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HomeMy WebLinkAboutRes 2017-01-279 Howe Take or PayCITY OF ANNA, TEXAS RESOLUTION NO. c").o VJ..-o \ -oil ~ A RESOLUTION RELATED TO TWO INTER-LOCAL AGREEEMNTS BETWEEN THE CITIES OF ANNA AND VAN ALSTYNE, AND THE CITIES OF ANNA AND HOWE IN WHICH VAN ALSTYNE AND HOWE AGREE TO TRANSFER A PORTION OF THEIR RESPECTIVE CONTRACTUAL MINIMUM TAKE OR PAY WATER OBLIGATION WITH THE GREATER TEXOMA UTILITY AUTHORITY TO THE CITY OF ANNA IN EXCHANGE FOR AN AGREED PAYMENT FROM ANNA AND AUHORIZING THE EXECUTION AND ADMINISTRATION OF SAID INTER-LOCAL AGREEMENTS WHEREAS, the Cities of MELISSA, ANNA, VAN ALSTYNE, and HOWE have 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 Cities VAN ALSTYNE and HOWE have chosen to not accept delivery of some or all of the required water through the end of the 2016 water year (ended July 31, 2016) and each of said Cities desire to transfer a portion of its respective and obligated minimum take or pay for said 2016 water year to the City of ANNA for consideration detailed in an inter-local agreement; and WHEREAS, the City of ANNA has indicated interest in purchasing a portion of the minimum take or pay from the Cities of VAN ALSTYNE and HOWE for the water year ended July 31, 2016 as explained in a report memorandum to the City Managers I Administrators of the Cities of Melissa, Anna, Van Alstyne, and Anna dated November 30, 2016 by Donald E. Paschal, Jr., consultant to said cities, which memorandum is attached to the respective Inter-local agreements for each specified City as "Exhibit A"; and WHEREAS, it is acknowledged that a companion or similar agreement is contemplated between the CGMA-GTUA Purchasing Cities of Melissa and Anna and the CGMA- GTUA Selling Cities of Van Alstyne and Howe. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: SECTION 1: The City Council of the City of Anna authorizes the City Manager to execute inter-local agreements with the Cities of Van Alstyne and Howe, attached and incorporated herein as Exhibit 1 and Exhibit 2 respectively, under the terms detailed in said inter-local agreements, each of which provides for the following: A. Receiving the transfer of a portion of said selling City's GTUA required minimum take or pay to Anna as provided for in the respective Inter-local Agreement. B. Paying the invoice submitted by the respective selling City for the agreed portion of the 2016 water year minimum take or pay specified in the inter-local agreement as provided for in said 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. PASSED AND APPROVED by the City Council of the City of Anna, Texas, on this 241h day of January, 2017. INTERLOCAL AGREEMENT BY AND BETWEEN THE CITY OF ANNA, TEXAS AND THE CITY OF HOWE, TEXAS FOR PURCHASE AND CORRESPONDING SALE OF A PORTION OF THE SELLING CITIES MINIMUM TAKE OR PAY OBLIGATION UNDER THE GTUA-CITIES OF ANNA, ANNA, VAN ALSTYNE, AND HOWE POTABLE WATER SUPPLY CONTRACT THIS AGREEMENT is made and entered by and between the CITY OF ANNA, TEXAS, a Texas Home-Rule Municipal Corporation, hereinafter referred to as "Anna", and CITY OF HOWE, TEXAS, a Texas General Law City hereinafter referred to as "Howe", collectively referred to herein as the "Cities", as follows: WI T N E S S E T H: WHEREAS, both Anna and Howe 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 Anna and Howe to enter into inter-local 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, hereinafter referred to as "GTUA" for the planning, construction, funding, and operations of a surface water supply system to serve the collective Contract Cities of Melissa, Anna, Van Alstyne , and Howe , which agreement specifies the obligations of each participant; 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 WHEREAS, for the water year 2015-2016 ended July 31 , 2016 as provided for in said water purchase agreements, including the North Texas Municipal Water District, hereinafter referred to as "NTMWD" standard water purchase agreement, only the Cities of Melissa, and Anna received delivery of water which equaled or exceeded the individual City required MT-P; and WHEREAS, the Contract Cities of Melissa, Anna, Van Alstyne, and Howe have a multi- year precedent of the referenced Minimum Take or Pay Buy-Sell concept as referenced herein and as is further referenced and detailed in "Exhibit A" attached hereto for reference in establishing the buy-sell rate; and WHEREAS, the Cities Van Alstyne and Howe are desirous of selling to Melissa and Anna a portion of their unused MT-P and Melissa and Anna are willing to purchase a portion of the unused minimum MT-P as defined in this agreement and detailed in "Exhibit A" thus MT-P Transfer agreement for 2016 water year -Anna I Howe -Page 1 Resolution 2017-01-279Exhibit A City of Howe allowing Van Alstyne and Howe to recover a portion of the purchased but unused MT-P for the stated water year; and WHEREAS, the background of the above noted agreements, volumes, rates, and circumstances are further detailed in the November 30, 2016 memorandum attached hereto for reference and labeled "Exhibit A". NOW, THEREFORE, ANNA and HOWD, 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, 2016 and shall be executed and consummated in full between December 1, 2016 and January 31, 2016 and shall not apply to subsequent water volumes or water years unless said Cities so authorize by subsequent agreement. II. AGREEMENT The Cities agree that HOWE shall transfer 29,656,250 gallons (29,656.25 one thousand gallon increments) of MT-P water to ANNA for the water year ended July 31, 2016 and ANNA shall remit to HOWE a payment for said transfer of MT-P at the rate of $1.40 per thousand gallons totaling in the sum of $41,518.75 as payment in full for said portion ofHOWE's MT-P. Following execution of this agreement, HOWE shall submit to ANNA an invoice for the transfer of the described MT-P for the above stated sum and ANNA shall remit payment for said transfer within fifteen (15) days of receipt of said invoice, it being the intent that this transaction shall be completed on or before January 31, 2017, although it is specifically provided that completion of said invoicing and payment after said date shall not invalidate any portion of this agreement, it being the intent however to complete said transaction by the stipulated date. III. RESPONSIBILITIES OF THE PARTIES 1. The respective City Councils of ANNA and HOWE shall each approve an interlocal agreement authorizing the sale I purchase ofMT-P as described herein and further detailed in the attached Exhibit A. 2. HOWE, following approval of the interlocal agreement by each party thereto shall submit to ANNA an invoice for the referenced gallons ofMT-P water detailed above in Section II and in the stipulated amount. 