HomeMy WebLinkAboutRes 2011-10-02 Interlocal Agreement with City of Melissa for Water PurchaseCITY OF ANNA, TEXAS
RESOLUTION NO. 2011-10-02
A RESOLUTION RELATED TO AN INTER-LOCAL AGREEEMNT
BETEWWN THE CITIES OF ANNA AND MELISSA UNDER WHICH THE
CITY OF ANNA AGREES TO TRANSFERR A PORTION OF ITS
CONTRACTUAL MINIMUM TAKE OR PAY WATER OBLIGATION WITH
THE GREATER TEXOMA UTILITY AUTHORITY TO THE CITY OF
MELISSA IN EXCHANGE FOR A PAYMENT FROM MELISSA AND
AUHORIZING THE EXECUTION AND ADMINISTRATION OF SAID
INTER-LOCAL AGREEMENT
WHEREAS, the City ofAnna has previously authorized and executed agreements with the
Greater Texoma Utility Authority for a surface water supply system to be planned, funded,
constructed, and operated by GTU, including the payment of monthly minimum take or pay water
purchase provisions necessary to fund said water transmission system and purchase ofpotable water;
and
WHEREAS, the City ofAnna has chosen to not accept delivery ofwater through the end of
the 2011 water year (ended July 31, 2011) and desires to transfer a portion ofits obligated minimum
take or pay to the City of Melissa for consideration detailed in an inter-local agreement; and
WHEREAS, the City of Melissa has indicated interest in purchasing a portion of Anna's
minimum take or pay for the water year ended July 31, 2011 as explained in a memorandum to the
City Managers I Administrators of the Cities of Melissa, Anna, VanAlstyne, and Howe dated
September 8, 2011 by Don Paschal, consultant to said cities, which memorandum is attached to said
Inter-local agreement as Exhibit A; and
WHEREAS, it is acknowledged that a companion or similar agreement is contemplated
between the City of Melissa and the other CGMA-GTUA cities (includes Anna, Van Alstyne, and
Howe).
NOW, THEREFORE BE IT RESOLVED,BY THE CITY COUNCIL OF THE CITY
OF ANNA THAT:
SECTION 1: The City Council of the City of Anna authorizes the execution by the City
Manager ofthe attached Inter-local agreement with the City ofMelissa for the terms detailed therein
providing for the following:
A. Transferring a portion of Anna's GTUA required minimum take or pay to Melissa.
B. Invoicing Melissa for the agreed portion of the 2011 water year minimum take or pay.
Res. 2011-1().4)2 ILA with Melissa-Take or pay obligation PAGE 1 ofl 10-11-11
C. Requiring and Accepting Payment from Melissa as provided for in the attached Inter
local agreement.
SECTION 2: It is specifically provided that the participating cities shall have the right to
verifY quantities of water with the GTUA prior to final consummation of the attached agreement.
Upon motion ofMayor Darren R. Driskell seconded by Council Member Becky Glover, the
above resolution was approved by the City Council ofthe City ofAnna at its meeting held this 11 th
day of October, 2011, by the following vote:
6 AYE o NAY ~'"'---~---
ATTEST:
yor, City of Anna
Wilkison, City Secretary, City of Anna
AL)
Res. 2011-10-02 ILA with Melissa-Take or pay obligation PAGE 2 of 2 10-11-11
INTERLOCAL AGREEMENT BY AND BETWEEN
THE CITY OF MELISS~TEXAS AND THE CITY OF ANNA, TEXAS
FOR PURCHASE AND CORRESPONDING SALE OF A PORTION OF THE
SELLING CITIES MINIMUM TAKE OR PAY OBLIGATION UNDER THE GTUA
CITY OF ANNA POTABLE WATER SUPPLY CONTRACT
THIS AGREEMENT (this "Agreement") is made and entered by and between the
CITY OF MELISSA, TEXAS, a Texas Geneml Law City, hereinafter referred to as "Melissa",
and CITY OF ANNA, TEXAS, a Texas Home-Rule Municipal Corporation hereinafter referred
to as "Anna", collectively referred to herein as the "Cities", as follows:
WIT N E SSE T H:
WHEREAS, both Melissa and Anna are political subdivisions within the meaning of
Interlocal Coopemtion Act, Texas Government Code, Chapter 791, as amended (the "Act"); and
WHEREAS, the Act provides authority for entities such as Melissa and Anna to enter
into interlocal agreements with each other to perform governmental functions and services as set
forth in the Act; and
WHEREAS, each of the Cities has previously entered into an agreement with the Greater
Texoma Utility Authority ("GTUA") for the planning, construction, funding, and operations of a
surface water supply system to collectively serve Melissa and Anna, as well as the City of Van
