HomeMy WebLinkAboutOrd 163a-2004 GTUA -Potable Water Pass-Through & Pump.pdfORD 163A-2004
AN ORDINANCE by the City Council of the City of Anna authorizing the
execution and delivery of a "Potable Water Pass -Through and
Pumping Agreement' by and among the Greater Texoma Utility
Authority, the City of McKinney, Texas, the City of Anna, Texas, the
City of Melissa, Texas, the City of Van Alstyne, Texas, and the City
of Howe, Texas, and resolving other matters incident and related to
the execution and delivery of such Agreement including specifying
the term, consideration, and obligations of the parties to such
Agreement, and resolving provisions incident and related to the
subject and purpose of this ordinance.
WHEREAS, negotiations have been conducted between the Greater Texoma
Utility Authority (the "Authority"), the City of McKinney, Texas, the City of Anna, Texas, the
City of Melissa, Texas, the City of Van Alstyne, Texas, and the City of Howe (the four
named Texas cities other than the City of McKinney being the "Participating Cities"), with
respect to the execution of a Potable Water Pass -Through and Pumping Agreement (the
"Agreement") the form of which is attached hereto as Exhibit A), whereby the City of
McKinney, Texas, would provide use of its water supply transmission and pumping
facilities for the benefit of the Authority and the Participating Cities, upon the terms and
conditions and for the good and valuable consideration set forth and specified in the
Agreement;
WHEREAS, said Agreement has been prepared and submitted to this governing
body for approval, and it has been determined by the City Council that the Agreement is in
the best interest of the City and should be approved; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS:
SECTION 1: That the "Potable Water Pass -Through and Pumping Agreement'
by and among the Greater Texoma Utility Authority, the City of McKinney, Texas, the City
of Anna, Texas, the City of Melissa, Texas, the City of Van Alstyne, Texas, and the City,
attached hereto as Exhibit A and incorporated herein for all purposes is hereby approved
for and on behalf of the City. The Mayor is hereby authorized and directed to execute
such Agreement for and on behalf of the City and as its act and deed, and such
Agreement may be countersigned by the City Secretary on behalf of the City.
Section 2: This ordinance shall take effect and be in force from and after its
passage.
45527373.1\10304552
PASSED AND APPROVED, this -93 day of 2004.
(City Seal)
of Anna, Texas
/L/1�/�l iL
ity Fecretary
Ci of Anna, Texas
45527373.1\10304552
EXHIBIT A
POTABLE WATER PASS-THROUGH AND PUMPING AGREEMENT
45527373.1\08000831 A_1
Greater Texoma Utility Authority — City of McKinney
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT
THE STATE OF TEXAS
THE COUNTY OF COLLIN
THIS AGREEMENT (the "Agreement") made and entered into as of this the 30 day of
November, 2004, .by and between the Greater Texoma Utility Authority ("GTUA'), a
conservation and reclamation district created under Article XVI, Section 59, of the Texas
Constitution, the City of Anna, Texas ("Anna'), a Texas municipal corporation, the City of
Howe, Texas ("Howe"), a Texas municipal corporation, the City of Melissa, Texas ("Melissa"),
a Texas municipal corporation, the City of Van Alstyne ("Van Alstyne"), a Texas municipal
corporation and the City of McKinney, Texas ("McKinney'l, a Texas municipal corporation.
WITNESSETH:
WHEREAS, GTUA has previously served as the coordinating entity to secure Texas Water
Development Board ("TWDB'J loans on behalf of participating Texas cities
including, but not limited to Anna, Howe, Melissa, and Van Alstyne (the
"Participating Cities"), for the construction of a water transmission main to
deliver surface water to said Participating Cities, all of whom are located in either
Collin County or Grayson County, Texas;
WHEREAS, said TWDB loans have been approved subject to execution of a water supply
agreement and other similar contingencies;
WHEREAS, the North Texas Municipal Water District ("NTMWD") has agreed to provide a
surface supply of water to GTUA for sale to the Participating Cities, by
transporting said water from NTMWD's transmission and delivery facilities to
various points of delivery in McKinney's water distribution system until such
time as NTMWD constructs an appropriate transmission line in closer proximity
to a point where GTUA can access the water from a NTMWD transmission line
directly;
WHEREAS, it has been determined that the most efficient mechanism for GTUA to receive
said transported water from NTMWD is through a cooperative arrangement with
McKinney through which McKinney will receive and flow said water to a point
of connection to GTUA facilities;
WHEREAS, GTUA and NTMWD have entered into an agreement (the "GTUA/NTMWD
Agreement') for the delivery and purchase of said water, a copy of which is
attached hereto as "Exhibit A" and made a part hereof as if incorporated frilly
herein;
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004
WHEREAS, GTUA and McKinney have analyzed various options and system capabilities,
including the construction by GTUA of a new transmission line funded by
NTMWD, TWDB, or other GTUA sources which will become an extension of the
McKinney water transmission system;
WHEREAS, McKinney agrees, subject to available capacity of water from NTMWD, under its
