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R-11-08-25-9E1 - 8/25/2011RESOLUTION NO. R -11-08-25-9E1 WHEREAS, the City of Round Rock ("City") has previously entered into that one certain Water and Wastewater Agreement ("Agreement") with Williamson County Municipal Utility District No. 9, now known as Vista Oaks Municipal Utility District ( the "District") and L&N Land Corp; and WHEREAS, City and the District, as between themselves, desire to enter into an Amended Agreement to amend and restate the terms and conditions upon which the City will provide wholesale water and wastewater services to the District; 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 an Amended and Restated Wholesale Water and Wastewater Agreement with Vista Oaks Municipal Utility District, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 25th day of August, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: sii444/11Ribcifot2 SARA L. WHITE, City Secretary O:\wdox\SCClnts\0112\ 1104\MUNICIPAL\00230480.DOC/rmc VISTA OAKS MUNICIPAL UTILITY DISTRICT AMENDED AND RESTATED WHOLESALE WATER AND WASTEWATER AGREEMENT STATE OF TEXAS § § KNOW ALL MEN AT THESE PRESENTS: COUNTY OF WILLIAMSON § This Amended and Restated Wholesale Water and Wastewater Agreement (this "Amended Agreement") is entered into as of the date last herein written between the CITY OF ROUND ROCK, TEXAS (the "City"), a home rule municipality located in Williamson County, Texas, and VISTA OAKS MUNICIPAL UTILITY DISTRICT, formerly known as Williamson County Municipal Utility District No. 9 (the "District"), a conservation and reclamation district created under Article XVI, Section 59 of the Texas Constitution and operating under the provisions of Chapters 49 and 54 of the Texas Water Code. In this Amended Agreement, the City and the District are sometimes referred to individually as "a Party" and collectively as "the Parties". WITNESSETH: WHEREAS, the City owns and operates a water treatment and distribution system serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the City owns wastewater collection facilities and capacity in regional wastewater treatment and disposal facilities serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the District is located within the City's extraterritorial jurisdiction and has been created, with the consent of the City, to provide, among other services, retail water and wastewater services to the land within its boundaries; and WHEREAS, the City, the District, and L&N Land Corp. (the "Developer") previously entered into that one certain Water and Wastewater Agreement dated the 22nd day of January, 1987 (as amended, modified, and supplemented, the "1987 Agreement"); and WHEREAS, the City and the District, as between themselves, now desire to enter into this Amended Agreement to amend and restate the 1987 Agreement to update the terms and conditions upon which the City will provide wholesale water and wastewater services to the District, such that upon the Effective Date, this Amended Agreement will supersede and replace the 1987 Agreement in its entirety, as between the City and the District; NOW, THEREFORE, for and in consideration of the premises and the mutual obligations and benefits herein contained, the Parties agree as follows: 00230798.DOC 403353-11 08/03/2011 - 1 - EXHIBIT Article I. Definitions 1.01 In addition to the terms defined in the preceding paragraphs of this Amended Agreement, the following terms, when used in this Amended Agreement, have the following meanings: a. "Board" or "Board of Directors" means the Board of Directors of the District. b. "Director" means the Director of the City's Water and Wastewater Utility. c. "Force Majeure" means acts of God, strikes, lockouts, or other industrial disturbances; acts of a public enemy; orders of the government of the United States or the State of Texas or any civil or military authority other than the Parties; insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, and droughts; restraint of government and people; civil disturbances; explosions, breakage or accidents to machinery, pipelines, or canals or other causes not reasonably within the control of the Party claiming the inability. d. "Living Unit Equivalent" or "LUE" means the amounts of water and wastewater service required to serve a service unit, as determined under City Ordinances. e. "Ordinances" means City ordinances, as amended from time to time. f. "Commission" means the Texas Commission on Environmental Quality, or its successor agency. Article II. Water Service 2.01 The City will sell and deliver water to the District, which will be supplied from the City's water distribution system as extended to the boundaries of the District for commercial and domestic uses. The District will have a guaranteed reservation and commitment of capacity in the City's water system for 1,400 LUEs. The City presently has or will obtain an adequate water supply with which to provide water service to the District at the same level that water services are provided to customers within the City. The supply of water to the District may be reasonably limited by the City on the same basis and to the same extent as the supply of water to any other customers within the City. The City will provide potable water meeting the standards of the Commission for human consumption and other domestic uses and in compliance with all applicable requirements for wholesale contracts for purchased water systems, including Section 290.45(f), Texas Administrative Code, and any other applicable regulatory requirements. Service by the City to the District will be nondiscriminatory and consistent with the City's standard service policies and regulations, as established by the Round Rock City Council. 2.02 The City will be the sole source of potable water to the District and the District will not seek to develop its own potable wells or alternate supplies of potable water, except in the event that the City is no longer able to provide potable water service as contemplated hereby. Regardless of the foregoing, the City understands that the District has two irrigation wells and the City has no objection to the District using these wells for strictly irrigation purposes. 