HomeMy WebLinkAboutResolution - 6174 - Agreement - CRMWA - Prepayment Of Obligations, Canadian River Project - 01/28/1999-00�
Resolution No. 6174
Item No. 48
January 28, 1999
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 by and
between the City of Lubbock and the Canadian River Municipal Water Authority for the
prepayment of obligations incurred in connection with the construction of the Canadian
River Project, attached hereto, 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 28th day of _ January '1999.
Y SITTON, Y R
ATT ST:
Kayth e Darnell, City Secretary
APPROVED AS TO CONTENT:
Terry Ellerbtoo , Managing Director of
Water Utilities
APPROVED AS TO FORM:
a' .4-7-
Anita Burgess, City Attorney
aalccaocs/CRMWA.res
January 21, 1999
Resolution No. 6174
Item No. 48
January 28, 1999
AGREEMENT
BETWEEN THE
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
AND THE
CITY OF LUBBOCK, TEXAS
FOR THE PREPAYMENT OF THE OBLIGATIONS
TO THE UNITED STATES OF AMERICA
INCURRED IN CONNECTION WITH THE CONSTRUCTION OF THE
CANADIAN RIVER PROJECT
TABLE OF CONTENTS
Page
ARTICLE 1. PURPOSE ....... . ..... 2
1.1 Purpose of Agreement ................... . .................. 2
1.2 Existing Contracts .......................................... 2
1.3 Contract Payments ......................................... 3
ARTICLE 2. DEFINITIONS ................... . ........ . ................ 3
ARTICLE 3. TERM OF AGREEMENT ............ . ... . . . ................ 7
ARTICLE 4. CITY'S PAYMENT OF ITS SHARE OF THE PREPAYMENT
COSTS OF THE PROJECT .......................... . ....... 7
4.1 Prepayment of Repayment Obligation ................. . ........ 7
4.2 Payment of Project Prepayment Costs .......................... 7
4.3 City's Option to Pay Project Prepayment Costs Without
Providing Payment of the Authority's Revenue Bonds .............. 8
4.4 Project Prepayment Costs Due for Revenue Bonds and
Payments from Escrow Accounts .............................. 9
4.5 Substitution of Payment Obligation ............................ 11
4.6 Termination of Project ...................................... 11
4.7 Cancellation of Contract for Failure to Fund ..................... 12
ARTICLE 5. OPERATION AND MAINTENANCE COSTS AND
ACCUMULATED FUNDS ................................... 12
ARTICLE 6.
FINANCING ARRANGEMENTS ..............................
13
6.1
Issuance of Revenue Bonds . ................................
13
6.2
Revenue Bond Proceeds ...................................
13
6.3
Establishment of Funds and Flow of Funds .....................
13
6.4
Project Prepayment Fund ...................................
14
6.5
Interest and Sinking Fund ...................................
14
6.6
Bond Reserve Fund .......................................
15
6.7
Unallocated and Unpledged Balance ..........................
16
6.8
Investments ..............................................
17
6.9
Final Payment ............................................
18
6.10
Additional Bonds ..........................................
18
ARTICLE 7. COVENANTS AND OBLIGATIONS OF THE AUTHORITY .......... 20
7.1 Obligation to Complete Project ............................... 20
7.2 Records and Accounts ..................................... 20
P_a�ae
7.3
Defeasance .............................................. 21
7.4
Sale or Encumbrance of Properties ...........................
21
7.5
Board to Submit Information to Meet Continuing
Disclosure Requirements ...................................
22
7.6
Reports and Inspections ....................................
22
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 ...................
23
8.6
Exclusive Agreement ......................................
24
8.7
City Obligation Not Separable ................................
24
8.8
City's Disclosure Agreement ................. ' ...............
24
ARTICLE 9.
GENERAL PROVISIONS ...................................
24
9.1
Assignment of Agreement ...................................
24
9.2
Inspection of Books and Records .............................
24
9.3
Past Due Payments .......................................
25
9.4
Default under Bond Documents ..............................
25
9.5
Amendment ..............................................
25
9.6
Subject to Authority Contract ................................
25
9.7
Notices .................................................
25
9.8
Governing Law ...........................................
26
9.9
Further Action ............................................
26
9.10
Binding Effect . ...........................................
26
9.11
Integration ...............................................
26
9.12
Severability ..............................................
26
9.13
Waiver ..................................................
26
9.14
Defaults and Remedies .....................................
26
9.15
Force Majeure............................................
27
9.16
Counterparts .............................................
27
9.17
Descriptive Headings ......................................
28
9.18
Construction of Agreement ..................................
28
9.19
Non -Discrimination ........................................
28
9.20
Determinations ...........................................
28
9.21
Costs, Expenses and Legal Fees .............................
28
9.22
Remedies ...............................................
28
9.23
Contract not for Benefit of Third Parties ........................
28
Schedule A - Contract between the Canadian River Municipal Water Authority
and the City of Lubbock, Texas for providing a Municipal Water
Supply
Schedule 8 - City's Share for Each Member City
Schedule C - Notice Information
Schedule a - Project Financing
Home Rule City
AGREEMENT BETWEEN THE CANADIAN RIVER MUNICIPAL
WATER AUTHORITY AND THE CITY OF LUBBOCK,
TEXAS FOR THE PREPAYMENT OF THE OBLIGATIONS
TO THE UNITED STATES OF AMERICA INCURRED IN
CONNECTION WITH THE CONSTRUCTION OF THE
CANADIAN RIVER PROJECT
This Agreement is made as of a, 1999, between the
CANADIAN RIVER MUNICIPAL WATER AUTHORI Y, 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
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 (the
"Canadian River Project").
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 Canadian River Project was authorized by an Act of Congress dated
December 29, 1950 (64 Stat. 1124), and constructed pursuantto the Repayment Contract,
Contract No. 14-06-500-485, between the United States of America and the Canadian
River Municipal WaterAuthority, Texas, dated November 28, 1960, and as subsequently
amended (the "Repayment Contract").
4. The prepayment of the obligations under the Repayment Contract was
authorized by an Act of Congress dated October 30, 1998, Public Law No. 105-316, the
Canadian River Project Prepayment Act (the "Prepayment Legislation"), whereby the
Authority is entitled to prepay its obligations to the United States of America, thereby
saving on the cost of the financing under the Repayment Contract and to receive certain
other benefits including conveyance of all the right, title and interest in and to all land and
improvements comprising the pipeline and related facilities of the Canadian River Project
as provided in 64 Stat. 1124 as a result of the prepayment and the assumption of certain
additional responsibilities for the operation of the Project.
5. The Prepayment Legislation requires that the Authority pay the United States
of America within 360 days of October 30, 1998.
6. Under the Repayment Contract, the Authority and the City have entered into
a water supply agreement for water from the Project (the "Meredith Supply Agreement").
7. A condition precedent to the prepayment of the obligation to the United
States of America for the Project is the execution of a contract between the Authority and
each of its member cities to provide for the funding of the respective City's share of the
costs of the prepayment of the Project.