3. ANNA shall remit to HOWE the above stated payment for the transferred MT-P within fifteen ( 15) working days of the receipt of referenced invoice. 4. Any party hereto wishing to verify the metered quantities of water or the portion of the minimum take or pay 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 minimum take or pay than MT-P Transfer agreement for 2016 water year -Anna I Howe -Page 2 referenced herein, the parties hereto shall modify said quantity and the resultant payment for said quantity of minimum take or pay prior to the invoicing and payment phase (item III -2 & 3 above). IV. TERMINATION C. The Cities recognize that this Agreement shall commence upon the effective date herein and continue in full force and effect until termination in accordance with its provisions. Anna and Howe 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 Anna and Howe , 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, cost, 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, Anna and Howe 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 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 (30) days written notice. x. VENUE MT-P Transfer agreement for 2016 water year -Anna I Howe -Page 3 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. 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 (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. 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 2016 water year -Anna I Howe -Page 4 IN WITNESS WHEREOF, the parties have executed this Agreement by signing below. CITY OF ANNA, TEXAS Date: l (<P:k I aol'l APPROVED AS TO FORM: CITY ATTORNEY CITY OF HOWE, TEXAS By:~~ Joeshhafd City Administrator Date: APPROVED AS TO FORM CITY ATTORNEY MT-P Transfer agreement for 2016 water year -Anna I Howe -Page 5 ACKNOWLEDGMENTS STATE OF TEXAS § § COUNTY OF COLLIN § This instrument was acknowledged before me on the ~ day of J@llQ }!lj , 1i\1, by ph,\\-p &rv\.ers , Cli·b 3 Xf\~e< of the City of Anna, Texas~ a Texas Home-Rule Municipal Corporation, on behalf of said municipality. STATE OF TEXAS § § COUNTYOFGRAYSON § Notary Public, State of Texas This ·nstrument was acknowledged be ore me on the (d/5f day of /Je(.f'milh , 2016, by e , 1 · · ' , of the City of Howe, Texas, a Texas General Law Ci y, on behalf of said unicipality . :-,\\\\\11 ""''''''" ~''\-..~1..A J srl' ~111. .§'o"?-'I<' •••••••'-~ ~ ~ '.·~~fl.RY Pu&··~~ ~ .·~*r~. ~ ..::: .. \,.... ~ ~ : : ~ -• • = ~ ~ <P : ~ ~ . ~ ~ . .::-~ • •• ~OF\~~ •• • ~ ~ ··~-\'PIRES,." ~ ~ ".) ······· ~ ;;'"'11,, <).27-2019 :-.''~ 11,, '"""'"'''~ Exhibit A Attach copy of November 30 , 2016 memorandum from Donald E. Paschal , Jr. to CGMA City Managers regarding the subject: Sale ofGTUA-CGMA Minimum Take or Pay to Participant City MT-P Transfer agreement for 2016 water year-Anna I Howe -Page 6 December 22, 2016 City of Anna Philip Sanders P 0 Box 776 Anna, TX 75409 Re: Take or Pay Water Joy Stevens City Secretary CITY OF HOWE 116 East Haning • Post Office Box 518 Howe, Texas 75459 903-532-5571 Invoice Amount Due: $41,518.75 RESOLUTION NO. 2016-0007 A RESOLUTION RELATED TO TWO INTER-LOCAL AGREEEMENTS BETWEEN THE CITIES OF ANNA AND VAN ALSTYNE, AND THE CITIES OF ANNA AND HOWE IN WHICH VAN ALSTYNE AND HOWE AGREE TO TRANSFER A PORTION OF THEIR RESPECTIVE CONTRACTUAL MINIMUM TAKE OR PAY WATER OBLIGATION WITH THE GREATER TEXOMA UTILITY AUTHORITY TO THE CITY OF ANNA IN EXCHANGE FOR AN AGREED PAYMENT FROM ANNA AND AUHORIZING THE EXECUTION AND ADMINISTRATION OF SAID INTER-LOCAL AGREEMENTS WHEREAS, the Cities of MELISSA, ANNA, VAN ALSTYNE, and HOWE have 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 Cities VAN ALSTYNE and HOWE have chosen to not accept delivery of some or all of the required water through the end of the 2016 water year (ended July 31, 2016) and each of said Cities desire to transfer a portion of its respective and obligated minimum take or pay for said 2016 water year to the City of ANNA for consideration detailed in an inter-local agreement; and WHEREAS, the City of ANNA has indicated interest in purchasing a portion of the minimum take or pay from the Cities of VAN ALSTYNE and HOWE for the water year ended July 31, 2016 as explained in a report memorandum to the City Managers I Administrators of the Cities of Melissa, Anna, Van Alstyne, and Anna dated November 30, 2016 by Donald E. Paschal, Jr., consultant to said cities, which memorandum is attached to the respective Inter-local agreements for each specified City as '"Exhibit A"; and WHEREAS, it is acknowledged that a companion or similar agreement is contemplated between the CGMA-GTUA Purchasing Cities of Melissa and Anna and the CGMA-GTUA Selling Cities of 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 City Manager to execute inter-local agreements with the Cities of Van Alstyne and Howe under the terms detailed in said inter-local agreements, each of which provides for the following: A. Receiving the transfer, a portion of said selling City's GTUA required minimum take or pay to Anna as provided for in the respective Inter-local Agreement. B. Paying the invoice submitted by the respective selling City for the agreed portion of the 2016 water year minimum take or pay specified in the inter-local agreement as provided for in said 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 i e. seconded by /31 '// ftench the above resolution was approved ~y the Cit Council of the City of ftw;e at its meeting held this c!Ji{}/n day of VfCfm/;/M , 2016, by the following vote: __i__AYE 0 NAY ABSTAIN Mayor, City of Hdwe / 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: November 30, 2016 Both Melissa and Anna used water in excess of their required GTUA-CGMA minimum take or pay (MT/P) through the North Texas Municipal Water District (NTMWD) agreement for the water year ended July 31, 2015. Based on the precedent initiated in 2010 and continued through 2013, a member City may acquire a portion of the MT/P from other CGMA member Cities at an agreed price. If there were no other source of water, the price would be the standard CGMA-GTUA price based on the MT/P, unless the purchasing city had exceeded its MT/P. In the case of both Melissa and Anna, however, both have significantly exceeded their MT/P. Once a city exceeds their MT/P for any year, they have the right by contract to acquire additional water under the NTMWD excess rate for the applicable water year. Or, in the case of Melissa, they could intentionally choose to shift the use to either the GTUA / CGMA meter or to their previously existing supply meter with NTMWD (hereinafter referenced as the original NTMWD meter) which would be at a lesser cost per 1000 gallons or they (Melissa) could choose to shift consumption to the GTUA-CGMA meter to use some of the other cities Minimum Take or Pay (MT-P) if the cost were attractive. In past years, until 2015), the reduced cost has been the average price between that which they would have paid if taken from the original NTMWD meter and the GTUA-NTMWD rate. In 2015, however, Melissa and Anna both exceeded their MT/P thus affording them the option of buying NTMWD water at the excess water rate. The excess water rate is the easiest option to understand and to calculate; additionally, it was the methodology used in the buy- sell agreements for the 2015 water year (one year ago). This action has allowed other CGMA Cities an opportunity to recoup a portion of the MT/P water cost paid during the water year. For the recently completed 2016 water year (ended July 31, 2016) both Melissa and Anna exceeded their MT/P sufficiently to purchase 100% of the other two cities (Van Alstyne and Howe) MT/P. The details of the proposed transaction are provided below; the explanation and process are intended to be as simple as possible. The basic concept is that two CGMA Cities (Van Alstyne and Howe) sell 100% of their MT/P since neither used any water in the 2016 water year, to Melisa and Anna at the excess water price / cost of that water as detailed below; this summary is an update of the same document from last year. The 2016 water year is the first time that the full CGMA (all four cities) MT/P was used, and more significantly, the two user cities used enough extra water over their MT/P to purchase 100% of the two non-user cities’ MT/P. Background: Minimum Take or Pay / City - CGMA City MT/P: The base MT/P water purchase for the 2016 water year (minimum contract provision that the GTUA-CGMA system has with NTMWD for water) was 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, or when any combination Exhibit A 2 of cities exceed the total CGMA MT/P volume for the subject water year, the excess water is charged to that respective City or cites at the cost then in effect for excess volumes (plus proportionate pumping and related costs) over the 59,312,500 gallon volume which is the responsibility of each City. A blend of the base rate and the District excess water rate would allow the cities to acquire water at an attractive rate if the MT-P was exceeded for the applicable water year. When the MT/P is exceeded, a new MT/P is established for the subsequent year. By acquiring unused MT/P, the purchasing cities are allowing the selling cities to recoup a portion of the cost they paid during the water year for their obligated MT/P plus the intra CGMA buy -sell arrangement helps to keep the total CGMA MT/P at a lower level thus facilitating the continued buy-sell arrangement for future years and keeping the total MT/P at a lower level for all.  2015-2016 water year take - For the recently ended water year, only Melissa and Anna have taken their respective full MT-P water. For the water year ended July 31, 2016, Melissa and Anna took water through most of the year and with growth both have experienced will continue to take water year round for future years. Neither Van Alstyne nor Howe took any water in the 2016 water year; it is expected that Van Alstyne will begin taking water in the fall of 2016 and is likely to take water for about 80% of the 2016-f17 water year. No target date has yet been set for Howe to take water. During the 2016 water year ground water supplies continued to provide a significant portion of the water used by Anna and all of the water used by Van Alstyne and Howe; ground water will continue to be used by these cities in the 2017 water year although it is expected that ground water will be used to accommodate growth less than surface wate r.  Break out of Maintenance Water - In an effort to assure equity in charges, the impact of user flushing or maintenance water was adjusted. It is also noted the volume of flushing and maintenance water decreased in 2016 from 2015 since there was more consistent pumping which reduced flushing and maintenance water needs. Thus, the two user cities (Melissa and Anna) are being assessed for all of the use related flushing and lost and unaccounted for water which totaled about 15,000 gallons. Absent use, there would have been no flushing or lost and unaccounted for water; this represents a slight modification of the charge out methodology. In prior years, there was excess flushing due to fewer cities taking and the total volumes being much less. Thus, the shift to charging user cities for administrative and lost water is deemed appropriate. The total unaccounted for water is divided into two equal pools: - The first pool is shared equally by the user cities (based on the assumption that any level of use contributes to the flushing and some of the lost water). - The second pool is allocated to the user cities based on the proportional use of each using city as a % of total system water (based on the assumption that use volume contributes to unaccounted water in the metering process. The actual amount charged to the user cities is only slightly higher than in the prior year; the percentage of water charged is less than the percentage the lost and unaccounted for water represented in prior years.  