HomeMy WebLinkAboutResolution - 5170 - Intergovernmental Contract - City Of O'donnell For Sale Of Water - 05_03_1996RESOLUTION NO. 5170
Item #3
May 3, 1996
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock a contract to be entered by and between the
City of Lubbock and the City of O'Donnell for the sale of water from the City of O'Donnell to
the City of Lubbock as provided in said contract, attached hereto and which shall be spread upon
the minutes of the Council and as spread upon the minutes of this Council shall constitute and be
part of this Resolution as if fully copied herein in detail.
Passed by the City Council this
ATTEST:
Betty A Johnso , City Secretary
APPROVED AS TO CONTENT:
Terry Ellerli ook, Director of Water Utilities
APPROVED AS TO FORM:
G. Vandiver, First Assistant City Attorney
DGV : da/ccdocs/o donnell. res
April 8. 1996
RESOLUTION NO. 5170
Item #3
May 3, 1996
AGREEMENT
For the Permanent
Transfer and Sale of Water Supply
Between
The City of Lubbock
and
The City of O'Donnell
Whereas, The City of Lubbock and the City of O'Donnell are both member cities of the
Canadian River Municipal Water Authority (Authority) and as such are entitled to receive a
portion of their respective water supplies from the source of supply known as Lake Meredith, a
surface water supply lake operated by the Authority, and
Whereas, the Authority intends to develop a source of groundwater supply to be used
conjunctively with the Lake Meredith supply, and the City of Lubbock and the City of O'Donnell
will become participants in the project to develop the groundwater supply, and
Whereas, the City of O'Donnell desires to permanently transfer to the City of Lubbock a
portion of the water it is entitled to receive from the Authority, in return for payment of all the
costs it would otherwise become obligated to pay as a participant in the Conjunctive Use
Groundwater Supply Project (Project) of the Authority,
Now Therefore, the parties hereto agree as follows:
1. Permanent Transfer and Sale of Water Supply
For and in consideration of the total payment to it of $ 225,000.00 to be paid in two installments,
the City of O'Donnell hereby sells to the City of Lubbock an annual water supply in the amount of
40 million gallons from the water it is entitled to receive from the Authority. Such water supply
shall be delivered to the City of Lubbock by the Authority after approval of this Agreement by the
Board of Directors of the Authority and in accordance with the terms and provisions of the
underlying agreements between the Authority and the City of O'Donnell for the City of
O'Donnell's purchase and acquisition of such water. Payments shall be made to the City of
O'Donnell by the City of Lubbock on such dates which will enable the City of O'Donnell to meet
its obligations to the Authority without requiring the assumption of bond issuance expenses on
revenue bonds to be issued by the Authority, in accord with the contractual arrangements between
the Authority and the parties hereto. Payment of the total amount above shall be comprised of
two separate payments. The first payment in the amount of $52,900.00 shall coincide with the
Authority's first bond issuance for the Project, and the second and final payment in the amount of
$172,100.00 shall coincide with the Authority's second bond issuance for the Project.
Notwithstanding any language herein contained, and to control over same in the event of conflict,
it is specifically agreed that all payments required of the City of Lubbock hereunder shall be made
by it at such times, and in such amounts, as may be required in order to permit the City of
O'Donnell to make timely payments under the terms and provisions of the agreement between the
Authority and the City of O'Donnell, Texas, for the purchase and acquisition of conjunctive use
groundwater supply. Failure by the City of O'Donnell to make such payments to the Authority as
are contemplated by this Agreement shall be a breach of this Agreement.
2. Payment of Delivery Charges
All delivery charges and other operation and maintenance charges made by the Authority for
water delivered to either the City of Lubbock or the City of O'Donnell shall be paid to the
Authority by the city receiving the water.
3. Term of Agreement
This agreement shall become effective upon execution by the City of Lubbock and the City of
O'Donnell and approval by the Board of Directors of the Authority, and shall remain in full force
and effect for the full life of the Project or any related or subsequent projects or construction to
replace or supplement the Project in order to maintain the Project's production capacity.
4. Shortages of Water
Should the Authority, in any calendar year or other allocation period, limit the amount of water
available from all sources to the City of O'Donnell to a total amount less than 53 million gallons,
the City of Lubbock and the City of O'Donnell, by their mutual agreement, shall agree for a sale
by the City of Lubbock to the City of O'Donnell of water adequate to remedy such shortage at a
rate and price mutually agreeable to both such cities.
5. Reimbursements
Should the actual costs of the Project be less than estimated at the time of execution of this
contract, the City of O'Donnell will reimburse to the City of Lubbock any portion of the payment
in Section 1 not applied to the Project or any portion reimbursed to the City of O'Donnell by the
Authority. Said reimbursement shall not reduce the amount of water conveyed to the City of
Lubbock by the City of O'Donnell in Section 1 of this agreement. Should the Project at any time
and for any reason be terminated and the amount of water agreed to in Section 1 cannot be
delivered, a prorated reimbursement or the amount not expended on the Project will be paid by
the City of O'Donnell to the City of Lubbock. In like manner, if the actual costs of the Project
are greater than estimated at the time of execution of this contract, Lubbock will, in a timely
fashion so as not to permit default, pay to the City of O'Donnell, to be by it promptly paid to the
Authority, an amount of money equal to the amount of any additional payment required of the
City of O'Donnell under the provisions of the agreements between the Authority and the City of
O'Donnell, Texas, for the purchase and acquisition of conjunctive use groundwater supply.
O'DONNELL AGMT - PAGE 2
6. Effective Date of Water Transfers
The water described in Section 1 shall be made available to the City of Lubbock by the City of
O'Donnell in the year that water is first available from the Project and thereafter for the life of the
Project or any related or subsequent projects or construction to replace or supplement the Project
in order to maintain the Project's production capacity.
7. Approval by Authority Board
In the event that the Authority's Board of Directors fails to authorize the transfer of the annual
water supply in the amount of 40 million gallons of water herein provided for, then the payments
required of the City of Lubbock to the City of O'Donnell shall be prorated, with the City of
Lubbock paying only that portion of the total payments which would have been made had the full
amount of such transfer been authorized as the number of gallons of annual water supply
authorized by the Authority's Board of Directors bears to the quantity of 40 million gallons.
8. Default Under Authority Contracts
The City of Lubbock desires to protect the water supply being purchased under this contract from
loss due to any default by the City of O'Donnell under its contracts with the Authority.
Under those contracts, the City of O'Donnell could lose its right to sell the water supply
to the City of Lubbock if it defaults on its obligations to the Authority. Therefore, the parties
hereto agree further that the City of O'Donnell will immediately notify the City of Lubbock of any
conditions which might result in the City of O'Donnell being judged to be in default of its contracts
to the Authority, so that the City of Lubbock may decide if it wishes to make the payments due to
the Authority from the City of O'Donnell to prevent the default from occurring.
IN WITNESS WBEREOF, the parties have executed this Agreement in triplicate
upon tJys..--9Vth day of April )1996,
ATTEST
W- )J,— 440)
Betty A. Johnson, City Secretary
ATTEST
Gustene •
City Secretary
O'DONNELL AGMT - PAGE 3
APPROVED AS TO CONTENT:
-22
Terry Ellerbro k, Director of Water Utilities
APPROVED AS TO FORM:
Donald G. Vandiver, First Assistant City Attorney
APPROVED THIS THE /DAY OF
CANADIAN RIVER MUNICIPAL WATER
AUTHORITY
By:
/JCA
illiams, General Manager
OTONNELL AGMT - PAGE 4
CITY OF LUBBOCK
COUNTY OF LUBBOCK §
STATE OF TEXAS §
AFFIDAVIT
Before me, the undersigned authority, personally appeared Betty M. Johnson,
who, being by me duly sworn, deposed as follows:
My name is Betty M. Johnson, I am of sound mind, over 18 years of age, capable
of making this affidavit, and personally acquainted with the facts herein stated:
I am the custodian of the records of the City Secretary's Office for the City of
Lubbock, Texas. Attached hereto is a copy of the Resolution No. 5170, Item 43 taken
from the City Council's Special Meeting on May 3, 1996, from the official records of the
City of Lubbock. These records are kept by me, the City Secretary, in the regular course
of business, and it was in the regular course of business of the City Secretary of the City
of Lubbock, Texas or an employee or representatives of the City Secretary of the City of
Lubbock, Texas, with knowledge of the act, event, condition, opinion, or diagnosis,
recorded to make the record or to transmit information thereof to be included in such
record; and the record was made at or near the time or reasonably soon thereafter. The
records attached hereto are the original or exact duplicates of the original.
J�A-� o,
Affiant
BEFORE ME, the undersigned authority, a Notary Public in and for said County.
Texas, on this day personally appeared Betty M. Johnson, known to me to be the person
whose name is subscribed to the foregoing instrument and acknowledged to me that she
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 8th day of May 1996.
Seal)
_ KATHERINE EGGER Notary Public, State of Texas
NOWY Public. state of Texas Commission Expires: 10/06/97
4 COMISSWa 10+97
RESOLUTION No. 5171
Item #4
May 3, 1996
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
-execute for and on behalf of the City of Lubbock an Agreement, attached herewith, by and
between the City of Lubbock and the Canadian River Municipal Water Authority for the
purchase and acquisition of conjunctive use groundwater supply, and any associated
documents, which Agreement shall be spread upon the minutes of the Council and as spread
upon the minutes of this Council shall constitute and be a part of this Resolution as if fully
copied herein in detail.
Passed by the City Council this 3rd
ATTEST:
Betty A johnsA, City Secretary
APPROVED AS TO CONTENT:
Terry Ellerbrodk, Director of Water Utilities
APPROVED AS TO FORM:
Dofiald G. Vandiver, First Assistant
City Attorney
DGV : da/ccdocs/crmwa. res
April 10, 1996
May , 1996.
ff
VID R. LANGSTON,
RESOLUTION No.5171
Item #4
May 4, 1996
AGREEMENT
BETWEEN THE
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
AND THE
CITY OF LUBBOCK, TEXAS
FOR THE PURCHASE AND ACQUISITION
OF CONJUNCTIVE USE GROUNDWATER SUPPLY
TABLE OF CONTENTS
Page
ARTICLE 1. PURPOSE .................................................... 2
1.1 Purpose of Agreement ......... . ....... . ......... . ....... 1 . , 2
1.2 Obligations ............................................... 2
1.3 Existing Contracts .......................................... 2
1.4 Contract Payments ......................................... 2
ARTICLE 2. DEFINITIONS ................................................ 2
ARTICLE 3. CITY'S PAYMENT OF ITS SHARE OF
PROJECT CONSTRUCTION COSTS ............................... 7
3.1 Construction Repayment Obligation ............................. 7
3.2 Payment of Project Construction Costs .......................... 7
3.3 City's Option to Pay Construction Cost Payment Without
Providing Payment of the Authority's Revenue Bonds ............. . . 7
3.4 Construction Cost Payments Due for Revenue Bonds
and Payments from Escrow Accounts ........................... 9
3.5 Termination of Project ................................... I . 10
ARTICLE 4. FINANCING ARRANGEMENTS ................................. 11
4.1
Issuance of Revenue Bonds ..................................
11
4.2
Revenue Bond Proceeds .... . ...............................
11
4.3
Establishment of Funds and Flow of Funds ......................
11
4.4
Project Payment Fund ................................. I .. , .
12
4.5
Construction Fund ........................................
12
4.6
Interest and Sinking Fund ...................................
12
4.7
Bond Reserve Fund ........................................
13
4.8
Unallocated and Unpledged Balance ...........................
14
4.9
Investments ..............................................
14
4.10
Final Payment ............................................
15
4.11
Additional Bonds .........................................
15
ARTICLE 5. OPERATION AND MAINTENANCE COSTS ....................... 17
i
A
Page
ARTICLE 6. WATER SUPPLY ............................................
6.1 Quantity ................................................
6.2 Allocations ..............................................
6.3 Unit of Measurement ......................................
6.4 Allocated Water Not Used ..................................
6.5 Conjunctive Use ..........................................
6.6 Water Shortages ...........................................
6.7 Control of Water ..........................................
6.8 Point of Delivery ..........................................
6.9 Allocation of Aqueduct Capacity ..............................
6.10 Water Measurement .......................................
6.11 Easements ...............................................
6.12 Benefits Conditioned Upon Payment ...........................
18
18
18
18
18
19
19
19
19
19
20
20
ARTICLE 7. COVENANTS AND OBLIGATIONS OF THE AUTHORITY ........... 20
7.1 Obligation to Complete Project ............................... 20
7.2
Operation of Project .......................................
20
7.3
Project Alterations and Repairs ...............................
20
7.4
Maintenance and Operation - Insurance .........................
21
7.5
Records and Accounts .....................................
21
7.6
Defeasance..............................................
22
7.7
Sale or Encumbrance of Properties ............................
22
7.8
Board to Submit Information to Meet Continuing
Disclosure Requirements ....................................
23
ARTICLE 8. COVENANTS AND OBLIGATIONS OF THE CITY .................. 23
8.1 Rate Covenant ........................................... 23
8.2 Additional Sources of Payments .............................. 23
8.3 Compliance with Law ...................................... 23
8.4 Authorization and Validity .................................. 23
8.5 Prior Obligations of City's Waterworks System ................... 24
8.6 Exclusive Agreement ...................................... 24
8.7 City Obligation Not Separable ................................ 24
8.8 City's Disclosure Agreement ................................. 24
ii
Page
ARTICLE 9. GENERAL PROVISIONS ....................................... 25
9.1
Assignment of Agreement ............... I ............ I ......
25
9.2
Term of Contract ........ , .. .............. . .............
25
9.3
Inspection of Books and Records ...... . . .....................
25
9.4
Past Due Payments .................... . ...................
25
9.5
Default under Bond Documents ..............................
25
9.6
Amendment ............................................
25
9.7
Subject to Authority Contract . ...............................
25
9.8
Notices .................................................
25
9.9
Governing Law ...........................................
26
9.10
Further Action ...........................................
26
9,11
Binding Effect ............................................
26
9.12
Integration ................... . ..........................
26
9.13
Severability..............................................
26
9.14
Waiver .................................................
27
9.15
Defaults and Remedies ................... ......
27
9.16
Force Majeure...........................................
27
9.17
Counterparts .............................................
28
9.18
Descriptive Headings ......................................
28
9.19
Construction of Agreement ............... . ..................
28
9.20
Non -Discrimination ........................................
28
9.21
Determinations .................................... . ......
28
9.22
Costs, Expenses and Legal Fees . .............................
28
9.23
Remedies ...............................................
28
Schedule A - Contract between the Canadian River Municipal Water Authority and
the City of Lubbock, Texas for providing a Municipal Water Supply
Schedule B - Canadian River Municipal Water Authority Manual
Schedule C - Notice Information
Schedule D - Project Financing
U1
W
Home Rule Citv
AGREEMENT FOR THE PURCHASE AND ACQUISITION
OF CONJUNCTIVE USE GROUNDWATER SUPPLY
This Agreement is made as of�-2 / , 1996, between the CANADIAN
RIVER MUNICIPAL WATER AUTHORITY, a conservation and reclamation district duly
created and existing under the laws of the State of Texas (the "Authority") and the CITY OF
LUBBOCK, a Home Rule city and municipal corporation in the State of Texas acting by virtue of
authority of its city charter and the laws of the State of Texas (the "City").
RECITALS:
1, The Authority provides the City all or a portion of its municipal water supply through
the operation and maintenance of the Sanford Dam and Lake Meredith through a Municipal Water
Supply Contract.
2. The Authority was created in 1953 by chapter 243, Acts of the 53rd Legislature,
Regular Session, as amended, and such enabling legislation was formerly codified as article 8280-154
of Vernon's Texas Civil Statutes.
3, The Authority needs to acquire an additional source of water in addition to its Lake
Meredith project for the benefit of its member cities. An additional underground water supply, used
in conjunction with the existing Lake Meredith supply, will increase both the quantity and quality of
water the Authority is able to supply its member cities.
4. The Authority is negotiating and intends to contract with the Quixx Corporation, a
Texas corporation ("Quixx"), for the purchase of an underground water supply ("Water Rights
Acquisition Agreement").
5. A condition to the acquisition of the underground water supply and the construction
of well field, collection systems and a pipeline to deliver the water (the "Project") is the execution of
a contract between the Authority and each of its member cities to provide for the funding of the costs
of the Project.
6. The City desires to participate in the Conjunctive Use Groundwater Supply Project
to secure a reliable and improved municipal water supply from the Authority.
7. The City desires to have the additional source of water that will be provided and
desires to share in the costs of the Project, as set forth below.
S. The City and the Authority are authorized to enter into this Agreement under various
legislative authority, including, but not limited to chapter 243, Acts of the 53rd Legislature, Regular
W
Session, as amended, Section 791.026, Texas Government Code, Section 402.012, Texas Local
Government Code, and Article 1113, TEx REV. CIV. SWAT. ANN.
9. The City and the Authority therefore desire to agree to (a) the terms of the City's
payment of its share of the acquisition of the Water Rights, the construction and development costs
of the Project, and (b) the other obligations and performances of the parties set forth herein.
NOW, THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the parties agree as follows:
ARTICLE 1. PURPOSE
1.1 Purpose of Agreement. This Agreement is the agreement between the Authority and
the City concerning the Project. The purpose of the Agreement is to set forth basic considerations
and agreements concerning the financing, acquisition, construction, and operation of the Project
which will be imposed on the Authority and paid for by the Member Cities, and the allocation of the
water secured by the acquisition of the Water Rights.
L2 Obligations. The obligations imposed under this Agreement and the similar
agreements with other Member Cities are for financing, acquiring and operating the Project, and the
delivery of water to the Member Cities.
1.3 Existing Contracts.
(a) Each of the Member Cities has a water supply agreement with the Authority
for water from the Canadian River Project. This agreement is separate and in addition to the
Meredith Supply Agreement between the City and the Authority for the Canadian River Project.
(b) The Authority and each of the Member Cities have entered or intend to enter
into a contract to reduce the salinity in Lake Meredith ("Lake Meredith Salinity Control Contract").
This Agreement is separate from the Lake Meredith Salinity Control Contract between the City and
the Authority.
1.4 Contract Payments. This Agreement establishes two payment obligations --the
payments for Project Operation and Maintenance Costs, and the payments to fund the Project
Construction Costs.
ARTICLE 2. DEFINITIONS
2.1 Additional Bonds means the additional revenue bonds related to the Project or
Project Expansion which the Authority reserves the right to issue and deliver in the future as provided
by this Agreement.
2
2.2 Agreement means this Agreement between the Authority and the City for the
acquisition of the Water Rights, construction, operation and maintenance of the Project, and the
supply of water to the City, as it may hereafter be amended from time to time.
2.3 Aqueduct means the system for transporting water to the points of delivery
established for the Project and the Canadian River Project, and includes all pipelines, conduits,
pumping facilities and related works, and the land and rights of way for such works and facilities.
2.4 Aqueduct Construction Costs means those costs associated with the construction
and acquisition of the Aqueduct.
2.5 Authoritymeans the Canadian River Municipal Water Authority, a conservation and
reclamation district duly created and existing under the laws of the State of Texas.
2.6 Board means the Board of Directors of the Authority.
2.7 Bond Documents mean this Agreement, the bond resolution or resolutions, and the
indenture or indentures, if any, authorizing the issuance of the Revenue Bonds for the Project, the
Revenue Bonds, and all amendments or supplements thereto.
2.8 Bond Reserve Fund means the fund established by the Board for each series of
Revenue Bonds in accordance with Section 4.7 of this Agreement.
2.9 Canadian River Project means the project that includes the Sanford Dam and Lake
Meredith as authorized by the Act of Congress dated December 29, 1950 (64 Stat. 1124).
2.10 Cityhas the meaning ascribed to it in the introductory paragraph of this Agreement.
2.11 City's Share of Water Supply means the City's water supply allocation from the
Project, which is thirty-seven and 58/1000 percent (37.058%).
2.12 City's Share of Aqueduct Construction Costs means the City's portion of the
construction cost allocation for the Aqueduct portion of the Project, which is thirty-seven and
456/1000 percent (37.456%).
2.13 City's Share of Operation and Maintenance Expense shall at all times be equal to
the City's portion of the operation and maintenance cost allocation for the Project as provided in
Article 5 of this Agreement.
2.14 City's Share of Project Construction Costs means the portion of the Project
Construction Cost that the City is responsible for under this Agreement. Such share will be calculated
for each Series of Revenue Bonds.
3
/0'*
2.15 City`s Share of Project Water Supply Costs means the City's portion of the
construction cost allocation for the Project Water Supply portion of the Project, which is thirty-seven
and 58/1000 percent (37,058%).
2.16 Construction Completion Date means the date, after the construction and testing
of the Project, upon which the Authority or its designee has accepted responsibility for the operation,
maintenance and replacement of the Project facilities.
2.17 Construction Cost Payment Schedule means the schedule prepared by the General
Manager in accordance with Section 3.2 of this Agreement.
2.18 Construction Fund means the fund established by the Board for each series of
Revenue Bonds in accordance with Section 4.5 of this Agreement.
119 Effective Date means the date upon which the Authority notifies Quixx and the
Member Cities that Agreements have been entered into between each Member City and the Authority
for the purchase and acquisition of groundwater rights, construction of the Project, and conjunctive
use water supply, which shall be evidenced by written notice to each Member City,
2.20 Financing Costs means the costs associated with the issuance of the Revenue Bonds,
including but not limited to the cost of funding the Reserve Fund, rating agency fees, bond insurance
premiums, underwriters discount, original issue discount, printing, professional services associated
with the Revenue Bonds, and cost of the validation lawsuits.
2.21 Fiscal Year means from October 1 through September 30 of the following calendar
year, or any other period subsequently designated by the Board to be the fiscal year of the Authority.
2.22 General Manager means the General Manager of the Authority.
2.23 Interest and Sinking Fund means the fund established by the Board in accordance
with Section 4.6 for each series of Revenue Bonds of this Agreement.
2.24 Member City means a city, town, or municipality which is a member of the Authority
pursuant to Acts 53rd Leg., Ch. 243 (1953), as amended.
2.25 Meredith Supply Agreement means that certain Contract between the Canadian
River Municipal Water Authority and the City of Lubbock, Texas, for providing a Municipal Water
Supply, dated January 9, 1961, a copy of which is attached as Schedule A.
2.26 Notice of Completion means that notice given by the Authority to Member Cities that
project construction is substantially complete and the project is capable of delivering water.
4
W
2.27 Operation and Maintenance Cost Payment Schedule means the schedule adopted
by the Board in accordance with Article 5 of this Agreement.
2.28 Parity Bond shall have the meaning as ascribed in Section 4.11(a).
2.29 Project means the acquisition of water rights, the construction of the well field,
collection and production facilities, an aqueduct, operation and maintenance of the Project, and the
supplying of water from the Project.
2.30 Project Construction Costs means the Aqueduct Construction Costs and the Project
Water Supply Costs, which together shall include any and all costs and expenses whatsoever, of all
kinds, of the Authority with respect to the acquisition, purchase, determination of the feasibility of,
testing, or construction of the Project or the abandonment, sale, exchange, or other disposition of the
Project for which the Authority is liable, incurred on, after, or before the date hereof, including but
not limited to, the Authority's costs of acquiring water rights, all Financing Costs, labor, materials,
equipment, engineering, legal fees, superintendence, administration, overhead, general expenses,
acquisition of land, rights -of -way and other property rights, inspections, special services, National
Environmental Policy Act compliance, property damages, insurance, costs of all licenses and permits;
provided, however, to the extent a city participates in project construction costs under Section 3.3,
the Financing Costs of the Revenue Bonds shall not be included as Project Construction Costs for
that city. Unless approved in writing by the City and each of the other Member Cities, Project
Construction Costs may not exceed $92,500,000 (representing approximately $81,000,000 in project
costs and $ 11,500,000 in Financing Costs).
