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HomeMy WebLinkAboutRes 2014-12-01 ILA with Melissa - Take or Pay Agreement.pdfCITY OF ANNA, TEXAS RESOLUTION NO. 2014-12-01 A RESOLUTION RELATED TO AN INTER -LOCAL AGREEEMNT BETWEEN THE CITIES OF ANNA AND MELISSA UNDER WHICH THE CITY OF ANNA AGREES TO TRANSFER 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 AN AGREED PAYMENT FROM MELISSA AND AUHORIZING THE EXECUTION AND ADMINISTRATION OF SAID INTER -LOCAL AGREEMENT WHEREAS, the City of ANNA 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 GTUA, including the payment of monthly minimum take or pay water purchase provisions necessary to fund said water transmission system and purchase of potable water; and WHEREAS, the City of ANNA has chosen to not accept delivery of water through the end of the 2014 water year (ended July 31, 2014) and desires to transfer a portion of its obligated minimum take or pay for said 2014 water year 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 the City of ANNA's minimum take or pay for the water year ended July 31, 2014 as explained in a memorandum to the City Managers / Administrators of the Cities of Melissa, Anna, Van Alstyne, and Anna dated October 17, 2014 by Donald E. Paschal, Jr., 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 (including Van Alstyne and Howe). NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of ANNA that: SECTION l: The City Council of the City of ANNA authorizes the execution by the City Manager of the attached Inter -local agreement with the City of Melissa for the terms detailed therein providing for the following: A. Transferring a portion of ANNA's GTUA required minimum take or pay to Melissa as provided for in the attached Inter -local Agreement. B. Invoicing Melissa for the agreed portion of the 2014 water year minimum take or pay. Res. 2014-12-01 ILA with Melissa — Take or Pay Agreement 12-09-14 C. 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 of Council Member Beazley seconded by Council Member Bryan, the above resolution was approved by the City Council of the City of Anna, Texas at its meeting held this 9th day of December, 2014, by the following vote: 6 AYE 0 NAY 0 ABSTAIN Mike Crist, Mayor, City of ANNA N t a Wilkison, City Secretary, Cit of Anna, Texas (SEAL) ,�``` OF 2"E X P"5 •/ 100 Res. 2014-12-01 ILA with Melissa— Take or Pay Agreement 12-09-14 INTERLOCAL AGREEMENT BY AND BETWEEN THE CITY OF MEL SSA� TEXAS AND THE CITY CORRES OlVDING SALEOF A PORTION OF T FOR PURCHASE AND HE OR PAY OBLIGATIN SELLING CITIES' MINIMUM TAS E WATER SUPPLY CONTRACTTHE GTUA- CITY OF ANNA POT THIS AGREEMENT (this "Agreement") is made and entered by and between the CITY OF MELISSA, TEXAS, a Texas home -rule municipality, hereinafter referred to as "Melissa", and CITY OF ANNA, TEXAS, a Texas home -rule municipality hereinafter referred to as "Anna", collectively referred to herein as the "Cities", as follows: WITNESSETH: WHEREAS, both Melissa and Anna are political subdivisions within the meaning of Interlocal Cooperation 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 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 Contract 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 for in said WHEREAS, for the water year 2013-2014ended MuniciJuly p, 2014 as al al Water District, l hereinafter water purchase agreements, including the North P referred to as "NTMWD" standard water purchase agreement, only the City of Melissa actually received delivery of water, the volume of which equaled or exceeded the individual City required Melissa MT -P; and WHEREAS, Melissa has a predecessor agreement with NTMWD for delivery of water through a separate water delivery point,which to stivery aid excessthas water purchase separate and (oversMT Pct M at a which exceeded the MT -P entitling M significantly discounted purchase rate; and WHEREAS, Anna desires to sell a portion of its unused MT -P and Melissa desires to purchase a portion of Anna's unused minimum MT -P as defined in this Agreement and detailed in " attached hereto for reference "Exhibit A a thus allowing Anna to recover a porion of the purchased but unused MT -P for the stated water year; and REAS, the background of the above noted agreements, attached hereto ofor WHE circumstances are further detaAed in the October 17, 2014 memorandum reference and labeled "Exhibit OW THEREFORE, MELISSA and ANNA, for and in