Alstyne, Texas ("Van Alstyne") and the City of Howe, Texas ("Howe") (each municipality
referenced herein either by name or as "Participating City"), which agreement specifies the
obligations of each Participating City; and
WHEREAS, each of said Cities has entered an Amended and Restated Contmct for
Water Supply providing that from the time water has been delivered to each Participating City
for one month and forward, on a monthly basis, each Participating City shall be charged for
water at the greater of its minimum take-or-pay amount ("MT -P") under the Potable Water
Supply Contract made and entered between such Participating City and GTUA; and
WHEREAS, for the water year 2010-2011 ended July 31,2011 as provided for in said
water purchase agreements, including the North Texas Municipal Water District ("NTMWD")
standard water purchase agreement, only Melissa actually received delivery of water and the
amount of said water delivery equaled the Melissa MT -P; and
WHEREAS, Melissa has a predecessor agreement with NTMWD for delivery of water
through a sepamte water delivery point, which delivery point has a separate and distinct MT-P,
which due to unusual circumstances heretofore documented for each of the Participating Cities,
exceeded the MT-P entitling Melissa to said excess water purchase (over MT-P) at a
significantly discounted purchase mte; and
WHEREAS, due to unusual circumstances, NTMWD has agreed to allow the above
referenced excess water purchase to be transferred to the GTUA -City point of delivery meter
MT-P Transfer agreement for 2011 water year -Melissa!Anna -Page 1
which can thus be applied to reduce the volume of unused MT-P by Anna, Van Alstyne, and
Howe; and
WHEREAS, Anna, VanAlstyne, and Howe are desirous of selling to Melissa a portion
of their unused MT-P and Melissa is willing to purchase a portion of the unused MT-P as defmed
in this Agreement in lieu of securing and paying for said volume of water though the NTMWD
predecessor point of delivery meter; and
WHEREAS, the background of the above noted agreements, volumes, rates, and
circumstances are further detailed in the September 8, 2011 memorandum attached hereto for
reference and labeled "Exhibit A".
NOW, THEREFORE, MELISSA and ANNA, for and in consideration of the recitals set
forth above and terms and conditions below, agree as follows:
I.
TERM
This Agreement shall apply to the NTMWD water year ended July 31, 2011 and shall be
executed and consummated in full between September 20, 2011 and November 15, 2011 and
shall not apply to subsequent water volumes or water years unless said Cities so authorized by
subsequent agreement.
II.
GENERAL SCOPE OF AGREEMENT
The Participating Cities agree that Anna shall transfer 19,731,331 gallons ofMT-P water
to Melissa for the water year ended July 31, 2011 and Melissa shall remit to Anna a payment for
said transfer of MT -P at the rate of $0.93 per thousand gallons totaling the sum of $18,350.00 as
payment in full for said portion of Anna's MT-P. Following execution of this Agreement,
verification of the NTMWD adjustment referenced herein and any verification of metered
quantities or MT -P portions, Anna shall submit to Melissa an invoice for the transfer of the
described MT -P for the above stated sum-or a different sum if applicable under III 4,
below-and Melissa shall remit payment for said transfer within 15 days of receipt of said
invoice, it being the intent that this transaction shall be completed on or before November 15,
2011, all subject to NTMWD making the adjustments provided for above and described in
Exhibit A. Failure of NTMWD to make said adjustment shall render this Agreement null and
void.
III.
RESPONSIBILITIES OF THE PARTIES
1. Melissa shall notify Anna within five working days of the receipt of verification from
NTMWD that the above-referenced adjustment to the original (predecessor point of delivery
meter) has been finalized.
2. Anna, following receipt of notice by Melissa of receipt of verification from NTMWD
described in III - I above, shall submit to Melissa an invoice for the referenced 19,731,333
gallons ofMT-P water in the amount of$18,350.00.
