HomeMy WebLinkAboutRes 2019-02-545 Water InterlocalCITY OF ANNA, TEXAS
RESOLUTION NO. ,-10! y -Q.? ^ 545"
A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER
TO EXECUTE AND ADMINISTRATE TWO INTER -LOCAL AGREEMENTS 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
WHEREAS, the Cities of Melissa, Anna, Van Alstyne, and Howe have previously authorized
and executed agreements with the Greater Texoma Utility Authority (GTUA) 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 2018 water year (ended July 31, 2018) and
each of said Cities desire to transfer a portion of its respective and obligated minimum take or
pay for said 2018 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, 2018
as explained in a report memorandum to the City Managers / Administrators of the Cities of
Melissa, Anna, Van Alstyne, and Howe dated October 18, 2018 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; and,
WHEREAS, the City Council desires to authorize the City Manager to execute and
administrate said interlocal agreements;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
Section 1. Recitals Incorporated.
The recitals above are incorporated herein as if set forth in full for all purposes.
Section 2. Authorization.
RESOLUTION NO.�2K PAGE 1 OF 2
Inter -local Agreements - Van Alstyne & Howe
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 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
2018 water year minimum take or pay specified in the Inter -local Agreement as
provided for in said Inter -local Agreement.
Section 2. Verification
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 26th day
of February 2019. /J
ATTEST: APPROVED:
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City Secretary Carrie L. Smith Mayor KatefPike
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RESOLUTION NO. PAGE 2 OF 2
Inter -local Agreements - Van Alstyne & Howe
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 Home -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:
WITNESSETH:
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
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 2017-2018 ended July 31, 2018 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 / Anna are willing to purchase a portion of the
MT -P Transfer agreement for 2018 water year — Anna / Van Alstyne - Page I
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 October 18, 2018 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:
NYU
This Agreement shall apply to the NTMWD water year ended July 31, 2018 and shall be
executed and consummated in full between October 1, 2018 and January 31, 2019 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 VAN ALSTYNE shall transfer 12,637,000 gallons (12,637.0 one
thousand gallon increments) of MT -P water to ANNA for the water year ended July 31, 2018
and ANNA shall remit to VAN ALSTYNE a payment for said transfer of MT -P at the rate of
$1.62 per thousand gallons totaling in the sum of $20,471.94 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, 2019, 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 / 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 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
MT -P Transfer agreement for 2018 water year — Anna / 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 2018 water year — Anna / 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 2018 water year— Anna / Van Alstyne - Page 4
IN WITNESS WHEREOF, the parties have executed this Agreement by signing below.
CITY OF A2PN A, TEXAS
n
Date: By:
i Proce
City Manager
APPROVED AS TO FORM:
ATTORNEY
CITY OF VAN ALSTYNE, TEXAS
Date:
Lane Jones
City Manager
APPROVED AS TO FORM
CITY ATTORNEY
MT -P Transfer agreement for 2018 water year — Anna / Van Alstyne - Page 5
ACKNOWLEDGMENTS
STATE OF TEXAS §
COUNTY OF COLLIN §
This instrument was acknowledged before me on the G day of Jd�2
2018, by Qew le2> of the City of Anna, Texas, a Texas
Home -Rule Municipal Corporation, on behalf of said municipality.
i0b6tti«#cn��w
Kim 113{?lm
*:.f
"IN?;
STATE OF TEXAS
COUNTY OF GRAYSON
e c
Notary Public, State of Texas
This instrument was acknowledged before me on the day of ,
2018, 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 October 18, 2018 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 2018 water year— Anna / Van Alstyne - Page 6
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 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 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:
WITNESSETH:
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 2017-2018 ended July 31, 2018 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 / Anna are willing to purchase a portion of the
unused minimum MT -P as defined in this agreement and detailed in "Exhibit A" thus allowing
MT -P Transfer agreement for 2018 water year — Melissa / Van Alstyne - Page 1
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 October 18, 2018 memorandum attached hereto for
reference and labeled "Exhibit A".
