R-09-05-14-9F1 - 5/14/2009RESOLUTION NO. R -09-05-14-9F1
WHEREAS, the City of Round Rock, Texas (the "City") is a
participating and founding member of the Brushy Creek Regional Utility
Authority, Inc., (the "BCRUA"), and
WHEREAS, the BCRUA, the City, along with the other participating
and founding member cities, namely the City of Leander, Texas and the
City of Cedar Park, Texas ("Member Cities") wish to enter into a System
Operating Agreement ("Agreement") to set forth in specific terms the
manner in which this project shall be managed and operated, and
WHEREAS, the City Council desires to enter into said agreement
with the BCRUA and the Member Cities, Now Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City, subject to the City Manager's and City Attorney's
approval of the final language and terms, the Brushy Creek Regional
Utility Authority System Operating Agreement (BCRUA Project, First
Phase), a copy of same being attached hereto as Exhibit "A" and
incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
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RESOLVED this 14th day of May, 2009.
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ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST:
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SARA L. WHITE, City Secretary
BRUSHY CREEK REGIONAL UTILITY AUTHORITY
SYSTEM OPERATING AGREEMENT
(BCRUA PROJECT, FIRST PHASE)
EXHIBIT
"A"
THIS BRUSHY CREEK REGIONAL UTILITY AUTHORITY SYSTEM OPERATING
AGREEMENT (the "Agreement") is dated and entered into as of the day of
2009 (the "Effective Date") by and among the Brushy Creek Regional Utility Authority, Inc.
("BCRUA"), a non-profit corporation of the State of Texas (the "State"), created and existing
under the laws of the State, including Subchapter D of Chapter 431 as amended, Texas
Transportation Code, and the City of Cedar Park, Texas ("Cedar Park"), the City of Leander,
Texas ("Leander"), and the City of Round Rock, Texas ("Round Rock") all home -rule
municipalities and political subdivisions of the State (individually, the "City"; collectively, the
"Cities"). The BCRUA and the Cities are collectively referred to herein as the "Parties," and as
the "Party" individually.
RECITALS
WHEREAS, Subchapter D of Chapter 431 of the Texas Transportation Code, as amended
(the "Act") authorizes municipalities to create one or more local government corporations to
accomplish any governmental purpose of the Cities including the planning, financing,
construction, ownership, operation, and/or maintenance of facilities necessary for the
conservation, storage, transportation, treatment, and/or distribution of treated water, including a
plant site, right-of-way, and property, equipment, and/or right of any kind useful in connection
with the conservation, storage, transportation, treatment, and/or distribution of treated water that
will ultimately provide an additional 105.8 million gallons per day of potable water supply to
meet future water demands of the Cities based on current population projections and estimates
(said facilities herein referred to as the "BCRUA System");
WHEREAS, the City Councils of Cedar Park, Leander, and Round Rock, respectively
(collectively, the "Governing Bodies"), have authorized and approved the creation of the
BCRUA as their constituted authority and instrumentality, pursuant to Subchapter D of Chapter
431 of the Texas Transportation Code to accomplish the specific public purpose of planning,
financing, constructing, acquiring, owning, operating or maintaining the BCRUA System,
pursuant to the provisions of the Act and other applicable law, including Section 791.026 Texas
Government Code, as amended;
WHEREAS, the Cities and the BCRUA have determined that the first phase of the
ultimate 105.8 million gallons per day BCRUA System, (the "BCRUA Project", as hereinafter
defined,) is substantially the same as the "Phase 1" referenced in the Preliminary Engineering
Report, as hereinafter defined, with the major exception being that the initial phase of the water
treatment plant has been reduced from 30 million gallons per day to 17 million gallons per day;
WHEREAS, in furtherance of its purposes, the BCRUA will issue one or more series of
bonds to finance the costs of the BCRUA Project, and the BCRUA has obtained a loan
commitment for such purposes from the Texas Water Development Board ("TWDB");
Operating Agreement- clean final- 5-6-09 (00160340) (2).DOC
WHEREAS, the Cities and the BCRUA have entered into that certain "Master Contract
for the Financing, Construction, and Operation of the BCRUA Regional Water Treatment and
Distribution Project" dated September 2, 2008 to set forth the terms and conditions under which
the Cities, by and through the BCRUA, will finance, construct, acquire, own, maintain and
operate the BCRUA Project and to set forth in general terms the manner in which the Cities will
share the costs of constructing, operating, and maintaining the BCRUA Project ("Master
Contract.") The term "Master Contract" as used herein includes any amendments thereto.
WHEREAS, the Cities and the BCRUA, exercising their respective mutual authorities,
wish to enter into this Agreement to set forth in specific terms the manner in which the BCRUA
Project shall be managed and operated and the manner in which the Cities will share in the costs
of operating and maintaining the BCRUA Project.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the sufficiency of which are hereby conclusively acknowledged, and subject to the
terms and conditions hereinafter set forth, the Cities and the BCRUA mutually undertake,
promise, and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions from Master Contract. For the purposes of this Agreement, and in
addition to the terms defined above, the following terms shall have the meanings assigned to
them in accordance with the Master Contract: Annual Payment, BCRUA, BCRUA Project,
Delivery Point(s); City System; Fiscal Year; Operations and Maintenance Expenses; Overhead
Expenses; and Preliminary Engineering Report.
Section 1.2 Additional Definitions. For the purposes of this Agreement, and addition to the
terms defined above, the following terms shall have the meanings stated as follows:
a. Annual Operations and Maintenance Report: the report prepared by BCRUA to
be submitted to the Operations Committee within ninety (90) days of the end of
each Fiscal Year. The Annual Operation and Maintenance Report shall be
prepared from prior Fiscal Year data and shall include, at a minimum, all income
and payments received by BCRUA from the Cities, all actual and budgeted
expenses for operations and maintenance, the quantity of all waters delivered to
each of the Cities, and any other information requested by the Operations
Committee.
b. BCRUA Annual Budget: The budget prepared by BCRUA each Fiscal Year and
as described in the BCRUA Bylaws including all annual revenue and expenses of
the BCRUA such as the Annual Payments and BCRUA Project Costs as defined
in the Master Contract.
Operating Agreement- clean final- 5-6-09 (00160340) (2).DOC
c. Cities' Raw Water Contracts: These contracts and agreements held by the Cities
providing for the withdrawal of raw water from Lake Travis for municipal use as
contained in Exhibits "A", "B", and "C" of the Master Contract.
d. Commencement Date: The date upon which construction of the BCRUA Project
is substantially complete and water is delivered, or capable of being delivered, to
a Delivery Point on a continuous (non -test) basis.
e. Fee In Lieu of Minimum Take: The fee described in Section 2.6 herein.
f Minimum Daily Flow: Approximately five (5) million gallons per day, the exact
amount to be determined according to Section 2.6 herein.
Operator: The entity serving as operator of the BCRUA Project as discussed in
Section 3.1 herein.
g.
Section 1.3 Interpretation. The caption headings of this Agreement are for reference purposes
only and shall not affect its interpretation in any respect. Unless the context otherwise requires,
words of the masculine gender shall be construed to include correlative words of the feminine
and neuter genders and vice versa. Defined terms include the plural and singular versions of the
words. This Agreement and all the terms and provisions shall be liberally construed to effectuate
the purpose set forth herein and to sustain the validity of this Agreement.
ARTICLE II
SYSTEM CONSTRUCTION, MANAGEMENT, & OPERATION
Section 2.1 System Ownership. The BCRUA Project shall be owned by the BCRUA. Each
City, respectively, shall have the exclusive right to its reserved capacity in each BCRUA Project
component as provided in Section 6.1 of the Master Contract. Each City shall have the right of
entry to any component of the BCRUA Project at any time, provided, however, that physical
changes or adjustments to the BCRUA Project may only be made upon authorization of the
BCRUA.
Section 2.2 System Design and Construction. The BCRUA shall provide for the design and
construction of the BCRUA Project as provided in the Master Contract.
Section 2.3 System Operation and Management. The BCRUA shall operate and maintain the
BCRUA Project in accordance with the terms of the Master Contract and this Agreement.
Section 2.4 Operations Committee. The Operations Committee shall represent the individual
and collective interests of the Cities and shall consult with and advise the BCRUA Board of
Directors and its General Manager or other designated representative in the manner provided in
Sections 5.3 and 5.4 of the Master Contract.
Section 2.5 Commencement Date. The Commencement Date shall be the date upon which
construction of the BCRUA Project is substantially complete and water is delivered, or capable
of being delivered, to a Delivery Point on a continuous (non -test) basis.
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Section 2.6 Minimum Operating Flow Requirements. The Parties acknowledge and agree
that a minimum amount of flow is required to operate the BCRUA Project and that such amount
is approximately five (5) million gallons per day ("Minimum Daily Flow"). The amount of the
Minimum Daily Flow shall be determined by the Operations Committee using generally
accepted engineering practices for the water treatment and distribution industry. The allocation
of the Minimum Daily Flow shall be allocated among the Cities as set forth below:
a. From Commencement Date to December 31, 2013. From the Commencement
Date until December 31, 2013, Cedar Park and Leander shall be obligated to take the Minimum
Daily Flow. Cedar Park shall be obligated to take 53.34% of the Minimum Daily Flow and
Leander shall be obligated to take 46.66% of the Minimum Daily Flow. In the event that either
Cedar Park or Leander elects to take more than its required allocation of flow, the other City may
reduce its obligation accordingly. Prior to January I, 2014, Round Rock shall have no obligation
with respect to the Minimum Daily Flow.
b. From January 1, 2014 and thereafter. Beginning January 1, 2014, Cedar Park
shall be obligated to take 26.67% of the Minimum Daily Flow and Leander shall be obligated to
take 46.66% of the Minimum Daily Flow, and Round Rock shall have the option of either taking
remaining 26.67% of the Minimum Daily Flow, or paying the Fee in Lieu of Minimum Daily
Flow as described below in this section. After January 1, 2014, if Round Rock elects to not take
water from the BCRUA Project, and the other two Cities combined are not voluntarily taking the
total Minimum Daily Flow, then Cedar Park and/or Leander will be required to take additional
water in the same proportions as set forth in 2.6(a) above so that their combined take is at least
the total Minimum Daily Flow. In such event, Round Rock shall then be obligated to pay a Fee
in Lieu of Minimum Take to Cedar Park and/or Leander to compensate them for the additional
costs that they may incur in taking more water from the BCRUA Project than they need. Such
fee paid to Cedar Park and/or Leander shall be calculated by determining the difference in the
unit cost of treating water at their respective water treatment plants and the BCRUA Project, and
applying such difference to the amount of water that each such City must take due to Round
Rock's election to not take water from the BCRUA Project. However, in the event that Cedar
Park and/or Leander voluntarily elect to take more than its required proportion of the Minimum
Daily Flow, so that the Minimum Daily Flow is exceeded, then Round Rock will not be
obligated to pay a Fee in Lieu of Minimum Take on such amounts. The Fee In Lieu of Minimum
Take for each City shall be calculated using the example in Exhibit "C".
The BCRUA shall charge Round Rock the Fee In Lieu of Minimum Take to be paid to each City
as part of Round Rock's Annual Payment and shall apply a credit to Cedar Park and Leander's
Annual Payment as a part of the Annual Budget process.
ARTICLE III
OPERATOR SERVICES; DELIVERY OF WATER
Section 3.1 Operator Services. No later than one hundred eighty (180) days prior to the
Commencement Date, the Parties shall determine who will be responsible for operating the
BCRUA Project. The Operator, to be approved by the Parties and hired by BCRUA, shall be
responsible for operating the BCRUA Project in accordance with the terms and provisions of this
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Agreement and to perform, at a minimum, the services listed in Exhibit "A" attached hereto,
including the provision of properly licensed operators to operate the BCRUA Project.
Section 3.2 Operator Compensation, Billing, and Method of Payment. BCRUA's contract
with the Operator shall provide terms for compensation, billing and method of payment that are
consistent with this Agreement. Any contract with the Operator shall be approved by the Parties.
