HomeMy WebLinkAboutResolution - 2019-R0414 - Lake Alan Henry Water District Lease Of Raw Water - 11/19/2019 Resolution No. 2019-RO414
Item No. 6.1
November 19, 2019
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
TIIAT 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, the First Amendment to the Raw Water
Lease by and between the City of Lubbock and the Lake Alan Henry Water District for the
lease of raw water. Said Amendment is attached hereto and incorporated in this Resolution as
if fully set forth herein and shall be included in the minutes of the City Council.
Passed by the City Council on the 19th day of Nove,,,b .r , 2019.
DANIEL M. POPE, MAYOR
ATTEST:
ADJA��Z JN�
Re t
ca Garza, City Secret y
APPROVED AS TO CONTENT:
J L� a - jr' ✓
Aubrey A. S ) r, P.E., Direc or of Water- Utilities
APPROVED AS TO FORM:
Am s, Deputy City Attorney
RES. First Amend Raw Water Lease LAHWD
(I1-4-19)
Resolution No. 2019-RO414
FIRST AMENDMENT TO
RAW WATER LEASE
BETWEEN
THE CITY OF LUBBOCK
AND
THE LAKE ALAN HENRY WATER DISTRICT
The following provisions are intended by the parties to modify, amend, or clarify the Raw
Water Lease between the City of Lubbock ("Lessor") and the Lake Alan Henry Water District
("Lessee") dated November 1, 2018, and attached hereto as Exhibit A. In the event it should be
determined that any of the following provisions conflict with the language in the attached Raw Water
Lease, the language in this Amendment shall govern as if the conflicting language in the printed
document had been deleted.
Section III.A. Term of Lease—Add the following to existing language:
The City has the option to renew the Lease for an additional term for ten years ending
on December 31, 2063.
Section III.J. Assignment of Lease—Delete and replace with the following:
Neither Lessor nor Lessee may assign any of its rights, duties, or obligations under
this Raw Water Lease other than to those holding mortgages on their respective water
supply systems without the prior written consent of the Mortgagor. Any successor or
assign of Lessee shall succeed to the rights and obligations of Lessee hereunder.
By execution hereof, Lessor and Lessee agree to all of the above terms and conditions.
SIGNED ON THE DATES SHOWN BELOW:
CITY OF LUBBOCK LAKE ALAN HENRY WATER DISTRICT
By: By:
Daniel M. Pope, Mayor Lindsay as o, Board Chairperson
Date: November 19, ?019 Date:
ATTEST:
Reb cca Garza, City Secre ary Ann Manning, Secretary
APPROVED AS TO ONTENT:
L. Woo Fr klin, P.E.,
Division Director of Public Works
Aubrey A. Spo, P.E.,
Director of Water Utilities
APPROVED AS TO FORM:
Airy Sim , )puty City Attorney
Resolution No. 2018-R0393
Item No. 6.6 Exhibit A
November 1, 2018
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 Raw Water Lease by and between the
City of Lubbock and the Lake Alan Henry Water District for the lease of raw water. Said
Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein
and shall be included in the minutes of the City Council.
Passed by the City Council on the i st day of _ Novem>Ler , 2018.
DANIEL M. POPE, f/IAYOIZ
ATTEST:
Rebcca Garza, City Secre ary
APPROVED AS TO CONTENT:
f� e
Aubrey A.�/p
6ar, P.F' Direc or of Water Utilities
L
APPROVED AS TO F01M
Amy Si eputy City y
RES. Raw Water Lease LAHWD
(10-17-18)
Resolution No. 2018-RO393
RAW WATER LEASE
BETWEEN
THE CITY OF LUBBOCK
AND
THE LAKE ALAN HENRY WATER DISTRICT
The City of Lubbock (hereinafter "Lessor") and The Lake Alan Henry Water District
(hereinafter"Lessee") enter into this Raw Water Lease("Lease")on the Ig day of November
2018, (the"Effective Date").