NOW, THEREFORE, ANNA and HOWE, for and in consideration of the recitals set
forth above and terms and conditions below, agree as follows:
This Agreement shall apply to the NTMWD water year ended July 31, 2018 and shall be
executed and consummated in full between October 1, 2018 and January 31, 2019 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 26,151,600 gallons (26,151.60 one thousand
gallon increments) of MT -P water to ANNA for the water year ended July 31, 2018 and ANNA
shall remit to HOWE a payment for said transfer of MT -P at the rate of $1.62 per thousand
gallons totaling in the sum of $42,365.59 as payment in full for said portion of HOWE'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, 2019, 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 / purchase of MT -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 of MT -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 2018 water year — Melissa / Van Alstyne - 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 2018 water year — Melissa / Van Alstyne - 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 2018 water year — Melissa / Van Alstyne - Page 4
IN WITNESS WHEREOF, the parties have executed this Agreement by signing below.
Date:
APPROVED AS TO FORM:
CITY ATTORNEY
Date:
CITY ATTORNEY
CITY OF HOWE, TEXAS
Joe Shepherd
City Administrator
MT -P Transfer agreement for 2018 water year— Melissa / Van Alstyne - Page 5
ACKNOWLEDGMENTS
STATE OF TEXAS §
COUNTY OF COLLIN §
This instrument was acknowledged before me on the day of
2018, by K CSP- f the City of Anna, Texas, a Texas
Home -Rule Municipal Corporation, on behalf of said municipality.
CABBIE L. SMITH
My Notary ID # 11419404
., a. Eom February 4, 2023
STATE OF TEXAS §
COUNTY OF GRAYSON §
Notary Public, State of Texas
This instrument was acknowledged before me on the day of ,
2018, by of the City of Howe, Texas, a
Texas General Law City, on behalf of said municipality.
Notary Public, State of Texas
Exhibit A
Attach copy of October 18, 2018 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 2018 water year — Melissa / 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: October18, 2018
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, 2018. Based on prior year precedents, 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. Since the 2015 water year, 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
cost option to understand and to calculate; additionally, it has generally been the methodology used
in the buy -sell agreements since the 2015 water year. This buy -sell action has allowed other CGMA
Cities using less than the MT/P the opportunity to recoup a portion of the MT/P water cost paid during
the water year.
For the recently completed 2018 water year (ended July 31, 2018) both Melissa and Anna exceeded
their MT/P sufficiently to purchase 100% of the other two cities (Van Alstyne and Howe) MT/P (as was
the case in 2016 and 2017 water years). 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 the unused portion of their MT/P to user Cities exceeding
their respective MT/P at an agreed price that provides benefits to both seller and buyer. The following
summary is an update of the similar / same document / transaction from last year with minor tweaks
as noted.
This program is not regulated or controlled by GTUA, but is purely an agreement among CGMA
participating cities for the benefit of the participants. MT/P obligations are paid by all cities in equal
monthly payments beginning in October and concluding in September of each budget year for the
MT/P as set for the water year beginning in August of each year. Participation in this program is not
a requirement, but a choice that each participant determines independently. However, the purpose
is:
2
1. To allow selling Cities to recoup a portion of the funds already spent for their required
MT/P; and
2. To provide a mechanism for purchasing cities to pay for water actually used which then
allows them to keep their respective MT/P at a lower level.
Background:
• Minimum Take or Pay / City - CGMA City MT/P: The base MT/P water purchase for the 2018
water year (minimum contract provision that the GTUA-CGMA system has with NTMWD for water)
was a total of 557,465,000 gallons of water annually (MT/P amount) which represents 557,465
one -thousand gallon increments (K gals). Each CGMA City is responsible for the lesser of
59,312.5 K gals or the previously set higher MT/P based on use plus pumping and related cost).
Once all four CGMA Cities reach the MT/P, or when any combination of cities exceed the total
CGMA MT/P volume for the subject water year, the excess water is charged to that respective City
or Cities at the cost then in effect for excess volumes (plus proportionate pumping and related
costs) over the 59,312 K 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 rate that
exceeds the excess water rate for users exceeding the MT -P but less than the base rate while the
cities using less than their MT/P would recoup a portion of the MT/P base rate that they paid during
the fiscal year. It is noted that when the MT/P is exceeded by any individual City, 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. Additionally, this intra CGMA buy -sell arrangement helps to reduce the total buying City
MT/P. It is also noted that the entire CGMA MT/P is kept at the lowest possible level. This concept
will cease to provide such benefits when all CGMA participants are using their MT/P or when any
other water cost component ceases to be a benefit for either a selling or buying City..