consideration of the recitals set N � agree as follows: forth above and terms and conditions below, agr I. TERM Agreement shall apply to the NTMWD water year ended d December 3 °3 2014 2014 shall be This gr all executed and consummated in full oNovembwater years2unlessnby written amendment to this not apply to subsequent water volumes Agreement. II. GENERAL SCOPE OF AGREEMENT Anna shall transfer 2,892,600 gallons (2,892.6 one thousand hal to mit to Anna a payment crements) of MT -P Ann 31, 2014 and Melissa _ water to Melissa for the water year ended July nsfer of MT -P at the rate of $1.21 per thousand gallons of this su er of $3,500-01 for said tia Anna as payment in full for said portion ofAnna's MT -P. Following execution submit to Melissa an invoice for the transfer of the described da -Pfor the above of receipt of said invoice, sum shall suoice, and Melissa shall remit payment for said transfer within fifteen ( Y in the intent that this transaction shall be completed on or before December 31, 2014. it be g III. RESPONSIBILITIES OF THE PARTIES ve roved this Agreement 1. The respective City CounMT P as described herelissa and einn and nna afurther detailed in the attached authorizing the sale / purchase of Exhibit A. royal of this Agreement by Melissa, shall submit to Melissa an invoice 2, Anna, following approval for the referenced 2,892,600 gallons of MT -P water in the amount of $e3,5 00 01. MT -P within 3. Melissa shall remit to Anna the above ae n invoice. payment for th fifteen (15) worldng days of the receipt either arty wishes to verify the metered quantities t twater Or the P onrsubj subject to 4. on of the If p to which this Agreement refers shall be en n item Ill _ minimum take or pay said verification being completed prior to the submission of the invoice of m'mimumt referenced e r pay than above. Should GTUA verification indicate i different quantity the resultant payment for said referenced herein, the parties hereto shall modify said q payment phase (item Ill -2 & 3 above). quantity of minimum take or pay prior to the invoicing and ay IV. TERMINATION The Cities recognize that this Agreement shall commence upon the effective date herein and continue in fall force and effect until termination in accordance with its provisions. Melissa and Anna herein recognize that the continuation of any future 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. VH. 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 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 thirty (3 0) days' written notice. VIII. VENUE This 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. IX. 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. X. 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 (1) 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. XI. 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. IN WITNESS WHEREOF, the parties have executed this Agreement by signing below. Date: APPROVED AS TO FORM: CITY ATTORNEY Date: APPROVED AS TO FORM CITY ATTORNEY CITY OF MELISSA, TEXAS By: Jason Little City Manager CITY OF ANAA, TEXAS IN ACKNOWLEDGMENTS STATE OF TEXAS § COUNTY OF COLLIN § This instrument was acknowledged before me on the day of of the City of Melissa , by ' rule municipality, on behalf of said municipality. STATE OF TEXAS § 2014, Texas, a Texas home Notary Public, State of Texas COUNTY OF COLLIN § "r___ da of l This instrument was acknowledged before me On of the City of Anna, Texas, Texas home b 616R r '` a e ' Y rule munic pality, on behalf of said unicipality. NATHA J WItKiSON My Commission Expires November 13, 2017 e S'4ica a+. D� l Nota y Public, S, ate of Texas Exhibit A Attach copy of October 17, 2014 memorandum fiom Donald E. Paschal, Jr. to CC -TMA City Managers regarding the subject: Sale of GTUA-CGMA Minimum Take or Pay to Participant City DONALD FAX Ea. 904 Parkwood Court McKinney, p Tel. &972.529.1325 TX 7507 email: don@paschalconsulting.com To: CGMA City Managers Subject: Sale of GTUA-CGMA Minimum Take or Pay to Participant City Date: October 17, 2014 pay nimum ake The City of Melissa has used water in excess of their requiredMD ag eement' for the twater ryear (MT/P) through the North Texas Municipal Water during District (N amount. Based on the 14. The City of An began use during the water year, P but since use began late m ended July 31, 20 3, a member City may acquire t.a portion of the the year, Anna consumption