I. RECITALS
WHEREAS, the Lessor is a home-rule municipality created pursuant to Article 11. Section V of
the Texas Constitution and its Charter; and
WHEREAS, the Lessee is a special law conservation and reclamation district created pursuant
to the authority of Article XVI, Section 59 of the Texas Constitution through the passage of
Senate Bill 1941, Regular Session, 78'x' Texas Legislature (2003) (the "Enabling Legislation");
and
WHEREAS, on September 25, 1984, Permit No. 4146 (the "Permit") was issued to the City of
Lubbock authorizing the construction, storage, diversion and use of water from Lake Alan Henry
(the"Lake"); and
WHEREAS, on May 8, 2008 the Lessor and Lessee entered into a Raw Water Lease (the "Prior
Lease"); and
WHEREAS, the Lessor and Lessee desire to terminate the Prior Lease and execute this Raw
Water Lease (the "Lease") with new terms and conditions herein, wherein the cost of water has
been determined to be fair.just and reasonable pursuant to the Enabling Legislation; and
WHEREAS, by entering into this Lease, the Lessor has determined that this Lease will assist in
fulfilling the Lessor's financial obligations for the Lake; and
WHEREAS, the Lessor is providing the Lessee with an easement so that it may deliver the raw
and/or treated water supplied pursuant to this Lease; and
WHEREAS,THE Lessor has an interest in the development around the Lake;
NOW THEREFORE, for and in consideration of the mutual promises, the adequacy of
consideration being hereby acknowledged, the Lessor and the Lessee do hereby agree and
covenant to each other the following:
PAGE 1 of 1;
11. WATER SUPPLY
A. Amount of Water Delivered - Lessee shall have the right to use from the Lake, in
accordance with the Permit, up to a maximum of 280 acre-feet of raw water per
annum. This quantity of- raw water shall become the Annual Quantity for all purposes
of this Lease. In addition, to the extent that Lessee is able to acquire and transfer
certain water extraction license rights to Lessor in accordance with Paragraph IILD
of this Lease, Lessee shall be credited and not charged for those amounts of raw water
that are actually transferred to Lessor during the term of this Lease.
In addition to the Annual Quantity, the Lessor shall deliver to the Lessee the raw
water required to meet the treated water needs of the Sam Wahl Recreation Area.
This quantity of raw water shall become the Recreation Quantity for all purposes of
this Lease. For accounting purposes, the City shall subtract the Recreation Quantity,
as metered at the meter for the Recreation Area, from the Annual Quantity so as not
to count against the amount of water supplied to the Lessee.
In the event the level of the Lake should decrease to the level of 2200 feet above
mean sea level or below during the term hereof, the amount of Annual Quantity of
water required to be delivered to Lessee by Lessor shall decrease in a corresponding
manner for such time as the Lake shall be at such level, as set forth in Exhibit "A".
I'he reduced quantity of water shall be deemed to be the Annual Quantity during the
term of such reduction. Once the level of the Lake has exceeded 2200 feet above
mean sea level, the Annual Quantity shall revert to the original Annual Quantity prior
to the reduction.
B. Acquisition of South Garza System. - This Agreement shall be contingent upon the
Lessee's acquisition of the South Garza Water Supply System (the "South Garza
System"). If the Lessee fails to acquire the South Garza System within seven hundred
thirty(730)days,then this Agreement shall automatically terminate.
C. Source of Water Suanly — Water supplied pursuant to this Lease will be water provided
in accordance with the Permit.
D. Rate of Diversion — Water supplied pursuant to this Lease will be diverted at the rate of
diversion as authorized in the Permit and as provided herein.
I�. Purpose of Use — Lessee represents to Lessor and Lessor relies on such representation
that all water supplied under this Lease will be utilized for retail water service and for
municipal uses only, as such terms are defined by rules adopted by the Texas
Commission on Environmental Quality (the "Commission"). Except as otherwise
provided herein, Lessee is expressly prohibited from providing or selling raw water to
any third party without the written consent of Lessor. The Lessee will supply treated
water to the Sam Wahl Recreation Area, owned by the City of Lubbock. Lessee is
expressly prohibited from providing or utilizing any water acquired pursuant to this
agreement for commercial irrigation or industrial uses.
PAGE 2 of 15
F. Place of Use— Water supplied pursuant to this Lease shall only be used by the Lessee to
supply retail potable water within the boundaries of the Lessee as described in the
Lessee's Enabling Legislation (the "Area of Service as may be amended from time to
time).
G. Point of Delivery and Water Facilities—
I. Master Meter — Water supplied pursuant to this Lease will be delivered to
Lessee at or near the stilling basin outlet works, on the downstream side of the
dam, as approximately depicted in Exhibit "B", attached hereto (the "Point of
Delivery"), at a master-meter to be installed by Lessor pursuant to Paragraph
III.E. Lessee shall pay for any and all expenses related to the installation of said
master-meter.
2. Easement—The Lessee currently owns and operates certain water facilities and
easements (tile "Existing Facilities") on Lessor's property as depicted in Exhibit
"C." Lessee agrees to notify the Lessor as to any modifications ar repairs to the
Existing Facilities on Lessor's property. file Lessee must obtain Lessor's
approval from the Director of Water Utilities for any modification to the Existing
Facilities on Lessor's property.