Melissa background of separate NTMWD take point - Melissa actually takes / receives water from two points of delivery: one being the original Melissa connection with McKinney to receive water from NTMWD which dates back over 25 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. Melissa actual use from the GTUA – CGMA meter was 83,834,000 gallons or 83,834 K gallons which was 24,521,700 gallons over their MT/P. Stated in water billing terms (1000 gallon increments), this represents 24,521.7 K gallons (1000 gallons). 3  Buy-Sell rate calculation - The prior year’s practice of rate determination for the extra water has been based on Melissa purchasing the water in excess of the CGMA MT/P from other CGMA Cities at a blended rate. That blended rate is based on the fact that Melissa could have purchased more excess water from their original meter at significant discount. The same excess water purchase provision for each participant city or aggregate CGMA membership (after MT/P is met) applies to all CGMA member cities. Thus this concept will be the basis of determining the rate for the buy - sell agreements between using cities and non-using or using less than the required MT/P cities. For the 2016 water year, the standard rate / K gallons was $2.34 and the excess water rate was $0.46 / K gallons. It is noted that the using cities have all been invoiced for the McKinney Pass- Through Agreement charges and the GTUA pumping and administrative charges. The principal issue to be determined is if the non-users wish to recoup a small portion of the water cost they have already paid. Thus, the buy-sell agreements only address the price of the bought or sold potable water.  Historical calculation rationale - As explained in prior years, Melissa could have saved some costs by maximizing the consumption from the original line since that consumption would have been at the excess water rate which would represent savings in water purchase costs by paying the excess water rate applicable to their original NTMWD / McKinney meter; that meter does not have the McKinney Pass Through Charges or GTUA pumping charges added. However, such action would have resulted in a very large increase in the MT/P for the original meter, Melissa followed the practice of moderation for that meter which was more prudent in the long term, thus opening the opportunity for the other three CGMA Cities to sell a portion of their MT/P from the GTUA-CGMA meter to Melissa and thus through the buy-sell agreements help keep the CGMA MT/P lower. Thus, the arrangement allowed Melissa to keep a lower MT/P on the original meter for future years while helping to use a portion of the other CGMA Cities MT/P and reimbursing the other three CGMA Cities a small portion of their MT/P thus also keeping the total MT/P lower.  Continuation of Historical Calculation Methodology - It is proposed that the same rate methodology be applied to water purchases by both Melissa and Anna at the historical practice for Melissa.  Cost Calculations for 2015-16 water year - The cost calculations for the above described MT/P transaction that was agreed to in prior years was $1.40 / K gallons for the 2016 water year. This rate was determined by averaging the MT/P excess water rate ($0.40 / K gal) with the NTMWD customer city base rate ($2.34 / K gal). This rate was an average of the normal CGMA Customer City rate and the NTMWD Customer City Excess Water Rate for 2016 as illustrated below: 2016 data Entities CGMA MT/P water / 1000 GPD Melissa Excess Water Blended Average rates $2.34 $0.46 $01.40 In 2016, both Melissa and Anna took significantly more water than in prior years. In fact, the Melissa – Anna talk fulfilled both their individual City MT/P volumes and even a fulfilled 100% of the Van Alstyne and Howe MT/P volumes (neither VA or Howe took any water in the 2016 year; VA is expected to take in the 2016-17 water year). The total water take in the 2016 water year set a new MT/P for both taking cities and for the CGMA as a whole. 4  2016 Water Compared to MT-P – In water year 2015 the historical practice was followed except with two Cities exceeding the MT-P, the process was adjusted to provide that unused water be prorated for purchase by the buying cities from the selling cities. Since the volume of excess water to be purchased for the recently completed 2016 water year exceeded the full MT/P of both selling cities, the proration is technically a moot point for 2016, but as a technical matter, the proration methodology is being followed…..with the proration being 100% of the collective unused MT/P. In summary, the purchasing cities are acquiring significantly more and the selling cities are selling100% of their MT/Ps. Additionally, this practice actually encourages a City with other options (could be separate surface source like Melissa or available well capacity like Anna) 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. 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 for 2016 water year: MT-P Melissa Anna Van Alstyne Howe MT-P water (all in K gallons) 59,312.5 59,312.5 59,312.5 59,312.5 Used 230,345.9 153,347.1 0 0 Unused NA NA 59,312.5 59,312.5 Excess water use over MT/P 171,033.4 94,034.6 NA NA Excess water to be purchased by excess Mt-P City 59,312.5 59,312.5 NA NA Portion of Melissa & Anna overage to be offered for sale to Melissa (excess water was 31,217.3 K gal NA NA 59,312.5 59,312.5  Applying this concept to the 2016 water year results in the following calculation: 2016 Proposed MT-P Sale Am t (total $41,518.75) each buyer City Item Van Alstyne Howe K gallons offered for sale / purchase 59,312.5 59,312.5 Total amount of sale by / purchase from $83,037.75 $83,037.75 2015 Proposed MT-P Purchase Am t (total $41,518.75) each seller City Item From Van Alstyne From Howe Melissa: Purchase K Gallons 29,656.25 29,656.25 Purchase $ amount $ 41,518.75 $ 41,518.75 Anna: Purchase K Gallons 29,656.25 29,656.25 Purchase $ amount $ 41,518.75 $ 41,518.75 Thus, the total sale by both Van Alstyne and Howe is: $ 83,037.50 And, the total purchase by both Melissa and Anna is: $ 83,037.50 5 Implementation of Sale / Purchase:  Buying City Actions - Melissa and Anna may purchase from each of the other two CGMA Cities (Van Alstyne, and Howe) the above calculated pro-rated portion of the Van Alstyne and Howe unused CGMA MT/P for the 2016 water year. In actuality, both Melissa and Anna used in excess of the additional other cities MT/P as shown in the first chart on page 4.  