Loading...
R-09-12-03-8D1 - 12/3/2009RESOLUTION NO. R -09-12-03-8D1 WHEREAS, the Cities of Round Rock, Austin, and Cedar Park (the "Cities"), the Lower Colorado River Authority ("LCRA"), and the Brazos River Authority ("BRA") entered into a Wastewater Disposal Contract dated October 1, 2000 regarding the ownership and operation of the Brushy Creek Regional Wastewater System ("BCRWWS"), and WHEREAS, the Cities of Round Rock and Cedar Park entered into a Memorandum of Understanding ("MOU") with LCRA on June 3, 2009 regarding the steps to purchase the BCRWWS from the LCRA, and WHEREAS, the Cities entered into a Purchase Agreement with LCRA on September 10, 2009, whereby the LCRA agreed to transfer the BCRWWS to the Cities on or about December 8, 2009, and WHEREAS, there has been presented to the City Council of the City of Round Rock a Master Contract for the ownership and operation of the BCRWWS by the Cities, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City a Master Contract for the Financing, Construction, Ownership and Operation of the Brushy Creek Regional Wastewater System, 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 O:\wdox\SCC1nts\0112\0905\MONICIPAL\R91203D1.DOC/rmc and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 3rd day of December, 2009. ATTEST: SARA L. WHITE, City Secretary 2 ALAN MCGRAW, Mayor City of Round Rock, Texas EXHIBIT I "An MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Among CITY OF AUSTIN CITY OF CEDAR PARK AND CITY OF ROUND ROCK Dated: December 8, 2009 TABLE OF CONTENTS Page RECITALS 1 ARTICLE I DEFINITIONS AND INTERPRETATIONS 1 Section 1.1 Definitions. 1 Section 1.2 Interpretation. 5 ARTICLE II PURPOSE AND DESCRIPTION OF THE SYSTEM 6 Section 2.1 Purpose of this Contract. 6 Section 2.2 General. 6 Section 2.3 System Described in Engineering Report. 6 Section 2.4 Permits and Approvals. 6 ARTICLE III SYSTEM ACQUISITION AND CONSTRUCTION 6 Section 3.1 General. 6 Section 3.2 Access to Cities. 6 Section 3.3 Easements 6 Section 3.4 Points of Entry 7 Section 3.5 System Design and Construction. 7 Section 3.6 Expansions. 7 Section 3.7 Other Capital Improvements and Emergency Repairs. 8 ARTICLE IV SYSTEM OWNERSHIP, OPERATION, AND MAINTENANCE 8 Section 4.1 System Ownership 8 Section 4.2 System Operation and Management. 8 Section 4.3 Operations Committee 8 Section 4.4 Responsibilities of Operations Committee 9 Section 4.5 General Management of the System. 10 Section 4.6 Meetings of the Operations Committee. 10 Section 4.7 Attendance by Fern Bluff MUD and Brushy Creek MUD at Operations Committee Meetings. 10 Section 4.8 Matters Requiring Unanimous Consent. 11 Section 4.9 Other Matters Not Requiring Unanimous Consent. 11 Section 4.10 Relationship of Operations Committee and Operator. 11 ARTICLE V RESERVED CAPACITIES 11 Section 5.1 Reserved Capacities in System Components. 11 i Section 5.2 Transfer of Reserved Capacity. 12 Section 5.3 Documentation of Transferred Reserved Capacity. 12 Section 5.4 Wholesale Contracts 12 ARTICLE VI POINT(S)OF ENTRY 12 Section 6.1 Point(s) of Entry. 12 Section 6.2 Inflow and Infiltration. 12 ARTICLE VII WASTEWATER DISCHARGE 13 Section 7.1 Discharge Quality 13 ARTICLE VIII FLOW CALCULATIONS 13 Section 8.1 Unit of Measurement 13 Section 8.2 Annual Flow. 13 ARTICLE IX BUDGETS, FLOW CHARGES, CITY COVENANTS 13 Section 9.1 Operation and Maintenance Budget and Capital Expense Budget. 13 Section 9.2 Monthly Flow Charges 14 Section 9.3 Annual Report 14 Section 9.4 Capital Expenses. 14 Section 9.5 How, When, and Where Payments are to be Made 14 Section 9.6 Source of Payment. 14 Section 9.7 Annual Budgeting by the Cities. 15 Section 9.8 Revenue Sources Pledged. 15 Section 9.9 General Covenants by Cities. 15 Section 9.10 City Rates, Fees, and Charges. 16 Section 9.11 Default. 16 Section 9.12 Unconditional Obligation to Make Payment 16 ARTICLE X COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS 17 Section 10.1 State or Federal Laws, Rules, Orders, or Regulations. 17 Section 10.2 City Cooperation 17 Section 10.3 Recordkeeping and Reporting. 17 ARTICLE XI NEGOTIATION AND MEDIATION OF DISPUTES 18 Section 11.1 Agreement Regarding Remedies 18 Section 11.2 Agreement to Negotiate First to Resolve Issues. 18 Section 11.3 Agreement to Mediate. 18 ii Section 11.4 Presentation of Written Claim Regarding Disputes Not Resolved by Negotiation. 19 Section 11.5 Performance During Mediation 19 Section 11.6 Appointment of Mediator. 19 Section 11.7 Rules for Mediation 19 Section 11.8 Arbitration. 20 ARTICLE XII SPECIAL PROVISIONS 20 Section 12.1 Contracts with Others in Relation to System 20 Section 12.2 Future Service to the City of Leander. 21 Section 12.3 Title to Wastewater. 21 Section 12.4 Reuse of Treated Effluent from the System. 21 ARTICLE XIII GENERAL PROVISIONS 22 Section 13.1 Participation by the Parties 22 Section 13.2 Insurance. 22 Section 13.3 Force Majeure. 23 Section 13.4 Term of Contract. 23 Section 13.5 Amendment and Modification. 23 Section 13.6 Addresses and Notice. 24 Section 13.7 Severability 24 Section 13.8 Remedies Upon Default. 24 Section 13.9 Venue. 25 Section 13.10 Statutory Authority 25 Section 13.11 Contract for Benefit of the Cities. 25 Section 13.12 Succession and Assignment. 25 Section 13.13 Incorporation of Preamble Recitals 25 Section 13.14 Entire Agreement. 25 Section 13.15 Applicable Law. 26 Section 13.16 Counterparts. 26 EXHIBIT A -System Components EXHIBIT B -Description of the System EXHIBIT C -K Friese Methodology for Winter Month Averaging iii MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM THIS MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP, AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (the "Contract") is dated and entered into as of the 8th day of December, 2009, by and among the City of Austin, Texas ("Austin"), the City of Cedar Park, Texas ("Cedar Park"), 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"). RECITALS Each City desires to accomplish the implementation of a regional wastewater collection, treatment and disposal system for the benefit of the Cities. The Cities, as of the date of this Contract, have purchased the Brushy Creek Regional Wastewater System ("System") from the Lower Colorado River Authority. The Cities desire to discharge wastewater from their individual wastewater collection systems into the System in order to serve the wastewater needs of the Cities, to achieve efficiencies of cost and operation and to protect and preserve the environment of the Brushy Creek watershed. 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 mutually undertake, promise, and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1 Definitions. In addition to the terms defined above, the following terms shall have the meanings assigned to them below wherever they are used in this Contract, unless the context clearly requires otherwise: (a) "Annual Flow" means the amount of wastewater generated in each City's service area delivered to the System on an annual basis as calculated in accordance with Section 8.2. (b) "Austin" means the City of Austin. (c) "Capital Expenses" means all direct costs for the design, permitting, construction and/or acquisition of Capital Improvements, including the costs of acquiring any necessary easements, rights of way, or fee simple title to real property. (d) "Capital Improvements" means physical improvements to or assets of the System with an expected useful life of a minimum of three years and of the type generally categorized as a capital improvement and/or a capital expense in individual budgets of the Cities, including but not limited to repairs and/or replacement of damaged, worn out or obsolete portions of the System and any new additions to or improvements made to the System, including Expansions, Emergency Repairs, and other improvements necessary for the System to meet or maintain Regulatory Requirements and/or improve operations of the System for the benefit of the Cities. (e) "Capital Expense Budget" means the annual amount budgeted as provided in Article IX for all Capital Expenses during any Fiscal Year. (f) "Cedar Park" means the City of Cedar Park. (g) "Cities" means, collectively, the City of Cedar Park, Texas, the City of Austin, Texas, and the City of Round Rock, Texas. "City" means, respectively, the City of Cedar Park, Texas, the City of Austin, Texas, or the City of Round Rock, Texas. (h) "City System" means and includes a respective City's existing combined waterworks and wastewater disposal system through which it provides retail and/or wholesale water and wastewater service in its Service Area, together with all future extensions, improvements, enlargements, and additions thereto, including, to the extent permitted by law, reclaimed water systems which are integrated with the waterworks or wastewater disposal system, and all replacements thereof, provided however, to the extent now or hereafter allowed by law, the term City System shall not include any waterworks or wastewater facilities which are declared by a City not to be a part of the City System of that City and which are hereafter acquired or constructed by that City with the proceeds from the issuance of "Special Project Bonds," which are hereby defined as being special revenue obligations of such City, which are not secured by or payable from the net revenues of a respective City System, but which are secured by and are payable solely from special contract revenues, or payments received by a City or any other legal entity, or any combination thereof, in connection with such facilities; and such revenues or payments shall not be considered as or constitute gross revenues of a respective City System, unless and to the extent otherwise provided in the ordinance or ordinances authorizing the issuance of such "Special Project Bonds." (i) "Contract" means this document. (j) "Effective Date" means the day following the "Closing Date" as defined in Section 6.1 of that one certain "Purchase Agreement for the Brushy Creek Regional Wastewater System, by and among the Lower Colorado River Authority, Round Rock, Cedar Park and Austin." (k) "Emergency Repairs" means those unanticipated System repairs and improvements that are not included in the Operations and Maintenance Budget or the Capital Expense Budget but must be initiated immediately to avoid System failures that threaten public health and safety and/or the environment. The costs and expenses for Emergency Repairs may be considered either Capital Expenses or Operation and Maintenance Expenses, as applicable. (1) "Engineering Report" means the report prepared by PBS&J, on behalf of the Lower Colorado River Authority, titled "BRA/LCRA Alliance Brushy Creek Regional Wastewater System Engineering Report", dated October 29, 2000, incorporated herein by reference, which describes the System and the System Components currently contemplated, the estimated construction costs, the proposed construction schedule and MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 2 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM other pertinent matters, and any further supplements or amendments thereto as contemplated herein. (m) "EPA" means the United States Environmental Protection Agency. (n) "Expansion" means an expansion, extension, or enlargement of any System Component(s) which results in an increase in the capacity reservation for such System Component(s) as identified in Exhibit A. (o) "Fiscal Year" means the twelve (12) month period beginning on October 1 of each year and ending on September 30 of the following year. (p) Contract. (q) "Force Majeure" means that term as it is defined in Section 13.3 of this "Month" means a calendar month. (r) "Monthly Flow Charge" means the amount to be paid each Month by each City calculated in accordance with Section 9.2 of this Contract. (s) "Operation and Maintenance Expense" means all direct costs of operation, maintenance, repair, rehabilitation, replacement and decommissioning of the System including, but not limited to: (1) costs of maintaining any permits or licenses necessary to own, operate and maintain the System; (2) costs such as, but not limited to, costs of labor, materials, utilities, supervision, engineering, accounting, auditing, legal and professional services, insurance, personnel, data processing and purchasing; (3) costs of repairs and/or replacement of damaged, worn out or obsolete portions of the System that are of a routine and/or recurring nature and are, therefore, not considered a Capital Expense and as may be necessary to meet and maintain Regulatory Requirements and/or serve to improve operations of the System for the benefit of the Cities. (4) such other costs or expenses as may be imposed upon the Cities in connection with fulfillment of their obligations under this Contract because of laws, regulations, or requirements of the State of Texas, the United States, or any agency or governmental subdivision of the State of Texas or any agency of the United States having jurisdiction; (5) costs of any other tools, supplies, inventory, services and equipment, together with other costs not otherwise included in this definition necessary for proper operation and maintenance of the System; and (6) payments made by the Cities in satisfaction of judgments resulting from or settlement of claims not covered by insurance or not paid by one particular City arising in connection with the ownership, operation or maintenance of the System; Depreciation shall not be considered an item of Operation and Maintenance Expense. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 3 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (t) `Operation and Maintenance Budget" means the annual amount budgeted as provided in Article IX for all Operation and Maintenance Expenses during any Fiscal Year. (u) "Operations Committee" means the committee created in Article IV of this Contract. (v) "Operator" means the entity with which the Cities contract to operate the System. It is anticipated that the initial Operator will be the Brazos River Authority. (w) "Plans and Specifications" means the plans and specifications prepared for the System and as the same may be revised from time to time in accordance with this Contract. (x) "Point of Entry" means a point at which Wastewater from each City enters the System. (y) "Prudent Utility Practice" means any of the practices, methods, and acts, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods, and acts engaged in or approved by a significant portion of the public utility industry prior thereto, known at the time the decision was made, that would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act at the exclusion of all others, but rather is a spectrum of possible practices, methods, or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. (z) "Regulatory Requirements" means all federal and state laws, rules and regulations governing the design, permitting and operation of municipal wastewater treatment and disposal systems in the State of Texas, including but not limited to the permits, rules, regulations and/or orders of the EPA, the TCEQ, and courts of competent jurisdiction. (aa) "Reserved Capacity" means the total quantity of Wastewater that a City is entitled to deliver into any System Component during a Fiscal Year pursuant to this Contract, or, alternatively, the percentage of capacity of a System Component that a City is entitled to utilize in any System Component pursuant to this Contract, all as set forth in Exhibit A. (bb) "Round Rock" means the City of Round Rock. (cc) "Service Area" means the following: (1) For Round Rock, the area within its corporate limits or extraterritorial jurisdiction as the same may exist from time to time; (2) For Cedar Park, the area within its corporate limits or extraterritorial jurisdiction as the same may exist from time to time and also including the area within the Highlands at Mayfield Ranch Municipal Utility District and the Parkside at Mayfield Ranch Municipal Utility District; MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 4 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (3) For Austin, that part of the area both (i) within its corporate limits or extraterritorial jurisdiction as the same exist from time to time and (ii) which is within the Brushy Creek watershed or other areas depicted on Figure 1 of the Engineering Report, (4) For Leander, that area both (i) within Leander's corporate limits and extraterritorial jurisdiction as the same exist from time to time and (ii) which is within the Brushy Creek watershed; provided Leander's Service Area will initially include land that is within the corporate limits or extraterritorial jurisdiction but outside of the Brushy Creek Watershed. (dd) "Significant Industrial Users" has the meaning for that term as defined by 40 Code of Federal Regulations §403.3(t). (ee) "System" means, collectively, the land interests and the improvements described in the Engineering Report, and as shown on Exhibit B, together with any Expansions and repairs and improvements made in conformance with this Contract. Without limitation the System includes the facilities, lines, lift stations, and other appurtenances in the System as described in the Engineering Report. (ff) "System Component" means a specified facility comprising part of the System as listed in Exhibit A for each segment of Wastewater collection line and the Treatment Facilities. (gg) "State" means the State of Texas. (hh) "TCEQ" means the Texas Commission on Environmental Quality or its successor agency. (ii) "Treatment Facilities" means any Wastewater treatment and disposal facilities acquired or constructed to comprise a part of the System, together with any improvements, expansions, betterments, rehabilitations or replacements thereof. (jj) "Wastewater" means liquid and water -carried waste discharged from sanitary conveniences of dwellings, business buildings, institutions and the like including garbage which has been shredded to such degree that all particles will be carried freely under flow conditions normally prevailing in public sewers, with no particle greater than one-half (1/2) inch in any dimension and the liquid wastes from industrial processes, and includes any infiltration water that has migrated from the ground into the System, or inflow water from above the ground entering the System. Section 1.2 Interpretation. The table of contents and caption headings of this Contract 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 Contract and all the terms and provisions shall be liberally construed to effectuate the purpose set forth herein and to sustain the validity of this Contract. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 5 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM ARTICLE II PURPOSE AND DESCRIPTION OF THE SYSTEM Section 2.1 Purpose of this Contract. The purpose of this Contract is to set forth the terms and conditions under which the Cities will finance, construct, acquire, own, maintain and operate the System. This Contract also sets forth in general terms the manner in which the Cities will share the costs of constructing, owning, operating, and maintaining the System. However, each City is not required to use the System for the treatment of Wastewater for any portion of its respective Service Area. Section 2.2 General. The System will be used for receiving, transporting, treating and disposing of Wastewater for the Cities generated within each City's respective Service Area. The Cities will design, acquire, construct, expand, extend, enlarge, improve and repair the System from time to time, as they deem necessary as described herein. Section 2.3 System Described in Engineering Report. The System shall be constructed as described in the Engineering Report and this Contract. The Cities shall exercise due diligence to complete the acquisition and construction of the System as set forth in the Engineering Report and this Contract. Section 2.4 Permits and Approvals. The Cities shall jointly obtain and hold all permits and approvals required for acquisition, construction, operation, and ownership of System. The Operator may also be named on such permits and approvals upon agreement of the Cities. ARTICLE III SYSTEM ACQUISITION AND CONSTRUCTION Section 3.1 General. Unless otherwise required by law, each consent, approval, or other official action required of the Cities by any provision of this Contract shall be conclusively deemed in compliance with this Contract when written evidence of such action, signed by the respective authorized representative, is delivered to the party who is to receive evidence of such action, unless otherwise specified herein. The Cities will cooperate with each other in the design, financing, acquisition, and construction of the System and, the Cities will not take any action or fail to take any action, if taking or failing to take such action, would unreasonably delay or obstruct the completion, or impair the operation, of the System. Section 3.2 Access to Cities. If any facility, pipeline, or appurtenance of the System is installed in any street, alley, or public way within the boundaries of a City, as same is now constituted or as may hereafter be extended, such City hereby grants to the System, upon complying with such City's franchise ordinances or other provisions as applied to similar entities, the right, privilege, and franchise of using such street, alley, or public way for the purposes of maintaining, operating, laying, repairing, or removing such facility, pipeline, or appurtenance. Section 3_3 Easements. Each City hereby agrees to grant to the System such easements as may be reasonably necessary for the purposes of placing, constructing, operating, repairing, maintaining, rebuilding, replacing, relocating, and removing wastewater lift stations, lines and related facilities upon, over, across and through the City's property and giving to System, all of MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 6 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM the rights and benefits necessary or appropriate for the full enjoyment and use of the easement, including but without limiting the same, to the free right of ingress and egress to and from the City's property, subject to the City's ordinances. Each City agrees to use its eminent domain powers, subject to its governing body's approval, to obtain any easement necessary for the operation and maintenance of the System that is located within that City's Service Area. Section 3.4 Points of Entry. Each City shall have the sole responsibility, at its own cost and expense, for providing additional pipelines and other facilities required for transporting its wastewater to one or more Points of Entry. Section 3.5 System Design and Construction. The Cities shall jointly fund, in accordance with their Reserved Capacity, and make decisions concerning the design and construction of the System as described in the Engineering Report. The Engineering Report may be amended and updated from time to time, to reflect final design and construction changes in the System and to reflect further actions and understandings of the Cities. The Cities agree that they shall cooperate to facilitate timely municipal plan review and permitting, and other construction related matters for construction related to the System located in the City's regulatory jurisdiction. Section 3.6 Expansions. Each City shall have the right to commence an Expansion under the provisions of this Contract as set forth in this Section. (a) Requests for Expansion. At any time, any City may request that an Expansion be made. In addition, when a City's Annual Flow reaches seventy-five percent (75%) of the Reserved Capacity of that City in a System Component, that City shall be deemed to have requested the Cities to