For new or proposed pipelines ("New Facilities") on Lessor's property, the Lessor
shall grant the Lessee, upon its request, an easement for New Facilities over and
across lands, upon payment of ten and no/100 Dollars ($10) and other good and
valuable consideration by Lessee to Lessor. The arrangement of the New
Facilities are roughly depicted in Exhibit "D", attached hereto. It is expressly
agreed by Lessee and Lessor that the New Facilities may differ from that depicted
if it is so deemed necessary or advisable by the Lessee or Lessor. Prior to
construction, in the event it becomes necessary to alter the route of the pipeline
due to archeology concerns, as determined by Lessor, Lessee stipulates that the
Lessor may unilaterally alter said pipeline route and Lessee shall cooperate with
Lessor to amend the survey and easement to so reflect the altered route. The
construction of any New Facilities shall be constructed in a prudent manner and
shall be supervised or provided with oversight by a duly licensed engineer as
employed or contracted by the Lessee and may be supervised by the Lessor. The
Lessee shall obtain all necessary licenses and permits regarding the construction
of any pump station, related facilities, and pipeline(s). Further, the Lessee shall
comply with all applicable laws, statutes, rules, regulations and ordinances
regarding the construction, maintenance and operation of the New Facilities,
including without limitation, the Clean Water Act(33 U.S.C. 1251 et seq.) and all
rules and regulations promulgated thereunder or related thereto.
3. Modification of Connectins Facilities — If modifications to the existing
improvements to Lessee's water system, including without limitation, plans for
meter, saddle and tap, and the valve assembly (referred to collectively as the
PAU 3 of 15
"Connecting Facilities") are made, the Lessee must allow the City to review and
approve such modifications. Lessee shall ensure that modifications to its facilities
are constructed in a professional manner so that there occurs no unreasonable
water loss as a result of the pump station construction and operation. Lessor
agrees to indemnify and hold Lessee harmless, to the fullest extent permitted by
law, from any and all claims or liabilities or damages caused by the negligence of
the Lessor or any of its employees, and agents related to the modification,
operation and maintenance of the Connecting Facilities, (i) if the City would be
liable in lacy for such claim; (ii) to the extent immunity, both from suit and
liability, has been waived pursuant to the laws of the State of Texas; and (iii) to
the extent limited by Paragraph VI.S. Nothing herein, or provided otherwise in
the Agreement, shall be construed as a waiver by the City of any immunities from
suit or liability, of any kind, whether provided by State or local statute, or
otherwise.
Upon completion of any modifications to the Connecting Facilities, Lessor shall
give notice to Lessee that the improvements have been completed.
4. Insurance Coverage for Construction — Lessee, and any other persons
performing all or a part of its construction activities, shall procure and carry, at its
sole cost and expense through the time of final completion of any and all
construction activities contemplated by this Lease, insurance protection as
hereinafter specified, in form and substance satisfactory to Lessor, carried with an
insurance company authorized to transact business in the State of Texas, covering
all aspects and risks of loss of all operations in connection with this Lease,
including without limitation, the indemnity obligations set forth herein. Lessee
shall obtain and maintain in full force and effect commercial general liability and
automobile liability coverage with insurance carriers admitted to do business in
the State of'I'exas. The insurance companies must carry a Best's Rating of A-VII
or better. The policies will be written on an occurrence basis, subject to the
following minimum limits of liability:
Commercial General Liabilitv:
Combined Single Limit: $500,000 Per Occurrence
Automobile Liability:
Combined Single Limit for any auto: $500,000 Per Occurrence
The Lessor shall be listed as additional insured and shall be granted a waiver of
subrogation under the policies. Lessee will provide a Certificate of Insurance to
the Lessor as evidence of coverage. The Certificate will provide 30 days' notice
of cancellation. A copy of the additional insured endorsement and waiver of
subrogation attached to the policy will be included in the certificate.
PAGE 4 of 15
Lessee shall elect to obtain or shall require its contractors, subcontracts, or other
entities constructing, operating, and maintaining facilities described in this Lease
on the Lessee's behalf to obtain worker's compensation coverage pursuant to
Section 406.002 of the Texas Labor Code. further, Lessee shall comply or shall
require its contractors, subcontracts, or other entities constructing, operating, and
maintaining facilities described in this Lease on the Lessee's behalf to comply
with all provisions of Title 5 of the Texas Labor Code to ensure that Lessee
maintains said coverage. The Lessor shall be granted a waiver of subrogation
under this policy.