MT-P Transfer agreement for 2011 water year -Melissa!Anna -Page 2
3. Melissa shall remit to Anna the above-stated payment for the transferred MT-P within 15
working days of the receipt of the Anna invoice.
4. Any party hereto wishing to verify the metered quantities of water or the portion of the
MT -P to which this Agreement refers shall be entitled to verification subject to said verification
being completed prior to the submission of the invoice referenced in item III - 2 above. Should
GTUA verification indicate a different volume of MT-P than referenced herein, the parties
hereto shall modify said quantity and the resultant payment for said quantity ofMT-P prior to the
invoicing and payment phase (item III - 2 & 3 above).
IV.
TERMINATION
The Cities recognize that this Agreement shall commence upon the effective date herein
and continue in full force and effect until the earlier of: (i) Anna receives the payment owed by
Melissa under item 111-2 or III -4, as applicable, or (ii) Anna receives notice from Melissa that
NTMWD has failed to verify the adjustment under item II. Melissa and Anna herein recognize
that the continuation of any contract after the termination of this Agreement or impacting any
future water year shall be subject to City Council approval for each City, respectively.
Following termination of this Agreement, or should either City fail to execute this Agreement,
there shall be no further commitment hereunder.
V.
RELEASE AND HOLD HARMLESS
Melissa and Anna, to the extent authorized under the constitution and laws of the State of
Texas, agree to be responsible for their own acts of negligence which may arise in connection
with any and all claims for damages, costs, and expenses to person or persons and property that
may arise out of or be occasioned by this Agreement. In the event of joint and concurrent
negligence, Melissa and Anna agree that responsibility shall be apportioned comparatively. This
obligation shall be construed for the benefit of the parties hereto, and not for the benefit of any
third parties, nor to create liability for the benefit of any third parties, nor to deprive the parties
hereto of any defenses each may have as against third parties under the laws and court decisions
of the State of Texas.
VI.
AUTHORITY TO SIGN
The undersigned officer and/or agents of the parties hereto are the properly authorized
officials and have the necessary authority to execute this Agreement on behalf of the parties
hereto. The Cities have executed this Agreement pursuant to the authority granted by its
governing body.
IX.
SEVERABILITY
The provisions of this Agreement are severable. If any paragraph, section, subdivision,
sentence, clause, or phrase of this Agreement is for any reason held to be contrary to the law or
MT-P Transfer agreement for 2011 water year -Melissa!Anna -Page 3
contrary to any rule or regulation having the force and effect of the law, such decisions shall not
affect the remaining portions of the Agreement. However, upon the occurrence of such event,
either party may terminate this Agreement by giving the other party 30 days written notice.
X.
VENUE
Ibis Agreement and any of its terms or provisions, as well as the rights and duties of the
parties hereto, shall be governed by the laws of the State of Texas. The parties agree that this
Agreement shall be enforceable in Collin County, Texas, and, if legal action is necessary,
exclusive venue shall lie in Collin County, Texas.
XI.
INTERPRETATION OF AGREEMENT
It is acknowledged that this is a negotiated document. Should any part of this Agreement
be in dispute, the Cities agree that the Agreement shall not be construed more favorably for
either city.
XII.
REMEDIES
No right or remedy granted herein or reserved to the parties is exclusive of any right or
remedy granted by law or equity; but each shall be cumulative of every right or remedy given
hereunder. No covenant or condition of this Agreement may be waived without the express
written consent of the parties. It is further agreed that one or more instances of forbearance by
either party in the exercise of its respective rights under this Agreement shall in no way
constitute a waiver thereof.
XIII.
SUCCESSORS AND ASSIGNS
The parties each bind themselves, their respective successors, executors, administrators
and assigns to the other party to this contract. Neither party will assign, sublet, subcontract or
transfer any interest in this Agreement without the prior written consent of the other party. No
assignment, delegation of duties or subcontract under this Agreement will be effective without
the written consent of both parties.
MT -P Transfer agreement for 2011 water year -Melissa! Anna -Page 4
IN WITNESS WHEREOF, the parties have executed this Agreement by signing below.
CITY OF MELISSA, TEXAS
Date: __________ By:___________
Jason Little
City Administrator
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF ANNA, TEXAS
Date: ~42NI
APPROVED AS TO FORM
MT -P Transfer agreement for 2011 water year -Melissa! Anna -Page 5
ACKNOWLEDGMENT
STATE OF TEXAS §
§
COUNTY OF COLLIN §
This instrument was acknowledged before me on the ___ day of ______
2011, by ________________ ofthe City of Melissa ,Texas, a Texas
General Law City, on behalf of said municipality.
