BCRUA_R-08-09-02-6A CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS §
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. §
The undersigned President of the Board of Directors of the Brushy Creek Regional Utility
Authority, Inc. (the "RUA"), hereby certify as follows:
1. The Board of Directors of the RUA convened in SPECIAL MEETING ON THE 2ND
DAY OF SEPTEMBER, 2008, at the designated meeting place (the "Meeting"), and the roll was
called of the duly constituted officers and members of the Board, to wit:
Scott Rhode - President
Mitch Fuller- Vice President
John Cowman - Secretary/Treasurer
and all of said persons were present, except the following absentees: thus constituting
a quorum. Whereupon,among other business,the following was transacted at the Meeting: a written
RESOLUTION APPROVING BYLAWS OF THE BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.; APPROVING A MASTER CONTRACT FOR THE
FINANCING, CONSTRUCTION AND OPERATION OF THE BCRUA REGIONAL
WATER TREATMENT AND DISTRIBUTION PROJECT; APPROVING A FINANCING
AGREEMENT; AND OTHER MATTERS IN CONNECTION THEREWITH
was duly introduced for the consideration of the Board. It was then duly moved and seconded that
the Resolution be passed; and, after due discussion, the motion, carrying with it the passage of the
Resolution, prevailed and carried by the following vote:
AYES: 3
NOES: D
2. A true, full and correct copy of the aforesaid Resolution passed at the Meeting described
in the above and foregoing paragraph is attached to and follows this Certificate;that the Resolution
has been duly recorded in the Board's minutes of the Meeting;that the above and foregoing paragraph
is a true, full and correct excerpt from the Board's minutes of the Meeting pertaining to the passage
of the Resolution;that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of the Board as indicated therein;that each of the officers
and members of the Board was duly and sufficiently notified officially and personally, in advance, of
the time, place and purpose of the aforesaid Meeting, and that the Resolution would be introduced
BCRUA%7 WDBWT ResApprvgByLawsCett
and considered for passage at the Meeting, and each of the officers and members consented, in
advance, to the holding of the Meeting for such purpose;that the Meeting was open to the public and
public notice of the time, place and purpose of the Meeting was given, all as required by Chapter 551,
Government Code, as amended and Section 49.064, Texas Water Code, as amended.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
BCRUAYIWDB107:ResApprvgByLawsCert
SIGNED AND SEALED this 2nd day of September, 200 .
Secre , Board o Directors P sident, Board of Directors
[SEAL]
BCRUA\TWDM07:RasApprvgByLawsCed
RESOLUTION APPROVING BYLAWS OF THE BRUSHY CREEK REGIONAL
UTILITY AUTHORITY, INC.; APPROVING A MASTER CONTRACT FOR THE
FINANCING, CONSTRUCTION AND OPERATION OF THE BCRUA REGIONAL
WATER TREATMENT AND DISTRIBUTION PROJECT; APPROVING A
FINANCING AGREEMENT; AND OTHER MATTERS IN CONNECTION
THEREWITH
THE STATE OF TEXAS §
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC. §
WHEREAS, there has been presented and approved by the City Council of each of the
participating and founding members of the Brushy Creek Regional Utility Authority, Inc.
("BCRUA") namely, the City of Cedar Park, Texas ("Cedar Park"), the City of Leander, Texas
("Leander")and the City of Round Rock, Texas ("Round Rock") (collectively,the Member Cities)
a copy of the proposed Bylaws of the BCRUA(the "Bylaws"),by which the BCRUA will operate;
and
WHEREAS, there has been presented and approved by the City Council of each of the
Members Cities a draft of the Master Contract for the financing, construction and operation of the
BCRUA Regional Water Treatment and Distribution Project (the "Master Contract") between the
Member Cities and the BCRUA,pursuant to which the BCRUA will construct,finance,operate and
maintain water treatment and distribution facilities for the benefit of the Member Cities; and
WHEREAS,the BCRUA has received a request from Cedar Park to issue a separate series
of contract revenue bonds for Cedar Park in the aggregate principal amount of $24,970,000 to
finance Cedar Park's contribution to the construction and equipment of the BCRUA Project pursuant
to the Master Contract; and
WHEREAS,the BCRUA has received a request from Leander to issue a separate series of
contract revenue bonds for Leander in the aggregate principal amount of$91,180,000 to finance
Leander's contribution to the construction and equipment of the BCRUA Project pursuant to the
Master Contract; and
WHEREAS, the BCRUA has received a request from the Round Rock to issue a separate
series of contract revenue bonds for Round Rock in the aggregate principal amount of$65,870,000
to finance Round Rock's contribution to the construction and equipment of the BCRUA Project
pursuant to the Master Contract; and
WHEREAS,there has been presented to the BCRUA a financing agreement with the Texas
Water Development Board ("TWDB") in connection with the issuance of a separate series of
contract revenue bonds for each Member City; and
BCRUA\CP%08:RoApp,ovgBylaws
WHEREAS, it is hereby found and determined that it is necessary and in the best interests
of the BCRUA and the Member Cities for BCRUA to approve the financing agreement with the
TWDB pursuant to the Master Contract; and
WHEREAS, it is hereby further officially found and determined that public notice of the
time, place, and purpose of this meeting was given, all as required by Texas Government Code,
Chapter 551.
NOW,THEREFOR,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
BRUSHY CREEK REGIONAL UTILITY AUTHORITY,INC.:
SECTION 1. RECITALS. The recitals set forth in the preamble hereof are incorporated
herein and shall have the same force and effect as if set forth in this Section. Capitalized terms used
herein shall have the meaning assigned in the preamble hereof or the Master Contract, unless
otherwise defined.
SECTION 2. BYLAWS. The Bylaws, as attached hereto as Exhibit "A", are hereby
approved and the President and Secretary of the Board are hereby authorized and directed to execute
the Bylaws, as appropriate.
SECTION 3. MASTER CONTRACT. The Master Contract is hereby approved and the
President and Secretary of the Board are hereby authorized and directed to execute the Master
Contract in substantially the form and substance attached hereto as Exhibit "B",with such changes
as may be approved by general counsel and bond counsel to the BCRUA.
SECTION 4. FINANCING AGREEMENT. The financing agreement is hereby approved
and the President and Secretary of the Board are hereby authorized and directed to execute the
financing agreement in substantially the form and substance attached hereto as Exhibit"C"with such
changes as may be approved by general counsel and bond counsel to the BCRUA. The General
Manager is hereby delegated the authority to confer with the City Manager of each Member City
regarding approval of TWDB financing rates in accordance with the financing agreement.
SECTION 5. IMMEDIATE EFFECT. This Resolution shall take effect immediately from
and after its adoption in accordance with the law.
BCRUA\CPl06:ResApprovgBylaws
PASSED AND APPROVED THIS 2nd day of September, 2008.
Pr ident
r rushy Creek Regional Utility Authority, Inc.
ATTEST:
Se 9qtary
Bryhy Creek Regional Utility Authority, Inc.
[SEAL]
BCRUA\CP%08;ResApprovgByl—s
EXHIBIT A
By Laws
BCRUA%CP108.ResApprovgBylaws A-1
EXHIBIT
Clean Draft: 8/11/48
BYLAWS
OF THE
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
00143902
TABLE OF CONTENTS
ARTICLE1: PURPOSES..........................................................................................1
Section1.01 Purposes ......................................................................................1
ARTICLEII: DIRECTORS......................................................................................2
Section 2.01 Appointment, Classes, Powers, Number, and Term of Office...2
Section 2.02 Meetings of Directors.................................................................3
Section 2.03 Annual Meeting. .........................................................................3
Section 2.04 Regular Meetings........................................................................3
Section 2.05 Special and Emergency Meetings...............................................3
Section2.06 Quorum .......................................................................................4
Section 2.07 Conduct of Business....................................................................4
Section 2.08 Compensation of Directors.........................................................5
Section 2.09 Director's Reliance on Consultant Information..........................5
ARTICLE III: OFFICERS........................................................................................5
Section 3.01 Titles and Term of Office ...........................................................5
Section 3.02 Powers and Duties of the President ............................................5
Section 3.03 Powers and Duties of the Vice-President ...................................6
Section 3.04 Treasurer .....................................................................................6
Section 3.05 Secretary......................................................................................6
Section 3.06 Compensation..............................................................................7
Section 3.07 Officer's Reliance on Consultant Information............................7
ARTICLEIV: BUDGET ..........................................................................................7
Section 4.01 Budget and Fiscal Year...............................................................7
ARTICLE V: INDEMNIFICATION........................................................................8
Section 5.01 Right to Indemnification.............................................................8
Section 5.02 Indemnification of Employees and Agents...............................10
Section 5.03 Non-exclusivity of Rights.........................................................11
Section 5.04 Insurance...................................................................................11
Section 5.05 Savings Clause..........................................................................11
i
ARTICLE VI: CODE OF ETHICS ........................................................................11
Section 6.01 Policy and Procedures...............................................................11
Section 6.02 Unlawful Acts ...........................................................................12
Section 6.03 Nepotism...................................................................................12
ARTICLE VII: AMENDMENTS...........................................................................13
Section 7.01 Amendments .............................................................................13
ARTICLE VIII: CONSENT OF CITY COUNCILS..............................................13
Section 8.01. Council Consent........................................................................13
ARTICLE IX: DISTRIBUTION OF NET INCOME ..............................................3
Section 9.07: Distribution of Net Income.......................................................13
ARTICLE X: AUTHORITY TO CONTRACT .....................................................14
Section 10.01 Authority to Contract................................................................14
ARTICLE XI: MISCELLANEOUS PROVISIONS ..............................................14
Section11.01 Seal............................................................................................14
Section 11.02 Notice and Waiver of Notice ....................................................14
Section 11.03 Resignations..............................................................................14
Section11.04 Gender.......................................................................................15
Section 11.05 Appropriations and Grants........................................................15
ii
BYLAWS
OF THE
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
ARTICLE I
PURPOSES
Section 1.01 Purposes. Brushy Creek Regional Utility Authority, Inc.