agreement with McKinney, and the payment of the direct and indirect operational,
maintenance, and necessary capital costs incurred by McKinney (and as
enumerated in this agreement) by virtue of the transportation of GTUA's
purchased water, to transport potable water for GTUA for ultimate delivery to the
Participating Cities through its water distribution system including receiving said
water from NTMWD and pumping said water to a point of delivery to GTUA;
WHEREAS, GTUA, Participating Cities and McKinney are authorized to enter into this
Agreement pursuant to the Texas Government Code, Chapter 791, the Interlocal
Cooperation Act, and other applicable laws;
WHEREAS, McKinney is desirous of assisting GTUA and the Participating Cities in obtaining
an adequate and dependable water supply;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained:
(i) Subject to and conditioned upon GTUA's and Participating Cities' continuous
performance under this Agreement, McKinney agrees to receive, and pump the
hereinafter described volumes of water to GTUA's designated point of delivery as
specified herein; and GTUA and the Participating Cities, jointly and severally,
agree to pay for the delivery and transmission water by McKinney and for all
direct and indirect costs of transmission of such water (including but not limited to
the costs of transmission arising under the NTMWD/McKinney Agreement)
regardless of any default by NTMWD or GTUA under the GTUA/NTMWD
Agreement, upon the terms and conditions and for the consideration hereinafter
set forth;
(ii) GTUA and the participating Cities, jointly and severally, agree to pay to
McKinney the amounts provided for in Section 7 hereinafter, but specifically
including the direct and indirect costs of transmission of such water to GTUA.
Section 1. DEFINITION OF TERMS. The following terms and expressions as used in this
Agreement, unless the context clearly shows otherwise, shall have the following
meanings:
a. "Anna" means the City of Anna, Texas.
b. "City Engineer" shall mean the City Engineer of McKinney, or the Designee or
representative of the City Engineer of McKinney.
C. "Eligible Oversize Costs" shall mean that portion of the cost of the New
Transmission Line exceeding the standard waterline size requirements of
McKinney (however, excluding those portions of the New Transmission Line
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004
which exceed the standard waterline size requirements but which are required
solely to serve GTUA and the Participating Cities) and only for those components
of costs for which McKinney reimburses developers under its ordinances and
policies (and particularly excluding easement acquisition costs).
d. "Eligible Base Size / Pro -rata Reimbursable Costs" shall mean the costs
recoverable from third -party developers under the McKinney Subdivision
Ordinance.
e. "Engineer" shall mean the Consulting Engineer with whom GTUA enters into an
agreement to design the improvements contemplated by the TWDB Loan, the
TWDB State Participation Loan, and other financing sources.
f. "GTUA" means the Greater Texoma Utility Authority, a conservation and
reclamation district created under Article XVI, Section 59, of the Texas
Constitution.
g. "Howe" means the City of Howe, Texas.
h. "McKinney" means the City of McKinney, Texas.
i. "Melissa" means the City of Melissa, Texas.
j. "MGD" is an abbreviation for "million gallons of water per day" and means a
quantity of water during a period of time expressed for convenience in terms of an
average annual daily quantity during an Annual Payment Period.
k_ "New Transmission Line" means that variable -sized water transmission pipeline
with diameters ranging from 36" to 20", installed at its cost by GTUA to the
McKinney water transmission system; however specifically excluding any portion
of the line (as depicted on McKinney's Water Master Plan as a future, developer -
constructed transmission line) designed and constructed by third -party developers.
]. "NTMWD" means the North Texas Municipal Water District, as defined in the
preamble to this Agreement.
in. "NTMWD loan" means any financing obtained from North Texas Municipal
Water District to construct the New Transmission Line on the McKinney water
system.
n. "Participating Cities" shall mean the cities which execute and approve agreements
representing participation in the objectives contemplated and described in this
Agreement, including, but not limited to, the Cities of Anna, Texas, Howe, Texas,
Melissa, Texas, Van Alstyne, Texas, and other Texas cities.
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 3
o. "System" means collectively the existing system and the future improvements of
GTUA for water storage, treatment, transportation, distribution, and supply, as
contemplated by this Agreement and as more fully detailed by the TWDB loan
application and/or subsequent engineering plans approved by the parties hereto.
p. "TWDB Loan" shall mean the Texas Water Development Board loan approved
by the TWDB on March 19, 2003 and extended by the TWDB on January 21,
2004.
q. "TWDB State Participation Loan" shall mean the state participation portion of the
loan approved March 19, 2003 and extended by the TWDB on January 21, 2004.
r. "Van Alstyne" means the City of Van Alstyne, Texas.
