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HomeMy WebLinkAboutResolution - 3091 - Agreement - Brazos River Authority - Water Supply, Lake Alan Henry Project - 05/11/1989II I OGV:da Resoution 3091 May 11, 1989 Iten #21 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Water Supply Agreement with the Brazos River Authority and such other associated documents and agreements as are necessary to effectuate the purposes of said Water Supply Agreement, attached herewith, which 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 //;f;k day of ~~ ' 1989. /B.C: McMINN~OR --: ATTEST: -~ - -·- APPROVED AS TO FORM: AUTHORITY 4400 COBBS DRIVE • P. O. BOX 7665 • TELEPHONE AREA CODE 817 716-1441 Mr. Samuel w. Wahl City of Lubbock P. o. Box 2000 Lubbock, Texas 79457 Dear Mr. Wahl: WACO, TEXAS 76714-1655 November a, 1989 HAND DELZVERED The WATER SUPPLY AGREEMENT BY AND BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF LUBBOCK dated 11 May 1989 provides that plans and specifications which are developed by the Authority for the Alan Henry Project will be made available to the City and shall be subject to approval by the City. Hand delivered to you this date with this letter is one set of plans and specifications for the Alan Henry Project Access Road which are substantially in final form. The current schedule calls for bids to be opened on 21 December 1989 and we will review them with the City for approval prior to the letting of a contract. If the Alan Henry Project Access Road plans and specifications are acceptable to the City, please have the appropriate person so indicate in the space provided below and return one copy of this letter to the Authority. If you have any questions or comments, please let me know. Very truly ~ GARLAND, P.E. j cts Division Manager JG:rp Approved: //-@-d'' date tY of ~oCk THE STATE OF TEXAS COUNTY OF LUBBOCK ASSIGNMENT § § For value received, the City of Lubbock, Texas, hereby assigns all of its rights, title and interest in and to the Contract en- tered into on the 12th day of June, 1986, by and between the City of Lubbock, Texas, and Freese and Nichols, Inc., a copy of which Contract is attached to this Assignment to the Brazos River Autho- rity. By this Assignment, the City of Lubbock hereby delegates to the Brazos River Authority all of its duties and obligations of performance under said Contract with Freese and Nichols, Inc. By acceptance of this Assignment, the Brazos River Authority hereby agrees to assume and perform all duties and obligations of the City of Lubbock under said Contract with Freese and Nichols, Inc., and to hold the City of Lubbock harmless from any liability for nonperformance of such obligations. DATED this 8-tl') day of __ _., ... J....,u~n ........ e. ________ , 1989. CITY OF LUBBOCK, TEXAS: ,$:_ f . ~ C.(#;·~ B. C. Mc~, MAYOR ATTEST_: -=---· ._ ---.. _ /---- / - ·,. -----... ---) ' -' APPROVED AS TO CONTENT: APPROVED AS TO FORM: ~ 5?J.~,uen Donald G. Vandiver, First Assistant City Attorney ACCEPTANCE For value received, the Brazos River Authority hereby accepts the assignment of the above described Contract with Freese and Nichols, Inc. and agrees to be bound by all of the terms and condi- tions thereof. DATED this /tS ~day of ___ lh .......... 1 ..... 4-¥-1 _____ , 1989. ATTEST: ~a~ Assistant Secretary - 2 - • '· . .. r tf'. .• '( •. 1' T I May 3, 1989 WATER SUPPLY AGREEMENT BY AND BETWEEN BRAZOS RIVER AUTHORITY AND CITY OF LUBBOCK AGREEMENT made and entered into this the /Id day of L2la1r I 1989, by and between BRAZOS RIVER AUTHORITY, a river authority of the State of Texas, and THE CITY OF LUBBOCK, LUBBOCK COUNTY, TEXAS, a home-rule city organized under the laws of Texas. 1. DEFINITIONS -The following terms have the following \ meanings in this Agreement. (a) "Administration Costs" means (i) "Direct Labor Cost" plus (ii) the share of Authority's un-allocated general and administrative expenses determined annually by Authority's certified public accountants to be appropriate to cover Authority's expense of supervision and administration attributable to its obligations under this Agreement (initially estimated to be 125% of "Direct Labor Cost") plus (iii) other costs incurred by Authority to develop, plan, construct and complete Project which Authority and City have each agreed in writing should be incurred by Authority in initiating fulfillment of its obligations under this Agreement before Bond .proceeds are available to pay such costs. (b) ~'Assignee" means a party other than City to which .• r l f ., ··' . .. Authority assigns a percentage of Dependable Yield after ' release thereof by city. (c) "Auth~rity 11 means the Brazos River Authori.:tY·. (d) "Board of Directors" means the Board of Directors of Brazos River Authority. (e) "Bonds" means bonds or other obligations issued by Authority ( 1) for the purpose of obtaining money to establish the funds required by the Resolution pursuant to whi~h the Bonds are issued, (2) to pay Project Costs, and, (') pursuant to Section 17. (f) "Capital costs" means principal payments and interest on Bonds plus costs incident to issuing and servicing of Bonds plus such deposits from other than Bond proceeds into reserve funds and other funds as may be required by any Resolution. (g) "City" means the City of Lubbock, Lubbock County, Texas. (h) "Construction Project Costs" means Project Costs incurred beginning with the date of Authority's award of the initial Construction contract for the construction of the Project. (i) "Construction Fund" means the fund (other than any fund established as a repair and replacement fund, debt service fund or a reserve fund for use in payment of principal of and interest on bonds in the event that revenues payable under this Agreement should ever be Page 2 . .. • r ( ..... insufficient for those purposes) established by any Resolution into which Bond proceeds are to be deposited pursuant to such Resolution. (j) "Debt Service Fund" means the fund established by any Resolution into which monies are to be deposited by ' . A~thority in amounts necessar.Y to pay Capital Costs and from which Authority is to make disbursements to pay Capital Costs. (k) "Dependable Yield" means that amount of water which the Engineer estimates can be withdrawn from Lake each year without completely depleting the supply of water in Lake during the most severe drought of record on the watershed upstream of and tributary to Lake under the siltation and runoff conditions determined to exist on such watershed in the year for which the estimate is ' made. (1) "Direct Labor Costs" means hourly salary cost of Authori~y employees directly allocable to the planning, ' financi~g and construction of Project, together with costs : of Social Security, retirement plan, hospitalization, major medical insurance, life insurance and worker's compensation insurance attributable to such salary costs. (m) "Engineer" means Freese and Nichols, Inc. a consulting engineering firm, or such other firm as may in the Page 3 ,- ... : , ... f • .A, future be designated by Authority, after approval by City, to perform the services assigned to the Engineer in this Agreement. (n) "Equity Payment" means a sum of money to be established by Board of Directors and approved by City to be paid to Authority by an Assignee upon .assignment by Authority to such Assignee of the right to receive any percentage of Dependable Yield and paid over or credited to City by Authority to prevent injustice to City resulting from the fact that expenditures made by City before such assignment