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ORD 1998-11 - Huntsville Raw Water Supply Contract Supplemental 05-26-1998ORDINANCE 98 -11 AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF CONTRACT BETWEEN THE CITY OF HUNTSVILLE AND TRINITY RIVER AUTHORITY ENTITLED "HUNTSVILLE RAW WATER SUPPLY CONTRACT - SUPPLEMENTAL "; CONTAINING OTHER PROVISIONS RELATING TO SUCH SUBJECT; AND PROVIDING THAT THIS ORDINANCE SHALL TAKE EFFECT FROM AND AFTER ITS FINAL PASSAGE THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, that: Section 1: The City is hereby authorized to enter into a contract with Trinity River Authority in substantially the form attached hereto, which is hereby approved as to the form and substance, subject to such insertions, completions and variations as shall be approved by the officers of the City (such approval to be evidenced by execution of the Contract and by approval of the City Attorney who shall pass upon the Contract as executed), and the Mayor or any other duly appointed person is hereby authorized and directed to execute and deliver the Contract and the City Secretary is hereby authorized and directed to attest thereto and impress the seal of the City thereupon. Section 2: This Ordinance shall be and become effective from and after its adoption upon its passage. PASSED AND APPROVED on the 26nd day of May, 1998. CITY HUNISVILL TEXAS William B. Green, Mayor ATT T: } Danna Welter, City Secretary APP ED: Scott Bounds, City Attorney HUNTSVILLE RAW WATER SUPPLY CONTRACT STATE OF TEXAS COUNTY OF WALKER THIS CONTRACT (hereinafter called "Contract ) is made and entered into as of the 22nd day of April, 1998, by and between the Trinity River Authority of Texas, a governmental agency and a body politic and corporate, created by Chapter 518, Acts of the Regular Session of the 54th Legislature, pursuant to Article XVI, Section 59 of the Constitution of Texas (herein called "Authority'), and the City of Huntsville, Texas, a municipal corporation of the State of Texas, acting under the laws of the State of Texas and its home rule charter (herein called �` "City'. WHEREAS, the City entered into a raw water purchase contract with the Authority on August 24, 1976 which provided initially for 2 million gallons per day (MGD) of water for use by the City from Lake Livingston for municipal purposes, with incremental increases for up to a maximum of 10 MGD through the year 2020; and WHEREAS, the City's current commitment under the agreement is for 8 MGD on a "take or pay" basis, with actual use at approximately 5 MGD; and WHEREAS, the City has now requested that the Authority structure a supplemental raw water supply agreement for the purchase of 6 MGD of raw water for industrial purposes; and WHEREAS, the Authority is willing to supply the City with up to 6 MGD of raw water for industrial purposes at an initial water cost of $0.08 per 1000 gallons ($175,200 per year), on a "take or pay" basis through December 2020; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, Authority agrees to sell raw water for industrial purposes to the City and the City agrees to pay Authority standby charges for the right to purchase raw water upon terms and conditions hereinafter set forth, to -wit: ARTICLE 1 COST AND QUANTITY OF RAW WATER The Authority shall reserve or supply up to 6 MGD of raw water (quantified herein as annual average daily amounts) from its Lake Livingston Reservoir to sell to the City for industrial purposes, at an initial water cost of $0.08 per 1000 gallons. ARTICLE 2 INTERIM STANDBY CHARGE The City agrees that in the event it does not divert the quantity of water established in Article 1 above, it shall pay to the Authority an annual interim standby charge of $175,200.00 per year in consideration for the Authority's current annual commitment of six (6) MGD of raw water from its share of the Livingston Reservoir. Payments shall be due and payable under this Section in semiannual installments on or before the tenth day of March and the tenth day of September of each year beginning with the initial payment due September 10, 1998 and continuing until such time as this provision may be superseded by the City's diversion of water as referenced in Article I above. The pates agree that the rates and methods of calculating rates may be amended by the Authority's adoption of new rates and methods of calculating rates, but in no event, for purposes of establishing future rates under provisions of this Contract, shall any amended rate be implemented other than at subsequent five-year intervals from the anniversary of the effective date of this Contract. Additionally, any increase in water cost so adopted shall be limited to no greater than fifteen percent (15%) over the contractual unit price of water in effect at the time of such increase. The City's right to take such amounts of raw water is conditioned on Authority's rights under State Permit No. 1970, which Authority holds jointly with the City of Houston, Texas, and Authority's contract with the City of Houston dated September 4, 1964 (the "Houston Contract', If Authority's rights under Permit No. 1970 are changed by any action beyond the control of Authority, and any such change reduces, or has the effect of reducing, the amount of water Authority has the right to take, then, in that event, City's rights hereunder shall be reduced proportionately by the percentage of the decrease Authority has the right to take under Permit No. 1970. If Permit No. 1970, the Houston Contract, or any other controlling document is changed outside the control of Authority, which obligates Authority to costs not anticipated in the rate structure established by this Contract, then Authority shall redetermine its cost of water in Livingston Reservoir and City's payments hereunder shall be calculated as provided herein, but using the newly established rate structure. ARTICLE 3 EXCESS WATER Should the City desire to contract for raw water supplies in addition to those committed hereunder the Authority agrees, subject to the availability