S. "Water Year" means the period of August I of each calendar year through July 31
of the next following calendar year or such other twelve (12) month period
designated by City.
Section 2. QUANTITY. McKinney agrees to use its water transmission and distribution
system to transmit water received from NTMWD to the GTUA point(s) of
delivery subject to the following conditions:
a. The maximum volume of water delivered per day shall not exceed the amounts
depicted in Column 1 entitled "Projected Average Surface Water Demand of
Participating Cities" on Exhibit B, attached hereto for all purposes. The rates for
the volumes depicted on Exhibit B, Column 1 shall be as shown in the water rate
line (entitled "Column Water Rate") of Column 1. In addition to the maximum
volumes described on Exhibit B, Column 1, and in such volumes (which volumes
include those depicted in Column 1) depicted on Column 2 and at the rates shown
on Exhibit B, rate line (entitled "Column Water Rate) of Column 2, GTUA may,
at the sole discretion of McKinney, receive additional amounts purchased by
GTUA from NTMWD, IF such volumes are available for delivery based on
McKinney's day-to-day demand for water. If additional amounts are desired by
GTUA above those amounts shown on Exhibit B, Column 2, GTUA shall make a
written request for such additional amounts forty-eight (48) hours prior to any
requested delivery. If McKinney provides volumes in any amounts exceeding
Exhibit B, Column 1, McKinney may unilaterally reduce any such additional
amounts in its sole discretion upon delivery of twelve (12) hours notice by fax,
email, or phone to GTUA. Except during those periods where McKinney has
determined that available volumes do not exist due to McKinney's day-to-day
demand as described in this Section 2, McKinney shall not reduce available
volumes to GTUA below the volumes shown on Column 2 of Exhibit B, during
any year. For subsequent years, the applicable volumes to be shown on
Column 1, Exhibit B shall be added to Column 1 after calculating the average
daily volumes received over the preceding 12 months; however in no event shall
such Projected Average Surface Water Demand volume for a subsequent year
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 4
exceed the corresponding amount shown on Exhibit B, Column 2. GTUA and
Participating Cities shall enact and enforce a Drought Contingency Plan which
shall apply concurrently with any plan adopted by McKinney. GTUA and
Participating Cities shall provide McKinney with written notice of any
implementation of such Drought Contingency Plan in any year of this Agreement.
b. Participating Cities shall be permitted to maintain existing well capacity as
depicted on Exhibit C, attached hereto and incorporated for all purposes, plus
additional wells begun subsequent to the execution of this Agreement but prior to
the initial flow of water through the System, throughout the term hereof to
provide for a portion of the Participating Cities' needs and to reduce spikes in
peak day usage. GTUA and Participating Cities shall have the right to construct
additional wells if McKinney elects not to provide GTUA and Participating Cities
with volumes in excess of the amounts provided for in Column 1, Exhibit B or if
GTUA and Participating Cities' demand exceeds the capacity of the McKinney
transmission system to deliver water in volumes exceeding Exhibit B, Column 3.
C. All water transported and delivered to GTUA hereunder shall not impair the
capacity or ability of McKinney to provide for the requirements of its existing and
future citizens and the projected utility infrastructure needs arising from
development during the term of this Agreement. Extensions of the term of this
Agreement shall be analyzed, in addition to other factors, on the effect that the
continuation of this Agreement has on McKinney's capacity and ability to serve
its citizens and customers.
d. McKinney shall designate Point(s) of Delivery during the term of this Agreement.
The initial Point of Delivery shall be as shown on Exhibit D attached hereto and
as such Point(s) of Delivery is further described in Section 4 hereinafter. The
parties agree to discuss alternative points of delivery which are mutually
beneficial to all parties and which would not impair any rights hereunder.
e. McKinney shall review and approve the final design, final location, and
construction agreement for the construction of the New Transmission Line to be
located generally as shown on Exhibit D attached hereto. All costs of
McKinney's review shall be borne by GTUA and Participating Cities. All costs
of construction, including any easement acquisition, SCADA equipment, and any
other associated equipment, shall be home by GTUA and Participating Cities.
McKinney agrees to assist in condemnation, at its sole discretion, but in no event
until GTUA and Participating Cities advance the reasonable costs of acquisition
and continue the funding thereof to completion.
f. McKinney shall designate the location and McKinney's engineer shall approve
the specifications for GTUA's metering station for monitoring water volumes as
more fully described in Section 5 hereinafter. McKinney and GTUA shall have
mutual access to the metering station throughout the term of this Agreement. All
costs of installation and maintenance of the metering equipment shall be bome by
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 5
GTUA and Participating Cities. McKinney shall designate the appropriate
person(s) for recording the flows at the metering station.
g. GTUA shall install a rate of flow controller, to specifications acceptable to
McKinney's City Engineer, limiting the maximum daily flow to the volume
provided for in Column 2, Exhibit B at the approved metering station described in
Section 2(f) above.