00230798.DOC 403353-11 08/03/2011 - 2 - 2.03 Retail water service within the District will be provided by the District. Water meters meeting City specifications for customers of the District will be provided by the District at the District's cost. 2.04 The District will adopt a water conservation and drought management plan which is at least as stringent as the City's, as amended from time to time and will amend its plan from time to time to correspond with any amendments adopted by the City. The District will provide the City with a copy of said water conservation and drought management plan within forty-five (45) days after the Effective Date. In addition, the District will implement water rationing and water conservation measures under its water conservation and drought management plan when those measures are activated by the City. The City will give the District prompt notice of any activation or deactivation of water rationing and/or water conservation measures and any amendments to the City's water conservation and drought management plan. 2.05 The District may not sell or deliver water to any customer outside the boundaries of the District without the City's approval. 2.06 Water delivered to the District will be measured by a master meter or meters installed at all connections to the City water distribution system (each, a "Water Point of Delivery"). The existing Water Points of Delivery are depicted on Exhibit A. Metering equipment and related facilities, including a meter vault and standard -type devices required for properly measuring the quantity of water delivered to the District, will be installed at each Water Point of Delivery at the District's cost. The meter facilities must be approved by the City prior to installation. The District, at its expense, will construct the vault and provide and install the meter. The City, at the expense of the District will operate and maintain the metering equipment. The District, at its cost, will calibrate the master meters annually, or more frequently at the City's request. The District will provide the City with a copy of the calibration report within ten (10) days of District's receipt of same. If the City requests calibration of a master meter more frequently than once every 12 months and, upon calibration, the master meter in question proves to be accurate, then the cost of the calibration will be borne by the City. Any master meter registering within three percent (3%) accuracy will be deemed to be accurate. If any master meter tests to be inaccurate by more than three percent (3%), all testing and calibration costs will be borne by the District, the master meter will be recalibrated or replaced, and a billing adjustment will be made based on the degree of the meter's inaccuracy, as determined by the test. If the Parties can reasonably estimate the time at which the master meter became inaccurate, the City will make a billing adjustment based on that time period. If the Parties cannot reasonably estimate the time at which the master meter became inaccurate, then the City will make a billing adjustment to no more than the date of the most recent calibration. If a master meter is out of service or under repair so that the amount of water delivered cannot be ascertained or computed from the readings, the water delivered during the period the master meter was out of service or repair will be estimated and agreed upon by the Parties based on the best data available. 2.07 The District will read all master meters on a daily basis, except on weekends and state and federal holiday and will keep accurate records of all measurements of water passing through the master meters. Such records will be open to the City for inspection or copying at all times during the District's regular business hours. Both the District and the City will be entitled to access the master meters at all times and the City will read the master meters once each City billing cycle, for billing purposes. 00230798.DOC 403353-11 08/03/2011 - 3 - 2.08 The rates to be charged by the City to the District for water supplied under this Amended Agreement will consist of a base monthly charge plus a volume rate per 1,000 gallons. For the periods set forth below, the rates will be as follows: a. From October 1, 2010 through September 30, 2011: Base Monthly Charge: Rate per 1,000 gallons: $10,500.00 $ 2.22 b. From October 1, 2011 through September 30, 2012: Base Monthly Charge: Rate per 1,000 gallons: $10,750.00 $ 2.50 Thereafter, the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City may include a reasonable rate of return in its rates. The amount of water passed -through the District's water system pursuant to and as determined by any pass-through water service agreements will not be included in any amounts owed by the District to the City for water service under this Amended Agreement. 2.09 The District agrees to pay the City in accordance with City Ordinances, to bill users of potable water within the District and to set and maintain tax rates and rates sufficient to pay the following: a. For water delivered by the City pursuant to this Amended Agreement. b. For all District operation and maintenance expenses as they come due. c. For debt service on any bonds issued by the District in an amount deemed appropriate by the Board of Directors. 2.10 The District agrees to provide the City with a copy of each resolution or order adopted by the District setting water rates within seven days of adoption. The City agrees to give written notice to the District at least 30 days prior to approval of any wholesale rate change in order to allow the District to (i) review and comment upon the proposed change and (ii) adjust its own rates to its customers based on the increase in wholesale costs. 