Section 3.3 Water Quality. BCRUA shall ensure that the BCRUA Project shall be operated in
a manner so that water delivered to the Delivery Point(s) shall at all times meet the requirements
of the Environmental Protection Agency, the Texas Commission on Environmental Quality and
other applicable regulatory agencies for potable water for human consumption and other
domestic uses, including, specifically, all applicable regulations promulgated pursuant to the
Safe Drinking Water Act, 42 U.S.C. § 300f et. seq. and the drinking water standards provided in
Title 30, Texas Administrative Code, Chapter 290, as may be amended from time to time.
Section 3.4 Water Quantity. BCRUA shall ensure that the BCRUA Project shall be operated
in a manner so that water delivered to the Delivery Point(s) shall be of a quantity and pressure
consistent with each City's capacity allocations as set forth in Exhibit "D" to the Master
Contract.
Section 3.5 Title to Raw Water, Metering and Reporting of Raw Water Use. Under the
Master Contract, the Cities have assigned to BCRUA the authority to take raw water from Lake
Travis pursuant to the Cities' Raw Water Contracts and to exercise servicing authority over, and
in all respects, to use the raw water for the sole purpose of treating said water in order to deliver
potable water to the Cities pursuant to the Master Contract and this Agreement. BCRUA shall
report to each City on a monthly basis the amount of raw water used by such City for the
purposes of the City's payments in accordance with its Raw Water Contracts. The method of
determining the amount of raw water used by each City shall be as follows: The BCRUA shall
first determine each City's pro rata percentage share of the total amount of treated water
delivered to all three Cities through their respective Delivery Points. Then the BCRUA shall
apply the said pro rata percentage shares to the total amount of raw water diverted from Lake
Travis. By way of example, if one City's percentage share of the total amount of water delivered
to all three Cities is twenty-five percent (25%), then that City would be charged with twenty-five
percent (25%) of the total amount of raw water diverted from Lake Travis.
Section 3.6 Regulatory Matters. BCRUA shall be responsible for meeting all federal and
state regulatory requirements associated with operation and management of the BCRUA Project,
including but not limited to, requirements found in Title 30, Texas Administrative Code, Chapter
290, Public Drinking Water, as may be amended from time to time, unless the Parties agree that
a particular requirement is better met by each City with respect to its City System. Specifically,
BCRUA shall be responsible for all recordkeeping, reporting, and water quality sampling
requirements associated with the treatment and delivery of potable water by the BCRUA Project.
BCRUA shall also promptly provide information to each City so that each City may meet
applicable public notification requirements with respect to its City System. If applicable,
BCRUA shall be responsible for drafting and maintaining a Risk Management Plan pursuant to
Section 112(r)(7) of the Clean Air Act for the BCRUA Project.
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ARTICLE IV
SYSTEM BUDGET; PAYMENT; BILLING
Section 4.1 BCRUA Budget. No later than ninety (90) days prior to the Commencement Date
and, thereafter, not less than ninety (90) days prior to the beginning of each Fiscal Year, BCRUA
shall furnish to the Cities and the Operations Committee a detailed budget of the Annual
Payments to be paid by each City including the Operations and Maintenances Expenses,
Overhead Expenses and Bond Payment to be incurred in the next Fiscal Year. Operations and
Maintenance Expenses shall be determined for each City based on this Agreement and the
Master Contract. After the Commencement Date and prior to the end of the initial Fiscal Year,
each City shall pay on or before the first day of each month, its pro -rata share of the Operations
and Maintenance Expense, based on the remaining months in the initial Fiscal Year. In the case
of each annual Operation and Maintenance Expense budget made after the availability of the
Annual Operations and Maintenance Report covering a Fiscal Year, the amount estimated for the
following Fiscal Year shall be adjusted upward or downward, as appropriate, to account for the
difference between actual Operation and Maintenance Expense as reflected by the Annual
Operations and Maintenance Report and that estimated for the previously reported period. The
monthly Operations and Maintenance expense for each City shall be calculated using flow
projections provided by each City for the period for which the estimate is being made. No later
than one hundred fifty (150) days prior to each Fiscal Year, each City shall submit to the
Operations Committee estimates of flows each City projects to take from the BCRUA Project for
the upcoming fiscal year. The Operations Committee shall meet to review and approve such
flow projections and provide its recommendations to the BCRUA no later than one hundred
twenty (120) days prior to each Fiscal Year. Such estimated flows shall be used to calculate the
BCRUA budget and Annual Payments.
Section 4.2 Annual Payments. BCRUA shall bill for and the Cities shall make payment on
the Annual Payments to fund the BCRUA Project as provided in the Master Contract. Such
Annual Payments shall include payments by each City for its respective share of the Operations
and Maintenance Expenses and Overhead Expenses as calculated pursuant to this Agreement and
the Master Contract. Annual Payments shall be made by each City, whether it takes water or not,
as required by Article IX. of the Master Contract.
Section 4.3 Operations and Maintenance Expenses. The Operations and Maintenance
Expenses shall consist of the following four (4) categories of expenses: Non -Operating
Expenses, Fixed Operating Expenses for Cities not receiving water from the BCRUA Project,
Fixed Operating Expenses for Cities receiving water from the BCRUA Project, and Variable
Operating Expenses for Cities receiving water from the BCRUA Project.
a) Non -Operating Expenses are those expenses, or portion thereof, which have a
percentage allocation shown in column 1 of Exhibit B. Non -Operating Expenses
shall be allocated to and included in each City's Annual Payment based on such
City's reserved capacity in the BCRUA Project. Each City will be responsible for
its share of Non -Operating Expenses whether it takes delivery of treated water or
not.
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b) Fixed Operating Expenses for Cities not receiving water from the BCRUA Project
are those expenses, or portion thereof, which have a percentage allocation shown
in column 2a of Exhibit B. Fixed Operating Expenses for Cities not receiving
water from the BCRUA Project shall be allocated to and included in each City's
Annual Payment based on such City's reserved capacity in the BCRUA Project.
Each City shall be responsible for its share of Fixed Operating Expenses for Cities
not receiving water from the BCRUA Project whether it takes delivery of treated
water or not.
c) Fixed Operating Expenses for Cities receiving water from the BCRUA Project are
those expenses, or portion thereof, which have a percentage allocation shown in
column 2b of Exhibit B. Fixed Operating Expenses for Cities receiving water
from the BCRUA Project shall be allocated to and included in each City's Annual
Payment, based on the amount of treated water that is delivered to such City
subject to the provisions of Section 2.6. A City shall be responsible for this
category of expense only if that City takes delivery of treated water.
d) Variable Operating Expenses are those expenses which have a percentage
allocation shown in column 3 of Exhibit B. Variable Operating Expenses shall be
allocated to and included in each City's Annual Payment, based on the amount of
treated water that is delivered to such City as a percentage of the total amount of
treated water delivered to all Cities. A City shall be responsible for Variable
Operating Expenses only if that City takes delivery of treated water.
Operations and Maintenance Expenses shall be allocated among the Cities in accordance
with Exhibit B. As shown on Exhibit B, some expenses are included in more than one
category. In those cases, the expenses shall be allocated between the two categories in
accordance with the percentages shown in Exhibit B. Notwithstanding anything herein to
the contrary, expenses for the General Manager shall be allocated among the Cities in
accordance with their respective capacity reservations in the ultimate system, which are
currently 47.26% to Leander, 38.56% to Round Rock and 14.18% to Cedar Park.
Section 4.4 Reserve Account. No later than thirty (30) days prior to the Commencement
Date, the BCRUA shall establish and maintain thereafter a reserve operating account, to be
funded by the Cities, in which it shall maintain, at a minimum, funds equivalent to three months'
worth of estimated Operations and Maintenance Expenses for the BCRUA Project. Each City's
share of the initial funding of such reserve account shall be based on the calculations for
Operations and Maintenance Expenses as provided in Section 4.3 above and on the initial
BCRUA Budget approved by the BCRUA Board of Directors. Billing for and payment of each
City's share of the reserve account funding pursuant to this Section shall be in accordance with
the procedures established for billing and payment of Annual Payments as established in the
Master Contract. All funds maintained in the reserve account described herein, including any
earned interest, shall be dedicated to and inure to the benefit of the BCRUA Project.
7
Section 4.5 Financial Records: Annual Audit. BCRUA shall maintain and update its financial
records on a monthly basis and submit profit and loss statements, financial statements, fund
balance reports, and any other similar report requested by BCRUA's Board of Directors, to the
BCRUA Board of Directors and the Cities on a monthly basis. BCRUA shall conduct an audit
each Fiscal Year consistent with accounting principles applicable to municipal water utilities and
shall circulate a final audit report to each City upon completion.
ARTICLE V
RISK MANAGEMENT
Section 5.1 INDEMNIFICATION. TO THE EXTENT ALLOWED BY LAW, EACH CITY
AGREES TO INDEMNIFY AND HOLD HARMLESS THE BCRUA AND/OR THE OTHER
CITIES, THEIR OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
CONTRACTORS OR CONSULTANTS FROM ALL CLAIMS, CAUSES OF ACTION,
DAMAGES, COSTS, CHARGES, EXPENSES, LIABILITY OR OBLIGATION FOR ANY
ACT OR OMISSION BY THE CITY, ITS OFFICERS, EMPLOYEES, REPRESENTATIVES,
AGENTS, CONTRACTORS OR CONSULTANTS WITH RESPECT TO OR ARISING OUT
OF OPERATIONS OF THE CITY'S SYSTEM.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Term. This Agreement shall be effective from the Effective Date, and shall
continue in force and effect during the entire useful life of the BCRUA Project. This Agreement
shall automatically terminate and be of no further force or effect if the Commencement Date has
not occurred by July 1, 2012.
Section 6.2 Amendment and Modification. This Agreement shall not be amended except in
writing by all Parties hereto. No change, amendment, or modification of this Agreement shall be
made or be effective which will affect adversely the prompt payment when due of all money
required to be paid by each City under the terms of this Agreement or the Master Contract.
Section 6.3 Addresses and Notice. Unless otherwise provided herein, any notice,
communication, request, reply, or advice (herein severally and collectively, for convenience,
called "Notice") herein provided or permitted to be given, made, or accepted by any Party to the
other Parties must be in writing and may be given or be served by depositing the same in the
United States mail postpaid and registered or certified and addressed to the Party to be notified,
with return receipt requested, or by delivering the same to an officer of such Party, or by prepaid
telegram when appropriate, addressed to the Party to be notified. Notice deposited in the mail in
the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise
stated herein, from and after the expiration of three days after it is so deposited. Notice given in
any other manner shall be effective only if and when received by the Party to be notified. For the
purposes of notice, the addresses of the Parties shall, until changed as hereinafter provided, be as
follows:
If to the BCRUA:
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President, Board of Directors
Brushy Creek Regional Utility Authority, Inc.
600 North. Bell Blvd.
Cedar Park, Texas 78613
If to Cedar Park:
City Manager
600 North Bell Blvd.
Cedar Park, Texas 78613
If to Leander:
City Manager
P.O. Box 319
Leander, Texas 78646-0319
If to Round Rock:
City Manager
221 E. Main St.
Round Rock, Texas 78664
The BCRUA and the Cities hereto shall have the right from time to time and at any time to
change their respective addresses and each shall have the right to specify as its address any other
address by at least fifteen (15) days' written notice to the other Parties.
Section 6.4 Severability. The Parties hereto specifically agree that in case any one or more of
the sections, subsections, provisions, clauses, or words of this Agreement or the application of
such sections, subsections, provisions, clauses, or words to any situation or circumstance should
be, or should be held to be, for any reason, invalid or unconstitutional, under the laws or
constitutions of the State or the United States of America, or in contravention of any such laws or
constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other
sections, subsections, provisions, clauses, or words of this Agreement or the application of such
actions, subsections, provisions, clauses, or words to any other situation or circumstance, and it
is intended that this Agreement shall be severable and shall be construed and applied as if any
such invalid or unconstitutional section, subsection, provision, clause, or word had not been
included herein, and the rights and obligations of the Parties hereto shall be construed and remain
in force accordingly.