shall have contributed to the planning, financing and construction of Project ·and its availability for supplying water to Assignee. (o) "Fiscal Year" means the fiscal year of Authority, which I is September 1 through August 31. (p) "Intake Facilities" means facilities to be constructed by Authority or approved by Authority for construction by oth~rs for release or withdrawal of water from Lake for City's and/or any Assignee's use. (q) "Lake" means Lake Alan Henry (formerly called Justiceburg Reservoir) including the dam, spillways and outlet works, roads, fences, buildings and all other facilities to be constructed as part of Project. (r) "Mainte~ance and Operation Costs" means all costs of repairs and replacements of Project for which no special P~ge 4 .. ·-, f' ... fund is created and all costs considered by Authority to be required for proper maintenance and operation of Project, including (for greater certainty but without _,;'" limiting the generality of the foregoing) the direct costs of labor, equipment, supplies, materials, energy, p~of essional services, s~pervision, engineering, accounting, administration, auditing, insurance and payments made by Authority in satisfaction of judgments resulting from claims not covered by Authority's insurance, plus any additional cost or expenses which may be imposed upon Authority in payment of claims in amounts preapproved by City and in connection with the fulfillment of its obligations under this Agreement by taxation or as a result of .actions requested by City or regulations or requirements lawfully imposed by the · State of Texas, the United States, any governmental subdivision of the State of Texas or any federal agency, plus the share of Authority's un-allocated general and administrative expenses Authority's certified determined annually public accountants to by be appropriate to cover Authority's expense of supervision and administration attributable to its obligations under this Agreement plus any certified reimbursement amount due City under Section 28, below. (s) "Management Fee" means an amount of money payable by Page s (t) (u) t , ( ·!.> City or any Assignee to Authority each Fiscal Year, in ! consideration of Authority's management of Project, i which I amount shall equal the sum of_ 5% of the Maintenance and Operation Costs plus one-half of 1% of 1 the annual payment for the principal of and interest on I the Bords. "Operaiional 11 means the status of the project when the l . .. construction thereof is certified as complete by the ! I Engineer. l "Penni~" means permit No. 4155 issued by the Texas Water i Commission. ! I (v) "Preconstruction Project Costs" means Project costs (w) (x) incurr~d before the date of Authority's award of the I initial Construction contract for the construction of I the Project. I "Project" means Lake, municipal facilities, and Intake ! Facilities to be located on the South Fork of the Double ! Mountain Fork of the Brazos River in Garza county, I I Texas, I constructed generally in accordance with plans submitt!ed to the Texas Water Commission in connection I ! with the application by City which resulted in the I l issuance by the Texas Water commission of Permit. I I "Project Cost" means all costs of constructing Project, I I includ1ng (without being limited to) all necessary costs I ; for acquisition of land, easements and mineral rights, I Page 6 . . clearipg, relocations, ! • and pesign, field t Administration Costs, planning supervision and inspection, engine~ring, legal expenses and expense: .. o~ financing and co~struction, and all payments and reimbursements to : City a~ herein provided. (y) "~esol~tion" means any Resolution of the Board of 2. I Directors I RECITALS. ! providing for the issuance of Bonds. . . . City desires to obtain an additional surface water supply. Authority is willing to assist City in its efforts I I to obtain such !surface water supply. In order to provide such assistance, Project. Authority must construct, maintain and operate ! ! To obtain money to construct Project, Authority must I issue and sell Bonds. For Authority to be able to sell Bonds, it· ! must be able to \demonstrate to the prospective purchasers thereof I ! that it will have sufficient monies available to pay Capital Costs and Maintenance and Operation Costs. such demonstration of ! the availability of sufficient monies can be made by Authority's I pledging for the payment of such costs, the revenues to be l received by Authority from the sale to the City of water from I j Project, provid~d that City agrees to pay for such water an amount sufficietjt to pay all Capital Costs and all Maintenance I and operation costs, and that such agreement by City with respect ; to capital costs is unconditional and for the benefit of the holders of the ~onds. The parties have agreed that City shall . I pay a Management'. Fee to Authority in addition to such costs. It I ! P~ge 7 .. '. I {.. is contemplated by the parties that City may release portions of city's rights under this Agreement to Authority in order that Authority may assign the rights released unto A~!?.ignees having needs for water. In such event, it is appropriate for each Assignee to make an Equity Payment to Authority and for Authority to immedia~ely pay over to City each Equity Payment as received by it. City has acquired a substantial part of the land needed for Project. It is contemplated that City will acquire the remainder of the land needed for that purpose, will continue to own all such land and will grant to Authority easements over such land for construction, maintenance and operation of Project thereon. It is recognized by the parties that it will be beneficial to the public to have facilities located at Project adjacent to Lake for use by the public and for access to the waters of Lake .for municipal purposes. It is contemplated that ! such areas will be operated by City. The purpose of this Agreement is t? provide that City will grant unto Authority easements over, across and upon the lands which it has acquired and will acquire for Project for the construction, maintenance and operation thereon of Project; that City will acquire the remainder of the land needed for construction, operation and maintenance of Project; that city will assign Permit to Authority; that Authority will construct Project (selling Bonds for that purpose) and operate and maintain it; that Authority will make available the water which can be supplied from Project Page a ~. to City and/or Assignee(s); that City will include land for municipal area adjacent to Project in the land over which Authority is to be granted an easement pursuant hereto; that City -; .. \.. . will operate facilities thereon, under an appropriate agreement with Authority, for public use and for access to the waters of Lake for p~blic use; that city will make sufficient payments to Authority for availability of water hereunder to enable Authority with such payments, together with payments to' be made by Assignees, to pay Capital Costs and Maintenance and Operation Cost; that City and/or Assignee will pay Management Fees to Authority; that city's obligations to make payments hereunder shall be maintenance and operating expenses of its waterworks system; that City will set rates for water supplied through its waterworks system which are adequate to enable it to fulfill its obligations to Authority to make payments hereunder; that Authority will be paid Equity Payments by Assignees upon assignments unto them of rights preY"iously held by City; that Authority will immediately pay over to City as received all of such Equity Payments; that the obligations of City to pay Capital costs shall be unconditional; that upon termination of this Agreement, the easements to be granted by City to Authority pursuant hereto will terminate; that when all Bonds and related obligations have been paid in full, City may assume responsibility for operation of Project; and that upon such assumption, Authority shall reassign Permit to City and city's Page 9 . . • . J_ t ,•, obligations to make payments to Authority referable to periods after the date of such assumption shall terminate. 