2.11 Any bonds issued by the District may be secured by a pledge of the net revenues from the operation of the District's water and sewer and/or drainage systems. Article III. Wastewater Collection, Treatment and Disposal Service 3.01 The City will collect and transport wastewater generated by customers within the District, from the boundaries of the District at the point of delivery shown on Exhibit A (the "Wastewater Point of Delivery"), through its system, to the City's wastewater treatment facilities. The District will have a guaranteed reservation and commitment of capacity in the City's wastewater system for 1,400 LUEs. The City presently has or will obtain adequate wastewater collection, 00230798.DOC 403353-11 08/03/2011 -4- treatment and disposal facilities with which to provide service to the District. Retail wastewater collection service within the District will be provided by the District. The City will be the sole source of wastewater treatment services for the District and the District will not seek to develop its own sanitary treatment capacity or an alternate source of service, except in the event that the City is no longer able to provide wastewater collection, treatment and disposal service as contemplated hereby. 3.02 The rate to be charged by the City to the District for wastewater services under this Amended Agreement will be as follows: a. $3.50 per 1,000 gallons through September 30, 2011; and b. $3.90 per 1,000 gallons from October 1, 2011 through September 30, 2012. Thereafter, the District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City will be entitled to include a reasonable rate of return for said rates. Unless the District and the City agree otherwise, the City will bill the District for wastewater services on the basis of the wholesale wastewater rate in effect under this Amended Agreement multiplied by the actual average monthly water usage as determined by the District's master water meter readings ("Winter Average Usage") during the preceding months of December, January, and February or other winter -averaging period approved by the City and the District (the "Winter Averaging Period"), but excluding usage from fire hydrant, fire line, dedicated irrigation meter, and pass-through water service connections (the "Winter -Average Exclusion"). The City will read the master water meter(s) and all irrigation and fire hydrant meters within the District on the same day during the Winter -Averaging Period, and will provide the District with an itemized report which reflects the master water meter(s) and each irrigation and/or fire hydrant meter in use within the District, the water usage registered by those meters, and the Winter -Average Exclusion during the preceding usage period. The District agrees to provide the City access to the meters and otherwise cooperate with the City to enable it to perform the meter readings. The District will have the right to perform meter read checks and otherwise verify the City's calculation of the Winter -Average Exclusion. The City agrees that any wastewater metering equipment previously used for billing purposes under the 1987 Agreement will be the property of the District. The amount of wastewater passed -through the District's wastewater system pursuant to and as determined by any pass-through wastewater service agreements will not be included in any amounts owed by the District to the City for wastewater services under this Amended Agreement. 3.03 The District agrees to pay the City in accordance with City Ordinances, to bill users of wastewater treatment services within the District and to set and maintain tax rates and rates sufficient to pay the following: a. For wastewater services provided by the City pursuant to this Amended Agreement. b. For all District operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. 00230798.DOC 403353-11 08/03/2011 - 5 - c. For debt service on any bonds issued by the District in an amount deemed appropriate by the Board of Directors. 3.04 The District agrees to supply the City with a copy of each resolution or order adopted by the District setting sewer rates within seven days of such adoption. The City agrees to give notice to the District at least 30 days prior to approval of any wholesale rate change in order to allow the District to (i) review and comment upon the proposed change and (ii) adjust its own rates to its customers based on the increase in wholesale costs. 3.05 Discharges of wastewater generated within the District to the City's wastewater system will be governed by the pretreatment regulations promulgated by City Ordinances, the Environmental Protection Agency (the "EPA") and the Texas Commission on Environmental Quality (the "Commission"). The District will adopt an order prohibiting industrial waste, as defined by applicable state and federal regulations, from entering its collection system and will coordinate with the City to maintain pretreatment standards consistent with those of the EPA and the Commission. The City will be obligated to receive into the City's system at the Wastewater Point of Delivery only wastewater meeting the quality requirements of this Section 3.05, and any actual and reasonable expenses incurred by the City in receiving, transporting, treating, and disposing of non-compliant wastewater shall be charged directly to the District by the City, upon demonstrating that such wastewater was generated within the District. Notwithstanding the foregoing, the City will be responsible for ensuring that all discharges of wastewater from City customers that is passed through the District's wastewater system comply with federal, state, and City requirements regarding pretreatment and monitoring of industrial waste and other prohibited waste. The City will not impose any fee, charge, or fine upon the District for any violation of any ordinance, rule, regulation, or agreement caused by wastewater from City customers that is passed through the District's wastewater system, nor will the City impose upon the District any surcharge that is caused by wastewater from City customers that is passed through the District's wastewater system. 