8. The City desires to prepay its portion of the outstanding obligation for the
Project and have its prepayment obligation substituted for its payment obligation for the
Project in its Meredith Supply Agreement with the Authority.
9. 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 Session, as amended, section 791.026, Texas Government Code,
section 402.012, Texas Local Government Code, and article 1113, TEX. REV. CN. STAT.
ANN.
10. The City and the Authority therefore desire to agree to (a) the terms of the
City's payment of its share of the costs of the prepayment for the Project, (b) the
continuation of the Meredith Supply Agreement for the operation and management of the
Project, and (c) 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 prepayment of the City's share of the obligation for
repayment of construction costs under the Meredith Supply Agreement (the "Prepayment
Agreement").
1.2 Existing Contracts.
(a) Each of the Member Cities has a water supply agreement ("Meredith
Supply Agreement") with the Authority for water from the Canadian River Project. This
2
Agreement is a supplement 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 into a
contract for the purchase and acquisition of a conjunctive use groundwater ("Conjunctive
Use Groundwater Agreement"). This Agreement is separate from the Conjunctive Use
Groundwater Agreement between the City and the Authority.
(c) The Authority and each of the Member Cities have entered into a
contract for the desalinization of the municipal water supply ("Salinity Control Agreement").
This Agreement is separate from the Salinity Control Agreement between the City and the
Authority.
1.3 Contract Payments. This Agreement establishes a payment obligation to
fund the prepayment of the Repayment Contract pursuant to the Prepayment Legislation
or Revenue Bonds or both.
ARTICLE 2. DEFINITIONS
2.1 Accumulated Funds mean the funds paid by the Member Cities for their
respective payments collected by the Authority during the period covered by the Drought
Relief Act of 1996, Public Law 104-318.
2.2 Additional Bonds mean the additional revenue bonds for the Project which
the Authority reserves the right to issue and deliver in the future as provided by this
Agreement.
2.3 Agreement means this Agreement between the Canadian River Municipal
Water Authority and the City of Lubbock, Texas for the prepayment of the Repayment
Contract, as it may hereafter be amended from time to time.
2.4 Applicable Amount means the amount that the Authority must pay within
360 days of the date of enactment of the Prepayment Legislation, such amount being (a)
$34,806,731, if payment is made within the 270 day period beginning on the date of
enactment of the Prepayment Legislation; or (b) the $34,806,731 adjusted to include
interest since the date of enactment of the Prepayment Legislation if the payment made
by the Authority occurs after the 270th day period, but on or before the 3601h day after the
date of enactment of the Prepayment Legislation.
2.5 Authority means the Canadian River Municipal Water Authority, a
conservation and reclamation district duly created and existing under the laws of the State
of Texas.
3
2.6 Board means the Board of Directors of the Authority.
2.7 Bond Documents means this Agreement, the bond resolution or resolutions,
and the indenture or indentures authorizing the issuance of the Revenue Bonds for the
Project, and all amendments or supplements thereto.
2.8 Bond Reserve Fund means the fund established by the Board in
accordance with Section 6.6 of this Agreement.
2.9 Canadian River Project means the project that includes the Sanford Dam
and Lake Meredith as authorized by an Act of Congress dated December 29, 1950 (64
Stat. 1124).
2.10 City has the meaning ascribed to it in the introductory paragraph of this
Agreement.
2.11 City's Share means forty-one and 877/1000 percent (41.877%) which
represents the City's percentage of the repayable construction cost obligation after
appropriate credits for the land cost under the Drought Relief Act of 1996, Public Law
104-318, and for payments made during the deferral period, such tabulation being attached
as Schedule B.
2.12 Effective Date means the date upon which the Authority notifies the Bureau
of Reclamation and the Member Cities that a Prepayment Agreement has been entered
into between each Member City and the Authority, which shall be evidenced by written
notice to each Member City.
2.13 Financing Costs means the costs associated with the issuance of the
Revenue Bonds, including but not limited to the cost of funding the Bond 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 lawsuit or lawsuits, if any.
2.14 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.
2.15 General Manager means the General Manager of the Authority.
2.16 Interest and Sinking Fund means the fund established by the Board in
accordance with Section 6.5 of this Agreement.
El!
2.17 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.
2.18 Meredith Supply Agreement means that certain Contract between the
Canadian River Municipal Water Authority and the City of Lubbock, Texas, providing a
Municipal Water Supply, dated January 9, 1961, as amended, a copy of which is attached
as Schedule A.
2.19 Parity Bond shall have the meaning as ascribed in Section 6.10(x).
2.20 Payment Schedule means the schedule prepared by the Board in
accordance with Article 4 of this Agreement.
2.21 Prepayment Agreements mean the agreements, in form and substance
substantially identical to this Agreement, entered into between the Canadian River
Municipal Water Authority and the respective Member Cities, for the prepayment of the
Repayment Contract.
2.22 Prepayment Legislation means Public Law No. 105-316, the federal
legislation authorizing the Authority to prepay its obligations to the United States of
America.
2.23 Project means the Canadian River Project.
2.24 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.
2.25 Project Prepayment Costs means any and all costs and expenses
whatsoever, of all kinds, of the Authority with respect to the prepayment to the United
States of America of the Authority's obligation to repay the United States of America
construction costs of the Project for which the Authority is liable, incurred on or after the
date hereof, including but not limited to, the Authority's share of costs arising under the
Prepayment Legislation, all Financing Costs, legal fees, superintendence, administration,
overhead, general expenses, acquisition of land, rights-of-way and other property rights,
inspections, special services, title transfer and related costs, and insurance, as may be
necessary; provided, however, to the extent a Member City participates in Project
Prepayment Costs under Section 4.3, the Financing Costs of the Revenue Bonds shall not
be included as Project Prepayment Costs for that Member City. Unless approved in
writing by the City and each of the other Member Cities, Project Prepayment Costs may
not exceed $32,220,000 (representing approximately $29,129,667 in project costs and
$3,090,333 in Financing Costs).
5
2.26 Project Prepayment Fund means the fund established by the 'Board in
accordance with Section 6.4 of this Agreement.
2.27 Project Prepayment Fund Subaccount means the subaccount created in
the Project Prepayment Fund into which payments for Requisitions will be accumulated
prior to the payment of the Requisition.
2.28 Project Payments means the payments from each Member City (other than
the City) under its respective Prepayment Agreement and from the City under this
Agreement.
2.29 Project Cost Payment Schedule means the schedule established by the
General Manager, which shall correspond to the debt service schedule for the Revenue
Bonds.
2.30 Repayment Contract means Contact No. 14-06-500-485 between the United
States of America and the Canadian River Municipal Water Authority, Texas, dated
November 28, 1960, and as subsequently amended, that provided for the construction of
the Canadian River Project by the United States of America and the repayment of the cost
of construction by the Canadian River Municipal Water Authority.
