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HomeMy WebLinkAboutRes 2011-05-03 Operations Agreement with South Grayson Water Supply CorporationCITY OF ANNA, ·rEXAS RESOLUTION NO. 2011-05-03 A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING AN OPERATIONS AGREEMENT WITH ·rHE SOU·rH GRAYSON WATER SUPPLY CORPORA1·ION WHEREAS, South Grayson Water Supply Corporation ("South Grayson) agreed to transfer to the City of Anna, Texas (the "City) certain portions of the service area covered by South Grayson's certificate and convenience and necessity (CCN) No. 10182 and certain associated facilities pursuant to an Agreement to Purchase Areas and Facilities from South Grayson Water Supply Corporation dated effective June 19, 2006 (the "Purchase Agreemenr); WHEREAS, to obtain approval of the Purchase Agreement from the Texas Commission on Environmental Quality (TCEQ), the Parties amended the Purchase Agreement effective September 26, 2006 to, in part, exclude from the proposed transfer certain areas and facilities within South Grayson's CCN area that were outside the City's extraterritorial jurisdiction; WHEREAS, as part of the amendment, the City agreed to use the acquired facilities to provide wholesale water to South Grayson so that South Grayson could continue to provide retail water service to customers within the excluded area; and WHEREAS, the City and South Grayson now desire for the City to operate, maintain, and manage water services within the excluded area in accordance with the terms of this Operations Agreement; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. Approval of Agreement The City Council hereby approves the Operations Agreement attached hereto as EXHIBIT 1, incorporated herein for all purposes and authorizes the City Manager to execute same on behalf of the City. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 24th day of May, 2011. ATTEST: . \\\\\111111111/1/ . ./..~~~--ft.~~1&Q~---­------:''-I'-'-'''"t-='---'l----~"" OF IIIIr. ~,~~ .......~ tha Wilkison, City Secretary i'''':.~...•••• _~ § '-'..- -.• ' ~ ~ : : ~ §.*: :*§-; _. .0 ~ ~ ~ ~ ~ ~ * -.. •.. * ~ .~....... ~ ................... ""cX p..C;, \",,~ 11111/1/111111111\\\\\ Res. 2011-05-03 Operations Agreement w/SGWS Corp. PAGE 1 OF 1 05-24-11 OPERATIONS AGREEMENT This Operations Agreement ("Agreement"), made on the date below written, is by and between South Grayson Water Supply Corporation ("South Grayson"), a Texas non-profit water supply corporation, and the City of Anna, Texas, a municipal corporation ("City"). The City and South Grayson may be referred to herein collectively as the "Parties" or individually as a "Party". RECITALS WHEREAS, South Grayson agreed to transfer to the City certain portions of the service area covered by South Grayson's certificate and convenience and necessity (CCN) No. 10182 and certain associated facilities pursuant to an Agreement to Purchase Areas and Facilities from South Grayson Water Supply Corporation dated effective June 19, 2006 (the "Purchase Agreement"); WHEREAS, to obtain approval of the Purchase Agreement from the Texas Commission on Environmental Quality (TCEQ), the Parties amended the Purchase Agreement effective September 26, 2006 to, in part, exclude from the proposed transfer certain areas and facilities within South Grayson's CCN area that were outside the City's extraterritorial jurisdiction; WHEREAS, as part of the amendment, the City agreed to use the acquired facilities to provide wholesale water to South Grayson so that South Grayson could continue to provide retail water service to customers within the excluded area; and WHEREAS, the Parties now desire for the City to operate, maintain, and manage water services within the excluded area in accordance with the terms of this Agreement; and WHEREAS, the Parties anticipate that future growth will result in the City of Melissa or the North Collin Water Supply Corporation eventually having facilities in the area sufficient to connect the customers and facilities of South Grayson which are now located in the excluded area, and thereafter the transfer of such customers to North Collin or Melissa. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both Parties, South Grayson and the City agree as follows: SECTION 1. DEFINITIONS For the purposes of this Agreement, the following words, terms, phrases, and their derivations shall have the meanings set forth below. "Effective Date." The effective date of this Agreement is the date on which the Parties execute this Agreement, as indicated in the last paragraph. "EPA" means the Environmental Protection Agency of the United States Government, or its successor agency. "Facilities" or "Water Facilities" means all the water supply, transmission, distribution, and related water facilities constructed and owned by South Grayson within the Service Area, including, but not limited to, all water transmission mains, distribution and collection lines, appurtenances, improvements, fixtures, and attached personal property (such as pumps, pipes, valves, electrical connections, meters, meter vaults and any and all appurtenances thereto). "Facilities