If Lessee fails to maintain the required insurance in frill force and effect, or if the
Lessee fails to ensure that the required insurance is maintained in full force and
effect by its contractors, subcontracts, or other entities constructing, operating,
and maintaining facilities described in this Lease on the Lessee's behalf, the
Lessor may terminate this Agreement in accordance with Paragraph III.G.3.
5. Inspections—The Parties agree that the Lessor has the right, but shall be under
no obligation, to make inspections as it deems necessary or advisable during the
construction phase of pipeline(s) and other water facilities being constructed on
property owned by the Lessor. Any inspection rights provided herein to Lessor
shalt not relieve the Lessee of any of its obligations hereunder.
Efate of Delivery — Lessor agrees to deliver water to Lessee at a rate not to exceed two
times the daily average quantity on an annual basis measured over a 24-hour period.
Lessor will not restrict the delivery pressure from the Lake, unless the restriction is
necessary to comply with this provision or the terms of the Permit.
1. Quality of Water—Lessor makes no representation as to the quality of the water supplied
tinder this Lease, and Lessee hereby releases Lessor and agrees to hold it harmless from
any and all claims that Lessee or Lessee's customers or users have or may have for any
diminution in or impairment of the quality of water supplied under this Lease caused by
any acts or omissions of Lessor.
III. ADMINISTRATION OF LEASE
A. Term of Lease — This Lease shall be for a term commencing on the Effective Date and
ending on December 31, 2053.
B. Computation of Rates for Leased Water— Lessee hereby acknowledges that the Enabling
Legislation accurately and appropriately defines the components necessary for the
computation of the rates to be charged by the Lessor to the Lessee for the water to be
supplied hereunder. Lessee hereby acknowledges that such components, if applied
correctly, will generate rates that are just, reasonable and non-discriminatory, as applied
to Lessee and the supply of water made available hereunder. The Lessor agrees that the
rates for the leased water shall not exceed that which is allowed by the Enabling
Legislation.
PAGE 5 of 15
C. Terms of Payment— Lessee hereby covenants to pay Lessor the initial sum of$3.65 per
thousand gallons for the delivery of the Annual Quantity and the Recreation Quantity.
Lessee shall be obligated to pay only for the water actually provided to it out of the
Annual Quantity and the Recreation Quantity. Lessee expressly stipulates and agrees that
the price for water paid to be delivered hereunder may be adjusted annually, effective for
deliveries of raw water to Lessee on and atter January I of each year of the term hereof,
in accordance with the terms of Paragraph III.B. and the Enabling Legislation.
During the term of this Lease, Lessor will mail a statement monthly to Lessee showing
the monthly diversions. Each statement submitted shall be paid to Lessor at its office in
Lubbock, Texas, by check or bankwire, on or before thirty (30) days from the date of
mailing of the statement to Lessee. In the event Lessee fails to make payment of that
statement within said thirty (30) day period, Lessee hereby agrees to pay and shall then
pay a late payment charge of five percent (5%) of the amount of the statement. For each
calendar month or fraction thereof that the statement remains unpaid, Lessee hereby
agrees to pay and shall pay interest at the rate of one and a half percent (1.5%) of the
amount of the statement. If the statement has not been paid in the prescribed period,
Lessee hereby further agrees to pay all costs of collection and reasonable attorney's fees,
regardless of whether suit is filed for such collection.
At no time shall the interest rate and/or other fees, if applicable, described herein exceed
the "Maximum Rate." The term "Maximum Rate," as used herein, shall mean the
maximum nonusurious interest rate, if any, that at any time, or from time to time may be
permitted by applicable law on such day or days.
Any provision herein notwithstanding, Lessor shall not in any event be entitled to receive
or collect, nor shall any amounts received hereunder be credited, so that Lessor shall be
paid, as interest, a sum greater than the Maximum Rate permitted by applicable law to be
charged hereunder. if any construction of this Agreement indicates a different right given
to Lessor to ask for, demand or receive any larger sum as interest, such is a mistake in
calculation or wording which this clause shall override and control, it being the intention
of the parties that this Agreement shall in all things strictly comply and conform with
applicable law. In the event that the aggregate of all consideration which constitutes
interest under applicable law that is taken, reserved, contracted tor, charged or received
Under this Agreement shall ever exceed the maximum nonusurious rate under applicable
law, any sum in excess thereof shall be paid to the Lessee.