2.31 Requisition means an invoice, statement, or progress payment request
submitted to the Authority for payment as a part of the Project Prepayment Costs.
2.32 Revenue Bond Funding Date means the date the Revenue Bonds are
delivered to the initial purchasers of the Revenue Bonds.
2.33 Revenue Bonds means bonds to be issued by the Authority to prepay the
Authority's obligation to repay the United States of America under the Repayment Contract
and the Prepayment Legislation, and any additional bonds issued in accordance with
Section 6.10 hereof.
2.34 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.
2.35 Rule means United States Securities and Exchange Commission Rule 15c2-
12, as amended.
2.36 Sanford Dam Operations and Maintenance Reserve Fund means the
reserve fund created for operations and maintenance in Section 5.2.
0
2.37 Unallocated and Unpledged Balance means the balance of funds
determined by the Board according to Section 6.7 of this Agreement.
2.38 United States or Bureau of Reclamation means the United States of
America acting through the Department of the Interior, Bureau of Reclamation.
2.39 Year means the period January 1 through the next following December 31
unless otherwise indicated by the text.
ARTICLE 3. TERM OF AGREEMENT
3.1 The term of this Agreement is, unless sooner terminated or canceled in
accordance with the provisions hereof, for the period beginning on the Effective Date of
this Agreement and continuing (1) until the latter to occur of (a) the date on which the
Revenue Bonds are fully paid, or (b) the date certified to the City by the Authority that there
are no obligations remaining to be fulfilled by any party to the Prepayment Agreement, or
(c) the date that the Project is terminated or abandoned by the Authority, or (2) until the
Agreement is canceled as a result of the failure to tender the Applicable Amount within the
360 -day period provided in the Prepayment Legislation, as provided in Section 4.6. The
Project shall not be deemed terminated or abandoned by the Authority unless the Board
has finally terminated, with no intention to resume, operation or maintenance of the Project
or any part thereof, and has notified the Member Cities that the Authority has no further
financial, maintenance, operational or other material obligations with respect to the Project
or with respect to any Revenue Bonds.
ARTICLE 4. CITY'S PAYMENT OF ITS SHARE OF
THE PREPAYMENT COSTS OF THE PROJECT
4.1 Prepayment of Repayment Obligation. In consideration for the ability to
participate in the prepayment of the Obligations to the United States of America for the
Project to obtain the benefit of the prepayment it receives from the Authority to result from
the implementation of the prepayment of the Project, the City shall pay to the Authority the
City's Share of Project Prepayment Costs.
4.2 Payment of Project Prepayment Costs. The Authority anticipates issuing
Revenue Bonds to pay for the prepayment of the construction cost repayment obligation
under the Repayment Contract 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 Prepayment Costs will be made to the Authority in accordance with the
applicable Project Cost Payment Schedules for each series of Revenue Bonds established
from time to time by the General Manager. Such Project Cost Payment Schedule shall
correspond to the debt service schedules for the Revenue Bonds issued to fund any
7
portion of the Project Prepayment Costs. All payments will be made in such manner to
provide the Authority with immediately available funds on the due date for such payment.
4.3 City's Option to Pay Project Prepayment Costs Without Providing
Payment of the Authority's Revenue Bonds. Rather than committing to make monthly
payments of the City's Share of Project Prepayment Costs for the Authority's Revenue
Bonds, a Member City shall have the option to independently fund all or a portion of its own
City's Share of the Project Prepayment 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 City's Share of
Project Prepayment Costs attributable to such series of the 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 6.1.
(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 Prepayment 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 Prepayment 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 Prepayment 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: For
any series of Revenue Bonds the City shall make its certification within ninety (90) days
after the receipt of notice provided in Section 6.1. 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 Prepayment 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 Prepayment Costs. Thereafter,
the Authority may issue its Revenue Bonds in an amount that includes all of the City's
Share of the Project Prepayment 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 own City's Share of the Project Prepayment 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 4.3(a) of this Agreement,
the Authority shall calculate the City's Share of the Project Prepayment Costs remaining,
if any (the "Remaining Project Cost Percentage"), which percentage shall be attributable
to costs other than those associated with the issuance of Revenue Bonds. The Authority
shall notify the City of its Remaining Project Cost Percentage, if any. Such Remaining
M.
Project Cost Percentage shall be calculated by reducing the portion of the total Project
Prepayment Costs attributableto the City by the amount of funds to be deposited in escrow
pursuant to Section 4.3(a) hereof (the "Remaining Project Cost Amount"). The Remaining
Project Cost Amount shall be divided by the total Project Prepayment Cost to determine
the Remaining Project Cost Percentage.
(c) If the City does timely give notice and makes its certification of
available funds pursuant to Section 4.3(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
Project Prepayment Costs and proceed to issue the Revenue Bonds, The City shall then
place the funds in the escrow account no later than five working 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
Prepayment 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 retain the interest earned on such account. The City shall not be
entitled to interest on money transferred to the Project Prepayment Fund Payment
Subaccount.
(e) To the extent that the City funds all of the City's Share of Project
Prepayment Costs by depositing funds in an escrow account pursuant to this Article 4, the
City shall have no liability for any of the Financing Costs, and any obligations associated
with financing by Revenue Bonds, including, but not limited to, those described in Sections
4.2, 4.4, 4.6, 7.1, 8.8 and Article 6 shall not apply to the City.
4.4 Project Prepayment Costs Due for Revenue Bonds and Payments from
Escrow Accounts.
(a) If the Authority issues Revenue Bonds to fund the prepayment of 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
priorto the Revenue Bond Funding Date. The debt service schedule will also reflect the
City's Share of Project Prepayment Costs being funded by the issuance of the Revenue
Bonds, the calculation being based on the Project Prepayment Costs. Unless the City has
paid its City's Share of the Project Prepayment Costs into escrow pursuant to Section
4.3(a) 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"), one twelfth
of 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.
4
(b) The Authority shall also prepare and provide to each Member City prior
to the Revenue Bond Funding Date a Project Prepayment Cost Schedule that indicates the
estimated schedule for the expenditures to be made for each series of Revenue Bonds.
Such schedule shall be updated, as necessary, and provided to each Member City.
(c) When the Authority receives a Requisition for Project Prepayment
Costs, the Authority shall transfer from the Project Prepayment Fund into a Subaccount of
the Project Prepayment Fund (the "Project Prepayment Fund Payment Subaccount") the
amount necessaryto 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 4.3(a), then
the City must arrange to transfer that portion of the City's Share of Project Prepayment
Costs necessary to pay a Requisition referenced in Section 4.4(c) to the Project
Prepayment Fund Payment Subaccount. The Authority shall provide to each Member City
that has paid funds into escrow, documentation for such payment. The Authority shall
submit the Requisition with the Authority's calculation of the City's Share. The City shall
have 15 calendar days to review the Requisition and the accompanying documentation to
check the calculations. Unless the City finds a discrepancy in the Requisition and
accompanying documentation during the 15 calendar day review period, the City shall
immediately transfer its share of such Requisition from the escrow account into the Project
Prepayment Fund Payment Subaccount. Should the City find a discrepancy in the
Requisition and accompanying documentation, 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 for a Requisition from the
Project Prepayment Fund Payment Subaccount unless the amount related thereto and
required both from the Revenue Bonds financing and the escrow account or accounts have
been placed in the Project Prepayment Fund Payment Subaccount.