Customers" means those utility customers, present and future, located within the Service Area and that are provided water service by the Facilities. The current customers are listed in Exhibit "A" attached hereto. "Revenues" means all amounts of money relating to water service collected by the City from Facilities Customers during the Term of this Agreement, including, water fees, service connect/disconnect fees, impact fees, delinquent billing fees, and any other special fees assessed on Facilities Customers. "Service Area" means the area more particularly described in Exhibit "B" attached hereto. "TCEQ" means the Texas Commission on Environmental Quality, or its successor agency. SECTION 2. TERM 2.1 Term. Unless terminated according to the terms hereof, this Agreement shall continue in force and effect for ten (10) years from the Effective Date and may thereafter be renewed in writing by mutual agreement of the Parties. 2.2 Termination. This Agreement may be terminated by mutual written agreement of the Parties, by written notice of not less than 30 days by either Party to the other in the event that the other Party fails to cure any default after written notice and expiration of the cure period, or without cause by either Party after 90 days written notice. SECTION 3. FACILITIES OPERATION AND MAINTENANCE 3.1 The City shall operate, maintain, and repair the Facilities on behalf of South Grayson in compliance with all regulations of the TCEQ and the EPA, and shall provide water supply and water services to Facilities Customers in accordance with the needs and demands of the Facilities Customers. The City's responsibilities shall include: a. Supply of water to the Facilities Customers meeting all regulatory requirements, including pressure, volume and quality. b. Maintenance, repair and replacement of the Facilities to assure that operation of the Facilities is in compliance with applicable regulations. This includes repairing any breaks and leaks as necessary and scheduled monthly flushing of dead end water mains. c. Providing on-call personnel for monitoring the Facilities and responding to Facilities Customers problems, equipment malfunctions, and emergencies. Providing Facilities inspections, including those mandated by all applicable statutes, ordinances, and regulations. d. Installing, maintaining and reading Facilities Customers' meters on a monthly basis, and billing and collecting water fees and charges. e. Providing customer service, including responding to requests for service, maintaining current customer service contracts, responding to inquiries related to billing and usage history, and maintaining a file of inspection certificates, a file of the annual test for backflow prevention devices, and a log of complaints and service interruptions. f. Completing and filing state and federal reports related to the operation of the Facilities. Collecting the required monthly water samples and delivery of the samples to the lab for analysis. g. Purchasing, maintaining, and storing the spare parts necessary for normal operation of the Facilities, including the necessary chemicals and expendable supplies. h. Responding in a timely manner to routine inquiries or correspondence from South Grayson and its representative and the Facilities Customers. 3.2 South Grayson will be responsible for: a. Adopting and implementing utility rates, connection fees and other charges necessary to operate the Facilities as outlined in Section 4.4 of this Agreement. b. Adopting and implementing fees required by licensing or regulatory agencies. 3.3 South Grayson and the City agree that their obligations hereunder shall include compliance with the requirements made under all applicable and valid laws, and any rules and regulations issued pursuant thereto. 3.4 If the City discovers that it is not complying or cannot comply with any requirement of any regulatory agency, the City shall immediately notify South Grayson of the problem, including steps to be taken by the City or steps required of South Grayson to correct the problem. The City shall further notify South Grayson of any problem that will result in extended water service interruption exceeding twelve (12) hours. SECTION 4. BILLING AND RATES 4.1 The City agrees to read Facilities Customer meters and bill Facilities Customers during the Term. The City shall exercise diligence in keeping accounts current to prevent delinquencies. The City shall disconnect and reconnect delinquent accounts upon proper notification and in accordance with those established procedures of the City, which do not conflict with TCEQ regulations on disconnection of service to the extent such TCEQ regulations apply to the City's operations. 4.2 The City shall be responsible for collecting all water connection fees and charges including deposits, if any. The City is authorized to collect any impact fee adopted by the City for any new service or connection within the Service Area. For all requests for new service or connections within the Service Area, City shall submit the requests to South Grayson for review and approval before any commitment for service is made, so that South Grayson may determine the cost of such service and whether capacity is available. The City may deny any request for a new service or connection if it determines that capacity is not available. 