Section 6.5 Remedies on Default. It is not intended hereby to specify (and this Agreement
shall not be considered as specifying) an exclusive remedy for any default, but all such other
remedies (other than termination) existing at law or in equity may be availed of by any Party
hereto and shall be cumulative. Recognizing that failure in the performance of the Cities'
obligations hereunder could not be adequately compensated in money damages alone, each City
agrees in the event of any default on its part that the BCRUA and the others shall have available
9
to them the remedies of mandamus and specific performance in addition to any other legal or
equitable remedies (other than termination) which may also be available to them.
Notwithstanding anything to the contrary contained in this Agreement, any right or remedy or
any default hereunder, except the right of the BCRUA to receive the Annual Payments and the
provision of Section 4.9 of the Master Contract, which shall never be determined 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 plus 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 the
performance by any other Party of any duty or obligation hereunder shall be deemed a waiver
thereof in the future, nor shall any such waiver or waivers be deemed or construed to be a waiver
of subsequent breaches or defaults of any kind, character or description, under any
circumstances.
Section 6.6 Venue. All amounts due under this Agreement, including, but not limited to,
payments due under this Agreement or damages for the breach of this Agreement, shall be paid
and be due in Williamson County, Texas, which is "the County in which the principal
administrative offices of the BCRUA are located. It is specifically agreed among the Parties to
this Agreement that Williamson County, Texas, is the place of performance of this Agreement;
and in the event that any legal proceeding is brought to enforce this Agreement or any provision
hereof, the same shall be brought in Williamson County, Texas.
Section 6.7 Succession and Assignment. This Agreement is binding on and inures to the
benefit of the Parties hereto and their respective successors, representatives, and assigns. This
Agreement may not be assigned by any Party hereto without prior written notice to and approval
by the other Parties, which consent may be withheld without cause.
Section 6.8 Incorporation of Preamble Recitals. The recitals contained in the preamble hereof
are hereby found to be true, and such recitals are hereby made a part of this Agreement for all
purposes and are adopted as a part of the judgment and findings of the BCRUA and the Cities.
Section 6.9 Entire Agreement. This Agreement constitutes the entire agreement among the
Parties with respect to the matters described herein.
Section 6.10 Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original and all of which together shall constitute but one and the same instrument.
(Signatures on Following Pages)
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BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
By:
Mitch Fuller, President
Attest:
By:
, Secretary
11
Attest:
By:
LeAnn Quinn, City Secretary
12
CITY OF CEDAR PARK, TEXAS
By:
Bob Lemon, Mayor
Attest:
By:
Debbie Haile, City Secretary
CITY OF LEANDER, TEXAS
13
By:
Jolm Cowman, Mayor
Attest:
By:
Sara White, City Secretary
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CITY OF ROUND ROCK, TEXAS
By:
Alan McGraw, Mayor
BRUSHY CREEK REGIONAL UTILITY AUTHORITY
SYSTEM OPERATING AGREEMENT
(BCRUA PROJECT, FIRST PHASE)
EXHIBIT
nAn
THIS BRUSHY CREEK REGIONAL UTILITY AUTHORITY SYSTEM OPERATING
AGREEMENT (the "Agreement") is dated and entered into as of the day of
2009 (the "Effective Date") by and among the Brushy Creek Regional Utility Authority, Inc.
("BCRUA"), a non-profit corporation of the State of Texas (the "State"), created and existing
under the laws of the State, including Subchapter D of Chapter 431 as amended, Texas
Transportation Code, and the City of Cedar Park, Texas ("Cedar Park"), the City of Leander,
Texas ("Leander"), and the City of Round Rock, Texas ("Round Rock") all home -rule
municipalities and political subdivisions of the State (individually, the "City"; collectively, the
"Cities"). The BCRUA and the Cities are collectively referred to herein as the "Parties," and as
the "Party" individually.
RECITALS
WHEREAS, Subchapter D of Chapter 431 of the Texas Transportation Code, as amended
(the "Act") authorizes municipalities to create one or more local government corporations to
accomplish any governmental purpose of the Cities including the planning, financing,
construction, ownership, operation, and/or maintenance of facilities necessary for the
conservation, storage, transportation, treatment, and/or distribution of treated water, including a
plant site, right-of-way, and property, equipment, and/or right of any kind useful in connection
with the conservation, storage, transportation, treatment, and/or distribution of treated water that
will ultimately provide an additional 105.8 million gallons per day of potable water supply to
meet future water demands of the Cities based on current population projections and estimates
(said facilities herein referred to as the "BCRUA System");
WHEREAS, the City Councils of Cedar Park, Leander, and Round Rock, respectively
(collectively, the "Governing Bodies"), have authorized and approved the creation of the
BCRUA as their constituted authority and instrumentality, pursuant to Subchapter D of Chapter
431 of the Texas Transportation Code to accomplish the specific public purpose of planning,
financing, constructing, acquiring, owning, operating or maintaining the BCRUA System,
pursuant to the provisions of the Act and other applicable law, including Section 791.026 Texas
Government Code, as amended;
WHEREAS, the Cities and the BCRUA have determined that the first phase of the
ultimate 105.8 million gallons per day BCRUA System, (the `BCRUA Project", as hereinafter
defined,) is substantially the same as the "Phase 1" referenced in the Preliminary Engineering
Report, as hereinafter defined, with the major exception being that the initial phase of the water
treatment plant has been reduced from 30 million gallons per day to 17 million gallons per day;
WHEREAS, in furtherance of its purposes, the BCRUA will issue one or more series of
bonds to finance the costs of the BCRUA Project, and the BCRUA has obtained a loan
commitment for such purposes from the Texas Water Development Board ("TWDB");
Operating Agreement- clean final- 5-13-09 (00160715).DOC
WHEREAS, the Cities and the BCRUA have entered into that certain "Master Contract
for the Financing, Construction, and Operation of the BCRUA Regional Water Treatment and
Distribution Project" dated September 2, 2008 to set forth the terms and conditions under which
the Cities, by and through the BCRUA, will finance, construct, acquire, own, maintain and
operate the BCRUA Project and to set forth in general terms the manner in which the Cities will
share the costs of constructing, operating, and maintaining the BCRUA Project ("Master
Contract.") The term "Master Contract" as used herein includes any amendments thereto.
WHEREAS, the Cities and the BCRUA, exercising their respective mutual authorities,
wish to enter into this Agreement to set forth in specific terms the manner in which the BCRUA
Project shall be managed and operated and the manner in which the Cities will share in the costs
of operating and maintaining the BCRUA Project.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the sufficiency of which are hereby conclusively acknowledged, and subject to the
terms and conditions hereinafter set forth, the Cities and the BCRUA mutually undertake,
promise, and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions from Master Contract. For the purposes of this Agreement, and in
addition to the terms defined above, the following terms shall have the meanings assigned to
them in accordance with the Master Contract: Annual Payment, BCRUA, BCRUA Project,
Delivery Point(s); City System; Fiscal Year; Operations and Maintenance Expenses; Overhead
Expenses; and Preliminary Engineering Report.
Section 1.2 Additional Definitions. For the purposes of this Agreement, and addition to the
terms defined above, the following terms shall have the meanings stated as follows:
a. Annual Operations and Maintenance Report: the report prepared by BCRUA to
be submitted to the Operations Committee within ninety (90) days of the end of
each Fiscal Year. The Annual Operation and Maintenance Report shall be
prepared from prior Fiscal Year data and shall include, at a minimum, all income
and payments received by BCRUA from the Cities, all actual and budgeted
expenses for operations and maintenance, the quantity of all waters delivered to
each of the Cities, and any other information requested by the Operations
Committee.
b. BCRUA Annual Budget: The budget prepared by BCRUA each Fiscal Year and
as described in the BCRUA Bylaws including all annual revenue and expenses of
the BCRUA such as the Annual Payments and BCRUA Project Costs as defined
in the Master Contract.
Operating Agreement- clean final- 5-13-09 (00160715).DOC
c. Cities' Raw Water Contracts: These contracts and agreements held by the Cities
providing for the withdrawal of raw water from Lake Travis for municipal use as
contained in Exhibits "A", "B", and "C" of the Master Contract.
d. Commencement Date: The date upon which construction of the BCRUA Project
is substantially complete and water is delivered, or capable of being delivered, to
a Delivery Point on a continuous (non -test) basis.
e. Fee In Lieu of Minimum Take: The fee described in Section 2.6 herein.
f. Minimum Daily Flow: Approximately five (5) million gallons per day, the exact
amount to be determined according to Section 2.6 herein.
g.
Operator: The entity serving as operator of the BCRUA Project as discussed in
Section 3.1 herein.
Section 1.3 Interpretation. The caption headings of this Agreement are for reference purposes
only and shall not affect its interpretation in any respect. Unless the context otherwise requires,
words of the masculine gender shall be construed to include correlative words of the feminine
and neuter genders and vice versa. Defined terms include the plural and singular versions of the
words. This Agreement and all the terms and provisions shall be liberally construed to effectuate
the purpose set forth herein and to sustain the validity of this Agreement.
ARTICLE II
SYSTEM CONSTRUCTION, MANAGEMENT, & OPERATION
Section 2.1 System Ownership. The BCRUA Project shall be owned by the BCRUA. Each
City, respectively, shall have the exclusive right to its reserved capacity in each BCRUA Project
component as provided in Section 6.1 of the Master Contract. Each City shall have the right of
entry to any component of the BCRUA Project at any time, provided, however, that physical
changes or adjustments to the BCRUA Project may only be made upon authorization of the
BCRUA.
Section 2.2 System Design and Construction. The BCRUA shall provide for the design and
construction of the BCRUA Project as provided in the Master Contract.
Section 2.3 System Operation and Management. The BCRUA shall operate and maintain the
BCRUA Project in accordance with the terms of the Master Contract and this Agreement.
Section 2.4 Operations Committee. The Operations Committee shall represent the individual
and collective interests of the Cities and shall consult with and advise the BCRUA Board of
Directors and its General Manager or other designated representative in the manner provided in
Sections 5.3 and 5.4 of the Master Contract.
Section 2.5 Commencement Date. The Commencement Date shall be the date upon which
construction of the BCRUA Project is substantially complete and water is delivered, or capable
of being delivered, to a Delivery Point on a continuous (non -test) basis.
3
Section 2.6 Minimum Operating Flow Requirements. The Parties acknowledge and agree
that a minimum amount of flow is required to operate the BCRUA Project and that such amount
is approximately five (5) million gallons per day ("Minimum Daily Flow"). The amount of the
Minimum Daily Flow shall be determined by the Operations Committee using generally
accepted engineering practices for the water treatment and distribution industry. The allocation
of the Minimum Daily Flow shall be allocated among the Cities as set forth below:
a. From Commencement Date to December 31, 2013. From the Commencement
Date until December 31, 2013, Cedar Park and Leander shall be obligated to take the Minimum
Daily Flow. Cedar Park shall be obligated to take 53.34% of the Minimum Daily Flow and
Leander shall be obligated to take 46.66% of the Minimum Daily Flow. In the event that either
Cedar Park or Leander elects to take more than its required allocation of flow, the other City may
reduce its obligation accordingly. Prior to January 1, 2014, Round Rock shall have no obligation
with respect to the Minimum Daily Flow.
b. From January 1, 2014 and thereafter. Beginning January 1, 2014, Cedar Park
shall be obligated to take 26.67% of the Minimum Daily Flow and Leander shall be obligated to
take 46.66% of the Minimum Daily Flow, and Round Rock shall have the option of either taking
remaining 26.67% of the Minimum Daily Flow, or paying the Fee in Lieu of Minimum Daily
Flow as described below in this section. After January 1, 2014, if Round Rock elects to not take
water from the BCRUA Project, and the other two Cities combined are not voluntarily taking the
total Minimum Daily Flow, then Cedar Park and Leander will be required to take additional
water in equal proportions so that their combined take is at least the total Minimum Daily Flow.