(f) 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 failure or 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 failure or inability to pay
or a Member City that is participating in the financing solely through the escrow payment
authorized in Section 4.3(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
10
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 to each Member City's Share of Project Prepayment Costs at the time the
allocation is made. The Authority agrees to pursue all reasonable efforts for the 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 nondefauiting 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 Member 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 Meredith 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. Notwithstanding anything to the contrary
herein, a Member City that is participating in the Project solely through the escrow deposit
provided for in Section 4.3(a) shall not, in any circumstance, 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.
4.5 Substitution of Payment Obligation. On the Revenue Bond Funding Date
and upon the tender of the Applicable Amount to the United States of America, the
repayment obligation of the City for the construction costs of the Project under the
Repayment Contract shall be substituted from that currently found in the Meredith Supply
Agreement to that established by this Agreement.
4.6 Termination of Project.
(a) If the Project is terminated or abandoned, the City shall continue to
pay timely to the Authority the City's Share of Project Prepayment Costs and the City's
portion of Project Operation and Maintenance Costs 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.
(b) The Project may not be terminated unless written notice is given to
each Member City thirty (30) days prior to a meeting of the Board of the Authority when the
issue of termination of the Project is on the agenda, and all of the Members of the Board
who are present and voting vote to terminate the Project.
4.7 Cancellation of Contract for Failure to Fund. If the City and the Authority,
along with the other Member Cities fail to contract and provide the funds required to tender
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the Applicable Amount to the United States of America for the prepayment of the
Authority's obligation to repay the construction costs of the Project within 360 days of
October 30, 1998 (being the date of enactment of the Prepayment Legislation), this
Agreement will expire and be of no force and effect with the obligation of the City to remain
as prescribed in the Meredith Supply Agreement, as if this Agreement were never in effect.
ARTICLE 5. OPERATION AND MAINTENANCE COSTS
AND ACCUMULATED FUNDS
5.1 The Authority has accumulated funds from payments by the Member Cities
during the period covered by the Drought Relief Act of 1996, Public Law 104-318 (the
"Accumulated Funds."). Such Accumulated Funds have been segregated for the benefit
of the Member Cities which made the payments.
5.2 The parties to this Agreement recognize that enactment of Public Law
105-316 extinguished all obligation of the United States of America to pay for a portion of
the operating and maintenance expense related to Sanford Dam of the Canadian River
Project, and that the Authority will be fully responsible for payment of all such costs after
prepayment of the construction cost repayment obligation. It is also recognized and
acknowledged by the parties to this Agreement that the Applicable Amount required to be
tendered for the prepayment is the net of the amount of $1,506,917 which was determined
to be the net present value of future costs of operation and maintenance which would have
been payable by the United States of America as offsets against future debt payments
receivable from the Authority if the Construction Cost Repayment Obligation were not
prepaid. The parties agree that the amount of $1,506,917 shall be established by the
Authority as a special reserve fund for the support of operation and maintenance costs
related to Sanford Dam (the "Sanford Dam Operations and Maintenance Reserve Fund"),
and that proceeds from this Sanford Dam Operations and Maintenance Reserve Fund shall
be utilized to pay those future costs of operation and maintenance which otherwise would
have been payable by the United States of America. The Authority's Board of Directors
shall establish procedures for replenishing this Sanford Dam Operations and Maintenance
Reserve Fund when and if necessary, provided that the respective Member Cities' shares
of payments to replenish the Sanford Dam Operations and Maintenance Reserve Fuad
shall always be proportionate to the share of water supply allocation available to the City
under the Meredith Supply Agreement.
5.3 The City and the Authority agree that the Authority shall take any
Accumulated Funds remaining after the payment into the Sanford Dam Operations and
Maintenance Reserve Fund and apply such funds to the reduction of the amount needed
to be borrowed by the Authority in the bond issue and to pay for costs of issuance of the
Bonds.
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5.4 The Authority shall provide an accounting to the City and each of the Member
Cities demonstrating what each contributed.
5.5 Operation and maintenance expenses shall be as provided for pursuant to
the Meredith Supply Agreement between the City and the Authority.
ARTICLE 6. FINANCING ARRANGEMENTS
6.1 Issuance of Revenue Bonds.
(a) The Authority shall determine and provide each Member City, not less
than ninety (90) days prior to proposed issuance of any Revenue Bonds, a notice of the
projected Project Prepayment Costs, the amount of Project Prepayment 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 Prepayment Costs.
(b) The Authority may, but is not required to, file a bond validation suit
under article 717m-1, TEX. REV. Civ. STAT. ANN. prior to issuing its Revenue Bonds under
this Agreement.
(c) If and at such time as the Revenue Bonds have been issued, all
Project Prepayment Costs, including Project Prepayment 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 4.3, 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 Prepayment Costs.
6.2 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.
6.3 Establishmentof 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 accordance with the laws of
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the State of Texas so long as any of the Revenue Bonds or any additional obligations or
interest thereon are outstanding and unpaid:
Project Prepayment Fund
Interest and Sinking Fund
Bond Reserve Fund
6.4 Project Prepayment Fund.
(a) The Authority shall establish a Project Prepayment Fund for each
series of Revenue Bonds issued under this Agreement.
(b) All payments from the Member Cities to the Authority under the
Prepayment Agreements with the Member Cities, except for payments under an escrow
agreement as provided for in Section 4.3, as received, are to be deposited in the Project
Prepayment Fund for the particular series of Revenue Bonds. All money in the Project
Prepayment Fund shall be applied as hereinafter provided.
(c) The money in each Project Prepayment 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.
(d) Concurrently with the delivery of each series of Revenue Bonds to the
initial purchasers thereof, the Authority shall establish a subaccount of the Project
Prepayment Fund, the Project Prepayment Fund Payment Subaccount, which shall be
utilized for payments of Requisitions. The Project Payment Fund Payment Subaccount
shall be funded with (1) money from escrow accounts of Member Cities which are
established pursuant to Section 4.3, and (2) a transfer of bond proceeds from the Project
Prepayment Fund. Such payments into the Project Prepayment Fund Payment
Subaccount shall be limited to the prorata portion of such Requisition to be paid from
proceeds of the Revenue Bonds and the escrow accounts established pursuant to Section
4.3. All Project Prepayment Costs, including those incurred prior to the establishment of
the Project Prepayment Fund, shall be paid from the Project Prepayment Fund. Any
amount remaining in this fund after the payment of all Project Prepayment Costs 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 4.3 shall be returned to that Member City.
6.5 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:
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(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 6.8 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.