3.06 Title to and responsibility for the reception, transportation, delivery, and disposal of all wastewater generated within the District and discharged hereunder shall remain with the District to the Wastewater Point of Delivery. Upon passing through a Wastewater Point of Delivery, title to and all responsibility for such wastewater shall pass to the City, and City will be responsible for the proper reception, transportation, treatment, disposal, and/or reuse of all wastewater, meeting the applicable quality standards, received by it at the Wastewater Point of Delivery. Article IV. Miscellaneous 4.01 If, by reason of Force Majeure, a Party is rendered unable, wholly or in part, to carry out its obligations under this Amended Agreement, such Party will give written notice and the full particulars of such Force Majeure to the other Party within a reasonable time after occurrence of the event or cause relied upon, and the obligation of the Party giving such notice, to the extent it is affected by such Force Majeure, will be suspended during the continuance of the inability then claimed, but for no longer period, and any such Party will endeavor to remove or overcome such inability with all reasonable dispatch. 00230798.DOC 403353-11 08/03/2011 - 6 - 4.02 The City will not be liable to the District or any customer of the District for the failure of the City to provide water or wastewater treatment service where the failure results from Force Majeure. 4.03 This Amended Agreement is subject to all valid rules, regulations and laws applicable thereto promulgated by the United States of America, the State of Texas, or any agency thereof or regulatory body having lawful jurisdiction. 4.04 This Amended Agreement constitutes the entire agreement of the Parties with respect to wholesale water and wastewater service to the District and, upon the Effective Date, supersedes the 1987 Agreement as to the Parties. The Parties understand that Section 8.04 of the 1987 Agreement provides that the 1987 Agreement maybe amended by consent of all of the parties. The City and the District each waive such provision with respect to each other and this Amended Agreement, inasmuch as the Developer is not a party to this Amended Agreement, and agree that this Amended Agreement will be effective and binding upon the Parties hereto. 4.05 This Amended Agreement will be for the sole and exclusive benefit of the City and the District and will not be construed to confirm any benefit or right upon any other parties. 4.06 This Amended Agreement may be amended by consent of both of the Parties. 4.07 The provisions of this Amended Agreement are severable and, if any word, phrase, clause, sentence, paragraph, section or other part of this Amended Agreement or the application thereof to any person or circumstance is ever held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Amended Agreement will be construed as if such invalid provision was not contained herein. 4.08 This Amended Agreement will be in force and effect from the date of execution by both Parties and will continue in effect for 40 years thereafter. The foregoing notwithstanding, if all of the land within the District is annexed and the District is dissolved, this Amended Agreement will terminate on the date of dissolution of the District. 4.09 This Amended Agreement will be construed under and in accordance with Texas law. Venue for any action arising hereunder will be in Williamson County, Texas. 4.10 Any notice given under this Amended Agreement must be in writing. Notice maybe given: (i) by depositing the notice in the United States Mail, postage paid, certified, and addressed to the Party to be notified with return receipt requested; (ii) by delivering the notice to the Party, or an agent of the Party or (iii) by confirmed facsimile, provided that a copy of the notice is also given in one of the manners specified in (i) or (ii). Notice deposited in the mail in the manner specified will be effective three days after deposit. Notice given in any other manner will be effective only if and when received by the Party to be notified. For the purposes of notice, the addresses of the parties will, until changed as provided below, be as follows: 00230798.DOC 403353-11 08/03/2011 - 7 - CITY: City of Round Rock 221 East Main Street Round Rock, Texas 78664 Attn: City Manager Facsimile: (512) 218-7097 DISTRICT: Vista Oaks Municipal Utility District c/o Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701 Attn: John Bartram Facsimile: (512) 435-2360 The Parties may change their respective addresses for purposes of Notice by giving at least five days written notice of the new address to the other party. 4.11 If any date or any period provided in this Amended Agreement ends on a Saturday, Sunday or legal holiday, the applicable period will be extended to the next business day. 4.12 Each party has been represented by legal counsel who have participated equally in the formulation, drafting, and approval of this Amended Agreement. Therefore, in the event of any ambiguity, the provisions of this Amended Agreement will not be construed for or against either party based on draftsmanship. Wherever appropriate, the masculine gender may include the feminine or neuter, and the singular may include the plural, and vice versa. IN WITNESS WHEREOF, the City and the District, acting under the authority of their respective governing bodies, have caused multiple counterparts of this Amended Agreement to be duly executed, each of which will be of equal dignity, all as of the day of , 2011 (the "Effective Date"). 