In such event, Round Rock shall then be obligated to pay a Fee in Lieu of Minimum Take to
Cedar Park and/or Leander to compensate them for the additional costs that they may incur in
taking more water from the BCRUA Project than they need. Such fee paid to Cedar Park and/or
Leander shall be calculated by determining the difference in the unit cost of treating water at
their respective water treatment plants and the BCRUA Project, and applying such difference to
the amount of water that each such City must take due to Round Rock's election to not take
water from the BCRUA Project. However, in the event that Cedar Park and/or Leander
voluntarily elect to take more than its required proportion of the Minimum Daily Flow, so that
the Minimum Daily Flow is exceeded, then Round Rock will not be obligated to pay a Fee in
Lieu of Minimum Take on such amounts. The Fee In Lieu of Minimum Take for each City shall
be calculated using the example in Exhibit "C".
The BCRUA shall charge Round Rock the Fee In Lieu of Minimum Take to be paid to each City
as part of Round Rock's Annual Payment and shall apply a credit to Cedar Park and Leander's
Annual Payment as a part of the Annual Budget process.
ARTICLE III
OPERATOR SERVICES; DELIVERY OF WATER
Section 3.1 Operator Services. No later than one hundred eighty (180) days prior to the
Commencement Date, the Parties shall determine who will be responsible for operating the
BCRUA Project. The Operator, to be approved by the Parties and hired by BCRUA, shall be
responsible for operating the BCRUA Project in accordance with the terms and provisions of this
4
Agreement and to perform, at a minimum, the services listed in Exhibit "A" attached hereto,
including the provision of properly licensed operators to operate the BCRUA Project.
Section 3.2 Operator Compensation, Billing, and Method of Payment. BCRUA's contract
with the Operator shall provide terms for compensation, billing and method of payment that are
consistent with this Agreement. Any contract with the Operator shall be approved by the Parties.
Section 3.3 Water Quality. BCRUA shall ensure that the BCRUA Project shall be operated in
a manner so that water delivered to the Delivery Point(s) shall at all times meet the requirements
of the Environmental Protection Agency, the Texas Commission on Environmental Quality and
other applicable regulatory agencies for potable water for human consumption and other
domestic uses, including, specifically, all applicable regulations promulgated pursuant to the
Safe Drinking Water Act, 42 U.S.C. § 300f et. seq. and the drinking water standards provided in
Title 30, Texas Administrative Code, Chapter 290, as may be amended from time to time.
Section 3.4 Water Quantity. BCRUA shall ensure that the BCRUA Project shall be operated
in a manner so that water delivered to the Delivery Point(s) shall be of a quantity and pressure
consistent with each City's capacity allocations as set forth in Exhibit "D" to the Master
Contract.
Section 3.5 Title to Raw Water, Metering and Reporting of Raw Water Use. Under the
Master Contract, the Cities have assigned to BCRUA the authority to take raw water from Lake
Travis pursuant to the Cities' Raw Water Contracts and to exercise servicing authority over, and
in all respects, to use the raw water for the sole purpose of treating said water in order to deliver
potable water to the Cities pursuant to the Master Contract and this Agreement. BCRUA shall
report to each City on a monthly basis the amount of raw water used by such City for the
purposes of the City's payments in accordance with its Raw Water Contracts. The method of
determining the amount of raw water used by each City shall be as follows: The BCRUA shall
first determine each City's pro rata percentage share of the total amount of treated water
delivered to all three Cities through their respective Delivery Points. Then the BCRUA shall
apply the said pro rata percentage shares to the total amount of raw water diverted from Lake
Travis. By way of example, if one City's percentage share of the total amount of water delivered
to all three Cities is twenty-five percent (25%), then that City would be charged with twenty-five
percent (25%) of the total amount of raw water diverted from Lake Travis.
Section 3.6 Regulatory Matters. BCRUA shall be responsible for meeting all federal and
state regulatory requirements associated with operation and management of the BCRUA Project,
including but not limited to, requirements found in Title 30, Texas Administrative Code, Chapter
290, Public Drinking Water, as may be amended from time to time, unless the Parties agree that
a particular requirement is better met by each City with respect to its City System. Specifically,
BCRUA shall be responsible for all recordkeeping, reporting, and water quality sampling
requirements associated with the treatment and delivery of potable water by the BCRUA Project.
BCRUA shall also promptly provide information to each City so that each City may meet
applicable public notification requirements with respect to its City System. If applicable,
BCRUA shall be responsible for drafting and maintaining a Risk Management Plan pursuant to
Section 112(r)(7) of the Clean Air Act for the BCRUA Project.
5
ARTICLE IV
SYSTEM BUDGET; PAYMENT; BILLING
Section 4.1 BCRUA Budget. No later than ninety (90) days prior to the Commencement Date
and, thereafter, not less than ninety (90) days prior to the beginning of each Fiscal Year, BCRUA
shall furnish to the Cities and the Operations Committee a detailed budget of the Annual
Payments to be paid by each City including the Operations and Maintenances Expenses,
Overhead Expenses and Bond Payment to be incurred in the next Fiscal Year. Operations and
Maintenance Expenses shall be determined for each City based on this Agreement and the
Master Contract. After the Commencement Date and prior to the end of the initial Fiscal Year,
each City shall pay on or before the first day of each month, its pro -rata share of the Operations
and Maintenance Expense, based on the remaining months in the initial Fiscal Year. In the case
of each annual Operation and Maintenance Expense budget made after the availability of the
Annual Operations and Maintenance Report covering a Fiscal Year, the amount estimated for the
following Fiscal Year shall be adjusted upward or downward, as appropriate, to account for the
difference between actual Operation and Maintenance Expense as reflected by the Annual
Operations and Maintenance Report and that estimated for the previously reported period. The
monthly Operations and Maintenance expense for each City shall be calculated using flow
projections provided by each City for the period for which the estimate is being made. No later
than one hundred fifty (150) days prior to each Fiscal Year, each City shall submit to the
Operations Committee estimates of flows each City projects to take from the BCRUA Project for
the upcoming fiscal year. The Operations Committee shall meet to review and approve such
flow projections and provide its recommendations to the BCRUA no later than one hundred
twenty (120) days prior to each Fiscal Year. Such estimated flows shall be used to calculate the
BCRUA budget and Annual Payments.
Section 4.2 Annual Payments. BCRUA shall bill for and the Cities shall make payment on
the Annual Payments to fund the BCRUA Project as provided in the Master Contract. Such
Annual Payments shall include payments by each City for its respective share of the Operations
and Maintenance Expenses and Overhead Expenses as calculated pursuant to this Agreement and
the Master Contract. Annual Payments shall be made by each City, whether it takes water or not,
as required by Article IX. of the Master Contract.
Section 4.3 Operations and Maintenance Expenses. The Operations and Maintenance
Expenses shall consist of the following four (4) categories of expenses: Non -Operating
Expenses, Fixed Operating Expenses for Cities not receiving water from the BCRUA Project,
Fixed Operating Expenses for Cities receiving water from the BCRUA Project, and Variable
Operating Expenses for Cities receiving water from the BCRUA Project.
a) Non -Operating Expenses are those expenses, or portion thereof, which have a
percentage allocation shown in column 1 of Exhibit B. Non -Operating Expenses
shall be allocated to and included in each City's Annual Payment based on such
City's reserved capacity in the BCRUA Project. Each City will be responsible for
its share of Non -Operating Expenses whether it takes delivery of treated water or
not.
6
b) Fixed Operating Expenses for Cities not receiving water from the BCRUA Project
are those expenses, or portion thereof, which have a percentage allocation shown
in column 2a of Exhibit B. Fixed Operating Expenses for Cities not receiving
water from the BCRUA Project shall be allocated to and included in each City's
Annual Payment based on such City's reserved capacity in the BCRUA Project.
Each City shall be responsible for its share of Fixed Operating Expenses for Cities
not receiving water from the BCRUA Project whether it takes delivery of treated
water or not.
c) Fixed Operating Expenses for Cities receiving water from the BCRUA Project are
those expenses, or portion thereof, which have a percentage allocation shown in
column 2b of Exhibit B. Fixed Operating Expenses for Cities receiving water
from the BCRUA Project shall be allocated to and included in each City's Annual
Payment, based on the amount of treated water that is delivered to such City
subject to the provisions of Section 2.6. A City shall be responsible for this
category of expense only if that City takes delivery of treated water.
d) Variable Operating Expenses are those expenses which have a percentage
allocation shown in column 3 of Exhibit B. Variable Operating Expenses shall be
allocated to and included in each City's Annual Payment, based on the amount of
treated water that is delivered to such City as a percentage of the total amount of
treated water delivered to all Cities. A City shall be responsible for Variable
Operating Expenses only if that City takes delivery of treated water.
Operations and Maintenance Expenses shall be allocated among the Cities in accordance
with Exhibit B. As shown on Exhibit B, some expenses are included in more than one
category. In those cases, the expenses shall be allocated between the two categories in
accordance with the percentages shown in Exhibit B. Notwithstanding anything herein to
the contrary, expenses for the General Manager shall be allocated among the Cities in
accordance with their respective capacity reservations in the ultimate system, which are
currently 47.26% to Leander, 38.56% to Round Rock and 14.18% to Cedar Park.
Section 4.4 Reserve Account. No later than thirty (30) days prior to the Commencement
Date, the BCRUA shall establish and maintain thereafter a reserve operating account, to be
funded by the Cities, in which it shall maintain, at a minimum, funds equivalent to three months'
worth of estimated Operations and Maintenance Expenses for the BCRUA Project. Each City's
share of the initial funding of such reserve account shall be based on the calculations for
Operations and Maintenance Expenses as provided in Section 4.3 above and on the initial
BCRUA Budget approved by the BCRUA Board of Directors. Billing for and payment of each
City's share of the reserve account funding pursuant to this Section shall be in accordance with
the procedures established for billing and payment of Annual Payments as established in the
Master Contract. All funds maintained in the reserve account described herein, including any
earned interest, shall be dedicated to and inure to the benefit of the BCRUA Project.
7
Section 4.5 Financial Records; Annual Audit. BCRUA shall maintain and update its financial
records on a monthly basis and submit profit and loss statements, financial statements, fund
balance reports, and any other similar report requested by BCRUA's Board of Directors, to the
BCRUA Board of Directors and the Cities on a monthly basis. BCRUA shall conduct an audit
each Fiscal Year consistent with accounting principles applicable to municipal water utilities and
shall circulate a final audit report to each City upon completion.
ARTICLE V
RISK MANAGEMENT
Section 5.1 INDEMNIFICATION. TO THE EXTENT ALLOWED BY LAW, EACH CITY
AGREES TO INDEMNIFY AND HOLD HARMLESS THE BCRUA AND/OR THE OTHER
CITIES, THEIR OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
CONTRACTORS OR CONSULTANTS FROM ALL CLAIMS, CAUSES OF ACTION,
DAMAGES, COSTS, CHARGES, EXPENSES, LIABILITY OR OBLIGATION FOR ANY
ACT OR OMISSION BY THE CITY, ITS OFFICERS, EMPLOYEES, REPRESENTATIVES,
AGENTS, CONTRACTORS OR CONSULTANTS WITH RESPECT TO OR ARISING OUT
OF OPERATIONS OF THE CITY'S SYSTEM.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Term. This Agreement shall be effective from the Effective Date, and shall
continue in force and effect during the entire useful life of the BCRUA Project. This Agreement
shall automatically terminate and be of no further force or effect if the Commencement Date has
not occurred by July 1, 2012.
Section 6.2 Amendment and Modification. This Agreement shall not be amended except in
writing by all Parties hereto. No change, amendment, or modification of this Agreement shall be
made or be effective which will affect adversely the prompt payment when due of all money
required to be paid by each City under the terms of this Agreement or the Master Contract.