2017-2018 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, 2018, Melissa and Anna
took water through all of the year and with continued growth both are expected to continue to take
volumes equaling or exceeding their MT/P for future years. Van Alstyne took water for eleven (11)
months of the water year although VA dis not take sufficient water to use the full MT/P. Van Alstyne
is expected to continue to take water throughout future years. Howe did not take any water year
during the 2018 water year for use; some water is allocated to each city for overall system
maintenance. Van Alstyne is expected to begin taking water their full MT/P soon. Howe has
indicated it is working on a plan to begin taking water, but no firm date has yet been set. During
the 2018 water year, ground water sources continued to provide a significant portion of the
water used by Anna, most of the water used by Van Alstyne, and all of Howe's water.
Ground water will continue to be used by these cities in the 2019 water year and beyond
although it is expected that surface water will be used to accommodate growth with ground
water providing a somewhat static base level of water. This will result in ground water
declining as a percentage or water used in subsequent years; it is also noted that ground
water availability may gradually decline as ground water aquafers are slowly depleted;
however, careful management of the aquafers may stabilize supplies and allow the use of
some base level of ground water for many years thus, extending the useful and economic
life of many CGMA wells for decades.
3
0 Break out of Maintenance Water — For the first time since tracking, the total unaccounted for
water in the 2018 water year was a negative value showing the system gained 15,307,000 gallons
or 15,307 K gallons; this includes all water used for flushing the main, maintenance, and / or lost
and unaccounted for water. This anomaly (a gain instead of loss) is apparently the result of timing
in reading meters between NTMWD and GTUA (total system take versus each city being
aggregated by GTUA in reading); it is also noted that the very heavy pumping during the end of
the take year could account for the difference in only a few hours of reading discrepancy. The gain
has been credited to the taking cities thus slightly reducing their water year take. There was no
charge or credit to Howe.
b It is noted that the volume of flushing / maintenance water, while gain instead of lost water does
not vary greatly from year to year and is typically fairly constant in the range of 10,000 to 12,000
K Gallon units. Much of this lost water due to the necessity to flush the northern portion of the
CGMA transmission main since the two north most cities have not used sufficient water to maintain
chlorine levels. Therefore, line flushing is necessary to eliminate under chlorinated and potentially
stagnating water. The 2018 reading anomaly has eliminated the charge for maintenance water for
the 2018 water year.
• 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 20 years. The second Melissa source is the being the
GTUA — CGMA transmission system which began pumping in 2009. Each of these connections
is separately metered and both the original meter and the CGMA-GTUA system each have MT/P
requirements.
• Historical Practice and Buy -Sell Rate Calculation — A blended rate methodology has been used
to establish the buy -sell rate; this is the same methodology as was used for the 2016 and 2017
water years. The blended rate is based on the average of the base and excess rates. For the
2018 water year, the standard rate / K gallons was $and the excess water rate was $0. / K gallons.
These water rates and the blended calculation are illustrated below. 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. In the future, once all cities are taking water at MT/P levels,
it has been proposed that the system incorporate a portion of the GTUA administrative,
maintenance cost, and operational cost to the charging methodology so that all water costs are
paid in an equitable share of costs.
• System Concept Objective of Buy -Sell - The principal issue to be determined is if the nonusers
or under -users wish to recoup a portion of the water cost they have already paid during the water
year. Thus, at this time, the buy -sell agreements only address the price of the bought or sold
potable water. It is noted that either Melissa or Anna would have paid a lesser rate under the
excess water calculation than through the blended rate methodology, however, the blended rate
has helped keep both the Anna and Melissa MT/P somewhat lower, thus providing something of
a future benefit. Further, Melissa could also have purchased more excess water from their original
meter at significant discount by avoiding the McKinney pass through fees, but the original meter
MT/P would also have increased.
• Continuation of Historical Calculation Methodology - It is proposed that the same rate
methodology be applied to the buy -sell agreements as was used in the 2016 and 2017 water year
buy -sell agreements.