Selling City Actions - Van Alstyne, and Howe may agree to sell the above noted total of 118,625 K gallons (59,312.5 K gallons each) of MT-P water to Melissa and Anna at the agreed rate of $1.40 / K gallons; the ratio of excess water used by Anna and Melissa is applied to the formula to arrive at the amount each will buy from Van Alstyne and Howe at the blended rate of $1.40 / K gallons with the total amount shown in the above table. Under this scenario, Melissa would pay a total of $83,037.50 and Anna would pay a total of $83,037.50 broken down by City as indicated above with each selling city receiving the same amount as each buying City will be paying. It is noted that the amounts are significantly more than in 2015. With continued growth, consumption is expected to escalate in the 2017 water year and will likely exceed the 2016 water year, although it is unlikely to be as much grown as experienced from 2015 to the 2016 water year. Process / Steps: 1. GTUA has verified the volumes from NTMWD billings; the above is believed to be the final calculations or near final calculations of water purchased from NTMWD. 2. Each of the two selling Cities may adopt a Resolution authorizing an inter-local agreement to sell the above noted MT/P to Melissa and Anna at the agreed rate. 3. Melissa and Anna may adopt a Resolution authorizing an inter-local agreement to purchase the above noted MT/P from the two 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 / purchase between the selling CGMA Cities (Van Alstyne and Howe) and the purchasing Cities (Melissa and Anna). 5. Following approval of Resolutions and execution of the inter-local agreements, Melissa and Anna will be able to pay the respective city for the agreed purchase. This can be completed by late 2016 or early 2017 as the respective cities complete authorization of the stipulated Resolutions and Inter-local Agreements. . 6. Consultant will be pleased to draft the respective Resolutions based on the same or similar Resolutions adopted in 2015. 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. INTERLOCAL AGREEMENT BY AND BETWEEN THE CITY OF ANNA, TEXAS AND THE CITY OF VAN ALSTYNE, TEXAS FOR PURCHASE AND CORRESPONDING SALE OF A PORTION OF THE SELLING CITIES MINIMUM TAKE OR PAY OBLIGATION UNDER THE GTUA-CITIES OF MELISSA, ANNA, VAN ALSTYNE, AND HOWE POTABLE WATER SUPPLY CONTRACT THIS AGREEMENT is made and entered by and between the CITY OF ANNA, TEXAS, a Texas Horne-Rule Municipal Corporation, hereinafter referred to as "Anna", and CITY OF VAN ALSTYNE, TEXAS, a Texas General Law City hereinafter referred to as "Van Alstyne", collectively referred to herein as the "Cities", as follows: WIT NESSETH: WHEREAS, both Anna and Van Alstyne 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 Anna and Van Alstyne to enter into inter-local 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 Texorna Utility Authority, hereinafter referred to as "GTUA" for the planning, construction, funding, and operations of a surface water supply system to serve the collective Contract Cities of Melissa, Anna, Van Alstyne, and Howe, which agreement specifies the obligations of each participant; 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 WHEREAS, for the water year 2015-2016 ended July 31, 2016 as provided for in said water purchase agreements , including the North Texas Municipal Water District, hereinafter referred to as "NTMWD" standard water purchase agreement, only the Cities of Melissa, and Anna received delivery of water which equaled or exceeded the individual City required MT-P; and WHEREAS, the Contract Cities of Melissa, Anna, Van Alstyne, and Howe have a multi- year precedent of the referenced Minimum Take or Pay Buy-Sell concept as referenced herein and as is further referenced and detailed in "Exhibit A" attached hereto for reference in establishing the buy-sell rate; and WHEREAS, the Cities Van Alstyne and Howe are desirous of selling to Melissa and Anna a portion of their unused MT-P and Melissa and Anna are willing to purchase a portion of MT-P Transfer agreement for 2016 water year -Anna I Van Alstyne -Page 1 Res 2017-01-279Exhibit AVan Alstyne the unused minimum MT-P as defined in this agreement and detailed in "Exhibit A" thus allowing Van Alstyne and Howe to recover a portion of the purchased but unused MT-P for the stated water year; and WHEREAS, the background of the above noted agreements, volumes, rates, and circumstances are further detailed in the November 30, 2016 memorandum attached hereto for reference and labeled "Exhibit A". NOW, THEREFORE, ANNA and VAN ALSTYNE, 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, 2016 and shall be executed and consummated in full between December 1, 2016 and January 31, 2017 and shall not apply to subsequent water volumes or water years unless said Cities so authorize by subsequent agreement. 