Section 6.3 Addresses and Notice. Unless otherwise provided herein, any notice,
communication, request, reply, or advice (herein severally and collectively, for convenience,
called "Notice") herein provided or permitted to be given, made, or accepted by any Party to the
other Parties must be in writing and may be given or be served by depositing the same in the
United States mail postpaid and registered or certified and addressed to the Party to be notified,
with return receipt requested, or by delivering the same to an officer of such Party, or by prepaid
telegram when appropriate, addressed to the Party to be notified. Notice deposited in the mail in
the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise
stated herein, from and after the expiration of three days after it is so deposited. Notice given in
any other manner shall be effective only if and when received by the Party to be notified. For the
purposes of notice, the addresses of the Parties shall, until changed as hereinafter provided, be as
follows:
8
If to the BCRUA:
President, Board of Directors
Brushy Creek Regional Utility Authority, Inc.
600 North. Bell Blvd.
Cedar Park, Texas 78613
If to Cedar Park:
City Manager
600 North Bell Blvd.
Cedar Park, Texas 78613
If to Leander:
City Manager
P.O. Box 319
Leander, Texas 78646-0319
If to Round Rock:
City Manager
221 E. Main St.
Round Rock, Texas 78664
The BCRUA and the Cities hereto shall have the right from time to time and at any time to
change their respective addresses and each shall have the right to specify as its address any other
address by at least fifteen (15) days' written notice to the other Parties.
Section 6.4 Severability. The Parties hereto specifically agree that in case any one or more of
the sections, subsections, provisions, clauses, or words of this Agreement or the application of
such sections, subsections, provisions, clauses, or words to any situation or circumstance should
be, or should be held to be, for any reason, invalid or unconstitutional, under the laws or
constitutions of the State or the United States of America, or in contravention of any such laws or
constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other
sections, subsections, provisions, clauses, or words of this Agreement or the application of such
actions, subsections, provisions, clauses, or words to any other situation or circumstance, and it
is intended that this Agreement shall be severable and shall be construed and applied as if any
such invalid or unconstitutional section, subsection, provision, clause, or word had not been
included herein, and the rights and obligations of the Parties hereto shall be construed and remain
in force accordingly.
Section 6.5 Remedies on Default. It is not intended hereby to specify (and this Agreement
shall not be considered as specifying) an exclusive remedy for any default, but all such other
remedies (other than termination) existing at law or in equity may be availed of by any Party
hereto and shall be cumulative. Recognizing that failure in the performance of the Cities'
obligations hereunder could not be adequately compensated in money damages alone, each City
9
agrees in the event of any default on its part that the BCRUA and the others shall have available
to them the remedies of mandamus and specific performance in addition to any other legal or
equitable remedies (other than termination) which may also be available to them.
Notwithstanding anything to the contrary contained in this Agreement, any right or remedy or
any default hereunder, except the right of the BCRUA to receive the Annual Payments and the
provision of Section 4.9 of the Master Contract, which shall never be determined 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 plus 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 the
performance by any other Party of any duty or obligation hereunder shall be deemed a waiver
thereof in the future, nor shall any such waiver or waivers be deemed or construed to be a waiver
of subsequent breaches or defaults of any kind, character or description, under any
circumstances.
Section 6.6 Venue. All amounts due under this Agreement, including, but not limited to,
payments due under this Agreement or damages for the breach of this Agreement, shall be paid
and be due in Williamson County, Texas, which is the County in which the principal
administrative offices of the BCRUA are located. It is specifically agreed among the Parties to
this Agreement that Williamson County, Texas, is the place of performance of this Agreement;
and in the event that any legal proceeding is brought to enforce this Agreement or any provision
hereof, the same shall be brought in Williamson County, Texas.
Section 6.7 Succession and Assignment. This Agreement is binding on and inures to the
benefit of the Parties hereto and their respective successors, representatives, and assigns. This
Agreement may not be assigned by any Party hereto without prior written notice to and approval
by the other Parties, which consent may be withheld without cause.
Section 6.8 Incorporation of Preamble Recitals. The recitals contained in the preamble hereof
are hereby found to be true, and such recitals are hereby made a part of this Agreement for all
purposes and are adopted as a part of the judgment and findings of the BCRUA and the Cities.
Section 6.9 Entire Agreement. This Agreement constitutes the entire agreement among the
Parties with respect to the matters described herein.
Section 6.10 Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original and all of which together shall constitute but one and the same instrument.
(Signatures on Following Pages)
10
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
By:
Mitch Fuller, President
Attest:
By:
, Secretary
11
Attest:
CITY OF CEDAR PARK, TEXAS
By:
Bob Lemon, Mayor
By:
LeAnn Quinn, City Secretary
12
Attest:
CITY OF LEANDER, TEXAS
By:
By:
Debbie Haile, City Secretary
13
John Cowman, Mayor
Attest:
CITY OF ROUND ROCK, TEXAS
By:
Alan McGraw, Mayor
By:
Sara White, City Secretary
14
EXHIBIT A
OPERATOR SERVICES
Certified Personnel
Chemical Inventories
Emergency Repairs
Emergency Response
Grounds Keeping and Mowing
Inspections
Insurance
Materials
Meter Reading and Reporting
Non -Emergency Repairs
Operations and Compliance Reports
Personnel and Equipment
Recordkeeping
Routine Maintenance
Sampling and Testing
Sub -Contract Repairs
Telemetric Monitoring
24 -Hour Control Center
Water Quality; TCEQ and EPA Regulatory Compliance
15
EXHIBIT B
OPERATIONS A
-___ -____ .---
Item
Non-
Operating
Expenses
Column 1
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 2b
Variable
Operating
Expenses
Column 3
Insurance
100%
Power-Security/Lighting
100%
Capital Outlay
100%
Desks, Files, Kitchen Appliances, etc.
100%
Grounds/Building Maint. (landscaping, etc.)
100%
Irrigation Water at Plant
100%
TCEQ Administration Fee
100%
Safety Equipment
100%
Treated/Raw Lines Repair and Maintenance
100%
Audit Fees
100%
Legal Services
100%
Computers/Radios Maintenance
33%
67%
SCADA Maintenance
33%
0
67/0
Communication/Telephone Line (Land Line
only)
33%
67%
Intake Barge Maintenance
33%
67%
Accounting/Finance/ Personnel
33%
67%
Plant Superintendent
33%
67%
Administration Assistant (operations)
33%
67%
Small Tools and Equipment
33%
67%
Office/Building & General Supplies (Paper, etc.)
33%
67%
Plant Winterization
33%
67%
-
Plant Operators
100%
-
Maintenance Technician
100%
Treatment Materials and Supplies
100%
Vehicles Repairs and Maintenance
100%
Contract Services (Lab services, etc.)
100%
Fuel and Oil
100%
Janitorial Facility Maintenance
100%
Equipment Facility Maintenance (pumps, etc.)
100%
Schools and Training
100%
License and Membership Dues
100%
Uniforms
100%
16
Item
Non-
Operating
Expenses
Column 1
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 2b
Variable
Operating
Expenses
Column 3
Power -Pumping Raw/Treated/Lift Stations
100%
Chemicals
100%
Sludge Disposal
100%
Column 1 Non -Operating Expenses are allocated in accordance with the total percentages shown in
this column and in accordance with Section 4.3(a) of the Operating Agreement.
Column 2a Fixed Operating Expenses for Cities not receiving water are allocated in accordance with
the total percentages shown in this column and in accordance with Section 4.3(b) of the Operating
Agreement.
Column 2b Fixed Operating Expenses for Cities receiving water are allocated in accordance with the
total percentages shown in this column and in accordance with Section 4.3(c) of the Operating
Agreement.
Column 3 Variable Operating Expenses are allocated in accordance with the total percentages shown
in this column and in accordance with Section 4.3(d) of the Operating Agreement.
17
EXHIBIT C
EXAMPLE CALCULATION OF ADDITIONAL FEE IN LIEU OF MINIMUM TAKE
(For One City)
(1) Calculate the average unit operations and maintenance costs per 1,000 gallons of City's
separate water treatment plant:
City's prior year annual operating and maintenance expenses
of its separate water treatment plant = $1,925,000
City's prior year annual flow through its separate water treatment plant in 1,000
gallons = 4,705,000 x's 1,000 gals.
Unit Cost = $1,925,000/4,705,000 = $0.41/1,000 gals.
(2) Calculate the average unit operations and maintenance costs per 1,000 gallons of
BCRUA regional water treatment plant:
BCRUA's prior year annual operating and maintenance
expenses of the regional water treatment plant (excluding amount paid by Round
Rock per Exhibit B and excluding raw water costs) = $1,375,000
BCRUA's prior year annual flow through the regional water treatment plant in
1,000 gallons = 1,825,000 x's 1,000 gals. (5 mgd avg)
Unit Cost = $1,375,000/1,825,000 = $0.75/1,000 gals.
(3) Subtract the BCRUA Operations and Maintenance Expense under Step 2 above from the
City's average unit costs calculated in Step 1 above to determine the Fee Rate:
Fee Rate = $0.75/1,000 gals - $0.41/1,000 gals = $0.34/1,000 gals.
(4) Calculate the additional quantity of water the City was required to take due to Round Rock
not taking water:
If all 3 cities were taking water from the BCRUA plant then one City would only
be required to take a minimum flow 26.67% of Minimum Flow of 5 mgd which is
1.334 mgd. The other City (not Round Rock) would only be required to take
46.66% of the Minimum Daily Flow which is 2.332 mgd. So the additional
quantity that the 2 cities must take is 1.334 mgd (5.0-1.334-2.332).
The additional 1.334 mgd is further allocated to each of the 2 cities based on a
proportional share of their respective capacities which is 1.334/(1.334+2.332) =
36.39% for one city and 1 — 0.3639 or 63.61% for the other city.
18
For this example City assume their additional percentage to be 36.39% of the
1.334 mgd = 0.485 mgd or 485,442 gallons per day or 177,186,549 gallons per
year.
(5) Calculate Fee In Lieu of Minimum Take to be paid to one of the cities by multiplying the Fee
Rate by the quantity of additional water taken by that city in 1,000 gallons:
$0.34/1,000 gals x's 177,186,549/1,000 gals = $60,243
19
EXHIBIT B
OPERATIONS AND MAINTENANCE EXPENSE ALLOCAT
Item
Non-
Operating
Expenses
Column 1
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 26
Variable
Operating
Expenses
Column 3
Insurance
100%
Power-Security/Lighting
100%
Capital Outlay
100%
Desks, Files, Kitchen Appliances, etc.
100%
Grounds/Building Maint. (landscaping, etc.)
100%
Irrigation Water at Plant
100%
TCEQ Administration Fee
100%
Safety Equipment
100%
Treated/Raw Lines Repair and Maintenance
100%
Audit Fees
100%
Legal Services
100%
Computers/Radios Maintenance
33%
67%
SCADA Maintenance
33%
67%
Communication/Telephone Line (Land Line
only)
33%
67%
Intake Barge Maintenance
33%
67%
Accounting/Finance/ Personnel
33%
67%
Plant Superintendent
33%
67%
Administration Assistant (operations)
33%
67%
Small Tools and Equipment
33%
67%
Office/Building & General Supplies (Paper, etc.)
33%
67%
Plant Winterization
33%
67%
-
Plant Operators
100%
Maintenance Technician
100%
Treatment Materials and Supplies
100%
Vehicles Repairs and Maintenance
100%
Contract Services (Lab services, etc.)
100%
Fuel and Oil
100%
Janitorial Facility Maintenance
100%
Equipment Facility Maintenance (pumps, etc.)
100%
Schools and Training
100%
License and Membership Dues
100%
Uniforms
100%
16
Item
Non-
Operating
Expenses
Column 1
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 2b
Variable
Operating
Expenses
Column 3
Power -Pumping Raw/Treated/Lift Stations
100%
Chemicals
100%
Sludge Disposal
100%
Column 1 Non -Operating Expenses are allocated in accordance with the total percentages shown in
this column and in accordance with Section 4.3(a) of the Operating Agreement.