4
Cost Calculations for 2016-17 water year - The cost calculations for the above described MT/P
transaction that was agreed to in prior years was $1.52 / K gallons for the 2017 water year. For
2018 the blended rate was $1.62 / K gal as determined by averaging the MT/P excess water rate
0.46/ K gal) with the NTMWD customer city base rate ($2.78 / K gal). The rate is an average of
the normal CGMA Customer City rate and the NTMWD Customer City Excess Water Rate for 2018
as illustrated below:
2018 data
Entities
CGMA MT/P water 11000 GPD
Melissa Excess Water
Blended Average
rates
$2.78
$0.46
$1.62
In the last several years, including 2018, both Melissa and Anna took significantly more water
than in prior years and it appears their growth will continue the additional water take trend. In
fact, in 2017 and 2018 the Melissa — Anna take fulfilled both their individual City MT/P volumes
and even a fulfilled 100% of the Van Alstyne and Howe MT/P volumes (with VA take increasing
as well). It should be noted that the total water take in the 2017 and 2018 water years set new
MT/P for both full- take cities and for the CGMA as a whole.
2018 Water Compared to MT -P —Since the volume of excess water to be purchased for the
recently completed 2018 water year exceeded the full MT/P of both selling cities, the proration
is technically a moot point for 2017, but as a technical matter, the proration amount for buy -sell
agreements is 100% of the collective unused MT/P. In summary, the purchasing cities are
acquiring the full amount of the selling cities un -used 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 Use: MT -P available to be sold to Excess use City for 2018 water year:
MT -P
Melissa
Anna
Van
Alstyne
Howe
MT -P water (all in K gallons)
267,955
170,885
59,312.5
59,312.5
Used
453,033
277,871
35,754
0
Unused (after maintenance Adjust
NA
NA
28,661
59,312.5
Excess water use over MT/P (after adj)
185,078
106,986
NA
NA
Excess water to be purchased by
excess MT -P cities
49,185
38789
NA
NA
Unused water to be offered for sale to
excess MT/P cities al
NA
NA
28,661
59,312.5
5
Note: One adjustment is being recommended for the 2018 water year buy -sell
agreements:
In 2017, the total unused from selling cities was simply divided between the two
purchasing cities irrespective of the volume of water used proportionate to the buying
City total purchase. For 2018, it is recommended that the purchase amount be
apportioned based on a formula that is based 50% on equal purchase and 50% based
on proportionality to the total use of the two buying cities, thus the cost savings is
apportioned somewhat equally between the two buying cities with the two selling cities
selling 100% of the unused water. The blended totals results in Melissa purchasing
55.91 % of the un -used from each city and Anna purchasing 44.09% from each city.
• Applying this concept to the 2018 water year results in the following calculation:
2018 Proposed MT -P Sale Amt apportioned as noted above to each buyer City
Item
Van Alstyne Howe
K gallons offered for sale / purchase
28,661 59,312.5
Total amount of sale by /
purchase @ $1.62 / K gal from
$ 46,430.82 $ 96,086.25
2017 Proposed MT -P Purchase Amt (divided by 2) to each seller Citv
Item
From Van Alstyne
From Howe
Melissa: Purchase K Gallons
16,024
33,160.90
Purchase $ amount
$ 25,958.88
$ 530720.66
Anna: Purchase K Gallons
12,637
26,151.6
Purchase $ amount
$ 20,471.94
$ 42,365.59
Thus, the total sale by Van Alstyne is $46,430.82 and by Howe is $ 96,086.25
and, the total purchase by both Melissa is $79,679.54 and by Anna is: $ 62,837.53 for a
grand total of un -used MT/P purchase is $142,517.10
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 portion of the Van Alstyne and Howe
unused CGMA MT/P for the 2018 water year. In actuality, both Melissa and Anna used in
excess of the additional other cities MT/P as shown in the proportionate share use chart
above.
Selling City Actions - Van Alstyne may agree to sell 28,661 K gallons of MT/P as shown above
to Melissa and Anna and Howe may agree to sell 59,312.5 K gallons of MT/P to Melissa and
Anna at the agreed rate of $1.62 / K gallons as illustrated in the above table. Under this scenario,
Melissa and Anna would pay the totals shown above equaling an aggregate of $142,517.10
assuming both Cities choose to buy said unused MT/P and both Van Alstyne and Howe choose
to sell their respective volumes of unused MT/P divided between the selling Cities as indicated
in the above chart.
M
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 2018 or early 2019 as the respective cities complete authorization of the stipulated
Resolutions and Inter -local Agreements.
6. Consultant will draft the respective Resolutions and inter -local agreements similar to the
documents used in 2017 for use by the Cities.
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.