6.6 Bond Reserve Fund.
(a) 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
defivery 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 Prepayment Fund into the
Bond Reserve 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 6.8 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 anytime,
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.
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The Bond Reserve Fund shall be used solely for the purpose of paying when due
the principal of or interest, or both, 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) 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).
(b) Notwithstanding the requirements of subsection (a) above, the
Authority may provide a Surety Policy or Policies issued in amounts equal to all or part (as
may be specified in the resolution authorizing any series of Parity Revenue Bonds) of the
average annual principal and interest requirements of the Parity Revenue Bonds, in lieu
of depositing cash into the Reserve Fund; provided, however, that no such Surety Policy
may be so substituted unless (i) the substitution of the Surety Policy will not cause any
ratings then assigned to the Bonds by either Moody's Investors Service or Standard &
Poor's Ratings Group to be lowered and (ii) the ordinance authorizing the substitution of
the Surety Policy for all or part of the average annual principal and interest requirements
of the Parity Revenue Bonds contains (A) a finding that such substitution is cost effective
and (B) a provision that the interest due on any repayment obligation of the Authority by
reason of payments made under such policy does not exceed the highest lawful rate of
interest which may be paid by the Authority at the time of the delivery of the Surety Policy.
The Authority reserves the right to apply the proceeds of the Revenue Fund to payment
of the subrogation obligation incurred by the Authority (including interest) to the issuer of
the Surety Policy, the payment of which will result in the reinstatement of such Surety
Policy, prior to making payments required to be made to the Reserve Fund pursuant to the
provisions of this Section to restore the balance in such fund to the average annual
principal and interest requirements of the Parity Revenue Bonds.
(c) In the event a Surety Policy issued to satisfy all or part of the
Authority's obligation with respect to the Reserve Fund causes the amount then on deposit
in the Reserve Fund to exceed the average annual principal and interest requirements of
all Parity Revenue Bonds, the Authority may transfer such excess amount to any fund or
funds established for the payment of or security for the Parity Revenue Bonds (including
any escrow established for the final payment of any such obligations pursuant to Article
717k, Vernon's Texas Civil Statutes) or use such excess amount for any lawful purpose
now or hereafter provided by law.
6.7 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 Prepayment 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
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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 Prepayment Fund for that
particular series of Revenue Bonds;
(b) Ascertain for that particularseries of Revenue Bonds the total amount
of unpaid obligations against: the Project Prepayment 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 fled
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.
6.8 Investments. Any money held in the Project Prepayment 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 of America 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 unconditionallyguaranteed or insured
by the State of Texas or the United States of America; (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 irrevocable letter
of credit issued by a bank organized and existing under the laws of the United States of
America 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.
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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 covenantto 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.
6.9 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 issued as 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 Prepayment Fund for that
particular series of Revenue Bonds.
6.10 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 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
I::
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
Project 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 2.25.
(b) Non -parity Basis. Unless the Additional Bonds are issued as Parity
Bonds, such bonds shall be issued with the establishment of separate Project Prepayment
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;
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(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 2.25 unless written approval has been obtained from each of
the Member Cities.
ARTICLE 7. COVENANTS AND OBLIGATIONS OF THE AUTHORITY
7.1 Obligation to Complete Project.
(a) The obligation of the Authority to contract for the prepayment of the
Repayment Contract for the Project shall be conditioned upon the execution of Prepayment
Agreements with the Member Cities to produce revenues which, in the judgment of the
Authority and participating Member Cities, will repay the costs of prepayment of the
obligation for the Project. If Prepayment Agreements are not secured whereby such
estimated costs of the Authority can be met, the Authority shall notify the City, whereupon
this Agreement will be voided.
(b) The Authority agrees to proceed promptly and to the best of its ability
for securing financing necessary for the performance of its obligations hereunder and to
negotiate all contracts necessary to finance the prepayment of the Repayment Contract
for the Project. It is understood that at this time the Authority is not in a position to
guarantee the undertaking of the financing of the Project.
7.2 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 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
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accounts to be made by an independent certified public 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 fhe 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 purchasers of
the Revenue Bonds and any bondholdershall 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.
7.3 Defeasance. The Authority may provide for the defeasance of its Revenue
Bonds in the Bond Documents.
7.4 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 4.6 hereof, the proceeds of the sale will be disposed of
as follows: (a) return the pro rata portion attributable to a Member City which were paid
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directly pursuant to Section 4.3, 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 park of the property sold.
7.5 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 ("NRMSIR") 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 1999, 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
1999. 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."
7.6 Reports and Inspections. The Board covenants that it will obtain or prepare
progress reports in connection with acquisition of real property and construction as
required by the Bureau of Reclamation.
7.7 Water Supply and Payment Obligations. For so long as the Revenue
Bonds and the Project are in operation, the Authority will supply water to the City pursuant
to the Meredith Supply Agreement and will forward the City's payments under this contract
to make the payments called for under this Agreement, including the payment on the
Revenue Bonds, if applicable.
7.8 Default and Remedies -City. If the Authority fails or defaults in meeting the
terms, conditions and covenants of this Agreement under Article 7, and such default
continues for 30 days after the City has given the Authority notice, then the City shall have
all of the rights and remedies provided at law and in equity, except in no event shall the
City be relieved of its obligation to the payments required under this Agreement. So long
as the City is not in default, the Authority stipulates that delivery of water, exclusive of the
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allocation of water available for delivery, discretionary activities under the Meredith Supply
Agreement, and factors beyond the Authority's control, is a ministerial duty.
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'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 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. 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
23
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. Pursuant to section 791.626(b), Tex. Govt. Code,
the City agrees that it will obtain all of its water from the Canadian River Project as
contemplated by this Agreement and the Meredith Supply Agreement from the Authority.
The City may obtain other independent sources of supply which are not provided by the
Authority under this Agreement from other sources.
8.7 City Obligation Not Separable. The City as a whole is obligated to pay to
the Authority the charges becoming due by it and only it as provided in this Agreement,
notwithsfanding 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 an "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.
ARTICLE 9. GENERAL PROVISIONS
9.1 Assignment of Agreement This Agreement or the payment of performance
obligations of the City hereunder, may not be assigned by the Authority withoutthe consent
of the City, which consent shall not be unreasonably denied. 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 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.
24
9.3 Past Due Payments. A past due penalty of one-half of one percent (.5%)
per month shall be charged on any amount owed under this Agreement which is not paid
when due.
9.4 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.
9.5 Amendment. Subject to Section 9.9 and Section 9.12 of this Agreement, this
Agreement may not be modified or amended without the mutual written agreement of the
Authority and the City.
9.6 Subject to Authority Contract. This Agreement shall be subject to the
terms, conditions, and provisions of the Repayment Contract between the Authority and
the Bureau of Reclamation for the Canadian River Project, as amended or modified, and
to all applicable state, federal and local government laws or regulations.
9.7 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 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 9.7 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.
25
9.8 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas.
9.9 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.