D. Acquisition and Transfer of Water Rights— For the purpose of the acquisition of land and
other property rights in order to construct Lake Alan Henry, the Lessor granted a water
extraction license for certain landowners, including, but not limited to, Clyde Kitten. Le
Wayne Fagan, Patsy Day, and John Huddleston to use a certain amount of raw water
from Lake Alan Henry (the "Water Extraction Licenses"). It is the intention of Lessee to
acquire the South Garza Water Supply water system from Clyde Kitten,one of the above-
described landowners. in acquiring the South Gama Water Supply water system, it is the
intent of Lessee to acquire the water extraction Iicense from Clyde Kitten.
PAGE 6 of 15
If Lessee offers to sell or receives a bona fide offer from a third party to buy all or any
portion of the Water Extraction Licenses, Lessee will promptly give written notice to
Lessor of the terms of the offer made or received and Lessee's willingness to sell for that
price and on those terms. Upon receiving the notice,the Lessor may exercise the option,
in the manner specified below, to purchase the Water Extraction Licenses described in
the offer at the stated price and on the stated terms.
If the Lessor elects to accept Lessee's offer or meet the third-party's offer under the
provisions of the preceding section, the Lessor will notify Lessee of that election,doing
so in writing delivered to Lessee within sixty(60) days after the date of Lessee's notice to
the Lessor of the offer. If the Lessor elects to refuse the offer or not to meet the third-
party offer, the Lessor need take no action whatsoever. If the Lessor elects to refuse the
offer, Lessee is free to sell or accept the offer to buy the property subject to the
continuation of the leasehold estate created by this lease.
If for any reason the property is not sold by Lessee following an offer from a third-party,
the right of first refusal granted and described in the preceding section shall continue in
full force and effect, on the same terms and conditions.
E. Metering of Delivered Water — To measure the amount of water delivered to Lessee
hereunder, Lessor agrees to install such flow meters and recording devices to permit,
within five percent (5%) accuracy, determination of quantities of raw water delivered
hereunder in units of thousand (1,000) gallons. Lessee agrees to pay for meter purchase,
installation, maintenance, calibration and replacement as more particularly set forth
below.
Lessor shall provide Lessee and Lessee shall provide Lessor with reasonable access to the
Meters for the purpose of making meter readings and/or periodic inspections. Lessee and
Lessor shall have the right to make a reading of the Meters installed by Lessee on a
monthly basis. The Lessor shall have the Meters tested for accuracy by qualified
personnel at the expense of Lessee at least once each three (3) calendar years. The report
of such test and calibration shall be furnished to the Lessor and the Lessee. Readings
within five percent(5%)of accuracy shall be considere=d correct.
The Meters may be tested at any reasonable time by either party, provided that the party
making the test shall notify the other party at least two (2) weeks in advance and allow
the other party to witness the test. Either party may install, at its own expense, check
meters of comparable quality and reliability as the meter utilized to measure the amount
of water delivered to the Lessee at any time and may leave such check meters installed
for such periods as the party deems to be reasonably necessary to determine the accuracy
of the metering equipment. Lessor shall be required to take necessary steps to correct any
meter inaccuracy discovered during any test of Lessor's meter.
In the event any question arises at any time as to the accuracy of any meter, such meter
shall be tested by Lessor, the expense of such test to be borne by Lessee, if the meter is
found to be correct or if it is found to be reading a lower amount of water used, and by
I"ACiI:7 of 15
Lessor, if it is found to be reading a higher amount of water used. If, as a result of any
test. any meter is found to be registering inaccurately (i.e., in excess of five percent(5%)
of accuracy), the readings of such meter shall be corrected at the rate of its inaccuracy for
any period which is def-initely known and agreed upon or, if no such period is known and
agreed upon, a period extending back either one hundred twenty (120)days from the date
of demand for the test or, if no demand for the test was made, one hundred twenty (120)
days from the date of the test. If the meter was incorrectly reading a lower of the amount
of water than was actually used, Lessee shall reimburse Lessor the difference as
calculated above and if the meter was incorrectly reading a higher of the amount of water
than was actually used, Lessor shall reimburse Lessee the difference as calculated above.
Lessee shall pay to Lessor a base monthly charge for the meter installed at the point of
delivery equal to the rate established by the City Council of the City of Lubbock (City of
Lubbock) for meters of equal size as set forth in Section 22.03.084 of Code of
Ordinances of the City of Lubbock, as may be amended from time to time.
