to the Texas Natural Resource Conservation Commission ( "TNRCC ") all required notices with respect to the change in ownership, conveyance of the Utility Assets and the transfer of deposits and obtain any approval, if required, of the same. The Seller shall cooperate and assist the City to the extent reasonably necessary in obtaining such consents or approvals. ARTICLE V. Closing 5.1 Time and Place of Closing. The Closing Date shall be a) sixty (60) days after the Effective Date, or b) such other date as may be agreed to in writing between the parties or as provided in Section 5.2 below. The closing of the transaction contemplated by this Agreement (the "Closing ") shall be held at such time and place as may be mutually agreed upon by the parties. All matters to take place at the Closing shall take place simultaneously, and no delivery shall be considered to have been made until all such proceedings have been completed. If the conditions to closing specified below in Section 5.2 of this Agreement have not occurred by the Closing Date, the Closing Date shall be extended for a reasonable period of time in order to allow the unresolved condition to be satisfied, provided in no event shall the Closing Date be extended beyond July 1, 1999, unless the required TNRCC approval request is still pending without resolution but is being pursued in good faith by the City and there is a reasonable likelihood of receiving such consent or approval, in which event the Closing Date shall continue to be extended periodically for reasonable periods to allow such consent or approval to be obtained. 0656 \05 \agr99020 I I j k I 5.2 Conditions to Closing. a. It shall be a condition precedent to the City's obligation hereunder that Seller shall, and Seller covenants and represents that it shall, satisfy, or cause the satisfaction of, the following conditions as of the Closing Date: i) The Seller Representations shall be true and correct, shall not be false or misleading, and there shall have been no failures thereof or thereunder. Seller shall have the right anytime at or before Closing to deliver to the City a statement of changes ( "Statement of Changes ") with respect to Seller's Representations that arise from Seller's and the City's continuing. "due diligence" investigation of the Utility System. If Seller delivers such a Statement of Changes to the City, the City may elect anytime before the Closing to either 1) terminate this Agreement or 2) continue to close the transactions contemplated by this Agreement in which event the affected Seller's Representation shall be deemed amended as of the Closing to reflect the matter set forth in the Statement of Changes, and Seller shall have no liability to the City on account of the occurrence or discovery by Seller of the facts giving rise to the Statement of Changes. ii) The Required Consents shall be obtained in writing, in form and substance reasonably satisfactory to the City and delivered to the City, and shall be unqualified and unconditional. iii) Seller shall have executed such other documents or taken such other actions as are required by any other provisions of this Agreement or reasonably requested by the City to carry out the transactions contemplated by this Agreement. b. It shall be a condition precedent to the City's obligations hereunder that on the Closing Date none of the contemplated transactions are prohibited by any applicable laws, orders, rules and regulations, including, without limitation, all federal, state and other laws governing the City. Notwithstanding the same, if any of the contemplated transactions are so prohibited, then the City may elect to terminate this Agreement, whereupon this Agreement shall be deemed terminated and neither party shall have any further rights against the other hereunder. c. The City, in its sole discretion, shall have the right to waive any of the unsatisfied conditions contained in this section. 5.3 Seller Delivery. At the Closing, Seller shall deliver or cause to be delivered to the City, at the Seller's sole cost and expense, each of the following items: a. A general warranty deed or similar instrument or instruments as appropriate duly executed and acknowledged by Seller, and in form for recording, conveying merchantable title in the Property Interests to the City (the "Deed "). 0656 \05\agr9902011jkl b. A Bill of Sale and Assignment with General Warranty ( "Assignment ") duly executed and acknowledged by the City and Seller, conveying, transferring and assigning to the City the Facilities and the Service Rights. The Assignment shall contain as exhibits recertified and updated lists of the Facilities and Service Rights. The Assignment shall further include Seller's covenant to reasonably cooperate with the City to secure performance by any warrantor or contractor for any work that the City believes should be performed by any warrantor or contractor pursuant to any assigned guaranties, warranties or contracts. c. The Required Consents in form and substance satisfactory to the City. d. Any other additional documents and instruments as in the mutual opinion of the City's counsel and Seller's counsel are reasonably necessary to the proper consummation of this transaction. 5.4 Buyer Delivery. At the Closing, the City shall deliver to Seller the following items: a. A resolution of the City Council of the City of Huntsville, Texas, evidencing the capacity of the City to close the transaction and the authority of the person or persons who are executing the various documents for the City concerning the purchase of the Utility Assets. b. The sum of $58,500.00 (Fifty -eight thousand, five hundred dollars). c. Any other additional documents or instruments as in the mutual opinion of the City's counsel and Seller's counsel are reasonably necessary to the proper consummation of this transaction. 