9.10 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, legal representatives, and permitted
assigns.
9.11 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.
9.12 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.
9.13 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.
9.14 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.
26
(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 invoke Section 25 of the Meredith Supply
Agreement.
(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 rights and
remed ies:
(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.
9.15 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, 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.
9.16 Counterparts. This Agreement may be exercised in counterparts. All
counterparts together shall constitute one agreement binding on all the parties, notwith-
standing that all parties are not signatories to the original or the same counterparts.
27
9.17 Descriptive Headings. The headings in this Agreement are intended solely
for convenience of reference and shall be given no effect in the construction or interpreta-
tion of this Agreement.
9.18 Construction of Agreement. The parties intend that this Agreement relate
specifically to the Project, and constitutes an activity distinctly separate and apart from the
Salinity Control Contract and the Conjunctive Use Groundwater Supply Agreement. The
parties do not intend that this Agreement constitute an amendment or modification of the
Salinity Control Contract or the Conjunctive Use Groundwater Supply Agreement. This
Agreement is, however, supplementaryto the Meredith Supply Agreement. 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.
9.19 Non -Discrimination. In connection with the performance of work under this
Agreement and in the provision of waterworks services, the Parties agree not to
discriminate against any employee or applicant for employment because of race, religion,
color or national origin; provided, however, this does not waive any requirement of state
or federal laws.
9.20 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.
9.21 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.
9.22 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.
9.23 Contract not for Benefit of Third Parties. This Contract is made for the
exclusive benefit of the City, the Authority, the owners of the Revenue Bonds, the parties
to any credit agreements, as defined and authorized under the provisions of Art. 717q, Tex.
Rev. Civ. Stat. Ann., which the Authority enters into relating to its obligations with respect
to the Revenue Bonds.
AUTHORITY: CANADIAN RIVER MUNICIPAL WATER
AUTHORITY
ATTEST:
[SEAL]
CITY:
B y: �' ",,- -
CITY OF LUBBOCK, TEXAS
By.
ATTEST: WINDY SITTON, MAYOR
Kaythi arnell, City Secretary
[SEAL]
APPROVED AS TO CONTENT:
Terry Ellerbroo , Managing Director
of Water Utilities
APPROVED AS TO FORM:
Anita Burgess, City A orney
29
CONTRACT
between the
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
and the
CITY OF LUBBOCK, TEXAS
for providing a
MUNICIPAL WATER SUPPLY
TSE CANADIAN RIVER
TABLE OF CONTENTS
ARTICLE SUBJECT PAGE
Preamble------------------------------------------------
1
WhereasArticles----------------------------------------
1
1
General. Defintiona--------------------------------------
1
2
Pian----------------------------------------------------
2
3
Constriction 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
Hater 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 0bligation not Separable---------------------------
10
22
Access to Books and Records -----------------------------
11
23
Determinations------------------------------------------
11
24
Penalty for Delinquent Paymeents-------------------------
11
25
Default-------------------------------------------------
11
26
Notices------------------- ------------------------------
12
27
Subject to United States and Authority Contract---------
12
28
Assignments by City-------------------------------------
12
29
Nondiscrimination in Employment-------------------------
12
C O N T R A C T
between the
CANADIAN RIM MUNICIPAL WATER AUTHORITY
and the
CITY OF LUBBOCK, TEXAS
for providing a
MUNICIPAL WATER SUPPLY
it
THIS CONTRACT, made thisday of
between the CANADIAN RI1,1ER MUNICIPAL WATER AU;�OR , an aut ri y 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 T11AT :
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
WAS, 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, waist execute contracts to receive
a share of the project water supply;
NOW, THKWORE, in consideration of the mutual and dependent
covenants herein contained, it is mutually agreed between the parties
hereto as follows:
GENERAL DEFINITIONS
1. Where used in this contract,
a. United States - Shall mean the United States of America,acting through the Secretary of the Interior, or his duly authorized
representative.
1
Lubbock, Texas
b. Authority - Shall mean the Canadian River Municipal
Water Authority, an authority duly created and existing under the lags
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 nater.
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, 195o (64 stat. 1124).
g. Project slater - Shah mean water available for use
through toe 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. Re nt Contract - Shall mean the contract, or contracts,
between the Canadian River Municipal dater Authority and the United States
of America for construction of the project.
k. Normal Nater 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
103,040 acre-feet (33,563 million gallons) to normally be Available for
release from the reservoir each year.
I. Year - Shall mean the period January 1 through the next
following December 31.
PLAIT
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
Lubbock, Testas
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,
Vernoa's Texas Civil Statutes.
CONSTRUCTION REPAYNENT 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 unemortized balance thereof at the rate of 2.632 percent.
FULL CALENDAR:ANNUAL :FULL CALENDAR: ANNUAL :FULL CALENDAR: ARQUUAL
YEAR AFTER :CONSTRUC-:YEAR AFTER :CONSTRUC-:YEAR AFTER :CONSTRUC-
COMMENCEMENT :TION :COMMENCEMENT :TION :COMMENCEMENT :TIOK
OF SERVICE :SERVICE :OF SERVICE :SERVICE :OF SERVICE :SERVICE
;CHARGE . :CHARGE : CHARGE
1
952,400
18 1,587,100
35
1,634,600
2
990,100
19 1,619,100
36
1,634,600
3
1,028,500
20 1,634.600
37
1,635,E
4
1,066,800
21
38
5
1,104,5W
22
39
6
1,142,800
23
40
7
1,181,100
24
41
8
1,219,100
25
42
9
1,257,E
26
43
1,635,E
10
1,295,000
27
44
1,635,500
11
1,333,300
28
45
I
3.2
1,371,100
29
46
rl+.
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,&600
17
1,555,700
34
Should construction costs payable by the Authority to the United States
vary from $92,960,000, 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
All.
terms of the contract between the Authority and the United States, each
annual installment due the United States shall, become due and payable on
or before October 1 of each year commencing with the year immediately
following that is 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. The 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 same 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 MAIPaTEKANCE CHARGES
4. a. At an appropriate meeting 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
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 (64) 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 rata 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 for delivery of the entire estimated normal water supply of
the project, provided, however, that all such contracts shall recognize
the right and responsibility of project grater users to share in the
normal water supply in the ratio of their contract rights. During
periods of scarcity vhea 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. Suality 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 1,004 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. SMIus 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.
WATER SHORTAGES
6. 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 transmissioa 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 WATKR
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
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 neap 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 o:r say past 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 14.
ALLOCATION 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
1.1
FM
delivery gill 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 shell
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 which, 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.
PLEDGE 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 sbal.l 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.
7
All
LIMITATION ON FINANCTA.L LWILITY of ciTr
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 MEARODO NT
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 crater delivered under this contract.
Dieters 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 teeter 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 vill 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 extending 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 sim-11ar conditions when the teeter was registering
accurately.