F. Water Conservation and Drought Contingency Measures — Pursuant to 30 Tex. Admin.
Cocle Chapter 288, Lessee-agrees to develop and implement water conservation and
drought contingency measures consistent with, or more restrictive on water use than,
Lessor's water conservation plan (the "Conservation Plan"), and that the water delivered
to Lessee pursuant to this Lease will be used in accordance with such Conservation Plan.
Lessor, in accordance with applicable law, may from time to time modify the
Conservation Plan. Lessee agrees to provide Lessor with copies of Commission approved
water conservation and drought contingency plans prior to the delivery of water pursuant
to this Lease.
G. Termination of the Lease—This Lease may be terminated hereto as follows:
I. Lessor, at its sole option, and in accordance with the terms and conditions set
forth in Paragraph IILH., "Non-Payment", may terminate this Lease without
recourse should Lessee fail to comply with the terms and conditions of this Lease
for the payment of moneys owed to Lessor pursuant to Paragraph III.C., "Terms
of Payment" and/or Paragraph III.E., "Metering of Delivered Water."
2. This Lease may be terminated immediately by Lessor upon the declaration of
bankruptcy by Lessee.
3. This Lease may be terminated should Lessee fail to comply with the terms and
provisions of Paragraphs II.F.7. if Lessor notifies Lessee of Lessee's default and
Lessor's intent to so terminate this Lease, and if Lessee fails to cure such default
after thirty(30) days notice and opportunity to cure such default.
Lessee shall remain liable for all fees and charges accruing under the Lease through the
date the Lease is terminated.
PAGr.8 of 15
Non-Pa nient — If Lessor determines that Lessee has not paid the full amount owed for
any payment due under Paragraph IILC., "Terms of Payment", and/or Paragraph
III.E., "Metering of Delivered Water" hereof within the time provided therefore, Lessor
shall give written notice to Lessee stating the amount due and unpaid. If Lessor gives
notice as provided herein and Lessee fails to pay within thirty (30) days of the date such
written notice was mailed the amounts claimed in such notice to be due and unpaid,
Lessor may, at its sole option, upon giving ten (10) days additional written notice to
Lessee, terminate this Lease without recourse. if Lessee should dispute Lessee's
obligation to pay all or any part of the amount stated in any statement or notice, Lessee
shall, nevertheless pay such amount, in which case such amount shall be deposited by
Lessor in an interest bearing account pending final resolution of such dispute. Nothing
herein shall be construed to require the Lessor to exercise the remedy of termination and
Lessor shall be entitled to exercise, concurrently or otherwise, other remedies as may be
available by law, contract, equity or otherwise. All remedies shall be cumulative in
nature and the exercise by either party of any right or remedy hereunder shall not
preclude the concurrent or subsequent exercise of any other right or remedy.
I. Notice— Each notice under this Lease shall be transnlitted by certified mail, return receipt
requested, and shall be effective on the date actually received. All notices and statements
shall be addressed to:
Lake Alan Henry Water District
Attention: Chairperson, Board ol'Directors
P.O. Box 493
Post,Texas 79356
City of Lubbock
Attention: Director of Water Utilities
P.O. Box 2000
Lubbock, Texas 79457
Either party may change its address by giving written notice of such change to the other
party.
I. Assignment of Lease - Lessee may assign the rights to this Lease only upon obtaining the
written approval of Lessor. Lessor may assign its rights to this Lease, in whole or in part,
at any time and from time to time, at its sole and absolute discretion. This clause does
not prohibit the delegation of duties prescribed by this Agreement.
J. Compliance with Commission Rules — Lessor agrees to file a copy of this Lease with the
Executive Director of the Conlnlission, it being fully recognized by the Lessee hereunder
that the effectiveness of this Lease is dependent upon compliance with 30 Tex. Admin.
Code Chapters 295 and 297.
PAGr 9 of 15
IV. WATER SUPPLY PLANNING
A. No Permanent Supply of Water— Lessee acknowledges that the supply of water pursuant
to this Lease is for a specified term of years and that Lessor may need this water to meet
its own future water supply needs. Lessee agrees that Lessor has no obligation to extend
the Lease or enter into another Lease for the benefit of Lessee.
13. Plan for Future Supply — Consistent with Water Code Section 11.036 and Government
Code Section 791.026, Lessee agrees to plan for its water supply needs beyond the term
of this Lease. In so doing, Lessee agrees to submit to Lessor, at least three (3) years
before the expiration of this Lease, a list of identified reasonable alternative water
management strategies approved in accordance with the Texas Water Development
Board's State Water Plan and Chapter 16 of the Water Code. Furthermore, at least one
(1) year before the expiration of this Lease, Lessee covenants that it will complete all
land acquisition, construction, and physical improvements necessary to realize any such
approved alternative water management supplies to replace the water supply provided
through this Lease. The Lessor, at its option, may extend this lease.