(the "Corporation") is organized for the purpose of aiding, assisting, and
acting on behalf of the cities of Round Rock, Cedar Park, and Leander, Texas
(collectively, the "Cities"), in the performance of their governmental
functions to promote the common good and general welfare of the Cities,
including, without limitation, the financing, construction, acquisition,
ownership, maintenance, and operation of a regional water transmission,
treatment and distribution and/or regional wastewater transmission, treatment
systems and/or water reuse system (the "Facilities") on behalf of the Cities,
and to perform such other governmental functions and purposes of the Cities
as may be determined from time to time by the City Councils of the Cities
(the "City Councils").
The Corporation is formed pursuant to the provisions of Subchapter D,
Chapter 431, Texas Transportation Code (the "Act") as it now or may
hereafter be amended, which authorizes the Corporation to assist and act on
behalf of the Cities to accomplish any governmental purpose of the Cities and
to engage in activities in the furtherance of the purposes for its creation.
The Corporation shall have and exercise all of the rights, powers,
privileges, authority, and functions, now or hereafter, given by the general
laws of the State of Texas to non-profit corporations incorporated under the
Act including, without limitation, the Texas Non-Profit Corporation Act,
Article 1396-1.01 et seq., Vernon's Texas Civil Statutes.
The Corporation shall have all other powers of a like or different nature
not prohibited by law which are available to non-profit corporations in Texas
and which are necessary or useful to enable the Corporation to perform the
purposes for which it is created, including the power to issue bonds, notes or
other obligations, and otherwise exercise its borrowing power to accomplish
the purposes for which it was created.
t
The Corporation is created as a local governmental corporation
pursuant to the Act and shall be a governmental unit within the meaning of
Subdivision (2), Section 101.001, Texas Civil Practice and Remedies Code.
The operations of the Corporation are governmental and not proprietary
functions for purposes of the Texas Tort Claims Act, Section 101.001 et seq.,
Texas Civil Practice and Remedies Code. The Corporation shall have the
power to acquire land in accordance with the Act as amended from time to
time.
ARTICLE II
DIRECTORS
Section 2.01. Appointment, Classes, Powers, Number, and Term of
Office. All powers of the Corporation shall be vested in the Board of
Directors (the `Board"). The Board shall consist of three (3) persons. Each
City shall have one (1) Director appointed by the respective City Council.
Each Director shall be a resident of the City that appointed such Director.
The term of office for each Director of the Board shall be two (2) years.
The terms of the Directors shall commence on the date that the respective
City Councils make the appointment(s). Upon the expiration of the term of
office of a Director, the City Council shall appoint a Director as stated above,
and the term of office for each appointed Director shall also be two (2) years.
The number of Directors may subsequently be either increased or decreased
in accordance with the provisions of Article VI of the Articles of
Incorporation of the Corporation.
Any Director may be removed at will by a majority vote of the City
Council that made such appointment and such City Council shall appoint a
new Director to complete the unexpired term.
In the event that a Director resigns or otherwise ceases to reside within
the city limits of the City that appointed him/her, then such Director shall be
considered. removed from the Board and the appropriate City Council shall
provide for the appointment of a new Director to complete the unexpired
term.
Section 2.02. Meetings of Directors. The Directors may hold their
meetings and may have an office and keep the books of the Corporation at
2
such place or places as the Board may from time to time determine; provided,
however, in the absence of any such determination, such places shall be the
registered office of the Corporation in the State of Texas.
The Board shall meet in accordance with and file notices of each
meeting of the Board as is required by Chapter 551, Government Code (the
"Open Meetings Act").
The Corporation, the Board, and any committee of the Board exercising
the powers of the Board are subject to Chapter 552, Government Code, and
(the "Public Information Act").
Section 2.03. Annual Meetings. The annual meeting of the Board shall
be held at the time and at the location in any of the Cities designated by the
resolution of the Board for the purposes of transacting such business as may
be brought before the meeting.
Section 2.04. Regular Meetings. Regular meetings of the Board shall
be held at such times and places as shall be designated, from time to time, by
a resolution of the Board.
Section 2.05. Special and Emergency Meetings. Special and
emergency meetings of the Board shall be held whenever called by the
President of the Board or by a majority of the Directors.
The Secretary shall give reasonable notice to all Directors of each
special meeting in person, by telephone, electronic transmission (e.g.,
facsimile transmission or electronic mail) or mail at least seventy-two (72)
hours before the meeting. Unless otherwise indicated in the notice thereof,
any and all matters pertaining to the purposes of the Corporation may be
considered and acted upon at a special or emergency meeting; provided that
all meetings shall comply with the Open Meetings Act.
Section 2.06. Quorum. A majority of the Board shall constitute a
quorum for the consideration of matters pertaining to the purposes of the
Corporation. Except as provided herein, and unless otherwise required by law,
the affirmative votes of a majority of the Directors present and voting at a
meeting shall constitute the act of the Board.
3
The affirmative votes of all three Directors shall be required to approve
the following matters:
1) The amendment of the Articles of Incorporation;
2) The amendment of these Bylaws; and
3) The addition of new members to the Corporation.
A Director who is present at a meeting of the Board at which any
corporate action is taken shall be presumed to have assented to such action,
unless his or her dissent shall be entered in the minutes of the meeting or
unless he or she shall file a written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting; and the Secretary shall
forward a copy of such dissent to the other Directors by mail within seven (7)
days. Such right to dissent shall not apply to a Director who voted in favor of
the action.
Section 2.07. Conduct of Business. At the meetings of the Board,
matters pertaining to the purposes of the Corporation shall be considered in
such order as from time to time the Board may determine.
At all meetings of the Board, the President shall preside, and in the
absence of the President, the Vice-President shall preside. In the absence of
the President and the Vice-President, an acting presiding officer shall be
chosen by the Board from among the Directors present.
The Secretary of the Corporation shall act as secretary of all meetings
of the Board, but in the absence of the Secretary, the presiding officer may
appoint any person to act as secretary of the meeting.
Section 2.08. Compensation of Directors; Reimbursement for
Expenses. Directors shall not receive any salary or compensation for their
services as Directors. Directors shall be reimbursed for their actual expenses
incurred in the performance of their duties as Directors.
Section 2.09. Director's Reliance on Consultant Information. A
Director shall not be liable if while acting in good faith and with ordinary
care, the Director relies on information, opinions, reports, or statements,
4
including financial statements and other financial data, concerning the
Corporation or another person that were prepared or presented by:
(a) one or more other officers or employees of the Corporation;
(b) legal counsel, public accountants, or other persons as to matters
the Director reasonably believes are within the person's
professional or expert competence; or
(c) a committee of the Board of which the Director is not a member.
ARTICLE III
OFFICERS
Section 3.01. Titles and Term of Office. The officers of the
Corporation shall be a President, a Vice-President, a Secretary, a Treasurer,
and other officers as the Board may from time to time elect or appoint. The
President shall also serve as Chairman of the Board and the Vice-President
shall serve as Vice-Chairman of the Board. One person may hold more than
one office, except that one person shall not concurrently hold the offices of
President and Secretary. The term of office for each officer shall be two (2)
years (or one (1) year )commencing with the date of the meeting of the Board
at which each such officer is elected.
Any vacancy in the office of any officer shall be filled by a majority
vote of the Board.
Section 3.02. Powers and Duties of the President. The President
shall be a member of the Board and shall preside at all meetings of the Board.
When authorized by the Board, the President or the Vice-President may sign
and execute all bonds, notes, deeds, conveyances, franchises, assignments,
mortgages, notes, contracts and other obligations in the name of the
Corporation. The President shall have such other duties as are assigned by the
Board. The President may call special and emergency meetings of the Board.
Section 3.03. Powers and Duties of the Vice-President. The Vice-
President shall be a member of the Board and shall not be from the same City
as the President. The Vice-President shall perform the duties and exercise the
powers of the President upon the President's death, absence, disability, or
resignation, or upon the President's inability to perform the duties of his or
5
her office. Any action taken by the Vice-President in the performance of the
duties of the President shall be conclusive evidence of the absence or inability
to act of the President at the time such action was taken. The Vice-President
shall have such other powers and duties as may be assigned to him or her by
the Board.
Section 3.04. Treasurer. The Treasurer shall have custody of all the
funds and securities of the Corporation which come into his or her hands.
When necessary or proper, he or she may endorse, on behalf of the
Corporation, for collection, checks, notes and other obligations and shall
deposit the same to the credit of the Corporation in such bank or banks or
depositories as shall be designated in the manner prescribed by the Board; he
or she may sign all receipts and vouchers for payments made to the
Corporation, either alone or jointly with such other officer as is designated by
the Board; he or she shall enter or cause to be entered regularly in the books
of the Corporation to be kept by him or her for that purpose full and accurate
accounts of all moneys received and paid out on account of the Corporation;
he or she shall perform all acts incident to the position of Treasurer subject to
the control of the Board; and he or she shall, if required by the Board, give
such bond for the faithful discharge of his or her duties in such forms as the
Board may require. The Treasurer need not be a member of the Board.
Section 3.05. Secretary. The Secretary shall keep or cause to be kept
the minutes of all meetings of the Board in books provided for that purpose;
he or she shall attend to the giving and serving of all notices; in furtherance of
the purposes of the Corporation and subject to the limitations contained in the
Articles of Incorporation, he or she may sign with the President in the name
of the Corporation and/or attest the signatures thereof, all contracts,
conveyances, franchises, bonds, deeds, assignments, mortgages, notes and
other instruments of the Corporation; he or she shall have charge of the
Corporation's books, records, documents and instruments, except the books
of account and financial records and securities of which the Treasurer shall
have custody and charge, and such other books and papers as the Board may
direct, all of which shall at all reasonable times be open to the inspection of
any Director upon application at the office of the Corporation during business
hours; and, he or she shall, in general, perform all duties incident to the office
of Secretary subject to the control of the Board. The Secretary need not be a
Director.
6
Section 3.06. Compensation. Officers are not entitled to compensation
except as otherwise provided in Section 2.08 of these Bylaws.