2.31 Project Expansion means the acquisition of additional water rights, the construction
of additional well fields, collection and production facilities, and extensions of the aqueduct to serve
member cities.
2.32 Project Operation and Maintenance Costs means the reasonable and necessary
expenses incurred in the efficient and economical administration, management and operation and the
maintenance of the Project in good repair and operating condition as provided in the Revised Manual.
2.33 Project Payments means the payments from each Member City (other than the City)
under its respective Agreement for the Purchase and Acquisition of Conjunctive Use Groundwater
Supply with the Authority and from the City under this Agreement for the Project Construction
Costs.
2.34 Project Payment Fund means the fund established by the Board for each series of
Revenue Bonds in accordance with Section 4.4 of this Agreement.
2.35 Project Water means water available for use through the Project works.
l;
2.36 Project Water Supply Costs means those costs associated with the acquisition of the
Water Rights, well fields, collection facilities and production facilities for the Project.
2.37 Project Water User refers to all member cities and other contractors, their successors
and assigns, which have contracted with the Authority to receive a portion of the project water
supply.
2.38 Requisitionmeans an invoice, statement, or progress payment request submitted to
the Authority for payment as a part of the Project Construction Costs.
2.39 Revenue Bonds means bonds to be issued by the Authority to pay Project
Construction Costs, whether in one or more issues, including Parity Bonds, such bonds to be secured
by a lien on and pledge of Project Payments and any bonds issued to refund any revenue bonds or to
refund any such refunding bonds.
2.40 Revenue Bond Funding Date means, for each series of Revenue Bonds, the date the
Revenue Bonds are delivered to the initial purchasers of the Revenue Bonds.
2.41 Revised Manual means the current version of the Canadian River Municipal Water
Authority Manual, as amended from time to time by the unanimous vote of the Board.
2.42 Rule means United States Securities and Exchange Commission Rule 15c2-12, as
amended.
2.43 Unallocated and Unpledged Balance means, for each series of Revenue Bonds, the
balance of funds determined by the Board according to Article 4 of this Agreement.
2.44 Water Rights means those rights to underground water acquired by the Authority in
Roberts and Hutchinson Counties pursuant to the Water Rights Acquisition Agreement between the
Authority and Quixx dated June 23, 1995, and any additional water rights acquired through a Project
Expansion.
2.45 Year means the period January 1 through the next following December 31 unless
otherwise indicated by the text.
R
ARTICLE 3. CI TY'S PAYMENT OF ITS SHARE OF
PROJECT CONSTRUCTION COSTS
3.1 Construction Repayment Obligation. In consideration of the allocation to it of
37.058 percent of the normal water supply from the Project, or a like percentage of any lesser
available supply, the City shall pay to the Authority the City's share of Aqueduct Construction Costs
and the City's share of Project Water Supply Costs (collectively referred to as "Project Construction
Costs").
3.2 Payment of Project Construction Costs. The Authority anticipates issuing Revenue
Bonds to pay for the construction of the Project that will be payable from and secured by the Project
Payments from Member Cities pursuant to this Agreement. Payment of the City's Share of Project
Construction Costs will be made to the Authority in accordance with the applicable Construction
Cost Payment Schedules for each series of Revenue Bonds established from time to time by the
General Manager. Such Construction Cost Payment Schedule shall correspond to the debt service
schedules for the Revenue Bonds issued to fund any portion of the Project Construction Costs. All
payments will be made in such manner to provide the Authority with immediately available funds on
the due date for such payment.
3.3 City's Option to Pay Construction Cost Payment Without Providing Payment
of the Authority's Revenue Bonds. Rather than committing to make monthly payments of the
tom`' City's Share of Project Construction Costs for the Authority's Revenue Bonds, a Member City shall
have the option to independently fund all or a portion of its own share of the Project Construction
Costs for any series of Revenue Bonds. In order to exercise this option, the City must notify the
Authority of its intent to provide such funding so as not to participate in the payment of all or a
portion of its share of the Project Construction Costs attributable to such series Authority's Revenue
Bonds. Such notification must occur on or before thirty (30) days after the Authority notifies the City
of its intention to issue Revenue Bonds as provided in Section 4.1.
(a) The City, if it gives such notice, shall arrange for the payment of all or a
portion of the City's Share of Project Construction Costs which it will fund separately from the
Revenue Bonds. The City shall deposit, in the time and manner provided below, the City's Share of
Project Construction Costs which it desires to independently fund in an escrow account, pursuant to
an escrow agreement, in a state or national bank with trust powers having a combined capital, surplus
and undivided profits of at least $75,000,000, that will be for the exclusive benefit of making the
City's payment to the Authority for the payment of the City's Share of Project Construction Costs.
The Authority shall have the right to approve and accept the form and provisions of the escrow
agreement. The City and the Authority shall resolve any problem with the form and provisions of the
escrow agreement to their mutual satisfaction. The City shall certify that it has unencumbered
available funds to make its deposit into escrow according to the following schedule: (1) For the first
series of Revenue Bonds issued under this Agreement, the City shall make its certification within
thirty (30) days after the receipt of notice provided in Section 4.1 and (2) for any subsequent series
of Revenue Bonds the City shall make its certification within one hundred twenty (120) days after the
7
receipt of notice provided in Section 4.1. If the City having given notice, fails to make its certification
and provide for firm banking arrangements to create an escrow fund for the full payment of all or a
portion of the City's Share of Project Construction Costs, the Authority shall notify the City that it
is proceeding to issue the Revenue Bonds for an amount that includes all of the City's Share of the
Project Construction Costs. Thereafter, the Authority may issue its Revenue Bonds in an amount that
includes all of the City's Share of the Project Construction Costs, and the City agrees that it will be
responsible for the payment on the same basis as if it had never given notice that it intended to
provide independent funding for its share of the Project Construction Costs.
(b) Within 15 days following receipt of the notification that the City has certified
the availability of funds to place in escrow under Section 3.3 (a) of this Agreement, the Authority shall
calculate the City's Share of the Project Construction Costs remaining, if any (the "Remaining Project
Cost Percentage"), which percentage shall be attributable to costs associated with the issuance of
Revenue Bonds. The Authority shall notify City of its Remaining Project Cost Percentage, if any.
Such Remaining Project Cost Percentage shall be calculated by reducing the portion of the total
Project Construction Costs attributable to the City by the amount of funds to be deposited in escrow
pursuant to Section 3.3(a) hereof (the "Remaining Project Cost Amount"). The Remaining Project
Cost Amount shall be divided by the total Project Construction Cost to determine the Remaining
Project Cost Percentage.
r"s, (c) If the City does timely give notice and makes its certification of available funds
pursuant to paragraph 3.3(a), the Authority shall then reduce the amount of the Revenue Bonds to
be issued to account for the City's escrow of the City's share of the Project Construction Costs and
proceed to issue the Revenue Bonds. The City shall then place the funds in the escrow account no
later than five work days prior to the date of the Revenue Bond Funding Date. The Authority shall
notify the City of the Revenue Bond Funding Date on or about the time the contract for the purchase
of the Revenue Bonds is approved by the Board.
(d) If the City elects to fund all or a portion of the City's Share of Project
Construction Costs by depositing funds in an escrow account, the City shall be entitled to manage the
account by making short term investments as authorized by the City's investment policy and to the
interest earned on such account. The City shall not be entitled to interest on money transferred to
the Construction Fund Payment Account.
(e) To the extent that the City funds all of the City's Share of Project Construction
Costs by depositing funds in an escrow account pursuant to this Article 3, the City shall have no
liability for any of the Financing Costs, and any obligations associated with financing by Revenue
Bonds described in Sections 3.1, 3.2, 3.4, 3.5, 8.1, 8.2, 8.8 and, Article 4 shall not apply to the City.
W
3.4 Construction Cost Payments Due for Revenue Bonds and Payments from Escrow
Accounts.
(a) If the Authority issues Revenue Bonds to acquire the water rights and/or to
construct the Project, the Authority for each series of Revenue Bonds shall provide to each Member
City a debt service schedule reflecting the total annual debt service on the Revenue Bonds prior to
the Revenue Bond Funding Date. The debt service schedule will also reflect the City's share of the
Project Construction Costs being funded by the issuance of the Revenue Bonds, the calculation being
based on the Project Construction Costs. The calculation will be made based on the appropriate
proration of the proposed use of the proceeds, being for Aqueduct Construction Costs, Project Water
Supply Costs or a combination thereof. Unless the City has paid its share of the Project Construction
Costs into escrow pursuant to Section 3.3 above, the City shall pay to the Authority, no later than
the first day of each month after the closing on the Revenue Bonds (the "Revenue Bond Funding
Date"), the City's Share of the annual debt service for the Revenue Bonds in accordance with the debt
service schedule provided by the Authority without further notice or billing from the Authority.
(b) The Authority shall also prepare and provide to each Member City prior to the
Revenue Bond Funding Date a Construction Cost Payment Schedule that indicates the estimated
schedule for the expenditures to be made throughout the Construction of the Project for each series
f^e of Revenue Bonds. Such schedule shall be updated, as necessary, and provided to each Member City.
a
(c) As the Authority receives a Requisition for Project Construction Costs, the
Authority shall transfer from the Construction Fund into a subaccount of the Construction Fund (the
"Construction Fund Payment Subaccount") the amount necessary to fund the share of such
Requisitions payable from the proceeds of the Revenue Bonds, and shall also make a draw on any
escrow account for such share of the Requisition that is attributable to that escrow account.
(d) If the City has paid funds into escrow pursuant to Section 3.3(a), then the City
must arrange to transfer that portion of the City's Share of Project Construction Costs necessary to
pay a Requisition referenced in Section 3.3(c) to the Construction Fund Payment Subaccount. The
Authority shall provide to each Member City that has paid funds into escrow, documentation for such
payment. For items that do not relate to the actual construction which require an engineer's
certification, the Authority shall submit the Requisition with the Authority's calculation of the City's
share. For construction items, the Authority shall submit a copy of the Requisition, a certification by
the Project engineer as to the accuracy of the Requisition and compliance with the plans and
specifications for construction, and the Authority's calculation of the City's share of the Requisition.
The City shall have 15 days to review the Requisition and the accompanying documentation to check
the calculations and the engineers certification. Unless the City finds a discrepancy in the Requisition
and accompanying documentation during the 15 day review period, the City shall immediately transfer
its share of such Requisition from the escrow account into the Construction Fund Payment
Subaccount. Should the City find a discrepancy in the Requisition and accompanying documentation,
X
it shall immediately notify the General Manager of the Authority and both the City and the Authority
agree to cooperate to resolve the problem prior to release of the funds from the escrow account.
(e) The Authority shall not release a payment from the Construction Fund
Payment Subaccount unless the amount required both from the Revenue Bond financing and the
escrow account or accounts have been placed in the Construction Fund Payment Subaccount.
M The parties understand and agree that, because of the nature of the Project,
it is necessary that each debt service installment be made. Therefore, in the event of the inability of
a Member City to make its proportionate share of the debt service payments on Revenue Bonds, the
Board may, for each year of nonpayment, establish an increased proportionate share of debt service
for the other Member Cities that are participating in the Project through the particular series of
Revenue Bonds related to the nonpayment, and increase each participating Member City's
proportionate share of debt service (provided the City was not the Member City with the inability to
pay or a city that is participating in the financing solely through the escrow payment authorized in
Section 3.3(a)) for the particular series of Revenue Bonds related to the nonpayment to prevent a
default on such series of Revenue Bonds, The share of debt service of the non-paying Member City
shall be apportioned and allocated among the other participating Member Cities obligated for the
payment of said series of Revenue Bonds according each Member City's Share of Project
Construction Costs at the time the allocation is made. If requested by the City, the Authority agrees
to pursue collection of any delinquent payments from a Member City which is in default under this
Agreement, including litigation to recover any payments that are in default and to compel
performance under the contract for payments by the defaulting Member City. Any recovery of such
amounts that have been paid by the nondefaulting Member Cities that are participating in the Project
through the particular series of Revenue Bonds related to the nonpayment will be credited back to
those cities which made the payments in proportion to the amount paid. If such amounts are not
capable of being credited back, the defaulting Member City's allocation of the Project Water Supply
will be reduced and credited proportionately to those Member Cities that have paid the non-paying
Member City's share that are not in default under this Agreement. A Member City that is
participating in the Project solely through the escrow deposit provided for in Section 3.3(a) shall not
be required to assume a part of the debt service attributable to the non-paying Member City. A
Member City that is participating in the Project solely through the escrow deposit method may elect
to participate in assuming its proportionate share of the non-paying Member City's share of debt
service.
3.5 Termination of Project.
(a) If the acquisition of the water rights or the construction of the Project is
terminated or abandoned, the City shall continue to pay timely to the Authority the City's Share of
Project Construction Costs and the City's Share of Operation and Maintenance Expense incurred by
the Authority or obligated to be paid by the Authority at such time and in such manner as will permit
the Authority to meet its obligations and to otherwise fulfill its obligations and liabilities with respect
to the Project, including without limitation, any obligations under any Revenue Bonds.
10
e-a. (b) The Project may not be terminated unless written notice is given to each
Member City thirty (30) days prior to a meeting when the issue of termination of the Project is on the
agenda, and three -fourths of the Members of the Board of the Authority vote to terminate the Project.
W
ARTICLE 4. FINANCING ARRANGEMENTS
4.1 Issuance of Revenue Bonds.
(a) Except for the first series of Revenue Bonds issued under this Agreement, the
Authority shall determine and provide each Member City, not less than one hundred twenty (120)
days prior to proposed issuance of any Revenue Bonds, a notice of the projected Project Construction
Costs, the amount of Project Construction Costs that will be included in the proceeds of the Revenue
Bonds, the principal amount of Revenue Bonds to be issued and each City's Share of Project
Construction Costs. The Authority shall be required to provide not less than forty-five (45) days'
notice to each Member City in order to issue the first series of Revenue Bonds under this Agreement.
(b) The Authority shall not issue the first series of Revenue Bonds under this
Agreement until the Authority files a bond validation suit under article 717m-1, TEX, REV. CIV. STAT.
ANN. and obtains a judgment validating the Revenue Bonds and proceedings authorizing the Revenue
Bonds, including this Agreement. The Authority shall not be required to file a validation suit for
subsequent issues of Revenue Bonds under this Agreement.
(c) If and at such time as the Revenue Bonds have been issued, all Project
Construction Costs, including Project Construction Costs incurred prior to the issuance of the
Revenue Bonds, shall be paid from the proceeds of the Revenue Bonds and escrow funds established
pursuant to Section 3.3, to the extent permitted by state and federal law.
(d) The Authority agrees to use reasonable efforts to issue, sell and deliver the
Revenue Bonds at the earliest practicable time and in an amount sufficient to pay all Project
Construction Costs.
4.2 Revenue Bond Proceeds. The Authority agrees that all proceeds received from the
sale of the Revenue Bonds, if any, as well as all other moneys and payments paid by the City to the
Authority pursuant to this Agreement, shall be applied solely in the manner and for the purposes
specified in this Agreement and the Bond Documents,
4.3 Establishment of Funds and Flow of Funds. For each series of Revenue Bonds
equally and ratably secured from the same source of Project Payments from the same group of
Member Cities, the following special funds shall be established and maintained by the Authority at
an official depository bank of the Authority as provided in the Bond Documents, and must be kept
separate and apart from all other funds and accounts of the Authority, including other issues of
Revenue Bonds (except for Parity Bonds) issued under the Agreement; and shall be secured in
11
t
accordance with the Laws of the State of Texas so long as any of the Revenue Bonds or any
additional obligations or interest thereon are outstanding unpaid:
Project Payment Fund
Construction Fund
Interest and Sinking Fund
Bond Reserve Fund
4.4 Project Payment Fund.
(a) The Authority shall establish a Project Payment Fund for each series of
Revenue Bonds issued under this Agreement.
(b) All payments from the Member Cities to the Authority under the Conjunctive
Use Groundwater Supply Agreements with the Member Cities, except for payments under an escrow
agreement as provided for in Section 3.3 or payments for Project Operation and Maintenance Costs,
as received, are to be deposited in the Project Payment Fund for the particular series of Revenue
Bonds. All money in the Project Payment Fund shall be applied as hereinafter provided.
(c) The money in each Project Payment Fund is to be used by the Board to pay
the debt service on the Revenue Bonds for which such fund was established and to make deposits or
payments required for the reserve funds or special accounts as provided herein for the particular series
of Revenue Bonds.
4.5 Construction Fund. Concurrently with the delivery of each series of Revenue Bonds
to the initial purchasers thereof, the Authority shall establish a Construction Fund to be funded from
a portion of the proceeds of the sale of the Revenue Bonds. A subaccount of the Construction Fund,
the Construction Fund Payment Subaccount, shall be established for payments of Requisitions. The
Construction Fund Payment Account shall be (1) funded with money from escrow accounts of
Member Cities which are not solely making monthly Project Payments for debt service on the
Revenue Bonds which bond proceeds are to be used to pay such Requisition, and (2) a transfer of
bond proceeds from the Construction Fund to pay the portion of such Requisition to be paid from
proceeds of the Revenue Bonds. All Project Construction Costs, including those incurred prior to
the establishment of the Construction Fund, shall be paid from the Construction Fund. Any amount
remaining in this fund after the Construction Completion Date is to be transferred to the Interest and
Sinking Fund, except that the prorata amount attributable to any excess payment by a Member City
making payments under an escrow agreement as provided for in Section 3.3 shall be returned to that
Member City.
4.6 Interest and Sinking Fund. For each series of Revenue Bonds, the Authority shall
establish an "Interest and Sinking Fund." The Authority shall deposit in the Interest and Sinking Fund
the following:
12
21
(a) such amounts, in substantially equal monthly installments, made on or before
the fifth day of the month following the Revenue Bond Funding Date and each month thereafter, as
will be sufficient to pay the interest scheduled to come due on the Revenue Bonds on the next interest
payment date; and
(b) such amounts, in substantially equal monthly installments, made on or before
the fifth day of the month following the Revenue Bond Funding Date and each month thereafter, as
will be sufficient to pay the principal of the Revenue Bonds next due and payable. Except for Parity
Bonds, the money deposited into the Interest and Sinking Fund for a particular series of Revenue
Bonds shall be used only for principal and interest due on that series of Revenue Bonds. Money in
each Interest and Sinking Fund shall be invested as provided in Section 4.9 of this Agreement, and
interest earned on such investment is to be retained in the Interest and Sinking Fund for such series
of Revenue Bonds.
4.7 Bond Reserve Fund. The Authority shall establish a 'Bond Reserve Fund" for each
series of Revenue Bonds on or before the Revenue Bond Funding Date. Concurrently with the
delivery of the Revenue Bonds to the initial purchasers thereof, the Authority shall transfer to the
Bond Reserve Fund for that series of Revenue Bonds an amount not to exceed the least of (i) ten
percent of the par amount of the Revenue Bonds, (ii) the maximum annual principal and interest
requirements on the Revenue Bonds, or (iii) 125 percent of the average annual principal and interest
requirements on the Revenue Bonds from the proceeds of the sale of the Revenue Bonds; provided,
however, the Bond Reserve Funds of Parity Bonds may be considered in the aggregate in meeting
this requirement. Such amount shall never exceed the legally allowed amount permitted by Section
148(d) of the Internal Revenue Code of 1986, as amended. When and so long as the Bond Reserve
Fund contains the legally authorized amount, no further payments need be made therein. But in the
event it becomes necessary to withdraw money from the Bond Reserve Fund to prevent a default in
the payment of principal of or interest on the Revenue Bonds, the Authority shall begin monthly
transfers of funds from the Project Payment Fund into the Bond Revenue Fund on the fifth day of
each month following the withdrawal from the Bond Reserve Fund at a rate, which in the judgment
of the Board, will restore such fund to the required level within a reasonable period of time, such
requirement to be specified in the resolution authorizing the issuance of the Revenue Bonds. Money
in the Bond Reserve Fund is to be invested by the Board in the manner allowed by Section 4.9 of this
Agreement. Interest earned on such investment must be deposited in the Interest and Sinking Fund
for the particular series of Revenue Bonds; provided, however, if at any time, the Bond Reserve Fund
contains less than the amount permitted under Section 148(d) of the Internal Revenue Code of 1986,
as amended, interest on such investment shall be retained in the Bond Reserve Fund until such time
as this fund again becomes fully capitalized.
The Bond Reserve Fund shall be used solely for the purpose of paying when due the principal
of and/or interest on that particular series of Revenue Bonds (and Additional Bonds if issued as Parity
Bonds) when and to the extent the amounts in the Interest and Sinking Fund are insufficient for such
purpose, for defeasing outstanding Revenue Bonds (and Additional Bonds if issued as Parity Bonds)
13
when excess funds are available resulting from a refunding, and for the purpose of finally retiring the
last of the outstanding Revenue Bonds of that series (and Additional Bonds if issued as Parity Bonds).
4.8 Unallocated and Unpledged Balance. Within thirty (30) days after the close of each
fiscal year after the fiscal year in which any Revenue Bonds are issued, the Board shall examine for
each series of Revenue Bonds (or all series of Parity Bonds) the balances in the Project Payment
Fund, the Interest and Sinking Fund, and the Bond Reserve Fund. If, on the last day of any such
fiscal year, the Board is current in the making of deposits into the Interest and Sinking Fund and the
Bond Reserve Fund for that particular series of Revenue Bonds, so that all deposits required under
the Agreement have been made into the. respective funds, and if there are no unpaid obligations
against any of the respective funds, or in the event there are unpaid obligations if they are taken into
account as indicated below, the Board will take the following actions with respect to the funds
maintained for each series of Revenue Bonds that are similarly secured:
(a) Ascertain the balance of funds in the Project Payment Fund for that particular
series of Revenue Bonds;
(b) Ascertain for that particular series of Revenue Bonds the total amount of
unpaid obligations against: the Project Payment Fund, the Interest and Sinking Fund, and the
Bond Reserve Fund (taking into account the special treatment afforded Parity Bonds) ,
including obligations which have been filed and those which have not been filed but, which
in the opinion of the Board, will probably be filed;
(c) Subtract item (b) from the sum from item (a). The remainder shall constitute
the Unallocated and Unpledged Balance for that particular series of Revenue Bonds;
(d) Transfer to the Interest and Sinking Fund for that particular series of Revenue
Bonds such Unallocated and Unpledged Balance,
4.9 Investments. Any money held in the Project Payment Fund for each series of
Revenue Bonds will be separately invested and reinvested in the following investments, as authorized
by the Texas Public Funds Investment Act, Chapter 2256, Texas Government Code: (1) obligations
of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas
or its agencies; (3) other obligations, the principal of and interest on which are unconditionally
guaranteed or insured by the State of Texas or the United States; (4) obligations of states, agencies,
counties, cities, and other political subdivisions or any state having been rated as to investment quality
of not less than "A" or its equivalent; (5) certificates of deposits issued by state or national banks
domiciled in the State of Texas that are guaranteed or insured by the Federal Deposit Insurance
Corporation, or its successor; or are secured by obligations as permitted by Chapter 2256, Texas
Government Code; (6) commercial paper payable in the United States of America, having original
maturities of not more than 92 days that either is rated not less than A-1, P-1, or the equivalent by
at least two nationally recognized credit rating agencies; or is rated at least A-1, P-1 , or the
equivalent by at least one nationally recognized credit rating agency and is fully secured by an
14
WE
irrevocable letter of credit issued by a bank organized and existing under the laws of the United States
or any state thereof; (7) prime domestic bankers' acceptances with a stated maturity of 270 days or
less; or (8) fully collateralized repurchase agreements, as provided in Chapter 2256, Texas
Government Code.