Notary Public, State of Texas
STATE OF TEXAS §
§
COUNTY OF COLLIN §
This instrument was acknowled ed before me on the .JIg day of OdD k, c
2011, by fi'fjf ..fa .,ltl S,' /" ,of the City of Anna , Texas, a
Home-Rule M cipal Corporation, on beh If of said . cipal corporation.
$V~t;9t....::\\r, Nathe J WllkilOn :'i. i~ My Commission Expires
~~11/1312013
MT-P Transfer agreement for 2011 water year -Melissa! Anna -Page 6
Exhibit A
DONALD E. PASCHAL, JR.·
904 Parkwood Court McKinney, TX 75070 Tel •• FAX 972.529.1325
email: don@paschalconsulting.com
To: CGMA City Managers
Subject: Sale of GTUA-CGMA Minimum Take or Pay to Participant City
Date: September 8, 2011
While it was not possible to effectuate a sale of GTUA-CGMA minimum take or pay (MTlP) to a
North Texas Municipal Water District (NTMWD) member City as discussed in my email to each
or you on August 31, we have been able to shift a portion of the City of Melissa use on their
previously existing supply meter with NTMWD to the GTUA-CGMA meter. The purpose of this
communication is to outline the proposed details of that transaction. I will try to keep the
explanation and process as simple as possible. There are, however, many variables to the
concept that have been carefully reviewed while working with the concept to sell MT IP to
NTMWD members including working through the conceptual price I cost of that water with the
respective Cities with which I visited.
Background:
• CGMA City MT/P: The base MT/P water purchase (minimum contract provision that the
GTUA-CGMA system has with NTMWD for water) is a total of 237,250,000 gallons of water
annually (MT/P amount) which represents 237,250 one thousand gallon increments (K gals).
Each CGMA City is responsible for 59,312.5 K gals plus pumping and related cost). Once
all four CGMA Cities reach the MT/P, excess water is charged to that respective City at the
cost then in effect for volumes (plus proportionate pumping and related costs) over the
59,312,500 gallons.
• For the recently ended water year, only Melissa has taken water. The other three Cities
have held off taking the water up to now relying instead on their ground water supplies
(transmission system fully complete and functional so Cities may begin taking as desired).
• Melissa actually takes I receives water from two points of delivery: one being the original
Melissa connection with McKinney to receive water from NTMWD which dates back over 20
years and the second being the GTUA -CGMA transmission system. Each of these
connections is separately metered; the original meter has a MT/P like the GTUA system.
For the recently ended water year, the Melissa original meter MT/P was 187,379,000
gallons. Melissa actual use from the GTUA -CGMA meter was 72,990,000 gallons which
was 13,677,500 gallons over their MT/P. Melissa use from their original meter was
232,895,000 gallons which was 45,516,000 over their MT/P on that meter.
• Melissa had the right to purchase the excess water from their Original meter at $0.43 I K
gals; the standard rate for the recently ended water year was $1.42 I K gals (same water
rate as GTUA -CGMA contract rate, which was the NTMWD customer rate).
MT -P Transfer agreement fOT 20 II water year -Melissa!Anna -Page 7
-
-. ..
Municipal Water District) and the City of Melissa agreed to an interruption of water service
on the original 12" water main providing water to Melissa by the NTMWD to accommodate a
NTMWD wastewater outfall main project crOSSing the original water line. To provide service
during that time, additional water was provided to Melissa through the GTUA-CGMA.
Normally, Melissa would have closely monitored the original line with the objective of
managing the flow to as to not exceed the annual minimum take or pay for that meter and
secured additional requirements through the GTUA-CGMA transmission system. As the
MT/P water year end approached (July 31), it was apparent that the service interruption
(about 4 months) had impacted Melissa minimum take or pay (MT/P) with the original line
having been used excessively after being reconnected to the extent that 45,516,000 gallons
of excess water flowed through the original line. NTMWD has agreed to adjust the meter
volumes by transferring this excess water to the GTUA-CGMA meter, thus using a larger
portion of the other three CGMA City's MT/P. Thus, the actual metered flow of 72,990,000
gallons will be adjusted by the 45,516,000 excess flow on the original meter resulting in an
adjusted total GTUA-CGMA use of 118,506,000 gallons.