00230798.DOC 403353-11 08/03/2011 - 8 - CITY OF ROUND ROCK, TEXAS By: ALAN MCGRAW, Mayor Date: ATTEST: Sara White City Secretary 00230798.DOC 403353-11 08/03/2011 - 9 - VISTA OAKS MUNICIPAL UTILITY DISTRICT By: Printed Name: Title: Date: ATTEST: Secretary, Board of Directors 00230798.DOC 403353-11 08/03/2011 - 10 - 1 1 1 00230798.D0C 403353-11 08/03/2011 - 11 - ROUNDROCK, TEXAS PURPOSE. PASSION. PROSPERITY Agenda Item No. 9E1. City Council Agenda Summary Sheet Consider a resolution authorizing the Mayor to execute an Amended and Restated Agenda Caption: Wholesale Water and Wastewater Agreement with Vista Oaks Municipal Utility District. Meeting Date: August 25, 2011 Department: Utilities and Environmental Services Staff Person making presentation: Michael Thane, P.E. Utilities Director Item Summary: The City and Vista Oaks Municipal Utility District (MUD) have agreed to amend and restate their 1987 Water and Wastewater Agreement to update the terms and conditions upon which the City will provide wholesale water and wastewater services to the MUD. Over the past few years, the City has experienced wastewater billing issues with the Vista Oaks MUD. These issues are related to the way the MUD is being billed for their wastewater by the City. In accordance with the previously existing Water and Wastewater Agreement, the billing method relied on data from three different wastewater flow meters, which historically have proven to be inaccurate and/or unreliable. City staff and representatives from the MUD have had ongoing discussions regarding these issues and have come to agree on a resolution. These negotiations have also resulted in an agreement upon changing the way the MUD is billed monthly for wastewater, from a flow metered approach to a winter average approach. Cost: Source of Funds: N/A N/A Date of Public Hearing (if required): N/A Recommended Action: Approval EXECUTED DOCUMENTS FOLLOW VISTA OAKS MUNICIPAL UTILITY DISTRICT AMENDED AND RESTATED WHOLESALE WATER AND WASTEWATER AGREEMENT STATE OF TEXAS KNOW ALL MEN AT THESE PRESENTS: COUNTY OF WILLIAMSON This Amended and Restated Wholesale Water and Wastewater Agreement (this "Amended Agreement") is entered into as of the date last herein written between the CITY OF ROUND ROCK, TEXAS (the "City"), a home rule municipality located in Williamson County, Texas, and VISTA OAKS MUNICIPAL UTILITY DISTRICT, formerly known as Williamson County Municipal Utility District No. 9 (the "District"), a conservation and reclamation district created under Article XVI, Section 59 of the Texas Constitution and operating under the provisions of Chapters 49 and 54 of the Texas Water Code. In this Amended Agreement, the City and the District are sometimes referred to individually as "a Party" and collectively as "the Parties". WITNESSETH: WHEREAS, the City owns and operates a water treatment and distribution system serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the City owns wastewater collection facilities and capacity in regional wastewater treatment and disposal facilities serving territory within the City's extraterritorial jurisdiction as well as within the boundaries of the City; and WHEREAS, the District is located within the City's extraterritorial jurisdiction and has been created, with the consent of the City, to provide, among other services, retail water and wastewater services to the land within its boundaries; and WHEREAS, the City, the District, and L&N Land Corp. (the "Developer") previously entered into that one certain Water and Wastewater Agreement dated the 22nd day of January, 1987 (as amended, modified, and supplemented, the "1987 Agreement"); and WHEREAS, the City and the District, as between themselves, now desire to enter into this Amended Agreement to amend and restate the 1987 Agreement to update the terms and conditions upon which the City will provide wholesale water and wastewater services to the District, such that upon the Effective Date, this Amended Agreement will supersede and replace the 1987 Agreement in its entirety, as between the City and the District; NOW, THEREFORE, for and in consideration of the premises and the mutual obligations and benefits herein contained, the Parties agree as follows: 00230798.DOC 403353-11 08/03/2011 - 1 - g-lk OS-ls-.9 Article I. Defmitions 1.01 In addition to the terms defined in the preceding paragraphs of this Amended Agreement, the following terms, when used in this Amended Agreement, have the following meanings: a. "Board" or "Board of Directors" means the Board of Directors of the District. b. "Director" means the Director of the City's Water and Wastewater Utility. c. "Force Majeure" means acts of God, strikes, lockouts, or other industrial disturbances; acts of a public enemy; orders of the government of the United States or the State of Texas or any civil or military authority other than the Parties; insurrection, riots, epidemics, landslides, lightning, earthquake, fires, hurricanes, storms, floods, washouts, and droughts; restraint of government and people; civil disturbances; explosions, breakage or accidents to machinery, pipelines, or canals or other causes not reasonably within the control of the Party claiming the inability. d. "Living Unit Equivalent" or "LUE" means the amounts of water and wastewater service required to serve a service unit, as determined under City Ordinances. e. "Ordinances" means City ordinances, as amended from time to time. f. "Commission" means the Texas Commission on Environmental Quality, or its successor agency. Article II. Water Service 2.01 The City will sell and deliver water to the District, which will be supplied from the City's water distribution system as extended to the boundaries of the District for commercial and domestic uses. The District will have a guaranteed reservation and commitment of capacity in the City's water system for 1,400 LUEs. The City presently has or will obtain an adequate water supply with which to provide water service to the District at the same level that water services are provided to customers within the City. The supply of water to the District may be reasonably limited by the City on the same basis and to the same extent as the supply of water to any other customers within the City. The City will provide potable water meeting the standards of the Commission for human consumption and other domestic uses and in compliance with all applicable requirements for wholesale contracts for purchased water systems, including Section 290.45(f), Texas Administrative Code, and any other applicable regulatory requirements. Service by the City to the District will be nondiscriminatory and consistent with the City's standard service policies and regulations, as established by the Round Rock City Council. 