11. AGREEMENT The Cities agree that VAN ALSTYNE shall transfer 29,656,250 gallons (29,656.25 one thousand gallon increments) of MT-P water to ANNA for the water year ended July 31, 2016 and ANNA shall remit to VAN ALSTYNE a payment for said transfer of MT-Pat the rate of $1.40 per thousand gallons totaling in the sum of $41,518.75 as payment in full for said portion of VAN ALSTYNE's MT-P. Following execution of this agreement, VAN ALSTYNE shall submit to ANNA an invoice for the transfer of the described MT-P for the above stated sum and ANNA shall remit payment for said transfer within fifteen (15) days of receipt of said invoice, it being the intent that this transaction shall be completed on or before January 31, 2017, although it is specifically provided that completion of said invoicing and payment after said date shall not invalidate any portion of this agreement, it being the intent however to complete said transaction by the stipulated date. III. RESPONSIBILITIES OF THE PARTIES 1. The respective City Councils of ANNA and VAN ALSTYNE shall each approve an interlocal agreement authorizing the sale I purchase of MT-P as described herein and further detailed in the attached Exhibit A. 2. VAN ALSTYNE, following approval of the interlocal agreement by each party thereto shall submit to ANNA an invoice for the referenced gallons of MT-P water detailed above in Section II and in the stipulated amount. 3. ANNA shall remit to VAN ALSTYNE the above stated payment for the transferred MT- p within fifteen (15) working days of the receipt ofreferenced invoice. 4. Any party hereto wishing to verify the metered quantities of water or the portion of the minimum take or pay to which this agreement refers shall be entitled to verification subject to MT-P Transfer agreement for 2016 water year -Anna I Van Alstyne -Page 2 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 minimum take or pay than referenced herein, the parties hereto shall modify said quantity and the resultant payment for said quantity of minimum take or pay prior to the invoicing and payment phase (item III -2 & 3 above). IV. TERMINATION C. The Cities recognize that this Agreement shall commence upon the effective date herein and continue in full force and effect until termination in accordance with its provisions . Anna and Van Alstyne 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 Anna and Van Alstyne , 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 , cost, 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, Anna and Van Alstyne 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 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 (30) days written notice. MT-P Transfer agreement for 2016 water year -Anna I Van Alstyne -Page 3 x. 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. 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 (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. 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 2016 water year -Anna I Van Alstyne -Page 4 IN WITNESS WHEREOF, the parties have executed this Agreement by signing below. APPROVE AS 0 FORM: CITY ATTORNEY APPROVED AS TO FORM CITY ATTORNEY CITY OF ANNA, TEXAS CITY OF VAN ALSTYNE, TEXAS Frank Baker City Manager MT-P Transfer agreement for 2016 water year -Anna I Van Alstyne -Page 5 ACKNOWLEDGMENTS STATE OF TEXAS § § COUNTY OF COLLIN § This instrument was acknowledged before me on the ~day of~t\ !HfYij , 2017, by fu,,\\y C;&fv\ev'S ,Q,1 h,\ma.nli;~f Yo f the City of Anna, Texas, a Texas Home-Rule .~;~~~~a~~::i:~~~;~ 1~~:.ili of sa (Jid :~:ci:~I~)~ ~- ! '~',;.. ,.:f?f My Commission Expires 'crl~ _G .1 "-.;;;;~·;;;:;'"<-'~ January 27, 2019 Notary Public, State of~ STATE OF TEXAS § § COUNTY OF GRAYSON § This instrument was acknowledged before me on the day of _____ _ 2017, by , of the City of Van Alstyne, Texas, a Texas General Law City, on behalf of said municipality. Notary Public, State of Texas Exhibit A Attach copy of November 30, 2016 memorandum from Donald E. Paschal, Jr. to CGMA City Managers regarding the subject: Sale of GTUA-CGMA Minimum Take or Pay to Participant City MT-P Transfer agreement for 2016 water year -Anna I Van Alstyne -Page 6 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: November 30, 2016 Both Melissa and Anna used water in excess of their required GTUA-CGMA minimum take or pay (MT/P) through the North Texas Municipal Water District (NTMWD) agreement for the water year ended July 31, 2015. Based on the precedent initiated in 2010 and continued through 2013, a member City may acquire a portion of the MT/P from other CGMA member Cities at an agreed price. If there were no other source of water, the price would be the standard CGMA-GTUA price based on the MT/P, unless the purchasing city had exceeded its MT/P. In the case of both Melissa and Anna, however, both have significantly exceeded their MT/P. Once a city exceeds their MT/P for any year, they have the right by contract to acquire additional water under the NTMWD excess rate for the applicable water year. Or, in the case of Melissa, they could intentionally choose to shift the use to either the GTUA I CGMA meter or to their previously existing supply meter with NTMWD (hereinafter referenced as the original NTMWD meter) which would be at a lesser cost per 1000 gallons or they (Melissa) could choose to shift consumption to the GTUA-CGMA meter to use some of the other cities Minimum Take or Pay (MT-P) if the cost were attractive. In past years, until 2015), the reduced cost has been the average price between that which they would have paid if taken from the original NTMWD meter and the GTUA-NTMWD rate. In 2015, however, Melissa and Anna both exceeded their MT/P thus affording them the option of buying NTMWD water at the excess water rate. The excess water rate is the easiest option to understand and to calculate; additionally, it was the methodology used in the buy- sell agreements for the 2015 water year (one year ago). This action has allowed other CGMA Cities an opportunity to recoup a portion of the MT/P water cost paid during the water year. For the recently completed 2016 water year (ended July 31, 2016) both Melissa and Anna exceeded their MT/P sufficiently to purchase 100% of the other two cities (Van Alstyne and Howe) MT/P. The details of the proposed transaction are provided below; the explanation and process are intended to be as simple as possible. The basic concept is that two CGMA Cities (Van Alstyne and Howe) sell 100% of their MT/P since neither used any water in the 2016 water year, to Melisa and Anna at the excess water price I cost of that water as detailed below; this summary is an update of the same document from last year. The 2016 water year is the first time that the full CGMA (all four