4.3 During the Term, the City shall bill Facilities Customers on a consistent monthly billing cycle using computer software and equipment owned by the City. 4.4 South Grayson shall amend the water rates in its tariff for the Facilities Customers to be no less than 1.25 times the water rates paid by utility customers of the City who live inside the Anna city limits, and all other fees and charges applicable to retail water service to the Facilities Customers shall be set at an amount equal to similar fees and charges charged by the City to its utility customers. Bills rendered by the City shall be based upon the water rates, fees, and charges set forth in South Grayson's amended tariff. If the City amends the water rates, fees, or charges in its tariff or schedule of charges, the City shall provide notice to South Grayson of such amendment, and within thirty (30) days of such notice, South Grayson shall amend the water rates, fees, and charges in its tariff for Facilities Customers as necessary to comply with this Paragraph 4.4. South Grayson shall provide notice to the City of such amendment. South Grayson shall not reduce any of the water rates, fees and charges applicable to the Facilities Customers without prior notice to the City. 4.5 If requested by South Grayson, the City will provide billing information so that South Grayson may maintain accurate and timely accounting information regarding billing, deposits, and collections. SECTION 5. COLLECTION AND RETENTION OF REVENUES 5.1 The City agrees to collect Revenues from Facilities Customers and shall retain such Revenues as compensation for operating the Facilities, and in exchange, South Grayson shall owe no other compensation to the City under this Agreement. Monthly, the City shall submit to South Grayson reports of all water sold and collections made. 5.2 The City shall keep accurate books of records and accounts concerning collection of the Revenues. South Grayson shall have the right by and through its auditor or other persons designated by it to examine the books, vouchers, and records maintained by the City at any reasonable time upon request. 5.3 The City and South Grayson shall cooperate in the preparation of rate schedules, reports, and reasonable statistics relating to the Facilities and the operation thereof routinely required to be filed with any governmental agency by all applicable laws and regulations. Copies of such reports shall be prepared by the City and filed with the proper regulatory agency and copied to South Grayson. SECTION 6. PAYMENTS BY SOUTH GRAYSON SUSPENDED 6.1 During the Term, and beginning with the water volumes associated with the first cycle of billing by the City, South Grayson's monthly payments for wholesale water made pursuant to Section 6 of the First Amendment to Agreement to Purchase CCN Areas and Facilities from South Grayson Water Supply Corporation, dated effective September 26, 2006 ("First Amendment"), shall be suspended, and the consideration paid by customers in the Service Area shall replace any payment obligations of South Grayson under the First Amendment and the Purchase Agreement during the Term. All other provisions of the First Amendment and the Purchase Agreement remain in full force and effect. SECTION 7. CUSTOMER SERVICE, ACCOUNTS, AND SECURITY DEPOSITS 7.1 The City shall maintain all Facilities Customer accounts and security deposits and, shall endeavor to settle any Facilities Customer disputes regarding amounts owed. 7.2 On the last day of the Term, the City shall transfer all Facilities Customer account documents and security deposits to South Grayson, unless this Agreement is renewed. SECTION 8. INSURANCE AND LIABILITY CLAIMS 8.1 South Grayson, as owner of the Facilities, shall obtain and maintain in effect at its expense insurance against all risks and claims arising from the ownership and operation of the Facilities as deemed necessary and appropriate by South Grayson in its discretion. City shall also obtain and maintain in effect at its expense insurance against all risks and claims arising from its operation, maintenance, and repair of the Facilities. 8.2 City shall be responsible for insurance coverage and payment of claims of its own employees for workers compensation, as well as any other claims of its own employees arising from their employment by the City. 8.3 Except as otherwise expressly provided herein, nothing in this Agreement is intended to confer upon any person, other than the Parties, any rights, benefits, or remedies under or by reason of this Agreement. 