2.02 The City will be the sole source of potable water to the District and the District will not seek to develop its own potable wells or alternate supplies of potable water, except in the event that the City is no longer able to provide potable water service as contemplated hereby. Regardless of the foregoing, the City understands that the District has two irrigation wells and the City has no objection to the District using these wells for strictly irrigation purposes. 00230798.DOC 403353-11 08/03/2011 - 2 - 2.03 Retail water service within the District will be provided by the District. Water meters meeting City specifications for customers of the District will be provided by the District at the District's cost. 2.04 The District will adopt a water conservation and drought management plan which is at least as stringent as the City's, as amended from time to time and will amend its plan from time to time to correspond with any amendments adopted by the City. The District will provide the City with a copy of said water conservation and drought management plan within forty-five (45) days after the Effective Date. In addition, the District will implement water rationing and water conservation measures under its water conservation and drought management plan when those measures are activated by the City. The City will give the District prompt notice of any activation or deactivation of water rationing and/or water conservation measures and any amendments to the City's water conservation and drought management plan. 2.05 The District may not sell or deliver water to any customer outside the boundaries of the District without the City's approval. 2.06 Water delivered to the District will be measured by a master meter or meters installed at all connections to the City water distribution system (each, a "Water Point of Delivery"). The existing Water Points of Delivery are depicted on Exhibit A. Metering equipment and related facilities, including a meter vault and standard -type devices required for properly measuring the quantity of water delivered to the District, will be installed at each Water Point of Delivery at the District's cost. The meter facilities must be approved by the City prior to installation. The District, at its expense, will construct the vault and provide and install the meter. The City, at the expense of the District will operate and maintain the metering equipment. The District, at its cost, will calibrate the master meters annually, or more frequently at the City's request. The District will provide the City with a copy of the calibration report within ten (10) days of District's receipt of same. If the City requests calibration of a master meter more frequently than once every 12 months and, upon calibration, the master meter in question proves to be accurate, then the cost of the calibration will be borne by the City. Any master meter registering within three percent (3%) accuracy will be deemed to be accurate. If any master meter tests to be inaccurate by more than three percent (3%), all testing and calibration costs will be borne by the District, the master meter will be recalibrated or replaced, and a billing adjustment will be made based on the degree of the meter's inaccuracy, as determined by the test. If the Parties can reasonably estimate the time at which the master meter became inaccurate, the City will make a billing adjustment based on that time period. If the Parties cannot reasonably estimate the time at which the master meter became inaccurate, then the City will make a billing adjustment to no more than the date of the most recent calibration. If a master meter is out of service or under repair so that the amount of water delivered cannot be ascertained or computed from the readings, the water delivered during the period the master meter was out of service or repair will be estimated and agreed upon by the Parties based on the best data available. 2.07 The District will read all master meters on a daily basis, except on weekends and state and federal holiday and will keep accurate records of all measurements of water passing through the master meters. Such records will be open to the City for inspection or copying at all times during the District's regular business hours. Both the District and the City will be entitled to access the master meters at all times and the City will read the master meters once each City billing cycle, for billing purposes. 00230798.DOC 403353-11 08/03/2011 - 3 - 2.08 The rates to be charged by the City to the District for water supplied under this Amended Agreement will consist of a base monthly charge plus a volume rate per 1,000 gallons. For the periods set forth below, the rates will be as follows: a. From October 1, 2010 through September 30, 2011: Base Monthly Charge: Rate per 1,000 gallons: $10,500.00 $ 2.22 b. From October 1, 2011 through September 30, 2012: Base Monthly Charge: Rate per 1,000 gallons: $10,750.00 $ 2.50 Thereafter, the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City may include a reasonable rate of return in its rates. The amount of water passed -through the District's water system pursuant to and as determined by any pass-through water service agreements will not be included in any amounts owed by the District to the City for water service under this Amended Agreement. 2.09 The District agrees to pay the City in accordance with City Ordinances, to bill users of potable water within the District and to set and maintain tax rates and rates sufficient to pay the following: a. For water delivered by the City pursuant to this Amended Agreement. b. For all District operation and maintenance expenses as they come due. c. For debt service on any bonds issued by the District in an amount deemed appropriate by the Board of Directors. 2.10 The District agrees to provide the City with a copy of each resolution or order adopted by the District setting water rates within seven days of adoption. The City agrees to give written notice to the District at least 30 days prior to approval of any wholesale rate change in order to allow the District to (i) review and comment upon the proposed change and (ii) adjust its own rates to its customers based on the increase in wholesale costs. 