was well under the Minimum a precedent initiated in 2010 and continued an d pr price. If there were no othesour e of water I ssa howevee MT/P from other CGMA member Cities a g l meter with NTMWD e would be the standard CGMA-GTUA price based othe sl/existi g supply et the price tion from their previously they could intentionally curtail consume_ NTMWD meter) and shift consumption to the MT/P andNtp vided the othercCGMA Cities (original to a significantly high proposes original meter from ratcheting up paid during the water year. opportunity to recoup a portion of the M lis water /P) from the CGMA-GTUA System tat the average an oppo Y to purchase the extra water taken (over Melissa's MTIP UA - price between that which they would have paid if taken from the original NTMWD meter and the GT NTMWD rate. The details of the proposed transaction are provided below; the explanation and process are intended as possible. The basic concept is that the other three cost of that'twater asA Cies (Anna, Van detailed below; this to be as simple p and Howe) sell a portion of their MT/P to Melisa at the price c summary is an update of the same document from last year. Background: P: The base MT/P water purchase (minimum contract 000 gallons ofsion that watetr annually e GTUA- CGMA City MT/ gals). Each CGMA CGMA system has with N SeW� 37 water)50 one -thousand thousand ga Ion increments e ag four CGMA Cities (MT/P amount) which repre and related cost). On City is responsible for 59,312.5 K gals plus pumping P excess water is charged to that respectiveh �59,312,500 gallons. in effect or reach the MT/P, and related costs) over volumes (plus proportionate pumping took a small For the recently ended water, year, only Melissa has taken its fulfe ante and chlorination water portion of their MT -P, and all were charged for minor main round during the 2015 water requirements. Melissa and Anna are expected to take water year that Van A styne II begin taking water soon after Van Alstyne, but no year (August 1, 2014 through July 31, 2014 and it is an icipa a water supplies continued to in the summer of 2015. Howe is expected �14begin takwater year ground w p owe. in fact, Anna firm date has yet been set. During Anna, Van Alstyne, and H provide the majority or all of the water used by 2 CGMA-GTUA consumption was so low that for the sake of this analysis, Anna is treated as anon -consumption city. l Melissa Melissa actually takes / receives water from two TMWDwhi h dates back oveelivery: one being r 25 years and the connection with McKinney to receive water from NT second being the GTUA — CGMA transmission system of these For the re�entlytended wa tr yealr, metered; the original meter has a MT/P like the GTUAsystem. the Melissa original meter consumption was 198,804,000 f om the GTUA gallons (which was CGMA meter was through the original meter in 2013). Melissa act 75,488,000 gallons or 75,488 K gallons which was 16,175,500 gallons over their MT/P. Stated in water billing terms (1000 gallon increments), this represents 16,175.5 K gallons (1000 gallons). hree Melissa proposes to purchase the water in excess of twat GMoA their from metertat $0 50 M K Cities. Melissa could have purchased more excess gals (the 2014 excess water rate); the standard rate for the recently ended water year e NT was the $1.92 / K gals (same base water rate as GTUA — CGMA contract rate, which was MWD customer rate). nw As in 2013, Melissa could have saved some costs by maximizing excess wthe ater consumption rate which would represent s line since that consumption would have been at the applicable to the original meter. savings in water purchase costs by paying the excess water rate app However, such action would have resulted in a very large sin1�cree prudent ithe n the long term, thus meter, Melissa believed that moderation for in that meter their MT/P opening the opportunity for the other three CGMA Cities to keep art werfMT/P on the roriginal GTUA-CGMA meter to Melissa. Thus, this allows Melissa of the othe r CGMA Cities MT/P and meter for future years while helping to use a portion reimbursing the other three CGMA Cities a small portion of their MT/P. The cost calculations for the above described ch as determinedansaction tbyas agreed to in 2013 averragi g the MT/Pbwat the r CGMA Member Cities was $1.075 /MGD, which w mise etween thir normal cost with the NTMWD customer city rate. This rate was a compro