Any money held in the Interest and Sinking Fund and the Bond Reserve Fund for each series
of Revenue Bonds will be separately invested and reinvested by the Board in investments described
in subsections (1), (2) or (5) of the preceding paragraph.
Any investments will be held by or under the control of the Board, and while so held will be
deemed a part of the fund in which such money was originally held. The earnings accruing on such
investments, including any profit realized, will be credited to such funds as provided for in this
Agreement.
The Authority in the resolution authorizing the issuance of the Revenue Bonds or any
Additional Bonds will covenant to pay the required rebate to the United States on any excess earnings
on its investments in accordance with Section 148(f) of the Internal Revenue Code of 1986, as
amended.
4.10 Final Payment. Notwithstanding anything to the contrary herein, whenever the total
amount of funds in the Interest and Sinking Fund and the Bond Reserve Fund for a particular series
of Revenue Bonds is equivalent to the aggregate principal and interest amount due and to become
due on that series of Revenue Bonds (and Additional Bonds if Parity Bonds), no further payments
need be made into the Interest and Sinking Fund or the Bond Reserve Fund securing that series of
Revenue Bonds, and the obligations shall not be regarded as being outstanding except for the purpose
of being paid with the funds on hand. Any amounts remaining in any of these funds after defeasance
and payment of the particular series of Revenue Bonds (and any Additional Bonds issued as a parity
with such bonds) may be transferred to the Project Payment Fund for that particular series of Revenue
Bonds.
4.11 Additional Bonds. The Authority reserves the right to issue, on a parity or non -
parity basis, further revenue obligations (the "Additional Bonds") payable from the Project Payments
for the purpose of refunding Revenue Bonds or completing the Project or for a Project Expansion
to the extent contemplated by this Agreement. Unless Additional Bonds expressly provide they have
a junior lien position, Additional Bonds will have a first lien position on the Project Payments for such
Bonds.
(a) Parity Bonds When issued as Parity Bonds in compliance with applicable law
and the terms and conditions set forth in this Agreement and Bond Documents, if any, such
Additional Bonds shall occupy an equal position with any previously issued Revenue Bonds that are
secured by the same Project Payments from the same Member Cities. The Authority hereby
15
W
covenants and agrees that no Additional Bonds will be issued on a parity basis with previously issued
series of Revenue Bonds unless and until the following conditions have been met:
(1) The Authority is not then in default as to any covenant, condition or
obligation prescribed by this Agreement or the Bond Documents and that the Interest
and Sinking Fund, and the Bond Reserve Fund contain the amounts then required to
be on deposit therein;
(2) The applicable laws of the State of Texas in force at such time and
which provide permission and authority for the issuance of such Additional Bonds
have been fully complied with;
(3) The resolution authorizing such Additional Bonds shall contain
provisions for increasing the Project Payments made in accordance with the
Construction Cost Payment Schedule so that the monthly deposits to be made into the
Interest and Sinking Fund will assure the availability of money on time for the purpose
of paying the installments of interest and principal of such Additional Bonds;
(4) The Additional Bonds are scheduled to mature only on the same
interest payment dates as the Revenue Bonds, and the interest thereon is scheduled
to be paid only on the same interest payment dates as the Revenue Bonds;
(5) The calculation of average annual principal and interest requirements
made pursuant to this section shall be made as of and from the date of the installment
or series of Revenue Bonds then proposed to be issued; and
(6) The resolution authorizing the issuance of such installment or series
of Additional Bonds provides that the aggregate amount to be accumulated and
maintained in the Bond Reserve Fund shall be increased from bond proceeds of the
Additional Bonds to an aggregate amount not less than the least of the average annual
principal and interest requirements for the Revenue Bonds and the installment or
series of Additional Bonds then proposed to be issued or the amounts stated in
Section 4.7.
(b) Non parity Basis. Unless the Additional Bonds are issued as Parity Bonds,
such bonds shall be issued with the establishment of separate Project Payment Funds, Construction
Funds, Interest and Sinking Funds, and Bond Reserve Funds which shall not be used except for the
series of Revenue Bonds for which they were issued. Such Additional Bonds issued on a non -parity
basis may not be issued unless
(1) The Authority is not then in default as to any covenant, condition or
obligation prescribed by this Agreement;
16
W
(2) The applicable laws of the State of Texas in force at such time and
which provide permission and authority for the issuance of such Additional Bonds
have been fully complied with; and
(3) The Additional Bonds are scheduled to mature only on the same
interest payment dates as the other Revenue Bonds, and the interest thereon is
scheduled to be paid only on the same interest payment dates as the other Revenue
Bonds.
(c) Limitation on Revenue Bonds. The aggregate amount of Revenue Bonds
issued under this Agreement (exclusive of Refunding Bonds) shall not exceed the amount specified
in Section 2.30 unless written approval has been obtained from each of the Member Cities.
ARTICLE 5. OPERATION AND MAINTENANCE COSTS
5.1 City agrees to pay City's portion of the Project Operation and Maintenance Costs.
5.2 Project Operation and Maintenance Costs shall be established based on the cost of
providing service to each Member City, as described in the Canadian River Municipal Water
Authority Manual ("Revised Manual"), a copy of which is attached as Schedule B, as such manual
may be revised from time to time by unanimous action of the Board.
5.3 At an appropriate meeting in each calendar year, in no event, however, to be later than
July 15, the Board of Directors of the Authority shall determine the total charges estimated to be
required for operation and maintenance of the Project including accumulating the necessary reserve
funds for the next ensuing fiscal year. A detailed budget, including the Operation and Maintenance
Cost Payment Schedule, shall be made available to the City at least two weeks prior to the Board
meeting for review and comment.
5.4 Payment of all operation and maintenance charges due from the City shall be made by
the City to the Authority on such dates and in such amounts as are designated by the Authority to
provide it with funds when needed, as determined by the Authority, provided that no installment shall
be due and payable before the day upon which the Project is sufficiently complete to permit diversion
by the City of the supply of water allocated to it in this Agreement, or when the Project shall be
deemed to have been completed within the meaning of this Agreement. Whenever collections from
all sources are insufficient to defray Project Operation and Maintenance Costs, proportionate
additional payments may be required through supplemental notice to the City at least sixty (60) days
in advance of the Effective Date. Such notice shall set forth the justification for the increase in full
detail.
17
ARTICLE 6. WATER SUPPLY
6.1 Quantity. For and in consideration of the payments required to be made under this
Agreement, subject to the limitations on Section 6.2 of this Agreement, the Authority agrees to make
the City's Share of the Water Supply of the untreated water from the Project available to the City for
municipal and industrial use annually.
6.2 Allocations.
(a) Allocations of the Water Supply to the City shall be made on the basis of the
rights and responsibilities of Project water users to share in the available water supply in the ratio of
their contractual rights. Nothing in this contract shall be construed as restricting the right of the
Authority to enter into firm contracts for delivery of the entire normal water supply of the Project,
provided that all such contracts shall recognize the rights of all users of Project water.
(b) The Authority shall use its best efforts to meet the needs of the City's total
water supply from the combined resources of the Lake Meredith supply and the groundwater supply
from the Project. When in periods of scarcity, it is necessary to decrease the quantity to be supplied
from either source of supply, the shortfall shall be made up from the other supply to the maximum
available extent, within the limitation of valid permits applicable to each source of supply.
(c) "Scarcity," as used in Section 6.2(b), is defined as the inability of the Authority
to provide each Member City's share of 116,000 acre/feet/year because:
(i) The quantity of water available for withdrawal stored in Lake
Meredith falls below 100,000 acre-feet, or
(ii) Groundwater production capability falls below 50,000 acre-feet/year
due to depletion.
(d) Decreased volumetric allocation due to scarcity shall not affect the continuing
obligation of the City to make the payments required by this Agreement.
6.3 Unit of Measurement. The unit of measurements for water delivered hereunder shall
be 1,000 gallons of water, U.S. Standard liquid measure.
6.4 Allocated Water Not Used. If the City does not use the total amount of water to
which it is entitled in any particular year, it shall not retain any carryover rights into succeeding years.
6.5 Conjunctive Use. It is intended that water from the Project will be blended with
water from Lake Meredith to improve the quality of water available to the City, and to increase the
water supply available to City. Generally, water will be blended from each source of supply in a
manner to meet both water quality goals and water quantity demands, utilizing the renewable surface
18
water supply from Lake Meredith to the maximum extent possible. The proportions of surface water
and ground water utilized at any specific time, or during any specific year, will be determined by the
Board or its designee, taking into account requests or suggestions from each city to the extent
possible.
6.6 Water Shortages. On account of drought or other causes beyond the reasonable
control of the Authority, there may occur at times during any year a shortage in the quantity of water
available for transmission to the City by the Authority pursuant to this contract. In no event shall any
liability accrue against the Authority or any of its officers or employees for any damage, direct or
indirect, arising out of any such shortages.
6.7 Control of Water. Right and responsibility for the control of all waters of the project
to the point or points of delivery shall remain in the Authority. Upon passing through the Authority's
meter installed at the point or points of delivery, right and responsibility for the control of water shall
pass to the City. The Board shall retain control of the source of the water
to be delivered to the City to make up the City's share of water, from the Project and the Canadian
River Project.
6.8 Point of Delivery. Deliveries of water to the City may be made at any point on the
Aqueduct between the source of supply and the point shall be the same point of delivery utilized by
City to receive water from Lake Meredith. The City may request that all or any part of its share of
the water supply from the Project be delivered at additional points on the Aqueduct if the City has
reserved Aqueduct capacity. Upon approval of such request for a change in the point of delivery or
for additional points of delivery, the cost of new connections as determined by the Authority shall be
advanced by the City as provided in the Meredith Supply Agreement.
6.9 Allocation of Aqueduct Capacity. This Agreement does not modify or amend the
allocation of capacity of the Canadian River Project Aqueduct under the Meredith Supply Agreement.
The provisions of this section apply only to the new Aqueduct constructed as part of this Project.
In the event the combined demand of all water users at a given time for the delivery of water shall
exceed the carrying capacity of the Aqueduct to the proposed point of diversion, deliveries to Project
Water Users will be made equitably on the basis that the maximum rate of delivery to each Project
Water User will be in proportion to its share of the designed capacity of the aqueduct. When the
carrying capacity of the aqueduct is taxed to its limit, the rate of delivery available for serving the City
shall be at least 21.49 million gallons daily (33.26 cubic feet per second). The rate of delivery will
be increased when possible without infringing upon the rights of others, giving consideration to the
demands made by all Project Water Users and the relative rights of each which remain unused for the
year. The determination of availability of water from time to time, and quantity, shall be made by the
Authority, whose determination shall be final.
6.10 Water Measurement. Metering and delivery points of water shall be governed by
the provisions of the Meredith Supply Agreement.
19
6.11 Easements. The Authority is hereby granted the right to use any easements, right-of-
way, or property held by the City for the purpose of making connections to the point or points of
delivery and the placing of necessary equipment to carry out the Authority's obligation to deliver
water to the City, including related operation and maintenance. Any easement shall be reduced to
writing and recorded.
6.12 Benefits Conditioned Upon Payment. Should any charges or payments required
by the terms of this Agreement and levied against any Project Water User be judicially determined
to be irregular or void, or the City or its officers be enjoined or restrained from making or collecting
any charges as provided for herein, such user shall have no right to any of the benefits of this
Agreement and no water shall be made available from the Project for such Project Water User. If it
is judicially determined that the City is not authorized to accomplish collections necessary for the sale
or distribution of water to meet its obligations under this Agreement, the Authority is hereby
authorized to sell water direct to those using the City supply and apply net revenues therefrom to the
credit of the City's account.
ARTICLE 7. COVENANTS AND OBLIGATIONS OF THE AUTHORITY
7.1 Obligation to Complete Project.
(a) The obligation of the Authority to contract for payment of the reimbursable costs
of construction, operation, and maintenance of the project shall be conditioned upon the execution
of Conjunctive Use Groundwater Supply Agreements with sufficient water users to produce revenues
which, in the judgment of the Authority and participating Member Cities, will repay the costs of
acquiring, constructing and operating the Project. If Conjunctive Use Groundwater Supply
Agreements are not secured whereby such estimated costs of the Authority can be met, the Authority
shall notify the City, whereupon this contract will be voided.
(b) The Authority agrees to proceed promptly and to the best of its ability for
securing construction of the facilities necessary for the performance of its obligations hereunder and
to negotiate all contracts necessary to finance the construction of the Project, It is understood that
at this time the Authority is not in a position to guarantee the undertaking of the construction of the
Project or the date upon which it will be able to make the first delivery of water to the City. The
Authority shall not be liable to the City for any damages occasioned by any delay in the
commencement of such service to the City.
7.2 Operation of Project. The Authority shall exercise reasonable efforts to ensure that
the Project is operated and maintained in accordance with applicable federal, state, and local laws.
7.3 Project Alterations and Repairs. It is expressly recognized by the City that the
Authority may be compelled to make necessary alterations, repairs, and installations of new or
additional equipment from time to time during the life of this Agreement, and any suspension of
delivery to the City due to such work shall not be cause for claim of damage on the part of the City.
20
However, every reasonable effort shall be made by the Authority to provide the City with water in
accordance with this Agreement. In cases of necessary suspension, the Authority shall give the City
as much advance notice as is practicable. The Authority will attempt to provide not less than fifteen
(15) days notice of suspension, and set forth the estimated duration thereof, except in an emergency
situation where conditions prevent providing such notice. In the event any Project facility
instrumental in the delivery of water to the City is destroyed or damaged as the result of any cause,
whether by force majeure or otherwise, so as to make deliveries of water requirements as herein
specified impossible, the Authority shall, to the extent of available resources, immediately proceed
to restore said Project facilities. Each City assumes the responsibility for maintenance of its
distribution system from the point of connection with the Aqueduct and agrees that its system shall
be constructed and maintained to result in a minimum of waste. Should the Authority determine that
any part of such City distribution system is causing unreasonable waste, it shall notify the City, and
upon failure of the City to remedy the situation, at its option the Authority may discontinue or limit
deliveries until the condition complained of has been corrected.
7.4 Maintenance and Operation - Insurance. The Authority agrees that the Project
will be maintained in good condition and that it will be operated in an efficient manner and at a
reasonable cost. So long as any of the Revenue Bonds are outstanding, the Authority will maintain
insurance or coverage through a governmental self-insurance pool for the benefit of the holders of
the Revenue Bonds and of any Additional Bonds of the kinds and in the amounts, if any, which are
normally provided for governmental projects of this type, and that during such time all policies of
insurance or governmental pool coverages shall be maintained in force and effect and that payments
will be made promptly when due. All moneys received from losses under such insurance policies or
governmental pool coverages, other than public liability policies will be pledged as security for the
Revenue Bonds and any Additional Bonds except for the prorata amount attributable to a Member
City making payments under an escrow agreement as provided in Section 3.3, until and unless the
proceeds are paid out in making good the loss or damage in respect of which such proceeds are
received, either by replacing the property destroyed or repairing the property damaged. Adequate
provision for making good such loss or damage is to be made within ninety days after the date of the
loss. The payment of premiums for all insurance policies required are to be considered as Project
Operation and Maintenance Costs.
7.5 Records and Accounts.
(a) So long as any of the Revenue Bonds or any interest thereon remain
outstanding and unpaid, the Authority will keep and maintain a proper and complete system of books,
records and accounts pertaining to the acquisition, construction and operation of the Project, separate
and apart from all other records and accounts in which complete and correct entries shall be made
of all transactions relating to the Project, and that the registered owner of any of the Revenue Bonds
or any duly authorized agent or agents of such registered owner shall have the right at all reasonable
times to inspect all such books, records, accounts and data relating thereto, and to inspect the
properties comprising the Project. Within six (6) months following the close of each fiscal year, the
Board will cause an audit of such books and accounts to be made by an independent certified public
21
accountant, showing the receipts and disbursements for account of the Project for such fiscal year.
Each such audit, shall in addition to any other items considered proper by the independent certified
public accountant, particularly include the following:
(1) a detailed statement of the income and expenditures for account of the Project
for such fiscal year;
(2) a balance sheet as of the end of such fiscal year;
(3) the independent certified public accountant's comments regarding the manner
in which the Board has carried out the requirements of this Agreement and Bond Documents,
and his or her recommendations for any changes or improvements in the operation, records
and accounts of the Project; and
(4) a list of the insurance policies in force at the end of the fiscal year on the
properties of the Project, setting out as to each policy the amount thereof, the risk covered,
the name of the insurer, and the policy's expiration date.
(b) For so long as the Project is in operation, the Authority will maintain a proper
set of books, records and accounts pertaining to the operation of the Project which shall be available
for inspection by the Member Cities. The original purchaser of the Revenue Bonds and any
elo� bondholder shall have the right to discuss with the accountant making the annual audit the contents
thereof and to request such additional information as he may reasonably request.
(c) Expenses incurred in making the audits above required shall be considered as
Project Operation and Maintenance Costs and paid as such.
7.6 Defeasance. The Authority may provide for the defeasance of its Revenue Bonds in
the Bond Documents.
7.7 Sale or Encumbrance of Properties. So long as any Revenue Bonds remain
outstanding, the Authority shall not, except as otherwise prescribed herein or in the Bond Documents
or as consented to by the holders of the Revenue Bonds, sell, or in any other manner dispose of any
properties comprising the Project, including property acquired later with the proceeds of Additional
Bonds. Notwithstanding anything herein to the contrary, the Board may dispose of property which
in its judgment has become inexpedient for use in connection with the Project. In the event of the
disposition of any property under such circumstances, the proceeds from such sale shall be used to
acquire other property suitable for use and needed by the Project or, if such sale occurs following the
termination of the Project pursuant to Section 3.5 hereof, the proceeds of the sale will be disposed
of as follows: (a) return the prorata portion attributable to a city which were paid directly pursuant
to Section 3.3, and (b) deposit the remainder to the credit of the appropriate Interest and Sinking
Fund for the payment of the Revenue Bonds issued to pay all or a part of the property sold.
22
7.8 Board to Submit Information to Meet Continuing Disclosure Requirements. In
order to meet the requirements imposed by United States Securities and Exchange Commission Rule
15c2-12, as amended (the "Rule"), if Revenue Bonds are issued and outstanding, the Authority shall
provide annually to each Nationally Recognized Municipal Securities Information Repository
("NRMSHV) and the State Information Depository ("SID") for the State of Texas, within six months
after the end of each fiscal year ending in or after 1996, financial information and operating data with
respect to itself of the general type included in the final Official Statement. To the extent the City and
the other Member Cities provide the requisite information, the Authority will provide such financial
information and operating data with respect to the City and the other Member Cities of the general
type included in the final Official Statement annually to each NRMSIR and the SID for the State of
Texas, within six months after the end of each fiscal year ending in or after 1996. The obligation to
make such reports will be for so long as the City or any of the Member Cities provide the information
to the Authority and remain an "obligated person" as defined in Rule 15c2-12(f)(10). The Authority,
with respect to the Revenue Bonds, also agrees to notify the SID for the State of Texas and either
each NRMSIR or the Municipal Securities Rulemaking Board, in a timely manner, of any of the
events listed in Rule 15c2-12(b)(5)(ii)(C), if such event is material within the meaning of the federal
securities laws. This covenant is for the benefit of the City, the other Member Cities, and the holders
of the Revenue Bonds and shall remain in effect for so long as the Authority remains an "obligated
person."
ARTICLE 8. COVENANTS AND OBLIGATIONS OF THE CITY
8.1 Rate Covenant. The City covenants that during the term of this Agreement and if
and for so long as any Revenue Bond is outstanding after the term of this Agreement, it shall fix,
maintain and collect uniform and nondiscriminatory charges for the facilities and services afforded
by its waterworks system as required by TEX. REV. CiV. STAT. ANN. art. 1113.
8.2 Additional Sources of Payments. The City may appropriate money from any
lawfully available source for the purpose of relieving the necessity of increasing the rates and charges
of its water service.
8.3 Compliance with Law. The City shall comply with all applicable federal, state, and
local laws or regulations applicable to supply of water from the Project or the City's delivery of such
water. The City's obligations under this Agreement shall never be construed to constitute a debt of
the City of such kind as to require it under the constitution and laws of the State of Texas to levy and
collect a tax to discharge such obligation.
8.4 Authorization and Validity. The City represents and warrants that the execution,
delivery and performance of this Agreement have been duly authorized by the City, that this
Agreement has been duly executed and delivered by the City and constitutes a legal, valid and binding
obligation of the City, enforceable against it in accordance with its terms. The City represents and
warrants this Agreement does not exceed any constitutional or statutory limitations, and that
provision will be made for all payments due hereunder by irrevocably pledging to the payment hereof
23
sufficient revenues of the water works system of the City. The City warrants and guarantees that it
has not obligated itself, and is not now bound by the issuance of prior bonds or otherwise in such a
manner that prohibits or makes inoperative any of the terms, conditions or obligations herein
provided. Neither the execution and performance of this Agreement, nor the consummation of the
transactions contemplated hereby will (a) result in a violation or breach of any agreement or other
instrument under which the City is bound or (b) violate any applicable law, ordinance or regulation,
or any judgment or order of any court or governmental agency affecting the City.
8.5 Prior Obligations of City's Waterworks System. The City represents and covenants
that the facilities and services to be obtained pursuant to this Agreement are essential and necessary
to the operation of the City and its waterworks system, and that all payments made hereunder by it
will constitute operating expenses of the City's waterworks system within the meaning of the
provisions of all City ordinances and resolutions authorizing the issuance of the City's revenue bonds,
payable from revenues of its waterworks system, with the effect that the City's obligation to make
payments to the Authority from its waterworks system revenues under this Agreement shall have
priority over its obligations to make payments of the principal and interest on any and all of such
bonds.
8.6 Exclusive Agreement. The Authority acknowledges that the water from the Project
will not be sufficient to supply all of the City's water requirements. Subject to that understanding,
the City will obtain all of the water supplied to the City from the Project, as contemplated by Section
791.026(b), Tex. Govt. Code. To the extent that Project does not meet the all the requirements of
the City, the City may also operate and obtain other independent sources of supply which it will use
in addition to or in conjunction with the supply from the Project, including the Lake Meredith supply
which the Authority also operates.
8.7 City Obligation Not Separable. The City as a whole is obligated to pay to the
Authority the charges becoming due as provided in this Agreement, notwithstanding the default in
the payment to the City by individual water users of charges fixed by the City.
8.8 City's Disclosure Agreement. The City acknowledges that if Revenue Bonds are
issued, it will be "obligated person" as defined in Rule 15c2-12(f)(10) of the Rules of the United
States Securities and Exchange Commission, If Revenue Bonds are issued, the City appoints the
Authority as its agent to file the financial information and operating data required by the Rule. The
City agrees to provide to the Authority a copy of its annual audited financial statement and such other
financial and operating information necessary for the Authority to comply with the continuing
disclosure requirements under the Rule. The information for the annual report shall be provided no
later than four months from the end of the City's fiscal year. This covenant is for the benefit of the
Authority and the holders of the Revenue Bonds and shall remain in effect for so long as the City
remains an "obligated person" as defined in Rule 15c2-12(f)(10). Should the City fail to provide the
requisite information to the Authority within the four month period after the end of its fiscal year, the
City agrees that it will make its own filings to comply with the Rule within six months after the end
of its fiscal year.