commence planning and design for an appropriate Expansion of that System Component, unless the City's anticipated growth does not warrant making the Expansion and such determination is agreed upon by the Cities. When a City's Annual Flow reaches ninety percent (90%) of the Reserved Capacity of that City in a System Component, that City shall be deemed to have requested commencement of construction of an appropriate Expansion of that System Component, unless the City's anticipated growth does not warrant making the Expansion and such determination is agreed upon by the Cities. During the term of this Contract, the Cities agree to request Expansions for all of their Wastewater service needs in their respective Service Areas. Under no circumstances shall a City exceed the Reserved Capacity of that City in a System Component. If a City exceeds the Reserved Capacity of that City in a System Component, then the City must immediately take actions to reduce its Wastewater flows or expand any affected System Components at that City's sole cost. (b) Expansion Planning. Should any City request in writing, or be deemed to have requested an Expansion pursuant to the above paragraph, the other Cities shall, within forty-five (45) days after such request, determine whether they are willing to participate in the Expansion. By the end of the forty-five day review period, the City(ies) participating in an Expansion shall notify the Operations Committee of such participation. Any City may move forward with an Expansion even if no other Cities participate in such Expansion. The City(ies) participating in an Expansion must ensure that the Expansion minimizes any negative impacts to the non -participating Cities and will coordinate with the Operations Committee regarding planning, design and MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 7 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM construction of the Expansion. The Operations Committee shall have the opportunity to timely review and comment on the preliminary design, final plans and specifications, and other construction related matters as appropriate regarding the Expansion. The City(ies) requesting or deemed to request an Expansion are financially responsible for the design, construction, and inspection of the Expansion in accordance with this Contract and agree to provide periodic updates of the Expansion to the Operations Committee. (c) Separate Agreement for Expansion. The Cities will negotiate and enter into a separate interlocal agreement providing the terms and conditions for any Expansion, including, but not limited to capacity reservations for the Expansion, cost allocations, timing and method of payment, design, permitting, contract award, and management. Costs of the Expansion will be allocated among the Cities based on the prorata shares of the capacity reservations of each City participating in the Expansion. Upon completion of construction, the Expansion will be part of the System, and the Reserved Capacity of the Expansion will be allocated to and reserved for each participating City based on the provisions of the interlocal agreement. The interlocal agreement shall also adopt a new Exhibit A showing the capacity allocation for the expanded System Component(s). Any non -participating Cities shall join the interlocal agreement for the purposes of approving the revised Exhibit A. (d) Non -participating Cities. The non -participating City(s) will fully cooperate with the participating City(s) in efforts to obtain necessary governmental and regulatory approvals and permits for the Expansion and will use their best efforts to provide assistance in this regard, which shall be paid for solely by the requesting City(s). Section 3.7 Other Capital Improvements and Emergency Repairs. Costs and expenses associated with Capital Improvements, other than Expansions, shall be planned for and funded through the Capital Expense Budget or the Operations and Maintenance Budget, as applicable, in the process set out in Article IX herein or as otherwise agreed to by the Cities. Emergency Repairs shall be identified and reported to the Operations Committee, and the Operations Committee shall determine the method and party responsible for completing such repair and the source of funding for the repair on a case by case basis. ARTICLE IV SYSTEM OWNERSHIP, OPERATION, AND MAINTENANCE Section 4_1 System Ownership. The System shall be owned by the Cities in proportion to their reserved capacities in each System Component as shown in Exhibit A. Each City, respectively, shall have the exclusive right to its reserved capacity in each System Component. Each City shall have the right of entry to any System Component at any time with notice provided to the Operator. Section 4.2 System Operation and Management. The Cities shall contract with an Operator to manage, operate, and maintain the System in accordance with Prudent Utility Practice and Regulatory Requirements. Section 4.3 Operations Committee. The Cities hereby create an Operations Committee to be composed of the following members: MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 8 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (a) Two representatives appointed by Cedar Park; (b) Two representatives appointed by Round Rock; and (c) Two representatives appointed by Austin. Each City shall have one vote for decision-making purposes on the Operations Committee. The Operations Committee shall represent the individual and collective interests of the Cities and shall consult with and advise the Cities, through their respective City Managers or other designated representative. The City of Round Rock shall select the Chair of the Operations Committee who will be responsible for calling and coordinating Operations Committee meetings, drafting and circulating meeting agendas and circulating other documents to Committee members necessary for the proper functioning of the Committee. The City Manager or designee of each City shall appoint appropriate city staff members as the City's representatives (and alternate representatives to serve in the absence of the City's representatives) to the Operations Committee promptly after execution of this Contract, and shall immediately notify the other Parties of such appointment. Each representative (or alternate representative) shall serve as a member of the Operations Committee at the will of the City Manager or designee who appointed such representative. Upon the death, resignation or revocation of the power of a City's representative (or alternate representative), the City Manager or designee of such City shall promptly appoint a new representative (or alternate representative) as a member of the Operations Committee. Section 4.4 Responsibilities of Operations Committee. The Operations Committee shall provide oversight and direction for the System and the Operator on the following issues: (a) Provision of an agenda, minutes, and action items for the Operations Committee meetings; (b) Verifications of flow allocations of each City; (c) The Operator of the System; (d) Points of Entry to the System; (e) Approval of reuse water (treated wastewater effluent) facilities to be connected to the System; (f) (g) Design criteria and specifications; The operation and maintenance of the System; (h) The addition of new owners of the System and the terms and conditions of the agreements with such new owners consistent with the provisions of this Contract; (i) Review of the budgets, prior to submission to the Cities; (j) Review of the annual reports of the System; (k) Improvements to and Expansions of the System; (1) Review of and suggestions regarding proposals submitted to the Cities for engineering services related to the System, including but not limited to inflow and infiltration studies, flow metering projects, and compliance with Edwards Aquifer Recharge Zone requirements; MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 9 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (m) Review of bids or proposals received for construction of System Components, and make recommendations for contract award; (n) Review of invoices received for the construction of Expansions to the System, and make recommendations for the allocation and payment of such invoices; (o) Recommendations for professional services consultants, including, but not limited to, engineering and financial services; (p) Changes to the Engineering Report; (q) Review of cash flow projections and provision of input as to the assumptions contained therein; (r) Wastewater treatment system process modifications; (s) Contracts and contract amendments; (t) Payment allocations and schedules; (u) Reimbursement of City costs; and Any other pertinent matters relating to the management of the System. The Operations Committee shall meet at regular intervals to review the progress of construction of the System and the ongoing operation of the System. The Operations Committee shall have access to and may inspect at any reasonable time all physical elements of the System and all records and accounts pertaining to the System. The Operations Committee shall be diligent, prompt, and timely in reviewing, commenting, and acting on matters submitted to it. Section 4_5 General Management of the System. Except as expressly provided in this Contract, the oversight of the day-to-day operations of the System shall rest with the Operations Committee. Section 4.6 Meetings of the Operations Committee. The Operations Committee will hold regular monthly meetings at times and places to be selected by the members. In addition, any City may call a special meeting to be held at any time after they have given three (3) business days' notice to all of the other members of the Operations Committee. Any member may waive notice of or attendance at any meeting of the Operations Committee. At a meeting, the Operations Committee will transact any business that may properly be brought before the meeting. Any City may place an issue for discussion on the Operations Committee's agenda. The Operations Committee may authorize action or may delay action regarding the agenda item regardless if a City's member does not attend or send an alternate representative. Section 4.7 Attendance by Fern Bluff MUD and Brushy Creek MUD at Operations Committee Meetings. The Cities agree that Fern Bluff Municipal Utility District and Brushy Creek Municipal Utility District may appoint one representative each to be provided notice of and attend Operations Committee meetings to obtain information regarding the System and provide advice and input on System operations and maintenance where appropriate. Such representatives shall not constitute voting members of the Operations Committee and their participation in Operations Committee meetings shall be advisory in nature. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 10 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 4_8 Matters Requiring Unanimous Consent. The following matters will require the unanimous consent of the Operations Committee and the Cities with respect to the System: (a) amendments to the Engineering Report; (b) selection of Operator; (c) admission of a new owner for the System; (d) approval of Operations and Maintenance Budget and Capital Expense Budget; and (e) attendance by third parties of Operations Committee meetings other than the representatives of Fern Bluff MUD and Brushy Creek MUD as provided in Section 4.7. If a dispute arises among the Cities with respect to any of the above matters, any City may request mediation of the disputed matter in accordance with Article XI herein. If the disputed matter involves the approval of the Operations and Maintenance Budget the System shall be operated and payments shall be made by the Cities for Flow Charges in accordance with the budgets as presented by the Operator until such time as the dispute is resolved through mediation or otherwise and the budget is adjusted (or not). If the disputed matter involves the approval of the Capital Expense Budget, and if the disputing party is paying the majority of the Capital Expense in dispute, such Capital Expense shall not be included in the Capital Expense Budget until such time as the dispute is resolved through mediation or otherwise. If the disputing party is not paying the majority of the Capital Expense in dispute, the Capital Expense shall be included in the Capital Expense Budget. Section 4.9 Other Matters Not Requiring Unanimous Consent. For other matters related to the System not listed in Section 4.8, the Operations Committee and the Cities shall endeavor to reach a consensus on action to be taken with respect to the System provided that such action shall not unreasonably harm any City and the System will continue to be operated and maintained in accordance with Regulatory Requirements and Prudent Utility Practices. Any City may request mediation of the disputed matter in accordance with Article XI herein. Section 4.10 Relationship of Operations Committee and Operator. The Cities agree that the delegation of matters regarding System management and operation as between the Operations Committee and the Operator shall be as set out in the agreement between the Cities and the Operator. ARTICLE V RESERVED CAPACITIES Section 5.1 Reserved Capacities in System Components. Each City, respectively, shall have the exclusive right to its reserved capacity in each System Component as described in Exhibit A. No Reserved Capacity may be allocated to or used by another City other than the City on whose behalf that capacity has been reserved, unless the affected City specifically agrees in writing to the allocation or use. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 11 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 5.2 Transfer of Reserved Capacity. Any City may transfer any portion of its reserved capacity in one or more System components to another City, in exchange for such consideration as such Cities shall deem appropriate. The Cities making such transfer shall provide written notice to other City, signed by the Cities making the transfer, specifying the amount of transferred reserved capacity and the affected System Component(s), and providing that the Cities otherwise ratify and confirm their pre-existing obligations under this Contract. No such transfer shall be effective until and unless such notice is provided. The Operations Committee must be timely notified of such transfer, but the transfer is not subject to the approval of the Operations Committee. Section 5.3 Documentation of Transferred Reserved Capacity. In the event that reserved capacity is transferred, the Operations Committee shall cause a written update to be made to Exhibit A describing such transfer and setting forth the revised reserved capacity of each City in the System Component. Such action shall not require an amendment to this Agreement. Section 5_4 Wholesale Contracts. In the event that wastewater service is sold by a City to another entity located within the City's Service Area which will contribute Wastewater to the System, the City selling the wastewater service is solely responsible for the City's quantity and quality of wastewater entering the System, the City's Reserved Capacity in each of the System Components, and all rights and obligations stated herein. Such action is not subject to the approval of the Operations Committee. ARTICLE VI POINT(S)OF ENTRY Section 6.1 Point(s) of Entry. Each City shall deliver its Wastewater to one or more Point(s) of Entry designated for each City. The Operations Committee shall maintain a map identifying such Point(s) of Entry which it shall update from time to time as necessary to reflect the Point(s) of Entry for each City. The Cities shall cooperate in good faith to design their respective Point(s) of Entry to be at appropriate sizes and in appropriate locations to receive the City's Reserved Capacities. Each City shall have the exclusive right to designate and deliver Wastewater to its Point(s) of Entry and shall provide written notification to the Operations Committee of any new Point of Entry it proposes, including a map showing such location. Such written notice shall be provided in a reasonable amount of time to allow the Operations Committee to take such action as may be necessary to accommodate such new Point of Entry. Section 6.2 Inflow and Infiltration. Each City shall use its commercially reasonable efforts to minimize inflow and infiltration into that City's wastewater system that transports wastewater to the System. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 12 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM ARTICLE VII WASTEWATER DISCHARGE Section 7.1 Discharge Quality. The Cities shall have the right to discharge Wastewater into the System meeting the requirements of quality as set forth in the pretreatment program approved by EPA and TCEQ for the System and of which the System is capable of handling. Each City agrees to implement and enforce the System pretreatment program for its Service Area. Each City also covenants that it will have in effect and will enforce a sewer use ordinance in accordance with EPA and TCEQ's regulations or regulations of other governmental agencies having jurisdiction to set standards for waste discharges. Furthermore, each City shall, at any reasonable time upon request by another City, produce pretreatment program records for its Service Area for review. Each City also agrees that no new Significant Industrial User shall be allowed to connect to the City's sewer system within its Service Area without prior notification of the intent to connect being given by the City to the Operator. All Significant Industrial Users that are customers of a City and located within its Service Area and outside the City's corporate limits will also be required to obtain a sewer use permit. ARTICLE VIII FLOW CALCULATIONS Section 8.1 Unit of Measurement. The unit of measurement for Wastewater delivered hereunder shall be 1,000 gallons of water, U. S. Standard Liquid Measure. Section 8_2 Annual Flow. The Cities agree that the methodology outlined in Exhibit C for determining each City's "winter month average" shall be used to determine each City's Annual Flow for the purposes of developing the Monthly Flow Charge for each City as provided herein. To develop the Annual Flow, the "winter month average" for each City shall be multiplied by twelve (12) to convert the month total to an annual total. Each City shall be responsible for calculating its Annual Flow for the upcoming Fiscal Year and shall submit such calculations to the Operations Committee for review and comment prior to submission to the Operator by May 15`h of each year. ARTICLE IX BUDGETS, FLOW CHARGES, CITY COVENANTS Section 9.1 Operation and Maintenance Budget and Capital Expense Budget. As soon as reasonably possible during the first partial Fiscal Year and not less than one hundred twenty (120) days before commencement of each Fiscal Year, the Operator shall furnish to the Cities a detailed estimate of Operations and Maintenance Expenses and Capital Expenses to be incurred in the next ensuing Fiscal Year which it deems properly includable in the Operations and Maintenance Budget and the Capital Expense Budget for the upcoming Fiscal Year. Not less than ninety (90) days prior to each Fiscal Year, the Cities shall approve the Operation and Maintenance Budget and the Capital Expense Budget for that Fiscal Year. The Cities shall use diligent efforts so that Operation and Maintenance Expenses and Capital Expenses incurred by, and ultimately paid by, the Cities are reasonable and justified. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 13 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 9_2 Monthly Flow Charles. Each City shall be required to pay a Monthly Flow Charge for use in meeting that Month's portion of the Operation and Maintenance Budget and Capital Expense Budget. Simultaneously with the approval of this Contract, the Cities shall approve an interim Operation and Maintenance Budget and Capital Expense Budget and schedule of Monthly Flow Charges for the period of time between the Effective Date and September 30, 2010. For each subsequent Operation and Maintenance Budget and Capital Expense Budget adopted after the availability of the annual report required by Section 9.3, below, that is for a Fiscal Year that follows a Fiscal Year during which Monthly Flow Charges from a City have been payable hereunder, the Monthly Flow Charge amount estimated for the subsequent Fiscal Year shall be adjusted upward or downward, as appropriate, to account for any difference between the actual Operation and Maintenance Expenses and Capital Expenses and those budgeted and estimated for the previously reported period. The Monthly Flow Charge for each City for each Operation and Maintenance Budget and Capital Expense Budget shall be 1/12th (or in the case of the initial Fiscal Year, the fraction obtained by dividing 1 by the number of complete Months between the Effective Date and September 30, 2010) of the amount calculated by multiplying the Annual Flow for each City during the twelve (12) month period ending on April 30 preceding the beginning of the Fiscal Year for which the calculation is being made, expressed in thousands of gallons, by the quotient obtained by dividing the Operation and Maintenance Budget and the Capital Expense Budget for the period for which the calculation is being made, expressed in dollars, by the sum of all of the Cities' Annual Flows into System, also expressed in thousands of gallons during the twelve (12) month period ending on such April 30. Section 9.3 Annual Report The Operations Committee may cause to be prepared an annual report of the System each year to contain such matters and information as may be considered necessary and useful by the Operations Committee, including actual Operations and Maintenance Expenses incurred by the System for the preceding fiscal year. Section 9.4 Capital Expenses. Capital Expenses shall be allocated among and borne by the Cities in proportion to each City's respective reserved capacity in the System Component that is the subject of the Capital Improvement as listed in Exhibit A. The Cities shall determine the schedule for the funding and commencement of projects identified in the Capital Expense Budget prior to the commencement of each fiscal year. Section 9.5 How, When, and Where Payments are to be Made. The Cities agree to make payments of the Flow Charges to the Operator as prescribed in the contract(s) between the Cities and the Operator. Any other payments related to the System shall be addressed through the Operations Committee. Section 9.6 Source of Payment. (a) Each City represents and covenants that all payments to be made by it under this Contract shall constitute reasonable and necessary "operating expenses," as defined in Texas Government Code, Chapter 1502, as amended, of its City System, but only to the extent of the payments, and the Cities shall not be obligated to make the payments under this Contract from any source other than the gross revenues of its City System. Each City further represents that its governing body has determined that the MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 14 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM services to be provided by the System are necessary and essential to the treatment of wastewater for such City. (b) Each City agrees to fix and collect such rates and charges for services to be supplied by its City System as will produce gross revenues at all times during the term of this Contract in an amount at least equal to (i) all of the expenses of operation and maintenance of its City System, including specifically its payments under this Contract