Section 3.UO AL1TY. McKinney does not warrant the water quality of the water to be
delivered by McKinney. McKinney agrees to deliver water to GTUA in the same
manner as any other wholesale customer.
Section 4. POINT(S) OF DELIVERY. The initial point of delivery to GTUA shall be the
western terminus of the New Transmission Line at a point approved by McKinney
and GTUA which initial point of delivery location shall be a required agreement
term in the construction documents for the GTUA/Participating Cities Delivery
System and Pipeline. McKinney agrees to provide for delivery of GTUA-
purchased water through McKinney's system to GTUA. The relevant points of
delivery through the systems are hereby designated as follows:
a. NTMWD Point(s) of Delivery. McKinney shall receive from NTMWD its
required quantity of water for the City's use and the GTUA/Participating Cities'
use at either the Highway 380 (McK POD #3) metering station or any of the
existing McKinney points of delivery from NTMWD.
b. GTUA/Participating Cities Initial Point of Delivery (hereinafter referred to as the
GTUA POD). Said GTUA POD is generally described as being located near or at
a GTUA (0.5 million gallon) ground storage water tank proposed to be
constructed by GTUA at a location approved by McKinney's City Engineer. It is
agreed that GTUA's Engineer shall keep McKinney's Engineer informed of the
design process and the prospective locations for the proposed GTUA ground
storage tank; it is anticipated that GTUA and McKinney may cooperate in the
selection of a consolidated tank site appropriate for City of McKinney future
delivery point # 4. It is further provided that GTUA, in concert with McKinney's
Engineer may install additional connections to the McKinney transmission and
distribution system if needed to maintain the agreed volume to GTUA; however
only if McKinney can concurrently maintain the water system capacity necessary
for McKinney's customers and growth. Any increased costs for pumping and any
related costs for operation of the GTUA ground storage water tank shall be added
to the amounts described in Section 7.
Section 5. MEASURING EQUIPMENT. GTUA shall furnish and install, at its sole
expense, at the GTUA POD the necessary rate of flow equipment of a standard
type approved by McKinney (and NTMWD if required by its agreement with
McKinney) for measuring properly the quantity of water delivered under the
GTUA/NTMWD Agreement, and such Master Meter and other equipment so
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 6
installed shall become the property of NTMWD. Additionally, GTUA, at its sole
expense, shall furnish and install at the GTUA POD the necessary rate of flow
equipment of a standard type approved by McKinney (and NTMWD if required
by its agreement with McKinney) for properly regulating / limiting the average
hourly rate of flow as required by this Agreement.
GTUA and the City shall have access to such metering equipment at all
reasonable times, but the reading, calibration, and adjustment thereof shall be
done only by the employees or agents of McKinney (or McKinney and NTMWD
if required by McKinney's or GTUA's agreement with NTMWD). NTMWD
shall perform the official meter reading for purposes of water billing, although
McKinney shall have the right to perform a verification reading. For the purpose
of this Agreement, the original record or reading of the meter shall be the journal
or other record book of McKinney in ita office in which the records of the
appropriate employees or agents of McKinney are kept or the record book or
journal of NTMWD. Upon written request of the GTUA, McKinney will provide
a copy of such journal or record book, or permit GTUA to have access to the
same in the office of McKinney during reasonable business hours.
Not more than once in any six month time period, GTUA/NTMWD shall test its
meter if requested in writing by McKinney to do so, in the presence of a
representative of McKinney, and the parties shall jointly observe any adjustments
which are made to the meter In case any adjustments shall be necessary, and if the
check meter hereinafter provided for has been installed, the same shall also be
calibrated by NTMWD in the presence of a representative of GTUA and
McKinney, and the parties shall jointly observe any adjustment if necessary. If
McKinney shall request of GTUA in writing that it be present during the
calibration of the meter, then GTUA shall give McKinney notice of the time when
any such calibration is to be made and if a representative of McKinney is not
present at the time set, GTUA/NTMWD may proceed with calibration and
adjustment in the absence of any representative of McKinney.
If either party at any time observes a variation between the delivery meter and the
check meter or meters, if any such check meter or meters shall be installed, such
party will promptly notify the other party, and the parties hereto shall then
cooperate to procure an immediate calibration test and joint observation of any
adjustment and the same meter or meters shall then be adjusted to accuracy. Each
party shall give the other party forty-eight (48) hours notice of the time of all tests
of meters so that the other party may conveniently have a representative present.