2.11 Any bonds issued by the District may be secured by a pledge of the net revenues from the operation of the District's water and sewer and/or drainage systems. Article III. Wastewater Collection, Treatment and Disposal Service 3.01 The City will collect and transport wastewater generated by customers within the District, from the boundaries of the District at the point of delivery shown on Exhibit A (the "Wastewater Point of Delivery"), through its system, to the City's wastewater treatment facilities. The District will have a guaranteed reservation and commitment of capacity in the City's wastewater system for 1,400 LUEs. The City presently has or will obtain adequate wastewater collection, 00230798.DOC 403353-11 08/03/2011 - 4 - treatment and disposal facilities with which to provide service to the District. Retail wastewater collection service within the District will be provided by the District. The City will be the sole source of wastewater treatment services for the District and the District will not seek to develop its own sanitary treatment capacity or an alternate source of service, except in the event that the City is no longer able to provide wastewater collection, treatment and disposal service as contemplated hereby. 3.02 The rate to be charged by the City to the District for wastewater services under this Amended Agreement will be as follows: a. $3.50 per 1,000 gallons through September 30, 2011; and b. $3.90 per 1,000 gallons from October 1, 2011 through September 30, 2012. Thereafter, the District agrees that the rates set by the City and charged to the District may be reviewed and/or amended annually based on a cost of service study performed by the City. The City will be entitled to include a reasonable rate of return for said rates. Unless the District and the City agree otherwise, the City will bill the District for wastewater services on the basis of the wholesale wastewater rate in effect under this Amended Agreement multiplied by the actual average monthly water usage as determined by the District's master water meter readings ("Winter Average Usage") during the preceding months of December, January, and February or other winter -averaging period approved by the City and the District (the "Winter Averaging Period"), but excluding usage from fire hydrant, fire line, dedicated irrigation meter, and pass-through water service connections (the "Winter Average Exclusion"). The City will read the master water meter(s) and all irrigation and fire hydrant meters within the District on the same day during the Winter -Averaging Period, and will provide the District with an itemized report which reflects the master water meter(s) and each irrigation and/or fire hydrant meter in use within the District, the water usage registered by those meters, and the Winter -Average Exclusion during the preceding usage period. The District agrees to provide the City access to the meters and otherwise cooperate with the City to enable it to perform the meter readings. The District will have the right to perform meter read checks and otherwise verify the City's calculation of the Winter -Average Exclusion. The City agrees that any wastewater metering equipment previously used for billing purposes under the 1987 Agreement will be the property of the District. The amount of wastewater passed -through the District's wastewater system pursuant to and as determined by any pass-through wastewater service agreements will not be included in any amounts owed by the District to the City for wastewater services under this Amended Agreement. 3.03 The District agrees to pay the City in accordance with City Ordinances, to bill users of wastewater treatment services within the District and to set and maintain tax rates and rates sufficient to pay the following: a. For wastewater services provided by the City pursuant to this Amended Agreement. b. For all District operation and maintenance expenses in an amount sufficient enough to meet such expenses as they come due. 00230798.DOC 403353-11 08/03/2011 - 5 - c. For debt service on any bonds issued by the District in an amount deemed appropriate by the Board of Directors. 3.04 The District agrees to supply the City with a copy of each resolution or order adopted by the District setting sewer rates within seven days of such adoption. The City agrees to give notice to the District at least 30 days prior to approval of any wholesale rate change in order to allow the District to (i) review and comment upon the proposed change and (ii) adjust its own rates to its customers based on the increase in wholesale costs. 3.05 Discharges of wastewater generated within the District to the City's wastewater system will be governed by the pretreatment regulations promulgated by City Ordinances, the Environmental Protection Agency (the "EPA") and the Texas Commission on Environmental Quality (the "Commission"). The District will adopt an order prohibiting industrial waste, as defined by applicable state and federal regulations, from entering its collection system and will coordinate with the City to maintain pretreatment standards consistent with those of the EPA and the Commission. The City will be obligated to receive into the City's system at the Wastewater Point of Delivery only wastewater meeting the quality requirements of this Section 3.05, and any actual and reasonable expenses incurred by the City in receiving, transporting, treating, and disposing of non-compliant wastewater shall be charged directly to the District by the City, upon demonstrating that such wastewater was generated within the District. Notwithstanding the foregoing, the City will be responsible for ensuring that all discharges of wastewater from City customers that is passed through the District's wastewater system comply with federal, state, and City requirements regarding pretreatment and monitoring of industrial waste and other prohibited waste. The City will not impose any fee, charge, or fine upon the District for any violation of any ordinance, rule, regulation, or agreement caused by wastewater from City customers that is passed through the District's wastewater system, nor will the City impose upon the District any surcharge that is caused by wastewater from City customers that is passed through the District's wastewater system. 