and (ii) all other amounts as required by law and the provisions of the ordinances or resolutions authorizing its bonds or other obligations now or hereafter outstanding and payable, in whole or in part, from the net revenues of its City System. (c) No ad valorem tax revenues of any City shall be pledged to the payment of any amounts to be paid by the Cities under this Contract, nor shall the Cities have the right to demand payment of any amounts to be paid by the City under this Contract be paid from funds raised or to be raised from ad valorem taxation from the City. The obligations under this Contract shall never be construed to be a debt or pecuniary obligation of the City of such kind as to require the City to levy and collect an ad valorem tax to discharge its obligations. Section 9.7 Annual Budgeting by the Cities. Each City shall make provision in each of its annual budgets and shall appropriate an amount sufficient, at a minimum, for the payment of all amounts required to be paid by the City under this Contract. Section 9.8 Revenue Sources Pledged. Each City hereby pledges gross revenues of its City System to the payment of its obligations under this Contract Section 9.9 General Covenants by Cities. Each City further represents, covenants and agrees that in accordance with and to the extent permitted by law, it will comply with the covenants listed below. (a) Performance. Each City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained herein; and it will, at the time and in the manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the fund and accounts created by ordinances, but only from and to the extent of the sources of funds described in such ordinances. (b) Legal Authority. Each City is a home rule city of the State and is authorized under the laws of the State to enter into this Contract. By execution hereof, each City represents that all actions on its part for the execution and delivery of this Contract have been effectively taken; and that this Contract is a valid and enforceable special obligation of the City in accordance with its terms. (c) Acquisition and Construction; Operation and Maintenance. Each City shall at all times use its best efforts to operate or cause to be operated its City System properly and in an efficient manner, consistent with Prudent Utility Practice, and shall use its best efforts to maintain, preserve, reconstruct and keep the same or cause the same to be so maintained, preserved, reconstructed and kept, with the appurtenances, in good repair, working order and condition, and shall from time to time make, or use its best efforts to cause to be made, all necessary and proper repairs, replacements, and renewals MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 15 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM so that at all times the operation of its City System may be properly and advantageously conducted. (d) Books, Records, and Accounts. Each City shall keep proper books, records, and accounts separate and apart from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to its City System, and it shall cause said books and accounts to be audited annually as of the close of each Fiscal Year. (e) Governmental Agencies. Each City will comply with all of the terms and conditions of all franchises, permits, and authorizations applicable to or necessary for a respective City System, and which have been obtained from any governmental entity, and the Cities have or will obtain and keep in effect all franchises, permits, authorizations, and other requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation, and maintenance of a respective City System. Section 9.10 City Rates, Fees, and Charges. Each City has the right under applicable law to assess, charge and collect such City impact fees, capital recovery fees, connection fees, meter fees, or other service fees, rates, taxes or other charges as it deems appropriate. This Contract shall not be construed to require (except as provided otherwise in this Section), limit or restrict the exercise of the governmental power of any City to implement the same. Each City will be solely responsible for the proper exercise of its governmental power to assess and collect such fees and charges and for ensuring that all fees, taxes, rates, and charges the City elects to charge are in compliance with applicable law. Each City agrees to establish and collect such rates and charges for its waterworks and sanitary sewer services to be supplied by its system as will make possible the prompt payment of all expenses of operating and maintaining its system including the payments committed hereunder, and the prompt payment of the principal of and interest on its obligations, if any, payable from the revenues of its waterworks and sanitary sewer systems. Section 9.11 Default. (a) Monetary Defaults by Cities. The deadline for payments of the Monthly Flow Charge required herein, and interest due on overdue amounts shall be governed by the provisions of Chapter 2251 of the Texas Government Code. (b) Other Defaults by Cities. In the event that any City defaults in the performance of any of its respective obligations under this Contract, other than the obligation to make payments of the Monthly Flow Charge, any of the non -defaulting parties, after giving reasonable notice of the default and opportunity to cure same, may exercise any remedy provided by law, as set forth in Section 13.8 below. Section 9.12 Unconditional Obligation to Make Payment. Recognizing the fact that the Cities urgently require the facilities and services of the System, and that such facilities and services are essential and necessary for actual use and for standby purposes, each City hereby waives all rights of set-off, recoupment, counterclaim, suspension, deferment, reduction, and amendment, with respect to making its payments and any other direct or indirect recipients of payments. Each City agrees that it shall make its appropriate payments and each City shall be unconditionally obligated to pay its payments as provided and determined by this Contract, regardless of whether or not the Cities actually acquire, construct, or complete the System or System Components, whether due to Force Majeure or any other reason, regardless of any other MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 16 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM provisions of this contract, or any other contract or agreement between any of the parties hereto. This covenant is for the benefit of and enforceable by the Cities. By entering into this Contract and performing its obligations under any Section of this Contract, each City does not release any persons from or waive any claims against such persons that the City may have resulting from actions by such persons contrary to that person's legal obligations. ARTICLE X COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS Section 10.1 State or Federal Laws, Rules, Orders, or Regulations. This Contract is subject to all applicable federal and State laws and any applicable permits, ordinances, rules, orders, and regulations of any local, state, or federal governmental authority having or lawfully asserting jurisdiction but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule, or regulation in any forum having jurisdiction and the Cities represent that, to the best of their knowledge, no provisions of any applicable federal or State law, including the City Charters of the Cities, nor any permit, ordinance, rule, order, or regulation of either party will limit or restrict the ability of any other party to carry out their respective obligations under or contemplated by this Contract. Section 10.2 Cooperation to Assure Regulatory Compliance. The Cities and the Operator must comply with all federal, state, and local requirements to obtain permits, grants and assistance for system construction, studies, etc.; therefore each City will cooperate with each other and with the Operator in good faith at all times to assure compliance with any such governmental requirements where noncompliance or non-cooperation by the City may subject the Operator to penalties, loss of grants or other funds, or other adverse regulatory action. In making the determinations called for herein, the Operator will covenant that such determinations will be made only after informing the Operations Committee, after detailed studies of statistical data available as to the need and feasibility have been made, and after consulting with engineers and financial advisors. Each City will be kept advised at all times of planning and implementing System repairs and improvements necessary to meet Regulatory Requirements. Section 10.3 Recordkeeping and Reporting. The Cities shall insure that the Operator maintains records on site in accordance with applicable State laws. (a) Records to be maintained by the Operator include, but are not limited to: (i) systems; (ii) as applicable, copies of contracts made with each wastewater customer, vendors, and consultants; (iii) records of volume of treated water delivered to each water user per delivery; (iv) water quality analyses; (v) as -built plans, easements, agreements, and leases concerning the access, operations, and maintenance of the System; copies of notifications made to the TCEQ concerning wastewater MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 17 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (vi) billing documents and all budgets; (vii) design criteria and specifications; (viii) compliance reports; (ix) documentation of facts and cause analysis of any overflows; (x) written assessments of the System made by the Operator; (xi) documents related to Points of Entry into the System; (xii) documentation of repairs and rehabilitation of the System; (xiii) documentation of maintenance of equipment and vehicles; (xiv) comprehensive asset list; (xv) documentation of safety issues and actions; (xvi) internal and vendor inspection reports; and (xvii) documentation of inflow and infiltration studies and actions. (b) The Operator shall report to the TCEQ as required by law. All costs of compliance with the rules of the TCEQ shall be considered an Operation and Maintenance Expense. ARTICLE XI NEGOTIATION AND MEDIATION OF DISPUTES Section 11.1 Agreement Regarding Remedies. The Cities agree that their respective obligations under this Contract are unique and recognize that they may be issuing bonds to acquire, construct, expand, improve or replace the System. The failure by any City to perform its obligations under this Contract would not be capable of being appropriately remedied by award of damages to any other affected party to this Contract and in any event, such damages would be difficult, if not impossible, to determine because of the unique nature of the Cities' obligations to each other hereunder. Further, the Cities agree that the remedy of termination of this Contract by any City is inappropriate and not in the public interest. Therefore, the Cities agree that they shall be entitled, and limited, to the remedies of specific performance, mandamus and injunction in the event of any breach of any obligation by any party under this Contract. The Cities hereby waive any requirement that they be required to provide any bond or other surety in order to obtain any of the agreed upon remedies. Section 11.2 Agreement to Negotiate First to Resolve Issues. The Cities agree to attempt first to resolve disputes concerning this Contract amicably by promptly entering into negotiations in good faith. The Cities agree that they will not refer any dispute to another dispute resolution procedure including mediation or litigation until they have first made reasonable and good faith efforts to settle their differences by joint negotiations conducted in a timely manner. Section 11.3 Agreement to Mediate. If any dispute cannot be resolved through good faith negotiation, then the Cities shall endeavor to resolve the dispute by mediation as provided herein. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 18 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 11.4 Presentation of Written Claim Regarding Disputes Not Resolved by Negotiation. In the event that a dispute is not resolved as a result of such negotiations, any City may at any time give formal written notice to another City of a "claim." A "claim" as used herein means a demand or assertion by one of the Cities (the "claimant") seeking, as a matter of right, adjustment or interpretation of contract terms, the payment of money, an extension of time for performance or other relief with respect to the terms of this Contract or any other dispute or matter in question among the Cities arising out of or related to this Contract. Such notice shall be in writing. After such notice is given, the dispute resolution procedure provided for below shall immediately enter into effect. Section 11.5 Performance During Mediation. The claimant shall continue with performance under this Contract pending mediation of the dispute. Section 11.6 Appointment of Mediator. Promptly following the making of a written claim by any City, the Cities will consult with one another to agree on the appointment of a mediator acceptable to all Cities. The mediator shall have experience in matters of the kind giving rise to the claim. If within five (5) business days the Cities are unable to agree on the appointment of a mediator, then any City may request the appointment of a mediator by the Center for Public Policy Dispute Resolution at the University of Texas at Austin School of Law. The Cities shall endeavor to secure such appointment from the Center for Public Policy Dispute Resolution within ten (10) business days after the request for same is made. The Cities agree to utilize the mediator appointed by the Center unless they ultimately reach agreement on an alternative selection and give notice to the Center that another selection has been made by agreement. Section 11.7 Rules for Mediation The Cities agree to the following stipulations concerning the conduct of the mediation: (a) The mediator shall be impartial among the Cities and shall have no conflict of interest. (b) The mediator shall not have any past, present or anticipated financial interest in the Contract or the System except for the payment for services as mediator nor shall the mediator have been previously employed or acted as a consultant, attorney, employee, engineer, architect, contractor or subcontractor of any City nor have any present or anticipated future engagement of the kind described. Before the engagement of the mediator is finalized, the mediator shall provide to the parties a disclosure statement containing a resume of experience, and a description of past, present or anticipated future relationships to the System and the Cities, their engineers, contractors, subcontractors, attorneys, architects, or consultants. (c) The mediation shall be held at a time and location mutually agreeable to the Cities and the mediator provided, however, that the mediation shall commence no later than fifteen (15) business days following the confirmation of appointment. (d) At least ten (10) business days prior to the mediation, the claimant shall submit to the other Cities and the mediator a statement of the claimant's position, the issues that need to be resolved, and a summary of the arguments supporting the claimant's position. At least two (2) business days prior to the mediation, the responding Cities MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 19 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM shall submit their written response to the claimant's statement and provide a summary of their arguments in response. (e) If the Cities agree that independent expert or technical advice would be helpful in facilitating a negotiated resolution of the dispute, the mediator may make arrangements to obtain such advice, and may, with the agreement of the Cities, make arrangements for an independent expert to render a non-binding advisory opinion with respect to any technical matters in dispute after hearing the contentions of the Cities with respect thereto. The expenses of obtaining such independent advice or advisory opinion shall be borne equally by the Cities. (f) No City shall engage in any private interview, discussion or argument with the mediator concerning the subject matter of the mediation. (g) The fees of the mediator and any other costs of administering the mediation shall be borne equally by the Cities unless otherwise agreed among them in writing. (h) The mediator may promote settlement in any manner the mediator believes appropriate at one or several mediation sessions as agreed to by the Cities. The mediation shall continue only so long as desired by the parties and with the consent of all of them. (i) Mediation sessions shall be private unless otherwise required by law. Persons other than the representatives of the Cities may attend mediation sessions only with the permission of all Cities and the consent of the mediator. (j) All communications made in the course of the mediation process including any advice or advisory opinions rendered shall be confidential in accordance with V.T.C.A. Civil Practice and Remedies Code, Section 154.073. Section 11.8 Arbitration. If a dispute arising pursuant to this Contract is not resolved through mediation as described in this article, the matter may be referred to binding arbitration upon the unanimous agreement of the Cities under terms and conditions to which the Cities agree. If the Cities do not agree to such arbitration, the Cities may pursue such other remedies as may be available to them in law or equity and as provided in this Contract. ARTICLE XII SPECIAL PROVISIONS Section 12.1 Contracts with Others in Relation to System (a) Each City shall have the right to enter into contracts with other persons natural or corporate, private or public, to receive Wastewater from such persons that are located within each respective City's Service Area. Each City covenants that it will advise the other Cities and the Operator of all such written contracts and will, if requested by another City or the Operator, furnish such City or Operator with a list of all customers other than retail residential, and commercial customers. Initially, within thirty (30) days after execution of this Agreement, and thereafter for each calendar year during the tenure hereof, each City will provide the other Cities by January 31st of each year an annual MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 20 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM report containing the following data about each City's customers within the City's Service Area that the System ultimately serves: (1) actual number of connections as of the end of the calendar year; (2) number of new wastewater connections made in the previous calendar year; classification, by number and percentage, of accounts according to the following: (i) residential; (ii) multi -family; (iii) business/commercial; and (iv) other. (4) if business or commercial connections, a copy of any City industrial waste discharge permit issued to such premises. Section 12.2 Future Service to the City of Leander. The Cities recognize and contemplate the likelihood of Leander's joining the System in the future and acquiring Reserved Capacity for Leander to serve the Leander Service Area at that time. In that regard, the Cities agree to reasonably cooperate to obtain Leander's concurrence to enter into an agreement with the Cities to receive service from the System. (3) Section 12.3 Title to Wastewater. Title to and interest in each City's Wastewater shall remain with each City, respectively, at all times. One City shall not acquire any right or title to the other Cities' respective Wastewater interests by virtue of this Contract and shall not otherwise assert any ownership interest in any City's Wastewater rights. Section 12.4 Reuse of Treated Effluent from the System. Any City may utilize treated effluent from the System in accordance with this Section. There will be no charge for the treated effluent; however, each City will be responsible for paying for all capital and operational costs associated with its respective use for any treated effluent reuse facilities. Each City's allowable withdrawal rates of treated effluent at any given time shall be in proportion to and not exceed each City's Annual Flow as a percent of the total Annual Flow of all Cities in the Wastewater Treatment Plants provided the Cities may contract between themselves for the reuse of effluent. The Operations Committee shall be kept apprised routinely by the Operator, and any other City, regarding actions taken or contemplated to be taken in regard to use of treated effluent, including without limitation, plans, engineering reports and similar information verifying compliance with the provisions of this Section. All reuse facilities shall be constructed by the City for whose benefit the reuse facilities are intended. Reuse facilities may be constructed on System property provided that the location of the facilities will not impair the ability of System facilities or other Cities' reuse facilities to be constructed in the future. Unless otherwise agreed by all Cities, title to any reuse facilities located on System property shall be dedicated to the Cities for ownership and operation, but responsibility for, construction costs and operation and maintenance costs of, and the right to the use of, those facilities shall remain with the City(s) for whose benefit the reuse facilities exist. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 21 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Round Rock's service area for treated effluent shall be Round Rock's Service Area and areas outside of Cedar Park's and Austin's Service Areas. Cedar Park's service area for treated effluent shall be Cedar Park's Service Area and areas outside of Round Rock's, and Austin's Service Areas. Austin's Service Area for treated effluent shall be Austin's Service Area and areas outside of Round Rock's, and Cedar Park's Service Areas. All Cities agree to not object to any future water right bed and banks permit requests filed by any City for delivery of that City's Contractual Flow of treated effluent from the East Plant. ARTICLE XIII GENERAL PROVISIONS Section 13.1 Participation by the Parties. Each City represents to the others that it is empowered by law to participate in the acquisition, construction, and financing of the System, and to execute this Contract and other agreements and documents as are or may hereafter be required to accomplish the same; and that its participation in the System and execution of this Contract have been duly authorized by action of its governing body at a meeting conducted in accordance with the Texas Open Meetings Act, as amended, Chapter 551, Texas Government Code. Each City agrees to furnish to each other such documentation or evidence of its authority to so participate and execute the contracts and other agreements as the other party may reasonably request, and to take and perform such other and further actions and execute such other agreements and documents as may be reasonably required to carry out the provisions of this Contract. Section 13.2 Insurance. (a) The Cities agree to carry public liability insurance on the System for purposes and in amounts which ordinarily would be carried by a privately owned utility company owning and operating such facilities. The Cities shall also carry property casualty insurance in the amount of the replacement value of all improvements and personal property connected with the System (less a deductible comparable to the deductible on the Cities' property insurance for Cities property generally). The amount of each respective insurance shall exclude a proportionate share of the replacement value equal to the portion thereof owned by Austin. The premiums for such insurance shall be an operation and maintenance expense which shall be shared by the Cities, excluding Austin. The proportionate charge to each of such Cities shall be based on their respective portion of the reserved capacity and included in the Flow Charge. The City of Austin is self insured and, in lieu of the above required insurance, may annually certify such fact to the Operations Committee and not have the proportionate cost of insurance included in its Flow Charge. In the event a liability claim or a casualty loss covered by the insurance becomes payable by the Cities, Austin shall pay its proportionate share pursuant to its self insurance plan. (b) The Cities agree to require the contractor or contractors employed for construction of the System to carry insurance coverage throughout the construction period in at least the following amounts: (i) Workers' Compensation: State law limits; MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 22 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (ii) General Liability (including contractual liability) and Automobile Liability: One million dollars ($1,000,000.00) per person and per occurrence for bodily injury and One million dollars ($1,000,000.00) for property damage; (iii) Builder's Risk: full replacement value of improvements; (iv) Performance and Payment Bond: full value of contract; (v) Cost Overrun Insurance; and (vi) Timely Completion Insurance. The Cities shall be furnished with a certified copy of such effective policy of insurance prior to commencement of construction. Such insurance policies shall name the Cities as additional insureds, and the Cities shall be provided with a certificate of insurance showing the required coverage and providing that the policies may not be canceled, changed, or not renewed until the Cities have been given thirty (30) days prior written notice of such event. The insurance required by this section may be modified by written agreement of the Cities, in accordance with good business practice. Any questions about the scope of coverage required hereunder shall be resolved by written agreement between the Cities. The Parties can agree to substitute an owner controlled insurance program for any of the above specified insurance requirements. Section 13.3 Force Majeure. By reason of "Force Majeure" any City is rendered unable wholly or in part to carry out its obligations under this Contract, if that City gives notice and full particulars of such "Force Majeure" in writing to the other parties within a reasonable time after occurrence of the event or cause relied on. The obligation of the party giving such notice, shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Majeure" as employed herein shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the United States or the State of Texas or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of wastewater systems or water supply and inability on the part of such City to provide water necessary for operation of its water and wastewater system hereunder, and impossibility by operation of law. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the party having the difficulty and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable in the judgment of the party having the difficulty. Section 13.4 Term of Contract. This Contract shall be effective upon the day and year above recited, and shall continue in effect until December 31, 2050. Section 13.5 Amendment and Modification. This Contract shall not be amended except in writing of all Parties hereto. No change, amendment, or modification of this Contract shall be made or be effective which will affect adversely the prompt payment when due of all money MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 23 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM required to be paid by each City under the terms of this Contract and no such change, amendment, or modification shall be made or be effective which would cause a violation of any provisions of any bond resolution of another City. Section 13.6 Addresses and Notice. Unless otherwise provided herein, any notice, communication, request, reply, or advice (collectively, "Notice") hereunder 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 herein 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 when received by the party to be notified. For the purposes of notice, the addresses of the Parties shall, until changed as herein provided, be as follows: If to Cedar Park: City Manager 600 North Bell Blvd. Cedar Park, Texas 78613 If to Austin: Director, Austin Water Utility P.O. Box 1088 Austin, Texas 78767 If to Round Rock: City Manager 221 E. Main St. Round Rock, Texas 78664 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 13.7 Severabilitv. The Cities specifically agree that in case any part of this Contract or the application of such part to any situation or circumstance should be held to be 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 part of this Contract or the application of such part to any other situation or circumstance, and it is intended that this Contract 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 13.8 Remedies Upon Default. It is not intended hereby to specify an exclusive remedy for any default, but all such other remedies (other than termination) existing at law or in MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 24 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM 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 other Cities 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 Contract, any right or remedy or any default hereunder 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 of any breach or default 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 be deemed or construed to be a waiver of subsequent breaches or defaults of any kind under any circumstances. Section 13.9 Venue. All amounts due under this Contract, including, but not limited to, payments due under this Contract or damages for the breach of this Contract, shall be paid and be due in Williamson County, Texas, which is the County in which the principal facilities of the System are located. It is specifically agreed among the Cities that Williamson County, Texas, is the place of performance of this Contract; and in the event that any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Williamson County, Texas. Section 13.10 Statutory Authority. In entering into this Contract and performing all duties and obligations hereunder, the Cities exercise their authority under and in accordance with the State Constitution and laws including, but not limited to, Chapter 1502, as amended, Texas Government Code; each City's respective Home Rule Charter; Chapter 1371, as amended, Texas Government Code; and all other laws which may authorize this Contract, all of which provisions and laws, cited or not cited herein, shall cumulatively provide the authority for this Contract. Section 13.11 Contract for Benefit of the Cities. This Contract is made for the exclusive benefit of the Cities only, and not for any third party or parties, such as Fern Bluff Municipal Utility District and Brushy Creek Municipal Utility District, and such third parties may not assert any rights or remedies under or by reason of this Contract. Section 13.12 Succession and Assignment. This Contract is binding on and inures to the benefit of the Cities hereto and their respective successors, representatives, and assigns. This Contract may not be assigned by any party hereto without (i) complying with any provisions relating to the right of the Parties to assign this Contract and (ii) prior written notice to and approval by the other Cities, which consent may not be unreasonably withheld or delayed. Section 13.13 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 Contract for all purposes and are adopted as a part of the judgment and findings of the Cities. Section 13.14 Entire Agreement. This Contract constitutes the entire agreement among the Cities with respect to the matters described herein. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 25 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 13.15 Applicable Law. This Contract shall be governed by and construed in accordance with the laws of the State, and the obligations, rights, and remedies of the Parties hereunder shall be determined in accordance with such laws without reference to the laws of any other state or jurisdiction, except for applicable federal laws, rules, and regulations. Section 13.16 Counterparts. This Contract 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. IN WITNESS WHEREOF, the Cities hereto acting under authority of their respective governing bodies have caused this Contract to be duly executed as of the day and year first above written. ** SIGNATURE PAGES TO FOLLOW ** MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 26 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM CITY OF AUSTIN, TEXAS By: Rudy Garza, Assistant City Manager MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 27 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM CITY OF CEDAR PARK, TEXAS By: Bob Lemon, Mayor Attest: By: LeAnn Quinn, City Secretary MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 28 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM CITY OF ROUND ROCK, TEXAS By: Alan McGraw, Mayor Attest: By: Sara White, City Secretary MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 29 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Exhibits Exhibit A—System Components Exhibit B—Description of the System Exhibit C—K Friese Methodology for Winter Month Averaging EXHIBITS EXHIBIT B THE SYSTEM The Brushy Creek Regional Wastewater System as described in the Engineering Report prepared by PBS&J on behalf of the Lower Colorado River Authority, titled BRA/LCRA Brushy Creek Regional Wastewater System Engineering Report dated October 29, 2000; The wastewater interceptor commonly known as the South Interceptor; The wastewater interceptor commonly known as the Onion Creek Relief Interceptor; and The wastewater interceptor commonly known as the Southwest Interceptor. BRUSHY CREEK REGIONAL WASTEWATER SYSTEM WINTER WATER AVERAGING CALCULATION Prepared for: City of Round Rock City of Cedar Park City of Austin Prepared by: K Friese & Associates, Inc. F-6535 1120 S. Capital of Texas Hwy The Setting III, Ste. 100 Austin, Texas 78746 (512) 338-1704 September 22, 2009 Introduction / Background The Cities of Austin, Cedar Park, and Round Rock are in the process of acquiring the Brushy Creek Regional Wastewater System (BCRWWS) from the Lower Colorado River Authority (LCRA). This system includes more than 13 miles of wastewater interceptor ranging in size from 36" to 84" in diameter and two wastewater treatment plants (WWTPs), including a 21.5 MGD Regional WWTP. Located entirely in Williamson County, the BCRWWS currently serves the wastewater needs of the referenced cities as they fall within the Brushy Creek Basin, as well as those of the Fern Bluff and Brushy Creek MUDs. Future plans include adding the flow from the City of Leander. Customers of the system currently operate under the terms of a "Wastewater Disposal Contract" with the LCRA/Brazos River Authority Alliance dated October 1, 2000, under which the terms of the annual cost allocation of "Operation and Maintenance Expense Requirements" are currently dictated. As Austin, Cedar Park, and Round Rock are in the process of drafting their own contract terms and conditions, they expressed the desire to create a uniform methodology of flow measurement and subsequent language appropriate to this O&M section of the contract. Recent discussions have considered using a system of "Winter Water Averaging" to establish base dry weather wastewater flows while other methods, including system/point of entry metering and flow monitoring, may be established to identify and refine Infiltration & Inflow (I&I) contribution. Scope K Friese & Associates, Inc. (KFA) was authorized to work with each BCRWWS participant city/MUD to gather information for the purpose of creating a uniform methodology for "winter water averaging". As a part of this initial scope, KFA also evaluated initial system meter locations, and prepared a suggested format for a one page quarterly report on flow monitoring. Future work efforts are anticipated to include actual meter installation and I&I Analysis. Winter Water Averaging — Data Collection and Analysis KFA developed an 11 item questionnaire intended to encompass the major factors necessary for a complete winter water averaging program. The questionnaire was then emailed to the system participants, including the City of Leander. Each participant submitted a completed questionnaire back to KFA. The responses were tabulated and used to develop a recommended policy for a common analysis — based on attempts to utilize as much of the collected data and methodologies currently in place by each individual participant. The Winter Water Averaging Summary spreadsheet and Winter Water Time Period Analysis are attached (Exhibits 1 and 2). Page 1 of 3 K# FRI ESE & ASSOCIATES, INC:. Proposed Methodology for Billing of System O&M For accounting for wastewater flows from each customer, the Participants shall use "winter averaging of water consumption" for connections as described herein. Winter average of water consumption shall mean: A. All Accounts Except for Those Listed Below 1. The following methodology: a. Use actual water usage of each Participant's accounts for all cycles read for 2 consecutive billing periods, with the earliest date being December 1St b. Average the water readings for the 2 periods (based on the average daily usage) for each user, except for those listed below, and create a "winter month average" to be applied each billing cycle. c. Bill wastewater usage based upon the winter month average, assuming 100% return flow. B. Metered Irrigation Accounts 1. Use wastewater meter readings, if available, or 2. If the Participant's customer's user has a separately metered irrigation system, use the above methodology on the actual domestic water usage. C. Wastewater Metered (Wholesale) Accounts 1. Any Participant customers with separate wastewater meters (wholesale accounts) will be accounted for using actual meter readings and 100% return flow. D. City of Cedar Park Water Reclamation Facility Bypass 1. For the City of Cedar Park Water Reclamation Facility bypass, the existing meter in the Regional System downstream of the facility and upstream of the first point -of -entry shall be read during a 12 month period ending April 30. At the conclusion of the metering period, the following procedure shall be used to derive the winter month average to be billed for the bypass flow: a. The totalized bypass flow at the conclusion of the 12 month period ending April 30 shall be divided by the sum of the totalized bypass flow and the totalized Water Reclamation Facility effluent flow from the same period. This value is the percentage of total flow to the Water Reclamation Facility that the bypass flow represents. b. The bypass flow percentage calculated in (a.) shall then be multiplied by the total winter month average flow, as calculated in A. above, contributing to the Water Reclamation Facility. The calculated value is considered to represent the total winter month average flow for the bypass flow. Page 3 of 3 K* FR ESE & AssociA,1 F43, E. Special Exceptions 1. Each Participant acknowledges and submits to the other Participants for review and consideration, any "Special Exceptions" to the agreed methodology. Exceptions may include, but are not limited to, cooling tower credit, and/or one time "extraordinary events". Wholesale agreements with MUDs which may be addressed in the methodology above are not considered "Special Exceptions". Meter Locations In a previous work effort, KFA evaluated data gathered from the existing system meters. Based on the quality of data obtained at these locations, combined with the goal of systematically identifying major I&I contributors, we identified six locations for the first round of metering. These suggested locations are depicted on the attached exhibit. Suggested Quarterly Report/Executive Summary Format Once meters have been installed and data is gathered, KFA will perform analysis and submit a quarterly report to the participants for review. KFA anticipates each quarterly report to include the results of any analysis as well as a one-page "Executive Summary". At this time, we envision the Executive Summary will address the following: • Data Gathering Period • General Quality of the Data (discussion and scatter graph) • Rain Events in the Service Area (description, number, intensity, location) • Peak flow as a % of pipe capacity at each meter site • Summary of Analysis Performed and Observations • Recommended Actions for the Upcoming Quarter (e.g., collect more data at same location, move meter to another location, etc.) Page 3 of 3 K#FRIESE & ASSC CCit r is, INC. EXHIBIT 2. BILLING PERIODS REPORTED BY UTILITIES FOR WINTER WATER USAGE 11111riti I ' ROUND ROCK �h'IIflNNIiuI.nnI :r Set11 Sun 11/2 Mon 11r3 IMMIIIMMI IIMEMEMINIMME Fr Sat Sun Mon 11/8 1119 11'12 Sat Sun Mon Sat Sun Mon Fri Sat Sun 11/15 11/18 MILIM MEM 11/21 11/22 11/23 24 1127 25 11/29 _ 11/30 Thu Set Sun Mon Tue Ned Thu Fri Sat Sun Mon Tue Wed Sat Sun Mon 2/12 12/13 2114 2/15 2/16 MIMI MINN 2_2412'25 Fn Sat Sun Mon 12; 26 12/27 12/28 2; 29 MENU WIMMI IN44IM® MEM Fri Sat Sun Mon Tue Wed Thu Sat Sun Non 1/3 /4 EWEN MEW WMTM =MN Thu Set Sun Mon Tue Wed =EMI MEM Sat Sun Mon Tue Ned Thu Set 11111 Thu_ Fri Sat Sun Mon 1 28 1 29 30 /31 2/1 2i 2 23 2,5 2,r6 2/1 2/8 2:9 ®® ®®VI ME 1111111111.1111111111 Sat Sun Non Fri Sat Sun Mon 2'73 2/14 2/15 2:16 KIM 220 2/21 2/22 223 11311111111 i111 r hu Fn Sat Sun Mon Tue Thu Fri Sat Sun Tue Thu Sat Sun Mon Sat Sun Mon 3:5 36 3/7 318 3; 9 3/f0 3/14 3/15 3!16 110111111 I_ - MINIM 11111_11M11® I II r•-• Ell IIIIMIIMMIMIINWIMM ra IIMMIIIMINNIWIIIIIIIWIW =11•11 --II mom��i-®® ®� _®__ ®®®11111111 IMMO _mmo® cr 0 Recommendation Round Rock 0 0 m LL Cedar Park 0 0 U CD O O 0 December through February 7g7.'" 99 o a) -. Q) 090 .> O 0 a 0 O m8",5-'0 8 `o ' 0 'm0 L 0 N i0 N j N 0 03 a) • a) L 0 E Q All three months All data used all 4 -months data 0 0 O O O O O O 0 0 Z Acknowledge Exceptions Actual domestic water usage Q Z 0 } Ww VI LLIato >- 5 2 z co < O w -0 • > a m t U-1 Lil 1- 1— z ce Recommendation Round Rock z 73 —j z 6.000 Gallons z ▪ ib- -c > q 92 0c45 E r„' • cp° 3 2 • cm • cf, ;) a_ One - WIC MUD 1 co co 0 4)1 z c 5,000 gallons default A" A", �g' ..... F irix J "'A -----..... ""z 0 7-- bER LEAtt" 0 d HUTTO, 'g U=--1 V -10— Legend Exisdrig BCRWWS Point of try Future BCRV4WS Logo .4 Components 35 ........ ............I Exhiflng BCRWWS muffiPle Custoffrer KOX. Cuslorter Components K*FRIESE Austin P,0Z &ASSOCATES, INC, Future SCRWM -U&C Customr Components T..1+gh-V&,V,04��t iao Brushy Creek MUD P 0 E 1—78746 �t—(512)a3&17D4 Fa,�512�3W-1784 LCRA Service Territory Cadar Park P�OX. Fern Bluff MUD P.0,E. MUD Boundary Brushy Creek Regional Round Rock P�O.E� Brusby Creek MUD out of Wastewater System District Wastewater service GSVM Meter Location Service Area Insid N4 Corporate undut e A Proposed Mehir Location Service Area Ouftide X-XX Contracts-MH 0 Corporate unwits DATE: November 24, 2009 SUBJECT: City Council Meeting — December 3, 2009 ITEM: 8D1. Consider a resolution authorizing the Mayor to execute a Master Contract for Financing, Construction, Ownership and Operation of the Brushy Creek Regional Wastewater System with the Cities of Cedar Park and Austin. Department: Staff Person: Water and Wastewater Utilities Michael Thane, P.E., Director of Utilities Justification: In October 2000, the Cities of Round Rock, Austin, and Cedar Park, the Lower Colorado River Authority (LCRA), and the Brazos River Authority (BRA) entered into a Wastewater Disposal Contract for the ownership and operation of the Brushy Creek Regional Wastewater System (BCRWWS). Over the past two years, the Cities have been in negotiations with the LCRA on the transfer of the BCRWWS back to the Cities. On June 3, 2009, the LCRA and the Cities of Round Rock and Cedar Park entered into a Memorandum of Understanding (MOU) that outlined the necessary steps in order for the Cities to purchase the BCRWWS from the LCRA. Under the MOU, the parties agreed to enter into a Purchase Agreement by September 8, 2009 and that the closing of the purchase shall occur on or before December 8, 2009. At closing, the LCRA shall transfer the BCRWWS to the Cities and the Cities agree to fully release and discharge LCRA from any further obligations or liability related to the BCRWWS. This Contract is for the ownership and operation of the BCRWWS by the Cities of Round Rock, Austin, and Cedar Park. The Cities desire to discharge wastewater from their individual wastewater collection systems into the BCRWWS in order to serve the wastewater needs of the Cities, to achieve efficiencies of cost and operation and to protect and preserve the environment of the Brushy Creek watershed. This Contract sets forth the terms and conditions under which the Cities will finance, construct, acquire, own, maintain and operate the BCRWWS. Strategic Plan Relevance: Public Health and Safety Strategic Initiative Goal 28.0 "Protect public health and protect the environment through proper waste disposal." Funding: Cost: N/A Source of funds: Self -Financed Wastewater Construction Outside Resources: Cities of Cedar Park and Austin Public Comment: N/A EXECUTED DOCUMENT FOLLOWS MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Among CITY OF AUSTIN CITY OF CEDAR PARK AND CITY OF ROUND ROCK Dated: December 8, 2009 TABLE OF CONTENTS Page RECITALS 1 ARTICLE I DEFINITIONS AND INTERPRETATIONS 1 Section 1.1 Definitions 1 Section 1.2 Interpretation. 5 ARTICLE II PURPOSE AND DESCRIPTION OF THE SYSTEM 6 Section 2.1 Purpose of this Contract. 6 Section 2.2 General. 6 Section 2.3 System Described in Engineering Report. 6 Section 2.4 Permits and Approvals. 6 ARTICLE III SYSTEM ACQUISITION AND CONSTRUCTION 6 Section 3.1 General. 6 Section 3.2 Access to Cities. 6 Section 3.3 Easements. 6 Section 3.4 Points of Entry. 7 Section 3.5 System Design and Construction. 7 Section 3.6 Expansions. 7 Section 3.7 Other Capital Improvements and Emergency Repairs 8 ARTICLE IV SYSTEM OWNERSHIP, OPERATION, AND MAINTENANCE 8 Section 4.1 System Ownership. 8 Section 4.2 System Operation and Management. 8 Section 4.3 Operations Committee. 8 Section 4.4 Responsibilities of Operations Committee. 9 Section 4.5 General Management of the System. 10 Section 4.6 Meetings of the Operations Committee. 1 0 Section 4.7 Attendance by Fem Bluff MUD and Brushy Creek MUD at Operations Committee Meetings. 10 Section 4.8 Matters Requiring Unanimous Consent. 11 Section 4.9 Other Matters Not Requiring Unanimous Consent 1 1 Section 4.10 Relationship of Operations Committee and Operator. 11 ARTICLE V RESERVED CAPACITIES 11 Section 5.1 Reserved Capacities in System Components. 1 1 Section 5.2 Transfer of Reserved Capacity 12 Section 5.3 Documentation of Transferred Reserved Capacity. 12 Section 5.4 Wholesale Contracts. 12 ARTICLE VI POINT(S)OF ENTRY 12 Section 6.1 Point(s) of Entry 12 Section 6.2 Inflow and Infiltration. 12 ARTICLE VII WASTEWATER DISCHARGE 13 Section 7.1 Discharge Quality. 13 ARTICLE VIII FLOW CALCULATIONS 13 Section 8.1 Unit of Measurement. 13 Section 8.2 Annual Flow 13 ARTICLE IX BUDGETS, FLOW CHARGES, CITY COVENANTS 13 Section 9.1 Operation and Maintenance Budget and Capital Expense Budget. 13 Section 9.2 Monthly Flow Charges. 14 Section 9.3 Annual Report 14 Section 9.4 Capital Expenses. 