Water Ratebor 2013 asellustra td CGMA Member City rate and the NTMWD Customer City below: 2013 data Entities CGMA MT/P water 11000 GPD Melissa Excess Water Average rates $1.75 $0.40 $01.075 s other thantook any er; thus, the issa In 2013 and in prior years, none of the CGMA citiea used was hatred equally between the three amount of excess water over the MT -P that Meliss non -taking Cities. he contract It was noted in 2011 that this methodology could be mounted nolf water (56 4% ofl all cities begin t t tMT-P) it s MT/P. However, since Anna took a significant a suggested that the methodology be amended /adjusted to provide a proration of the only k more that unused water to be sold to one of the other cities (in this another option to use a'portiossa aoof the CGMA MT -P). Additionally, it actually encourages a City with Cities MT/P by allowing that City to preserve other sources of water or to keep the other MT/P :c3 lower, at least up to the time that all the CGMA Cities are using their MT/P. Calculation of the proportionate share of unused MT -P to be sold is as follows: Proportionate Share of unused MT -P available to be sold to Excess use City: Van Alstyne Howe MT -P Anna 59,312.5 59,312.5 59,312.5 Used water 0 33,480 0 Used 25,832.5 59,312.5 59,312.5 Unused Ratio of % of unused by city to 17,088 K 0.17882 0.41058 0.41058 gal, the Melissa excess water taken Portion of Melissa overage to be offered for 2,892.6 6,641.5 6,641.5 sale to Melissa (excess water was 17,088 K gal ® Applying this revised (prorated) concept to the 2014 water year results in the following calculation: 2014 Proposed Purchase / Sell rate Entities CGMA MT/P water 11000 GPD Melissa Excess Water Average rates $1.92 $0.50 $1.21 2014 Proposed MT -P Sale / Purchase Agreaement (aortal $19,572.3 ne H) we Item 6,641.5 6,641.: K gallons offered for sale / urchase 2892.6 Total amount of sale I purchase I $ 3,500-01 I $8,036.17 1 $8,036.17 Implementation of Sale I Purchase: ® Melissa may purchase from each of the other three CGMA Cities (Anna, Van Alstyne, and Howe) the above calculated pro -rated portion of the Melissa CGMA water volume taken over the Melissa MTIP which was a total overage of 16,175.5 K gallons. That volume applied to the calculated ratio results in Anna selling 2892.6 K gallons and Van Alstyne and Howe each selling 6,641.5 K gallons of minimum take or pay. ® Anna, Van Alstyne, and Howe may agree to sell the above noted total of 16,175,500 gallons o of (17,088 K gallons) of MT -P water to Melissa at the agreed rate of $1.21 / K gallons; unused water for each city is applied to the amount of excess taken by Melissa and as in the past the share is offered at the average price of $1.21 / K gallons with the total amount shown in the above table. Under this scenario, Melissa would pay a total of $19,572.36, broken down by City as indicated above. It is noted that the amounts are significantly less than 2013, however, with continued growth, consumption is expected to escalate in the 2015 water year and will likely exceed the 2014 water year significantly. Process / steps: 4 1 • GTUA has verified the volumes from NT calculations of water purchased b MWD billings; 2• Each of the Y meter, g ; the above is believed to be three selling Cities will ado sell the above noted pt a Resolution authorizing the final 3. Melissa will adopt a Me/P to Melissa at the g an infer -►Deal agreement f noted MT/P from Resolution agreed rate. m the three res eauthorizing an inter -local a ree o 4. An inter -local a p ctive Cities at the g ment to detailing the r agreement will be attached toe agreed rate, purchase the above g provisions of the sale / each of the Al tailin and Howey and the purchase between the selling CG noted e items 2 & 3 5. Following approval of purchasing Cit g CGMA Cities be able to Resolutions and execution y (Melissa). (Anna, Van (Y the respective cify for the of the inter -local agreement the 2015 fiscal year as the respect'agreeds Res olutio and Infer -local q ree ►ve purchase. This can be corn 'Melissa will 6. Consults g ments. cities complete authorization pleted as early in wild be pleased to draft the res of the stipulated Resoluti ' adopted in 2013. respective Resolutions b 7. It is sug ted that this 013. based on the s It is sue o help clarify the document be the or -oasimilar attached as a reference pt and to se document to the inter -local serve as a future reference.