V. RETAIL WATER SERVICE
A. Service to City. At such time Lessee purchases or otherwise gains access and control of
the South Garza Water Supply Co., Lessee shall make available to the City retail potable
water service at delivery rates and volumes acceptable to City to the meter located south
of the north boundary of the Sam Wahl Recreation Area, as approximately depicted on
Exhibit"E," attached hereto.
B. Rates for Service. The total rate payable by the City to Lessee for such water shall be
$80 for the first 3,000 gallons of water and $5.00 per thousand gallons thereafter.
C. Termination of Service. The City may terminate retail water service to the Recreation
Area at any time in accordance with the Tariff. FIowever, to the extent the Recreation
Area is certificated to Lessee, the City may not obtain retail water service from any other
retail water service provider. However, the City may provide its own potable water
service to the Recreation Area and Lessee hereby consents to such activity. Lessee shall
take whatever action is necessary to allow for such activity by the City.
VI. GENERAL PROVISIONS
A. Preamble — All matters stated in the preamble are found to be true and correct and are
incorporated into the body of this Lease as if copied in their entirety.
B. Hold Harmless and Indemnification — To the extent, and only to such extent allowed by
law, and subject to Paragraph VI.S. herein, Lessor and Lessee will save and hold the
other harmless from any and all claims or demands whatsoever to which either may be
subjected by reason of any injury to any person or damage to any property resulting from
PAGE 10 of 15
or in any way connected with any and all actions and activities (or failure to act) of the
other party under this Lease.
C. Force Maieure—The term "force majeure" as used herein, shall mean those situations or
conditions which are beyond dle control of Lessor or Lessee and which,after the exercise
of due diligence to remedy such situation or condition, render Lessor or Lessee unable,
wholly or in part, to carry out the covenants contained herein. Such force majeure
includes, but is not limited to, acts of God, strikes, lockouts, acts of the public enemy,
orders of any kind of the government of the United States or of the State of Texas or any
civil or military authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, hurricanes, storms, floods, washouts, droughts, civil disturbances,
explosions, breakage or accidents to machinery, pipelines, canals, or dams, partial or
entire failure of water supply, insofar as each of the foregoing are beyond the reasonable
control of the party in question. Lessor shall not be held liable or responsible for any
damage that may be caused by its inability, after the exercise of due diligence, to make
the supply of water available to Lessee due to any force majeure. Lessor shall use
reasonable and timely diligence to repair or recondition the machinery, pipelines, or dams
in the event Such machinery, pipelines or dams are damaged or made unserviceable from
any force majeure.
D. Maintenance and Periodic Shutdowns — Lessee agrees that routine and emergency
maintenance conditions may impact Lessor's ability to deliver water pursuant to this
Lease. Except in the case of force majeure, and to the extent reasonable, Lessor agrees to
give 72 hours notice prior to any shutdown of equipment or infrastructure necessary to
deliver water to Lessee.
E. No Third Party Beneficiary—The parties hereto are entering into this Lease solely for the
benefit of themselves and agree that nothing herein shall be construed to confer any right,
privilege or benefit on any person or entity other than the parties hereto.
F. No Rights or "title Acquired — Lessee agrees and acknowledges that it acquires by this
Lease no rights or title to the water that is the subject of this Lease other than those rights
explicitly set forth herein. Furthermore, nothing in this Lease shall be construed as an
assignment of any diversion rights,equity, or financial obligations under the Agreement.
G. Representations And Warranties — Both Lessor and Lessee represent and warrant to the
other that this Lease has been duly executed by an authorized officer and constitutes a
valid and binding contract, enforceable against it in accordance with its terms (except as
such enforceability may be limited by bankruptcy laws or other similar laws relating to
the enforcement of creditors' rights generally and by general equitable principles).
Fl. Amendment — This Lease may not be modified or amended except by an instrument in
writing signed by authorized representatives of the parties.
PAGE I 1 of 15
I. Binding in Effect—The terms of this Lease shall be binding upon, and inure to the benefit
of, the parties and their. in the case of Lessor, successors and assigns, and in the case of
Lessee, its permitted successors and assigns.