If upon any test, the percentage of inaccuracy of any metering equipment is found
to be in excess of two percent (2%), registration thereof shall be corrected fora
period extending back to the time when such inaccuracy began, if such tr_rne is
ascertainable, and if such time is not ascertainable, then for a period extending
back one-half (1/2) of the time elapsed since the last date of calibration, but in no
event further back than a period of six (6) months. If for any reason any meters
are out of repair so that the amount of water delivered cannot be ascertained or
computed from the reading thereof, the water delivered through the period such
meters are out of service or out of repair shall be estimated and agreed upon by
the parties hereto upon the basis of the best data available. For such purpose, the
best data available shall be deemed to be the registration of any check meter or
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 7
meters if the same have been installed and are accurately registering. Otherwise,
the amount of water delivered during such period may be estimated (i) by
correcting the error if the percentage of the error is ascertainable by calibration
tests or mathematical calculation, or (ii) estimating the quantity of delivery by
deliveries during the preceding periods under similar conditions when the meter
or meters were registering accurately.
GTUA or McKinney may, at its option and its own expense, install and operate a
check meter to check each meter installed by GTUA. The measurement of water
for the purpose of this agreement shall be solely by the McKinney meters, except
in the cases hereinabove specifically provided to the contrary. All such check
meters shall be of standard make and shall be subject at all reasonable times to
inspection and examination by any employee or agent of GTUA, but the reading,
calibration and adjustment thereof shall be made only by McKinney except during
any period when a check meter may be used under the provisions hereof for
measuring the amount of water delivered, in which case the reading, calibration,
and adjustment thereof shall be made by McKinney with like effect as if such
check meter or meters had been furnished or installed by McKinney.
Section 6. UNIT OF MEASUREMENT. The unit of measurement for treated water
delivered under this Agreement shall be 1,000 gallons of water, U.S. Standard
Liquid Measure.
Section 7. RATES AND TERMS. Payments by GTUA to McKinney shall be for the
following components of Base Cost for the services:
a. Direct and Indirect Costs of Pumping and Transmission. GTUA shall pay
McKinney an amount per thousand gallons of water flowing through the
McKinney Transmission and Distribution System calculated as follows: the cost
for pumping water (per thousand gallons) multiplied times the number of
thousand gallons metered per month. The cost per thousand gallons pumped shall
be determined and adjusted annually by McKinney by dividing the total of
system -wide electrical service costs for water pumping by the total volume of
gallons of water pumped system -wide on an annual basis. McKinney may use
fiscal or calendar year for making this annual adjustment. It is specifically agreed
that GTUA shall pay NTMWD directly for all water purchases, and GTUA and
Participating Cities shall hold harmless McKinney for any amounts purchased by
GTUA for which NTMWD attributes to McKinney. Unless the parties mutually
agree otherwise, the initial rate charged shall be calculated on September 1, 2006
based on the prior 12 months of charges for the expenses described herein.
b. Allowance for Water Loss. The initial cost shall be 2.5% times that rate charged
by NTMWD to McKinney (McKinney rate)/1000 gallons, subject to McKinney's
right to make future adjustments which adjustments shall not be made less than
five (5) years after any previous adjustment. Any adjustment shall be based on a
system -wide study after consultation with GTUA on the scope and design of the
study; however in no event shall the cost be less than 2.5%.
POTABLE WATER PASS THROUGH & PUMPtNG AGREEMENT . November 23, 2004
C. Overhead and Risk Return. The initial cost shall be $0.08/1000 gallons and shall
be adjusted annually on September 1 based on the Consumer Price Index -All
Urban Consumers -Dallas -Fort Worth (All Items) [Series ID: CUURA316SA0,
CUUSA316SA01 as the index for the adjustment calculation.
d. Capital Recovery Expense. GTUA shall pay a charge for the capacity reserved
by McKinney for GTUA within the System which shall equal $3,204.44 per
month, per MGD average daily rate of flow through the GTUA POD within the
billing month, (as identified as "Projected Average Surface Water Demand")
shown on Exhibit B, Column 1, for the initial year and as such is adjusted in
subsequent years under Paragraph 2(a), minus the amounts owing to GTUA for
the eligible oversize costs of the New Transmission Line as described in Section
10 (a).
e. McKinney Franchise Fee. GTUA shall pay the fee charged to all water customers
(as adjusted from time -to -time by McKinney) served by McKinney. The initial
charge shall be 4% of all amounts paid under paragraphs a -d of this Section 7.
Section 8. RATE FOR WATER DEL1VhXhQ tsz Avtcrs JYm1xi uN DAI.DJJ _JF
MAXIMUM. During the primary term hereof, McKinney and GTUA may agree
to the delivery by McKinney of additional volumes of water, in excess of those
described in Column 2, Exhibit B. The rate for any amounts delivered under this
Section 8 shall be as depicted on Columns 3 and 4, Exhibit B.
Section 9. INDEMNIFICATION OF MCKINNEY BY GTUA. GTUA and Participating
Cities agrees to indemnify McKinney for all claims of third -parties arising out of
the obligations and performance of this Agreement by the parties, including any
judgments, attorney's fees or costs. Notwithstanding the foregoing, the
indemnification hereunder shall not apply to suit or claims brought by third -party
customers under Section 10 (f).