3. CONSTRUCTION OF PROJECT. Subject to the ~yai~ability of funds through the sale of Bonds and/or as provided under Section a, below, Authority agrees that it will proceed diligently with the planning, financing and construction of Project in accordance with the schedule to be proposed by Author! ty and approved by . City. City shall assign Permit unto Authority in time so that Authority can proceed with the actions described in the preceding sentence without delay. Cit}' shall promptly acquire all lands and land rights not already owned by it which may be required in connection with the construction, operation and maintenance of Project and shall grant unto Authority easements upon the lands now owned or to be acquired by it for Project for the construction, maintenance and operation of Project so long as this Agreement shall remain in force. City shall reserve easements required for construction of City's water pumping and transmission facilities and shall retain title to all land and easements which City reasonably determines is not necessary for Authority to construct and operate the Project. Authority shall cause the relocation of all highways, railroads, pipelines, utilities, bridges and other facilities which must be relocated in connection with construction and operation of Project. Authority shall take actions reasonably requested by city to abate and prevent pollution of water in Lake from activities Page 10 ·. .l ,'.. I '~ associated with the exploration, development, and production of oil, gas, and other minerals, and geothermal resources. Authority will cooperate with city and City will cooperate with -:: ..... Authority in obtaining any required consent from the Texas Water Commission or any other governmental agency necessary for transfer of Permit as contemplated herein and any other permits or licenses required in connection with Project and the delivery .. - and use of water to be supplied from it.. The obtaining of all such needed consents, licenses and permits (other than consent for reassignment of Permit as provided in Section 14, below) is a condition of the obligations of the parties under this Agreement. Should Authority or City be unable to obtain any such required consent, license or permit, the obligations of the parties under this Agreement, except the obligations of city set forth in Section 10, below, shall cease. Authority shall cause a copy of this Agreement to be filed with the Texas Water Commission. As plans and specifications for Project are developed by Authority, same will be made available to City and shall be subject to approval of city. Prior to letting of any contract for construction of Project or any part thereof, Authority will allow City to review bids received, and the letting of any such contract shall be subject to the approval of City, which approval may be withheld if the amount of the bid by the lowest responsible bidder exceeds the Engineer's advance estimates of costs for such contract as supplied to City by Authority. City Pa.ge 11 ·-' ·. ~ l. • ,,, reserves the r~ght to review and approve any change order that exceeds five percent of the contract price. It is agreed, however, that Authority shall be excused f rqm -:- meeting ' a responsibility it has hereunder to the extent it is prevented from meeting such responsibility as a result of rejection or modification by C~ty of any change or~er proposed by Authority. City shall be ,responsible for construction and installation of water pumping and transmission facilities, except the intake facilities, and such facilities shall not be included in the Project. 4. CERTIFICATION THAT THE PROJECT IS OPERATIONAL. Authority shall certify to City and to any Assignee in writing the date on which Project is expected to become Operational at least thirty (30) days prior to such date. The obligation of City and of any Assignee to make payments to Authority under Section 7, below, shall begin on the date thus certified to be 1 the date on which Project is to become Operational, unless City or Assignee is obligated to begin such payments prior to .such date under the terms of said Section 7 or Section 9, below. 5. AUTHORITY'S BONDS. Upon request of City, and only upon , its request, Authority shall issue and sell Bonds in an aggregate amount sufficient in the opinion of Authority and City to pay all Project costs and to establish any funds required by the Resolution. Bonds will be sold in one or more increments at times selected ~y Authority after consultation with city. Bonds Page 12 .... .. . , will be d~scribed in a Resolution, as amended or supplemented ' from time to time. The initial Resolution issued for PreConstruption Project Costs and the initial Re~9lution issued for constrilction Project Costs each shall be subject to approval • of City. The entire proceeds from the sale of Bonds (other than \ costs of issuance of Bonds and any amount required by the terms r • of Resolution to be deposited into a repair and replacement fund, \ a debt seryice fund, or a reserve fund to be used for payment of . I principal of and interest on Bonds in the event of insufficiency of revenues hereunder for that purpose) shall be placed by • Authority in Construction Fund. All Project Costs shall be paid from Construction Fund. Immediately upon receipt of proceeds from Bonds, Authority shall, at the option of city, pay to city from construction fund for the easements to be granted by city to Authority pursuant hereto an amount of money certified in writing by City to Authority prior to the issuance of Bonds as being equal to the amount of costs theretofore paid by city for lands i for Project, for expenses incurred in obtaining Permit, for advances to Authority under the provisions of Section a, below, and for fulfillment of ancillary obligations as provided in Section 27, below. Should City, after such initial payment and prior to Project becoming Operational, incur and pay additional ' costs for ~he acquisition of land, easements or mineral interest for Project or for fulfillment of ancillary obligations provided l in Section !27, below, Authority shall, immediately upon receipt Page 13 .. i . . of written notice from city that such additional costs have been paid and of the amount thereof, reimburse City for . same from Construction Fund. Disbursements from Construction_Fund shall be made only for the payment of Project Costs. Any funds remaining in the Construction Fund after the payment of all Project Costs shall be utilized to reduce the capit~l Costs payments required to be made by city under Section 7, below, and by any Assignee under provisions in the agreement between Authority and such Assignee of like effect to the provisions in Section 7, below, and may be withdrawn from Construction Fund and deposited into Debt Service Fund for such purpose after the payment of all Project Costs. All Capital Costs shall be payable from Debt Service Fund. Bonds shall be sold on the basis of competitive bidding, unless Authority and City agree otherwise. Bonds shall be revenue bonds payable solely from reserve funds established by a Resolution and monies to be paid hereunder. 