Column 2a Fixed Operating Expenses for Cities not receiving water are allocated in accordance with
the total percentages shown in this column and in accordance with Section 4.3(b) of the Operating
Agreement.
Column 2b Fixed Operating Expenses for Cities receiving water are allocated in accordance with the
total percentages shown in this column and in accordance with Section 4.3(c) of the Operating
Agreement.
Column 3 Variable Operating Expenses are allocated in accordance with the total percentages shown
in this column and in accordance with Section 4.3(d) of the Operating Agreement.
17
EXHIBIT C
EXAMPLE CALCULATION OF ADDITIONAL FEE IN LIEU OF MINIMUM TAKE
(For One City)
(1) Calculate the average unit operations and maintenance costs per 1,000 gallons of City's
separate water treatment plant:
City's prior year annual operating and maintenance expenses
of its separate water treatment plant = $1,925,000
City's prior year annual flow through its separate water treatment plant in 1,000
gallons = 4,705,000 x's 1,000 gals.
Unit Cost = $1,925,000/4,705,000 = $0.41/1,000 gals.
(2) Calculate the average unit operations and maintenance costs per 1,000 gallons of
BCRUA regional water treatment plant:
BCRUA's prior year annual operating and maintenance
expenses of the regional water treatment plant (excluding amount paid by Round
Rock per Exhibit B and excluding raw water costs) = $1,375,000
BCRUA's prior year annual flow through the regional water treatment plant in
1,000 gallons = 1,825,000 x's 1,000 gals. (5 mgd avg)
Unit Cost = $1,375,000/1,825,000 = $0.75/1,000 gals.
(3) Subtract the BCRUA Operations and Maintenance Expense under Step 2 above from the
City's average unit costs calculated in Step 1 above to determine the Fee Rate:
Fee Rate = $0.75/1,000 gals - $0.41/1,000 gals = $0.34/1,000 gals.
(4) Calculate the additional quantity of water the City was required to take due to Round Rock
not taking water:
If all 3 cities were taking water from the BCRUA plant then one City would only
be required to take a minimum flow 26.67% of Minimum Flow of 5 mgd which is
1.334 mgd. The other City (not Round Rock) would only be required to take
46.66% of the Minimum Daily Flow which is 2.332 mgd. So the additional
quantity that the 2 cities must take is 1.334 mgd (5.0-1.334-2.332).
The additional 1.334 mgd is further allocated to each of the 2 cities based on a
proportional share of their respective capacities which is 1.334/(1.334+2.332) =
36.39% for one city and 1 — 0.3639 or 63.61% for the other city.
18
For this example City assume their additional percentage to be 36.39% of the
1.334 mgd = 0.485 mgd or 485,442 gallons per day or 177,186,549 gallons per
year.
(5) Calculate Fee In Lieu of Minimum Take to be paid to one of the cities by multiplying the Fee
Rate by the quantity of additional water taken by that city in 1,000 gallons:
$0.34/1,000 gals x's 177,186,549/1,000 gals = $60,243
19
DATE: May 7, 2009
SUBJECT: City Council Meeting — May 14, 2009
ITEM: 9F1. Consider a resolution authorizing the Mayor to execute the Brushy Creek
Regional Utility Authority System Operating Agreement (BCRUA Project, First
Phase).
Department:
Staff Person:
Justification:
Water and Wastewater Utilities
Michael Thane, P.E., Director of Utilities
The Cities of Cedar Park, Leander, and Round Rock and the Brushy Creek Regional Utility Authority
(BCRUA) wish to enter into this Operating Agreement to set forth in specific terms the manner in which
this project shall be managed and operated. Furthermore, this agreement provides the manner in which
the Cities will share in the costs of operating and maintaining the BCRUA regional water supply project.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Cities of Cedar Park and Leander
Background Information:
The Cities of Round Rock, Cedar Park, and Leander have agreed to jointly pursue a Regional Water
System that will ultimately provide an additional 105.8 million gallons per day (MGD) of potable water
to meet future water demands of the Cities based on projected population growth. The Cities and the
BCRUA have determined that the first phase of the water treatment plant will be constructed to
produce 17 MGD of treated water beginning April 1, 2012.
On September 2, 2008, the Cities and the BCRUA previously entered into a Master Contract that sets
forth the terms and conditions under which the Cities, by and through the BCRUA, will finance,
construct, acquire, own, maintain, and operate the BCRUA project.
Public Comment: N/A
EXECUTED
DOCUMENT
FOLLOWS
BRUSHY CREEK REGIONAL UTILITY AUTHORITY
SYSTEM OPERATING AGREEMENT
(BCRUA PROJECT, FIRST PHASE)
THIS BRUSHY CREEK REGIONAL UTILITY AUTHORITY SYSTEM OPERATING
AGREEMENT (the "Agreement") is dated and entered into as of the t day of May ,
2009 (the "Effective Date") by and among the Brushy Creek Regional Utility Authority, Inc.
("BCRUA"), a non-profit corporation of the State of Texas (the "State"), created and existing
under the laws of the State, including Subchapter D of Chapter 431 as amended, Texas
Transportation Code, and the City of Cedar Park, Texas ("Cedar Park"), the City of Leander,
Texas ("Leander"), and the City of Round Rock, Texas ("Round Rock") all home -rule
municipalities and political subdivisions of the State (individually, the "City"; collectively, the
"Cities"). The BCRUA and the Cities are collectively referred to herein as the "Parties," and as
the "Party" individually.
RECITALS
WHEREAS, Subchapter D of Chapter 431 of the Texas Transportation Code, as amended
(the "Act") authorizes municipalities to create one or more local government corporations to
accomplish any governmental purpose of the Cities including the planning, financing,
construction, ownership, operation, and/or maintenance of facilities necessary for the
conservation, storage, transportation, treatment, and/or distribution of treated water, including a
plant site, right-of-way, and property, equipment, and/or right of any kind useful in connection
with the conservation, storage, transportation, treatment, and/or distribution of treated water that
will ultimately provide an additional 105.8 million gallons per day of potable water supply to
meet future water demands of the Cities based on current population projections and estimates
(said facilities herein referred to as the `BCRUA System");
WHEREAS, the City Councils of Cedar Park, Leander, and Round Rock, respectively
(collectively, the "Governing Bodies"), have authorized and approved the creation of the
BCRUA as their constituted authority and instrumentality, pursuant to Subchapter D of Chapter
431 of the Texas Transportation Code to accomplish the specific public purpose of planning,
financing, constructing, acquiring, owning, operating or maintaining the BCRUA System,
pursuant to the provisions of the Act and other applicable law, including Section 791.026 Texas
Government Code, as amended;
WHEREAS, the Cities and the BCRUA have determined that the first phase of the
ultimate 105.8 million gallons per day BCRUA System, (the `BCRUA Project", as hereinafter
defined,) is substantially the same as the "Phase 1" referenced in the Preliminary Engineering
Report, as hereinafter defined, with the major exception being that the initial phase of the water
treatment plant has been reduced from 30 million gallons per day to 17 million gallons per day;
WHEREAS, in furtherance of its purposes, the BCRUA will issue one or more series of
bonds to finance the costs of the BCRUA Project, and the BCRUA has obtained a loan
commitment for such purposes from the Texas Water Development Board ("TWDB");
Operating Agreement- clean final- 5-13-09 (00160715).DOC
9'--a` 09 Lit-41.?I
WHEREAS, the Cities and the BCRUA have entered into that certain "Master Contract
for the Financing, Construction, and Operation of the BCRUA Regional Water Treatment and
Distribution Project" dated September 2, 2008 to set forth the terms and conditions under which
the Cities, by and through the BCRUA, will finance, construct, acquire, own, maintain and
operate the BCRUA Project and to set forth in general terms the manner in which the Cities will
share the costs of constructing, operating, and maintaining the BCRUA Project ("Master
Contract.") The term "Master Contract" as used herein includes any amendments thereto.
WHEREAS, the Cities and the BCRUA, exercising their respective mutual authorities,
wish to enter into this Agreement to set forth in specific terms the manner in which the BCRUA
Project shall be managed and operated and the manner in which the Cities will share in the costs
of operating and maintaining the BCRUA Project.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the sufficiency of which are hereby conclusively acknowledged, and subject to the
terms and conditions hereinafter set forth, the Cities and the BCRUA mutually undertake,
promise, and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions from Master Contract. For the purposes of this Agreement, and in
addition to the terms defined above, the following terms shall have the meanings assigned to
them in accordance with the Master Contract: Annual Payment, BCRUA, BCRUA Project,
Delivery Point(s); City System; Fiscal Year; Operations and Maintenance Expenses; Overhead
Expenses; and Preliminary Engineering Report.
Section 1.2 Additional Definitions. For the purposes of this Agreement, and addition to the
terms defined above, the following terms shall have the meanings stated as follows:
a. Annual Operations and Maintenance Report: the report prepared by BCRUA to
be submitted to the Operations Committee within ninety (90) days of the end of
each Fiscal Year. The Annual Operation and Maintenance Report shall be
prepared from prior Fiscal Year data and shall include, at a minimum, all income
and payments received by BCRUA from the Cities, all actual and budgeted
expenses for operations and maintenance, the quantity of all waters delivered to
each of the Cities, and any other information requested by the Operations
Committee.
b. BCRUA Annual Budget: The budget prepared by BCRUA each Fiscal Year and
as described in the BCRUA Bylaws including all annual revenue and expenses of
the BCRUA such as the Annual Payments and BCRUA Project Costs as defined
in the Master Contract.
Operating Agreement- clean final- 5-13-09 (00160715).DOC
c. Cities' Raw Water Contracts: These contracts and agreements held by the Cities
providing for the withdrawal of raw water from Lake Travis for municipal use as
contained in Exhibits "A", "B", and "C" of the Master Contract.
d. Commencement Date: The date upon which construction of the BCRUA Project
is substantially complete and water is delivered, or capable of being delivered, to
a Delivery Point on a continuous (non -test) basis.
e. Fee In Lieu of Minimum Take: The fee described in Section 2.6 herein.
f. Minimum Daily Flow: Approximately five (5) million gallons per day, the exact
amount to be determined according to Section 2.6 herein.
g.
Operator: The entity serving as operator of the BCRUA Project as discussed in
Section 3.1 herein.
Section 1.3 Interpretation. The caption headings of this Agreement are for reference purposes
only and shall not affect its interpretation in any respect. Unless the context otherwise requires,
words of the masculine gender shall be construed to include correlative words of the feminine
and neuter genders and vice versa. Defined terms include the plural and singular versions of the
words. This Agreement and all the terms and provisions shall be liberally construed to effectuate
the purpose set forth herein and to sustain the validity of this Agreement.
ARTICLE II
SYSTEM CONSTRUCTION, MANAGEMENT, & OPERATION
Section 2.1 System Ownership. The BCRUA Project shall be owned by the BCRUA. Each
City, respectively, shall have the exclusive right to its reserved capacity in each BCRUA Project
component as provided in Section 6.1 of the Master Contract. Each City shall have the right of
entry to any component of the BCRUA Project at any time, provided, however, that physical
changes or adjustments to the BCRUA Project may only be made upon authorization of the
BCRUA.
Section 2.2 System Design and Construction. The BCRUA shall provide for the design and
construction of the BCRUA Project as provided in the Master Contract.
Section 2.3 System Operation and Management. The BCRUA shall operate and maintain the
BCRUA Project in accordance with the terms of the Master Contract and this Agreement.
Section 2.4 Operations Committee. The Operations Committee shall represent the individual
and collective interests of the Cities and shall consult with and advise the BCRUA Board of
Directors and its General Manager or other designated representative in the manner provided in
Sections 5.3 and 5.4 of the Master Contract.
Section 2.5 Commencement Date. The Commencement Date shall be the date upon which
construction of the BCRUA Project is substantially complete and water is delivered, or capable
of being delivered, to a Delivery Point on a continuous (non -test) basis.