Section 10. OTHER CONDITIONS AND PROVISIONS.
a. McKinney Acquisition of New Transmission Line between the Point of
Connection to the McKinney System and the GTUA Pumping Station. McKinney
may acquire the New Transmission Line between the point(s) of connection to the
McKinney system and the GTUA pumping station upon the termination of this
agreement. Such acquisition shall be based on the prior approval of the design
and installation of said line(s) by the McKinney City Engineer. McKinney shall
have the right to utilize the New Transmission Line as if it were part of the
McKinney water transmission system under the same terms of this Agreement
until all related GTUA debt for the subject line is retired. The foregoing
provision and the hereinafter pro -rata reimbursement provision shall survive the
termination or expiration of this Agreement. Unless the lien holders for such line
approve transfer of ownership, ownership cannot be transferred to McKinney.
GTUA shall use best efforts to execute debt instruments which will allow for the
transfer sequence described in this Paragraph. At the time that all GTUA debt is
retired on the New Transmission Line, GTUA shall transfer the New
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 9
Transmission Line to McKinney at no charge, free and clear of all liens and
encumbrances. The "debt" shall be the actual cost of the New Transmission Line
plus accrued interest charged to GTUA for that component portion of the debt
incurred for its construction. As consideration for such transfer, McKinney shall
collect pro rata utility fees from third -party developers connecting to the New
Transmission Line in such amounts as are allowed by then existing McKinney
ordinances, and in accordance with state law, for at least the term of this
Agreement. McKinney shall remit such pro rata amounts to GTUA upon
McKinney's receipt from developers, and such payments to GTUA shall
terminate upon the termination of this Agreement or upon transfer of line
ownership to McKinney hereunder. GTUA shall apply such payments to debt
amortization of said line. In addition to the pro rata payments aforementioned and
as additional consideration for the transfer of the New Transmission Line to
McKinney, McKinney shall pay to GTUA the eligible oversize costs of the New
Transmission Line. Such eligible oversize costs shall be deducted in equal
monthly amounts (during the initial ninety-six (96) months of the Agreement)
from the Capital Recovery Expense component of the rates charged to GTUA in
Section 7. Notwithstanding the foregoing, the amounts credited for eligible
oversize costs shall not exceed the amounts owing for the Capital Recovery
Expense component. If the amount of the credit would have exceeded the Capital
Recovery Expense Component, the term of the deducted credits shall be extended
accordingly. If McKinney pays an aggregate amount of developer pro rata
payments and eligible oversize costs equal to the debt on the New Transmission
Line prior to the term of this Agreement, GTUA shall obtain a partial release of
the New Transmission Line from any debt instrument and shall transfer title to the
line to McKinney.
b. Use of New Transmission Line by McKinney. It is agreed that McKinney may
make connections to the New Transmission Line to the McKinney system
between the GTUA metering station and the point of connection to the McKinney
system for purpose of serving McKinney customers subject to mutual
coordination of said connection point, it being the intent to accommodate
McKinney service needs without negatively impacting the line capacity to a
volume less than required by this Agreement.
C. Maintenance of New Transmission Line. The line referenced in (b) above shall
be maintained by McKinney. Direct maintenance costs incurred by McKinney
shall be billed to GTUA / Participating Cities at the invoiced amounts, and said
costs shall be paid in the same time frame as the pumping costs provided for in
this agreement. Direct costs shall also include a factor for McKinney's internal
costs which shall be computed in accordance with similar costs charged to
departments within McKinney as described by McKinney finance policies;
however in no event shall the internal costs exceed 25%.
d. Other Agreements by GTUA. GTUA reserves the right to supply treated water
from the System to additional or other parties as determined by GTUA's Board of
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 10
Directors and as approved by the initial Participating Cities, so long as doing so
does not result in an increase in the maximum daily demand as provided for
herein.
e. Remedies for NTMWD's Failure to Commence Construction of Delivery Point.
McKinney shall have the unilateral right to terminate this Agreement if by
January 1, 2012 NTMWD has failed to initiate, in McKinney's sole
determination, sufficient plans for design, funding, and construction of the
NTMWD-GTUA delivery point contemplated by this Agreement. Upon such
determination by McKinney and after 180 days written notice to GTUA, this
Agreement shall terminate; however, GTUA shall have the continuing obligation
to transfer the New Transmission Line under Section 10 (a).
f. Adjustment of Price Based on Challenge to Customer Rates. GTUA agrees to a
unilateral adjustment in the rates for delivery under Section 7 if any McKinney
customer successfully challenges the rates charged in this Agreement. A
successful challenge shall be one where the rates charged to GTUA are found to
be discriminatory or unfair. Any ordered reduction or adjustment to the rates of
other customers which results in less net revenue to McKinney shall entitle
McKinney to increase the rates hereunder to an amount which will yield the same
revenues contemplated by this Agreement. The date of adjustment shall be sixty
(60) days after written notice is sent to GTUA.
g. Shared Legal Exnenses for Challenge to Customer Rates. GTUA and McKinney
shall equally share in any attorney's fees and expenses in defending any contest,
challenge or lawsuit, whether through an administrative agency of the State of
Texas or in a court of law. McKinney shall have the sole control over the
engagement and direction of legal counsel for any lawsuit wherein McKinney is a
ply.