6. SALE AND PURCHASE OF WATER. Subject to assignment of rights under Section 11, below, Authority agrees to sell to City and city agrees to buy from Authority, and to pay for as provided herein, whether such water is actually used or not, the entire amount of water which can be supplied from Project. Times and rates of delivery of water from Project to City shall, within the limits of capability of Project, be selected by City. Deliveries shall be through the Intake Facilities. Authority and City shall each have the right of access to the sites and facilities of the Page 14 . . " ' • t. other as r~asonably required for effective utilization of Project I for delivery of water to City. Authority will measure and maintain accurate records of water withdrawn fr.?tn Lake and of water delivered to City and will furnish City with monthly summaries 'of such records. city shall have the right to inspect the measurii,.ng devices and records of operation of Project at reasonable ,times. 7. PAYMENTS BY CITY. Subject to assignment of rights and obligations pursuant to Section 11, below, City shall make payments to Authority during each Fiscal Year which shall equal the sum of: (i) Capital Costs payable during such Fiscal Year; plus (ii) Ma .intenance and Operation Costs as adjusted, which, by Board of Directors' estimates made prior to the beginning of such Fiscal Year, will be incurred during such Fiscal Year; plus (iii)Management Fees for such Fiscal Year. Payments to be made under this Section 7 on account of Capital Costs shall ' be due and payable on or before ten (10) days before the date on which such capital Costs are required to be paid by Authority and shall be in such amounts as shall enable Authority, with the monies thus paid, to pay Capital Costs as they become payable. All payments representing Capital Costs shall be deposited by Authority into Debt Service Fund and other funds as shall be required by the terms of any Resolution. Disbursements P~ge 15 .. ' ... t; shall be made from Debt Service Fund only for payment of those Capital Costs required by a Resolution to be made therefrom. At or prior to its regular July meeting each ~~~r,, Board of Directors shall determine the amount estimated as necessary to pay Maintenance and Operation Costs for the following Fiscal Year, which amount shall be adjusted by any deficit or surplus in the payments by City to cover Maintenance and Operation Costs for preceding Fiscal Years and shall include credit for any miscellaneous income to Authority resulting from operation of Project. At the same time, Board of Directors shall determine the amount of Management Fees payable during the following Fiscal Year. These determinations, together with a schedule of monthly payments necessary to pay such Maintenance and Operation Costs as adjusted, plus Management Fees, for the following Fiscal Year, and with the data on which such determinations and schedule are based, shall be submitted to city in writing before August 1, following such meeting. The amount of each monthly payment specified in such schedule shall be 1/12th of such Maintenance and Operation Costs, as adjusted, plus 1/12th of Management Fees for such following Fiscal Year less any reimb~rsement credit due City under Section 28, below. If city shall make written objections to such determinations within thirty (30) days after receipt of same, the parties shall negotiate during the month of September in an attempt to resolve their differences. Should the parties fail to resolve their differences by the end of Page 16 T . ..., , •, September, the matter shall be submitted to arbitration pursuant to Section 21, below. Pending the outcome of such arbitration, City shall make payments to Authority in accordance with the schedule. When the decision of the arbitrator is received, subsequent payments during the Fiscal Year shall be in equal installments and shall be in such adjusted amount so that total payments for the Fiscal Year involved shall be in accordance with such decision. In the event of subsequent reversal of the decision of the arbitrator, appropriate adjustments to account for the effects of such reversal shall be made in the determinations made by the Board of Directors with respect to Operation and Maintenance Costs and Management Fees to be paid in subsequent Fiscal Years. The amount payable for each month shall be due and payable on or before the first day of that month. For the Fiscal Year in which Project becomes Operational, the aforesaid written determination and schedule for the remainder of that Fiscal Year shall be furnished with the certification required to be given in section 4, above. Authority agrees to keep proper financial and operating records and books of account, pursuant to law and in accordance with generally accepted governmental accounting principles as presented and recommended in the National Committee on Governmental Accounting publication, . Governmental Accounting, Auditing and Financial Reporting and the Industry Audit Guide of the American Institute of Certified Public Accountants, entitled Audits of State and Local Page 17 "· ' ~. ' I• Governmental Units, as such principles are supplemented and modified from time to time, pertaining to Authority's performance of its obligations under this Agreement, and such records and books of account shall be open to audit by City at all reasonable times. All payments required hereunder shall be payable in McLennan county, Texas. 8. ADVANCES OF FUNDS. Monthly, beginning upon execution of this Agreement, Authority will invoice City for Administration Costs. That portion of Administration Costs defined in Section l(a)(ii), above, for which estimated payments have been made by City shall be adjusted, estimated amount versus actual determined amount, annually by Authority's certified public accountants after the end of each Fiscal Year. City will receive credit for or refund of any surplus or invoice for any deficit amounts. City shall make payments within ten (10) days of receipt of monthly invoices from Authority but City reserves the right to challenge propriety of such costs. As provided above, City shall, at its option, be reimbursed for such advances, as adjusted, out of the first available Bond proceeds. That portion of Administration Costs defined in Section l(a) (i) and (ii), above, shall not exceed 3 (three) percent of the estimated total price of the contracts for construction of the Project without the prior approval by City and, absent such approval, that portion of the Administration Costs that is in excess of such percentage shall be deducted from Management Fee. Page 18 . '• 9. ADDITIONAL PROVISIONS TO ASSURE PAYMENTS. Should the amount of money set aside from Bond proceeds to pay interest on Bonds during construction of the Project prove insuf~icient for -:··... .. that purpose, or should any payments of principal fall due before the Project is Operational, City shall pay to Authority such amounts of money at such times as will enable Authority to pay Capital Costs when due. Authority shall certify to City in writing the need for such payments at least thirty (30) days prior to the date when same are required to be made by City. 10. PAYMENT UNCONDITIONAL. Bonds that will be issued to pay Project costs will be payable only from payments made by City or any Assignee pursuant to this Agreement; therefore the obligation of the City to make payments under Section 7, above, shall be unconditional whether or not Project is completed and even in the event of a total failure of the water supply agreed to be made available under this Agreement. The obligation to make such payment shall not be relieved by release and reassignment of any or all of City's rights hereunder. 