24
ARTICLE 9. GENERAL PROVISIONS
9.1 Assignment of Agreement. This Agreement or the payment of performance
obligations of the City hereunder, may be assigned by the Authority without the consent of the City
only to a legislatively created or determined successor entity. The City may not assign all or any part
of this Agreement without the prior written consent of the Authority, which consent shall not be
unreasonably denied.
9.2 Term of Contract. This Agreement shall be effective on execution and shall continue
until the Revenue Bonds for the acquisition of the Water Rights and construction of the Aqueduct
are paid in full. Upon expiration of said term the City shall have a vested right to renew said
Agreement indefinitely at appropriate annual service charges so long as a water supply from the
Water Rights is available in sufficient quantities and the City is current on its payments for water
service. After the acquisition and construction Bonds are paid, succeeding payments shall be the
estimated amounts which will be required to meet the City's proper share of the Authority's
obligations, including, but not limited to, Project Operation and Maintenance Costs.
9.3 Inspection of Books and Records. Each party shall have the right, during normal
office hours, to inspect and at its own expense to make copies of the other party's books and official
records relating to matters covered by this Agreement.
9.4 Past Due Payments. A past due penalty of five percent (5%) shall be charged on any
amount owed under this Agreement which is not paid when due.
9.5 Default under Bond Documents. If at any time, the Authority has failed to perform
any of its obligations under this Agreement (a) which are related to the Bond Documents or (b) which
result in the occurrence of an event of default under the Bond Documents, the Authority may obtain
from the holder of the Revenue Bonds a consent to the Authority's failure to perform the obligation
or a waiver of the event of default. The consent or the waiver of the holders of the Revenue Bonds
will automatically cure an event of default under this Agreement resulting from the Authority's failure
to perform the obligation and will relieve the Authority from performing the obligation to the holders
of the Revenue Bonds.
9.6 Amendment. Subject to Section 9.14 of this Agreement, this Agreement may not be
modified or amended without the mutual written agreement of the Authority and the City.
9.7 Subject to Authority Contract. This Agreement shall be subject to the terms,
conditions, and provisions of the contract between the Authority and Quixx for acquiring Water
Rights for the Project, as amended or modified, and to all applicable state, federal and local
government laws or regulations.
9.8 Notices. Each notice, request, demand, approval or other communication which may
be or is required to be given under this Agreement shall be in writing and shall be deemed to have
25
been properly given when delivered personally at the address set forth in Schedule C for the intended
party during normal business hours at such address, when sent by facsimile or other electronic
transmission to the respective facsimile transmission numbers of the parties set forth in Schedule C
with the telephone confirmation of receipt, or when sent by recognized overnight courier or by United
States registered or certified mail, return receipt requested, postage prepaid, addressed as provided
in Schedule C. Notices shall be given to such other addressee or address, or both, or by way of such
facsimile transmission number as the particular party may from time to time designate by written
notice to the other parties hereto. Each notice, request, demand, approval or other communication
made in accordance with this Section 9.8 shall be deemed given and received for all purposes of this
Agreement as of three business days after the date of deposit thereof for mailing in a duly constituted
United States post office or branch thereof, one business day after deposit with a recognized
overnight courier service, or upon confirmation of receipt of any facsimile transmission. Notice given
to a party hereto by any other method shall only be deemed to be given and received when actually
received in writing by such party.
9.9 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Texas.
9.10 Further Action. The parties shall execute and deliver all documents, provide all
information and take such action as may be reasonably necessary or appropriate to achieve the
purposes of this Agreement or to assist the Authority in obtaining financing for the Project and related
activities. The City specifically understands and agrees, in this respect, that the Authority may, in its
discretion, obtain financing for all or a part of the Project from one or more sources, including but
not limited to the issuance of Revenue Bonds. The City shall, as reasonably requested, execute such
documents and enter into such amendments to this Agreement as the Authority reasonably requests,
in order to facilitate the issuance of Revenue Bonds or obtaining other financing for the Project and
related activities. A description of any issue of Revenue Bonds, or other Project financing, shall be
attached to this Agreement as Schedule D, as soon as practicable after arrangements for such
financing activities are finalized.
9.11 Binding Et%ct. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors, legal representatives, and permitted assigns.
9.12 Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.
9.13 Severability. In the event that any of the provisions, or portions thereof, of this
Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity
and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby. The
parties shall, if any portion of this Agreement is determined to be unenforceable or invalid, exercise
their reasonable best efforts to negotiate an amendment to this Agreement which will evidence the
original intent of the parties with respect to the invalid or illegal provision.
26
9.14 Waiver. No failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon
a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement
or condition.
9.15 Defaults and Remedies.
(a) An event of default shall occur when the City fails to pay all or any part of a
payment to the Authority when due hereunder, or when the Authority fails to deliver water to the City
as required by Article 6 of this Agreement.
(b) If the City fails to pay all or any part of a payment to the Authority when due,
and such amount remains outstanding and unpaid for ninety (90) days, the Authority shall send notice
to the City and all the other Member Cities of the failure of the City to make the payment. The City
shall have ninety (90) days after the receipt of the notice to become current. Should the City fail to
bring its account current within this time, an event of default occurs and the Authority may declare
the Agreement with the City to be terminated and the City's rights under the Agreement permanently
forfeited, and the Authority may withhold all or any part of the normal water supply allocated to the
City by this Agreement and may sell or dispose of such part without obligation, responsibility, or
liability for damages to the City and shall apply the net revenue from said sales as a credit upon the
obligation of the City to the Authority. Notice to the other Member Cities shall be to inform them
that they may be called on to assume the non-paying city's share as provided in Section 3.4(f).
(c) If an event of default occurs, the Parties may, in addition to any other rights
or remedies provided herein or at law, exercise any or all of the following right and remedies:
(i) The City stipulates that payment of the City's obligations hereunder is
a ministerial duty.
(ii) The Authority may terminate this Agreement. Such termination shall
not relieve the City of its obligations under this Agreement.
9.16 Force Majeure. If by reason of force majeure, either party shall be rendered unable,
wholly or in part, to carry out its obligations under this Agreement, and if such party gives notice and
full particulars of such force majeure, in writing, to the other party within a reasonable time after
occurrence of the event or cause relied on, the obligations of the party giving such notice (other than
obligations for the payment of money), so far as they are affected by such force majeure, shall be
suspended during the continuance of the inability then claimed, including a reasonable time for
removal of the effect thereof. The term "force majeure" shall mean acts of God, strikes, lockouts or
other industrial disturbances, acts of the public enemy, orders of any kind of the Government of the
United States, or any state, or any agency or political subdivision of the United States or any state,
or any other civil or military authority, insurrections, riots, epidemics, landslides, lightening,
earthquakes, fire, hurricanes, tornadoes, storms, floods, washouts, arrests, civil disturbances,
27
explosions, breakage or accidents to machinery, transmission pipes or canals, shortages of labor,
materials, supplies or transportation, or any other like cause not reasonably within the control of the
party claiming such inability. The requirement that any force majeure shall be reasonably beyond the
control of the party shall be deemed to be fulfilled even though the existing or impending strike,
lockout or other industrial disturbance may not be settled but could have been settled by acceding to
the demand of the opposing person or persons. The parties shall use their best efforts to remove the
cause of any force majeure; provided further, to the extent the inability does not continue the City
shall retain its right to receive the volume of water that would have otherwise been delivered, and
the Authority shall make delivery of such water as soon as is reasonably possible following
resumption of deliveries, or upon such other terms as the parties may agree.
9.17 Counterparts. This Agreement may be exercised in counterparts. All counterparts
together shall constitute one agreement binding on all the parties, notwithstanding that all parties are
not signatories to the original or the same counterparts.
9.18 Descriptive Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or interpretation of this
Agreement.
9.19 Construction of Agreement. The parties intend that this Agreement relate
specifically to the Project, and constitutes an activity distinctly separate and apart from the Canadian
River Project. The parties do not intend that this Agreement constitute an amendment or
modification of the Municipal Water Supply Contract. It is the further intention of the parties that
this Agreement not be strictly construed against either party hereto, it being understood that this
Agreement was negotiated, in good faith, by each party to this Agreement.
9.20 Non -Discrimination. In connection with the performance of work under this
Agreement and in the provision of its water works services, the City agrees not to discriminate
against any employee or applicant for employment because of race, religion, color or national origin.
9.21 Determinations. Where the terms of this Agreement provide for action to be based
upon the opinion or determination of either party to this contract, whether or not stated to be
conclusive, said terms shall not be construed as permitting such action to be predicated upon
arbitrary, capricious, or unreasonable opinions or determinations.
9.22 Costs, Expenses and Legal Fees. Each party shall bear its own costs and expenses
('including attorneys fees) except that each party hereto agrees, to the extent allowed by applicable
law, to pay the costs and expenses, including reasonable attorneys fees, incurred by the other party
in successfully (a) enforcing any of the terms of this Agreement or (b) proving that the other party
breached any of the terms of this Agreement in any material respect.
9.23 Remedies. The remedies provided in this Agreement shall not be exclusive of any
other rights or remedies available by one party against the other, either at law or in equity.
28
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this contract to be duly executed in several counterparts, each of which
shall constitute an original, all as of the day and year first above written.
AUTHORITY: CANADIAN RIVER MUNICIPAL WATER
AUTHORITY
ATTEST:
ATTEST:
Betty M. Johnson, Cqty Secretary
APPROVED AS TO CONTENT:
Terry Ellerbr ok, Managing Direct of
Water Utilities
APPROVED AS TO FORM:
Anita Burgess, City Attorney
29'
CITY OF LUBBOCK §
COUNTY OF LUBBOCK
STATE OF TEXAS
AFFIDAVIT
Before me, the undersigned authority, personally appeared Betty M. Johnson,
who, being by me duly sworn, deposed as follows:
My name is Betty M. Johnson, I am of sound mind, over 18 years of age, capable
of making this affidavit, and personally acquainted with the facts herein stated:
I am the custodian of the records of the City Secretary's Office for the City of
Lubbock, Texas. Attached hereto is a copy of the Resolution No. 5171, Item #4 taken
from the City Council's Special Meeting on May 3, 1996, from the official records of the
City of Lubbock. These records are kept by me, the City Secretary, in the regular course
of business, and it was in the regular course of business of the City Secretary of the City
of Lubbock, Texas or an employee or representatives of the City Secretary of the City of
Lubbock, Texas, with knowledge of the act, event, condition, opinion, or diagnosis,
recorded to make the record or to transmit information thereof to be included in such
record; and the record was made at or near the time or reasonably soon thereafter. The
records attached hereto are the original or exact duplicates of the original.
1,ctt- )jc�, _-
Af iant
BEFORE ME, the undersigned authority, a Notary Public in and for said County,
Texas. on this day personally appeared Betty M. Johnson, known to me to be the person
whose name is subscribed to the foregoing instrument and acknowledged to me that she
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 8th day of May 1996.
(Seal)
.; . .. Notary Public, State of Texas
"• �• Commission Expires: 10/06/97
KATHERINE EGGER
i Notary PUWk, State of Texas
••r
my CWMd%WEVk"1W7
RESOLUTION NO. 96-$-1A
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CANADIAN
RIVER MUNICIPAL WATER AUTHORITY AUTHORIZING THE APPROVAL
AND EXECUTION OF CONJUNCTIVEF USE GROUNDWATER SUPPLY
AGREEMENTS WITH EACH MEMBER CITY
WHEREAS, the CANADIAN RIVER MUNICIPAL WATER AUTHORITY is a
conservation and reclamation district duly created and existing
under the laws of the State of Texas (the "Authority") and provides
water to the cities of Amarillo, Borger, Brownfield, Lamesa,
Levelland, Lubbock, O'Donnell, Pampa, Plainview, Slaton, and Tahoka
(the "Member Cities") under water supply contracts; and
WHEREAS, the Authority provides the Member Cities with water
for their municipal water supply through the operation and
maintenance of the Sanford Dam and Lake Meredith (the "Canadian
River Project"); and
WHEREAS, the Authority needs to acquire an additional source
of water in addition to the supply from the Canadian River Project
for the benefit of its Member Cities. An additional underground
water supply, used in conjunction with the existing Canadian River
Project supply, will increase both the quantity and quality of
water the Authority is able to supply its Member Cities; and
WHEREAS, the Authority has negotiated a contract with the
Quixx Corporation, a Texas corporation, for the purchase of an
underground water supply ("Water Rights Acquisition Agreement");
and
WHEREAS, each of the Member Cities has executed a contract, a
Conjunctive Use Underground Water Supply Agreement, and has
submitted it to the Authority to approve and execute in order to
provide for the funding of the costs of the acquisition of the
water rights as provided in the Water Rights Acquisition Agreement,
the construction of an aqueduct, the drilling of wells and the
operation and maintenance of the system to deliver the underground
water supply to the Member Cities (the "Project"); and
WHEREAS, the Authority needs to approve and execute the
Conjunctive Use Underground Water Supply Agreements.
NOW, THEREFORE, be it resolved:
Section 1. The Conjunctive Use Groundwater Supply Agreements
with the cities of Amarillo, Borger, Brownfield. Lamesa, Levelland,
Lubbock, O'Donnell, Pampa, Plainview, Slaton, and Tahoka are hereby
approved.
Section 2. The President of the Authority is authorized to
execute and the Secretary of the Authority is authorized to attest
each of the Conjunctive Use Groundwater Supply Agreements with the
fo" respective Member Cities.
Section 3. A copy of this Resolution shall be attached to
each of the executed Conjunctive Use Groundwater Supply Agreements.
Attest:
46et
Joh C. Williams, Secretary
Ca dian River Municipal Water
Authority
canresap.tmp
W
E. R. oore, resident
Canadian River Municipal Water
Authority
SCHEDULE A
00,01,
Contract between the Canadian River Municipal Water Authority
and the City of Lubbock, Texas for providing a Municipal Water Supply
W
AFS10036oc
5a
C O N T R A C T
between the
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
and the
CITY OF LUBBOCK, TEXAS
for providing a
MUNICIPAL WATER SUPPLY
REP
TABLE OF CONTENTS
ARTICLE SUBJECT PAGE
Preamble------------------------------------------------
I
WhereasArticles----------------------------------------
1
1
General Defintions--------------------------------------
1
2
Pl.an----------------------------------------------------
2
3
Construction repayment obligation-----------------------
3
4
Operation and Maintenance Charges-----------------------
4
5
Water Supply--------------------------------------------
5
6
Water Shortages-----------------------------------------
6
7
Control of Water----------------------------------------
6
8
Point of Delivery---------------------------------------
6
9
Allocation of Aqueduct Capacity-------------------------
6
10
Obligation to Complete Project --------------------------
7
11
Pledge of Contract--------------------------------------
7
12
Project Alterations and Repairs-------------------------
7
13
Limitation on Financial Liability of City---------------
8
14
rater Measurement---------------------------------------
8
15
Contract Contingent Upon Construction of Project--------
8
16
Easements-----------------------------------------------
9
17
Certification------------------ -------------------------
9
18
Benefits Conditioned Upon Payment-----------------------
9
19
Term of Contract --------------------------------- . ------
9
20
Rates and Charges by the City---------------------------
10
21
City Obligation not Separable---------------------------
10
22
Access to Books and Records-----------------------------
11
23
Determinations------------------------------------------
11
24
Penalty for Delinquent Payments-------------------------
ll
25
Default-------------------------------------------------
11
26
Notices-------------------------- -----------------------
12
27
Subject to United States and Authority Contract---------
12
28
Assignments by City-------------------------------------
12
29
Nondiscrimition in Employment-------------------------
12
w
W
CONTRACT
between the
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
and the
CITY OF LUBBOCK, TEXAS
for providing a
MUNICIPAL WATER SUPPLY
AC
THIS CONTRACT, made this �day oY—��'1��i��� , , �,
between the CANADIAAN RIVER MUNICIP WATER Avpm , an autbority duly
created and existing under the laws of the State of Texas, and the CITY
OF LUBBOCK, a municipal corporation in the State of Texas acting by
virtue of authority of general law.
WITNESSETH TW:
WHEREAS, the Authority has contracted or is negotiating with
the United States for payment of the reimbursable costs of construction,
operation, and maintenance of the project works of the Canadian River
Project, Texas, which project is designed to provide a municipal water
supply for member cities of the Authority, and
WHEREAS, the City desires to secure a municipal water supply
from the Authority, and
WHEREAS, construction of the project depends upon the negotiation
of a sufficient number of contracts for a municipal water supply from the
project, and a number of water users within the boundaries of the Authority,
and possibly others outside the Authority, must execute contracts to receive
a share of the project water supply;
NOW, TORE, in consideration of the mutual and dependent
covenants herein contained, it is mutually agreed between the parties
hereto as follows:
GENERAL DEFDMIONS
1. Where used in this contract,
a. United States - Shall mean the United States of America,
4cting through the Secretary of the Interior, or his duly authorized
representative.
l
Lubbock, Texas
b. Authority - Shall mean the Canadian River Municipal
Water Authority, an authority duly created and existing under the laws
of the State of Texas, acting through its Board of Directors.
c. City - Shall mean the City of Lubbock, Texas.
d. Member City - Shall mean a city, town, or municipality
which is a member of the Authority and is contracting for project water.
e. Dam and Reservoir - Shall refer to the Sanford Dam and
Reservoir on the Canadian River used for storing and regulating project
water, including all lands and rights of way.
f. Project - Shall mean the Canadian River Project, Texas,
as authorized by the Act of Congress dated December 29, 1950 (64 Stat. 1124).
g. Project Water - Shall mean water available for use
through the project works for municipal and industrial purposes.
h. Project Water User - Shall refer to all member cities
and other contractors, their successors and assigns, which have contracted
with the Authority to receive a portion of the project water supply.
i. Aqueduct - Shall mean the project system for transport-
ing stored water to the points of delivery established for the project, and
includes all pipelines, conduits, pumping facilities and related works, and
the land and rights of way for such works and facilities.
j. Repayment Contract - Shall mean the contract, or contracts,
between the Canadian River Municipal. Water Authority and the United States
of America for construction of the project.
k. Normal Water Supply - Shall_ mean the amount of water which
studies indicate will normally be available from the project for delivery
each calendar year. Allocations of water are based upon an estimate of
103,000 acre-feet (33,563 million gallons) to normally be available for
release from the reservoir each year.
1. Year - Shall mean the period January 1 through the next
following December 31.
PLAN
2. This contract between the City, which owns and operates its
water distribution system, and the Authority is for requiring the Authority
to make available for delivery to and use by the City, all or part of the
municipal water supply to be used in or for the distribution system of such
City. This contract provides for payment solely out of the water system
revenues of such City and all moneys herein required to be paid by the City
shall constitute an operating expense of the City's water system, and the
2
W
Lubbock, Texas
City shall fix and maintain rates and charges for services rendered by
such water system as will be sufficient to pay the expenses thereof,
including those contemplated by Articles 1109e, 1109g and 1113,
Vernon's Texas Civil Statutes.
CONSTRUCTION REPAYMENT OBLIGATION
3. In consideration of the allocation to it of 37.058 percent
of the normal water supply from the project, or a like percentage of any
lesser available supply, the City shall pay to the Authority 15.752 per-
cent of the actual reimbursable cost of constructing the dam and reser-
voir, and 50.975 percent of the actual cost of constructing the aqueduct
all as determined by the United States. Such construction charge obli-
gation shall be paid in fifty (50) successive annual installments as
follows, based upon a total construction obligation allocation to the
City of $37,548,000, plus interest during construction and interest on
the unamortized balance thereof at the rate of 2.632 percent.
FULL CALENDAR:ANNUAL :FULL CALENDAR: ANNUAL :FULL CALENDAR: ANNUAL
YEAR AFTER :CONSTRUC-:YEAR AFTER :CONSTRUC-:YEAR AFTER XONSTRUC-
COMMENCEMENT MON :COMMENCEMENT MON :COMMENCEMENT :TION
OF SERVICE :SERVICE :OF SERVICE :SERVICE :OF SERVICE :SERVICE
:CHARGE :CHARGE :CHARGE
1
952,4
18 1,587,100
35
1,634,600
2
990,100
19 1,619,ioo
36
1,634,600
3
1,028,500
20 1,634.600
37
1,635,E
4
1,o66,8o0
21
38
5
1,104,500
22
39
6
1,142,8o0
23
40
7
1,181,100
24
41
8
1,219,100
25
42
9
1,257,E
26
43
1,635,E
10
1,295,E
27
44
1,635,500
11
1,333,300
28
45
I
12
1,371,100
29
46
�r
13
1, 4o9, 400
30
47
1,635,500
14
1,447,700
31
48
1,635,600
15
1,485,400
32
49
16
1,523,800
33
50
1,45,600
17
.11555,700
34
Should construction costs payable by the Authority to the United States
vary from $92,96o,000, the amount upon which annual installments are
established for repayment by the Authority, the amounts designated in
the preceding table shall be adjusted, but not increased unless the City
has executed an amendatory contract or contracts by which it agrees to
pay an increased amount. The City may make additional payments on the
construction repayment obligation at any time, whereupon appropriate
adjustments in the schedule of future payments will be made. Under the
W
W
All
terms of the contract between the Authority and the United States, each
annual installmnt due the United States shall become due and payable on
or before October l of each year commencing with the year immediately
following that in which a notice is given by the United States stating
that the project is sufficiently complete to permit the initiation of
water deliveries and water is available to serve member cities, if such
notice is given prior to October 1, otherwise to commence in the second
calendar year after such notice is given. Me first annual construction
repayment obligation payment by the City to the Authority shall become
due and payable on or before September 1 of the same year in which the
first installment is due and payable by the Authority to the United
States. Subsequent installments shall become due consecutively on
September 1 of each succeeding year. Payments shall be made on the
basis of the above table until all project costs are finally determined
by the United States and reported to the Authority at which time a
revised schedule of payment shall be prepared based upon the sage ratio
of annual repayment as was used in preparing the above table. Payments
thereafter shall conform with that table. If construction of the
project works shall have been commenced, but is terminated prior to
completion by reason of lack of funds or failure to secure the necessary
amendatory contracts, then the City shall pay to the Authority its
percentage share of the total amount theretofore incurred or obligated
by the Authority at such time and in such manner as will permit the
Authority to meet its obligation to the United States.
OPERATION AND MAIMENANCE CHARGES
4. a. At an appropriate neeting in each calendar year, in no
event, however, to be later than November 1, the Board of Directors of
the Authority shall determine the total charges estimated to be required
during the next year for operation and maintenance of the project includ-
ing accumulating the necessary reserve funds. A detailed budget shall
be made available to the City at least two weeks prior to the Board
meeting for review and comment.
b. The City shall pay its share of the total operation
and maintenance charges required to deliver water to the City, on the
basis of the advance estimates prepared by the Authority. At the end of
each year an adjustment will be made in the operation and maintenance
charges to reconcile the charges with actual costs, reserve fund require-
ments, and water uses.
c. Payment of all operation and maintenance charges due
from the City shall be made by the City to the Authority on such dates
and in such amounts as are designated by the Authority to provide it
with funds when needed, as determined by the Authority, provided that
no installment shall be due and payable before the day upon which the
project is sufficiently complete to permit diversion by the City of
the supply of water allocated to it in this contract, or when the
4
Lubbock, Texas
project works shall be deemed to have been completed within the meaning
of the contract between the United States and the Authority for con-
structing and financing the project, all as set forth in a prior written
notice by the Authority to the City. Whenever collections from all
sources are insufficient to defray Authority operation and maintenance
expenses and payments, proportionate additional payments may be required
through supplemental notice to the City at least sixty (6o) days in
advance of the effective date. Such notice shall set forth the justi-
fication for the increase in full detail.