14 Section 9.5 How, When, and Where Payments are to be Made. 14 Section 9.6 Source of Payment. 14 Section 9.7 Annual Budgeting by the Cities. 15 Section 9.8 Revenue Sources Pledged. 15 Section 9.9 General Covenants by Cities 15 Section 9.10 City Rates, Fees, and Charges 16 Section 9.11 Default 16 Section 9.12 Unconditional Obligation to Make Payment. 16 ARTICLE X COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS 17 Section 10.1 State or Federal Laws, Rules. Orders, or Regulations. 17 Section 10.2 City Cooperation 17 Section 10.3 Recordkeeping and Reporting 17 ARTICLE XI NEGOTIATION AND MEDIATION OF DISPUTES 18 Section 11.1 Agreement Regarding Remedies. 18 Section 1 1.2 Agreement to Negotiate First to Resolve Issues. 18 Section 11.3 Agreement to Mediate 18 ii Section 11.4 Presentation of Written Claim Regarding Disputes Not Resolved by Negotiation. 19 Section 11.5 Performance During Mediation. 19 Section 11.6 Appointment of Mediator. 19 Section 11.7 Rules for Mediation 19 Section 11.8 Arbitration. 20 ARTICLE XII SPECIAL PROVISIONS 20 Section 12.1 Contracts with Others in Relation to System 20 Section 12.2 Future Service to the City of Leander 21 Section 12.3 Title to Wastewater. 21 Section 12.4 Reuse of Treated Effluent from the System 21 ARTICLE XIII GENERAL PROVISIONS 22 Section 13.1 Participation by the Parties. 22 Section 13.2 Insurance. 22 Section 13.3 Force Majeure. 23 Section 13.4 Term of Contract. 23 Section 13.5 Amendment and Modification. 23 Section 13.6 Addresses and Notice. 24 Section 13.7 Severability. 24 Section 13.8 Remedies Upon Default. 24 Section 13.9 Venue. 25 Section 13.10 Statutory Authority. 25 Section 13.11 Contract for Benefit of the Cities. 25 Section 13.12 Succession and Assignment. 25 Section 13.13 Incorporation of Preamble Recitals. 25 Section 13.14 Entire Agreement. 25 Section 13.15 Applicable Law. 26 Section 13.16 Counterparts. 26 EXHIBIT A — System Components EXHIBIT B — Description of the System EXHIBIT C — K Friese Methodology for Winter Month Averaging iii MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM THIS MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP, AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (the "Contract-) is dated and entered into as of the 8th day of December, 2009, by and among the City of Austin. Texas (``Austin"), the City of Cedar Park, Texas ("Cedar Park"), 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'). RECITALS Each City desires to accomplish the implementation of a regional wastewater collection, treatment and disposal system for the benefit of the Cities. The Cities, as of the date of this Contract, have purchased the Brushy Creek Regional Wastewater System (``System") from the Lower Colorado River Authority. The Cities desire to discharge wastewater from their individual wastewater collection systems into the System in order to serve the wastewater needs of the Cities, to achieve efficiencies of cost and operation and to protect and preserve the environment of the Brushy Creek watershed. 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 mutually undertake, promise, and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1 Definitions. In addition to the terms defined above, the following terms shall have the meanings assigned to them below wherever they are used in this Contract, unless the context clearly requires otherwise: (a) "Annual Flow- means the amount of wastewater generated in each City's service area delivered to the System on an annual basis as calculated in accordance with Section 8.2. (b) "Austin" means the City of Austin. (c) "Capital Expenses- means all direct costs for the design, permitting, construction and/or acquisition of Capital Improvements, including the costs of acquiring any necessary easements, rights of way, or fee simple title to real property. (d) "Capital Improvements- means physical improvements to or assets of the System with an expected useful life of a minimum of three years and of the type generally. categorized as a capital improvement and/or a capital expense in individual budgets of the Cities, including but not limited to repairs and/or replacement of damaged, worn out or obsolete portions of the System and any new additions to or improvements made to the System, including Expansions, Emergency Repairs, and other improvements necessary for the System to meet or maintain Regulatory Requirements and/or improve operations of the System for the benefit of the Cities. (e) "Capital Expense Budget- means the annual amount budgeted as provided in Article IX for all Capital Expenses during any Fiscal Year. (f) "Cedar Park" means the City of Cedar Park. (g) `'Cities' means, collectively, the City of Cedar Park, Texas, the City of Austin, Texas, and the City of Round Rock, Texas. "City' means, respectively, the City of Cedar Park, Texas, the City of Austin, Texas, or the City of Round Rock, Texas. (h) "City Systeme means and includes a respective City's existing combined waterworks and wastewater disposal system through which it provides retail and/or wholesale water and wastewater service in its Service Area, together with all future extensions, improvements, enlargements, and additions thereto, including, to the extent permitted by law, reclaimed water systems which are integrated with the waterworks or wastewater disposal system. and all replacements thereof, provided however, to the extent now or hereafter allowed by law. the term City System shall not include any waterworks or wastewater facilities which are declared by a City not to be a part of the City System of that City and which are hereafter acquired or constructed by that City with the proceeds from the issuance of "Special Project Bonds,- which are hereby defined as being special revenue obligations of such City, which are not secured by or payable from the net revenues of a respective City System, but which are secured by and are payable solely from special contract revenues, or payments received by a City or any other legal entity. or any combination thereof, in connection with such facilities; and such revenues or payments shall not be considered as or constitute gross revenues of a respective City System, unless and to the extent otherwise provided in the ordinance or ordinances authorizing the issuance of such "Special Project Bonds.- (i) "Contract'. means this document. (j} "Effective Date- means the day following the "Closing Date- as defined in Section 6.1 of that one certain "Purchase Agreement for the Brushy Creek Regional Wastewater System. by and among the Lower Colorado River Authority, Round Rock, Cedar Park and Austin. - (k) "Emergency Repairs. means those unanticipated System repairs and improvements that are not included in the Operations and Maintenance Budget or the Capital Expense Budget but must be initiated immediately to avoid System failures that threaten public health and safety and/or the environment. The costs and expenses for Emergency Repairs may be considered either Capital Expenses or Operation and Maintenance Expenses, as applicable. (1) "Engineering Report" means the report prepared by PBS&J, on behalf of the Lower Colorado River Authority, titled "BRA/LCRA Alliance Brushy Creek Regional Wastewater System Engineering Report- dated October 29. 2000, incorporated herein by reference, which describes the System and the System Components currently contemplated, the estimated construction costs. the proposed construction schedule and MASTER CONTRACT FOR I HE I-INANCING_ CONSTRUCTION_ OWNERSHIP Page 2 AND OPERATION OF THE BRE :SHY CREEK REGIONAL WASTEWATER SYSTEM other pertinent matters, and any further supplements or amendments thereto as contemplated herein. (m) "EPA" means the United States Environmental Protection Agency. (n) "Expansion" means an expansion, extension, or enlargement of any System Component(s) which results in an increase in the capacity reservation for such System Component(s) as identified in Exhibit A. (o) "Fiscal Year' means the twelve (12) month period beginning on October 1 of each year and ending on September 30 of the following year. (p) Contract. "Force Majeure" means that tem as it is defined in Section 13.3 of this (q) "Month" means a calendar month. (r) "Monthly Flow Charge" means the amount to be paid each Month by each City calculated in accordance with Section 9.2 of this Contract. (s) "Operation and Maintenance Expense" means all direct costs of operation, maintenance, repair, rehabilitation, replacement and decommissioning of the System including, but not limited to: (1) costs of maintaining any permits or licenses necessary to own, operate and maintain the System; (2) costs such as, but not limited to, costs of labor, materials, utilities, supervision, engineering, accounting, auditing. legal and professional services, insurance, personnel, data processing and purchasing; (3) costs of repairs and/or replacement of damaged, worn out or obsolete portions of the System that are of a routine and/or recurring nature and are, therefore, not considered a Capital Expense and as may be necessary to meet and maintain Regulatory Requirements and/or serve to improve operations of the System for the benefit of the Cities. (4) such other costs or expenses as may be imposed upon the Cities in connection with fulfillment of their obligations under this Contract because of laws, regulations, or requirements of the State of Texas. the United States, or any agency or governmental subdivision of the State of Texas or any agency of the United States having jurisdiction: (5) costs of any other tools, supplies, inventory, services and equipment. together with other costs not otherwise included in this definition necessary for proper operation and maintenance of the System; and (6) payments made by the Cities in satisfaction of judgments resulting from or settlement of claims not covered by insurance or not paid by one particular City arising in connection with the ownership. operation or maintenance of the System. Depreciation shall not be considered an item of Operation and Maintenance Expense. MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Pa�?e 3 (t) `Operation and Maintenance Budget" means the annual amount budgeted as provided in Article IX for all Operation and Maintenance Expenses during any Fiscal Year. (u) "Operations Committee- means the committee created in Article IV of this Contract. (v) "Operator" means the entity with which the Cities contract to operate the System. It is anticipated that the initial Operator will be the Brazos River Authority. (w) "Plans and Specifications' means the plans and specifications prepared for the System and as the same may be revised from time to time in accordance with this Contract. (x) "Point of Entry" means a point at which Wastewater from each City enters the System. (y) "Prudent Utility Practice- means any of the practices, methods, and acts, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods, and acts engaged in or approved by a significant portion of the public utility industry prior thereto, known at the time the decision was made, that would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method, or act at the exclusion of all others, but rather is a spectrum of possible practices, methods, or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. (z) "Regulatory Requirements- means all federal and state laws, rules and regulations governing the design, permitting and operation of municipal wastewater treatment and disposal systems in the State of Texas, including but not limited to the permits, rules, regulations and/or orders of the EPA, the TCEQ, and courts of competent jurisdiction. (aa) "Reserved Capacity" means the total quantity of Wastewater that a City is entitled to deliver into any System Component during a Fiscal Year pursuant to this Contract, or, alternatively, the percentage of capacity of a System Component that a City is entitled to utilize in any System Component pursuant to this Contract. all as set forth in Exhibit A . (bb) "Round Rock" means the City of Round Rock. (cc) "Service Area means the following: (1) For Round Rock, the area within its corporate limits or extraterritorial jurisdiction as the same may exist from time to time: (2) For Cedar Park, the area within its corporate limits or extraterritorial jurisdiction as the same may exist from time to time and also including the area within the Highlands at Mayfield Ranch Municipal Utility District and the Parkside at Mayfield Ranch Municipal Utility District; MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION_ OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWA"E E:R SYSTEM Pane 4 (3) For Austin, that part of the area both (i) within its corporate limits or extraterritorial jurisdiction as the same exist from time to time and (ii) which is within the Brushy Creek watershed or other areas depicted on Figure 1 of the Engineering Report, (4) For Leander, that area both (i) within Leander's corporate limits and extraterritorial jurisdiction as the same exist from time to time and (ii) which is within the Brushy Creek watershed; provided Leander's Service Area will initially include land that is within the corporate limits or extraterritorial jurisdiction but outside of the Brushy Creek Watershed. (dd) "Significant Industrial Users" has the meaning for that term as defined by 40 Code of Federal Regulations §403.3(t). (ee) "System" means, collectively, the land interests and the improvements described in the Engineering Report, and as shown on Exhibit B, together with any Expansions and repairs and improvements made in conformance with this Contract. Without limitation the System includes the facilities, lines, lift stations, and other appurtenances in the System as described in the Engineering Report. (ff) "System Component" means a specified facility comprising part of the System as listed in Exhibit A for each segment of Wastewater collection line and the Treatment Facilities. (gg) "State" means the State of Texas. (hh) "TCEQ" means the Texas Commission on Environmental Quality or its successor agency. (ii) "Treatment Facilities" means any Wastewater treatment and disposal facilities acquired or constructed to comprise a part of the System, together with any improvements, expansions, betterments, rehabilitations or replacements thereof. (jj) "Wastewater" means liquid and water -carried waste discharged from sanitary conveniences of dwellings, business buildings, institutions and the like including garbage which has been shredded to such degree that all particles will be carried freely under flow conditions normally prevailing in public sewers. with no particle greater than one-half (1/2) inch in any dimension and the liquid wastes from industrial processes, and includes any infiltration water that has migrated from the ground into the System, or inflow water from above the ground entering the System. Section 1.2 Interpretation. The table of contents and caption headings of this Contract 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 Contract and all the terms and provisions shall be liberally construed to effectuate the purpose set forth herein and to sustain the validity of this Contract. MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION. OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 5 ARTICLE II PURPOSE AND DESCRIPTION OF THE SYSTEM Section 2.1 Purpose of this Contract. The purpose of this Contract is to set forth the terms and conditions under which the Cities will finance, construct, acquire, own, maintain and operate the System. This Contract also sets forth in general terms the manner in which the Cities will share the costs of constructing, owning, operating, and maintaining the System. However, each City is not required to use the System for the treatment of Wastewater for any portion of its respective Service Area. Section 2.2 General. The System will be used for receiving, transporting, treating and disposing of Wastewater for the Cities generated within each City's respective Service Area. The Cities will design, acquire, construct, expand, extend, enlarge, improve and repair the System from time to time, as they deem necessary as described herein. Section 2.3 System Described in Engineering Report. The System shall be constructed as described in the Engineering Report and this Contract. The Cities shall exercise due diligence to complete the acquisition and construction of the System as set forth in the Engineering Report and this Contract. Section 2.4 Permits and Approvals. The Cities shall jointly obtain and hold all permits and approvals required for acquisition, construction, operation, and ownership of System. The Operator may also be named on such permits and approvals upon agreement of the Cities. ARTICLE III SYSTEM ACQUISITION AND CONSTRUCTION Section 3.1 General. Unless otherwise required by law, each consent, approval, or other official action required of the Cities by any provision of this Contract shall be conclusively deemed in compliance with this Contract when written evidence of such action, signed by the respective authorized representative, is delivered to the party who is to receive evidence of such action, unless otherwise specified herein. The Cities will cooperate with each other in the design, financing, acquisition_ and construction of the System and, the Cities will not take any action or fail to take any action. if taking or failing to take such action, would unreasonably delay or obstruct the completion, or impair the operation, of the System. Section 3.2 Access to Cities. If any facility, pipeline, or appurtenance of the System is installed in any street, alley, or public way within the boundaries of a City, as same is now constituted or as may hereafter be extended, such City hereby grants to the System, upon complying with such City -s franchise ordinances or other provisions as applied to similar entities, the right, privilege, and franchise of using such street, alley, or public way for the purposes of maintaining, operating, laying, repairing, or removing such facility. pipeline, or appurtenance. Section 3.3 Easements. Each City hereby agrees to grant to the System such easements as may be reasonably necessary for the purposes of placing_ constructing, operating. repairing, maintaining, rebuilding, replacing, relocating, and removing wastewater lift stations, lines and related facilities upon, over, across and through the City's property and giving to System, all of MASTER CONTRACT FOR THE FINANCING_ CONSTRUCTION. OWNERSHIP Pa e 6 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM the rights and benefits necessary or appropriate for the full enjoyment and use of the easement, including but without limiting the same, to the free right of ingress and egress to and from the City's property, subject to the City's ordinances. Each City agrees to use its eminent domain powers, subject to its governing body's approval, to obtain any easement necessary for the operation and maintenance of the System that is located within that City's Service Area. Section 3.4 Points of Entry. Each City shall have the sole responsibility, at its own cost and expense, for providing additional pipelines and other facilities required for transporting its wastewater to one or more Points of Entry. Section 3.5 System Design and Construction. The Cities shall jointly fund, in accordance with their Reserved Capacity, and make decisions concerning the design and construction of the System as described in the Engineering Report. The Engineering Report may be amended and updated from time to time, to reflect final design and construction changes in the System and to reflect further actions and understandings of the Cities. The Cities agree that they shall cooperate to facilitate timely municipal plan review and permitting, and other construction related matters for construction related to the System located in the City's regulatory jurisdiction. Section 3.6 Expansions. Each City shall have the right to commence an Expansion under the provisions of this Contract as set forth in this Section. (a) Requests for Expansion. At any time, any City may request that an Expansion be made. In addition, when a City's Annual Flow reaches seventy-five percent (75%) of the Reserved Capacity of that City in a System Component, that City shall be deemed to have requested the Cities to commence planning and design for an appropriate Expansion of that System Component, unless the City's anticipated growth does not warrant making the Expansion and such determination is agreed upon by the Cities. When a City's Annual Flow reaches ninety percent (90%) of the Reserved Capacity of that City in a System Component, that City shall be deemed to have requested commencement of construction of an appropriate Expansion of that System Component, unless the City's anticipated growth does not warrant making the Expansion and such determination is agreed upon by the Cities. During the term of this Contract, the Cities agree to request Expansions for all of their Wastewater service needs in their respective Service Areas. Under no circumstances shall a City exceed the Reserved Capacity of that City in a System Component. If a City exceeds the Reserved Capacity of that City in a System Component, then the City must immediately take actions to reduce its Wastewater flows or expand any affected System Components at that City's sole cost. (b) Expansion Planning. Should any City request in writing, or be deemed to have requested an Expansion pursuant to the above paragraph, the other Cities shall, within forty-five (45) days after such request, determine whether they are willing to participate in the Expansion. By the end of the forty-five day review period. the City(ies) participating in an Expansion shall notify the Operations Committee of such participation. Any City may move forward with an Expansion even if no other Cities participate in such Expansion. The City(ies) participating in an Expansion must ensure that the Expansion minimizes any negative impacts to the non -participating Cities and will coordinate with the Operations Committee regarding planning, design and MASTER CONTRACT FOR THE FINANCING_ CONSTRUCTION. OWNERSHIP Page 7 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM construction of the Expansion. The Operations Committee shall have the opportunity to timely review and comment on the preliminary design, final plans and specifications, and other construction related matters as appropriate regarding the Expansion. The City(ies) requesting or deemed to request an Expansion are financially responsible for the design, construction, and inspection of the Expansion in accordance with this Contract and agree to provide periodic updates of the Expansion to the Operations Committee. (c) Separate Agreement for Expansion. The Cities will negotiate and enter into a separate interlocal agreement providing the terms and conditions for any Expansion, including, but not limited to capacity reservations for the Expansion, cost allocations, timing and method of payment, design, permitting, contract award, and management. Costs of the Expansion will be allocated among the Cities based on the prorata shares of the capacity reservations of each City participating in the Expansion. Upon completion of construction, the Expansion will be part of the System, and the Reserved Capacity of the Expansion will be allocated to and reserved for each participating City based on the provisions of the interlocal agreement. The interlocal agreement shall also adopt a new Exhibit A showing the capacity allocation for the expanded System Component(s). Any non -participating Cities shall join the interlocal agreement for the purposes of approving the revised Exhibit A. (d) Non -participating Cities. The non -participating City(s) will fully cooperate with the participating City(s) in efforts to obtain necessary governmental and regulatory approvals and permits for the Expansion and will use their best efforts to provide assistance in this regard, which shall be paid for solely by the requesting City(s). Section 3.7 Other Capital Improvements and Emergency Repairs. Costs and expenses associated with Capital Improvements, other than Expansions, shall be planned for and funded through the Capital Expense Budget or the Operations and Maintenance Budget, as applicable, in the process set out in Article IX herein or as otherwise agreed to by the Cities. Emergency Repairs shall be identified and reported to the Operations Committee, and the Operations Committee shall determine the method and party responsible for completing such repair and the source of funding for the repair on a case by case basis. ARTICLE IV SYSTEM OWNERSHIP, OPERATION, AND MAINTENANCE Section 4.1 System Ownership. The System shall be owned by the Cities in proportion to their reserved capacities in each System Component as shown in Exhibit A. Each City, respectively, shall have the exclusive right to its reserved capacity in each System Component. Each City shall have the right of entry to any System Component at any time with notice provided to the Operator. Section 4.2 System Operation and Management. The Cities shall contract with an Operator to manage, operate, and maintain the System in accordance with Prudent Utility Practice and Regulatory Requirements. Section 4.3 Operations Committee. The Cities hereby create an Operations Committee to be composed of the following members: MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION, OWNERSHIP Page 8 AND OPERATION OF THE BRUSHY CREEK REGIONAL_ WASTEWATER SYSTEM (a) Two representatives appointed by Cedar Park; (b) Two representatives appointed by Round Rock; and (c) Two representatives appointed by Austin. Each City shall have one vote for decision-making purposes on the Operations Committee. The Operations Committee shall represent the individual and collective interests of the Cities and shall consult with and advise the Cities, through their respective City Managers or other designated representative. The City of Round Rock shall select the Chair of the Operations Committee who will be responsible for calling and coordinating Operations Committee meetings, drafting and circulating meeting agendas and circulating other documents to Committee members necessary for the proper functioning of the Committee. The City Manager or designee of each City shall appoint appropriate city staff members as the City's representatives (and alternate representatives to serve in the absence of the Citys representatives) to the Operations Committee promptly after execution of this Contract, and shall immediately notify the other Parties of such appointment. Each representative (or alternate representative) shall serve as a member of the Operations Committee at the will of the City Manager or designee who appointed such representative. Upon the death, resignation or revocation of the power of a City's representative (or alternate representative), the City Manager or designee of such City shall promptly appoint a new representative (or alternate representative) as a member of the Operations Committee. Section 4.4 Responsibilities of Operations Committee. The Operations Committee shall provide oversight and direction for the System and the Operator on the following issues: (a) Provision of an agenda, minutes, and action items for the Operations Committee meetings; (b) Verifications of flow allocations of each City; (c) The Operator of the System: (d) Points of Entry to the System; (e) Approval of reuse water (treated wastewater effluent) facilities to be connected to the System; (f) Design criteria and specifications: (g) The operation and maintenance of the System: (h) The addition of new owners of the System and the terms and conditions of the agreements with such new owners consistent with the provisions of this Contract: (i) Review of the budgets, prior to submission to the Cities; (j) Review of the annual reports of the System; (k) Improvements to and Expansions of the System; (1) Review of and suggestions regarding proposals submitted to the Cities for engineering services related to the System, including but not Limited to inflow and infiltration studies, flow metering projects_ and compliance with Edwards Aquifer Recharge Zone requirements; MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 9 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (m) Review of bids or proposals received for construction of System Components, and make recommendations for contract award; (n) Review of invoices received for the construction of Expansions to the System, and make recommendations for the allocation and payment of such invoices; (o) Recommendations for professional services consultants, including, but not limited to, engineering and financial services; (p) Changes to the Engineering Report; (q) Review of cash flow projections and provision of input as to the assumptions contained therein; (r) Wastewater treatment system process modifications; (s) Contracts and contract amendments; (t) Payment allocations and schedules; (u) Reimbursement of City costs; and Any other pertinent matters relating to the management of the System. The Operations Committee shall meet at regular intervals to review the progress of construction of the System and the ongoing operation of the System. The Operations Committee shall have access to and may inspect at any reasonable time all physical elements of the System and all records and accounts pertaining to the System. The Operations Committee shall be diligent, prompt, and timely in reviewing, commenting, and acting on matters submitted to it. Section 4.5 General Management of the System. Except as expressly provided in this Contract, the oversight of the day-to-day operations of the System shall rest with the Operations Committee. Section 4.6 Meetings of the Operations Committee. The Operations Committee will hold regular monthly meetings at times and places to be selected by the members. In addition, any City may call a special meeting to be held at any time after they have given three (3) business days" notice to all of the other members of the Operations Committee. Any member may waive notice of or attendance at any meeting of the Operations Committee. At a meeting, the Operations Committee will transact any business that may properly be brought before the meeting. Any City may place an issue for discussion on the Operations Committee's agenda. The Operations Committee may authorize action or may delay action regarding the agenda item regardless if a City's member does not attend or send an alternate representative. Section 4.7 Attendance by Fern Bluff MUD and Brushy Creek MUD at Operations Committee Meetings. The Cities agree that Fern Bluff Municipal Utility District and Brushy Creek Municipal Utility District may appoint one representative each to be provided notice of and attend Operations Committee meetings to obtain information regarding the System and provide advice and input on System operations and maintenance where appropriate. Such representatives shall not constitute voting members of the Operations Committee and their participation in Operations Committee meetings shall be advisory in nature. MASTER CONTRACT FOR THE FINANCING_ CONSTRUCTION, OWNERSHIP Page 10 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 4.8 Matters Requiring Unanimous Consent. The following matters will require the unanimous consent of the Operations Committee and the Cities with respect to the System: (a) amendments to the Engineering Report; (b) selection of Operator; (c) admission of a new owner for the System; (d) approval of Operations and Maintenance Budget and Capital Expense Budget; and (e) attendance by third parties of Operations Committee meetings other than the representatives of Fern Bluff MUD and Brushy Creek MUD as provided in Section 4.7. If a dispute arises among the Cities with respect to any of the above matters, any City may request mediation of the disputed matter in accordance with Article XI herein. If the disputed matter involves the approval of the Operations and Maintenance Budget the System shall be operated and payments shall be made by the Cities for Flow Charges in accordance with the budgets as presented by the Operator until such time as the dispute is resolved through mediation or otherwise and the budget is adjusted (or not). If the disputed matter involves the approval of the Capital Expense Budget, and if the disputing party is paying the majority of the Capital Expense in dispute, such Capital Expense shall not be included in the Capital Expense Budget until such time as the dispute is resolved through mediation or otherwise. If the disputing party is not paying the majority of the Capital Expense in dispute, the Capital Expense shall be included in the Capital Expense Budget. Section 4.9 Other Matters Not Requiring Unanimous Consent. For other matters related to the System not listed in Section 4.8, the Operations Committee and the Cities shall endeavor to reach a consensus on action to be taken with respect to the System provided that such action shall not unreasonably harm any City and the System will continue to be operated and maintained in accordance with Regulatory Requirements and Prudent Utility Practices. Any City may request mediation of the disputed matter in accordance with Article X1 herein. Section 4.10 Relationship of Operations Committee and Operator. The Cities agree that the delegation of matters regarding System management and operation as between the Operations Committee and the Operator shall be as set out in the agreement between the Cities and the Operator. ARTICLE V RESERVED CAPACITIES Section 5.1 Reserved Capacities in System Components. Each City, respectively. shall have the exclusive right to its reserved capacity in each System Component as described in Exhibit A. No Reserved Capacity may be allocated to or used by another City other than the City on whose behalf that capacity has been reserved, unless the affected City specifically agrees in writing to the allocation or use. MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 11 Section 5.2 Transfer of Reserved Capacity. Any City may transfer any portion of its reserved capacity in one or more System components to another City, in exchange for such consideration as such Cities shall deem appropriate. The Cities making such transfer shall provide written notice to other City, signed by the Cities making the transfer, specifying the amount of transferred reserved capacity and the affected System Component(s), and providing that the Cities otherwise ratify and confirm their pre-existing obligations under this Contract. No such transfer shall be effective until and unless such notice is provided. The Operations Committee must be timely notified of such transfer, but the transfer is not subject to the approval of the Operations Committee. Section 5.3 Documentation of Transferred Reserved Capacity. In the event that reserved capacity is transferred, the Operations Committee shall cause a written update to be made to Exhibit A describing such transfer and setting forth the revised reserved capacity of each City in the System Component. Such action shall not require an amendment to this Agreement. Section 5.4 Wholesale Contracts. In the event that wastewater service is sold by a City to another entity located within the City's Service Area which will contribute Wastewater to the System, the City selling the wastewater service is solely responsible for the City's quantity and quality of wastewater entering the System, the City's Reserved Capacity in each of the System Components, and all rights and obligations stated herein. Such action is not subject to the approval of the Operations Committee. ARTICLE VI POINT(S)OF ENTRY Section 6.1 Point(s) of Entry. Each City shall deliver its Wastewater to one or more Point(s) of Entry designated for each City. The Operations Committee shall maintain a map identifying such Point(s) of Entry which it shall update from time to time as necessary to reflect the Point(s) of Entry for each City. The Cities shall cooperate in good faith to design their respective Point(s) of Entry to be at appropriate sizes and in appropriate locations to receive the City's Reserved Capacities. Each City shall have the exclusive right to designate and deliver Wastewater to its Point(s) of Entry and shall provide written notification to the Operations Committee of any new Point of Entry it proposes, including a map showing such location. Such written notice shall be provided in a reasonable amount of time to allow the Operations Committee to take such action as may be necessary to accommodate such new Point of Entry. Section 6.2 Inflow and Infiltration. Each City shall use its commercially reasonable efforts to minimize inflow and infiltration into that City's wastewater system that transports wastewater to the System. MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION. OWNERSHIP Page 12 AND OPFR.ATION OF THE BRESITY CREEK REGIONAL WASTEWATER SYSTEM ARTICLE VII WASTEWATER DISCHARGE Section 7.1 Discharge Quality. The Cities shall have the right to discharge Wastewater into the System meeting the requirements of quality as set forth in the pretreatment program approved by EPA and TCEQ for the System and of which the System is capable of handling. Each City agrees to implement and enforce the System pretreatment program for its Service Area. Each City also covenants that it will have in effect and will enforce a sewer use ordinance in accordance with EPA and TCEQ's regulations or regulations of other governmental agencies having jurisdiction to set standards for waste discharges. Furthermore, each City shall, at any reasonable time upon request by another City, produce pretreatment program records for its Service Area for review. Each City also agrees that no new Significant Industrial User shall be allowed to connect to the City's sewer system within its Service Area without prior notification of the intent to connect being given by the City to the Operator. All Significant Industrial Users that are customers of a City and located within its Service Area and outside the City's corporate limits will also be required to obtain a sewer use permit. ARTICLE VIII FLOW CALCULATIONS Section 8.1 Unit of Measurement. The unit of measurement for Wastewater delivered hereunder shall be 1,000 gallons of water, U. S. Standard Liquid Measure. Section 8.2 Annual Flow. The Cities agree that the methodology outlined in Exhibit C for determining each City's "winter month average- shall be used to determine each City's Annual Flow for the purposes of developing the Monthly Flow Charge for each City as provided herein. To develop the Annual Flow, the ``winter month average" for each City shall be multiplied by twelve (12) to convert the month total to an annual total. Each City shall be responsible for calculating its Annual Flow for the upcoming Fiscal Year and shall submit such calculations to the Operations Committee for review and comment prior to submission to the Operator by May 15th of each year. ARTICLE IX BUDGETS, FLOW CHARGES, CITY COVENANTS Section 9.1 Operation and Maintenance Budget and Capital Expense Budget. As soon as reasonably possible during the first partial Fiscal Year and not less than one hundred twenty (120) days before commencement of each Fiscal Year, the Operator shall furnish to the Cities a detailed estimate of Operations and Maintenance Expenses and Capital Expenses to be incurred in the next ensuing Fiscal Year which it deems properly includable in the Operations and Maintenance Budget and the Capital Expense Budget for the upcoming Fiscal Year. Not less than ninety (90) days prior to each Fiscal Year. the Cities shall approve the Operation and Maintenance Budget and the Capital Expense Budget for that Fiscal Year. The Cities shall use diligent efforts so that Operation and Maintenance Expenses and Capital Expenses incurred by, and ultimately paid by. the Cities are reasonable and justified. MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION. OWNERSHIP Page 13 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Section 9.2 Monthly Flow Charges. Each City shall be required to pay a Monthly Flow Charge for use in meeting that Month's portion of the Operation and Maintenance Budget and Capital Expense Budget. Simultaneously with the approval of this Contract, the Cities shall approve an interim Operation and Maintenance Budget and Capital Expense Budget and schedule of Monthly Flow Charges for the period of time between the Effective Date and September 30, 2010. For each subsequent Operation and Maintenance Budget and Capital Expense Budget adopted after the availability of the annual report required by Section 9.3, below, that is for a Fiscal Year that follows a Fiscal Year during which Monthly Flow Charges from a City have been payable hereunder, the Monthly Flow Charge amount estimated for the subsequent Fiscal Year shall be adjusted upward or downward, as appropriate, to account for any difference between the actual Operation and Maintenance Expenses and Capital Expenses and those budgeted and estimated for the previously reported period. The Monthly Flow Charge for each City for each Operation and Maintenance Budget and Capital Expense Budget shall be 1 /12th (or in the case of the initial Fiscal Year, the fraction obtained by dividing 1 by the number of complete Months between the Effective Date and September 30. 2010) of the amount calculated by multiplying the Annual Flow for each City during the twelve (12) month period ending on April 30 preceding the beginning of the Fiscal Year for which the calculation is being made, expressed in thousands of gallons, by the quotient obtained by dividing the Operation and Maintenance Budget and the Capital Expense Budget for the period for which the calculation is being made, expressed in dollars, by the sum of all of the Cities' Annual Flows into System, also expressed in thousands of gallons during the twelve (12) month period ending on such April 30. Section 9.3 Annual Report The Operations Committee may cause to be prepared an annual report of the System each year to contain such matters and information as may be considered necessary and useful by the Operations Committee. including actual Operations and Maintenance Expenses incurred by the System for the preceding fiscal year. Section 9.4 Capital Expenses. Capital Expenses shall be allocated among and borne by the Cities in proportion to each City's respective reserved capacity in the System Component that is the subject of the Capital Improvement as listed in Exhibit A. The Cities shall determine the schedule for the funding and commencement of projects identified in the Capital Expense Budget prior to the commencement of each fiscal year. Section 9.5 How, When, and Where Payments are to be Made. The Cities agree to make payments of the Flow Charges to the Operator as prescribed in the contract(s) between the Cities and the Operator. Any other payments related to the System shall be addressed through the Operations Committee. Section 9.6 Source of Payment. (a) Each City represents and covenants that all payments to be made by it under this Contract shall constitute reasonable and necessary "operating expenses," as defined in Texas Government Code, Chapter 1502. as amended, of its City System, but only to the extent of the payments, and the Cities shall not be obligated to make the payments under this Contract from any source other than the gross revenues of its City System. Each City further represents that its governing body has determined that the MASTER CONTRACT FOR IHE FINANCING. CONSTRUCTION_ OWNERSHIP Page 14 AND OPERATION OF 1 HE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM services to be provided by the System are necessary and essential to the treatment of wastewater for such City. (b) Each City agrees to fix and collect such rates and charges for services to be supplied by its City System as will produce gross revenues at all times during the term of this Contract in an amount at least equal to (i) all of the expenses of operation and maintenance of its City System, including specifically its payments under this Contract and (ii) all other amounts as required by law and the provisions of the ordinances or resolutions authorizing its bonds or other obligations now or hereafter outstanding and payable, in whole or in part, from the net revenues of its City System. (c) No ad valorem tax revenues of any City shall be pledged to the payment of any amounts to be paid by the Cities under this Contract, nor shall the Cities have the right to demand payment of any amounts to be paid by the City under this Contract be paid from funds raised or to be raised from ad valorem taxation from the City. The obligations under this Contract shall never be construed to be a debt or pecuniary obligation of the City of such kind as to require the City to levy and collect an ad valorem tax to discharge its obligations. Section 9.7 Annual Budgeting by the Cities. Each City shall make provision in each of its annual budgets and shall appropriate an amount sufficient, at a minimum, for the payment of all amounts required to be paid by the City under this Contract. Section 9.8 Revenue Sources Pledged. Each City hereby pledges gross revenues of its City System to the payment of its obligations under this Contract Section 9.9 General Covenants by Cities. Each City further represents, covenants and agrees that in accordance with and to the extent permitted by law, it will comply with the covenants listed below. (a) Performance. Each City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained herein; and it will, at the time and in the manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the fund and accounts created by ordinances, but only from and to the extent of the sources of funds described in such ordinances. (b) Legal Authority. Each City is a home rule city of the State and is authorized under the laws of the State to enter into this Contract. By execution hereof, each City represents that all actions on its part for the execution and delivery of this Contract have been effectively taken; and that this Contract is a valid and enforceable special obligation of the City in accordance with its terms. (c) Acquisition and Construction: Operation and Maintenance. Each City shall at all times use its best efforts to operate or cause to be operated its City System properly and in an efficient manner, consistent with Prudent Utility Practice, and shall use its best efforts to maintain, preserve_ reconstruct and keep the same or cause the same to be so maintained, preserved, reconstructed and kept, with the appurtenances, in good repair, working order and condition, and shall from time to time make, or use its best efforts to cause to be made, all necessary and proper repairs, replacements, and renewals MASTER CONTRACT FOR THE FINANCING_ CONSTRUCTION_ OWNERSHIP Pae 15 AND OPERATION OF 1 HE BRUSHY CREEK REGIONAL. W ASTEWATER SYSTEM so that at all times the operation of its City System may be properly and advantageously conducted. (d) Books, Records, and Accounts. Each City shall keep proper books, records, and accounts separate and apart from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to its City System, and it shall cause said books and accounts to be audited annually as of the close of each Fiscal Year. (e) Governmental Agencies. Each City will comply with all of the terms and conditions of all franchises. pen -nits. and authorizations