11. ASSIGNMENTS. Upon agreement by a prospective Assignee to assume a percentage or all of the payments required to be made by City hereunder at the times when payments are required of City, city shall have the right to release a percentage or all of Dependable Yield unto Authority. When City shall have thus released any percentage of Dependable Yield unto Authority and such prospective Assignee shall have made the Equity Payment P~ge 19 .... "• hereinafter provided for, Authority shall thereupon assign the percentage of Dependable Yield thus released unto such Assignee, subject to the limitation of Section 12., and such Assignee shall ~ ·- assume the obligations of City to make a percentage or all of the payments required to be made by City hereunder at the times ~hen payments are required of City. Such percentage shall be a fraction (expressed as a percentage) the numerator of which shall . . be the part of Dependable Yield, as determined at the time of such assignment, expressed in acre-feet per year (AF/Y) released by City and assigned by Authority unto such Assignee and the denominator of which shall be the total Dependable Yield, as determined at the time such assignment is made, also expressed in AF/Y. So long as an Assignee shall fully and promptly discharge its assumed obligations to make payments to Authority, City shall be relieved of the obligation to make such payments to the extent of the obligations assumed. However, City shall not be thus relieved to the extent that such Assignee default;s in prompt fulfillment of the obligations which it has assumed. As a condition for any such assignment, Authority shall require Assignee to make an Equity Payment to Authority in an amount or amounts and at a time or times to be established by Authority and approved by City in advance of such assignment. All Equity Payments received by Authority shall be paid over by Authority to City immediately upon receipt. In the event of any such assignment, Authority shall make available to Assignee, rather Page 20 \ •' than to City, the percentage of Dependable Yield thus assigned by Authority so long as such Assignee shall promptly fulfill all obligations to Authority assumed by it in conside~ation of such assignment. Upon failure of any Assignee to fulfill such obligations promptly, Authority shall give written notice of such failure to Assignee and to City. If such failure is not pured by Assignee within 30 days after effective date of such notice, City . .. . . . . shall fulfill the obligations in default, such assignment shall terminate and shall be renewed only with approval of city on terms approved by city and the percentage of Dependable Yield assigned unto the Assignee under such assignment shall revert to City. At the time an initial assignment is made, and thereafter at the time of subsequent assignments or at 10-year intervals, whichever is less, Authority shall cause the Engineer to prepare a current estimate of Dependable Yield. The amount of water an Assignee shall be entitled to from the Project in any full calendar year shall be equal to Dependable Yield of the Project as last determined by the Engineer prior to January 1 of that calendar year multiplied by the percentage of Dependable Yield assigned to such Assignee. If any assignment becomes effective • on any date other than January 1, then the amount of water available to that Assignee during the remainder of that beginning year shall be a prorated amount of the total assigned amount of Dependable Yield expressed in AF /Y. Proration shall be on the basis of ·a fraction in which the numerator is the number of days P~ge 21 ~ .. remaining in the beginning year following the effective date of the assignment and the denominator is 365 days. Payment obligations of City assumed by Assignee as describ~d above shall be prorated on the same basis in any partial beginning year. Upon assumption of operation of Project by city as provided in Section 14, below, city will assume then existing obligations of Authority to any Assignee arising out of assignments made - pursuant to this Section ll. 12. DIVERSION RIGHTS OF CITY. Prior to any release and assignment of an amount of Dependable Yield in accordance with Section 11., City shall have the right to make a total annual diversion of up to 35,000 acre-feet. The monthly diversion rate and the total annual diversion amount up to 35,000 acre-feet will be decided by City. It is anticipated that city will limit its total annual diversion in accordance with the overdraft mode of operation defined by Freese and Nichols, Inc. in Feasibility Report on the Justiceburg Reservoir; 1978, which is summarized in the following table: Lake Contents more than 60,000 Acre-feet less than 60,000 Acre-feet but more than 30,000 Acre-feet less than 30,000 Acre-feet Annual Diversion Limits-overdraft mode 35,000 Acre-feet 25,000 Acre-feet 20,000 Acre-feet P~ge 22 ... As described in Section 11., Engineer will be directed to prepare a current estimate of Dependable Yield at the time of the initial assignment of an amount of Dependable Yield and the~eafter at the time of subs~quent assignments or at 10-year intervals, whichever is less. Concurrently, Engineer will be directed to re-evaluate the overdraft mode of operation in order to account for the effects of the total assigned amount(s) of Dependable Yield. .. . .. .. City's diversion rights subsequent to any release and assignment shall be limited by the results of Engineer's reevaluation of the overdraft mode of operation. Authority shall not be obligated to assign any amount of Dependable Yield released by City unless City agrees at · the time of any such release to accept annual diversion limits and conditions which will, in the opinion of Engineer, allow Authority to provide assigned amount(s) of Dependable Yield to Assignee(s) on a reliable basis through the most severe drought of record as used to define Dependable Yield. 13. MUNICIPAL FACILITIES. City may, at its option, acquire land as part of Project as it shall determine to be needed for municipal facilities to be owned and operated by City in connection with operation of Project and as an area across which the public shall have access to the water of Lake. such land shall be subject to the easements to be granted by City to Authority for operation of Project but shall be owned and operated by City to provide municipal functions and access to Lake. Lake Rangers who have been designated by Authority as P~ge 23 : -~ _. Authority.peace officers in connection with operation of Project shall have jurisdiction for the purpose of law enforcement in such municipal area through the easement provided to Authority by City. 14. TERM, ASSUMPTION OF OPERATION AND TERMINATION. The term of this Agreement shall commence on the date hereof. This Agreement shall remain in effect for so long as any Bonds or any - bonds that have been issued to refund or refinance the obligations originally represented by the Bonds, or issued pursuant to section 17 remain outstanding and thereafter for so long as City shall elect while Project continues to be useful for the purpose of supplying