Section 3.07. Officer's Reliance on Consultant Information. In the
discharge of a duty imposed or power conferred on an officer of the
Corporation, the officer may in good faith and with ordinary care rely on
information, opinions, reports, or statements, including financial statements
and other financial data, concerning the Corporation or another person that
were prepared or presented by:
(a) one or more other officers or employees of the Corporation,
including Directors; or
(b) legal counsel, public accountants, or other persons as to matters
the officer reasonably believes are within the person's
professional or expert competence.
ARTICLE IV
BUDGET
Section 4.01. Budget and Fiscal Year. The fiscal year of the
Corporation shall commence on October 15' of each year and end on
September 30'h of the following year. At least ninety (90) days prior to
October I" of each year, the Board shall prepare and adopt a proposed budget
of expected revenues and proposed expenditures for the next ensuing fiscal
year. The budget shall contain such classifications and shall be in such form
as may be prescribed from time to time by the City Councils. The budget
proposed for adoption shall include the projected expenses, and such other
budgetary information as shall be required by the City Councils for their
approval and adoption. The budget shall be considered adopted upon formal
approval of all three City Councils. Should any of the City Councils take no
final action on or before October V, the proposed budget shall be deemed to
have been finally adopted by such City Council.
ARTICLE V
INDEMNIFICATION
Section 5.01. Right to Indemnification.
A. Definitions in this Article:
1. Covered person includes current and former Directors,
committee members, employees of the Corporation, and
officers and former officers and the estate of current or
former Directors, ex-officio Directors, officers and former
officers or employees of the Corporation
2. Loss means a sum of money which a covered person is
legally obligated to pay.
3. Proceeding means any threatened, pending or completed
claim, action, suit or civil, criminal, administrative,
arbitrative or investigative proceeding.
B. Coverage Generally. To the fullest extent permitted by law, the
Corporation shall indemnify and defend a covered person in
accordance with this Section from and against a loss arising in
connection with a proceeding relating to an act or omission of
the covered person during the course and scope of the covered
person's office or employment for the Corporation.
C. Additional Coverage. In addition to the coverage described in
subsection B of this Section, the Corporation will pay the
following:
1. The Corporation's expenses in investigating and defending
the proceeding;
2. Court costs assessed against a covered person;
3. Reasonable expenses of the covered person incurred at the
Corporation's request or with the Corporation's approval;
and
8
4. Attorney's fees ordered by a court to be paid by the
covered person.
D. Criteria for Coverage. To be entitled to coverage under this
Section, a covered person must:
1. Notify the Corporation's General Manager or legal
counsel in writing as soon as practicable, but not later than
three (3) working days, after receipt of written notice of a
proceeding;
2. Cooperate with the Corporation in the conduct of the
proceeding, negotiation of settlements, and enforcement of
any rights of the Corporation or the covered person against
any claimant;
3. Attend depositions, hearings and trials, and assist in
securing evidence and obtaining attendance of witnesses;
4. Not, except with the written consent of the Corporation's
General Manager or legal counsel, enter into any
agreement or stipulation concerning a proceeding;
5. Not, except with the written consent of the Corporation's
General Manager or legal counsel, or upon request of a
public officer at the scene of an accident, give any oral or
written statement concerning the accident; and
6. Not, except at the covered person's own cost, voluntarily
make any payment, assume any obligation or incur any
expense in connection with a proceeding without the
consent of the Corporation's General Manager or legal
counsel.
E. Exemptions. Coverage under this Section will not apply to a
claim or suit brought against a covered person:
1. By the Corporation;
9
2. Arising from the intentional or knowing violation of a
penal statute or law committed by or with the knowledge
and consent of the covered person, or arising from a
fraudulent act committed by or at the direction of the
covered person;
3. If the covered person joins or attempts to join a proceeding
against the Corporation or an officer or employee of the
Corporation with a proceeding against the covered person;
or
4. If the covered person fails to comply with subsection (e)
of this Section.
F. Investigation, negotiation, settlement. The Corporation may
investigate, retain counsel, negotiate and settle any proceeding as
it determines to be reasonable and prudent.
G. Subrogation of rights. A covered person, in accepting coverage
under this Section, agrees to allow the Corporation to be
subrogated to any rights of the covered person to the extent of
the Corporation's obligations and payments under this Section.
-H. Conflict of Interest. If the Corporation's General Manager or
legal counsel determines there is a conflict between the interests
of the Corporation and those of the person involved in a
proceeding, the Corporation may designate and pay the
reasonable fees of a separate attorney.
I. Disciplinary action. Nothing is this Section will affect the
Corporation's right to take disciplinary action against a covered
person for conduct otherwise indemnified or defended by the
Corporation under this Section.
Section 5.02. Indemnification of Employees and Agents. The
Corporation, by adoption of a resolution of the Board, may indemnify and
advance expenses to an employee or agent of the Corporation to the same
extent and subject to the same conditions under which it may indemnify and
advance expenses to Directors and officers under this Article V; and the
Corporation may indemnify and advance expenses to persons who are not or
10
were not Directors, officers, employees or agents of the Corporation but who
are or were serving at the request of the Corporation as a Director, officer,
partner, venture proprietor, trustee, employee, agent or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
liability asserted against him or her and incurred by him or her in such a
capacity or arising out of his or her status such a person to the same extent
that it may indemnify and advance expenses to Directors under this Article V.
Section 5.03. Non-exclusivity of Rights. The right to indemnification
conferred in this Article V shall not be exclusive of any other right which a
covered person may have or hereafter acquire under any law (common or
statutory), these Bylaws, written agreement with the Corporation, vote of
disinterested Directors or otherwise.
Section 5.04. Insurance. The Corporation may purchase and maintain
insurance, at its expense, to protect itself and any covered person against any
expense, liability or loss, whether or not the Corporation would have power to
indemnify such person against such expense, liability or loss under this
Article V.
Section 5.05. Savings Clause. If this Article V or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify and hold harmless each
covered person with respect to a proceeding to the extent permitted by any
applicable portion of this Article V that shall not have been invalidated and to
the fullest extent permitted by applicable law.
ARTICLE VI
CODE OF ETHICS
Section 6.01. Policy and Purposes.
A. It is the policy of the Corporation that Directors and officers
conduct themselves in a manner consistent with sound business
and ethical practices; that the public interest always be
considered in conducting corporate business; that the appearance
of impropriety by avoided to ensure and maintain the public
confidence in the Corporation; and that the Board establish
it
policies to control and manage the affairs of the Corporation
fairly, impartially, and without discrimination.
B. This Code of Ethics has been adopted as part of the Board's
Bylaws for the following purposes: (a) to encourage high ethical
standards in official conduct by Directors and corporate officers;
and (b) to establish guidelines for such ethical standards of
conduct.
Section 6.02. Unlawful Acts. A Director or officer shall not
intentionally or knowingly offer, confer or agree to confer on another, or
solicit, or agree to accept from another:
(a) any benefit as consideration for the Director or officer's
decision, opinion, recommendation, vote, or other exercise
of discretion as a Director or officer;
(b) any benefit as consideration for the Director's or officer's,
decision, vote, recommendation, or other exercise of
official discretion in a judicial or administrative
proceeding; or
(c) any benefit as consideration for a violation of a duty
imposed by law on the Director or officer.
Section 6.03. Nepotism. No Director or officer shall appoint, or vote
for, or confirm the appointment to any office, position, clerkship, employment
or duty, or any person related within the second degree by affinity (marriage
relationship) or within the third degree of consanguinity (blood relationship)
to the Director or officer so appointing, voting or confirming, or to any other
Director or officer. This provision shall not prevent the appointment, voting
for, or confirmation of any person who shall have been continuously
employed in such office, position, clerkship, employment or duty at least
thirty (30) days prior to the appointment of the Director or officer so
appointing or voting.
12
ARTICLE VII
AMENDMENTS
Section 7.01. Amendments. A proposal to alter, amend, or repeal
these Bylaws shall be made by the affirmative vote of all the Directors at any
annual or regular meeting, or at any special meeting if notice of the proposed
amendment be contained in the notice of said special meeting. However, any
proposed change or amendment to the Bylaws must be approved by the three
City Councils to be effective.
ARTICLE VIII
CONSENT OF CITY COUNCILS
Section 8.01. Council Consent. To the extent that these Bylaws refer
to approval by the Cities or refer to advice and consent by the Cities, such
approval or advice and consent shall be evidenced by a certified copy of a
resolution or other official action duly adopted by each of the City Councils.
ARTICLE IX
DISTRIBUTION OF NET INCOME
Section 9.07. Distribution of Net Income. Unless otherwise
determined by the City Councils in accordance with the provisions of Section
431.107 of the Transportation Code, any income earned by the Corporation
after payment of reasonable expenses, debt, and the establishment of a reserve
sufficient to cover estimated expenditures for future activities, shall either be
retained by the Corporation or distributed to the Cities in an equitable manner
to be determined by the three City Councils taking into consideration the
relative use of the Facilities and the initial capital investments of the
respective Cities. In the event that the Facilities cease to operate, the three
City Councils may either direct that (a) the Corporation retain such income,
but only in such a manner so as to ensure compliance with all then applicable
federal tax law relating to the Corporation and its non-profit status, or (b) the
Cities receive any such income earned by the Corporation in an equitable
manner determined by the three City Councils as set forth above.
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ARTICLE X
AUTHORITY TO CONTRACT
Section 10.01. Authority to Contract.
A. The Board may, with the approval of the three (3) City Councils,
contract with any qualified and appropriate person, association,
corporation or governmental entity to perform and discharge
designated tasks which will aid or assist the Board in the
performance of its duties. However, no such contract shall ever
be approved or entered into which seeks or attempts to divest the
Board of its discretion and policy making functions in
discharging the duties herein set forth.
B. The Board may, with the approval of the three (3) City Councils,
contract with one or more of the Cities to utilize the services of
staff and employees of the respective Cities.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Seal. The seal of the Corporation shall be such as from
time to time may be approved by the Board.