applicable to or necessary for a respective City System, and which have been obtained from any governmental entity, and the Cities have or will obtain and keep in effect all franchises, permits, authorizations, and other requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation, and maintenance of a respective City System. Section 9.10 City Rates, Fees, and Charges. Each City has the right under applicable law to assess, charge and collect such City impact fees, capital recovery fees, connection fees, meter fees, or other service fees, rates. taxes or other charges as it deems appropriate. This Contract shall not be construed to require (except as provided otherwise in this Section), limit or restrict the exercise of the governmental power of any City to implement the same. Each City will be solely responsible for the proper exercise of its governmental power to assess and collect such fees and charges and for ensuring that all fees, taxes. rates. and charges the City elects to charge are in compliance with applicable law. Each City agrees to establish and collect such rates and charges for its waterworks and sanitary sewer services to be supplied by its system as will make possible the prompt payment of all expenses of operating and maintaining its system including the payments committed hereunder. and the prompt payment of the principal of and interest on its obligations, if any, payable from the revenues of its waterworks and sanitary sewer systems. Section 9.11 Default. (a) Monetary Defaults by Cities. The deadline for payments of the Monthly Flow Charge required herein, and interest due on overdue amounts shall be governed by the provisions of Chapter 2251 of the Texas Government Code. (b) Other Defaults by Cities. In the event that any City defaults in the performance of any of its respective obligations under this Contract, other than the obligation to make payments of the Monthly Flow Charge, any of the non -defaulting parties, after giving reasonable notice of the default and opportunity to cure same, may exercise any remedy provided by law, as set forth in Section 13.8 below. Section 9.12 Unconditional Obligation to Make Payment. Recognizing the fact that the Cities urgently require the facilities and services of the System, and that such facilities and services are essential and necessary for actual use and for standby purposes, each City hereby waives all rights of set-off. recoupment, counterclaim. suspension, deferment, reduction, and amendment, with respect to making its payments and any other- direct or indirect recipients of payments. Each City agrees that it shall make its appropriate payments and each City shall be unconditionally obligated to pay its payments as provided and determined by this Contract, regardless of whether or not the Cities actually acquire, construct, or complete the System or System Components, whether due to Force Majeure or any other reason, regardless of any other MASTER CONTRACT FOR Z HE FINANCING. CONSTRE:CTION. OWNERSHIP Page 16 AND OPERATION OF THE BRUSHY CREEK REGIONAL. WASTEWATER SYSTEM provisions of this contract, or any other contract or agreement between any of the parties hereto. This covenant is for the benefit of and enforceable by the Cities. By entering into this Contract and performing its obligations under any Section of this Contract, each City does not release any persons from or waive any claims against such persons that the City may have resulting from actions by such persons contrary to that person's legal obligations. ARTICLE X COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS Section 10.1 State or Federal Laws, Rules, Orders, or Regulations. This Contract is subject to all applicable federal and State laws and any applicable permits. ordinances, rules, orders, and regulations of any local, state, or federal governmental authority having or lawfully asserting jurisdiction but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, ordinance, order, rule, or regulation in any forum having jurisdiction and the Cities represent that, to the best of their knowledge, no provisions of any applicable federal or State law, including the City Charters of the Cities, nor any permit, ordinance, rule, order, or regulation of either party will limit or restrict the ability of any other party to carry out their respective obligations under or contemplated by this Contract. Section 10.2 Cooperation to Assure Regulatory Compliance. The Cities and the Operator must comply with all federal, state, and local requirements to obtain permits, grants and assistance for system construction, studies, etc.; therefore each City will cooperate with each other and with the Operator in good faith at all times to assure compliance with any such governmental requirements where noncompliance or non-cooperation by the City may subject the Operator to penalties, loss of grants or other funds, or other adverse regulatory action. In making the determinations called for herein, the Operator will covenant that such determinations will be made only after informing the Operations Committee. after detailed studies of statistical data available as to the need and feasibility have been made. and after consulting with engineers and financial advisors. Each City will be kept advised at all times of planning and implementing System repairs and improvements necessary to meet Regulatory Requirements. Section 10.3 Recordkeeping and Reporting. The Cities shall insure that the Operator maintains records on site in accordance with applicable State laws. (a) Records to be maintained by the Operator include. but are not limited to: (i) copies of notifications made to the TCEQ concealing wastewater systems; (ii) as applicable. copies of contracts made with each wastewater customer, vendors, and consultants; (iii) records of volume of treated water delivered to each water user per delivery; (iv) water quality analyses; (v) as -built plans. easements, agreements, and leases concerning the access, operations, and maintenance of the System: MASTER CONTRACT FOR THE FINANCING. CONS -RUCTION. OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 17 (vi) billing documents and all budgets; (vii) design criteria and specifications; (viii) compliance reports; (ix) documentation of facts and cause analysis of any overflows; (x) written assessments of the System made by the Operator; (xi) documents related to Points of Entry into the System; (xii) documentation of repairs and rehabilitation of the System; (xiii) documentation of maintenance of equipment and vehicles; (xiv) comprehensive asset list; (xv) documentation of safety issues and actions; (xvi) internal and vendor inspection reports; and (xvii) documentation of inflow and infiltration studies and actions. (b) The Operator shall report to the TCEQ as required by law. All costs of compliance with the rules of the TCEQ shall be considered an Operation and Maintenance Expense. ARTICLE XI NEGOTIATION AND MEDIATION OF DISPUTES Section 11.1 Agreement Regarding Remedies. The Cities agree that their respective obligations under this Contract are unique and recognize that they may be issuing bonds to acquire, construct, expand, improve or replace the System. The failure by any City to perform its obligations under this Contract would not be capable of being appropriately remedied by award of damages to any other affected party to this Contract and in any event, such damages would be difficult, if not impossible, to detennine because of the unique nature of the Cities' obligations to each other hereunder. Further, the Cities agree that the remedy of termination of this Contract by any City is inappropriate and not in the public interest. Therefore, the Cities agree that they shall be entitled, and limited, to the remedies of specific performance, mandamus and injunction in the event of any breach of any obligation by any party under this Contract. The Cities hereby waive any requirement that they be required to provide any bond or other surety in order to obtain any of the agreed upon remedies. Section 11.2 Agreement to Negotiate First to Resolve Issues. The Cities agree to attempt first to resolve disputes concerning this Contract amicably by promptly entering into negotiations in good faith. The Cities agree that they will not refer any dispute to another dispute resolution procedure including mediation or litigation until they have first made reasonable and good faith efforts to settle their differences by joint negotiations conducted in a timely manner. Section 11.3 Agreement to Mediate. If any dispute cannot be resolved through good faith negotiation, then the Cities shall endeavor to resolve the dispute by mediation as provided herein. MASTER CONTRACT FOR THE FINANCING. CONS TIUJCTION_ OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Patle 18 Section 11.4 Presentation of Written Claim Regarding Disputes Not Resolved by Negotiation. In the event that a dispute is not resolved as a result of such negotiations, any City may at any time give formal written notice to another City of a "claim." A "claim" as used herein means a demand or assertion by one of the Cities (the "claimant") seeking, as a matter of right, adjustment or interpretation of contract terms, the payment of money, an extension of time for performance or other relief with respect to the terms of this Contract or any other dispute or matter in question among the Cities arising out of or related to this Contract. Such notice shall be in writing. After such notice is given, the dispute resolution procedure provided for below shall immediately enter into effect. Section 11.5 Performance During Mediation. The claimant shall continue with performance under this Contract pending mediation of the dispute. Section 11.6 Appointment of Mediator. Promptly following the making of a written claim by any City, the Cities will consult with one another to agree on the appointment of a mediator acceptable to all Cities. The mediator shall have experience in matters of the kind giving rise to the claim. If within five (5) business days the Cities are unable to agree on the appointment of a mediator, then any City may request the appointment of a mediator by the Center for Public Policy Dispute Resolution at the University of Texas at Austin School of Law. The Cities shall endeavor to secure such appointment from the Center for Public Policy Dispute Resolution within ten (10) business days after the request for same is made. The Cities agree to utilize the mediator appointed by the Center unless they ultimately reach agreement on an alternative selection and give notice to the Center that another selection has been made by agreement. Section 11.7 Rules for Mediation The Cities agree to the following stipulations concerning the conduct of the mediation: (a) The mediator shall be impartial among the Cities and shall have no conflict of interest. (b) The mediator shall not have any past, present or anticipated financial interest in the Contract or the System except for the payment for services as mediator nor shall the mediator have been previously employed or acted as a consultant. attorney, employee, engineer, architect, contractor or subcontractor of any City nor have any present or anticipated future engagement of the kind described. Before the engagement of the mediator is finalized. the mediator shall provide to the parties a disclosure statement containing a resume of experience, and a description of past, present or anticipated future relationships to the System and the Cities, their engineers. contractors, subcontractors, attorneys, architects, or consultants. (c) The mediation shall be held at a time and location mutually agreeable to the Cities and the mediator provided, however, that the mediation shall commence no later than fifteen (1 5) business days following the confirmation of appointment. (d) At least ten (10) business days prior to the mediation, the claimant shall submit to the other Cities and the mediator a statement of the claimant's position, the issues that need to be resolved, and a summary of the arguments supporting the claimant's position. At least two (2) business days prior to the mediation. the responding Cities MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION. OWNERSHIP Page 19 AND OPERATION OF T HE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM shall submit their written response to the claimant's statement and provide a summary of their arguments in response. (e) If the Cities agree that independent expert or technical advice would be helpful in facilitating a negotiated resolution of the dispute, the mediator may make arrangements to obtain such advice, and may, with the agreement of the Cities, make arrangements for an independent expert to render a non-binding advisory opinion with respect to any technical matters in dispute after hearing the contentions of the Cities with respect thereto. The expenses of obtaining such independent advice or advisory opinion shall be borne equally by the Cities. (f) No City shall engage in any private interview, discussion or argument with the mediator concerning the subject matter of the mediation. (g) The fees of the mediator and any other costs of administering the mediation shall be borne equally by the Cities unless otherwise agreed among them in writing. (h) The mediator may promote settlement in any manner the mediator believes appropriate at one or several mediation sessions as agreed to by the Cities. The mediation shall continue only so long as desired by the parties and with the consent of all of them. (i) Mediation sessions shall be private unless otherwise required by law. Persons other than the representatives of the Cities may attend mediation sessions only with the permission of all Cities and the consent of the mediator. (j) All communications made in the course of the mediation process including any advice or advisory opinions rendered shall be confidential in accordance with V.T.C.A. Civil Practice and Remedies Code, Section 154.073. Section 11.8 Arbitration. If a dispute arising pursuant to this Contract is not resolved through mediation as described in this article. the matter may be referred to binding arbitration upon the unanimous agreement of the Cities under terms and conditions to which the Cities agree. If the Cities do not agree to such arbitration, the Cities may pursue such other remedies as may be available to them in law or equity and as provided in this Contract. ARTICLE XII SPECIAL PROVISIONS Section 12.1 Contracts with Others in Relation to System (a) Each City shall have the right to enter into contracts with other persons natural or corporate. private or public, to receive Wastewater from such persons that are located within each respective City's Service Area. Each City covenants that it will advise the other Cities and the Operator of all such written contracts and will, if requested by another City or the Operator, furnish such City or Operator with a list of all customers other than retail residential, and commercial customers. Initially, within thirty (30) days after execution of this Agreement, and thereafter for each calendar year during the tenure hereof, each City will provide the other Cities by January 31st of each year an annual MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION, O'W'NERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Pane 20 report containing the following data about each City's customers within the City's Service Area that the System ultimately serves: (1) actual number of connections as of the end of the calendar year; (2) number of new wastewater connections made in the previous calendar year; classification, by number and percentage, of accounts according to the following: (i) residential; (ii) multi -family; (iii) business/commercial; and (iv) other. (4) if business or commercial connections, a copy of any City industrial waste discharge permit issued to such premises. Section 12.2 Future Service to the City of Leander. The Cities recognize and contemplate the likelihood of Leander's joining the System in the future and acquiring Reserved Capacity for Leander to serve the Leander Service Area at that time. In that regard, the Cities agree to reasonably cooperate to obtain Leander's concurrence to enter into an agreement with the Cities to receive service from the System. (3) Section 12.3 Title to Wastewater. Title to and interest in each City's Wastewater shall remain with each City, respectively. at all times. One City shall not acquire any right or title to the other Cities' respective Wastewater interests by virtue of this Contract and shall not otherwise assert any ownership interest in any City's Wastewater rights. Section 12.4 Reuse of Treated Effluent from the System. Any City may utilize treated effluent from the System in accordance with this Section. There will be no charge for the treated effluent; however, each City will be responsible for paying for all capital and operational costs associated with its respective use for any treated effluent reuse facilities. Each City's allowable withdrawal rates of treated effluent at any given time shall be in proportion to and not exceed each City's Annual Flow as a percent of the total Annual Flow of all Cities in the Wastewater Treatment Plants provided the Cities may contract between themselves for the reuse of effluent. The Operations Committee shall be kept apprised routinely by the Operator, and any other City, regarding actions taken or contemplated to be taken in regard to use of treated effluent, including without limitation, plans. engineering reports and similar information verifying compliance with the provisions of this Section. All reuse facilities shall be constructed by the City for whose benefit the reuse facilities are intended. Reuse facilities may be constructed on System property provided that the location of the facilities will not impair the ability of System facilities or other Cities' reuse facilities to be constructed in the future. Unless otherwise agreed by all Cities, title to any reuse facilities located on System property shall be dedicated to the Cities for ownership and operation, but responsibility for, construction costs and operation and maintenance costs of, and the right to the use of those facilities shall remain with the City(s) for whose benefit the reuse facilities exist. MASTER CONTRACT FOR I`HE FIN ANCING. CONS] RUCTION. OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 21 Round Rock's service area for treated effluent shall be Round Rock's Service Area and areas outside of Cedar Park's and Austin's Service Areas. Cedar Park's service area for treated effluent shall be Cedar Park's Service Area and areas outside of Round Rock's, and Austin's Service Areas. Austin's Service Area for treated effluent shall be Austin's Service Area and areas outside of Round Rock's, and Cedar Park's Service Areas. All Cities agree to not object to any future water right bed and banks permit requests filed by any City for delivery of that City's Contractual Flow of treated effluent from the East Plant. ARTICLE XIII GENERAL PROVISIONS Section 13.1 Participation by the Parties. Each City represents to the others that it is empowered by law to participate in the acquisition, construction, and financing of the System, and to execute this Contract and other agreements and documents as are or may hereafter be required to accomplish the same; and that its participation in the System and execution of this Contract have been duly authorized by action of its governing body at a meeting conducted in accordance with the Texas Open Meetings Act, as amended, Chapter 551, Texas Government Code. Each City agrees to furnish to each other such documentation or evidence of its authority to so participate and execute the contracts and other agreements as the other party may reasonably request, and to take and perform such other and further actions and execute such other agreements and documents as may be reasonably required to carry out the provisions of this Contract. Section 13.2 Insurance. (a) The Cities agree to carry public liability insurance on the System for purposes and in amounts which ordinarily would be carried by a privately owned utility company owning and operating such facilities. The Cities shall also carry property casualty insurance in the amount of the replacement value of all improvements and personal property connected with the System (less a deductible comparable to the deductible on the Cities' property insurance for Cities property generally). The amount of each respective insurance shall exclude a proportionate share of the replacement value equal to the portion thereof owned by Austin. The premiums for such insurance shall be an operation and maintenance expense which shall be shared by the Cities, excluding Austin. The proportionate charge to each of such Cities shall be based on their respective portion of the reserved capacity and included in the Flow Charge. The City of Austin is self insured and. in lieu of the above required insurance, may annually certify such fact to the Operations Committee and not have the proportionate cost of insurance included in its Flow Charge. In the event a liability claim or a casualty loss covered by the insurance becomes payable by the Cities. Austin shall pay its proportionate share pursuant to its self insurance plan. (b) The Cities agree to require the contractor or contractors employed for construction of the System to carry insurance coverage throughout the construction period in at least the following amounts: (i) Workers' Compensation: State law limits: MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION. OWNERSHIP Page 22 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM (ii) General Liability (including contractual liability) and Automobile Liability: One million dollars ($1,000,000.00) per person and per occurrence for bodily injury and One million dollars ($1,000,000.00) for property damage; (iii) Builder's Risk: full replacement value of improvements; (iv) Performance and Payment Bond: full value of contract; (v) Cost Overrun Insurance; and (vi) Timely Completion Insurance. The Cities shall be furnished with a certified copy of such effective policy of insurance prior to commencement of construction. Such insurance policies shall name the Cities as additional insureds, and the Cities shall be provided with a certificate of insurance showing the required coverage and providing that the policies may not be canceled, changed, or not renewed until the Cities have been given thirty (30) days prior written notice of such event. The insurance required by this section may be modified by written agreement of the Cities, in accordance with good business practice. Any questions about the scope of coverage required hereunder shall be resolved by written agreement between the Cities. The Parties can agree to substitute an owner controlled insurance program for any of the above specified insurance requirements. Section 13.3 Force Majeure. By reason of "Force Majeure" any City is rendered unable wholly or in part to carry out its obligations under this Contract, if that City gives notice and full particulars of such "Force Majeure" in writing to the other parties within a reasonable time after occurrence of the event or cause relied on. The obligation of the party giving such notice, shall be suspended during the continuance of the inability then claimed. but for no longer period. and any such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Majeure" as employed herein shall mean acts of God. strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the United States or the State of Texas or any civil or military authority, insurrections, riots, epidemics. landslides. lightning, earthquakes, fires, hurricanes, storms, floods. washouts, droughts, arrests. restraint of government and people, civil disturbances, explosions. breakage or accidents to machinery, pipelines or canals, partial or entire failure of wastewater systems or water supply and inability on the part of such City to provide water necessary for operation of its water and wastewater system hereunder, and impossibility by operation of law. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the party having the difficulty and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable in the judgment of the party having the difficulty. Section 13.4 Term of Contract. This Contract shall be effective upon the day and year above recited, and shall continue in effect until December 31, 2050. Section 13.5 Amendment and Modification. This Contract shall not be amended except in writing of all Parties hereto. No change, amendment, or modification of this Contract shall be made or be effective which will affect adversely the prompt payment when due of all money MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION, OWNERSHIP Page 23 AND OPERATION OF 1 HE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM required to be paid by each City under the terms of this Contract and no such change, amendment, or modification shall be made or be effective which would cause a violation of any provisions of any bond resolution of another City. Section 13.6 Addresses and Notice. Unless otherwise provided herein, any notice, communication, request, reply. or advice (collectively, "Notice-) hereunder 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 herein 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 when received by the party to be notified. For the purposes of notice, the addresses of the Parties shall, until changed as herein provided, be as follows: If to Cedar Park: City Manager 600 North Bell Blvd. Cedar Park, Texas 78613 If to Austin: Director, Austin Water Utility P.O. Box 1088 Austin, Texas 78767 If to Round Rock: City Manager 221 E. Main St. Round Rock, Texas 78664 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 13.7 Severabilitv. The Cities specifically agree that in case any part of this Contract or the application of such part to any situation or circumstance should be held to be 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 part of this Contract or the application of such part to any other situation or circumstance, and it is intended that this Contract 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 13.8 Remedies Upon Default. It is not intended hereby to specify an exclusive remedy for any default. but all such other remedies (other than termination) existing at law or in MASTER CONTRACT FOR -1 HE FINANCING. CONSTRUCTION, OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 24 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 other Cities 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 Contract, any right or remedy or any default hereunder 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 of any breach or default 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 be deemed or construed to be a waiver of subsequent breaches or defaults of any kind under any circumstances. Section 13.9 Venue. All amounts due under this Contract, including, but not limited to, payments due under this Contract or damages for the breach of this Contract, shall be paid and be due in Williamson County, Texas, which is the County in which the principal facilities of the System are located. It is specifically agreed among the Cities that Williamson County, Texas, is the place of performance of this Contract; and in the event that any legal proceeding is brought to enforce this Contract or any provision hereof, the same shall be brought in Williamson County, Texas. Section 13.10 Statutory Authority. In entering into this Contract and performing all duties and obligations hereunder, the Cities exercise their authority under and in accordance with the State Constitution and laws including, but not limited to, Chapter 1502, as amended, Texas Government Code; each City's respective Home Rule Charter; Chapter 1371, as amended, Texas Government Code; and all other laws which may authorize this Contract, all of which provisions and laws, cited or not cited herein, shall cumulatively provide the authority for this Contract. Section 13.11 Contract for Benefit of the Cities. This Contract is made for the exclusive benefit of the Cities only. and not for any third party or parties, such as Fern Bluff Municipal Utility District and Brushy Creek Municipal Utility District, and such third parties may not assert any rights or remedies under or by reason of this Contract. Section 13.12 Succession and Assignment. This Contract is binding on and inures to the benefit of the Cities hereto and their respective successors, representatives, and assigns. This Contract may not be assigned by any party hereto without (i) complying with any provisions relating to the right of the Parties to assign this Contract and (ii) prior written notice to and approval by the other Cities, which consent may not be unreasonably withheld or delayed. Section 13.13 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 Contract for all purposes and are adopted as a part of the judgment and findings of the Cities. Section 13.14 Entire Agreement. This Contract constitutes the entire agreement among the Cities with respect to the matters described herein. MASTER CONTRACT FOR THE FINANCING. CONSTRUCTION. OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 25 Section 13.15 Applicable Law. This Contract shall be governed by and construed in accordance with the laws of the State, and the obligations, rights, and remedies of the Parties hereunder shall be determined in accordance with such laws without reference to the laws of any other state or jurisdiction, except for applicable federal laws, rules, and regulations. Section 13.16 Counterparts. This Contract 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. IN WITNESS WHEREOF, the Cities hereto acting under authority of their respective governing bodies have caused this Contract to be duly executed as of the day and year first above written. ** SIGNATURE PAGES TO FOLLOW ** MASTER CONTRACT FOR THE FINANCING. CONS1Rt!CTION. OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 26 CITY OF AUSTIN, TEXAS By: Rudy Garza,st t City Manager MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION, OWNERSHIP Page 27 AND OPERATION OF] HE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM CITY OF CEDAR PARK, TEXAS By: Attest: LeAnn Quinn, City Secretary Aole Bob Lemon, . yor MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION_ OWNERSHIP Page 28 AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM CITY OF ROUND ROCK, TEXAS By: Attest: By: /Arai132i Sara White, City Secretary Alan McGraw, Mayor MASTER CONTRACT FOR THE FINANCING_ CONSTRUCTION_ OWNERSHIP AND OPERATION OF THE BRUSHY CREEK REGIONAL WASTEWATER SYSTEM Page 29 Exhibits Exhibit A—System Components Exhibit B --Description of the System Exhibit C—K Friese Methodology for Winter Month Averaging EXHIBITS EXHIBIT A Capacity Reservations in Brushy Creek Regional Wastewater System System Component Cedar Park Austin Round Rock Check Node From To Brushy Creek Interceptor - Upstream Collection System A C1-30 C1-17 100.00% 0.00% 0.00% 100.00% B C 1- 1 7 C2-31 100.00% 0.00% 0.00% 100.00% C C2-31 C2-23 90.78% 9.22% 0.00% 100.00% D C2-23 C2-16 90.90% 9.10% 0.00% 100.00% E C2-16 C2-9 87.30% 12.70% 0.00% 100.00% F C2-9 C2- I B 86.11% 13.89% 0.00% 100.00% G C2 -1B C3-22 83.38% 16.62% 0.00% 100.00% 11 C3-22 C3-18 87.16% 12.84% 0.00% 100.00% I C3-18 C3- 13 86.09% 12.68% 1.23% 100.00% J C3-13 C3-1 82.66% 12.18% 5.16% 100.00% Brushy Creek Interceptor - Downstream Collection System K C3-1 C20-28 72.73% 10.73% 16.54% 100.00% L C20-28 C20-8 71.88% 10.60% 17.52% 100.00% M C20-8 C21-1 45.23% 35.60% 19.17% 100.00% N C2 I -1 C6 -12A 40.27% 31.71% 28.02% 100.00% 0 C6 -12A C6-1 38.84% 30.59% 30.57% 100.00% P C6-1 C9-1 35.16% 27.73% 37.11% 100.00% Q C9-1 C6A-21 34.17% 26.94% 38.89% 100.00% R C6A-21 C6A-12 33.26% 26.25% 40.49% 100.00% S C6A-12 C6A-1 32.61% 25.72% 41.67% 100.00% Onion Creek Interceptor 0.00% 0.00% 100.00% Onion Geek Relief Interceptor 0.00% 0.00% 100.00% Southwest Interceptor 0.00% 44.05% 55.95% South Interceptor 0.00% 44.05% 55.95% Lake Creek Interceptor 0.00% 44.05% 55.95% Treatment Facilities Percent of Treatment Facilities Capacity 14.61% 3.43% 81.96% Avg Daily Flow Capacity. ThroughTreatment Facilities in MGD 3.58 0.84 20.08 Total Plant Capacity in MGD 24.50 EXHIBIT B THE SYSTEM The Brushy Creek Regional Wastewater System as described in the Engineering Report prepared by PBS&J on behalf of the Lower Colorado River Authority, titled BRA/LCRA Brushy Creek Regional Wastewater System Engineering Report dated October 29, 2000; The wastewater interceptor commonly known as the South Interceptor; The wastewater interceptor commonly known as the Onion Creek Relief Interceptor; and The wastewater interceptor commonly known as the Southwest Interceptor. EXHIBIT C BRUSHY CREEK REGIONAL WASTEWATER SYSTEM WINTER WATER AVERAGING CALCULATION Prepared for: City of Round Rock City of Cedar Park City of Austin Prepared by: K Friese & Associates, Inc. F-6535 1120 S. Capital of Texas Hwy The Setting 111, Ste. 100 Austin, Texas 78746 (512) 338-1704 September 22, 2009 Introduction / Background The Cities of Austin, Cedar Park, and Round Rock are in the process of acquiring the Brushy Creek Regional Wastewater System (BCRWWS) from the Lower Colorado River Authority (LCRA). This system includes more than 13 miles of wastewater interceptor ranging in size from 36" to 84" in diameter and two wastewater treatment plants (WWTPs), including a 21.5 MGD Regional WWTP. Located entirely in Williamson County, the BCRWWS currently serves the wastewater needs of the referenced cities as they fall within the Brushy Creek Basin, as well as those of the Fern Bluff and Brushy Creek MUDs. Future plans include adding the flow from the City of Leander. Customers of the system currently operate under the terms of a "Wastewater Disposal Contract" with the LCRA/Brazos River Authority Alliance dated October 1, 2000, under which the terms of the annual cost allocation of "Operation and Maintenance Expense Requirements" are currently dictated. As Austin, Cedar Park, and Round Rock are in the process of drafting their own contract terms and conditions, they expressed the desire to create a uniform methodology of flow measurement and subsequent language appropriate to this O&M section of the contract. Recent discussions have considered using a system of "Winter Water Averaging" to establish base dry weather wastewater flows while other methods, including system/point of entry metering and flow monitoring, may be established to identify and refine Infiltration & Inflow (1&I) contribution. Scope K Friese & Associates, Inc. (KFA) was authorized to work with each BCRWWS participant city/MUD to gather information for the purpose of creating a uniform methodology for "winter water averaging". As a part of this initial scope, KFA also evaluated initial system meter locations, and prepared a suggested format for a one page quarterly report on flow monitoring. Future work efforts are anticipated to include actual meter installation and I&I Analysis. Winter Water Averaging — Data Collection and Analysis KFA developed an 11 item questionnaire intended to encompass the major factors necessary for a complete winter water averaging program. The questionnaire was then emailed to the system participants, including the City of Leander. Each participant submitted a completed questionnaire back to KFA. The responses were tabulated and used to develop a recommended policy for a common analysis — based on attempts to utilize as much of the collected data and methodologies currently in place by each individual participant. The Winter Water Averaging Summary spreadsheet and Winter Water Time Period Analysis are attached (Exhibits 1 and 2). Page 1 of 3 Proposed Methodology for Billing of System O&M For accounting for wastewater flows from each customer, the Participants shall use "winter averaging of water consumption" for connections as described herein. Winter average of water consumption shall mean: A. All Accounts Except for Those Listed Below 1. The following methodology: a. Use actual water usage of each Participant's accounts for all cycles read for 2 consecutive billing periods, with the earliest date being December 1st. b. Average the water readings for the 2 periods (based on the average daily usage) for each user, except for those listed below, and create a "winter month average" to be applied each billing cycle. c. Bill wastewater usage based upon the winter month average, assuming 100% return flow. B. Metered Irrigation Accounts 1. Use wastewater meter readings, if available, or 2. If the Participant's customer's user has a separately metered irrigation system, use the above methodology on the actual domestic water usage. C. Wastewater Metered (Wholesale) Accounts 1. Any Participant customers with separate wastewater meters (wholesale accounts) will be accounted for using actual meter readings and 100% return flow. D. City of Cedar Park Water Reclamation Facility Bypass 1. For the City of Cedar Park Water Reclamation Facility bypass. the existing meter in the Regional System downstream of the facility and upstream of the first point -of -entry shall be read during a 12 month period ending April 30. At the conclusion of the metering period, the following procedure shall be used to derive the winter month average to be billed for the bypass flow: a. The totalized bypass flow at the conclusion of the 12 month period ending April 30 shall be divided by the sum of the totalized bypass flow and the totalized Water Reclamation Facility effluent flow from the same period. This value is the percentage of total flow to the Water Reclamation Facility that the bypass flow represents. b. The bypass flow percentage calculated in (a.) shall then be multiplied by the total winter month average flow, as calculated in A. above. contributing to the Water Reclamation Facility. The calculated value is considered to represent the total winter month average flow for the bypass flow. K FR ESE Page 3 of 3 E. Special Exceptions 1. Each Participant acknowledges and submits to the other Participants for review and consideration, any "Special Exceptions" to the agreed methodology. Exceptions may include, but are not limited to, cooling tower credit, and/or one time "extraordinary events". Wholesale agreements with MUDs which may be addressed in the methodology above are not considered "Special Exceptions". Meter Locations In a previous work effort, KFA evaluated data gathered from the existing system meters. Based on the quality of data obtained at these locations, combined with the goal of systematically identifying major I&I contributors, we identified six locations for the first round of metering. These suggested locations are depicted on the attached exhibit. Suggested Quarterly Report/Executive Summary Format Once meters have been installed and data is gathered, KFA will perform analysis and submit a quarterly report to the participants for review. KFA anticipates each quarterly report to include the results of any analysis as well as a one-page "Executive Summary". At this time, we envision the Executive Summary will address the following: • Data Gathering Period • General Quality of the Data (discussion and scatter graph) • Rain Events in the Service Area (description, number, intensity, location) • Peak flow as a % of pipe capacity at each meter site • Summary of Analysis Performed and Observations • Recommended Actions for the Upcoming Quarter (e.g.. collect more data at same location, move meter to another location, etc.) Page 3 of 3 1 Recommendation 1 Utilize data from two months which contain the most overlap of data collection - water usage with the earliest date of Dec 1st Utilize data from two months which contain the most overlap of data collection - water usage with the earliest date of Dec 1st Utilize data from two months which contain the most overlap of data collection - water usage with the earliest date of Dec_ 1st ' o • Utilize winter water averaging for systems with separate irrinatien meters Z Acknowledge Exceptions Round Rock 3 -month winter average: because we have 4 zones from November - February. 4 billing cycles- November 1`1 thru February 290 L_ Oo E o O Winter averaging on domestic meter Residential, residential irrigation, commercial, commercial irrigation, apartment, government. industrial, MUD wholesale meters, city accounts Dell and Texas State get credit for cooling tower evaporative losses. For various MUD wholesale accounts, each month we take their water usage, subtract any dedicated irrigation meters from their water usage, then multiply this amount by 70% to determine the MUDs wholesale wastewater amount to bill for the month. Leander December through February One cycle 5th through 10th of each month All three months g) O Actual domestic water usage Residential. commercial, multi• family, apartments. municipal, golf course. school Q z FBMUD mid-Novemebr through mid- February One cycle read on the 15th Average of three months O o Irrigation only meters are not subject to wastewater billing Residential, school, HOA, Community Center Q z Cedar Park December through February 4: December 1 to March 1: December 8 to March 8: November 15 to February 15; November 22 to February 22 All data used 100% of winter monthly average Actual domestic water usage on a gallon for gallon basis Residential. multi -family, non- residential. wholesale Wastewater only customers - based on city wide average BCMUD November through Fehruary 2 per month, reads from last 3 days of the month are billed on the 2nd reads from 13th - 15th are billed on 17th all 4 -months data c 0 N >-- Residential, multi -family. commercial. irrigation (water only) evaporative loss - about 70 List any special exceptions customers; wastewater only you have for winter water customers - about 350', wells - averaging (individual or group same as wastewater only of users), the number of customers: 'One-time' customers in each category. extraordinary events - minimal credit allowed if customer proves and how each category is #: leaks during winter VWVA they filled a new pool or had a adjusted. period - estimate 500-1000 leak 0 Q 3 consecutive months between designated dates from mid-November to mid- March 20 killing cycles (4 of which were determined by COA staff to be those which contribute to the BCRWWS) Weighted average of the two months with the lowest daily water use 0 Residential - Wastewater averaging. Commercial and multi -family - gallon for gallon: billed at the same volume as domestic water usage Single family. multifamily. commercial. large volume/industrial. golf course. wholesale Question Over what time period is water usage analyzed for winter water averaging? How many billing cycles does the utility have and what are the meter read dates for each billing cycle during the wastewater averaging period? What portion of the data collected is used to determine the winter water average? Is 100% of the winter month average used for wastewater billing or is a return flow percentage assumed? If a return flow percentage is assumed. what percentage? For customers with separate irrigation meters. is winter water averaging used or is wastewater billed based on actual domestic water usage on a gallon for gallon basis? What are the account categories used for billing? >- 2 2 2 D 0 z_ us >a w > U Q W m�� w F— Q W 1- z Recommendation Wholesale Wastewater Accounts - use 100%. 4 z Round Rock Currently we have one mud account that we read a wastewater meter. The intent over the next few months is to remove the meter and use the 70% methodology as mentioned above. Zone average Leander 4 z 6.000 Gallons FBMUD Q z Current monthly usage or 8.000 gallons. whichever is less a R 13 47 U One - WTC MUD 1 C7 c 0 a V co cr5 BCMUD 0 c Z or new residential customers, what monthly wastewater average is assumed until winter month average can be calculated? 5.600 gallons default 7,000 gallons c .y 3 4 about 15 customers have wastewater flow meters. none have separate non metered domestic wastewater flows Question How many customers do you have with wastewater meters that are used for billing? How many of these customers have separated domestic wastewater flow Inot metered)? F EXHIBIT 2. BILLING PERIODS REPORTED BY UTILITIES FOR WINTER WATER USAGE O Sat Sun Mon Fri Sal Sun Mon 11/1 11/2 11/6 1112 `i ROUND ROCK ?: r" ar flfNfN�rom CITY OF STIN 1.1'11 ® 1®� Sat Sun Mon 11/15 11/16 - Sat Sun Mon Sat gun 1121 11!22 1/23 24 MEM 1126 1127 11'28 1120 11/30 =OM MOM MEM Thu Sat Sun Mon Tue Wed hu Fri Sat SUn Mon Tue Sal Sun Mon 2'12 12113 12/14 215 1i;is IMEMINIEEEM 2 24 225 Fri Sat Sun Mon 226 12/27 2/29 12;29 -- ®® Fri Sat Sun Mon Tue Ned Thu Fri Set Sun Mon 1'2 1/3 /4 ME= EINEM -- Set Sun Mon Tue Wed ®® Sat Sun Mon Tue Ned Thu Sat 1:23 /24 1/25 26 1;27 1 28 1.29 70 1/31 2/1 2!2 23 ®- Thu Sat Sun Mon 2:5 2'6 2/7 2,9 ME= MIEN MEM =EOM Sat Sun Mon 2'13 214 215 2:16 nem Fri Sat Sun Mon 220 2/21 2/22 2:23 =ME 11•11•111111111MIMI 11111111111 1111111111111111111111 11111111111 ®® 1 1 - mum ®®a mom Thu 3:5 Fri 3;6 Sal 3/7 Sun 319to --=® 3;9 Tue Wed Thu Set Sun Tue MEM MMEM MOM MEM MIME MMM MOM N Thu Sat Sun Mon Fr Sat Sun Mon 332.19 0 11111111•1111111111111•1 ®®®111111111 EXHIBIT 2. BILLING PERIODS REPORTED BY UTILITIES FOR WINTER WATER USAGE 4 \ \ S S" b J k< —�P.s r „ n„ Y l I .� f\ x azar„YAM f ,w Men X l R t 3 V a r � rr r x: r � r :. n�.a u r xs ..ds,S ..., '" . -- . .,✓, .r��"',~�-,,: ,_x�. r' ,mow J svn tls sx#t tniat«•:e 4c ..,...:r...u,.,, ,/r .,a,-.,a..;, .,..:. NEM„....>.. /^"rev i'^-, � �"< ✓' ,:,. ,,,_ ,., ,ear � , � � , v ✓ i<w?:"✓'_'_ /":?w» '„ .,: ..,> ,.> .,�. ... e. .,x. .2. P/n`, r`.,,?' >,...-o. ^Y� sxrn.:+,�'' 3z'-a`Y '\, ,.,..a...�'„„ .. ,, ;_ c^ ,....a� ���.~�"s'r"., rY^a .-.,,-,., x ,... ,... '..,x. `"m ,... «... ,,,.., ", � � .C ..,. ,,. ..x4, .>r'1. „,• w s r c � sas a � s >. n .: ':., -�<'i�,;:F.;>� -' � ;a '�,, .:..,� ..„N »;>j ,`r��`' m�-''-� F' r:,,, ": ,a „,s:�x'•:,, ,. '�'� 'r .�"s�..�zn: i *...�, , '.., .gin. ..:, .F-n..,,�< � �:. ✓..,...,- ,.x .,* �, i, ;� „ },.� ,. -�,. ^� ":,�., � ,�:" '4 >r + e ✓ y. ^ r' y, ..,, - � "_ � � ? :,. � .-.-,,. ,r ;,x✓ .. `�.'�".,�a^ `�";- ,..... ;`�»yam ;, r.,,^ws�w -'� �,sU": �,<`�,. r•�a ., \'�-< r- .�. "�.;\n, �:;�. .r=v`"� ';r.=,�-:s`\. �a �; d C ePark '" ,.. ,.,..,.;, .�':4, r -` '.�'�,,, �.i,`"�,�`. � ;�. a>�` ry`�''✓",�-w`�,? ..� .r<��--^; s, ,. _ , �..,= .... .s<✓ K.✓.. _.�. .,;5, �. ,,.. .< :, , .,, ,,; 45 .,. x�"-moi, .,., .. ,. �.�., -�.s--,...-`"-==`. ;..a••..,n:� .,.�`'^� ��' ,,." ...�. rT' _,:. ..rte' � '�.: -.�„ x - � �. :» .f<:. �� 1 �'-ter , ,�� � ✓ 45 r x 1660 Legend Cna"nentsJET 4? Clfd .; FutureSCR4 s a r Components Exjsdng BCRWWS ( AfrtittpBe CU�8aaerr P„Cf,E. � ,.� :. Custer Components „ 40 � r { K*FRIESE .Austin RO Future SCRWW Customer Gra9c€ante „ _ _ at �ann..eu.as _`, M, Brushy tcsaCrcetL S. aHt i TexsTs HigaY &sIt[ ' ,`YejfM A. . ra7Poo n�r�s lutea 33E-i',rt7d For.1511}33G-97tl%i w LCRA Service Territory Cedar Park P,O.E. x ,.�>'' r, :, Fern Nuff MUD P,O1 E. 1526 �� �� Brushy 9t,Ci) awdsry d Brushy Creek 64tBR eraet u8 � Round Rock.P,O,E, �� Wastewater System '-- District Wastewater serwke ?> WW deter Location ”'y Service Area Inside P,..paazd fee.LORA Corporate Lanins PeenLocation Bused FkeIIes Bcsf.:v:3e wo Service Area Outside X-XX Contract Or-PAPSi - " -• ;,; "� '^,o Y, PsePaf.d by:K R".&Assaciafes Caai:E3[6;2CR7k'b Cite fate-LtrnEts . Fie:X:1Peoye1ASG127,BGFtVAor Eng Report Updo.-LCRA,Qrst