water to City or to any Assignee. When all obligations under Bonds have been fully discharged, City may elect to assume operation of Project at any time by written notice to the Board of Directors given at least one year prior to the date of election. Upon the effective date of election, City shall assume responsibility for operation of Project, subject to then existing obligations to Assignees and with existing rights as against Assignees. Thereupon, Authority shall be relieved of further responsibility for operation of Project and City shall be relieved of all obligations to make payments to Authority provided for in this Agreement and referable to periods of time after the date of such assumption. Upon any such assumption, Authority shall reassign Permit unto City, and shall assign to City any other permits or licenses or contractual rights required P~ge 24 -· . -·' .. , or held in connection with maintenance and operation of Project. Upon such reassignment and assignments, Authority shall cooperate with City in obtaining any necessary consent to sue~ reassignment and assignments from the Texas Water Commission and/or any other governmental agency having jurisdiction in the premises. Upon any such assumption, this Agreement shall terminate and the easements granted by City to Authority pursuant hereto shall terminate. 15. FORCE MAJEURE. Neither party shall be under any liability or suffer any default for any failure to perform or for delay in performing such party's obligations hereunder where the same is due to acts of God, fire, storm, war, riot, _ sabotage, drought, low flows in the south Fork of the Double Mountain Fork of the Brazos River, strikes or other differences with labor (whether or not within the power of such party to settle same), decrees or orders of courts or other governmental authority, or other similar or dissimilar causes not within the reasonable control of such party and not due to the negligence of such party, while and so long and to the extent that performance is prevented for such cause (hereinafter sometimes called a "Force Majeure") and due diligence is used to resume performance at the earliest practical time. Force Maj eure sha 11 not, however, excuse City from performing the obligations and fulfilling its undertaking under Section 10, above. 16. CONDITIONS. The obligations of Authority hereunder are Page 25 .. . . . -., , conditional upon its ability to sell Bonds for sums of money sufficient to enable it to pay therewith the costs of what it has undertaken to do under the terms of Section 3, _p.bove, and to <· obtain labor, materials and equipment to fulfill such obligations, and upon its being furnished with an opinion of counsel for City to the effect that the execution of this Agreement is within the power of City under the laws of Texas, that all proceedings for the authorization of the execution of this Agreement by the officials of City executing it on behalf of City are valid and that this Agreement is and will be a binding and fully enforceable obligation of City. The obligations of City hereunder are conditioned upon receipt by it of a written opinion of counsel for Authority to the effect that the execution of this Agreement by Authority is authorized under the laws of Texas, that all proceedings respecting authorization of execution of this Agreement on behalf of Authority are valid and that this Agreement is and will be a binding and fully enforceable obligation of Authority. 17. MAINTENANCE AND REPAIRS. so long as it shall operate Project, Authority shall maintain, repair and operate same in a prudent, efficient and economical manner, to the end that it shall be able to fulfill its obligations hereunder at a minimum cost. Authority may issue additional Bonds to obtain funds to make repairs and replacements to Project necessary or desirable for its efficient and economical operation or as required by any Pa,ge 26 . . .. .,• w '~ regulatory body with applicable jurisdiction so long as this Agreement remains in effect. Such additional Bonds may be on a parity with Bonds issued per Section 5, above, or may be subordinate to the pledge of revenues to the payment of Bonds. 18. INSURANCE. Authority shall maintain a practical insurance program, with reasonable terms, provisions, insurance and costs which the Board of Directors determines will afford adequate protection against liability for bodily injury and property damage occurring in connection with the construction, '• operation and maintenance of Project, which insurance shall also protect City and Assignees, if any, as named insureds. Authority shall also carry such insurance against fire and other casualties affecting Project as is usual and practical to obtain with respect to such facilities. Proceeds of insurance against fire and other casualties will be used solely to repair and maintain Project. 19. WAIVER. Any waiver at any time by any party of its rights with respect to a default under this Agreement or with respect to any other matter arising in connection with this Agreement shall not be deemed a waiver with respect to any subsequent default or matter. 20. REMEDIES. Nothing in this Agreement shall be construed, in any manner, to abridge, limit or deprive either .party hereto of any mean~ which it would otherwise have of enf arcing any remedy, either at law or in equity, for breach of any of the Page 27 • l r ' -'· .. provisions hereof; provided, however, that no default hereunder shall excuse performance by City of its obligations under Section 1 • 10, above, ~t being expressly acknowledged, understood and agreed -r,;,, . that Bonds will be issued and purchased in reliance upon the undertakings of City in Section 10, above. Recognizing that failure in the performance of Authority's or City's obligations hereunder could not be adequately compensated in money damages alone, each ,Party agrees in the event of ··any .default of it·s part that the other party shall have available to it the equitable remedy of mandamus and specific performance in addition to any other legal 'or equitable remedies (other than termination) which ' may also be available to the party. Notwithstanding anything to the contrary contained in this Agreement, any right or remedy or I I any default hereunder, except the right of the Authority to receive payments per Section 7, which shall never be determined I : to be waived, shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years p~us one (1) day after the occurrence of such default. No waiver or waivers of any breach or default (or any breaches or defaults) by.any party hereto or of performance shall be deemed a waiver thereof in the future, nor shall any such waiver or waivers be deemed or construed to be waiver of subsequent breaches or defaults of any kind, character, or description, under any circumstances. 21. 