Section 11.02. Notice and Waiver of Notice. Whenever any notice
whatever is required to be given under the provisions of these Bylaws, such
notice shall be deemed to be sufficient if given by depositing the same in a
post office box in a sealed postpaid wrapper addressed to the person entitled
thereto at his or her post office address, as it appears on the books of the
Corporation, and such notice shall be deemed to have been given on the day
of such mailing. A waiver of notice, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
Section 11.03. Resignations. Any Director or officer may resign at
any time. Such resignations shall be made in writing and shall take effect at
the time specified therein, or, if no time be specified, at the time of its receipt
by the President or Secretary. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
14
Section 11.04. Gender. References herein to the masculine gender
shall also refer to the feminine in all appropriate cases, and vice versa.
Section 11.05. Appropriations and Grants. The Corporation shall
have the power to request and accept any appropriation, grant, contribution,
donation, or other form of aid from the federal government, the State, or from
any other source.
15
EXHIBIT B
Master Contract
13CRUA\CP\08:ResApprovgHylaws B-1
E
HIBIT
MASTER CONTRACT FOR THE FINANCING,
CONSTRUCTION AND OPERATION OF THE BCRUA
REGIONAL WATER TREATMENT
AND DISTRIBUTION PROJECT
Among
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC,
CITY OF CEDAR PARK
CITY OF LEANDER
AND
CITY OF ROUND ROCK
Dated: August_, 2008
Clean Draft Master Agreement
August 13, 2008
00143974
Page
ARTICLE I DEFINITIONS AND INTERPRETATIONS..................................................3
Section1.1 Definitions............................................................................................................3
Section1.2 Interpretation........................................................................................................9
ARTICLE II PURPOSE AND DESCRIPTION OF THE BCRUA PROJECT....................9
Section 2.1 Raw Water Contracts...........................................................................................9
Section 2.2 Regional Water Treatment and Distribution........................................................9
Section 2.3 Local Government Corporation......................................................................... 10
Section 2.4 Purpose of this Contract..................................................................................... 10
Section 2.5 Title to Raw Water.............................................................................................10
Section2.6 Other Contracts.................................................................................................. 10
Section2.7 Quality................................................................................................................10
Section2.8 Operation............................................................................................................10
Section 2.9 Conservation Plans............................................................................................. 11
ARTICLE III ACQUISITION AND CONSTRUCTION OF THE BCRUA PROJECT..... I I
Section3.1 General.............................................................................................. ..........11
Section 3.2 Location of BCRUA Project; Acquisition of Land Interests............................. 11
Section3.3 Construction.......................................................................................................11
Section 3.4 Selection of BCRUA Consulting Engineer(s); Plans and Specifications..........12
Section 3.5 Award of Construction Contracts......................................................................12
Section3.6 Liens.................................................................................. ...12
Section 3.7 Revisions of Plans.............................................................................................. 12
Section3.8 Approvals........................................................................................................... 12
Section3.9 Completion.........................................................................................................12
Section 3.10 Raw Water Supply.............................................................................................12
Section 3.11 Access to Cities..................................................................................................13
Section3.12 Easements ..........................................................................................................13
Section 3.13 Delivery Point.................................................................................................... 13
Section 3.14 Other Contracts..................................................................................................13
Section3.15 Quality................................................................................................................13
ARTICLE IV FINANCING OF THE BCRUA PROJECT..................................................14
Section4.1 Issuance of Bonds..............................................................................................14
Section4.2 Proceeds of Bonds..............................................................................................15
Section 4.3 Refunding of Bonds........................................................................................... 16
Section 4.4 Redemption of Bonds ........................................................................................16
Section 4.5 Debt Service on Bonds and Other Bond Funding Requirements ......................16
Section4.6 Billing................................................................................................................ 17
Section 4.7 Delinquency in Payment.................................................................................... 17
i
Section 4.8 BCRUA's Rights Assigned to Trustee .............................................................. 17
Section4.9 Tax-Exempt Bonds............................................................................................18
Section 4.10 Payment to Rebate Fund.................................................................................... 18
Section 4.11 City's Obligations.............................................................................................. 18
Section 4.12 Interest on Money..............................................................................................19
Section 4.13 Sale and Offering Documents............................................................................ 19
Section 4.14 Right to Prepay .............................................................
ARTICLE V OPERATION, FINANCE AND MAINTENANCE OF
BCRUAPROJECT. ......................................................................................19
Section5.1 Operation............................................................................................................19
Section 5.2 Payments for Operations and Maintenance Expenses.......................................20
Section 5.3 Composition of Operations Committee.............................................................20
Section 5.4 Responsibility of Operations Committee...........................................................20
Section 5.5 BCRUA'S Overhead Expenses..........................................................................21
ARTICLE VI RESERVED CAPACITIES...........................................................................22
Section 6.1 Reserved Capacities in BCRUA Project Components.......................................22
Section 6.2 Reserved Capacities for Treated Water in the BCRUA Project........................22
Section 6.3 Transfer of Reserved Capacity...........................................................................22
Section 6.4 Documentation of Transferred Reserved Capacity............................................22
ARTICLE VII DELIVERY POINT(S)..................................................................................22
Section 7.1 Delivery Point(s)......................................................................... .....22
Section 7.2 Rate and Quantity at Delivery Point(s)..............................................................22
ARTICLE VIII METERING AND MEASUREMENT..........................................................23
Section 8.1 Unit of Measurement .........................................................................................23
Section 8.2 Measuring Equipment at the Intake Point..........................................................23
Section 8.3 Measuring Equipment at Delivery Points..........................................................23
ARTICLE IX ANNUAL PAYMENTS, CITY COVENANTS............................................24
Section 9.1 Annual Estimate of Annual Payments...............................................................24
Section 9.2 Annual Payments by the Cities..........................................................................24
Section9.3 Source of Payment.............................................................................................25
Section 9.4 Annual Budgeting by the Cities.........................................................................26
Section 9.5 Revenue Sources Pledged..................................................................................26
Section 9.6 General Covenants by Cities..............................................................................26
ii
ARTICLE X CONTINUING DISCLOSURE.....................................................................29
Section10.1 Annual Reports............................................................................... ......29
Section 10.2 Material Event Notices ....................................................................... ....30
Section 10.3 Limitations,Disclaimers, and Amendments......................................................31
ARTICLE XI COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS ............32
Section 11.1 Compliance with Federal, State and Local Laws...............................................32
Section 11.2 Recordkeeping and Reporting............................................................................32
ARTICLE XII GENERAL PROVISIONS ............................................................................33
Section 12.1 Participation by the Parties................................................................................33
Section 12.2 Insurance.................................................................. ..33
........................................
Section12.3 Force Majeure....................................................................................................34
Section 12.4 Unconditional Obligation to Make Payment.....................................................34
Section 12.5 Term of Contract................................................................................................35
Section 12.6 Amendment and Modification...........................................................................35
Section 12.7 Addresses and Notice.........................................................................................35
Section 12.8 State or Federal Laws,Rules, Orders, or Regulations.......................................36
Section12.9 Severability........................................................................................................36
Section 12.10 Remedies Upon Default.....................................................................................36
Section12.11 Venue.................................................................................................................37
Section 12.12 Statutory Authority................................................................
Section 12.13 Indemnification........................................................ .............37
.............................
Section 12.14 Contract for Benefit of the Cities.......................................................................38
Section 12.15 Succession and Assignment...............................................................................38
Section 12.16 Incorporation of Preamble Recitals ...................................................................38
Section 12.17 Independent Contractor......................................................................................38
Section 12.18 Financing Statement...........................................................................................38
Section 12.19 Entire Agreement...............................................................................................38
Section12.20 Applicable Law..................................................................................................38
Section 12.21 Counterparts.......................................................................................................38
EXHIBITS
Exhibit A Contract between City of Round Rock and LCRA for Lake Travis Water.......42
Exhibit B Contract between City of Cedar Park and LCRA for Lake Travis Water.........43
Exhibit C Contract between City of Leander and LCRA for Lake Travis Water..............44
Exhibit D Cities' Reserved Capacity and Cost Allocation in BCRUA
ProjectComponents...........................................................................................45
iii
MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION AND OPERATION
OF THE BCRUA REGIONAL WATER TREATMENT
AND DISTRIBUTION PROJECT
THIS MASTER CONTRACT FOR THE FINANCING, CONSTRUCTION AND
OPERATION OF THE BCRUA REGIONAL WATER TREATMENT AND DISTRIBUTION
PROJECT (the"Contract") is dated and entered into as of the day of August, 2008, by and
among the Brushy Creek Regional Utility Authority, Inc. ("BCRUA"), a non-profit corporation
of the State of Texas (the "State"), created and existing under the laws of the State, including
Subchapter D of Chapter 431 as amended, Texas Transportation Code, and the City of Cedar
Park, Texas("Cedar Park"), the City of Leander, Texas ("Leander"), and the City of Round
Rock, Texas ("Round Rock") all home-rule municipalities and political subdivisions of the State
(individually, the "City'; collectively, the "Cities"). The BCRUA and the Cities are collectively
referred to herein as the"Parties."