WATER SUPPLY
5. a. Quantity - For and in consideration of the payments
required to be made under this contract, the Authority agrees to make
12,438 million gallons of untreated project water available to the City
for municipal and industrial use during each year of normal supply,
which is the City's pro rats share of the project normal water supply.
b. Allocations - Nothing in this contract shall be
construed as restricting the right of the Authority to enter into firm
contracts fpr delivery of the entire eet�mated normal water supply of
the project, provided, however, that all such contracts shall recognize
the right and responsibility of project water users to share in the
normal water supply in the ratio of their contract rights. During
.1011-1 periods of scarcity when rationing is in the opinion of the Authority
required, the allocation of a lesser volume than listed in Article 5a
shall not affect the continuing obligation of the City to make the
payments provided in this contract.
c. Quality of water - Water delivered to the'City under
this contract shall be as received from storage in the Sanford Reservoir.
d. Unit of Measurement - The unit of measurements for
water delivered hereunder shall be 1,000 gallons of water, U. S.
Standard liquid measure.
e. Allocated Water not Used - If the City does not use
the total amount of water to which it is entitled in any particular
year, it shall not retain any carryover rights into succeeding years.
f. Other Uses - It is understood that the Project is
authorized for the purpose of irrigating land, delivering water for
industrial and municipal use, controlling floods, providing recreation
and fish and wildlife benefits, and controlling and catching silt. The
supply to be available for City use and the price it pays for water may
5
Lubbock, Texas
reflect apportionment among these purposes or regulation of releases to
coordinate all listed benefits.
g. Surplus Water - All project Water available for use
in excess of the normal Water supply, as determined by the Authority,
is hereby defined as surplus Water. Surplus Water may be disposed of
by the Authority for municipal and industrial purposes on such terms or
at such rates as are established by it.
Vol
6. Oa account of drought or other causes beyond the reasonable
control of the Authority, there may occur at times during any year a
shortage in the quantity of Water available for transmission to the City
by the Authority pursuant to this contract. In no event shall any
liability accrue against the Authority, the United States, or any of
their officers or employees for any damage, direct or indirect, arising
out -of any such shortages.
CONTROL OF WATER
7. Right and responsibility for the control of all waters of
the project to the point or points of delivery shall remain in the
Authority or the United States. Upon passing through the Authority's
400111 meter installed at the point or points of delivery, right and respon-
sibility for the control of water shall pass to the City.
POINT OF DELIVERY
8. Deliveries of water to the City shall be made at one
point on the aqueduct system, Which point shall be designated by the
City in advance of construction. A location map or plat showing the
proposed location of the aqueduct will be available for use by the
City in selecting its point of delivery. Thereafter, the City may
request that all or any part of its share of the project water supply
be delivered at the dam and reservoir, or may request deliveries at
additional points on the aqueduct where the City has reserved
aqueduct capacity. Upon approval of such request for a change in
the point of delivery or for additional points of delivery, the
cost of new connections as determined by the Authority shall be
advanced by the City as provided in Article A.
AT.,LOCATION OF AQUEDUCT CAPACITY
9. In the event the combined demand of all water users at
a given time for the delivery of water shall exceed the carrying
capacity of the aqueduct to the proposed point of diversion, deliveries
to project water users will be made equitably on the basis that the
maximum rate of delivery to each project water user will be in pro-
portion to its share of the designed capacity of the aqueduct. When
the carrying capacity of the aqueduct is taxed to its limit, the rate
of delivery available for serving the City shall be at least 41.69
million gallons daily (64.50 cubic feet per second). The rate of
2
All
delivery will be increased when possible without infringing upon the
rights of others, giving consideration to the demands made by all project
water users and the relative rights of each which remain unused for the
year. The determination of availability of water from time to time,
and quantity, shall be made by the Authority, Whose determination shall
be final.
OBLIGATION TO COMPLETE PROJECT
10. The obligation of the Authority to contract for payment
of the reimbursable costs of construction, operation, and maintenance
of the project shall be conditioned upon the execution of contracts with
sufficient water users to produce revenues Mich, in the judgment of the
Authority and the United States, will repay the costs of constructing'
and operating the project water supply and distribution system. If con-
tracts are not secured whereby such estimated costs of the Authority can
be met, the Authority shall notify the City, Whereupon this contract will
be voided.
PLX)GE OF CONTRACT
11. This contract, or the repayment obligations assumed by
the City under it, may be pledged or assigned by the Authority to the
United States as security for repayment of the Authority obligation
for construction, operation, and maintenance of the project, but only
together with other like contracts with all project water users
covering the disposition of the major portion of the project normal
water supply.
PROJECT ALTERATIONS AND REPAIRS
12. It is expressly recognized by the City that the Authority
may be compelled to make necessary alterations, repairs, and installa-
tions of new or additional equipment from time to time during the life
of this contract, and any suspension of delivery to the City due to such
work shall not be cause for claim of damage on the part of the City.
However, every reasonable effort shall be made by the Authority to pro-
vide the City with water in accordance with this contract. In cases of
necessary suspension, the Authority shall give the City as much advance
notice as is practicable, in no event to be less than fifteen (15) days,
and set forth the estimated duration thereof. In the event any project
facility instrumental in the delivery of water to the City is destroyed
or damaged as the result of any cause, whether by force majeure or
otherwise, so as to make deliveries of water requirements as herein
specified impossible, the Authority shall, to the extent of available
resources, immediately proceed to restore said project facilities.
Each City assumes the responsibility for maintenance of its distribu-
tion system from the point of connection with the aqueduct and agrees
that its system shall be constructed and maintained to result in a
minimum of waste. Should the Authority determine that any part of the
City system is causing unreasonable waste, it shall notify the City,
and upon failure of the City to remedy the situation, at its option the
Authority may discontinue or limit deliveries until the condition
complained of has been corrected.
All
LIMITATION ON FIRANCIAL LIABILITY OF CITY
13. The City is obligated under this contract to pay its
share of the costs of construction, operation, and maintenance of the
project. Nothing herein shall be construed as prohibiting the Authority
from making reasonable rate increases to cover expenses authorized by
this contract.
WATER MWLODi M
14. a. Water shall be metered at the point or points of
delivery. The Authority shall furnish, install, operate and maintain at
its own expense at said delivery point a master meter of standard type
for measuring properly the quantity of ,rater delivered under this contract.
Meters for more than one point of delivery requested by the City shall be
furnished, installed, operated, and maintained by the Authority, with the
cost of the meter and its installation to be paid by the City. The City
may, at its option and expense, install. operate and maintain at said
delivery points, a check meter or meters of standard type. The City shall
have access to all such metering equipment at all reasonable times, but
the reading, calibration, and adjustment of the Authority's master meter
shall be done only by employees or agents of the Authority. The Authority
shall keep a true record of all meter readings as transcribed from the
reports of the Authority's employees or agents with respect thereto.
Upon written request of the City, the Authority will give it such infor-
mation as it may request from the Authority's journals or record books or
permit the City to have access to the same in the office of the Authority
during business hours.
b. The Authority shall calibrate its metering equipment
as often as it considers necessary and at such times as the City may
show reasonable evidence of error. If upon any test, the percentage of
any inaccuracy thereof is found to be in excess of 2 percent, registration
thereof shall be corrected for a period extending back to the time when
such inaccuracy began if such time is ascertainable, and if not, then for
a period jextending back one-half of the time elapsed since the last date
of calibration, but in no event further back than a period of six months.
In the event the City has provided no check meter with reference thereto
and if for any reason any master meter is out of service or out of repair
so that the amount of water delivered cannot be ascertained or computed
from the reading thereof, the water delivered during the period such
meter is out of service or out of repair shall be agreed upon by the
parties thereto, by correcting the error if the percentage of the error
is ascertainable by calibration tests or mathematical calculations, or
by estimating the quantity of delivery by the deliveries made during
preceding periods under similar conditions when the meter was registering
accurately.
CONTRACT CONTI%ENT UPON CONSTRUCTION OF PROJECT
15. This contract shall not be valid and binding unless the
repayment contract between the Authority and the United States is
confirmd. 'The Puthcrity agrees to proceed promptly and to the best
9
l0/20/60
of its ability for securing construction of the facilities necessary
for the performance of its obligations hereunder and to negotiate all
contracts necessary to finance the construction of such facilities. It
is understood that at this time the Authority is not in a position to
guarantee the undertaking of the construction of the facilities or the
date upon which it will be able to make the first delivery of water to
the City. The Authority shall not be liable to the City for any damages
occasioned by any delay in the commencement of such service to the City.
EASEMENTS
16. The Authority is hereby granted the right to use any
easements, right-of-way, or property held by the City for the purpose
of making connections to the point or points of delivery and the
placing of necessary equipment to carry out the Authority's obligation
to deliver water to the City, including related operation and maintenance.
CERTIFICATION
17. The City certifies and recites that the execution of
this contract is duly authorized by law and by a majority of the resident
qualified electors owning taxable property in said City and who have
duly rendered the same for taxation, voting at an election held for that
purpose within said City; that all acts, conditions, and things required
to exist precedent to this contract, to render the same lawful and valid,
have been properly done, and happened, and have been performed in
regular and due time, form and manner as required by the consitution
and laws of the State of Texas, and that this contract does not exceed
any constitutional or statutory limitations, and that provision will be
made for all payments due hereunder by irrevocably pledging to the.pay-
ment hereof sufficient revenues of the waterworks system of the City.
The City warrants and guarantees that it has not obligated itself, and
is not now bound by the issuance of prior bonds or otherwise in such a
manner that prohibits or makes inoperative any of the terms, conditions,
or obligations herein provided.
BENEFITS CONDITIONED UPON PAYMENT
18. Should any charges or payments required by the terms of
this contract and levied against any water user be judicially determined
to be irregular or void, or the City or its officers be enjoined or
restrained from making or collecting any charges as provided for herein,
such user shall have no right to any of the benefits of this contract
and no water shall be made available from the project for such user.
If it is judicially determined that the City is not authorized to
accomplish collections necessary for the sale or distribution of water
to meet its obligations under the contract, the Authority is hereby
authorized to sell water direct to those using the City supply and
apply net revenues therefrom to the credit of the City's account.
TERM OF CONTRACT
19. This contract shall be effective on execution and shall
continue until the construction repayment obligation is paid in full.
W
All
Upon the expiration of said term the City shall have a vested right to
renew said contract indefinitely at appropriate annual service charges
so long as a crater supply may be availablk and the City is current on
its payments for water service. After the construction repayment
obligation is paid, succeeding payments shall be the estimated amounts
which Brill be required to meet the City's proper share of the Authority's
obligations.
RATES AND CHARGES BY THE CITY
20. a. City shall fix and collect such rates and charges
for water and services to be supplied by its vaterworks system as will
make possible the prompt payment of all expenses of operating and
maintaining its waterworks system, the making of all payments contracted
hereunder, and the prompt payment of the principal and interest on all
of its obligations payable from the revenues of its waterworks system.
The City may in its discretion, as permitted under lags at the time
effective, appropriate money from any sources for the purpose of relieving
the necessity of increasing the said rates and charges for water service.
b. The Authority shall never have the right to demand
payment by the City of any obligation assumed or imposed on it under and
by virtue of this contract from funds raised or to be raised by taxation.
The City's obligations under this contract shall never be construed to be
a debt of the City of such kind as to require it under the Constitution
and laws of the State of Texas to levy and collect a tax to discharge
such obligation, it being expressly understood by the parties hereto that
all payments due by the City hereunder are to be made from water
revenues received by the City.
c. The City represents and covenants that all payments
to be made hereunder by it shall constitute Operating Expenses of its
waterworks system as defined in Article 1113, Vernon's Texas Civil
Statutes.
d. Should the City fail to collect charges due from
any Water user, or should the City be prevented from collecting such
charges by any judicial proceeding, or otherwise fail to collect them,
no such `rater user shall receive Water available under this contract.
The Authority reserves the right Without liability to refuse delivery
of Water to the City in the event the City fails to pay charges at the
time and in the manner and amounts provided for in this contract.
CITY OBLIGATION NOT SEPARABLE
21. The Ci'y as a whole is obligated to pay to the Authority
the charges becoming due as provided in this contract, notwithstanding
the default in the payment to the City by individual water users of
charges fixed by the City.
10
W
M
22. Each party shall have the right, during office hours,
to inspect and to make copies of the other party's books and official
records relating to matters covered by this contract.
DE3'ERMMMATIONS
23. Where the terms of this contract provide for action to
be based upon the opinion or determination of either party to this
contract, whether or not stated to be conclusive, said terms shall not
be construed as permitting such action to be predicated upon arbitrary,
capricious, or unreasonable opinions or determinations.
PENALTY FOR DELINQUENT PAYMENTS
24. Every installment or charge required to be paid to
the Authority under this contract which remains unpaid after it has
become due and payable, shall be subject to a penalty of one-half of
one percent per month from the date of delinquency.
DEE'AUM
25. In the event the City shall fail to pay all or any part
of its obligations incurred under this contract, and such delinquency
shall have continued for a period of not less than two years, the
Authority may, at its option, in addition to all other rights provided
in this contract, exercise all or any of the following rights and
remedies.
a. The Authority may stipulate water rates to be
charged by the City and the City shall conform its rates according.
b. The Authority may withhold all or any part of the
normal water supply allocated to the City by this contract and may sell
or dispose of such part without obligation, responsibility, or liability
for damages to the City and shall apply the net revenue from said sales
as a credit upon the obligation of the City to the Authority.
c. The Authority may terminate this contract whereupon
all rights thereunder accruing to the City shall cease and determine.
Such termination, however, sba-U not relieve the City from its obliga-
tion to pay all costs, charges, or installments due and payable under
this contract prior to the effective date of such termination.
11
Lubbock, Texas
All rights of action for breach of this contract are reserved
to the Authority or the United States. Nothing contained in this con-
tract shall be construed as abridging, limiting, or depriving the United
States or the Authority of any means of enforcing any remedy either at
law or in equity for the beach of any provisions hereof which either
party would otherwise have. The waiver of a breach of any of the pro-
visions of this contract shall not be deemed to be a waiver of any pro-
visions hereof, or of any other or subsequent breach of any provision
hereof.
NOTICES
26. Any notice authorized or required by this contract shall
be deemed properly given, except where otherwise herein specifically
provided, if mailed postage prepaid to the office of the General Manager,
Canadian River Municipal Water Authority, on behalf of the Authority,
and to the Mayor of the City of Lubbock, at Lubbock, Texas, on behalf
of the City. The designation of the person to be notified, or the -
address of such person, may be changed at any time by similar notice.
SUBJECT TO UNITED STATES AND AUTHORITY CONTRACT
27. This contract shall be subject to the terms, conditions,
and provisions of the repayment contract between the Authority and the
United States for constructing and financing the project, as amended or
modified. This contract cannot be amended or supplemented without the
advance written approval of a duly authorized representative of the
United States. The Authority may assign all or any part of its rights
or authority under this contract to the United States.
ASSIGNMSIVS BY CITY
28. The City may sell or assign this contract or any portion
of its allocation of the right to receive project water only with the
approve) of the Authority and the United States. Under any assignment,
it Waist be established to the Authority's satisfaction that the water
right may be transferred under Texas law and the laws of the United
States for diversion as proposed. The -alternate user must enter a con-
tract or contracts satisfactory to the Authority and the United States.
29. a. In connection with the performance of work under this
contract, the City agrees not to discriminate against any employee or
applicant for employment because of race, religion, color or national
origin. The aforesaid provision shall include, but not be limited to,
the following: Employment, upgrading, demotion, or transfer; recruitment
or recruitment advertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training, including apprentice-
ship. The City agrees to post hereafter in conspicuous places, avail-
able for employees and applicants for employment, notices to be provided
by the United States setting forth the provisions of the nondiscrimination
clause.
12
w
Lubbock, Texas
b. The City further agrees to insert the foregoing pro-
vision in all subcontracts hereunder, except subcontractq for standard
commercial supplies or rav materials.
IN WITS WHMOF, the parties hereto acting under authority
of their respective governing bodies have caused this contract to be
duly executed in several counterparts, each of vhich shall constitute
an original, all as of the day and year first above written.
CANADIAN RIVER MUNICIPAL WATER AUTHOR
BY
CITY OF LUBBOCK, 'TEXAS
Title �... ;`:.' Ci; cr L_
%�—j
ATTEST.
City C1 rk riy o: lac rc'.:, ;co;
Approved as to Form:
City Attorney
13
1 ,
s
AMEND4W TO THE COMM CT
BETWEEN THE CANADIAN RIVER MUNICIPAL
WATER AUTHORITY AND THE
�h
CITY OF LUBBOCK., j TEXAS
This Agreement is made this the h day of Jub_ e
1969, between the CANADIAN RIVER MUNICIPAL WATER AUTHORITY, an
authority duly created and existing under the Laws of the State
of Texas, and the CITY OF LUBBOCK, TEXAS
a municipal corporation in the State of Texas.
FOR AND IN CONSIDERATION of the mutual agreements and
covenants, the parties hereto do hereby amend their contract
dated the gth _ day of Jaa%a 19_61 _, as follows:
follows:
A. So that Article 1, section.1, shall hereafter be as
"1.1 Year - shall mean the period January 1 through
the next following December 31 unless otherwise
indicated by the text."
B. Sr) that Article 48 sections a. and b. shall hereafter
be as follows:
%.a. At an appropriate meeting in each calendar year,
in no event, however, to be later than August 1, the
Board of Directors of the Authority shall determine the
total charges estimated to be required for operation
and maintenance of the project including accumulating
the necessary reserve fluids for the next ensuing budget
year commencing October 1 and ending the following
September 30. A detailed budget shall be made available
to the City at least two weeks prior to the Board
meeting for review and convent."
/"Sl
W
"b. The City shal1 pay its share of the total
operation and maintenance charges required to
deliver Water to the City, on the basis of the
advance estimates prepared by the Authoritys
At the end of each budget year an adjustment will
be made in the operation and maintenance charges
to reconcile the charges with actual costs.# reserve
fund requJxements, and Water uses."
This AGRZ= shall. not become effective until a similar
agreement has been executed by the Authority and each of the other
member cities.
Ili „:T;1-.-jG 1IWEOW, . the parties hereto acting under authority
of their res-pective governing bodies, and with the prior approval
of a duly authorized representative of the United States, have
caused this contract to be duly executed in several counterparts,
each of which shall constitute an original, all as of the clay
and year first above written.
a,.
f
IV
RIVER MUNICIPAL
P.
APPROVED. The United States of America
i
BY 46:9=�
�SgdY Leon W. Hill
Title-. X09 iona I pirgd t
-3-
SCHEDULED
Canadian River Municipal Water Authority Manual
w
Amended by action of the Board of Directors of CRMWA on May 15, 1996
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
MANUAL
I. SCOPE AND APPLICABILITY:
The respective cities' share of the total operation and maintenance charges as
contemplated by the Meredith Supply Agreement and the Groundwater Supply
Agreement between the Authority and the respective member cities, including
the establishment of and maintenance of reserve funds, shall be allocated in
accordance with this Manual.
This Manual allocates the expenses for producing and delivering water to the
Authority's member cities from the facilities of the Canadian River Project, as
constructed for the Authority by the Bureau of Reclamation in accordance with
Contract No. 14-06-500-485 and such supplements and amendments thereto
as have been executed prior to the date of approval of this Manual, and from
the facilities of the Conjunctive Use Groundwater Supply Project, to be
constructed in accordance with the Groundwater Supply Agreements, and shall
apply to all expenses payable under Article 4 of the Meredith Supply
Agreements and Article 5 of the Groundwater Supply Agreements between the
Authority and its member cities. Such expenses for production and delivery
shall include only those costs and expenses reasonably related to the
fulfillment of the Authority's contractual obligation to the cities and to the United
States, and shall include no other costs or expenses.
Rates and charges applicable to any programs, functions, or operations, not
covered under contracts in effect as of the date of approval of this Manual are
to be established and determined by the Board of Directors of the Authority
prior to the initiation of such future activities.
Nothing in this Manual shall be construed as affecting in any way the
Construction Repayment Obligations of each member city, as provided for in
the City/Authority contracts.
W
Amended by action of the Board of Directors of CRMWA on May 15, 1996
II. DEFINITIONS:
The following definitions shall apply in all cases where the defined terms are
used in this Manual:
A. Pumping and Chemical Costs" shall mean the following specific costs:
1. The direct cost of energy or motive power required for the pumping of
water from wells in the well field or fields and for the pumping of water
through the Aqueduct system.
2. The direct cost of chemicals required for the efficient operation of the
Aqueduct system.
3. Contributions to the Pumping and Chemical Reserve Fund, as described
in Section III-B hereof and to the Well and Well Pump Reserve Fund, as
described in Section III-C hereof.
B. "General Operation and Maintenance Costs" shall mean all costs covered
by this Manual other than "Pumping and Chemical Costs".
C. "Lake Water Supply Allocation" shall mean that percentage share of the
normal water supply allocated to each member city by the terms of Paragraph
3 of the Meredith Supply Agreement.
D. "Groundwater Supply Allocation" shall mean that percentage share of the
normal water supply allocated to each member city by the terms of Article 6.1
of the Groundwater Supply Agreement.
E. "Cost Accounting System„ shall mean a system of accounting to determine
the cost of delivery of water to each member city, through the Aqueduct
systems as constructed to deliver water to the member cities of the Authority.
The Cost Accounting System described in Appendix A shall be used for this
purpose, as more fully described therein and in Section IV of this Manual.
Page 2
N
Amended by action of the Board of Directors of CRMWA on May 15, 1996
F. All other terms used herein shall have the meaning ascribed to them in the
Meredith Supply Agreements and the Groundwater Supply Agreements
between the Canadian River Municipal Water Authority and each of the
respective member cities.
G. "Meredith Supply Agreements" shall mean the contracts between each
member city and the Authority for providing a municipal water supply from Lake
Meredith and the facilities of the Canadian River Project, as entered in 1960
and 1961.
H. "Ground Water Supply Agreements" shall mean those contracts between
the Authority and each member city for Conjunctive Use Groundwater Supply,
providing for the acquisition of an underground water supply by the Authority
and the provision of water from that source of supply to the member cities for
conjunctive use with water from Lake Meredith, as entered in 1996.
Page 3
W
Amended by action of the Board of Directors of CRMWA on May 15, 1996
III. COMPUTATION OF ASSESSMENTS FOR PUMPING AND CHEMICAL
COSTS:
Expenses incurred for meeting pumping and chemical costs shall be charged
against the City or Cities benefitted by the expenditure, as follows:
A. Pump ng Power Costs: At the end of each Fiscal Year of the Authority, each
member city shall be billed for the direct cost of energy or motive power used
in pumping water to or on behalf of that city during said Fiscal Year. Such
charges shall be computed by distributing the cost of energy or motive power
used at each of the Authority's pumping plants and well fields among the cities
receiving water through that plant or from that well field in proportion to the
volumes of water delivered to those cities. Where water delivered consists of
a blend or mixture of well water and lake water, the costs shall be calculated
in proportion to the total amounts delivered from each source of supply. Only
one such computation, covering the entire Fiscal Year, shall be made annually.
(All computations and the resulting adjustment of charges shall be made at the
end of the complete Fiscal Year.)
Chemical Costs: At the end of each Fiscal Year of the Authority, each
member city shall be billed for the direct cost of chemicals applied to water
delivered to or on behalf of that city during said Fiscal Year. Such charges
shall be computed by distributing the cost of chemicals used at each point of
application among the cities receiving water past or through the facility at which
such chemicals are applied, in proportion to the volumes of water delivered to
those cities. One such computation shall be made with respect to each Fiscal
Year.