Section 11. PAYMENT AND REMEDIES FOR BREACH BY PARTY. McKinney shall use
the same meter reading (volume of water) as NTMWD uses to determine water
purchase volume. McKinney shall bill GTUA at the end of each month for the
cost provided for in Section 7 above. GTUA shall remit payment to McKinney
within 15 days of receipt of said billing. Liability for making payments, as herein
set forth shall commence on the date of initial water flow from McKinney to
GTUA.
In the event that GTUA shall fail to make any such monthly payment within the
time herein specified in this Section, interest on such amount shall accrue at the
rate of ten percent (10%) per annum from the date such payment becomes due
until paid in full with the interest as herein specified. In the event such payment
is not made within thirty (30) days from the date such payment becomes due or in
the event GTUA shall default in the performance of any other provision of this
Agreement, City may at its option, after thirty (30) days' written notice to GTUA,
discontinue delivery of water to GTUA until the amount due City is paid in full
with interest as herein specified or the default is cured, or terminate this
Agreement upon 30 days additional written notice and right to cure any default,
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 11
whether monetary or otherwise. It is further provided that in the event that GTUA
shall fail to make any such monthly payment or annual payment within the time
herein in this Section specified, City shall have the right to petition the District
Court in Collin County for a writ of mandamus to compel compliance with this
Agreement. GTUA may terminate this Agreement if McKinney fails to
commence delivery in accordance with Section 10.
Section 12. TERM OF AGREEMENT. So long as no default shall exist, McKinney shall
exercise its best efforts to complete the design and necessary utility infrastructure
to effectuate this Agreement, which if completed shall have a primary term
commencing on December 31, 2006 (or sooner if McKinney completes the
necessary utility infrastructure) and continue in force and effect until September
30, 2016 (or ten [10] years after the commencement date whichever is sooner),
unless:
McKinney agrees to extend said agreement on a year to year basis if 1) McKinney
determines it has available capacity for any requested extension term, 2) the
increased volumes requested are not more than 2.5 MGD over the previous year's
volumes, and 3) GTUA agrees to a price for water delivery which is 150% more
than the previous year's Base Cost; however in no event shall the agreement be
extended without the mutual agreement to the then existing timeline for the
pending the completion of a new NTMWD transmission facility designed to
provide service to GTUA; however in no event shall this Agreement be extended
more than three (3) consecutive one-year extensions.
NTMWD completes construction of an adequate transmission facility designed to
serve GTUA prior to the scheduled termination of this agreement. In such event,
this agreement will be immediately terminated upon the connection of the
NTMWD transmission line to the GTUA Point of Delivery and upon final
payment for any costs incurred by GTUA to McKinney under this agreement.
Section 13. MODIFICATION. This Agreement may be changed or modified only with the
consent of the governing bodies of both GTUA and the McKinney, except that
temporary delivery of additional water volumes may be coordinated and approved
by the respective staffs of each entity; however only to the extent authorized by
the McKinney City Charter, the budget of McKinney, and the limits of this
Agreement.
Section 14. FORCE MAJEURE. If by reason of force majeure any party hereto shall be
rendered unable wholly or in part to carry out its obligations under this
Agreement, other than the obligation of GTUA and Participating Cities to make
the payments required under Section 7 of this Agreement, then if such party shall
give notice and full particulars of such force majeure in writing to the other party
after occurrence of the event or cause relied on, the obligation of the party giving
such notice, so far as it is affected by such force majeure, shall be suspended
during the continuance of the inability then claimed, but for no longer period, and
any such party shall endeavor to remove or overcome such inability with all
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 12
reasonable dispatch. The term "Force Majeure" as employed herein shall mean
acts of God, strikes, lockouts, or other industrial disturbances, acts of public
enemy, orders of any kind of the Government of the United States or the State of
Texas, or any civil or military authority, insurrection, riots, epidemics, landslides,
lightning, earthquake, fires, hurricanes, storms, floods, washouts, droughts,
arrests, restraint of government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines or canals, partial or entire failure of
water supply, or on account of any other causes not reasonably within the control
of the party claiming such inability.