• While Melissa could save Significant water purchase costs by paying the excess water rate
applicable to the Original meter, transferring the excess flow to the GTUA-CGMA meter
keeps the Melissa original MT/P lower for future years while helping to use a portion of the
other CGMA cities MT/P.
• The cost that was generally agreed to by the NTMWD member cities in the potential sale of
MT/P to then was a compromise between their normal member City rate and the excess
water rate which is an average that that provides each entity with approximately the same
savings (return) or extra cost:
NTMWD Member MT/Pwater Excess Water Average
rate 11000 gal $1.37 $0.38 $0.88 IKgal
Melissa I Customer $1.42 $0.43 $0.93 IKgal
• Applying this same principal to the GTUA -CGMA situation results in the CGMA City not using
its MT/P selling a portion of the unused MT/P for $0.90 cents I K gal that cost $1.42 and Melissa
purchasing the same unused MT/P for $0.90 instead of $0.43 if it had taken the MT/P option on
the original meter. This methodology can be used until all cities begin using the contract MT/P.
Additionally, it actually encourages a City with another option to use a portion of the CGMA Cities
MT/P by allowing that City to preserve other sources of water or to keep the other MT/P lower, at
least up to the time that all the CGMA Cities are using their MT/P.
• NTMWD and the City of McKinney have agreed that the Melissa Excess water being transferred
to the GTUA-CGMA meter will not be charged the McKinney pass through since the wastewater
transmission main that caused the interruption of the original Melissa line flow was for the benefit
of the City of McKinney. Thus, it will not be necessary for Melissa to payor the other CGMA
Cities to credit Melissa for the McKinney pass through fee on the 45 million gallons transferred.
Melissa (or any other CGMA user) will pay the pass through on any I the proportionate flow
through the GTUA -CGMA meter.
Implementation Results:
• Melissa will be responsible for paying the McKinney pass though fee for its MT/P and the
additional 13 million gallons that actually flowed through the GTUA -CGMA meter for a total
metered flow of 72,990,000 gallons.
MT-P Transfer agreement for 2011 wateryear-MelissalAnna -Page 8
• Melissa will agree to purchase from each of the other three CGMA Cities (Anna, Van Alstyne,
and Howe). Thus, adjusted GTUA~CGMA volume of 118,506,000 less the Melissa MT/P of
59,312,500 gallons results in 59,193,994 gallons that Melissa purchases from the other three
cities at the discounted rate.
• Anna, Van Alstyne, and Howe will agree to sell the above noted total of 59,193,994 gallons of
water to Melissa at the agreed rate; each of these three cities share of the sale of 19,731,331
gallons. At the noted rate of $0.931 K gals, Melissa will thus pay to each of the three cities the
amount of $18,350 (rounded to nearest dollar).
Process 1 Steps:
1. GTUA will be asked to verify the volumes from NTMWD billings; the above is believed to be
very close to final, but could be slightly adjusted by final billings.
2. Each of the three selling Cities will adopt a Resolution authorizing an inter~local agreement
to sell the above noted MT/P to Melissa at the agreed rate.
3. Melissa will adopt a Resolution authorizing an inter~local agreement to purchase the above
noted MT/P from the three respective Cities at the agreed rate.
4. An inter~local agreement will be attached to each of the Resolutions noted in items 2 & 3
detailing the provisions of the sale 1 purchase between the selling CGMA Cities (Anna, Van
Alstyne, and Howe) and the purchasing City (Melissa).
5. Following approval of Resolutions and execution of the inter~local agreements, Melissa will
be able to pay the respective city for the agreed purchase. This can be completed by the
end of the fiscal year or at the beginning of the new fiscal year.
6. Consultant will be pleased to draft the respective Resolutions or work with one of the City
Managers to draft the Resolution and craft an inter~local agreement (cities may wish for one
of the City Attorneys to review and "clean-up" or draft the agreement, in which case
Consultant will simply meet with the drafting City Attorney to explain and assist).
7. It is suggested that this document be attached as a reference document to the inter-local
agreement to help clarify the concept and to serve as a future reference.
MT-P Transfer agreement for 20 II water year -MelissalAnna -Page 9