cities) MT/P was used, and more significantly, the two user cities used enough extra water over their MT/P to purchase 100% of the two non-user cities' MT/P. Background: • Minimum Take or Pay I City -CGMA City MT/P: The base MT/P water purchase for the 2016 water year (minimum contract provision that the GTUA-CGMA system has with NTMWD for water) was 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, or when any combination 2 of cities exceed the total CGMA MT/P volume for the subject water year, the excess water is charged to that respective City or cites at the cost then in effect for excess volumes (plus proportionate pumping and related costs) over the 59,312,500 gallon volume which is the responsibility of each City. A blend of the base rate and the District excess water rate would allow the cities to acquire water at an attractive rate if the MT-P was exceeded for the applicable water year. When the MT/P is exceeded, a new MT/P is established for the subsequent year. By acquiring unused MT/P, the purchasing cities are allowing the selling cities to recoup a portion of the cost they paid during the water year for their obligated MT/P plus the intra CGMA buy-sell arrangement helps to keep the total CGMA MT/P at a lower level thus facilitating the continued buy-sell arrangement for future years and keeping the total MT/Pat a lower level for all. • 2015-2016 water year take -For the recently ended water year, only Melissa and Anna have taken their respective full MT-P water. For the water year ended July 31, 2016, Melissa and Anna took water through most of the year and with growth both have experienced will continue to take water year round for future years. Neither Van Alstyne nor Howe took any water in the 2016 water year; it is expected that Van Alstyne will begin taking water in the fall of 2016 and is likely to take water for about 80% of the 2016-f17 water year. No target date has yet been set for Howe to take water. During the 2016 water year ground water supplies continued to provide a significant portion of the water used by Anna and all of the water used by Van Alstyne and Howe; ground water will continue to be used by these cities in the 2017 water year although it is expected that ground water will be used to accommodate growth less than surface water. • Break out of Maintenance Water -In an effort to assure equity in charges, the impact of user flushing or maintenance water was adjusted . It is also noted the volume of flushing and maintenance water decreased in 2016 from 2015 since there was more consistent pumping which reduced flushing and maintenance water needs. Thus, the two user cities (Melissa and Anna) are being assessed for all of the use related flushing and lost and unaccounted for water which totaled about 15,000 gallons. Absent use, there would have been no flushing or lost and unaccounted for water; this represents a slight modification of the charge out methodology. In prior years, there was excess flushing due to fewer cities taking and the total volumes being much less. Thus, the shift to charging user cities for administrative and lost water is deemed appropriate. The total unaccounted for water is divided into two equal pools: -The first pool is shared equally by the user cities (based on the assumption that any level of use contributes to the flushing and some of the lost water). -The second pool is allocated to the user cities based on the proportional use of each using city as a % of total system water (based on the assumption that use volume contributes to unaccounted water in the metering process . The actual amount charged to the user cities is only slightly higher than in the prior year; the percentage of water charged is less than the percentage the lost and unaccounted for water represented in prior years. • Melissa background of separate NTMWD take point -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 25 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 . Melissa actual use from the GTUA-CGMA meter was 83,834,000 gallons or 83,834 K gallons which was 24,521,700 gallons over their MT/P. Stated in water billing terms (1000 gallon increments), this represents 24,521.7 K gallons (1000 gallons). 3 • Buy-Sell rate calculation -The prior year's practice of rate determination for the extra water has been based on Melissa purchasing the water in excess of the CGMA MT /P from other CGMA Cities at a blended rate. That blended rate is based on the fact that Melissa could have purchased more excess water from their original meter at significant discount. The same excess water purchase provision for each participant city or aggregate CGMA membership (after MT/P is met) applies to all CGMA member cities. Thus this concept will be the basis of determining the rate for the buy-sell agreements between using cities and non-using or using less than the required MT/P cities. For the 2016 water year, the standard rate I K gallons was $2.34 and the excess water rate was $0.46 I K gallons . It is noted that the using cities have all been invoiced for the McKinney Pass-Through Agreement charges and the GTUA pumping and administrative charges. The principal issue to be determined is if the non-users wish to recoup a small portion of the water cost they have already paid. Thus, the buy-sell agreements only address the price of the bought or sold potable water. • Historical calculation rationale -As explained in prior years, Melissa could have saved some costs by maximizing the consumption from the original line since that consumption would have been at the excess water rate which would represent savings in water purchase costs by paying the excess wate r rate applicable to their original NTMWD I McKinney meter; that meter does not have the McKinney Pass Through Charges or GTUA pumping charges added. However, such action would have resulted in a very large increase in the MT/P for the original meter, Melissa followed the practice of moderation for that meter which was more prudent in the long term, thus opening the opportunity for the other three CGMA Cities to sell a portion of their MT/P from the GTUA-CGMA meter to