3.06 Title to and responsibility for the reception, transportation, delivery, and disposal of all wastewater generated within the District and discharged hereunder shall remain with the District to the Wastewater Point of Delivery. Upon passing through a Wastewater Point of Delivery, title to and all responsibility for such wastewater shall pass to the City, and City will be responsible for the proper reception, transportation, treatment, disposal, and/or reuse of all wastewater, meeting the applicable quality standards, received by it at the Wastewater Point of Delivery. Article IV. Miscellaneous 4.01 If, by reason of Force Majeure, a Party is rendered unable, wholly or in part, to carry out its obligations under this Amended Agreement, such Party will give written notice and the full particulars of such Force Majeure to the other Party within a reasonable time after occurrence of the event or cause relied upon, and the obligation of the Party giving such notice, to the extent it is affected by such Force Majeure, will be suspended during the continuance of the inability then claimed, but for no longer period, and any such Party will endeavor to remove or overcome such inability with all reasonable dispatch. 00230798.DOC 403353-11 08/03/2011 - 6 - 4.02 The City will not be liable to the District or any customer of the District for the failure of the City to provide water or wastewater treatment service where the failure results from Force Majeure. 4.03 This Amended Agreement is subject to all valid rules, regulations and laws applicable thereto promulgated by the United States of America, the State of Texas, or any agency thereof or regulatory body having lawful jurisdiction. 4.04 This Amended Agreement constitutes the entire agreement of the Parties with respect to wholesale water and wastewater service to the District and, upon the Effective Date, supersedes the 1987 Agreement as to the Parties. The Parties understand that Section 8.04 of the 1987 Agreement provides that the 1987 Agreement may be amended by consent of all of the parties. The City and the District each waive such provision with respect to each other and this Amended Agreement, inasmuch as the Developer is not a party to this Amended Agreement, and agree that this Amended Agreement will be effective and binding upon the Parties hereto. 4.05 This Amended Agreement will be for the sole and exclusive benefit of the City and the District and will not be construed to confirm any benefit or right upon any other parties. 4.06 This Amended Agreement may be amended by consent of both of the Parties. 4.07 The provisions of this Amended Agreement are severable and, if any word, phrase, clause, sentence, paragraph, section or other part of this Amended Agreement or the application thereof to any person or circumstance is ever held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Amended Agreement will be construed as if such invalid provision was not contained herein. 4.08 This Amended Agreement will be in force and effect from the date of execution by both Parties and will continue in effect for 40 years thereafter. The foregoing notwithstanding, if all of the land within the District is annexed and the District is dissolved, this Amended Agreement will terminate on the date of dissolution of the District. 4.09 This Amended Agreement will be construed under and in accordance with Texas law. Venue for any action arising hereunder will be in Williamson County, Texas. 4.10 Any notice given under this Amended Agreement must be in writing. Notice maybe given: (i) by depositing the notice in the United States Mail, postage paid, certified, and addressed to the Party to be notified with return receipt requested; (ii) by delivering the notice to the Party, or an agent of the Party or (iii) by confirmed facsimile, provided that a copy of the notice is also given in one of the manners specified in (i) or (ii). Notice deposited in the mail in the manner specified will be effective three days after deposit. Notice given in any other manner will be effective only if and when received by the Party to be notified. For the purposes of notice, the addresses of the parties will, until changed as provided below, be as follows: 00230798.DOC 403353-11 08/03/2011 - 7 - CITY: City of Round Rock 221 East Main Street Round Rock, Texas 78664 Attn: City Manager Facsimile: (512) 218-7097 DISTRICT: Vista Oaks Municipal Utility District c/o Armbrust & Brown, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78701 Attn: John Bartram Facsimile: (512) 435-2360 The Parties may change their respective addresses for purposes of Notice by giving at least five days written notice of the new address to the other party. 4.11 If any date or any period provided in this Amended Agreement ends on a Saturday, Sunday or legal holiday, the applicable period will be extended to the next business day. 4.12 Each party has been represented by legal counsel who have participated equally in the formulation, drafting, and approval of this Amended Agreement. Therefore, in the event of any ambiguity, the provisions of this Amended Agreement will not be construed for or against either party based on draftsmanship. Wherever appropriate, the masculine gender may include the feminine or neuter, and the singular may include the plural, and vice versa. IN WITNESS WHEREOF, the City and the District, acting under the authority of their respective governing bodies, have caused multiple counterparts of this Amended Agreement to be duly executed, each of which will be of equal dignity, all as of the day of , 2011 (the "Effective Date"). 00230798.DOC 403353-11 08/03/2011 - 8 - CITY OF ROUND ROCK, TEXAS By: ON ALAN MCGRAWI , Mayor Date: e). ZS- . l . ATTEST: 5)2/14/1/1,- , Vi232Z(1- Sara White City Secretary 00230798.DOC 403353-11 08/03/2011 - 9 - VISTA OAKS MUNICIPAL UTILITY DISTRIC� VII 11 By: Printed Name: Dougl. s Mink Title: president, Board of Directors Date: August 29, 2071 Allen Douthitt Asst. Secretary, Board of Directors 403353-11 08/03/2011 - 10 - . 00230798. DOC 403353-11 08/03/2011 -ll -