'ARBITRATION. In the event that any dispute between the Page 28 •• ·-·' . -,_._. '' . . Authority and the City arises under any of the terms or provisions , of. this Agreement, other than a dispute with respect to payments described in section 7 and Section 19, above, the obligations to make such payments being unconditional, the parties wiJ..l adhere to the following procedures. This is the exclusive procedure for the resolution of disputes under this Agreement. (a) The parties agree that every effort will be made to resolve the dispute on an informal basis. The parties agree to submit written notices of objections as specified in various sections of this Agreement. In the absence of specific time frames, the parties agree to submit written objections to acts or occurrences which they dispute within twenty (20) calendar day~ , of the date they become aware or should have become aware of the act or occurrence. The parties will meet within fourteen (14) calendar days of receipt of the notice to attempt informal resolution. (b) In the event the parties are not able to reach a mutually satisfactory settlement within ten ( 10) calendar days from the first informal meeting, either party may invoke arbitration. The moving party must submit a written notification to the other party specifying the disputed item(s) being submitted to arbitration. Such arbitration shall occur and shall comply with and be governed by this section and by the provisions of the Texas General Arbitration Act, Articles 224 through 238-6 Page 29 . '. •. .. l ·' , V.A.T.S. (c) The term "dispute(s)" shall be given the broadest meaning and interpretation and shall include but not be limited to any dispute over sums due by one party to another, any interpretat+n or application of the provisions of this Agreement, tny issues relating to any rights, liabilities, remedies of fnY party herein. While under this Agreement neither party will ihstitute a lawsuit pertaining to any dispute that may arise under !this Agreement. Either party may institute action for specif icl enforcement in a court of competent jurisdiction to compel another party to arbitrate any dispute under this I Agreement. The moving party shall, within fifteen (15) days following th date of the notice invoking arbitration, submit a request to the American Arbitration Association to provide a list of potential arbitrators from which selection can be made. If the estimate , or actual, value of the disputed issue is $100,000 or less, a list of seven (7) arbitrators will be requested. If the estimate , or actual, value of the disputed issue is greater than $100,0 o a list of fifteen (15) arbitrators will be requested. ~e parties shall meet within ten (10) calendar days after recei t of such list to select an arbitrator, or arbitrators. If they cannot mutually agree on one of the listed arbitrators, then the Authority and the City will alternately strike an ar itrator's name from the list. If the value of the Page 30 I ' ,. T . '· I ~ disputed issue is $100,000 or less, the striking continues until one name remains. If the value is greater than $100, 000, the striking con~inues until three (3) names remain.~~The remaining person(s) shall be the duly selected arbitrator(s). The procedures to determine who strikes the first name will be determined by lot. If either party refuses to participate in the selection process, the other party will make a selection of an arbitrator from the list. The arbitrator shall hold the hearing at a mutually agreeable date and location not later than ninety (90) days following the date of notice invoking arbitration. The procedures used to conduct the hearing shall be determined by the arbitrator. The arbitrator shall issue and sign a written decision within forty-five (45) days after the close of the hearing. Time limits at any step of the arbitration procedure ' may be exten~ed by mutual consent of the parties. The arbitrator has full authority to award, in his judgment, appropriate remedies including reasonable attorney's fees in any case where he deems it to be warranted. The decision of the arbitrator shall state the findings and conclusions which are the basis for the decision. The arbitrator's decision shall be final and .binding subject to the applicable provisions of the Texas General Arbitration Act. If, upon application of a party, a court of competent jurisdiction vacates the award in accordance with Article 237, section A (1) through (4) of the Texas General Page 31 ,• t ·-.-•• ...... l r . Arbitration Act, and orders a rehearing before a new arbitrator, the new arbitrator will be selected in the same manner as the original arbitrator. The costs of the arbitration, including fees and expenses of the arbitrator and fees of the American Arbitration Association, shall be paid by Authority from and be a part of Maintenance and Operation Costs. 22. NOTICES. All notices or communications provided for herein shall be in writing and shall be delivered to City or to Authority, or, if mailed, shall be sent by certified mail, postage prepaid, addressed to City at City Hall, Lubbock, Texas 79457, and to Authority, P.O. Box 7555, Waco, Texas 76714-7555. Either party may change the address to which such notices and communications are to be delivered or sent to it by written notice to the other party. Mailed notices shall be deemed to have been received on the first business day following day of mailing. 23. MISCELLANEOUS. The payments by City required hereunder shall consti~ute full consideration for all rights and benefits accruing to city under this Agreement. 24. COMPLIANCE WITH LAWS. The parties hereto agree to discharge their respective obligations under this Agreement in compliance with all applicable laws, ordinances and governmental rules and regulations. 25. COMPLETION BONDS. Should the proceeds of Bonds issued Page 32 ' .• per Section 5, above, be insufficient to enable Authority to complete the Project, place it into operation and pay from the proceeds thereof all costs enumerated in Sectipn 5, above, Authority may issue additional Bonds for the purpose of obtaining funds for completion of Project. Such additional Bonds may be on a parity with Bonds issued per Section 5, above, or may be subordinate to the pledge of revenues to the payment of Bonds. Upon agreement of the parties and to the extent not precluded by the provisions of any resolution or other document pertaining to Bonds, Authority may issue other additional bonds to obtain funds to provide additional facilities agreed upon by the ·parties for the withdrawal, treatment and delivery to City of water from Project, which additional bonds may be on a parity with Bonds issued per Section 5, above and/or per the foregoing provisions of this Section 25 or may be subordinate to the pledge of revenues to the payment of such other Bonds. 26. SEVERED MINERAL INTEREST. In some cases, there are outstanding severed mineral interests in the lands to be subject to easements in favor of Authority for the construction, maintenance and operation of Project pursuant hereto. Should acquisition of such outstanding severed mineral interests or their subjection to the easement rights of Authority ever be necessary in order to prevent interference with the construction, operation or maintenance of Project or with the quality of the water impounded in Lake, City will either acquire such Page 33 ~ l ,. , • t' .. • ~ .• outstanding mineral interests and subject them to Authority's easements or will otherwise arrange for their subjection to Authority's easements. 27. ANCILLARY OBLIGATIONS. City shall fulfill all obligations imposed by the terms of any license or permit issued in connection with operation of Project, whether held by City or by Authority, for operation of municipal facilities and for mitigation of losses of wildlife habitat resulting from construction of Project. city shall take actions and institute programs which are necessary to allow Authority to meet obligations of any and all permits required for construction and operation of Project. 