Melissa and thus through the buy-sell agreements help keep the CGMA MT/Plower. Thus, the arrangement allowed Melissa to keep a lower MT/Pon the original meter for future years while helping to use a portion of the other CGMA Cities MT/P and reimbursing the other three CGMA Cities a small portion of their MT/P thus also keeping the total MT/Plower. • Continuation of Historical Calculation Methodology -It is proposed that the same rate methodology be applied to water purchases by both Melissa and Anna at the historical practice for Melissa. • Cost Calculations for 2015-16 water year -The cost calculations for the above described MT/P transaction that was agreed to in prior years was $1.40 I K gallons for the 2016 water year . This rate was determined by averaging the MT/P excess water rate ($0.40 I K gal) with the NTMWD customer city base rate ($2 .34 I K gal). This rate was an average of the normal CGMA Customer City rate and the NTMWD Customer City Excess Water Rate for 2016 as illustrated below: 2016 data Entities CGMA MT/P water/ 1000 GPO Melissa Excess Water Blended Avera~e rates $2.34 $0.46 $01.40 In 2016, both Melissa and Anna took significantly more water than in prior years. In fact, the Melissa -Anna talk fulfilled both their individual City MT/P volumes and even a fulfilled 100% of the Van Alstyne and Howe MT/P volumes (neither VA or Howe took any water in the 2016 year; VA is expected to take in the 2016-17 water year). The total water take in the 2016 water year set a new MT/P for both taking cities and for the CGMA as a whole. 4 • 2016 Water Compared to MT-P-In water year 2015 the historical practice was followed except with two Cities exceeding the MT-P, the process was adjusted to provide that unused water be prorated for purchase by the buying cities from the selling cities. Since the volume of excess water to be purchased for the recently completed 2016 water year exceeded the full MT /P of both selling cities, the proration is technically a moot point for 2016, but as a technical matter, the proration methodology is being followed ..... with the proration being 100% of the collective unused MT/P. In summary, the purchasing cities are acquiring significantly more and the selling cities are selling 100% of their MT /Ps. Additionally, this practice actually encourages a City with other options (could be separate surface source like Melissa or available well capacity like Anna) 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/Plower, 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 for 2016 water year: MT-P Melissa Anna Van Howe Alstyne MT-P water (all in K gallons) 59,312.5 59,312 .5 59,312.5 59 ,312.5 Used 230 ,345.9 153 ,347 .1 0 0 Unused NA NA 59 ,312.5 59 ,312.5 Excess water use over MT/P 171 ,033.4 94 ,034 .6 NA NA Excess water to be purchased by 59,312.5 59,312.5 NA NA excess Mt-P City Portion of Melissa & Anna overage to NA NA 59 ,312.5 59 ,312 .5 be offered for sale to Melissa (excess water was 31 ,217.3 K gal • Applying this concept to t he 2016 water year results in the following calculation : 2016 Proposed MT-P Sale Amt (total $41,518.75) each buyer City Item Van Alstyne Howe K gallons offered for sale I purchase 59 ,312 .5 59,312 .5 Total amount of sale by I purchase from $83,037.75 $83,037.75 2015 Pr oposed MT-P Purchase Amt total $41,518.75) each seller City Item From Van Alstyne From Howe Melissa: Purchase K Gallons 29,656.25 29,656.25 Purchase $ amount $ 41,518.75 $ 41,518.75 Anna: Purchase K Gallons 29,656 .25 29 ,656.25 Purchase $ amount $ 41,518.75 $ 41,518.75 Thus, the total sale by both Van Alstyne and Howe is: $ 83,037 .50 And, the total purchase by both Melissa and Anna is: $ 83,037.50 Implementation of Sale I Purchase: • Buying City Actions -Melissa and Anna may purchase from each of the other two CGMA Cities (Van Alstyne , and Howe) the above calculated pro-rated portion of the Van Alstyne and Howe unused CGMA MT/P for the 2016 water year. In actuality, both Melissa and Anna used in excess of the additional other cities MT/P as shown in the first chart on page 4. • Selling City Actions -Van Alstyne, and Howe may agree to sell the above noted total of 118,625 K gallons (59,312.5 K gallons each) of MT-P water to Melissa and Anna at the agreed rate of $1.40 I K gallons; the ratio of excess water used by Anna and Melissa is applied to the formula to arrive at the amount each will buy from Van Alstyne and Howe at the blended rate of $1.40 I K gallons with the total amount shown in the above table. Under this scenario, Melissa would pay a total of $83,037.50 and Anna would pay a total of $83,037.50 broken down by City as indicated above with each selling city receiving the same amount as each buying City will be paying. It is noted that the amounts are significantly more than in 2015. With continued growth, consumption is expected to escalate in the 2017 water year and will likely exceed the 2016 water year, although it is unlikely to be as much grown as experienced from 2015 to the 2016 water year. Process I Steps: 5 1. GTUA has verified the volumes from NTMWD billings; the above is believed to be the final calculations or near final calculations of water purchased from NTMWD. 2. Each of the two selling Cities may adopt a Resolution authorizing an inter-local agreement to sell the above noted MT/P to Melissa and Anna at the agreed rate. 3. Melissa and Anna may adopt a Resolution authorizing an inter-local agreement to purchase the above noted MT/P from the two 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 I purchase between the selling CGMA Cities (Van Alstyne and Howe) and the purchasing Cities (Melissa and Anna). 5. Following approval of Resolutions and execution of the inter-local agreements, Melissa and Anna will be able to pay the respective city for the agreed purchase. This can be completed by late 2016 or early 2017 as the respective cities complete authorization of the stipulated Resolutions and Inter-local Agreements .. 6. Consultant will be pleased to draft the respective Resolutions based on the same or similar Resolutions adopted in 2015. 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.