I. Integrated Document—This Lease, together with all Exhibits attached hereto, constitutes
the entire agreement of the parties relating to the subject matter of this Cease and
supersedes all prior agreements or understandings with respect to the subject matter
hereof, both oral and written, including but not limited to the May 11, 2006 Raw Water
Lease between the City of Lubbock and the Lake Alan Henry Water District. Each party
agrees that the other party (and their agents and representatives) have not made,and it has
not relied upon, any representation, warranty, covenant or agreement to or with such
party relating to the transactions contemplated hereunder other than those expressly set
forth herein.
K. Counterparts — This Lease may be executed by the parties in any number of separate
counterparts, each of which when so executed and delivered shall be deemed an original,
but all such counterparts shall together constitute one and the same agreement. All
signatures need not be on the same counterpart.
L. f=urther Assurances — Each party agrees to do all acts and things and to execute and
deliver such further written instruments, as may be from time to time reasonably required
to carry out the terms and provisions of this Lease.
M. Governing Law — This Lease and the rights and duties of the parties arising out of this
Lease shall be governed by, and construed in accordance with, the laws of the State of
Texas, without reference to the conflict of laws rules thereof. This Lease is performable,
at least in part, in Lubbock County, Texas. Lessor and Lessee hereby irrevocably consent
to Lubbock County as the exclusive venue for any action related hereto.
N. Headings — The headings of the Articles and Paragraphs of this Lease are included for
convenience only and shall not be deemed to constitute a part of this Lease.
O. Exhibits—All Exhibits attached to this Lease are incorporated herein by this reference in
their entirety and made a part hereof for all purposes.
P. Interpretation and Reliance — No presumption will apply in favor of any party in the
interpretation of this Lease or in the resolution of any ambiguity of any provisions
thereof.
Q. Relationship of Parties — Neither the execution nor delivery of this Lease, nor the
consummation of the transactions contemplated hereunder, shall create or constitute a
partnership, joint venture, or any other form of business organization or arrangement
between the parties, except for the contractual arrangements specifically set forth in this
Lease. Except as is expressly agreed to in writing in this Lease, no party (or any of its
agents, officers or employees) shall be an agent or employee of the other party, nor shall
PAGE 12 of 1
a party (or any of its agents, officers or employees) have any power to assume or create
any obligation on behalf of the other party.
R. Severability— In the event that any provision of this Lease is held to be unenforceable or
invalid by any court of competent jurisdiction, the parties shall negotiate an equitable
adjustment to the provisions of this Lease with the view to effecting, to the extent
possible, the original purpose and intent of this Lease, and the validity and enforceability
of the remaining provisions shall not be affected thereby.
S. Actual Damages — A party shall be in default hereunder if any of the following shall
occur and be continuing: (i) failure to perform and/or be in compliance with any
covenant, warranty or agreement herein; or (ii) any representation shall prove to be
untrue during the term hereof. In the event of default of this Lease by any party,the Non-
defaulting party shall be entitled to seek damages, specific performance, injunctive relief,
or any other remedy to which it might be entitled under this Lease, in law or at equity.
Notwithstanding the foregoing, neither party shall be liable or have any responsibility to
the other for any indirect, special, consequential, punitive or delay-related or
performance-related damages including, without limitation, lost earnings or profits. Such
limitation on liability shall apply to any claim or action, whether it is based on whole or
in part on contract, negligence,strict liability, tort,statute or any other theory of liability.
PAGE 13 of 15
Executed and effective as of the(late identified above by the signatures of the parties below.
CITY OF LUBBOCK LAKE ALAN I I1?NI:Y WA'fliR DISTRICT
BY: BY:
Daniel M. Pope, Mayor Lindsay Masso, oaref Chairperson
ATTEST: ATTEST:
12 0
Rebe ca Garza, City Secre ary Ann Mannin , Se&ittary
APP OVBD AS 'f CONTEN"I":
Wood rai in, P.E., Division Director of Public Works
Aubrey A. Sp li• P.E., Dirk rn' of Water Utilities
APPROVED AS TO FORM:
F
n , Depu Attorney
PAoe 14 of 15
EXHIBITS
Exhibit A: Schedule of Reduced Water Allocation
Exhibit B: Raw Water Point of Delivery for LAH Water District
Exhibit C: Existing LAH Water District Facilities and Easements
Exhibit D: Proposed LAH Water District Easements
Exhibit E: Retail Meter Point of Delivery for Sam Wahl Recreational Area
PAGF 15 of I5
Exhibit "A"
Schedule for Reducing Water Allocation
Lake Water Reduction in
Level Base Annual
Elevation (1) Quantity
2200 10%
2195 20%
2190 30%
2185 40%
2180 60%
2175 80%
(1) Feet above mean sea level as measured at the intake tower USGS gauge on January
Vt of each year
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