RECITALS
WHEREAS, Subchapter D of Chapter 431 of the Texas Transportation Code, as amended
(the "Act") authorizes municipalities to create one or more local government corporations to
accomplish any governmental purpose of the Cities including to plan, finance, construct, own,
operate, and/or maintain facilities necessary for the conservation, storage,' transportation,
treatment, and/or distribution of treated water, including a plant site, right-of-way, and property,
equipment, and/or right of any kind useful in connection with the conservation, storage,
transportation, treatment, and/or distribution of treated water that will ultimately provide an
additional 105.8 million gallons per day of potable water supply to meet future water demands of
the Cities based on current population projections and estimates (said facilities herein referred to
as the"BCRUA System");
WHEREAS, the City Councils of Cedar Park, Leander, and Round Rock, respectively
(collectively, the "Governing Bodies"), have authorized and approved the creation of the
BCRUA as their constituted authority and instrumentality to accomplish the specific public
purpose to plan, finance, construct, acquire, own, operate, or maintain facilities necessary for the
conservation, storage, transportation, treatment, or distribution of treated water, including plant
sites, rights-of-way, and property, equipment, or rights of any kind useful in connection with the
conservation, storage, transportation, treatment, or distribution of treated water, pursuant to the
provisions of the Act and other applicable law, including Section 791.026 Texas Government
Code, as amended;
WHEREAS, the Cities, pursuant to the Act and other applicable law, have authorized the
creation of the BCRUA, which affords the Cities and their ratepayers, respectively, the most
efficient and cost-effective option for municipal water treatment;
WHEREAS, the Cities and the BCRUA anticipate that the BCRUA System will
eventually supply 105.8 million gallons per day of potable water to the Cities as generally
described in the Preliminary Engineering Report;
WHEREAS, the Cities and the BCRUA recognize that the establishment of the BCRUA
system will occur in phases or stages that will occur over time and will depend on future growth
and environmental conditions that are uncertain today;
WHEREAS, in furtherance of its purposes, the BCRUA will issue one or more series of
bonds to finance the costs of the"BCRUA Project," as hereinafter defined;
WHEREAS, the Cities and the Lower Colorado River Authority ("LCRA") have
previously entered into multiple agreements in anticipation of the regional water system,
including, but not limited to, (i) the "Interlocal Agreement Regarding Design of New Hope
Regional Waterline" among Round Rock, Cedar Park and LCRA dated December 15, 2005, (ii)
the"Interlocal Agreement Regarding Construction of Regional Water Line" among Round Rock,
Cedar Park, and LCRA dated March 23, 2006, (iii) the"Interlocal Agreement for Interim Water
Supply" between Round Rock and Cedar Park dated March 9, 2006, (iv) the "Interlocal
Agreement Regarding Water Supply Agreement Obligations" between LCRA and Cedar Park,
dated March 9, 2006 and (v) the "Wholesale Potable Water Service Agreement" among the
Brazos River Authority, LCRA and Leander dated March 2, 1998;
WHEREAS, the BCRUA intends to own, design, finance, construct, acquire, maintain,
and operate the BCRUA Project in a manner that will allow the BCRUA to deliver potable water
to the Cities on a regional basis;
WHEREAS, the Cities and the BCRUA, exercising their respective mutual authorities,
wish to enter into this Contract in order to most efficiently and quickly obtain the capability to
deliver treated water to the Cities;
WHEREAS, it is necessary that BCRUA construct facilities, intake structures, storage
tanks, lines,booster pumps, treatment facilities, and other appurtenances necessary and sufficient
for the delivery, treatment, and transmission of the raw water for which the Cities, individually,
have contracted with the LCRA, as well any additional raw water which one or more of the
Cities may acquire in the future, and acquire easements,rights-of-way, and other interests in land
or other facilities necessary for the withdrawal, diversion,delivery, transmission and/or treatment
of such raw water;
WHEREAS, the Cities, respectively, have contracted with LCRA, directly or indirectly,
to purchase raw water from Lake Travis in sufficient quantities to meet each City's anticipated
treatment capacity for the BCRUA Project (as hereinafter defined,) and each City shall make
available sufficient raw water to the BCRUA for its reserved treatment capacity in the BCRUA
Project;
WHEREAS, after treatment, the BCRUA, will deliver the treated water to the Cities,
respectively, for use within their respective corporate limits or applicable service areas;
WHEREAS, the governing bodies of the Cities and the Board of Directors of the
BCRUA have determined that the provisions of this Contract and all of the actions contemplated
2
herein are in compliance with the Texas State Water Plan and the Regional Water Plan adopted
pursuant to Chapter 16, Subchapter C, Planning, of the Texas Water Code;
WHEREAS, the Cities, respectively, have adopted water conservation plans approved by
the Texas Commission on Environmental Quality("TCEQ") prior to execution of this Contract;
WHEREAS, it is expected by the BCRUA and the Cities that as soon as practicable after
the execution of this Contract the BCRUA will issue its Bonds in separate series (as hereinafter
defined) for one or more of the Cities requesting financing through the BCRUA to pay for the
BCRUA Project(as hereinafter defined);
WHEREAS, it is further acknowledged by the BCRUA and the Cities that this Contract
covers only the first phase of the BCRUA System, and that any future phases of the BCRUA
System may be accomplished by amending this Contract or by one or more separate future
contracts among the BCRUA and one or more of the Cities, and by future series of bonds, which
bonds may be payable from payments on parity with the payments under this Contract; and
WHEREAS, the BCRUA, to the best of its ability, shall in general do or cause to be done
all such things as may be required or necessary for the proper acquisition, construction, and
operation of the BCRUA Project;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the sufficiency of which are hereby conclusively acknowledged, and subject to the
terms and conditions hereinafter set forth, the Cities and the BCRUA mutually undertake,
promise, and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions. 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) "Additional Bonds" means one or more series of additional Bonds which are
issued by the BCRUA to finance completion of the BCRUA Project pursuant to Section 3.9
hereof or for any other lawful purpose.
(b) "Annual Payments" means the amount of money constituting the Operation and
Maintenance Expenses, Overhead Expenses, and to the extent the BCRUA issues a series of
Bonds on behalf of a City, the Bond Payment to be paid to the BCRUA by each City, on a
several and not a joint basis as described in Section 4.1 and Section 4.5 hereof from the revenues
of each City's System as an operating and maintenance expense of each City's System at the
times and in the amounts required by Sections 4.5 and 9.2 of this Contract.
(c) "Authorized Representative" means any person at the time delegated authority to
act on behalf of the Cities or the BCRUA, as the case may be, and designated as such in a written
certificate, containing a specimen signature of such person, which, for the Cities shall be the City
Manager, of each City or such other officers or employees of the Cities authorized to act on
3
behalf of the Cities during the respective City Manager's absence or incapacity, and for the
BCRUA shall be the General Manager of the BCRUA or such other officer or employee of the
BCRUA authorized to act on behalf of the BCRUA during the General Manager's absence or
incapacity, unless a party notifies the other party in writing of a change in its Authorized
Representative.
(d) "BCRUA"means the Brushy Creek Regional Utility Authority, Inc. and its lawful
successors and assigns.
(e) `BCRUA Consulting Engineer(s)" means such engineering firm or firms as may
be selected by the BCRUA.
(f) "BCRUA Project" means, collectively, the Land Interests and the improvements
described in the recitals to this Contract and further described in the Preliminary Design Report,
and as shown on Exhibit "D". Without limitation the BCRUA Project includes the facilities,
lines, intake structures, storage tanks, booster pumps, and other appurtenances in the BCRUA
Project as described in the Preliminary Design Report and owned by the BCRUA sufficient to
treat the raw water and deliver the treated water to which the Cities, respectively, are entitled
under this Contract.
(g) `BCRUA Project Costs" means and includes, without limitation, the following
costs incurred for the BCRUA Project by or on behalf of the BCRUA or the Cities:
(i) the cost of acquisition of the Land Interests, including appraisals, closing costs
and title insurance policies;
(ii) the cost of acquisition, construction, repair, replacement, improvement or
decommissioning of the BCRUA Project, and any structure, item of equipment, or
other item, used for, or in connection with, the BCRUA Project;
(iii) the cost of site preparation of the Land Interests, including demolition or
removal of structures and improvements as necessary or incident to
accomplishing the BCRUA Project;
(iv) the cost of engineering, legal,architectural or other related services;
(v) the preparation cost of plans, specifications, studies, surveys, cost estimates,
and other expenses necessary or incident to planning, providing, or financing the
BCRUA Project;
(vi) the cost of machinery, equipment, furnishings, and facilities necessary or
incident to placing the BCRUA Project in operation;
(vii) finance charges and interest before, during, and after construction as
permitted by the laws of the State;
(viii) costs incurred in connection with financing the BCRUA Project, including,
without limitation:
(1) financing, legal, accounting, financial advisory, rating agency, and
auditing fees,expenses and disbursements;
(2) the cost of printing, engraving, and reproduction services; and
4
(3) the cost of a trustee's or paying agent's initial or acceptance fee and
subsequent fees;
(ix) all costs,fees and expenses of litigation of all kinds;
(x) the cost of property casualty and public liability insurance;
(xi) the fees and costs of the underwriters as the anticipated purchasers of the
Bonds;
(xii) reimbursement of the costs previously incurred by and agreeable to the other
Cities with respect to the BCRUA Project; and
(xiii) other costs generally recognized as a part of BCRUA Project construction
costs.
BCRUA Project Costs will be allocated among the Cities in accordance with Exhibit"D".
(h) "Bond Payment(s)" means the amount of money to be paid to the BCRUA by a
City, for the debt service or to fund or replenish any debt service reserve fund or other special or
contingency fund or the payment of Trustee or other fees related to one or more series of Bonds
issued for that City, which Bonds are payable from the gross revenues of the City's System as an
operating and maintenance expense of the City's System at the times and in the amounts required
to pay debt service on a series of Bonds issued for that City, at such time as further provided in
Section 4.5 of this Contract. A City is responsible for paying debt service on only the series of
Bonds issued for that City, after taking into account any capitalized interest funded from the
proceeds of any series of Bonds issued for that City. A City is not responsible for paying debt
service on any series of Bonds issued for another City.
(i) "Bond Resolution" means any resolution and/or trust indenture of the BCRUA,
authorizing the issuance of and securing a series of Bonds and all amendments and supplements
thereto authorized by such resolution to establish certain terms of the Bonds authorized by such
resolution. Since separate series of Bonds will be issued for each City requesting financing, any
such reference in this Contract means the Bond Resolutions related to the City for which such
series of Bonds are being issued.
0) "Bonds" means all bonds, notes, or other obligations hereafter issued by the
BCRUA, for each City requesting financing, the proceeds of which shall be used to pay such
City's share of BCRUA Project Costs,(including any Additional Bonds ) or to refund any Bonds
or to refund any such refunding Bonds.
(k) "Cities" means, collectively, the City of Cedar Park, Texas, the City of Leander,
Texas, and the City of Round Rock, Texas. "City" means, respectively, the City of Cedar Park,
Texas, the City of Leander, Texas, or the City of Round Rock, Texas.