3
Section 2.6 Minimum Operating Flow Requirements. The Parties acknowledge and agree
that a minimum amount of flow is required to operate the BCRUA Project and that such amount
is approximately five (5) million gallons per day ("Minimum Daily Flow"). The amount of the
Minimum Daily Flow shall be determined by the Operations Committee using generally
accepted engineering practices for the water treatment and distribution industry. The allocation
of the Minimum Daily Flow shall be allocated among the Cities as set forth below:
a. From Commencement Date to December 31, 2013. From the Commencement
Date until December 31, 2013, Cedar Park and Leander shall be obligated to take the Minimum
Daily Flow. Cedar Park shall be obligated to take 53.34% of the Minimum Daily Flow and
Leander shall be obligated to take 46.66% of the Minimum Daily Flow. In the event that either
Cedar Park or Leander elects to take more than its required allocation of flow, the other City may
reduce its obligation accordingly. Prior to January 1, 2014, Round Rock shall have no obligation
with respect to the Minimum Daily Flow.
b. From January 1, 2014 and thereafter. Beginning January 1, 2014, Cedar Park
shall be obligated to take 26.67% of the Minimum Daily Flow and Leander shall be obligated to
take 46.66% of the Minimum Daily Flow, and Round Rock shall have the option of either taking
remaining 26.67% of the Minimum Daily Flow, or paying the Fee in Lieu of Minimum Daily
Flow as described below in this section. After January 1, 2014, if Round Rock elects to not take
water from the BCRUA Project, and the other two Cities combined are not voluntarily taking the
total Minimum Daily Flow, then Cedar Park and Leander will be required to take additional
water in equal proportions so that their combined take is at least the total Minimum Daily Flow.
In such event, Round Rock shall then be obligated to pay a Fee in Lieu of Minimum Take to
Cedar Park and/or Leander to compensate them for the additional costs that they may incur in
taking more water from the BCRUA Project than they need. Such fee paid to Cedar Park and/or
Leander shall be calculated by determining the difference in the unit cost of treating water at
their respective water treatment plants and the BCRUA Project, and applying such difference to
the amount of water that each such City must take due to Round Rock's election to not take
water from the BCRUA Project. However, in the event that Cedar Park and/or Leander
voluntarily elect to take more than its required proportion of the Minimum Daily Flow, so that
the Minimum Daily Flow is exceeded, then Round Rock will not be obligated to pay a Fee in
Lieu of Minimum Take on such amounts. The Fee In Lieu of Minimum Take for each City shall
be calculated using the example in Exhibit "C".
The BCRUA shall charge Round Rock the Fee In Lieu of Minimum Take to be paid to each City
as part of Round Rock's Annual Payment and shall apply a credit to Cedar Park and Leander's
Annual Payment as a part of the Annual Budget process.
ARTICLE III
OPERATOR SERVICES; DELIVERY OF WATER
Section 3.1 Operator Services. No later than one hundred eighty (180) days prior to the
Commencement Date, the Parties shall determine who will be responsible for operating the
BCRUA Project. The Operator, to be approved by the Parties and hired by BCRUA, shall be
responsible for operating the BCRUA Project in accordance with the terms and provisions of this
4
Agreement and to perform, at a minimum, the services listed in Exhibit "A" attached hereto,
including the provision of properly licensed operators to operate the BCRUA Project.
Section 3.2 Operator Compensation, Billing, and Method of Payment. BCRUA's contract
with the Operator shall provide terms for compensation, billing and method of payment that are
consistent with this Agreement. Any contract with the Operator shall be approved by the Parties.
Section 3.3 Water Quality. BCRUA shall ensure that the BCRUA Project shall be operated in
a manner so that water delivered to the Delivery Point(s) shall at all times meet the requirements
of the Environmental Protection Agency, the Texas Commission on Environmental Quality and
other applicable regulatory agencies for potable water for human consumption and other
domestic uses, including, specifically, all applicable regulations promulgated pursuant to the
Safe Drinking Water Act, 42 U.S.C. § 300f et. seq. and the drinking water standards provided in
Title 30, Texas Administrative Code, Chapter 290, as may be amended from time to time.
Section 3.4 Water Quantity. BCRUA shall ensure that the BCRUA Project shall be operated
in a manner so that water delivered to the Delivery Point(s) shall be of a quantity and pressure
consistent with each City's capacity allocations as set forth in Exhibit "D" to the Master
Contract.
Section 3.5 Title to Raw Water, Metering and Reporting of Raw Water Use. Under the
Master Contract, the Cities have assigned to BCRUA the authority to take raw water from Lake
Travis pursuant to the Cities' Raw Water Contracts and to exercise servicing authority over, and
in all respects, to use the raw water for the sole purpose of treating said water in order to deliver
potable water to the Cities pursuant to the Master Contract and this Agreement. BCRUA shall
report to each City on a monthly basis the amount of raw water used by such City for the
purposes of the City's payments in accordance with its Raw Water Contracts. The method of
determining the amount of raw water used by each City shall be as follows: The BCRUA shall
first determine each City's pro rata percentage share of the total amount of treated water
delivered to all three Cities through their respective Delivery Points. Then the BCRUA shall
apply the said pro rata percentage shares to the total amount of raw water diverted from Lake
Travis. By way of example, if one City's percentage share of the total amount of water delivered
to all three Cities is twenty-five percent (25%), then that City would be charged with twenty-five
percent (25%) of the total amount of raw water diverted from Lake Travis.
Section 3.6 Regulatory Matters. BCRUA shall be responsible for meeting all federal and
state regulatory requirements associated with operation and management of the BCRUA Project,
including but not limited to, requirements found in Title 30, Texas Administrative Code, Chapter
290, Public Drinking Water, as may be amended from time to time, unless the Parties agree that
a particular requirement is better met by each City with respect to its City System. Specifically,
BCRUA shall be responsible for all recordkeeping, reporting, and water quality sampling
requirements associated with the treatment and delivery of potable water by the BCRUA Project.
BCRUA shall also promptly provide information to each City so that each City may meet
applicable public notification requirements with respect to its City System. If applicable,
BCRUA shall be responsible for drafting and maintaining a Risk Management Plan pursuant to
Section 112(r)(7) of the Clean Air Act for the BCRUA Project.
5
ARTICLE IV
SYSTEM BUDGET; PAYMENT; BILLING
Section 4.1 BCRUA Budget. No later than ninety (90) days prior to the Commencement Date
and, thereafter, not less than ninety (90) days prior to the beginning of each Fiscal Year, BCRUA
shall furnish to the Cities and the Operations Committee a detailed budget of the Annual
Payments to be paid by each City including the Operations and Maintenances Expenses,
Overhead Expenses and Bond Payment to be incurred in the next Fiscal Year. Operations and
Maintenance Expenses shall be determined for each City based on this Agreement and the
Master Contract. After the Commencement Date and prior to the end of the initial Fiscal Year,
each City shall pay on or before the first day of each month, its pro -rata share of the Operations
and Maintenance Expense, based on the remaining months in the initial Fiscal Year. In the case
of each annual Operation and Maintenance Expense budget made after the availability of the
Annual Operations and Maintenance Report covering a Fiscal Year, the amount estimated for the
following Fiscal Year shall be adjusted upward or downward, as appropriate, to account for the
difference between actual Operation and Maintenance Expense as reflected by the Annual
Operations and Maintenance Report and that estimated for the previously reported period. The
monthly Operations and Maintenance expense for each City shall be calculated using flow
projections provided by each City for the period for which the estimate is being made. No later
than one hundred fifty (150) days prior to each Fiscal Year, each City shall submit to the
Operations Committee estimates of flows each City projects to take from the BCRUA Project for
the upcoming fiscal year. The Operations Committee shall meet to review and approve such
flow projections and provide its recommendations to the BCRUA no later than one hundred
twenty (120) days prior to each Fiscal Year. Such estimated flows shall be used to calculate the
BCRUA budget and Annual Payments.
Section 4.2 Annual Payments. BCRUA shall bill for and the Cities shall make payment on
the Annual Payments to fund the BCRUA Project as provided in the Master Contract. Such
Annual Payments shall include payments by each City for its respective share of the Operations
and Maintenance Expenses and Overhead Expenses as calculated pursuant to this Agreement and
the Master Contract. Annual Payments shall be made by each City, whether it takes water or not,
as required by Article IX. of the Master Contract.
Section 4.3 Operations and Maintenance Expenses. The Operations and Maintenance
Expenses shall consist of the following four (4) categories of expenses: Non -Operating
Expenses, Fixed Operating Expenses for Cities not receiving water from the BCRUA Project,
Fixed Operating Expenses for Cities receiving water from the BCRUA Project, and Variable
Operating Expenses for Cities receiving water from the BCRUA Project.
a) Non -Operating Expenses are those expenses, or portion thereof, which have a
percentage allocation shown in column 1 of Exhibit B. Non -Operating Expenses
shall be allocated to and included in each City's Annual Payment based on such
City's reserved capacity in the BCRUA Project. Each City will be responsible for
its share of Non -Operating Expenses whether it takes delivery of treated water or
not.
6
b) Fixed Operating Expenses for Cities not receiving water from the BCRUA Project
are those expenses, or portion thereof, which have a percentage allocation shown
in column 2a of Exhibit B. Fixed Operating Expenses for Cities not receiving
water from the BCRUA Project shall be allocated to and included in each City's
Annual Payment based on such City's reserved capacity in the BCRUA Project.
Each City shall be responsible for its share of Fixed Operating Expenses for Cities
not receiving water from the BCRUA Project whether it takes delivery of treated
water or not.
c) Fixed Operating Expenses for Cities receiving water from the BCRUA Project are
those expenses, or portion thereof, which have a percentage allocation shown in
column 2b of Exhibit B. Fixed Operating Expenses for Cities receiving water
from the BCRUA Project shall be allocated to and included in each City's Annual
Payment, based on the amount of treated water that is delivered to such City
subject to the provisions of Section 2.6. A City shall be responsible for this
category of expense only if that City takes delivery of treated water.
d) Variable Operating Expenses are those expenses which have a percentage
allocation shown in column 3 of Exhibit B. Variable Operating Expenses shall be
allocated to and included in each City's Annual Payment, based on the amount of
treated water that is delivered to such City as a percentage of the total amount of
treated water delivered to all Cities. A City shall be responsible for Variable
Operating Expenses only if that City takes delivery of treated water.
Operations and Maintenance Expenses shall be allocated among the Cities in accordance
with Exhibit B. As shown on Exhibit B, some expenses are included in more than one
category. In those cases, the expenses shall be allocated between the two categories in
accordance with the percentages shown in Exhibit B. Notwithstanding anything herein to
the contrary, expenses for the General Manager shall be allocated among the Cities in
accordance with their respective capacity reservations in the ultimate system, which are
currently 47.26% to Leander, 38.56% to Round Rock and 14.18% to Cedar Park.
Section 4.4 Reserve Account. No later than thirty (30) days prior to the Commencement
Date, the BCRUA shall establish and maintain thereafter a reserve operating account, to be
funded by the Cities, in which it shall maintain, at a minimum, funds equivalent to three months'
worth of estimated Operations and Maintenance Expenses for the BCRUA Project. Each City's
share of the initial funding of such reserve account shall be based on the calculations for
Operations and Maintenance Expenses as provided in Section 4.3 above and on the initial
BCRUA Budget approved by the BCRUA Board of Directors. Billing for and payment of each
City's share of the reserve account funding pursuant to this Section shall be in accordance with
the procedures established for billing and payment of Annual Payments as established in the
Master Contract. All funds maintained in the reserve account described herein, including any
earned interest, shall be dedicated to and inure to the benefit of the BCRUA Project.
7
Section 4.5 Financial Records; Annual Audit. BCRUA shall maintain and update its financial
records on a monthly basis and submit profit and loss statements, financial statements, fund
balance reports, and any other similar report requested by BCRUA's Board of Directors, to the
BCRUA Board of Directors and the Cities on a monthly basis. BCRUA shall conduct an audit
each Fiscal Year consistent with accounting principles applicable to municipal water utilities and
shall circulate a final audit report to each City upon completion.