Section 15. INSURANCE. GTUA agrees to cant' and arrange for fire, casualty, public
liability, and/or other insurance, including self insurance, on the System, and with
McKinney as an additional insured, for purposes and in amounts not less than
$1,000,000 on its property and utility systems which, as determined by
McKinney, ordinarily would be carried by a public utility district owning and
operating such facilities, except that GTUA shall not be required to provide
liability insurance except to insure itself and McKinney against risk of loss due to
claims for which it can, in the opinion of McKinney's legal counsel, be liable
under the Texas Tort Claims Act or any similar law or judicial decision. Such
insurance will provide, to the extent feasible and practicable, for the restoration of
damaged or destroyed properties and equipment, to minimize the interruption of
the services of such facilities. All premiums for such insurance shall constitute an
operation and maintenance expense of the System. The insurance coverage does
not extend to any facility owned by McKinney; however the coverage shall insure
McKinney against all claims arising out of this Agreement.
Section 16. REGULATORY BODIES AND LAWS. This Agreement is subject to all
applicable Federal and State Laws and any applicable permits, ordinances, rules,
orders, and regulations of any local, state or federal governmental authority
having or asserting jurisdiction, but nothing contained herein shall be construed as
a waiver of any right to question or contest any such law, ordinance, order, rule,
or regulation in any forum, having jurisdiction.
Section 17. NOTICES. Unless otherwise provided herein, any notice, communication,
request, reply, or advice (herein severally and collectively, for convenience, called
"Notice" herein provided or permitted to be given, made, or accepted by any party
to any other party must be in writing and may be given or be served by depositing
the same in the United States mail postpaid and registered or certified and
addressed to the party to be notified, with return receipt requested, or by
delivering the same to an officer of such party, or by prepaid telegram when
appropriate, addressed to the party to be notified. Notice deposited in the mail in
the manner hereinabove described shall be conclusively deemed to be effective,
unless otherwise stated herein, from and after the expiration of three (3) days after
it is so deposited. Notice given in any other manner shall be effective only if and
when received by the party to be notified. For the purposes of notice, the
addresses of the parties shall, until changed as hereinafter provided, be as follows:
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 13
If to GTUA, to:
Greater Texoma Utility Authority
5100 Airport Drive
Denison, Texas 75020
If to the City, as follows:
City of McKinney
P.O. Box 512
McKinney, Texas 75069
The parties hereto shall have the right from time to time and at any time to change
their respective addresses and each shall have the right to specify as its address
any other address by at least fifteen (15) days written notice to the other parties
hereto.
Section 18. SEVERABILITY. The parties hereto specifically agree that in case any one or
more of the sections, subsections, provisions, clauses, or words of this Agreement
or the application of such sections, subsections, provisions, clauses, or words to
any situation or circumstance should be, or should be held to be, for any reason,
invalid or unconstitutional, under the laws or constitutions of the State of Texas,
or the United States of America, or in contravention of any such laws or
constitutions, such invalidity, unconstitutionality, or contravention shall not affect
any other sections, subsections, provisions, clauses, or words of this Agreement or
the application of such sections, subsections, provisions, clauses, or words to any
other situation or circumstance, and it is intended that this Agreement shall be
severable and shall be construed and applied as if any such invalid or
unconstitutional section, subsection, provision, clause, or word had not been
included herein, and the rights and obligations of the parties hereto shall be
construed and remain in force accordingly; however only if the remaining
sections are consistent and structurally dependent on one another.
Section 19. VENUE. All amounts due under this Agreement, including, but not limited to,
payments due under this Agreement or damages for the breach of this Agreement,
shall be paid and be due in Collin County, Texas, which is the County in which
the principal administrative offices of City are located. It is specifically agreed
among the parties to this Agreement that Collin County, Texas, is the principal
place of performance of this Agreement.
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT . November 23, 2004 14
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective governing
bodies have caused this Agreement to be duly executed in several counterparts, each of which
shall constitute an original, all as of the day and year first above written, which is the date of this
Agreement.
GREATER T XOMA UTILITY AUTHORITY
Denison, Te
By:
Lai g
Presid nt, Boaz f Dir tors
Attest:
GREATER TEXOMA UTILITY AUTHORITY
Denison, Texas
Secretary, Board>of Directors
Accepted and agreed to:
zw:t��
NCE W. ROBII'3 N
City Manager
City of McKinney, Texas
Attest:
BEVERLY 610VINGTONO
Deputy City Secretary
City of McKinney, Texas
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT - November 23, 2004 draft 15
d Name:
jMayor
City of Anna, Texas
Attest:
OrhifeA Name: aa,6o.K A. %66JAt--
City Secretary
City of Anna, Texas
Mayor
City of Melissa, Texas
Attest:
City Secretary
City of Howe, Texas
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT November 23, 2004 16
Printed Name:
Mayor
City of Van Alstyne, Texas
Attest: n �`
Printed Name:{ra Q. :hm o n
City Secretary
City of Van Alstyne, Texas
POTABLE WATER PASS THROUGH & PUMPING AGREEMENT November 23, 2004 17