(1) "City System" means and includes a respective City's existing combined
waterworks and wastewater disposal system, together with all future extensions, improvements,
enlargements, and additions thereto, including, to the extent permitted by law, and/or reclaimed
water systems which are integrated with the waterworks or wastewater disposal system, and all
replacements thereof, provided that, notwithstanding the foregoing, and to the extent now or
hereafter authorized or permitted 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 its City System of such
City and which are hereafter acquired or constructed by a respective City with the proceeds from
5
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."
(m) "Claim", as used in Section 12.13 of this Contract, means claims, demands, and
expenses, including reasonable attorney's fees.
(n) "Code" means the Internal Revenue Code of 1986, and any amendments thereto,
as in force and effect on the date of delivery of any series of Bonds.
(o) "Completion Date" means such term as it is defined in Section 3.9 of this
Contract.
(p) "Construction Fund"means the fund created with that name pursuant to a Bond
Resolution.
(q) "Credit Agreement" means any bond insurance policy or other credit agreement,
as-defined in and authorized by the provisions of Chapter 1371, as amended, Texas Government
Code,which the BCRUA may execute relating to a series of Bonds.
(r) "Delivery Point" means the place, whether one or more, to which the BCRUA
will deliver treated water to each City pursuant to this Contract.
(s) "Engineering Reports" means collectively the Preliminary Engineering Report
("PER") and the Preliminary Design Report ("PDR"). The Preliminary Design Report updates,
and in some circumstances replaces and modifies, the Preliminary Engineering Report. In the
event there is a conflict between the two reports, the Preliminary Design Report shall prevail.
The Engineering Reports may be amended, modified and changed and superseded with the
approval of the BCRUA and Cities, at any time prior to the execution of construction contracts
for the BCRUA Project or as modified and changed by change orders issued after the execution
of such construction contracts; provided, however, no such change order shall adversely affect
any City without the unanimous consent of the Cities.
(t) "Fiscal Year" means the fiscal year, which currently begins on October 1 of each
year and ends on September 30 of the following year.
(u) "Force Majeure" means such term as it is defined in Section 12.3 of this Contract.
(v) "General Manager" means the individual hired by the BCRUA to manage the
affairs of the BCRUA.
(w) "Insurance Policy" means the insurance policy, if any, issued by the Insurer
guaranteeing the scheduled payment of principal of and interest on a particular series of Bonds
when due.
(x) "Insurer" means the company, if any, insuring a particular series of the Bonds, or
any successor thereto or assignee thereof.
6
(y) "Land Interests" means the fee simple interests and/or the easements, right-of-
way, and other interests in real property necessary for the acquisition, construction, and operation
of the BCRUA Project.
(z) "MSRB" means the Municipal Securities Rulemaking Board and any successor to
its duties.
(aa) "NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
(bb) "Operation and Maintenance Expenses"means all direct costs and expenses, fixed
and variable, incurred by the BCRUA for its operation and maintenance of the BCRUA Project,
including (for greater certainty but without limiting the generality of the foregoing) the costs of
utilities, supervision, treatment, engineering, accounting, auditing, legal services, insurance
premiums, supplies, services, and administration of the BCRUA Project, Overhead Expenses,
and costs of operating, repairing, maintaining, and replacing equipment for proper operation and
maintenance of the BCRUA Project. The term "Operation and Maintenance Expenses" does not
include depreciation charges or such portion of the above-described costs to the extent such costs
are paid pursuant to an agreement other than this Contract.
(cc) "Operations Committee" means the committee created in Article V of this
Contract.
(dd) "Overhead Expenses" means the BCRUA's reasonable and necessary costs and
expenses incurred at any time directly related to the issuance and servicing of the Bonds, the
acquisition of Land Interests required for the BCRUA Project, the design, permitting, financing,
acquisition, construction, and ownership of the BCRUA Project and any other activities required
of or involving the BCRUA in connection with or attributable to the BCRUA Project or the
Bonds.
(ee) "Permitted Liens"means
(i) minor irregularities, charges, liens, encumbrances, defects, easements, licenses,
rights-of-way, servitudes, restrictions, mineral rights, and clouds on title which, in
the opinion of counsel to the BCRUA, a copy of which shall be forwarded to each
City, do not materially impair the use of the BCRUA Project for the purposes for
which it is designed;
(ii) easements for roads (as used in this Contract, the term "roads" shall include,
without limitation, streets, curbs, gutters, drains, ditches, sewers, conduits, canals,
mains, aqueducts, aerators, connections, ramps, docks, viaducts, alleys,
driveways, parking areas, walkways, and trackage), utilities (which for purposes
of this Contact shall include, without limitation, water, sewer, electricity, gas,
telephone, pipeline, railroad, and other collection, transportation, light, heat,
power, and communication systems) and similar easements and other easements,
rights-of-way, rights of flowage, flooding, diversion or outfall, licenses,
restrictions, and obligations relating to the operation and maintenance of the
BCRUA Project which, in the opinion of counsel to the BCRUA, a copy of which
shall be forwarded to each City, do not materially impair the use of the BCRUA
Project for the purposes for which it is designed; and
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(iii) rights of the United States or any state or political subdivision thereof, or
other public or governmental authority or agency or any other entity vested with
the power of eminent domain to take or control property or to terminate any right,
power, franchise, grant, license, or permit previously in force.
(fl) "Plans and Specifications" means the plans and specifications prepared for the
BCRUA Project by the BCRUA Consulting Engineer(s), as the same may be revised from time
to time in accordance with this Contract.
(gg) "Preliminary Design Report" or "PDR" means collectively the following
described documents:
(i) Treatment Plant PDR. "Brushy Creek Regional Water Treatment Plant;
Preliminary Design Report prepared by Camp Dresser& McKee, Inc., dated July,
2008;
(ii) Raw Water PDR, "Brushy Creek Regional Water Supply Project - Phase 1
Raw Water Facilities - Floating Intake and Raw Water Pipeline; Preliminary
Design Report"prepared by Carter&Burgess, Inc.,dated October 2007;
(iii) Treated Transmission Main, Segment 1 PDR, "Brushy Creek Regional Utility
Authority 78 inch Water Transmission Main Preliminary Engineering Report:
prepared by Lockwood, Andrews &Newnam, Inc.,dated May 24, 2007; and
(iv) Treated Transmission Main, Segment 2C PDR, "Preliminary Engineering
Report- Treated Water Transmission Line Segment 2C"prepared by K. Friese &
Associates, Inc., dated September 2007.
(hh) "Preliminary Engineering Report" or "PER" means the "Cedar Park - Round
Rock - Leander Regional Water Supply Project Preliminary Engineering Report," prepared by
HDR Engineering, Inc., dated January 2007.
(ii) "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. In the case
of any facility included in a City System which is owned in common with one or more other
entities, the term "Prudent Utility Practice", as applied to such facility, shall have the meaning
set forth in the agreement governing the operation of such facility.
0j) "Rule"means SEC Rule 150-12,as amended from time to time.
(kk) "Sale and Offering Documents" means any official notice of sale, official bid
form, preliminary official statement, official statement, or other offering document for the
Bonds.
(11) "SEC" means the United States Securities and Exchange Commission and any
successor to its duties.
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(mm) "SID" means any entity designated by the State or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(nn) "State"means the State of Texas.
(oo) "TCEQ" means the Texas Commission on Environmental Quality or its
successors or assigns.
(pp) "Trustee" means any trustee named under a trust indenture or the paying
agent/registrar named in a paying agent/registrar agreement entered into by the BCRUA relating
to the payment of a series of Bonds and authorized by a Bond Resolution.
(qq) "Utility Bond" means the bonds, notes and other obligations of a City outstanding
from time to time secured by a lien on and pledge of the net revenues of that City's System or
any part thereof, regardless of lien priority.
(rr) "TWDB" means the Texas Water Development Board or any successor entity
thereto.
(ss) "TWDB Program"means the applicable TWDB programs.
(tt) "Water Rights" means each City's respective right to raw water under each City's
contract with LCRA. Each City's right(s) to raw water are' and shall remain the City's sole
property. The BCRUA holds no raw water rights and will not acquire any raw water rights by
virtue of this Contract.
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.
ARTICLE II
PURPOSE AND DESCRIPTION OF THE BCRUA PROJECT
Section 2.1 Raw Water Contracts. Each City, individually, has contracted with LCRA
to purchase raw water from Lake Travis in sufficient quantities to meet the long-term projected
demands for treated water for each City. Each City has conducted its own investigation and,
based solely thereon, has determined that it has contracted for and acquired sufficient quantities
of raw water to meet its own needs. A copy of the contract between the City of Round Rock and
LCRA for raw water from Lake Travis is attached hereto as Exhibit "A." A copy of the contract
between the City of Cedar Park and LCRA for raw water from Lake Travis is attached hereto as
Exhibit "B." A copy of the contract , as amended, between the City of Leander and LCRA for
raw water from Lake Travis is attached hereto as Exhibit"C."
Section 2.2 Regional Water Treatment and Distribution. In order to utilize the raw
water from Lake Travis, in 2005, each City began independently studying and planning for its
own water intake, treatment, and distribution system. In early 2006, the three Cities entered into
discussions regarding the possibility of a joint regional intake, treatment, and distribution system.
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Shortly thereafter, the Cities determined that a joint regional intake, treatment, and distribution
system would be the most efficient and cost-effective option for each of them and their
respective rate-payers.
Section 2.3 Local Government Corporation. After determining that a joint regional
intake, treatment, and distribution system was the best solution available to the Cities water
needs, in 2007 the Cities continued their discussions to determine the best method of jointly
acquiring, financing, constructing, and operating such system. After researching the various
options for a regional system, the Cities determined that the best method would be to create a
Local Government Corporation pursuant to Subchapter D of Chapter 431, Texas Transportation
Code. In July 2007, the three Cities jointly created a Local Government Corporation which was
named the Brushy Creek Regional Utility Authority, Inc. The express purpose for the creation of
the BCRUA was to provide an efficient vehicle for the financing, construction, acquisition,
ownership, maintenance, and operation of a regional water transmission, treatment, and
distribution and/or a regional wastewater collection and treatment systems and/or a water reuse
system.