of its raw water, to commit said additional water supplies based on rates as may be deemed reasonable by the Authority. ARTICLE 4 SOURCE OF CONTRACT PAYMENTS Authority shall not demand payment by City of any obligations assumed by it or imposed on it under and by virtue of this contract from funds raised or to be raised by taxes levied by City. City's obligations under this contract shall not be construed to be a debt of the City of such kind as to require it under the law of this State to levy and collect a tax to discharge such obligation, it being expressly understood by the parties hereto that all payments due by City hereunder are to be made from water and sewer revenues received by City. City represents and covenants that all payments to be made hereunder by it shall constitute "Operating Expenses" of its waterworks and sewer system as defined in Article 1113 of the Revised Civil Statutes of Texas, as amended, and that all such payments will constitute operating expenses of City's waterworks and sewer system. City agrees to fix and collect such rates and charges for water and sewer services to be supplied by its waterworks and sewer system as will produce revenues in an amount equal to at least the minimum payments due under this contract and other contracts with the Authority and to comply with provisions of ordinances authorizing its outstanding revenue bonds. N E` The parties agree that the duties and obligations of each as governmental entities are subject to limitations regarding appropriations under the State Constitution. ARTICLE 5 FILING OF PLANS Before diverting water hereunder the City shall file and have approved by Authority detailed plans and specifications showing the location, size, and capacity of the diversion structure and a legal description of (bearing and distance from a known survey point) the intended point of diversion. In addition Authority must approve the point and rate of diversion. The cost of diversion facilities and costs associated with the operation and maintenance thereof shall be bome by the City. ARTICLE 6 METERING The City shall provide, operate, and maintain a meter or meters, approved by Authority, to record monthly water diverted. For the purpose of accounting for water, the City shall determine the amount of water diverted each month by recording, as a minimum, the reading on the City's meter on the last day of each calendar month. The City shall report such reading to Authority monthly. Authority reserves the right to read and inspect the meter or meters during normal business hours. If requested in writing by Authority, the City shall calibrate its water meter or meters. Authority shall have the opportunity to have a representative present during such calibration. If upon any test of the water meter the percentage of inaccuracy of such metering equipment is found to be in excess of two (2) percent, registration thereof shall be corrected for a period extending back to the time when such inaccuracy began, if such time is ascertainable, but in no event further back than a period of six (6) months. If the meter is out of service so that the amount of water delivered cannot be ascertained or computed from the reading thereof, the water delivered through the period such meter is out of service shall be estimated and agreed upon by the parties on the basis of the best data available. Authority reserves the right to install a check meter, it being understood that in no event shall Authority be liable for any special or consequential damages occasioned by the installation of said check meter. ARTICLE 7 TERM OF CONTRACT This Contract shall be effective upon the date hereof and shall continue in force and effect until December 31, 2020. Any renewal shall be based upon terms and conditions mutually agreed to by the parties hereto. ARTICLE 8 ADDRESSES AND NOTICE All notices, payments and communications required herein shall be sent, respectively, to the Southern Region Manager of the Trinity River Authority of Texas at P.O. Box 1554 Huntsville, Texas 77340 and to the City Manager of the City of Huntsville at P. O. Box 831 Huntsville, Texas 77340 3 ARTICLE 9 CERTIFIED NOTICE Any notice of breach of this Contract, notice of forfeit or notice of force majeure by either party shall be sent by certified mail with return receipt requested to the addresses stated above. The parties shall have the right from time to time and at any time to change their respective addresses and both will have the right to specify as its address any other address by giving at least fifteen (15) days' written notice to the other party. ARTICLE 10 DEFAULT In the event that either the City or Authority shall breach or fail to perform any of the provisions of this Contract, the aggrieved party shall promptly notify the other party of the breach or failure to perform. In the event such breach or failure to perform is not cured within thirty (30) days after the receipt of such notice, the party sending the notice, at its discretion, may notify the other party of its intention to declare this Contract forfeited and null and void. Upon receipt of such notice the violating party shall have thirty (30) days to cure such violation prior to final action by the other party declaring this Contract forfeited and null and void. Any notice requirement under the terms of this section shall be in writing and shall be delivered by certified mail in accordance with Articles 8 and 9 above. No failure on the part of either party to this Contract to require the performance by the other party of any portion of this Contract shall in any way affect either party's right to enforce such provision, nor shall any waiver by either party to taken or held to be a waiver of any other provision. No rights under this Contract may be waived and no modification or amendment to this Contract may be made except by written amendment executed by the parties. ARTICLE 11 SEVERABILITY The parties hereto agree that if any of the provisions of this Contract should be or be held to be invalid or to