28. ADDITIONAL REIMBURSEMENT. Prior to Project becoming Operational, reimbursement of City's costs associated with Sections 26 and 27, above, shall be in accordance with Section 5. After Project becomes Operational, should City incur and pay additional costs for the acquisition of land, easements or mineral interests or otherwise in fulfillment of its obligations under Sections 26 and 27, above, at City's option and upon receipt of written notice from City of the fact and amount of such additional costs, Authority shall include such certified amount in Maintenance and Operation Costs for the following Fiscal Year. City shall receive reimbursement in the form of monthly credit of 1/12th of such certified amount applied to payments to be made by City under Section 7 during such Fiscal Page 34 ! I 3 ~ ,_ • \_J f .. Year. 29. NO TAX OBLIGATION OF THE CITY. The Authority shall never have the right to demand payment by the. City of any -:· .... ~ obliqation assumed or imposed on it under and by virtue of this Agreement from funds raised or to be raised by taxation. 30. OPERATING AND MAINTENANCE EXPENSES AND RATES. City represents and covenants that the services to be obtained . . pursuant to this Aqreement are essential and necessary to the operation of the city's waterworks system and that all payments to be made hereunder by it will constitute reasonable and necessary "operating and maintenance expenses" of City's waterworks system, within the meaning of Articles 1112 and 4413(32c), Vernon's .Texas Civil Statutes, and the provisions of all ordinances authorizing the issuance of all bonds or other obliqations of the City's waterworks or waterworks and sanitary sewer system. City will set and charqe rates for services supplied through its waterworks system (or waterworks and sewer system) which are adequate to enable it to fulfill its obliqations hereunder, as well as all other obligations which must be discharqed out of revenues of such waterworks system (or waterworks and sewer system). 31. WATER CONSERVATION AND WATER QUALITY PROGRAMS. The construction of the Project and the proper maintenance and operation of the Project shall include, subject to Authority's legal power to adopt and jurisdiction, development and P~qe 35 .. ._ .. implementation of any water conservation program or water quality program that City requests Authority to adopt. These programs shall include (for greater certainty, but withou~ limiting the generality of the foregoing) the controlling or prohibiting the installation of or use of private sewage facilities in the area surrounding the Lake and the abatement and prevention of pollution from activities associated with the exploration, development, and production of oil, gas, or geothermal resources. Within a reasonable time after approval by the Texas Water Commission of the transfer of Permit to Authority, Authority shall request and use due diligence to obtain an order from the Texas Water Commission adopting rules to abate or prevent pollution or injury to public health from private sewage facilities in the area surrounding the Lake and delegating to Authority the responsibility for performing a licensing function and administrating a licensing system. To the extent private sewage facility license fees do not pay all regulatory expenses, the shortfall shall be Maintenance and Operation Expenses. Authority and City recognize that the chemical quality of the water stored in the Lake will be influenced by the annual volumes of diversions. The chemical quality will be best when diversions are at the allowable maximum rates under the overdraft mode of operation described in Section 12 above. Concentrations of dissolved minerals in the impounded water will tend to increase when diversions are less than the allowable annual amounts. When Page 36 • I • f' \, ) .. .. .> .• diversions ~re less than the allowable maximum amounts, Authority i shall, if requested by City, release water through the outlet i works at the dam so long as the sum of diversions a~d releases is not greater ~han the City's allowable maximum diversion, in order to avoid undue build-up of dissolved mineral concentrations. In ! the event that there is disagreement as to whether such releases I are actually needed for control of the chemical quality of the c I impounded water, the matter shall be submitted to Engineer for i . evaluation, I and Engineer's recommendation shall be followed so ' long as such releases can be made without impairing Authority's I obligation, lif any, to provide an assigned amount of Dependable I Yield to any: Assignee. I 32. CONFROL OF PROJECT. As between Authority and City, Authority s1all control the construction and operati'on of the Project and all related facilities and improvements and shall hold exclus4ve possession of the Project. Authority agrees to defend and srve and hold harmless, City from all claims, demands, and causes 9f action which may be asserted by anyone on account I • • of the consr-ruction and operation of the Pro) ect and related I facilities and improvements, or possession and use of the I ! Project. T~is promise is not made for the benefit of any third I party. This section shall in no manner be construed to relieve I city from itf obligation to pay capital Costs and Maintenance and I Operation Costs. I I I P~ge 37 I r ~ I> . , • ... '·:.. ~ ) ... ) " ' t .. •• .. ATTEST: ~4'~ Ass"istant Secretary "Authority" CITY OF LUBBOCK -· __ .......... -.,., - ~. ( ' BY • ~.. ~~ ~ "Mayor" CZ --__ ,_ --~ -, -, -----~ -~~let-' ---... -------"City" -· Page 38 . ,. THAT THE RESOLUTION APPROVING A FORM OF AGREEMENT BETWEEN BRAZOS RIVER AUTHORITY AND THE CITY OF LUBBOCK, TEXAS, AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE SAID AGREEMENT BE ADOPTED IN THE FORM ATTACHED HERETO AS EXHIBIT. A copy of the Resolution ref erred to in the above motion is attached. I, Jack Wooley, Assistant Secretary of the Brazos River Authority, hereby certify that the above and foregoing is a true and correct copy of a motion adopted by the Board of Directors of Brazos River Authority at its regular quarterly Board meeting held in Waco, Texas, on April 17, 1989. WITNESS MY HAND this 16th day of May, 1989. istant Secretary zos River Author'ty .. - RESOLUTION APPROVING THE FORM OF AGREEMENT WITH THE CITY OF LUBBOCK, ~EXAS AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE SAID AGREEMENT WHEREAS, the City of Lubbock, Texas (the "City") desires to obtain an additional surface water supply: and WHEREAS, Brazos River Authority (the "Authority") proposes to construct and operate a dam and reservoir (to be known as "Lake Alan Henry", formerly called "Justiceburg Reservoir"), to provide a long-term, firm supply of surface water to the City: and WHEREAS, .in the accomplishment of said purposes, the Authority has determined it to be appropriate to issue its revenue bonds secured by payments made by the City of Lubbock; and WHEREAS, the Board of Directors of the Authority has heretofore authorized the General Manager to conduct negotiations with the City of Lubbock, leading to an agreement which would accomplish such purposes: and WHEREAS, the City and the General Manager have agreed to terms which would accomplish such purposes: NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BRAZOS RIVER AUTHORITY: l. That the form of agreement between the Brazos River Authority and the City of Lubbock, entitled "Water Supply Agreement by and between Brazos River Authority and the City of Lubbock" this day presented to this Board, is hereby approved. 2. That the General Manager is authorized to execute said agreement, and the Secretary of the Authority is hereby authorized to attest same and affix the seal of the Brazos River Authority thereto.