5.5 Adjustments and Proration&. At Closing, the following items shall be adjusted or prorated between Seller and the City: a. Ad valorem taxes, assessments, Service Right revenues, Utility Assets expenses and other normally and customarily prorated amounts for the current applicable period of time shall be prorated to date of Closing, and each party shall pay to the other, in cash at Closing, the party's pro rata portion of such amounts. The Seller's pro rata portion of such taxes shall be based upon taxes actually assessed for the current calendar year. If, for any reason, any of such amounts for the current applicable period of time are not known, such proration shall be estimated based upon known actual amounts for the immediately preceding applicable period of time, and adjusted within thirty (30) days following the date when exact amounts are available. This covenant shall not merge with the Assignment to be delivered hereunder but shall survive the Closing. 0656 \05\agr990201Ijkl b. If, after Closing, any adjustments pursuant to this section are erroneous, then either party hereto who is entitled to additional monies shall invoice the other party for such additional amounts as may be owing, and such amount shall be paid within ten (10) days from receipt of the invoice. This covenant shall not merge with the instruments of conveyance, transfer or assignment to be delivered hereunder but shall survive the Closing. 5.6 Possession. Possession of the Utility Assets shall be delivered to the City by Seller at the Closing. 5.7 Costs and Expenses. All costs and expenses in connection with the transaction contemplated by this Agreement shall, except as otherwise expressly provided herein, be borne by Seller and the City in the manner in which such costs and expenses are customarily allocated between the parties at closing of the purchase or sale of real property in the Huntsville, Texas area. ARTICLE VI. Termination of Prior Agreements 6.1 All other agreements or contracts between the City and Seller for the sale of Seller's Utility Assets, specifically the "Agreement for Purchase and Sale of Water Facilities" dated December 9, 1 997, are hereby terminated and of no further force or effect. ARTICLE VII. General Provisions 7.1 Notices. All notices and other communications hereunder shall be in writing and shall be delivered by hand delivery, expedited courier delivery or mailed (if mailed, by registered or certified mail, return receipt requested, postage prepaid) addressed as follows, and shall be effective upon actual delivery if delivered by hand or by expedited courier delivery, or, if mailed, three days after deposit in the United States mail: a. If to the City, to: Gene Pipes City of Huntsville 1212 Avenue M Huntsville, Texas 77340 (409)291 -5401 With a copy to: Lauren J. Kalisek Lloyd, Gosselink, Blevins, Rochelle, Baldwin & Townsend, P.C. 111 Congress Avenue Suite 1800 Austin, Texas 78701 (512)322 -5847 0656 \05\agr990201Ijkl b. If to Seller, to: Mary Niederhofer Lamb 2034 Sam Houston Avenue Huntsville, Texas 77340 (409)294 -0124 Any party may change the address for received notice by giving notice of a new address in the manner herein provided; however, if mailed, notice of such new address will be effective only upon actual receipt by the other party. 7.2 Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. 7.3 No Oral Modification. This Agreement may not be modified or amended, except by an agreement in writing signed by both the Seller and the City. 7.4 No Oral Waiver. The parties may waive any of the conditions contained herein or any of the obligations of the other party hereunder, but any such waiver shall be effective only if in writing and signed by the party waiving such conditions or obligation. 7.5 Time of Essence. Time is of the essence of this Agreement. 7.6 Total Agreement. This Agreement, including the Exhibits hereto, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings of the parties in connection therewith. No representation, warranty, covenant, agreement or condition not expressed in this Agreement shall be binding upon the parties hereto or shall affect or be effective to interpret, change or restrict the provisions of this Agreement. 7.7 Partial Invalidity. If any clause or provision of this Agreement is or should ever be held to be illegal, invalid, or unenforceable under any present or future law applicable to the terms hereof, then and in that event, it is the intention of the parties hereto that the remainder of this Agreement shall not be affected thereby, and that in lieu of each such clause or provision of this Agreement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement a clause or provision as may be possible and be legal, valid, and enforceable, such that the intention of the parties is effected as closely as is possible. 7.8 Counterpart Execution. To facilitate execution, this Agreement may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature of all persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each party hereto. 0656 \05\agr99020IIjkI 7.9 Holidays. If the date upon which any duties or obligations hereunder to be performed shall occur upon a Saturday, Sunday or legal holiday, then, in such events, the parties shall automatically extend the due date for performances of any duty or obligation to the next succeeding business day. 7.10 Effective Date. The Effective Date of this Agreement shall be the date the last party executes the Agreement. IN WITNESS WHEREOF, each party hereto has signed this Agreement, or caused this Agreement to be signed in its corporate name by its officer thereunto duly authorized, all as of the date first above written. ATTEST: �1 CC-G2 4it/ U,ut "City Secretary Approved: Attorney 0656 \05\agr9902011jk1 Mary Neiderhofer Lamb dba A.N.N.S. Water Systems /12?" Z/-64-49-J 01'1414-