CONTRACT CONTII+iGENT UPON CONSTRUCTION OF PROJECT
15• This contract shall not be valid and binding unless the
repaysent contract between the Authority and the United States is
confirmed. '?1-.e Aut crity agwees to proceed promptly and to the best
10/20/60
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 lav 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 PAY)WT
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.
9
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 water supply may be available 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 will be required to meet the City's proper sure of the Authority's
obligations.
RATES ARD CHARGES BY THE CITY
20. a. City shall fix and collect such rates and charges
for water and services to be supplied by its waterworks 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 laws at the time
effective, appropriate money from any sources for the purpose of relieving
the necessity of increasing the said rates and charges for Rater service.
b. The Authority shall. newer 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 TL-xas 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. Shoeild the City fail to collect charges due from
any nater user, or should the City be prevented from collecting such
charges by any Judicial proceeding, or otherwise fail to collect them,
no such water user shall receive nater 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 ebarges at the
time and in the manner and amounts provided for in this contract.
CITY OBLIGATION NOT SEPARABLE
21. The City 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
awM: r :rr rr Fr•��
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.
11)
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 PAYNFgN'I'S
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.
DEFAULT
25. Ia 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 accordingly.
b. The Authority may withhold all or any part of the
normal water supply allocated to the City by this contract and mey 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 termition, however, shell 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
Al2 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
lav or in equity for the breach 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.
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 UNITO STATES AND AUXHQRI'i'X CONTHACT
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.
ASS IGN14LM 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
approval of the Authority and the United States. Under any assignment,
it must be established to the Authority's satisfaction that the nater
right may be transferred under Texas law and the lags of the United
States for diversion as proposed. Thealternate user mwt enter a con-
tract or contracts satisfactory to the Authority and the United States.
SONDISCRIMMATION IN EWLOYMKNT
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
Lubbock, Texas
b. The City further agrees to insert tha foregoing pro.
vision is all subcontracts hereunder, except subcontractq for standard
commercial supplies or raw materials.
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 sha11 constitute
an original, all as of the day and year first above written.
CANADIAN RIM MUNICIPAL WATER AUTHOR
By
---o,,J. prri�'- -- - ---
CITY OF LURBOCK, TE7W
By,0,Vr0.
Title r C;;/ of
Val
ATTEST:
-1 v7z' r
City Cl rk , ity cs,
Approved as to Form:
City Attorney
13
T
Ate' TO THE CONTRA CT
BETWEEN THE CANADIAN RIVER MUNICIPAL
WATER AUTHORITY AND THE
CITY OF LUBBOCK., TEXAS
This Agreement is made this the 2§th day of
1969, between the CANADIAN RrM MUNICIPAL WATER AUTHORITY, an
authority duly created and existing under the laws of the State
of Texas, and the CITY OF LUBBOCK, TM=
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 h day of Janua l 19_6L_, as follows:
follows:
A. So that Article 1, section 1, shall hereafter be es
"1.1 Year - shall mean the period January 1 through
the next following December 31 unless otherwise
indicated by the text."
B. So that Article k, sections a. and b. sball 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 funds 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 comment."
"b. The City sha1.I 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 budget year an adjustment vi]l
be made in the operation and maintenance charges
to reconcile the charges with actual costs, reserve
fund requirements, and water uses."
This AGFZD iT shall not become effective until a similar
agreement has been executed by the Authority and each of the other
member cities.
Iv ~i' iu WI , , the parties hereto acting under authority
of their respective governing bodies, and with the prior approval
of a duly authorized representative of the 1aited States, have
caused this contract to be duly executed in severel counterparts,
each of which shall, constitute an original, all as of the day
and year first above written.
;r.
•1 s B
RIVER MUNICIPAL
APPROVED: The United States of America,
11
BY 14PAEX=9P
Ir
�Sgdf' Leon W. Hill
Title Regional 2irgCfor
-3-
SCHEDULE C
Notice information
ff to Authority.
Canadian River Municipal Water Authority
1 mile west of City of Sanford on
Water Authority Road (zip 79078)
P.O. Box 99 (zip 79078)
Sanford, Texas
Attention: General Manager
ff to city.
City of Lubbock
162513 th Street (zip 79401)
P. O. Box 2000 (zip 79457-0001)
Lubbock,Texas
Attention: Mayor
CANADiANRivER MumcIPAL WATERAuT4oRiTy
Mr. Bob Cass, City Manager
P.O. BOX 99, SANFORD, TEXAS 79078
Ms.
PHONE 8 06 865-332 5 / FAX 808 8�r3314
EXECUTIVE COMMITTEE
L-ECEIVED
APS
�JJ
E.R. MOORE, PRESIDENT
f
NORMAN WRIGHT, VICE-PRESIDENT
Mr.
JOHN C. WILLIAMAND SECRETARYS GENERAL MGR.
' OFFICE
BUDDY TRNT ADMINISTRATIVE OFFICERa��R+C
AND ASST. SECRETARY
1 c}
April 6, 1999
Dear Bob:
MEMBER CITIES
DIRECTORS
AMARILLO
Mr. Bob Cass, City Manager
HAL MINER
Ms.
GEORGE SELL
City of Lubbock
BORGER
BILL WILLARD
P.O. BOX 2000
TOM EDMONDS
Lubbock, TX 79457
PAMPA
Mr.
JERRY CARLSON
Mr.
WILLIAM HALLERBERG
PLAINVIEW
Dear Bob:
NORMAN WRIGHT
GLENN BICKEL
LUBBOCK
Please refer to my letter of February 5, 1999, transmitting proposed
JAMES COLLINS
ROBERT ROWERS
contract forms for the prepayment of CRMWA's debt to the United
S
States for the original construction of the Canadian River Project. All of
T
STTEVEEVETUCKER
TAHOKA
the member cities have now approved the Contracts, and a finalized
LARRY HAGOOD
O'DONNELL
executed copy of the Contract with your City is attached for filing in your
City's Archives. Also attached is a Notice of Effective Date, stating that
LAMMOORE
RAYRENNER
the Contract is effective as of today.
DALE NEWBERRY
BROWNFIELD
L.J.RICHARDSON
Thanks for assistance with this Prepayment. Please let me know if
LEVELLAND
CARLSHAMBURGER
your
additional information is needed.
O.W.MARCOM
Ve,ry truly yours,
f
n C. Williams, P. E.
eneral Manager
Enclosures
cc wl encl: Mr. Bruce Blalack
Mr.
Terry Ellerbrook
Ms.
Betsy Bucy, Director of Finance
Ms.
Anita Burgess, City Attorney
Mr.
Jim Collins
Mr.
Robert Rodgers
Mr.
Tom Pollan, Bickerstaff law firm, Austin
Mr.