B. Contributions to the Pumping and Chemical Reserve Fund: Whenever the
amount accumulated in the Pumping and Chemical Reserve Fund at the end
of the last complete Fiscal Year was less than the maximum amount specified
in Section V-A hereof, interim charges and final adjusted charges for Pumping
and Chemical Costs shall be increased by two percent (2%) for contribution to
the Pumping and Chemical Reserve Fund, unless a greater . amount be
approved by the Board of Directors of the Authority.
Page 4
Amended by action of the Board of Directors of CRMWA on May 15, 1996
C. Contributions to the Well and Well Pump Reserve Fund: Whenever the
amount accumulated in the Well and Well Pump Reserve Fund at the end of
the last complete Fiscal Year was less than the maximum amount specified in
Section V-B hereof, interim charges and final adjusted charges for Well
Pumping Cost shall be increased by an amount established by the Board of
Directors of the Authority, not to exceed ten percent (10%) of the actual cost
of energy for pumping water from wells. The amount by which Well Pumping
Cost is to be increased each year for the purpose of funding the Well and Well
Pump Reserve is to be determined by the Board at the time the annual Budget
for Operation and Maintenance is established, on the basis of the anticipated
requirement for funds for the purposes spelled out in Section V-B hereof.
D. Interim Charges: During the progress of each Fiscal Year, charges for
pumping and chemical costs shall be billed monthly to each city at rates per
thousand gallons estimated by the General Manager of the Authority to
represent the actual pumping and chemical costs, determined as described
above, as accurately as practicable. These rates shall be applied to the
amount of water delivered in each month to each member city to determine the
monthly Interim Charge for Pumping and Chemical Costs.
E. Revision of Interim Charges: Should it become apparent during the
progress of any Fiscal Year that the estimated rates being charged are not
representative of actual costs being incurred, the General Manager shall advise
the Board and thereafter make charges for subsequent deliveries at increased
or decreased rates more nearly representative of actual costs. The cities shall
be given sixty (60) days notice prior to the application of any increased rates
under this Subsection.
F. Adjustment of Char, es: At the end of each Fiscal Year, an adjustment will
be made to reconcile the interim charges (described in Subsection D above)
to the actual pumping and chemical costs (described in Subsection A, B, and
C above).
G. Credits: If the Board of Directors of the Authority determines that the year-
end charges for actual costs should be reduced to some amount less than the
total actual pumping and chemical costs, such reduction shall be made
uniformly in proportion to the amounts otherwise due for pumping and chemical
costs from each of the cities for that year.
Page 5
Amended by action of the Board of Directors of CRMWA on May 15, 1996
H. Minimum Charge Provision: In the event that the minimum charge provision
of the contracts or tariffs covering the furnishing of motive power to the
Authority's pumping plants and/or well fields should be invoked, each city's
"basic share" of the total minimum charges under each contract or tariff shall
be in proportion to the reserved aqueduct capacity of each city at the affected
facility.
The amounts payable by each respective city under the foregoing Paragraph
III -A shall first be credited to the "basic share" of the city making such payment.
If such amount paid or charged under Paragraph III -A exceeds any city's "basic
share", the amount paid by such city in excess of its "basic share" shall be
credited to the "basic shares" of the other cities whose amounts paid or
charged to not equal their "basic shares", in the ratio that their respective "basic
shares" bear to the remaining total minimum charge. If such application should
cause the amount credited to any such city to exceed the "basic share" of such
city, the amount by which such credit causes the total credit against such city's
"basic share" to exceed such "basic share" shall in turn be credited in the same
fashion to the other cities whose credits do not equal their "basic share". Each
city shall then pay the amount owing on its "basic share" after such "basic
share" has been so reduced by such city's credits for payments and charges
to such city under Paragraph III -A and by its share of credits of excess
payments made by other cities as here provided.
The provisions of this Subsection H shall apply reqardless of any transfers of
water allocations between member cities.
I. Special Charge Provisions: Any capacity charge or other charge which may
become payable by the Authority by reason of a member city's request to
receive water in excess of contractual -obligations shall be reimbursed by the
city or cities making the request.
J. Termination or Renegotiation of Power Contracts: Upon any renegotiation
of existing power supply contracts or tariffs or the making of new contracts or
tariffs with terms such as would make the charges for pumping energy
(including minimum charges) payable by the Authority incompatible with the
foregoing, this Section III shall be revised as necessary to maintain the
principle of charging pumping and chemical costs against the city or cities
benefitted by the expenditure.
Page 6
Amended by action of the Board of Directors of CRMWA on May 15, 1996
IV. COMPUTATION OF ASSESSMENTS FOR GENERAL O & M COSTS:
A. For the purposes of budgeting, accounting, and computation of
assessments, General O&M Costs shall be separated into four categories
which shall be allocated or distributed among the member cities on the basis
of the following:
1. Administrative Costs, determined in accordance with the Cost
Accounting System as described in Appendix A, shall be distributed in
proportion to the Lake water supply allocations.
2. Dam and Reservoir Operation and Maintenance Costs, determined in
accordance with the Cost Accounting System as described in Appendix A
shall also be distributed in proportion to the Lake water supply- allocations.
Credit received from the Bureau of Reclamation for the reasonable annual
cost of operation and maintenance of Sanford Dam and Reservoir allocated
to Flood Control and Fish and Wildlife facilities shall be credited to this
category of General O&M Costs.
3. Well Field General Operation and Maintenance Costs, determined in
accordance with the Cost Accounting System described in Appendix A shall
be distributed in proportion to the Groundwater Supply Allocations.
4. Aqueduct System General Operation and Maintenance Costs shall be
distributed among the member cities as follows:
After the cost of General O&M associated with each segment of the
Aqueduct System is determined in accordance with the cost Accounting
System as described in Appendix A, one-half (50%) of the General O&M
charged to each Aqueduct segment shall be allocated to the cities in
proportion to the amounts of water actually delivered to or on behalf of that
city through the Aqueduct segment in question. The remaining one-half
(50%) shall be allocated to the cites -which have reserved aqueduct capacity
in the segment in question in proportion to their respective water supply
allocations in that segment. For all segments of the Canadian River Project
Aqueduct System, the percentages used for this computation shall be the
Lake Water Supply Allocation percentages; for all segments of the
Groundwater Aqueduct System the percentages used in this computation
shall be the Groundwater Supply Allocation percentages.
Page 7
Amended by action of the Board of Directors of CRMWA on May 15, 1996
Undistributed Indirect Cost of Operation and Maintenance as described in
the Cost Accounting System attached to this Manual as Appendix A shall
be allocated to the cities in proportion to their respective Lake water supply
allocations, in addition to the costs associated with each segment as
described above.
B. Interim Billings to cover General O&M Costs expected to be encountered
during any Fiscal Year shall be calculated on the basis of the average
distribution of adjusted final costs payable for the last five completed Fiscal
Years, as applied to the approved amounts budgeted for Administrative Costs,
Dam and Reservoir O&M Costs, Well Field General O&M Costs, and Aqueduct
System General O&M Costs, PROVIDED, that interim billings for General
Operation and Maintenance of the Well Field and Ground Water Aqueduct
System shall be based on estimates prepared by the General Manager of the
Authority until such time as five years of actual operation cost history is
available. Unless the Board of Directors determines otherwise at the time of
budget approval, interim billings to cover General O&M Cost shall be paid in
monthly installments, equal to the nearest dollar, on or before the first day of
each month of the Fiscal Year.
C. If the Board of Directors determines that an additional assessment is
necessary to add funds to the General Reserve Fund, such assessment shall
be added to the interim billings for General O&M Costs calculated as described
in Section N-B above, in proportion to the total interim billings for all categories
of General 0&M Costs.
D. At the end of each Fiscal Year, an adjustment shall be made to reconcile
amounts collected for General O&M Costs with actual expenses, water
deliveries, and reserve fund requirements, to the end that the adjusted
amounts payable by each of the cities for the year just ended shall always be
proportionate to the costs incurred on behalf of that city during that year for
each category of General O&M Costs; PROVIDED: That no adjustment shall
be made of the amount collected for contribution to the General Reserve Fund.
E. In the event that the total actual cost incurred for all categories of General
O&M Cost on behalf of any member city during any Fiscal Year is less than the
amount collected from that city as interim billings the excess amount shall be
refunded. In the event that the total actual cost incurred for all categories of
General O&M Cost on behalf of any member city during any Fiscal Year is
more than the amount collected from that city as interim billings, the deficit
Page 8
Amended by action of the Board of Directors of CRMWA on May 15, 1996
� shall be due and payable upon notice; PROVIDED: That the total amount
payable by any member city for any Fiscal Year shall not exceed one hundred
ten percent (110%) of the interim billings to that city during that Fiscal Year,
and the excess cost over 110% shall be met by withdrawing funds from the
General Reserve Fund. Funds so withdrawn shall be replaced as provided in
Section V-B hereof; PROVIDED FURTHER: That the occurrence of any
expense or event which results in final charges to any city or group of cities
exceeding the interim billings shall not be due cause for the elimination of any
item of expense from the calculation of cost distribution under the Cost
Accounting System. -
F. If the Board of Directors of the Authority determines that the total of charges
to cover General Operation and Maintenance Costs should be reduced to
some amount less that the anticipated or actual costs, such reduction shall be
made by reducing the anticipated costs to be encountered during the year and
by crediting actual costs at the end of the year with the same amount. Any
such credit shall be applied proportionately to the total charges for General
Operation and Maintenance payable by each city with respect to that year.
Page 9
Amended by action of the Board of Directors of CRMWA on May 15, 1996
V. RESERVE FUNDS:
The Authority shall maintain the following Reserve Funds:
A. Pumping and Chemical Reserve Fund: This Reserve shall be maintained
for the purposes described below:
1. Replacement or repair of the following items of pumping plant facilities
which are anticipated to deteriorate or wear during the repayment period to
such an extent as to require periodic replacement or major repair:
a) Pump units
b) Pump unit motors and motor controls
c) Check valves and valve actuating systems
d) Ventilating units for pump unit motors
This fund shall be used to pay for replacement or major repair of the listed
items only. Minor component parts and supplies shall be provided for as
part of the annual budget for General Operation and Maintenance Costs.
2. Payment of minimum charges in the event that the minimum charge
provisions of any of the contracts or tariffs covering the furnishing of motive
power to the Authority's pumping plants are invoked, until such time as the
minimum charges are paid by the cities in accordance with Section 111-H.
Interest earned on amounts accumulated in this Reserve and amounts
collected as pumping and chemical charges for this purpose shall be set aside
to maintain this Reserve. Any assessments for use in increasing or
replenishing this Reserve shall be included as part of the charges for pumping
and chemical costs, as provided in Section III-13.
The maximum amount of this Reserve shall be the amount required to pay the
minimum charges for one (1) year, plus the average annual direct cost of
pumping energy for the two (2) immediately preceding complete budget years.
Any amount accumulating in this Reserve in excess of maximum amount shall
be credited to required revenue to meet Pumping and Chemical Costs as
described in Section III-G.
Page 10
0
Amended by action of the Board of Directors of CRMWA on May 15, 1996
B. Well and Well Pump Reserve Fund: This Reserve shall be maintained for
the purpose of providing for the major repair or rehabilitation of wells, well
pumps, well pump motors, motor controls, or related equipment, and for the
purpose of paying any applicable minimum charges which may become due on
contracts or tariffs for motive power for pumping from wells, until such time as
the minimum charges are paid by the cities in accordance with Section 111-H.
Normal repair including replacement of minor component parts and supplies
shall be provided for as part of the annual budget for Well Field General
Operation and Maintenance.
Interest earned on amounts accumulated in this Reserve and amounts
collected as Well Pumping Cost for this purpose shall be set aside to maintain
this Reserve. Any assessment for use in increasing or replenishing this
Reserve shall be included as part of the charges for Well Pumping Cost, as
provided in Section III-C.
The maximum amount of this Reserve shall be the amount required to pay the
minimum charges on any contract or tariff for motive power for pumping, plus
the average annual direct cost of motive power for well pumping for the two (2)
immediately preceding complete budget years. Any amount accumulating in
this Reserve in excess of the allowable maximum amount shall be credited to
required revenue to meet Well Pumping Cost as described in Section III-G.
Page 11
W
Amended by action of the Board of Directors of CRMWA on May 15, 1996
C. General Reserve Fund: This Reserve shall be maintained for the following
purposes:
1. To meet the extraordinary and unforeseen costs of operation and
maintenance, repair and betterment of project works.
2. Replacement or major repair of items of equipment and facilities not
provided for by the Pumping and Chemical Reserve Fund or the Well and
Well Pump Reserve.
3. For capital or major improvement of project works.
PROVIDED: The amount accumulated in this reserve shall not be reduced
to less than $300,000 for the purposes listed in Items 2 or 3 above without
the approval of the Contracting Officer of the Bureau of Reclamation:
Interest earned on amounts accumulated in this Reserve and amounts
collected as General O&M charges for contribution to this Reserve shall be set
aside to maintain this Reserve. Any interest, dividends, or other earnings of
the Authority not otherwise provided for shall also be placed in this Reserve.
The Maximum amount of this Reserve shall be $300,000.00 plus the average
of the amounts budgeted for General Operation and Maintenance Costs during
the two (2) immediately preceding complete budget years. Any amount
accumulating in this Reserve in excess of the maximum amount shall be
credited to required revenue to meet General Operation and Maintenance
Costs as described in Section IV-F.
No withdrawal of funds from this Reserve shall be made for any purpose during
any budget year until the total amount budgeted to meet current General
Operation and Maintenance Costs for that budget year has been expended.
Thereafter, funds may be withdrawn from this Reserve to meet necessary
expenses, provided, the payment of such expenses is approved by the Board
of Directors.
Page 12
Amended by action of the Board of Directors of CRMWA on May 15, 1996
Whenever funds are withdrawn from this Reserve to reduce the amount due
and payable from any member city as a result of the year-end adjustment of
General Operation and Maintenance Costs, the city receiving the benefit of
such withdrawal shall be charged annually one -tenth of the amount withdrawn
plus interest on the unpaid balance at the weighted average rate being then
currently earned on all Authority Reserve funds invested for periods of one year
or longer. Amounts thus payable for replenishment of the General Reserve
shall be added to the interim billings for General Operation and Maintenance
Costs for the second subsequent Fiscal Year after the end of the Fiscal Year
for which withdrawal was necessary, and shall be payable in the same manner
as such interim billings.
Notwithstanding the provision for repayment of funds owing this Reserve over
a ten-year period, such repayments shall be made at a rate adequate to meet
the requirements of Paragraph 9-b of the Authority/Bureau of Reclamation
Contract (No. 14-06-500-485). If payments due under the above provision total
less than the required amount, the payments due from all cities which owe
funds to the Reserve shall be increased by the same proportion so as to equal
the required amount, provided that such increase shall not cause the
repayment obligation of any city for that year to exceed its total obligation to the
Reserve fund.
Member cities may at their option repay any or all amounts owing to the
General Reserve in advance of the ten-year period provided above, but any
such payment shalt include interest as provided above from the date of
withdrawal of funds from Reserve to date of payment.
C. Other Optional Reserve Funds: The Authority may establish and maintain
other reserve funds in addition to those described above. However, no
assessment or charge shall ever be made to any member city in support of any
reserve fund except as provided herein, and funded depreciation as provided
in Appendix A.
Page 13
Amended May 15, 1996
CANADLkN RIVER MUNICIPAL WATER AUTHORITY
NIA.NUAL
APPENDIX A
COST ACCOUNTING SYSTEM
A. GENERAL: This Accounting System shall be used as described herein to determine the
actual cost of General Operation and Maintenance which is properly attributable to the various
segments of the Authority's Aqueduct System (including both the Canadian River Project Aqueduct
and the Groundwater Aqueduct), to Sanford Dam and Lake Meredith, to the operation of
underground well fields, and to Administration of the Authority's affairs.
The facilities serving the member cities shall be divided into segments, with points of division
determined on the basis of service provided to member cities. A new segment shall be established
at each bifurcation or terminal point, with each segment serving a designated city or group of cities.
The Dam and Reservoir and the underground well field shall be considered as separate segments.
A separate Cost Account, designated by a code number, shall be assigned for each Project segment
A Cost Account shall also be assigned for Administrative Costs.
Whenever any item of Special Work is authorized with the cost thereof to be reimbursed separately
from the cost of General Operation and Maintenance payable by the member cities, a separate Cost
Account shall be assigned to that item of Special Work.
All expenditures which can reasonably be identified as benefitting a given Cost Account shall be
charged directly to that account, including items or portions thereof listed herein. Expenditures
which cannot be so identified, or which are more equitably distributed to the various Cost Accounts
on an accumulative basis rather than at the time of expenditure, shall be charged to Distributive
Accounts as described herein. At the close of each fiscal period, Distributive Accounts shall be
cleared and the amounts accumulated therein shall be charged to the Cost Accounts in accordance
with the procedure given herein.
All expenditures made to deliver water to the member cities, or to assure the continued capability
of fulfilling the contractual obligations of the Authority, shall be included in determining the
distribution of costs in accordance with this Cost Accounting System, whether or not such costs are
considered normal or abnormal.
W.
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 2
B. COST ACCOUNTS: The following Cost Accounts shall be maintained:
01 thru 21 - CANADIAN RIVER PROJECT (CRP) AQUEDUCT SYSTEM GENERAL O&M
COSTS: The following Cost Accounts shall be used to accumulate and reflect all costs of General
Operation and Maintenance related to segments of the Aqueduct System provided to deliver water
from Lake Meredith to the member cities: --
01 -
Main Aqueduct I -Main Aqueduct to and including the forebay at
Pumping Plant No. 2
02 -
East Aqueduct I - From the forebay at Pumping Plant No. 2 to and
including Borger Regulating Reservoir
03 -
East Aqueduct II - (Borger Facilities) Borger Outlet at Borger
Regulating Reservoir and Borger Terminal (Also includes the Camex
Turnout)
04 -
East Aqueduct 1111 (Pampa Facilities) - From Borger Regulating
Reservoir to and including the Pampa Terminal
05 -
Main Aqueduct II -Main Aqueduct from the forebay at Pumping
Plant No. 2 to and including the Amarillo Turnout
06 -
Main Aqueduct III (Amarillo Facilities) - Amarillo Delivery Points
07 -
Main Aqueduct IV - Main Aqueduct from the Amarillo Turnout to
and including the Plainview Lateral Turnout
08 -
Plainview Lateral -Plainview Lateral and Plainview Terminal
09 -
Main Aqueduct V -Main Aqueduct from the Plainview Turnout to and
including the Southwest Aqueduct Turnout
14 -
Southwest Aqueduct I - From the Southwest Aqueduct Turnout to and
including Regulating Tank No. 3
11-
Southwest Aqueduct II (Levelland Facilities) - Pumping Plant No.
11 and Levelland Lateral
12
- Southwest Aqueduct 1H rownfield Facilities) - Southwest Aqueduct
from Regulating Tank No. 3 to end
13 -
Main Aqueduct VI - Main Aqueduct from the Southwest Aqueduct
Turnout to and including Regulating Tank No. 6
14
- Main Aqueduct VII (Lubbock Facilities) - North Lubbock Lateral and
Lubbock Delivery Points
15 -
Main Aqueduct VIII - Main Aqueduct from Regulating Tank No. 6
to and including the Slaton Turnout
16
- Slaton Lateral (Slaton Facilities) - Slaton Lateral, including the Slaton
Terminal
17 -
Main Aqueduct IX - Main Aqueduct from the Slaton Turnout to and
including Regulating Tank No. 7
CRMWA MANUAL
Appendix A -- Cost Accounting System
Amended May 15, 1996
Page 3
18 - Tahoka Facilities -Tahoka Terminal
19 -Main Aqueduct X - Main Aqueduct from Regulating Tank No. 7 to and
including the O'Donnell Turnout
20 - O'Donnell Lateral (O'Donnell Facilities) - O'Donnell Lateral,
including the O'Donnell Terminal
21 - Main Aqueduct XI Lamesa Facilities) - Main Aqueduct from the
O'Donnell Turnout to end
The following specific costs, or portions thereof identifiable as being of benefit
to that segment of the CRP Aqueduct System, shall be charged to each of the
above Cost Accounts 01 through 21 as applicable:
Salaries and Wages of employees working on aqueduct
Engineering Fees for work on aqueduct facilities
Contracted Repairs on aqueduct facilities
Right -of -Way Damages incurred along aqueduct
Fuel and Lubricants for use on aqueduct
Parts for Facilities used on aqueduct
Supplies - Building Material and Hardware used on aqueduct
Supplies - Plumbing and Electrical used on aqueduct
Paint and Painting_ Supplies used on aqueduct
Other Consumable Supplies and Materials used on aqueduct
Telephone service provided at aqueduct structures
Utilities (Except PumpingPower) ower) service to aqueduct structures
Insurance on aqueduct structures and facilities
Travel and Per Diem for work on aqueduct
Rents and Leases - Equipment for use on aqueduct
Leased Telephone Lines provided for remote control and telemetering
along aqueduct
System Improvements - Special budget line items as applicable
AU Other Expense chargeable in accordance herewith
Share of the Following Distributive Accounts:
71 - Fringe Benefits
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other)
53 - Indirect Expenses - Field Office (applies only to that
segment representing all cities served by the Field Office)
52 - Indirect Expenses - Headquarters Office
29
CRMWA MANUAL
Appendix A -- Cost Accounting System
B. COST ACCOUNTS - Continued
Amended May 15, 1996
Page 4
25 - DAM AND RESERVOIR GENERAL O&M COSTS: The following Cost Account
shall be used to accumulate and reflect those costs of General Operation and Maintenance related
to Sanford Dam, Lake Meredith, and the water stored therein, including water quality surveillance
and protection.
25 - DAM AND RESERVOIR O&M
The following specific costs, or portions thereof identifiable as being
of benefit to this feature, shall be charged to Cost Account 25:
Salaries and Wages of employees working on this feature
Engineering Fees for work on dam or reservoir
Contracted Repairs on dam and.reservoir facilities
Other Contracted Maintenance on dam and reservoir facilities
Fuel and Lubricants for use in facilities of this feature
Laboratory Chemicals and Supplies
Parts for Facilities used on dam or reservoir
Supplies - Building Material and Hardware used on dam or reservoir
Supplies - Plumbing and Electrical used on dam or reservoir
Paint and Painting Supplies used on dam or reservoir
Other Consumable Supplies and Materials used on dam or reservoir
Utilities for structures at Sanford Dam
Insurance on structures at Sanford Dam
Travel and Per Diem for work on dam or reservoir
Rents and Leases - Eguipment for work on dam or reservoir
System Improvements - Budget line items as applicable
Any Other Expense chargeable in accordance herewith _
Share of the Following Distributive Accounts:
71 - Fringe Benefits
61 - Equipment Expenses (Boat, 100%)
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other)
52 - Indirect Expenses - Headquarters Office
W
5W
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 5
B. COST ACCOUNTS -- Continued
32 thru 35 - GROUNDWATER PROJECT AQUEDUCT SYSTEM GENERAL O&M COSTS: The
following Cost Accounts shall be used to accumulate and reflect all costs of General Operation and
Maintenance related to segments of the Aqueduct System provided to deliver water from Lake
Meredith to the member cities:
32 - Main Groundwater Aqueduct I -Main Groundwater Aqueduct to the
bifurcation at Pumping Plant No. 6 on the CRP East Aqueduct,
where water for Borger and Pampa is withdrawn
33 - Borizer Facilities -Branch line to Borger Outlet at Borger Treatment
Plant, including associated pumping station and pumps, and Borger
Terminal
34 - Pampa Facilities -- Tanks, pumps, mixing valves and controls
provided to inject water from the Groundwater Aqueduct into the
Canadian River Project Aqueduct Pumping Plant No. 6
35 - Main Groundwater Aqueduct II - All facilities from the bifurcation
at Pumping Plant No. 6 to the Forebay at CRP Main Aqueduct Pumping Plant
No. 3, including all facilities necessary to inject water from the
Groundwater Aqueduct into the CRP Main Aqueduct.