Section 2.4 Purpose of this Contract. The purpose of this Contract is to set forth the
terms and conditions under which the Cities,by and through the BCRUA,will finance, construct,
acquire, own, maintain and operate the BCRUA Project. This Contract also sets forth in general
terms the manner in which the Cities will share the costs of constructing, operating, and
maintaining the BCRUA Project.
Section 2.5 Title to Raw Water. Title to and interest in each City's raw water supply
shall remain with each City, respectively, at all times. The BCRUA shall not acquire any right or
title to the Cities' respective raw water interests by virtue of this Contract and shall not otherwise
assert any ownership interest in any City's raw water rights. However, the Cities hereby
authorize and assign to the BCRUA the authority to take the raw water from Lake Travis and to
exercise servicing authority over, and in all respects, to use the raw water for the sole purpose of
treating said water in order to deliver potable water to the Cities. The BCRUA will be
responsible for the operation of the BCRUA Project and the treatment of raw water, but shall not
claim title to any of the raw water contracted for by the Cities, respectively, which passes
through and is treated by the BCRUA Project. Each City is solely responsible to make available
sufficient raw water to the BCRUA for its reserved treatment capacity in the BCRUA Project,
and the BCRUA shall treat such raw water at its treatment plant.
Section 2.6 Other Contracts. The BCRUA shall not enter into contracts with other
entities or persons for the supply of treated water without the prior written consent of all the
Cities, which consent shall not be unreasonably withheld.
Section 2.7 Qualit . The treated water to be delivered by the BCRUA and received by the
Cities shall be potable water. The BCRUA will draw all or a portion, as the case may be, of each
City's raw water from Lake Travis into the BCRUA Project for treatment and distribution in
order to serve each City's need for treated water, and the BCRUA will treat such raw water using
the BCRUA Project and equipment described in the Preliminary Design Report.
Section 2.8 Operation_ The BCRUA covenants to operate the BCRUA Project in accordance
with Prudent Utility Practices and in accordance with applicable regulatory requirements and
standards.
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Section 2.9 Conservation Plans. Each City has adopted a water conservation plan in
accordance with the rules and regulations of the TCEQ. Each City agrees to provide the BCRUA
a certified copy of its adopted plan. Each City covenants to the other Cities and to the BCRUA to
fully comply with their respective conservation plans and to comply with all applicable rules and
regulations of the TCEQ.
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE BCRUA PROJECT
Section 3.1 General. Subject to the remaining terms and provisions of this Contract, the
BCRUA agrees to issue one or more series of the Bonds,as requested by any City, to acquire and
construct the BCRUA Project as generally described in the Preliminary Design Report. The
Parties anticipate that the BCRUA Project will be operational by April 1, 2011. It is expressly
understood and agreed that any obligations on the part of the BCRUA to finance, acquire,
construct, and complete the BCRUA Project and any future expansions of the BCRUA Project
and to provide the water treatment capacity to the Cities shall be (i) conditioned upon the
BCRUA's ability to obtain all necessary permits, Land Interests, material, labor, and equipment,
and upon the ability of the BCRUA to finance the BCRUA Project Costs through the actual sale
of the Bonds or receipt of funds from the Cities, including any Additional Bonds needed.to
complete the BCRUA Project, and (ii) subject to all present and future valid laws, orders, rules,
and regulations of the United States of America, the State, and any regulatory body having
jurisdiction. The BCRUA shall acquire and construct the BCRUA Project with all reasonable
dispatch, and the BCRUA will diligently pursue such acquisition and construction in order that
the BCRUA Project will be operational by April 1, 2011, delays incident to events of Force
Majeure only excepted; but if for any reason there should be delays in or the entire failure of
such acquisition, construction, and improvement, there shall be no diminution in or
postponement of the Annual Payments to be made by the Cities hereunder and no resulting
liability on the part of the BCRUA.
Section 3.2 Location of BCRUA Project; Acquisition of Land Interests. The BCRUA
Project will be constructed and located on, across, within and through the Land Interests. The
BCRUA (or one or more of the Cities) shall, as soon as possible after the delivery of this
Contract, and subject to the receipt of the Bond proceeds or funds from the Cities, undertake the
acquisition of the Land Interests. The BCRUA shall be responsible for ensuring that proper
filings of each such portion of the Land Interests are made in the deed records of the appropriate
counties to ensure that all interested parties have proper notice of the BCRUA's interests in the
Land Interests. As each deed, easement, or other evidence of an interest in real property
comprising a portion of the Land Interests is acquired by the BCRUA, a copy of such instrument,
together with evidence of its filing in the deed records of the counties in which such portion lies,
shall,upon the written request of the Cities, be given to the Cities.
The BCRUA shall acquire a title insurance policy or a title opinion showing good and
indefeasible title with respect to each Land Interest acquired. A copy of each such title insurance
policy or title opinion shall be retained in the BCRUA's official records.
Section 3.3 Construction. The BCRUA shall, as soon as possible, undertake to make,
execute, deliver, and prosecute all contracts, orders, receipts, writings, and instructions with or to
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other persons, and in general do or cause to be done all such other things, as may be required for
the proper acquisition and construction of the BCRUA Project.
Section 3.4 Selection of BCRUA Consulting Engineer(s); Plans and Specifications.
The BCRUA acknowledges that the Cities have previously contracted with several engineering
firms to prepare the Preliminary Design Report for the BCRUA Project. Upon BCRUA's receipt
of funding, the Cities shall assign to the BCRUA the aforesaid engineering contracts. Upon
assignment, the BCRUA shall cause the aforesaid engineering firms to complete the Plans and
Specifications and the other materials to be used in the construction of the BCRUA Project and
to perform such other engineering tasks as shall be necessary for construction of the BCRUA
Project.
Section 3.5 Award of Construction Contracts. Upon obtaining the approval of the
Board of Directors of the BCRUA of the Plans and Specifications, the BCRUA will promptly
advertise for sealed bids or comply with the requirements for an alternative delivery method for
the BCRUA Project to the extent and as required by law. The BCRUA may break the BCRUA
Project into several contracts or phases as it determines is best for the timely acquisition and
construction of the BCRUA Project. The BCRUA shall not be obligated to award a construction
contract unless the proceeds from the Bonds or other funding are available to pay the contract(s).
The BCRUA shall ensure that all contracts for the construction of the BCRUA Project provide
that the BCRUA Project will be operational by April 1, 2011.
Section 3.6 Liens. Neither the Cities nor the BCRUA will create or permit or suffer to
exist any lien, encumbrance, or charge upon the BCRUA Project or any interest therein at any
time, except Permitted Liens.
Section 3.7 Revisions of Plans. The BCRUA may revise the Plans and Specifications
prior to the Completion Date with the unanimous approval of the Cities.
Section 3.8 Approvals. Unless otherwise required by law, each consent, approval, or
other official action required of the Cities or the BCRUA by any provision of this Contract shall
be 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. All contracts to be entered into by the BCRUA shall be authorized by the BCRUA's
Board of Directors. The Cities will cooperate with the BCRUA in the design, financing,
acquisition, and construction of the BCRUA Project and, following the adoption of the Bond
Resolution by the BCRUA's Board of Directors, will not take any action or fail to take any
action (including, without limitation, any exercise or denial of its consent or approval of any
action proposed to be taken by the BCRUA or any of its agents hereunder), if taking or failing to
take such action, respectively, would unreasonably delay or obstruct the completion of the
BCRUA Project by the BCRUA.
Section 3.9 Completion. Upon completion of the BCRUA Project, the BCRUA shall
deliver to the Cities a certificate of the BCRUA and the BCRUA Consulting Engineer(s) stating
that, as of a specified date, the BCRUA Project has been completed (the date specified in such
certificate being herein called the"Completion Date").
Section 3.10 Raw Water Supply. Each City has conducted its own investigation and,
based solely thereon, has determined that it has contracted for and acquired sufficient quantities
of raw water to meet its needs. Title to and interest in each City's raw water supply shall remain
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with each City, respectively, at all times. The BCRUA shall not acquire any right or title to the
Cities' respective raw water interests by virtue of this Contract and shall not otherwise assert any
ownership interest in any City's raw water rights. However, the Cities hereby authorize and
assign to the BCRUA the authority to take the raw water from Lake Travis and to exercise
servicing authority over and in all respects to use such raw water for the sole purpose of treating
such raw water in order to deliver potable water to the Cities. The BCRUA will be responsible
for the operation of the BCRUA Project and the treatment of raw water, but shall not claim title
to any of the raw water contracted for by the Cities, respectively, which passes through and is
treated by the BCRUA Project. Each City is solely responsible to make available to the BCRUA
sufficient raw water for its reserved treatment capacity in the BCRUA Project, and the BCRUA
shall treat such raw water at its treatment plant.
Section 3.11 Access to Cities. If any facility, pipeline, or appurtenance owned by the
BCRUA 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 BCRUA, upon
complying with such City's franchise ordinances or other provisions, 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 3.12 Easements. Each City hereby agrees to grant to the BCRUA such
easements as may be reasonably necessary for the purposes of placing, constructing, operating,
repairing, maintaining, rebuilding, replacing, relocating, and removing water treatment facilities
upon, over, across and through the City's property and giving to the BCRUA, and its successors
and assigns, all of 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.
Section 3.13 Delivery Point. The BCRUA Project will include the Land Interests
required to deliver treated water to the Deliver Point for each City at the location depicted in the
Engineering Reports. After completion of the BCRUA Project, each City shall have the sole
responsibility, at its own cost and expense, for providing additional pipelines and other facilities
required for transporting its share of the treated water from the BCRUA Project to a new or
additional Delivery Point, but an additional or alternative Delivery Point will be allowed only
with the consent of the Cities, which consent will not be unreasonably withheld.
Section 3.14 Other Contracts. The BCRUA shall not enter into contracts with other
persons for the supply of treated water without the prior written consent of all the Cities, which
consent shall not be unreasonably withheld.