contravene the laws of this State, or the United States, such fact shall not invalidate the entire Contract, but it shall be construed as though not containing that particular provision, and the rights and obligations of the parties shall be construed and remain in force accordingly. ARTICLE 12 CONTRACT ASSIGNMENT The City understands and agrees that this Contract may not be assigned and raw water diverted by the City hereunder shall not be resold without the express written consent of Authority. . ARTICLE 13 TERMINATION This Contract may be terminated upon mutual written consent of the parties hereto. rd ARTICLE 14 VENUE The place of performance as agreed to by the parties to this Contract shall be Tarrant County, Texas. In the event any legal proceeding is brought to enforce this Contract or any provision hereof the same shall be brought in said Tarrant County, Texas. ARTICLE 15 FAILURE TO DELIVER The City understands that Authority has made commitments of water available to Authority under Permit No. 1970, as amended, prior to the effective date of this Contract. The City agrees that in the event of water shortage, Authority shall incur no liability for the reduction or termination of sales of water hereunder, when, in Authority's sole judgment, such action is necessary to comply with any order of any court or administrative body or any statute or regulation of any govemmental body having appropriate jurisdiction. ARTICLE 16 QUALITY OF RAW WATER Water sold hereunder is non - potable, raw untreated water. Authority expressly disclaims any warranty as to the quality or suitability for use by the City. The City agrees that any variation in the quality or characteristics of water contemplated for sale hereunder shall not entitle the City to avoid its obligation to make payments provided for herein. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION HEREIN. ARTICLE 17 PAYMENT OF TAXES In the event any sales or use taxes, or taxes of any similar nature are hereafter imposed on gathering, taking, sale, use, or consumption of the water received by the City hereunder, the amount of such taxes shall be bome by the City. In addition to all other charges, and whenever Authority shall be required to pay, collect, or remit any such taxes on water received by the City, then the City shall promptly reimburse Authority therefor. ARTICLE 18 DELINQUENT PAYMENTS All amount due and owing to Authority by the City shall, if not paid when due, bear interest at the rate of ten (10) percent per annum from the date when due until paid. If any amount due and owing by the City to Authority is placed with an attomey for collection, the City shall pay to Authority reasonable attomeys' fees, in addition to all other payments provided for herein, including interest. ARTICLE 19 FORCE MAJEURE In the event that the performance by the parties hereto of any of the parties' obligations or undertaking hereunder shall be interrupted or delayed by an occurrence and not occasioned by the conduct of either party hereto, whether such occurrence be an act of God or the common enemy or the result of war, riot, civil commotion, sovereign conduct, or the act or conduct of any 5 person or persons not party or privy hereto, then the parties shall be excused from such performance for such period of time as is reasonably necessary after such occurrence to remedy the effects thereof. , No damage shall be recoverable from Authority by reason of the suspension of the delivery of water due to any of the causes above mentioned, and no failure of Authority to meet any obligations by reason of force majeure shall relieve the City from its obligations to make payments required under the terms of this Contract . ARTICLE 20 STATE OR FEDERAL LAWS, RULES, ORDERS OR REGULATIONS This Contract is subject to all applicable Federal, State and local laws and any applicable ordinances, rules, orders and regulations of any local, State or Federal governmental authority having or asserting jurisdiction. Nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule or regulation in any forum having jurisdiction, and each party agrees to make a good faith effort to support such proposed laws and regulations which would be consonant with the performance of this Contract in accordance with its terms. ARTICLE 21 CONTRACTUAL AMENDMENT The effectiveness of this Contract is dependent upon the Authority and the City complying with the rules and regulations of the Texas Natural Resource Conservation Commission The Authority will file an executed copy of this Contract with the Executive Director of said Commission pursuant to the rules of the Commission. The City shall submit an annual written report to the foregoing Commission, on forms provided by said Commission, in accordance with applicable Commission rules indicating the total amount of water diverted under this Contract each week and each month. In addition, on or before the 5th day of each month, the City shall furnish to Authority, on forms provided by Authority, the total amount of water diverted under this Contract during the prior month. ARTICLE 22 INDEMNITY To the extent it legally may, the City hereby agrees to indemnify Authority and provide a legal defense for and/or hold Authority harmless from and defend any claim that may arise in connection with any claim that may arise as a result of this Contract including but not limited to the quality, quantity, use, misuse, transportation, and metering of water or the installation, inspection, adjusting, and testing of metering equipment except to the extent of gross negligence on the part of Authority. IN WITNESS WHEREOF, the parties hereto acting under authority of their respective governing bodies have caused this Contract to be duly executed in several counterparts, each of which is deemed to be an original and as of the day and date first written above. TRINITY RIVER AUTHORITY OF TEXAS CITY OF HUNTSVILLE, TEXAS DANNY F. VANCE, General Manager 1.1 �..� --' WILLIAM B. GREEN, Mayor JAMES L MURPHY, Secretary Board of Directors 7 (CITY SEAL)