The following specific costs, or portions thereof identifiable as being of benefit to that
segment of the Groundwater Aqueduct System, shall be charged to each of the above
Cost Accounts 32 through 35 as applicable:
Salaries and Wages of employees working on aqueduct
En ' eering Fees for work on aqueduct facilities
Contracted Repairs on aqueduct facilities
Right -of -Way Damages incurred along aqueduct
Fuel and Lubricants for use on aqueduct
Parts for Facilities used on aqueduct
Supplies - Building Material and Hardware used on aqueduct
Supplies - Plumbing and Electrical used on aqueduct
Paint and Painting Supplies used on aqueduct
Other Consumable Supplies and Materials used on aqueduct
Telephone service provided at aqueduct structures
Utilities (Except Pumpin Power
) service to aqueduct structures
Insurance on aqueduct structures and facilities
Travel and Per Diem for work on aqueduct
Rents and Leases - Equipment for use on aqueduct
Leased Telephone Lines provided for remote control and telemetering
along aqueduct
CRMWA N IANUAL
Appendix A -- Cost Accounting System
B. COST ACCOUNTS --Continued
Amended May 15, 1996
Page 6
32 through 35 - GROUNDWATER PROJECT AQUEDUCT SYSTEM GENERAL O&M COSTS -
Specific Costs -- Continued
System Improvements - Special budget line items as applicable
Any Other Expense chargeable in accordance herewith
Shares of the Following Distributive Accounts:
71 - Fringe Benefits
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other)
52 - Indirect Expenses - Headquarters Office
39 - WELL FIELD SUPPLY GENERAL 0&M COSTS: The following Cost Account shall
be used to accumulate and reflect those costs of General Operation and Maintenance related to the
groundwater wells and collection system, including water quality surveillance and protection.
39 - WELL FIELD GENERAL 0&M COSTS
The following specific costs, or portions thereof identifiable as being
of benefit to this feature, shall be charged to Cost Account 39:
Salaries and Wages of employees working on this feature
Engineering Fees for work on wells or collection system
Contracted Repairs on facilities at the well field
Other Contracted Maintenance on well field facilities
Fuel and Lubricants for use in facilities of this feature
Parts for Facilities used on well field facilities
Supplies - Building Material and Hardware used on well
field facilities
Supplies - Plumbing and Electrical used on well field facilities
Paint and Painting Supplies used on well field facilities
Other Consumable Supplies and Materials used on well field
facilities
Utilities for structures at the well field (but not pumping energy)
Insurance on structures at the well field
Travel and Per Diem for work on well field facilities
Rents and Leases - Equipment for work on well field facilities
System Improvements - Budget line items as applicable
Any Other Expense chargeable in accordance herewith
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 7
B. COST ACCOUNTS -- Continued
39 - WELL FIELD GENERAL O&M COSTS -
Specific Costs -- Continued
Share of the Following Distributive Accounts:
71 - Fringe Benefits
61 - Equipment Expenses (Boat, 100%)
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other)
55 - Indirect Expenses - Headquarters Office
40 - ADMINISTRATIVE COSTS: The following Cost Account shall be used to
accumulate and reflect those expenses which are necessary to the conduct of the affairs of the
Authority as part of the cost of providing a water supply to the member cities, but which are not
specifically related to the operation and maintenance of Project facilities:
45- Administrative Costs
The following specific costs shall be charged to this Cost Account:
Director's Fees
Salaries and Wages of employees as follows:
General Manager and Assistant Manager ----------- 100%
Administrative Assistant (Board Secretary) ---------- 50%
Clerk -Stenographer -------------------------- ------------ 50%
Legal Fees
Auditing Fees
Bookkeeping
Legal Notices
Surety Bond Premiums of Directors and General Manager
Travel and Per Diem of Directors and General Manager
Dues to Organizations
Books. Subscriptions, and Publications for Administrative Use
Any Other Expense chargeable in accordance herewith
Share of the Following Distributive Accounts:
71 - Fringe Benefits
62 - Equipment Expenses (Vehicles)
55 - Headquarters Facility Expense (50%)
W
CRMWA MANUAL
Appendix A -- Cost Accounting System
Amended May 15, 1996
Page 8
C. DISTRIBUTIVE ACCOUNTS: The following Distributive Accounts shall be maintained:
50 - INDIRECT GENERAL O&M EXPENSES: The following Distributive Accounts shall
be used to accumulate those expenses of overhead and supervision incurred at the office of the
Authority and made necessary by the functions of operating and maintaining Project facilities
provided for the purpose of furnishing a water supply to the member cities of the Authority, but
which cannot be directly connected or identified with a specific segment or feature of the Project
facilities.
52 - Indirect Expenses - Headquarters Office
The following specific expenses incurred at the Headquarters Office, or portions
thereof which cannot be identified as benefitting a project segment or the
Administrative function shall be charged to this Distributive Account 4+:
Salaries and Wages not related to project segments, administration,
or equipment maintenance
Contracted Repairs for headquarters shop area
Radio System Maintenance (All)
Other Contracted Maintenance for headquarters shop area
Janitorial and Grounds Maintenance for headquarters shop area
Fuel and Lubricants used at headquarters shop
Small Tools used at headquarters shop
Parts for Facilities used at headquarters shop
Supplies - Building Material and Hardware used at headquarters shop
Supplies - Plumbing and Electrical used at headquarters shop
Paint and Painting Supplies used -at headquarters shop
Other Consumable Supplies and Materials used at headquarters shop
Utilities for headquarters shop and residence
Insurance on headquarters shop, residence, and storage buildings, and
all Liability Insurance
Surety Bond Premiums of Employees other than the General
Manager
Books, Subscriptions and Publications for O&M purposes
Rents and Leases - Space for radio antennae
Leased Telephone Lines for radio system operation
Capitalized Items not for office use
System Improvements - Budget line items as applicable
Any Other Expense chargeable in accordance herewith
Share of the Following Distributive Accounts:
71 - Fringe Benefits
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other)
55 - Headquarters Facility Expenses (501/o)
CRMWA MANUAL
Appendix A -- Cost Accounting System
C.
W
Amended May 15, 1996
Page 9
DISTRIBUTIVE ACCOUNTS: Continued
52 - Indirect Expenses -- Headquarters office - Continued
At the end of each fiscal period, amounts accumulated in or distributed to this Account
52 shall be distributed as follows:
a) Shares of Account 52 shall be distributed to Account 25 and to
the 80 Series Accounts in the proportion that amounts accumulated
in those Accounts bear to the total of amount accumulated in all of
Accounts 01 through 39, and the 80 Series. _
b) One-half (50%) of the amount remaining in this Account 52 after
making the above distribution to Accounts 25 and 80 Series shall be
distributed to Accounts 01 through 21, 32 through 35, and 39,
in the proportion that the amount accumulated in each of those accounts bears
to their total.
c) After all of the above distributions have been made, the amount
remaining in this Account 52 shall be classified as Undistributed
Indirect Cost of Operation and Maintenance, and such amount
shall be allocated to the member cities as prescribed in the Manual.
53 - Indirect Expenses - Lubbock Field Office
The following specific expenses incurred at the Lubbock Field Office
or portions thereof which cannot be identified as benefitting a project
segment, shall be charged to this Distributive Account 53:
Salaries and Wages not related to Project segments
Training of field office employees
Contracted Repairs for field office area
Janitorial and Grounds Maintenance at field office
Other Contracted Maintenance at field office
Printing and Office Supplies for field office use
Fuel and Lubricants for use at field office shop
Small Tools for general use by field office personnel
Parts for Facilities to be used at field office
Supplies - Building_ Material and Hardware to be used at field office
Supplies - Plumbing _and Electrical to be used at field office
Paint and Painting Supplies to be used at field office
Other Consumable Supplies and Materials to be used at field office
Postage used at field office
Telephone Service at field office
rN CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 10
C. DISTRIBUTIVE ACCOUNTS: Continued
53 - Indirect Expenses -- Lubbock Field Office - Continued
Utilities at field office
Insurance on field office buildings
Travel and Per Diem of field office personnel
Books. Subscriptions, and Publications for field office use
Rents and Leases - Equipment such as copy machine at field office
Canalized Items for general use by field office
System Improvements of field office or shop areas
Any Other Expense chargeable in accordance herewith
Share of the followingY Distributive Accounts:
71 - Fringe Benefits
62 - Equipment Expenses (Vehicles)
63 - Equipment Expenses (Other) -
At the end of each fiscal period, amounts accumulated in or distributed to this
Account 53 shall be cleared and distributed to that Cost Account for
Aqueduct System General O&M Costs representing all of the cities served by
portions of the Aqueduct maintained by the Lubbock Field Office.
W
W
W
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 11
C. DISTRIBUTIVE ACCOUNTS: Continued
55 - HEADQUARTERS FACILITY EXPENSES: The following Distributive Account shall
be used to accumulate and reflect the expense of providing, maintaining, and operating Headquarters
Facilities of the Authority:
55 - Headquarters Facility Expenses
The following specific expenses incurred at the Headquarters Office or
portions thereof which can reasonably be identified as being of benefit
to this function, shall be charged to this Distributive Account 55:
Salaries and Wages for repair and maintenance of Headquarters
Building or office equipment
Contracted Repairs of Headquarters Building
Janitorial And Grounds Maintenance of building and yard
Other Contracted Maintenance for upkeep of building, office
equipment
Printing and Office Supplies used at Headquarters
Fuel and Lubricants used at Headquarters Building
Small Tools for general office use
Parts of Facilities used at Headquarters Building
Supplies -Building` Material and Hardware used at Headquarters
Building
Supplies - Plumbing and Electrical used at Headquarters Building
Paint and Painting Supplies used at Headquarters Building
Other Consumable Supplies and Materials used at Headquarters
Building
Postage
Telephone Service at Headquarters
Utilities for Headquarters Building
Insurance on Headquarters Building and contents
Rents and Leases - Equipment for copy machines, etc.
Capitalized Items for general office use
Minor Equipment Replacement of office equipment
System Improvements for Headquarters improvement
Share of the Following Distributive Accounts:
71- Fringe Benefits
63- Equipment Expense (Other)
W
CRrr WA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 12
C. DISTRIBUTIVE ACCOUNTS: Continued
55 - Headquarters Facility Expenses - Continued
At the end of each fiscal period, the amount accumulated in or distributed to this
Distributive Account 55 shall be cleared. One-half (501/%) of the amount shall be
charged to Cost Account 45 (Administrative Costs) and one-half (50%) to
Distributive Account 52 (Indirect Expenses - Headquarters).
60 - EQUIPMENT EXPENSES: The following Distributive Accounts shall
be used to accumulate and reflect the expense of ownership, operation, and
maintenance of boats, vehicles, trucks, tractors, and other equipment. Each
account shall reflect the expense of fuel, lubricants, contracted repairs and
maintenance, parts (including tires), labor and force account repairs or maintenance,
and funded depreciation as budgeted, all for the class of equipment covered by the
respective Account. Shares of the Distributive Account 71 shall also be added to
each of these accounts at the end of each fiscal period.
61 Equipment ExpensesBoat)
(This Account shall contain those expenses related to the Authority's
boat or boats on Lake Meredith.) At the end of each fiscal period,
this Account shall be cleared and the amount accumulated therein
shall be charged to Cost Account 25 (Dam and Reservoir O&M).
62 - Equipment Expenses (Vehicles,)
(This Account shall contain those expenses related to passenger
vehicles and light trucks up to and including 3/4 ton.) At the end of
each fiscal period, the amount accumulated in this Account shall be
cleared and charged to the following Accounts in proportion to the
pro rats number of hours charged to those Accounts by field and
Administrative personnel utilizing vehicles, as shown by the Time
and Attendance reports of such personnel. (In making this
distribution, hours worked by office personnel, control room
operators, or other employees who do not require transportation shall
be excluded.)
Accounts 01 through 21
Account 25
Accounts 32 through 35
Account 39
Account 45
Accounts 52 and 53
Account 55
80 Series Accounts
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 13
C. DISTRIBUTIVE ACCOUNTS: Continued
Equipment Expenses - Continued
63 - Equipment Expenses (Other)
(This Account shall contain those expenses related to all movable
equipment other than boats and vehicles, such as trucks above 314
ton, tractors, air compressors, welders, pumps, generators, sprayers,
painting equipment, sand blasters, augers, or other items.) At the end
of each fiscal period the amount accumulated in this Account shall
be cleared and charged to the following Accounts in proportion to the
number of hours charged to those accounts by field personnel below
the level of Division Head, as shown by the Time and Attendance
reports of those employees:
Accounts 01 through 21—
Accounts 25
Accounts 32 through 35
Account 39
Accounts 52 and 53
Accounts 55
80 Series Accounts
W
'# CRMWA MANUAL
Appendix A -- Cost Accounting System
C. DISTRIBUTIVE ACCOUNTS: Continued
Amended May 15, 1996
Page 14
70 - INDIRECT LABOR EXPENSES: The following Distributive Account
shall be used to accumulate the expense of fringe benefits and other
expenses of employing personnel:
71 - Fringe Benefits
This Account shall contain the expenses of the following for all
employees:
Contributions to Retirement Fund
Social Security Taxes
Health Insurance Premiums
Life Insurance Premiums
Annual, Sick or Other Leave (including sick leave bonus)
Worker's Compensation Insurance
Disability Income Insurance
Unemployment Compensation
Any other benefit program provided
At the end of each fiscal period, the amount accumulated in this account
shall be cleared out and distributed to all other accounts in proportion to
the amounts of direct labor cost contained therein.
SEQUENCE OF CLEARING DISTRIBUTIVE ACCOUNTS:
At the close of each fiscal period, Distributive Accounts shall be cleared in the following sequence:
1.
Account 71
2.
Account 61
3.
Account 62
4.
Account 63
5.
Account 55
6.
Account 53
rN 7.
Account 52
CRMWA MANUAL Amended May 15, 1996
Appendix A -- Cost Accounting System Page 15
D. ALLOCATION OF COST TO CITIES: After the total cost (other than Pumping and
Chemical Costs) attributable to each project segment or function has been determined at the end of
each Fiscal Year, including the clearing of Distributive Accounts to Cost Accounts as described in
the foregoing sections, the resulting segment costs shall be allocated to the member cities as
prescribed in the Manual.
E. SPECIAL WORK: Whenever any item of Special Work is authorized with the cost thereof
reimbursable separately from the costs of General Operation and Maintenance, the following Special
Cost Accounts shall be used to accumulate and reflect such costs:
80 - SPECIAL WORK: (Assign a separate account code for each job)
These Special Cost Accounts shall be used to accumulate and reflect all cost reasonably identifiable
with items of work such as installation of additional delivery points, repair of damage caused and/or
reimbursable by any identifiably party, performance of work outside the scope of normal Authority
operations (such as installation of protective facilities at proposed road or railway crossings), or
maintenance or repair of facilities owned by any party other than the Authority. Such costs shall
include labor, materials, contracted work, and travel expense, as well as shares of Distributive
Accounts for Fringe Benefits, Equipment Expense, and Indirect Expenses (Hdq.), as applicable.
Costs accumulated in or distributed to Special Cost Accounts shall be charged to the party or parties
responsible for reimbursement of such costs.
Since costs of Special Work may be chargeable to responsible parties prior to the close of the fiscal
period, shares of distributive accounts added to each job shall be determined on the basis of
available information from past accounting periods. The amounts so determined shall be deducted
from the Distributive Accounts at the time billing is issued.
SCHEDULE C
Notice Information
If to Authority,•
Canadian River Municipal Water Authority
1 mile west of City- Water Authority Road
P. O. Box 99 (zip 79078)
Sanford, Texas
Attention: General Manager
If to City.
City of Lubbock
1625 13th Street (zip 79457)
''' P. Q. Box 2000 (zip 79457-0001)
Lubbock, Texas
Attention: Mayor
5d
w
W
SCHEDULE D
Project Financing
SPECIAL ESCROW DEPOSIT AGREEMENT
THE STATE OF TEXAS
COUNTY OF LUBBOCK
THIS SPECIAL ESCROW DEPOSIT AGREEMENT, dated as of August 6,
1996, (the "Agreement") by and between the City of Lubbock, Texas,
a municipal corporation duly organized and existing under the laws
of the State of Texas (the "City") and Norwest Bank Texas, National
Association, a banking association organized and existing under the
laws of the United States of America (the "Bank" or "Escrow
Agent").
W I T N E S S E T H:
WHEREAS, on or about the 15th day of May, 1996, the Canadian
River Municipal Water Authority ( the "Authority") and the City
entered into an "Agreement For The Purchase And Acquisition Of
Conjunctive Use Groundwater Supply" (the "Groundwater Supply
Agreement"), whereby the Authority agreed to acquire certain
underground water rights from the Quix Corporation and construct a
well field, collection systems and a pipeline to deliver water to
the City and other contracting parties; all subject to and in
accordance with the terms and provisions of said Groundwater Supply
Agreement; and
WHEREAS, under the terms of the Groundwater Supply Agreement,
the City has the option to independently fund all or a portion of
its share of the Project Construction Costs for any series of
Revenue Bonds to be issued by the Authority to finance the costs of
the Project; and
WHEREAS, should the City exercise its option to independently
fund all or a portion of its share of the Project Construction
Costs, the Groundwater Supply Agreement requires the amount
independently funded to be deposited in an escrow account, pursuant
to an escrow agreement, in a state or national bank with trust
powers having a combined capital, surplus and undivided profits of
at least $75,000,000 and such deposit shall be for the exclusive
benefit of making payments to the Authority for payment of the
City's Share of Project Construction Costs; and
0345054
in
WHEREAS, the City has notified the Authority that it has
unencumbered available funds to deposit into escrow to fund at
least a portion of its share of Project Construction Costs; and
WHEREAS, the City has selected the Bank to serve as escrow
agent for the receipt, custody and disbursement of the funds to be
deposited with the Bank by the City pursuant to the terms of the
Groundwater Supply Agreement to be held in escrow in accordance
with the terms and provisions hereof.
NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the City
and the Bank agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. Unless the context clearly
indicates otherwise, the following terms shall have the meanings
assigned below when used in this Agreement:
"Authorized Representative" shall mean with respect to the
City, the Mayor, the City Manager, Assistant City Manager, Director
of Finance, City Attorney, or such other official or employee of
the City as may be designated by the Mayor of the City through
official action filed with the Bank.
"Authorized Investments" shall mean those securities or
obligations authorized for investment of public funds pursuant to
the Public Funds Investment Act and the City's policies and
guidelines pertaining to the investment of proceeds of sale derived
from the issuance and sale of bonds or similar obligations.
"Escrow Fund" shall mean the special fund or account
established with the Bank pursuant to the provisions of this Escrow
Agreement for the deposit and safekeeping of funds to be paid to
the Authority to acquire and construct the "Project" under the
Groundwater Supply Agreement.
"Escrow Amount" shall mean
the Escrow Fund to fund all or
the Project Construction Costs
Groundwater Supply Agreement.
0345054
that amount of funds deposited in
a portion of the City's share of
pursuant to Section 3.3 of the
-2-
Section 1.02. Other Definitions. The terms "Groundwater
Supply Agreement", "Authority", "City", "Agreement" shall have the
meanings assigned in the "RECITALS" of this Agreement.
Furthermore, capitalized terms not otherwise defined herein shall
have the meanings assigned thereto in the Groundwater Supply
Agreement.
Section 1.03. Interpretations. The titles and headings of
the articles and sections of this Agreement have been inserted for
convenience and reference only and are not to be considered a part
thereof and shall not in any way modify or restrict the terms
hereof. Words of the singular number shall be considered to
include the plural, words of the plural number shall be construed
to include the singular and words of the masculine, feminine and
neuter genders shall be construed to include the other genders.
This Agreement and all of the terms and provisions hereof shall be
liberally construed to effectuate the purposes set forth herein and
to achieve the intended purpose of providing for (i) the receipt
and safekeeping of the Escrow Amount and (ii) the disbursement of
such Escrow Amount in accordance with the terms of this Agreement.
ARTICLE II
ESCROW FUND
Section 2.01. Escrow Fund Creation. A special segregated and
irrevocable trust fund to be known as the "Special Lubbock
Conjunctive Use Groundwater Project Escrow Fund" (hereinafter
called the "Escrow Fund") shall be and is hereby established and
shall be maintained by the Bank for the receipt, deposit,
administration and safekeeping of the Escrow Amount pending its
use, disbursement and withdrawal; all in accordance with and in
strict conformity with the provisions of this Agreement.
Section 2.02. Escrow Fund Deposit. On or prior to the fifth
(5th) work day of the "Revenue Bond Funding Date", the City agrees
and covenants to deposit to the credit of the Escrow Fund all of
the Escrow Amount and the Escrow Agent agrees to receive and
deposit such Escrow Amount to the credit of the Escrow Fund and
hold the same for application and disbursement for the purposes and
in the manner prescribed in this Agreement.
Section 2.03. Escrow Fund Characterization. (a) The Escrow
Agent shall hold such Escrow Amount, together with income, profits
and interest realized from investing such funds, at all times as a
special and separate trust fund wholly segregated from other moneys
and securities on deposit with the Escrow Agent; shall never
commingle the Escrow Amount held in the Escrow Fund with other
moneys of securities of the Escrow Agent; and shall hold and
dispose of the assets therein only as set forth herein. Nothing
0345054 �3�
herein contained shall be construed as requiring the Escrow Agent
to keep the identical moneys, or any part thereof, in said Escrow
Fund, if it is impractical, but moneys of an equal amount, except
to the extent such are represented by the Authorized Investments,
shall always be maintained on deposit in the Escrow Fund by the
Escrow Agent, as trustee; and a special account evidencing such
facts shall at all times be maintained on the books of the Escrow
Agent.
(b) Legal ownership of or title to the Escrow Amount or the
Authorized Investments deposited or held for the account of the
Escrow Fund shall be in the City with equitable or beneficial
ownership or title vested in Authority, and such legal and
beneficial owners as their respective interests may be determined
shall be entitled to a preferred claim and shall have a first lien
upon such funds and Authorized Investments in the Escrow Fund until
paid out, used and applied in accordance with this Agreement. The
funds and Authorized Investments received by the Escrow Agent under
this Agreement shall not be considered as a banking deposit and the
Escrow Agent and the City shall have no right or title with respect
thereto, except as otherwise provided herein.
Section 2.04. Escrow Fund Security. The Escrow Agent shall
continuously secure the monies in the Escrow Fund not invested in
Authorized Investments by a pledge of direct obligations of the
United States of America, in the par or face amount at least equal
to the amount of such uninvested monies and to the extent such
money is not insured by the Federal Deposit Insurance Corporation.
Such securities shall be deposited with the Escrow Agent or, with
the approval of the City, may be held in safekeeping and custody by
a third party banking institution or trust company.