George Williford, First Southwest, Dallas
NOTICE THAT ALL MEMBER CITIES HAVE ENTERED INTO
PREPAYMENT AGREEMENTS WITH THE
CANADIAN RIVER MUNICIPAL WATER AUTHORITY
TOS Bureau of Reclamation, Department of Interior, United States of America
And
The Cities of Amarillo, Borger, Brownfield, Lamesa, Levelland, Lubbock, O'Donnell,
Pampa, Plainview, Slaton and Tahoka (the "Member Cities")
TAKE NOTICE that each of the Member Cities has entered into a Prepayment
Agreement for the prepayment of the Obligations to the United States of America Incurred
in connection with the Construction of the Canadian River Project. This notice is given as
required in the Prepayment Agreements to establish the effective date for the Prepayment
Contracts.
John C. Williams, P.E.
General Manager
Canadian River Municipal Water Authority
April 6, 1999
F:IHOMEIGENERALlC1T[ESICONTRACTIPREPAYIAGMTNOTI.WPD
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 28 day of janUary , 1999, a regular meeting of the City Council
of the City of Lubbock, Texas, was held at the regular meeting place in the City Council
Chambers in City Hall; the duly constituted members of the City Council being as follows:
Windy Sitton
Mayor
Victor Hernandez.
Councilmember
T. J. Patterson
Councilmember
David Nelson
Councilmember
Max L. Ince
Councilmember
Mark McDougal
Councilmember
Alex "Ty" Cooke
Councilmember
and all of said persons were present, except for the following: victor Hernandez,
Councilmember thus constituting a quorum.
Whereupon, among other business, the following was transacted at said meeting: a written
Resolution entitled
A RESOLUTION BY THE CITY OF LUBBOCK, TEXAS, PRESCRIBING THE
FORM AND SUBSTANCE OF A CONTRACT FOR THE PREPAYMENT OF
THE OBLIGATIONS TO THE UNITED STATES OF AMERICA INCURRED
IN CONNECTION WITH THE CONSTRUCTION OF THE CANADIAN
RIVER PROJECT, AND AUTHORIZING THE MAYOR AND CITY
SECRETARY TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY
1K0111►let II
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: 6_
NOES: Q
ABSTENTIONS: -
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
L3
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 28th day of January , 1999-
City � cretary
City 'Qf Lubbock, Texas
[CITY SEAL]
CRWA a LubbtxA�
czn-Im Page 2
F.
Bickerstaff, Heath, Smiley, Pollan, Kever & McDaniel, L.L.P.
1700 Frost Bank Pia77a 816 Congress Avenue
February 16, 1999
Ms. Anita Burgess
City Attorney
City of Lubbock
1625 - 13" Street
Lubbock, TX 79401
Lear Anita:
Austin, Texas 78701-2443 (512)472-8021 Fax (612)320-5M www.hickerstaMcuan
Dallas Acts
(214) 752-8021
As we discussed, I have enclosed a substitute page for the Prepayment Contract. 1 am
sending three pages to John Williams at the Authority to insert in the three copies that he has in his
possession.
Thank you for your assistance in this matter.
TMP:ea
CRM W A ?mpa} mrnuLeum t, Anita 8mges—pd
Enclosure
cc: John Williams
Very truly yours,
Thomas M. Pollan
Alt
� 1
$� R. Ib
�'vtvw ,
rRIck
directly pursuant to Section 4.3, and (b) deposit the remainder to the credit of the
appropriate Interestand Sinking Fund for the payment of the Revenue Bonds issued to pay
all or a part of the property sold.
7.5 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
anding, the Authority shall provide annually to each Nationally Recognized
rities Information Repository ("NRMSIR") and the State Information
)") for the State of Texas, within six months after the end of each fiscal year
r 1999, financial information and operating data with respect to itself of the
r luded in the final Official Statement. To the extent the City and the other
arovide the requisite information, the Authority will provide such financial
operating data with respect to the City and the other Member Cities of the
...luded 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
1999. 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."
7.6 Reports and Inspections. The Board covenants that it will obtain or prepare
progress reports in connection with acquisition of real property and construction as
required by the Bureau of Reclamation.
7.7 Water Supply and Payment Obligations. For so long as the Revenue
Bonds and the Project are in operation, the Authority will supply water to the City pursuant
to the Meredith Supply Agreement and will forward the City's payments under this contract
to make the payments called for under this Agreement, including the payment on the
Revenue Bonds, if applicable.
7.8 Default and Remedies -City. If the Authority fails or defaults in meeting the
terms, conditions and covenants of this Agreement under Article 7, and such default
continues for 30 days after the City has given the Authority, then the City shall have all of
the rights and remedies provided at law and in equity, except in no event shall the City be
relieved of its obligation to the payments required under this Agreement. So long as the
City is not in default, the Authority stipulates that delivery of water, exclusive of the
`%
Bickerstaff, Death, Smiley, Pollan, K.ever & McDaniel, L.L.P.
1700 Frost Bank Plaza 816 Congress Avenue Austin, Texas 78701-2443 (512)472-8021 Fax (512)320-5638 www.biekerstafl.com
January 26, 1999
Mr. Bob N. Cass
City Manager
City of Lubbock
1625 13"' Street
Lubbock, TX 79401
RE: Agreement Between the Canadian River Municipal Water Authority and the
City of Lubbock, Texas for the Prepayment of the Obligations to the United
States of America Incurred in Connection with the Construction of the
Canadian River Project
Dear Mr. Cass:
I have been asked to send you certain documents that will be addressed at the
January 28, 1998 meeting of the Lubbock City Council.
I have enclosed the following documents:
4 Agreement Between the Canadian River Municipal Water Authority and the
City of Lubbock, Texas for the Prepayment of the Obligations to the United
States of America incurred in Connection with the Construction of the
Canadian River Project
4 Resolution by the City of Lubbock, Texas Prescribing the Form and
Substance of a Contract for the Prepayment of the Obligations to the United
States of America Incurred in Connection with the Construction of the
Canadian River Project, and Authorizing the Mayor and City Secretary to
Execute Said Contract on Behalf of the City Council
6 Certificate for a Resolution
The first item is the contract for the prepayment of the obligation owed to the United
States in connection with the construction of the Canadian River Project. We have
negotiated the contract with your City Attorney's office and your bond counsel, Mr. Ed
Esquivel of the Fulbright & Jaworski law firm.
The second item is a proposed resolution to be used to approve the contract.
The third item are certificates for the City Secretary to execute in connection with
the approval of the resolution.
Upon approval of the resolution, we will need you to provide the executed copies
of the contracts, resolution and certificate to the General Manager of the Canadian River
Municipal Water Authority. He will affix the attachments to the contracts and return two
complete originals to you. We understand that the City may use a different format for its
resolution. The attached version is a suggested version only. We would appreciate having
the requisite number of resolutions and certificates returned to us.
Please bring this matter to the attention of your City Attorney as soon as possible.
Please call me should you have any question concerning this matter.
cc: John Williams
General Manager
Canadian River Municipal Water Authority
Ed Esquivel
Fulbright & Jaworski, L.L.P.
Very truly yours,
Thomas M. Pollan
TMP:ea
CRM WA Prepaym"hGRMWA Prepaymern-& to Lubbock m agent-tmp.wpd
Enclosures