ARTICLE V
RISK MANAGEMENT
Section 5.1 INDEMNIFICATION. TO THE EXTENT ALLOWED BY LAW, EACH CITY
AGREES TO INDEMNIFY AND HOLD HARMLESS THE BCRUA AND/OR THE OTHER
CITIES, THEIR OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
CONTRACTORS OR CONSULTANTS FROM ALL CLAIMS, CAUSES OF ACTION,
DAMAGES, COSTS, CHARGES, EXPENSES, LIABILITY OR OBLIGATION FOR ANY
ACT OR OMISSION BY THE CITY, ITS OFFICERS, EMPLOYEES, REPRESENTATIVES,
AGENTS, CONTRACTORS OR CONSULTANTS WITH RESPECT TO OR ARISING OUT
OF OPERATIONS OF THE CITY'S SYSTEM.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Term. This Agreement shall be effective from the Effective Date, and shall
continue in force and effect during the entire useful life of the BCRUA Project. This Agreement
shall automatically terminate and be of no further force or effect if the Commencement Date has
not occurred by July 1, 2012.
Section 6.2 Amendment and Modification. This Agreement shall not be amended except in
writing by all Parties hereto. No change, amendment, or modification of this Agreement shall be
made or be effective which will affect adversely the prompt payment when due of all money
required to be paid by each City under the terms of this Agreement or the Master Contract.
Section 6.3 Addresses and Notice. Unless otherwise provided herein, any notice,
communication, request, reply, or advice (herein severally and collectively, for convenience,
called "Notice") herein provided or permitted to be given, made, or accepted by any Party to the
other Parties must be in writing and may be given or be served by depositing the same in the
United States mail postpaid and registered or certified and addressed to the Party to be notified,
with return receipt requested, or by delivering the same to an officer of such Party, or by prepaid
telegram when appropriate, addressed to the Party to be notified. Notice deposited in the mail in
the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise
stated herein, from and after the expiration of three days after it is so deposited. Notice given in
any other manner shall be effective only if and when received by the Party to be notified. For the
purposes of notice, the addresses of the Parties shall, until changed as hereinafter provided, be as
follows:
8
If to the BCRUA:
President, Board of Directors
Brushy Creek Regional Utility Authority, Inc.
600 North. Bell Blvd.
Cedar Park, Texas 78613
If to Cedar Park:
City Manager
600 North Bell Blvd.
Cedar Park, Texas 78613
If to Leander:
City Manager
P.O. Box 319
Leander, Texas 78646-0319
If to Round Rock:
City Manager
221 E. Main St.
Round Rock, Texas 78664
The BCRUA and the Cities hereto shall have the right from time to time and at any time to
change their respective addresses and each shall have the right to specify as its address any other
address by at least fifteen (15) days' written notice to the other Parties.
Section 6.4 Severability. The Parties hereto specifically agree that in case any one or more of
the sections, subsections, provisions, clauses, or words of this Agreement or the application of
such sections, subsections, provisions, clauses, or words to any situation or circumstance should
be, or should be held to be, for any reason, invalid or unconstitutional, under the laws or
constitutions of the State or the United States of America, or in contravention of any such laws or
constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other
sections, subsections, provisions, clauses, or words of this Agreement or the application of such
actions, subsections, provisions, clauses, or words to any other situation or circumstance, and it
is intended that this Agreement shall be severable and shall be construed and applied as if any
such invalid or unconstitutional section, subsection, provision, clause, or word had not been
included herein, and the rights and obligations of the Parties hereto shall be construed and remain
in force accordingly.
Section 6.5 Remedies on Default. It is not intended hereby to specify (and this Agreement
shall not be considered as specifying) an exclusive remedy for any default, but all such other
remedies (other than termination) existing at law or in equity may be availed of by any Party
hereto and shall be cumulative. Recognizing that failure in the performance of the Cities'
obligations hereunder could not be adequately compensated in money damages alone, each City
9
agrees in the event of any default on its part that the BCRUA and the others shall have available
to them the remedies of mandamus and specific performance in addition to any other legal or
equitable remedies (other than termination) which may also be available to them.
Notwithstanding anything to the contrary contained in this Agreement, any right or remedy or
any default hereunder, except the right of the BCRUA to receive the Annual Payments and the
provision of Section 4.9 of the Master Contract, which shall never be determined 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 plus 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 the
performance by any other Party of any duty or obligation hereunder shall be deemed a waiver
thereof in the future, nor shall any such waiver or waivers be deemed or construed to be a waiver
of subsequent breaches or defaults of any kind, character or description, under any
circumstances.
Section 6.6 Venue. All amounts due under this Agreement, including, but not limited to,
payments due under this Agreement or damages for the breach of this Agreement, shall be paid
and be due in Williamson County, Texas, which is the County in which the principal
administrative offices of the BCRUA are located. It is specifically agreed among the Parties to
this Agreement that Williamson County, Texas, is the place of performance of this Agreement;
and in the event that any legal proceeding is brought to enforce this Agreement or any provision
hereof, the same shall be brought in Williamson County, Texas.
Section 6.7 Succession and Assignment. This Agreement is binding on and inures to the
benefit of the Parties hereto and their respective successors, representatives, and assigns. This
Agreement may not be assigned by any Party hereto without prior written notice to and approval
by the other Parties, which consent may be withheld without cause.
Section 6.8 Incorporation of Preamble Recitals. The recitals contained in the preamble hereof
are hereby found to be true, and such recitals are hereby made a part of this Agreement for all
purposes and are adopted as a part of the judgment and findings of the BCRUA and the Cities.
Section 6.9 Entire Agreement. This Agreement constitutes the entire agreement among the
Parties with respect to the matters described herein.
Section 6.10 Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original and all of which together shall constitute but one and the same instrument.
(Signatures on Following Pages)
10
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
By:
Atte
By:
SCJ .
6C,
lip 1). COWAri, Secretary
11
tch Fuller, Pre
dent
Attest:
By:Grr::;"
'
LeAnn Quinn, City Secretary
Q.iocirO5Ik 'lf 1
12
CITY OF CEDAR PARK, TEXAS
By:
ri
Bob Lemon, Mayor
CITY OF LEANDER, TEXAS
&,•—.--..—.—•
Attest:
By:
Debbie Haile, City Secretary
13
12--octrt-It --"R1
t).
Cowman, Mayor
Attest:
BY: S -#1011L- likaR
Sara White, City Secretary
14
CITY OF ROUND ROCK, TEXAS
By: Y
Alan McGraw, Mayor
EXHIBIT A
OPERATOR SERVICES
Certified Personnel
Chemical Inventories
Emergency Repairs
Emergency Response
Grounds Keeping and Mowing
Inspections
Insurance
Materials
Meter Reading and Reporting
Non -Emergency Repairs
Operations and Compliance Reports
Personnel and Equipment
Recordkeeping
Routine Maintenance
Sampling and Testing
Sub -Contract Repairs
Telemetric Monitoring
24 -Hour Control Center
Water Quality; TCEQ and EPA Regulatory Compliance
15
EXHIBIT B
OPERATIONS AND M
Item
- -- -- --
Non-
Operating
Expenses
Column 1
�++ vas a au✓ V Vt
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
11 1 Vl
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 2b
Variable
Operating
Expenses
Column 3
Insurance
100%
Power-Security/Lighting
100%
Capital Outlay
100%
Desks, Files, Kitchen Appliances, etc.
100%
Grounds/Building Maint. (landscaping, etc.)
100%
Irrigation Water at Plant
100%
TCEQ Administration Fee
100%
Safety Equipment
100%
Treated/Raw Lines Repair and Maintenance
100%
Audit Fees
100%
Legal Services
100%
Computers/Radios Maintenance
33%
67%
SCADA Maintenance
33%
67%
Communication/Telephone Line (Land Line
only)
33%
67%
Intake Barge Maintenance
33%
67%
Accounting/Finance/ Personnel
33%
67%
Plant Superintendent
33%
67%
Administration Assistant (operations)
33%
67%
Small Tools and Equipment
33%
67%
Office/Building & General Supplies (Paper, etc.)
33%
67%
-
Plant Winterization
33%
67%
-
Plant Operators
100%
-
Maintenance Technician
100%
Treatment Materials and Supplies
100%
Vehicles Repairs and Maintenance
100%
Contract Services (Lab services, etc.)
100%
Fuel and Oil
100%
Janitorial Facility Maintenance
100%
Equipment Facility Maintenance (pumps, etc.)
100%
-
Schools and Training
100%
License and Membership Dues
100%
Uniforms
100%
Item
Non -
Operating
Expenses
Column 1
Fixed
Operating
Expenses for
Cities not
Receiving
Water
Column 2a
Fixed
Operating
Expenses
for Cities
Receiving
Water
Column 2b
Power -Pumping Raw/Treated/Lift Stations 100%
Chemicals 100%
Variable
Operating
Expenses
Column 3
Sludge Disposal
100%
Column 1 Non -Operating Expenses are allocated in accordance with the total percentages shown in
this column and in accordance with Section 4.3(a) of the Operating Agreement.
Column 2a Fixed Operating Expenses for Cities not receiving water are allocated in accordance with
the total percentages shown in this column and in accordance with Section 4.3(b) of the Operating
Agreement.
Column 2b Fixed Operating Expenses for Cities receiving water are allocated in accordance with the
total percentages shown in this column and in accordance with Section 4.3(c) of the Operating
Agreement.
Column 3 Variable Operating Expenses are allocated in accordance with the total percentages shown
in this column and in accordance with Section 4.3(d) of the Operating Agreement.
EXHIBIT C
EXAMPLE CALCULATION OF ADDITIONAL FEE IN LIEU OF MINIMUM TAKE
(For One City)
(1) Calculate the average unit operations and maintenance costs per 1,000 gallons of City's
separate water treatment plant:
City's prior year annual operating and maintenance expenses
of its separate water treatment plant = $1,925,000
City's prior year annual flow through its separate water treatment plant in 1,000
gallons = 4,705,000 x's 1,000 gals.
Unit Cost = $1,925,000/4,705,000 = $0.41/1,000 gals.
(2) Calculate the average unit operations and maintenance costs per 1,000 gallons of
BCRUA regional water treatment plant:
(3)
City's
BCRUA's prior year annual operating and maintenance
expenses of the regional water treatment plant (excluding amount paid by Round
Rock per Exhibit B and excluding raw water costs) = $1,375,000
BCRUA's prior year annual flow through the regional water treatment plant in
1,000 gallons = 1,825,000 x's 1,000 gals. (5 mgd avg)
Unit Cost = $1,375,000/1,825,000 = $0.75/1,000 gals.
Subtract the BCRUA Operations and Maintenance Expense under Step 2 above from the
average unit costs calculated in Step 1 above to determine the Fee Rate:
Fee Rate = $0.75/1,000 gals - $0.41/1,000 gals = $0.34/1,000 gals.
(4) Calculate the additional quantity of water the City was required to take due to Round Rock
not taking water:
If all 3 cities were taking water from the BCRUA plant then one City would only
be required to take a minimum flow 26.67% of Minimum Flow of 5 mgd which is
1.334 mgd. The other City (not Round Rock) would only be required to take
46.66% of the Minimum Daily Flow which is 2.332 mgd. So the additional
quantity that the 2 cities must take is 1.334 mgd (5.0-1.334-2.332).
The additional 1.334 mgd is further allocated to each of the 2 cities based on a
proportional share of their respective capacities which is 1.334/(1.334+2.332) =
36.39% for one city and 1 — 0.3639 or 63.61% for the other city.
18
For this example City assume their additional percentage to be 36.39% of the
1.334 mgd = 0.485 mgd or 485,442 gallons per day or 177,186,549 gallons per
year.
(5) Calculate Fee In Lieu of Minimum Take to be paid to one of the cities by multiplying the Fee
Rate by the quantity of additional water taken by that city in 1,000 gallons:
$0.34/1,000 gals x's 177,186,549/1,000 gals = $60,243
19