Section 2.05. Escrow Fund Withdrawals. The Escrow Amount,
together with the income, earnings and receipts thereon from
Authorized Investments, held in the Escrow Fund shall be first
applied and disbursed for making payments to the Authority upon
receipt of (a) a Requisition for Project Construction Costs and (b)
a written requisition from an Authorized Representative in
substantially the form and substance of Exhibit A attached hereto,
duly executed and completed in all respects. Any excess amounts in
Escrow Fund resulting from Authorized Investments may be remitted
to the City upon the Escrow Agent receiving (x) a written request
from the City and (y) a written confirmation from the Authority
that the amount to be remitted to the City will not reduce the
total amount on deposit to the credit of the Escrow Fund to an
amount less than the Escrow Amount less all prior payments to the
Authority. The Escrow Agent shall retain on file copies of such
written requisitions, requests and confirmations for which a
disbursement or withdrawal of funds is made. The Escrow Amount,
together with the income, earnings and interest received from
0345054
-4
Authorized Investments, shall not be subject to checks, drafts or
warrants drawn by the City.
All disbursements from the Escrow Fund to the Authority or to
the City shall be by wire transfer or other similar means so as to
provide the recipient with immediately available fund on the day of
the transfer and in accordance with written instructions to the
Escrow Agent from the Authority or the City, as the case may be.
Section 2.06. Escrow Fund Authorized Investments. All money
held by the Escrow Agent pursuant to this Agreement shall be
deposited or invested only in Authorized Investments and only at
the direction of the Authorized Representative of the City. The
City intends that such funds shall be invested in Authorized
Investments so as to obtain the highest yield practicable while
maintaining the safety of the corpus of such funds and the date
when such funds will be required for uses and purposes specified in
this Agreement. The City shall direct any investments made by the
Escrow Agent by letter from an Authorized Representative.
All interest and other income received from the investment of
moneys held in the Escrow Fund shall be retained in the Escrow Fund
until disbursed or withdrawn in accordance with Section 2.05
hereof.
The Escrow Agent shall not be liable for any loss resulting
from the making or disposition of any investment pursuant to this
section, and any such losses shall be charged to the Escrow Fund.
To the extent the Escrow Fund at any time contains less than the
required Escrow Amount balance (i.e., the cash and market value of
the Authorized Investments on deposit to the credit of the Escrow
Fund total less than the Escrow Amount minus all prior payments to
the Authority), the City agrees to immediately deposit to the
credit of the Escrow Fund the amount of the deficiency in cash or
additional Authorized Investments.
ARTICLE III
RECORDS AND REPORTS
Section 3.01. Records. The Escrow Agent will keep books of
records and account in which complete and correct entries shall be
made of all transactions relating to the receipts, disbursements,
allocations and application of the money and Authorized Investments
deposited to the Escrow Fund and all proceeds thereof, and all such
books shall be available for inspection at reasonable hours and
under reasonable conditions by Authorized Representatives of the
City and designated officials or representatives of the Authority.
0345454--
Section 3.02. Reports. While this Agreement remains in
effect, the Escrow Agent annually shall prepare and send to the
City, and at the request of the Authority, a written report
summarizing all transactions relating to the Escrow Fund during the
preceding year, together with a detailed statement of all
Authorized Investments and the cash balance on deposit in the
Escrow Fund as of the end of such period.
ARTICLE IV
CONCERNING THE ESCROW AGENT
Section 4.01. Representations. The Escrow Agent hereby
represents that it has all necessary power and authority to enter
into this Agreement and undertake the obligations and
responsibilities imposed upon it herein, and that it will carry out
all of its obligations hereunder.
Section 4.02. Limitation on Liability. The Escrow Agent
makes no representations at to the value, conditions or sufficiency
of the Escrow Fund, or any part thereof, or as to the title of the
City thereto, or as to the security afforded thereby or hereby, and
the Escrow Agent shall not incur liability or responsibility in
respect to any of such matters.
It is the intention of the parties hereto that the Escrow
Agent shall never be required to use or advance its own funds or
otherwise incur personal financial liability in the performance of
any of its duties of the exercise of any of its rights and powers
hereunder.
The Escrow Agent shall not be liable for any action taken or
neglected to be taken by it in good faith in any exercise of
reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow
Agent be responsible for the consequences of any error of judgment;
and the Escrow Agent shall not be answerable except for its own
action, neglect or default, nor for any loss unless the same shall
have been through its negligence or want of good faith.
Unless it is specifically otherwise provided herein, the
Escrow Agent has no duty to determine or inquire into the happening
or occurrence of any event or contingency or the performance of
failure of performance of the City with respect to arrangements or
contracts with others, with the Escrow Agent's sole duty hereunder
being to safeguard the Escrow Fund, to dispose of and deliver the
same in accordance with this Agreement. If, however, the Escrow
Agent is called upon by the terms of this Agreement to determine
the occurrence of any event or contingency, the Escrow Agent shall
be obligated, in making such determination, only to exercise
reasonable care and diligence, and in event of error in making such
0345054 -6-
determination the Escrow Agent shall be liable only for its own
misconduct or its negligence. In determining the occurrence of any
such event or contingency the Escrow Agent may request from the
City or any other person such reasonable additional evidence as the
Escrow Agent in its discretion may deem necessary to determine any
fact relating to the occurrence of such event or contingency, and
in this connection may make inquiries of, and consult with, among
others, the City at any time.
Section 4.03. Rights of Interpleader. In the event of any
disagreement or controversy hereunder or if conflicting demands or
notices are made upon the Escrow Agent growing out of or relating
to this Agreement or in the event that the Escrow Agent in good
faith is in doubt as to what action should be taken hereunder, the
City expressly agrees and consents that the Escrow Agent shall have
the absolute right at its election to:
(a) Withhold and stop all further proceedings in,
and performance of, this Agreement with respect to the
issue in question and of all instructions received
hereunder in regard to such issue; and
(b) File a suit in interpleader and obtain an order
from a court of appropriate jurisdiction requiring all
persons involved to interplead and litigate in such court
their several claims and rights among themselves.
Section 4.04. Successor Escrow Accent. If at any time the
Escrow Agent or its legal successor or successors should be unable,
through operation of law or otherwise, to act as escrow agent
hereunder, or if its property or affairs shall be taken under the
control of any state or federal court or administrative body
because of insolvency or bankruptcy or for any other reason, a
vacancy shall forthwith exist in the office of the Escrow Agent
hereunder. In such event the City, by appropriate action, promptly
shall appoint an Escrow Agent to fill such vacancy. If, in a
proper case, no appointment of a successor escrow agent shall be
made pursuant to the foregoing provisions of this section within
three months after a vacancy shall have occurred, the Authority may
apply to any court of competent jurisdiction to appoint a successor
escrow agent. Such court may thereupon, after such notice, if any,
as it may deem proper, prescribe and appoint a successor escrow
agent.
03* -7-
Any successor escrow agent shall be a state or national bank
with trust powers having at the time of appointment a combined
capital, surplus and undivided profits of at least $75,000,000 and
subject to the supervision or examination by Federal and State
authority.
Any successor escrow agent shall execute, acknowledge and
deliver to the City and the Escrow Agent an instrument accepting
such appointment hereunder, and the Escrow Agent shall execute and
deliver an instrument transferring to such successor escrow agent,
subject to the terms of this Agreement, all the rights, powers and
trusts of the Escrow Agent hereunder. Upon the request of any such
successor escrow agent, the City shall execute any and all
instruments in writing for more fully and certainly vesting in and
confirming to such successor escrow agent all such rights, powers
and duties.
ARTICLE V
MISCELLANEOUS
Section 5.01. Notice. Any notice, authorization, request, or
demand required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed to the City
or the Escrow Agent as follows:
CITY:
City of Lubbock
1625 13th Street (Zip-79457)
P. 0. Box 2000 (Zip-79457-2000)
Lubbock, Texas
Attention: City Manager
ESCROW AGENT:
Norwest Bank Texas, National Association
1601 Elm Street
4300 Thanksgiving Tower
Dallas, Texas 75201
Attention: Corporate Trust Department
ME
The United States Post Office registered or certified mail receipt
showing delivery of the aforesaid shall be conclusive evidence of
the date and fact of delivery. Any party hereto may change the
address to which notices are to be delivered by giving to the other
parties not less than ten (10) days prior notice thereof.
Section 5.02. Termination of Responsibilities. Upon the
taking of all the actions as described herein by the Escrow Agent,
the Escrow Agent shall have no further obligation or
responsibilities hereunder to the City, the Authority or to any
other person or persons in connection with this Agreement.
Section 5.03. Binding Agreement. This Agreement shall be
binding upon the City and the Escrow Agent and their respective
successors and legal representatives, and shall inure solely to the
benefit of the Contracting Parties to the Contracts, the City, the
Escrow Agent and their respective successors, assigns and legal
representatives.
Section 5.04. Severability. In case any one or more of the
provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but this Agreement shall be
construed as if such invalid or illegal or unenforceable provision
had never been contained herein.
Section 5.05. Texas Law Governs. This Agreement shall be
governed exclusively by the provisions hereof and by the applicable
laws of the State of Texas.
Section 5.06. Time of the Essence. Time shall be of the
essence in the performance of obligations from time to time imposed
upon the Escrow Agent by this Agreement.
Section 5.07. Amendments. This Agreement shall not be
amended except to cure any ambiguity or formal defect or omission
in this Agreement. No amendment shall be effective unless the same
shall be in writing and signed by the parties thereto and approved
by the Authority.
Section 5.08. Counterparts. This Agreement may be executed
in several counterparts, all or any of which shall be regarded for
all purposes as one original and shall constitute and be but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed and attested as of the
date first above written.
03450-FA -9-
EXECUTED as of the date fi
ATTEST:
e ,
cretary
(SEAL)
ATTEST
Title
Vice President
(SEAL)
-10-
APPROVED S TO FORM:
City Attorney
NORWEST BANK TEXAS, NATIONAL
ASSOCIATION
By: ,. �..
Title: Sherri L. HeWett
i Vice President
EXHIBIT "A"
Payment Request Form No.
To: Norwest Bank Texas, National Association
Escrow Agent
As Escrow Agent, you are hereby requested to pay from the
Escrow Fund established by the Special Escrow Deposit Agreement,
dated as of August 6, 1996 between the City of Lubbock, Texas (the
"City") and the Escrow Agent (the "Escrow Agent") to the Canadian
River Municipal Water Authority (the "Authority") the sum set forth
below such designation. The City, acting by and through its
Authorized Representative, hereby certifies that such amount
represents [full] [partial] payment due the Authority for payment
of the City's Share of Project Construction Costs pursuant to the
attached Requisition for Project Costs received from the Authority.
The City represents and warrants that all conditions precedent
for payment of the amount due the Authority have been satisfied and
payment of the amount shown below has been approved by the City.
Payee:
Address:
Amount:
-11-
CITY OF LUBBOCK, TEXAS
Authorized Representative
City of Lubbock/Canadian River Authority
Escrow Agreement
Fee Proposal for Escrow Agent Services
I. Acceptance Fee $500
Our acceptance fee covers the review, acceptance and assumption of all
responsibilities and duties as Escrow Agent under the agreement, participation in
document conferences, establishing records and accounts, receipt of funds,
consultation with counsel and attendance at closing. This one time charge is payable
at closing of the financing.
II. Administration Fee $1,000
This fee includes the normal day-to-day administration of the escrow performed in
accordance with the governing documents, maintenance of all administrative records,
and the duties and functions associated with the Escrow Agent agreement. Our
administration fee is billed at closing.
III. Out -of -Pocket Expenses At cost as incurred
All out-of-pocket expenses incurred in connection with the acceptance of the paying
agent appointment and annual administration will be billed at actual cost as incurred.
Expenses for which we are normally reimbursed include, but are not limited to
postage, express mail, mail insurance, long distance calls, fax charges, travel
expenses, and wire charges.
IV. Extraordinary Services
Fees indicated in this schedule are based upon services rendered in accordance with
established procedures and during normal business hours. Unusual or extraordinary
services such as those provided upon an Event of Default are subject to additional
charges based on the duties, responsibilities, and other factors involved.
Our proposal is subject in all respects to our review and acceptance of the governing
documents which set forth our duties and responsibilities.
Please note that the Acceptance Fee and Administration Fee are due at closing.
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
I, the undersigned City Secretary of said City, hereby certify
as follows:
1. That on the 3rd day of May, 1996, a special meeting of
the City Council of the City of Lubbock, Texas, was held at the
regular meeting place in the City Council Chambers; the duly
constituted members of the Council being as follows:
David R. Langston
Alex "Ty" Cooke
Randy Neugebauer
Max L. Ince
Victor Hernandez
Windy Sitton
T. J. Patterson
Bob Cass
Mayor
Councilmember
Councilmember
Councilmember
Councilmember
Councilmember
Councilmember
City Manager
and Mayor Pro-Tem
and all of said persons were present, except for the following:
David R. Langston ; thus constituting a quorum.
Whereupon, among other business, the following was transacted at
said meeting: a written resolution authorizing the execution of
the Conjunctive Use Groundwater Agreement between the City of
Lubbock, Texas and the Canadian River Municipal Water Authority.
The Resolution was duly introduced for consideration of said City
Council and read in full. It was then duly moved and seconded that
said Resolution be passed; and, after due discussion, said motion,
carrying with it the passage of said Resolution, prevailed and
carried by the following vote:
AYES: 5
NOES: 1
ABSTENTIONS: 0
2. A true, full and correct copy of the aforesaid Resolution
passed at the meeting described in the above and foregoing
paragraph is attached to and follows this Certificate; said
Resolution has been duly recorded in the official minutes of said
City Council; the above and foregoing paragraph is a true, full and
correct excerpt from said minutes of said meeting pertaining to the
passage of said Resolution; the persons named in the above and
foregoing paragraph, at the time of said meeting and the passage of
said Resolution, were the duly chosen, qualified and acting
officers and members of said City Council as indicated therein;
each of said officers and members was duly and sufficiently
notified officially and personally in advance, of the time, place
and purpose of the aforesaid meeting and that said Resolution would
be introduced and considered for passage at said meeting, and each
of said members consented in advance to the holding of said meeting
for such purpose; and said meeting was open to the public, and
public notice of the time, place and purpose of said meeting was
given, all as required by Chapter 551, Texas Government Code.
SIGNED AND SEALED this 3r6C of July, 1996.
[CITY SEAL]
ity Secreta
City of Lubbock, Texas
'7'
l a,?, :
0.S Mai
lubbcert.tmp Page 2
ACKNOWLEDGMENT OF NOTICE OF
SPECIAL MEETING FOR ABSENTEES
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
The undersigned member of the City Council of the City of
Lubbock, Texas, hereby acknowledges and certifies that he was duly
and suf f iciently' notif ied officially and personally, in advance, of
the time, place and purpose of the Special Meeting of said City
Council, which was held at the regular designated meeting place on
May 3, 1996, and that a written resolution authorizing the
execution of the Conjunctive Use Groundwater Agreement between the
City of Lubbock, Texas and the Canadian River Municipal Water
Authority would be duly introduced and considered for passage at
said Special Meeting, and that he consented in advance to the
holding of said Special5._for such purpose..
SIGNED the _ Ord dky of July,\199�.
P<vid R. Langston, -Mayor
City of Lubbock, Texas
lubtahct.tmp
RESOLUTION NO. 5170
Item #3
May 3, 1996
RESOLUTIQN
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock a contract to be entered by and between the
City of Lubbock and the City of O'Donnell for the sale of water from the City of O'Donnell to
the City of Lubbock as provided in said contract, attached hereto and which shall be spread upon
the minutes of the Council and as spread upon the minutes of this Council shall constitute and be
part of this Resolution as if fully copied herein in detail.
Passed by the City Council this
ATTEST:
Betty . Johns o , City Secretary
APPROVED AS TO CONTENT:
Terry Eller oak, Director of Water Utilities
APPROVED AS TO FORM:
Donald G. Vandiver, First Assistant City Attorney
D Gv: da/ccdocs/odonnel l.res
April 8, 1996
RESOLUTION NO. 5170
Item #3
May 3, 1996
AGREEMENT
For the Permanent
Transfer and Sale of Water Supply
Between
The City of Lubbock
and
The City of O'Donnell
Whereas, The City of Lubbock and the City of O'Donnell are both member cities of the
Canadian River Municipal Water Authority (Authority) and as such are entitled to receive a
portion of their respective water supplies from the source of supply known as Lake Meredith, a
surface water supply lake operated by the Authority, and
Whereas, the Authority intends to develop a source of groundwater supply to be used
conjunctively with the Lake Meredith supply, and the City of Lubbock and the City of O'Donnell
will become participants in the project to develop the groundwater supply, and
Whereas, the City of O'Donnell desires to permanently transfer to the City of Lubbock a
portion of the water it is entitled to receive from the Authority, in return for payment of all the
costs it would otherwise become obligated to pay as a participant in the Conjunctive Use
Groundwater Supply Project (Project) of the Authority,
Now Therefore, the parties hereto agree as follows:
1. Permanent Transfer and Sale of Water Supply
For and in consideration of the total payment to it of $ 225,000.00 to be paid in two installments,
the City of O'Donnell hereby sells to the City of Lubbock an annual water supply in the amount of
40 million gallons from the water it is entitled to receive from the Authority. Such water supply
shall be delivered to the City of Lubbock by the Authority after approval of this Agreement by the
Board of Directors of the Authority and in accordance with the terms and provisions of the
underlying agreements between the Authority and the City of O'Donnell for the City of
O'Donnell's purchase and acquisition of such water. Payments shall be made to the City of
O'Donnell by the City of Lubbock on such dates which will enable the City of O'Donnell to meet
its obligations to the Authority without requiring the assumption of bond issuance expenses on
revenue bonds to be issued by the Authority, in accord with the contractual arrangements between
the Authority and the parties hereto. Payment of the total amount above shall be comprised of
two separate payments. The first payment in the amount of $52,900.00 shall coincide with the
Authority's first bond issuance for the Project, and the second and final payment in the amount of
$172,100.00 shall coincide with the Authority's second bond issuance for the Project.
Notwithstanding any language herein contained, and to control over same in the event of conflict,
it is specifically agreed that all payments required of the City of Lubbock hereunder shall be made
by it at such times, and in such amounts, as may be required in order to permit the City of
O'Donnell to make timely payments under the terms and provisions of the agreement between the
Authority and the City of O'Donnell, Texas, for the purchase and acquisition of conjunctive use
groundwater supply. Failure by the City of O'Donnell to make such payments to the Authority as
are contemplated by this Agreement shall be a breach of this Agreement.
2. Payment of Delivery Charges
All delivery charges and other operation and maintenance charges made by the Authority for
water delivered to either the City of Lubbock or the City of O'Donnell shall be paid to the
Authority by the city receiving the water.
3. Term of Agreement
This agreement shall become effective upon execution by the City of Lubbock and the City of
O'Donnell and approval by the Board of Directors of the Authority, and shall remain in full force
and effect for the full life of the Project or any related or subsequent projects or construction to
replace or supplement the Project in order to maintain the Project's production capacity.
4. Shortages of Water
Should the Authority, in any calendar year or other allocation period, limit the amount of water
available from all sources to the City of O'Donnell to a total amount less than 53 million gallons,
the City of Lubbock and the City of O'Donnell, by their mutual agreement, shall agree for a sale
by the City of Lubbock to the City of O'Donnell of water adequate to remedy such shortage at a
rate and price mutually agreeable to both such cities.
5. Reimbursements
Should the actual costs of the Project be less than estimated at the time of execution of this
contract, the City of O'Donnell will reimburse to the City of Lubbock any portion of the payment
in Section 1 not applied to the Project or any portion reimbursed to the City of O'Donnell by the
Authority. Said reimbursement shall not reduce the amount of water conveyed to the City of
Lubbock by the City of O'Donnell in Section 1 of this agreement. Should the Project at any time
and for any reason be terminated and the amount of water agreed to in Section 1 cannot be
delivered, a prorated reimbursement or the amount not expended on the Project will be paid by
the City of O'Donnell to the City of Lubbock. In like manner, if the actual costs of the Project
are greater than estimated at the time of execution of this contract, Lubbock will, in a timely
fashion so as not to permit default, pay to the City of O'Donnell, to be by it promptly paid to the
Authority, an amount of money equal to the amount of any additional payment required of the
City of O'Donnell under the provisions of the agreements between the Authority and the City of
O'Donnell, Texas, for the purchase and acquisition of conjunctive use groundwater supply.
O'DONNELL AGMT - PAGE 2
6. Effective Date of Water Transfers
The water described in Section 1 shall be made available to the City of Lubbock by the City of
O'Donnell in the year that water is first available from the Project and thereafter for the life of the
Project or any related or subsequent projects or construction to replace or supplement the Project
in order to maintain the Project's production capacity.
7. Approval by Authority Board
In the event that the Authority's Board of Directors fails to authorize the transfer of the annual
water supply in the amount of 40 million gallons of water herein provided for, then the payments
required of the City of Lubbock to the City of O'Donnell shall be prorated, with the City of
Lubbock paying only that portion of the total payments which would have been made had the full
amount of such transfer been authorized as the number of gallons of annual water supply
authorized by the Authority's Board of Directors bears to the quantity of 40 million gallons.
S. Default Under Authority Contracts
The City of Lubbock desires to protect the water supply being purchased under this contract from
loss due to any default by the City of O'Donnell under its contracts with the Authority.
Under those contracts, the City of O'Donnell could lose its right to sell the water supply
to the City of Lubbock if it defaults on its obligations to the Authority. Therefore, the parties
hereto agree further that the City of O'Donnell will immediately notify the City of Lubbock of any
conditions which might result in the City of O'Donnell being judged to be in default of its contracts
to the Authority, so that the City of Lubbock may decide if it wishes to make the payments due to
the Authority from the City of O'Donnell to prevent the default from occurring.
IN WITNESS WBEREOF, the parties have executed this Agreement in triplicate
upon 1Ws- -Vth day of April , 1996.
• • • ' • • •Mayor
ATTEST
ATTEST
9af,- AJ,- 41,4� = � . �, .' '
Betty At. Johnson,VCity Secretary Gustene BairringtGn
City Secretary
OTONNELL AGMT - PAGE 3
APPROVED AS TO CONTENT:
Terry Ellerbro k, Director of Water Utilities
APPROVED AS TO FORM:
Donald G. Vandiver, First Assistant City Attorney
APPROVED THIS THE ff—DAY OF
_—AU,o , 1996.
CANADIAN RIVER MUNICIPAL WATER
AUTHORITY
By: r
J C. Williams, General Manager
O'DONNELL AGMT - PAGE 4
CITY OF LUBBOCK §
COUNTY OF LUBBOCK §
STATE OF TEXAS §
AFFIDAVIT
Before me, the undersigned authority, personally appeared Betty M. Johnson,
who, being by me duly sworn, deposed as follows:
My name is Betty M. Johnson, I am of sound mind, over 18 years of age, capable
of making this affidavit, and personally acquainted with the facts herein stated:
I am the custodian of the records of the City Secretary's Office for the City of
Lubbock, Texas. Attached hereto is a copy of the Resolution No. 5170, Item 43 taken
from the City Council's Special Meeting on May 3, 1996, from the official records of the
City of Lubbock. These records are kept by me, the City Secretary, in the regular course
of business, and it was in the regular course of business of the City Secretary of the City
of Lubbock, Texas or an employee or representatives of the City Secretary of the City of
Lubbock, Texas, with knowledge of the act, event, condition, opinion, or diagnosis,
recorded to make the record or to transmit information thereof to be included in such
record; and the record was made at or near the time or reasonably soon thereafter. The
records attached hereto are the original or exact duplicates of the original.
Affiant
BEFORE ME, the undersigned authority, a Notary Public in and for said County,
Texas, on this day personally appeared Betty M. Johnson, known to me to be the person
whose name is subscribed to the foregoing instrument and acknowledged to me that she
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 8th day of May 1996.
Seal)
a� -
��'� Notary Public, State of Texas
KATHERINE EGGER
r~' _ 'totary Public, state of Texas Commission Expires: 10/06/97
".ty Commission Expires 10.E-97