8.4 South Grayson shall forward to the City all material correspondence related to the operations of the Facilities, including all notifications, correspondence, and other communications from regulatory agencies. SECTION 9. GENERAL PROVISIONS 9.1 Notices. Unless otherwise provided herein, any notices required to be given herein shall be deemed to have been sufficiently given to either party for all purposes hereof if faxed or mailed by certified mail, postage prepaid, addressed as follows: South Grayson: John Spencer South Grayson Water Supply Corporation P.O. Box 2 Van Alstyne, Texas 75495 Fax: (903) 482-6194 with a copy to: Leonard H. Dougal Jackson Walker L.L.P. 100 Congress Avenue, Suite 1100 Austin, Texas 78701 Fax: (512) 391-2112 City: City Manager City of Anna 101 N. Powell Parkway Anna, Texas 75409-0776 Fax: (972) 924-2620 with a copy to: Clark McCoy Wolfe, Tidwell, & McCoy LLP 2591 Dallas Parkway, Suite205 Frisco, TX 75034 Fax: (972) 712-3540 Each Party may change the address to which notice may be sent by giving written notice of such change to the other Party in accordance with this notice provision. 9.2 Notice and Opportunity to Cure. If either Party fails to comply with its obligations under this Agreement or is otherwise in breach or default under this Agreement (collectively, a "Default"), the non-defaulting Party shall provide written notice to the defaulting Party setting forth the particulars of the Default and specifying the actions necessary to cure the Default. For matters that can be cured solely by the payment of money, the defaulting Party shall have ten (10) days after receiving notice to cure the Default. For matters that cannot be cured solely by payment of money, the defaulting Party shall be given a reasonable period of time after receiving notice to commence and complete any actions necessary to cure the Default. 9.3 Severability. If any section, subsection, sentence, clause, phrase, tenn, provision, condition, covenant or portion of this Agreement is for any reason held invalid or unenforceable by any court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby but shall be deemed as a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions hereof, and each remaining section, subsection, sentence, clause, phrase, tenn, provision, condition, covenant and portion of this Agreement shall be valid and enforceable to the fullest extent pennitted by law. 9.4 Entire Agreement. This Agreement shall constitute the entire agreement between South Grayson and the City regarding the subject matter hereto, and may not be modified or amended other than by a written instrument executed by both Parties. 9.5 Assignability. Neither Party may assign this Agreement without the written consent of the other Party. 9.6 Waiver. Any waiver by any Party of its rights with respect to a default or requirement under this Agreement will not be deemed a waiver of any subsequent default or other matter. 9.7 Regulatory Bodies. This Agreement shall be subject to all valid rules, regulations, and laws applicable hereto passed or promulgated by the United States of America, the State of Texas, or any governmental body or agency having lawful jurisdiction, or any authorized representative or agency of any of the above. 9.8 Governing Law. This Agreement shall be governed and construed pursuant to the laws of the State of Texas. All obligations herein shall be perfonnable and all payment shall be due and payable in Collin County, Texas. 9.9 Captions and Construction. All section titles or captions contained in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement or any provision hereof. Both Parties have participated in the preparation of this Agreement so that this Agreement shall not be construed either more or less favorably for or against either Party. 9.10 Cooperation. Each Party agrees to execute and deliver all such other and further instruments and undertake such actions as are or may become necessary to effectuate the purposes and intent of this Agreement. IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed in several counterparts, each of which shall constitute an original, all as of this .20 tb day of J"'",-L , 2011 (the "Effective Date"). {signature pages follow J SOUTH GRA YSON WATER SUPPLY CORPORAnON STATE OF TEXAS COUNTY OF 6~ § § This instrument was acknowledged before me on this ~o+L day of Jl~ jOhh b. "~e{, for South Grayson Corporation, a exas nonprofit corporation, on behalf of saId corporatIOn. ,2011 by Water Supply CITY OF ANNA ~ Title: t:!:'r ~e.r STATE OF TEXAS § COUNTY OF §CO 11,'n This i strument was acknowledged before me on this ~,tA.day of ~ ,2011 by .. II ,C{·~ Ma tII.~(.r for the citY f Anna, Texas, a munic' al corporation, on behalf of he City of nna, Texas. I EXHIBIT "A" List of Current Facilities Customers Walid B. Qumsiyeh 7665 CR 277 James P. McComas 287 Skyview Dr Joe Livingston 462 Skyview Dr Gary & Silvia Long 442 Skyview Dr Wayne Divers 480 Skyview Dr Robert Dysart 150 CR 363 John P. Walden 7411 CR 277 Doug & Stacey Graves 898 Ridgeview Rd Gary Babb 216 Ridgeview Rd James B. Walden 249 Ridgeview Rd Anthony McCollum 7277 CR 277 Robert McKee 7241 CR 277 Sandra Bryant 7071 CR 277 Sandra Bryant 7157 CR 277 J.R. Wade 7784 CR 286 EXHIBIT IIA" B.J. Holmes 7241 US Hwy 75 Jacque Rountree 7195 US Hwy 75 B.J. Holmes 7241 US Hwy 75 B.J. Holmes 7241 US Hwy 75 EXHIBIT "B" Map of the Service Area # ......-•• .-" I"~···~t, . t~," • ,I ., ,I ,,,,. , I I :1 ,I ,, •t I I r I t I I ,,,,----­I r " . ,;" . ",' ,'fft, .....' , ,,: .. . t • i l.?7 ~z i