Section 3.15 Qualit .. The treated water to be delivered by the BCRUA and received by
the Cities shall be potable water. The BCRUA will draw all or a portion, as the case may be, of
each City's raw water from Lake Travis into the BCRUA Project for treatment and distribution
in order to serve each City's need for treated water, and the BCRUA will treat such raw water
using the BCRUA Project and equipment described in the Engineering Reports.
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ARTICLE IV
FINANCING OF THE BCRUA PROJECT
Section 4.1 Issuance of Bonds.
(a) The BCRUA's acquisition, construction, and completion of the BCRUA Project
will be financed by
(i) receipt of funds from the Cities,respectively,
(ii) the BCRUA through the issuance of one or more series or issues of Bonds by
the BCRUA for a City, which Bonds are payable solely from and secured, in part,
by an assignment of the Bond Payments made under this Contract by the City for
which such series of Bonds are issued, or
(iii) any combination of funds from the Cities, respectively, and the issuance of
Bonds for the Cities, respectively. It is expressly understood and agreed by the
13CRUA and the Cities that the BCRUA shall issue Bonds as separate series for
the applicable City.
Each City shall be solely responsible for Bond Payments on its series of Bonds. No City
shall have any liability or responsibility for any Bond Payment on a series of Bonds issued for
another City. In consideration of the covenants and agreements set forth in this Contract, and to
enable the BCRUA to issue the Bonds to carry out the intents and purposes hereof, this Contract
is executed to assure the issuance of the Bonds at the request of a City and to provide for and
ensure the due and punctual payment by such City to the BCRUA, or to the Trustee relating to
the series of Bonds issued for such City, of amounts not less than the Bond Payments. Each City
hereby agrees to make, or cause to be made, its respective Bond Payments, as and when due, for
the benefit of the owners of the Bonds, as provided in the Bonds and the Bond Resolution. The
cost allocations for the BCRUA Project Cost are shown in Exhibit "D."
(b) The proceeds from the sale of the Bonds, together with any funds received from a
City will be used for the payment of the BCRUA Project Costs. Upon request of a City, the
Bonds will be issued by the BCRUA for such City's share of the amount anticipated to be
required to acquire and construct the BCRUA Project, including payment of all BCRUA Project
Costs advanced by such City and incurred by the BCRUA prior to the date of issuance of the
Bonds, and to fund, to the extent deemed advisable by the BCRUA, a debt service reserve fund,
if applicable, and interest on the Bonds during construction and for up to one year after the
Completion Date. However, each City specifically reserves the right to pay cash to the BCRUA
rather than have the BCRUA issue Bonds on its behalf.
(c) Each Bond Resolution of the BCRUA shall specify the maximum principal
amount of the Bonds for each City's series of Bonds to be issued thereunder. The Bonds shall
mature not more than forty (40) years from the date of such Bonds and shall bear interest at not
to exceed the maximum legal rate then permitted by law, and the Bond Resolution may create
and provide for the maintenance of a revenue fund, a debt service fund, a reserve fund, a
construction fund, and any other funds deemed prudent by the BCRUA, all in the manner and
amounts as provided in such Bond Resolution.
(d) Prior to the final adoption of a Bond Resolution or any amendment of a Bond
Resolution by the BCRUA's Board of Directors for a City, a substantially final copy of the
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proposed Bond Resolution for such City and the Sale and Offering Documents, if any, for such
City shall be presented to the governing body of such City for review and approval.
(e) Upon approval by the City's governing body of
(i) a substantially final copy of the Bond Resolution for the City hereafter adopted
by the BCRUA for the applicable City, including any Credit Agreements,
(ii)any amendments to any Bond Resolution for the City, and
(iii) the Sale and Offering Documents for the City and the delivery to the BCRUA
of a certification signed by the Authorized Representative of the City to the effect
that the Bond Resolution and the Sale and Offering Documents comply with this
Contract,
then upon the adoption and approval of the Bond Resolution in such final form by the BCRUA's
Board of Directors or Authorized Representative, as the case may be, and the issuance and
delivery of the Bonds to the purchaser thereof, the Bond Resolution shall for all purposes be
considered approved by the City for its Bonds and deemed to be in compliance with this Contract
in all resects, and the Bonds issued thereunder will constitute Bonds as defined in this Contract
for all parposes. Any registered owner of Bonds is entitled to rely fully and unconditionally on
any such-approval.
(f) All covenants and provisions in the Bond Resolution affecting, or purporting to
bind, the-City shall, upon the delivery of the Bonds, become absolute, unconditional, valid, and
binding covenants and obligations of the City so long as the Bonds and interest thereon are
outstanding and unpaid, and may be enforced by the remedies of mandamus and specific
performance in addition to any other legal or equitable remedies which may be available, as
providedr ii Section 12.10 of this Contract and the Bond Resolution. Particularly, the obligation
of the City to make, promptly when due, all Annual Payments specified in this Contract shall be
absolute and unconditional, and said obligation may be enforced as provided in this Contract. In
addition, subject to the approval of the City, the BCRUA may enter into Credit Agreements for
the purpose of achieving the lowest financing costs for the BCRUA Project.
Section 4.2 Proceeds of Bonds. Subject to the terms and provisions of this Contract,
the proceeds of the Bonds shall be used by the BCRUA for the purpose of financing and funding
the BCRUA's acquisition and construction of the BCRUA Project as provided in Section 4.1.
Upon request by a City, the BCRUA shall use its best efforts to issue its Bonds, in one or more
separate series for each City requesting financing, in amounts which will be sufficient, together
with any funds contributed by a City, to accomplish such purpose. The proceeds of the Bonds
shall be deposited in the Construction Fund established pursuant to the terms of each Bond
Resolution. A trust indenture may be entered into between the BCRUA and a corporate trustee
for the purpose of securing the payment of the Bonds. The trust indenture or each Bond
Resolution, as appropriate, will establish procedures for the payment of BCRUA Project Costs
out of one or more construction funds, or subaccount within the Construction Fund. It is
anticipated that the Bonds will be issued pursuant to each Bond Resolution and that a paying
agent/registrar agreement will be executed between the BCRUA and the Trustee concerning the
payment procedures with respect to the Bonds.
Any funds contributed by a City for its share of BCRUA Project Costs shall be deposited into a
separate subaccount of the Construction Fund of the BCRUA
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(a) prior to the BCRUA pricing any series of Bonds for a City or
(b) simultaneous with the delivery of the proceeds of any series of Bonds so long as
sufficient evidence is provided to the BCRUA and Cities prior to pricing of Bonds that
their funds will be available at the closing of the Bonds.
Section 4.3 Refunding of Bonds. The BCRUA reserves the right to issue refunding
bonds in accordance with the laws of the State and will provide notice to each applicable City,
respectively,of the redetermined Bond Payment in accordance with Section 9.2 of this Contract.
Section 4.4 Redemption of Bonds. The BCRUA, in its sole discretion or upon the
written request of a City(and provided that the affected series of Bonds for such City are subject
to redemption or prepayment prior to maturity at the option of the BCRUA, and provided that
such request is received in sufficient time prior to the date upon which such redemption or
prepayment is proposed), forthwith shall take or cause to be taken all action that may be
necessary under the applicable redemption provisions of the series of Bonds to redeem the Bonds
or any part thereof, to the full extent of funds that are either made available for such purpose by
the applicable City or already on deposit under the Bond Resolution and available for such
purpose. The redemption of any outstanding Bonds prior to maturity at any time shall not relieve
the applicable City of its absolute and unconditional obligation to pay each remaining Annual
Payment with respect to any outstanding Bonds, as specified in the Bond Resolution.
Section 4.5 Debt Service on Bonds and Other Bond FundingRequirements. It is
acknowledged and agreed that payments to be made under this Contract will be the primary
source available to the BCRUA to provide the money necessary for the BCRUA to meet its
obligations with respect to any series of Bonds and any Credit Agreements. Each City therefore
agrees and accepts sole responsibility to pay the Bond Payments related to the series of Bonds
issued for the respective City, as outlined in subsections (a) through (c) below, in full when due
as provided in this Contract. However, no City shall have any liability or responsibility for any
Bond Payments on a series of Bonds issued for another City. Bond Payments shall be due by the
close of business on the business day prior to each date on which any of the following payments
or deposits shall be due and shall be in an amount equal to all such payments and deposits due on
such date:
(a) debt service on its related series of Bonds for each respective City for which such
series of Bonds were issued and related payments and deposits, as follows:
(i) principal of, redemption premium, if any, and interest on, its related series
of Bonds for each respective City, less interest to be paid out of Bond proceeds or
from other sources if permitted by any Bond Resolution, and the redemption price
of any Bonds to be redeemed prior to maturity when and as provided in any Bond
Resolution plus the fees, expenses, and, to the extent permitted by law,
indemnities of the Trustee, if any, for the Bonds, and those of the paying
agent/registrar for paying the principal of and interest on the Bonds and for
authenticating, registering, and transferring Bonds on the registration books;
(ii) deposits required to be made to any special, contingency, or reserve fund
by the provisions of any Bond Resolution; and
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(iii) any deposit in addition thereto required to restore any deficiency in any of
such funds by the provisions of any Bond Resolution,
(b) amounts payable by the BCRUA under a Credit Agreement; and
(c) the fees, expenses, and indemnities(to the extent permitted by law)of the Trustee,
remarketing agent, rate setting agent, authentication agent, arbitrage rebate compliance firm, and
tender agent, if any, for the Bonds.
Section 4.6 Bluing. The BCRUA will maintain rates and charges sufficient to meet the
debt service requirements on outstanding Bonds, and each City shall maintain rates and charges
for its City System sufficient to pay the City's obligations secured by and made payable from the
revenues derivedfrom the operation of its City System, as provided in Section 9.3(b) of this
Contract. To the extent Annual Payments are due, the BCRUA will render a bill to each City not
more than once each month, for the payments required by this Contract. The BCRUA shall, until
further notice, render such bills on or before the 5th day of each month and such bills shall be
due and payable on the 15th day of each month or ten (10) days after such bill is deposited into
the United States mail, properly stamped and addressed to the Cities whichever is later and
thereafter, to the extent permitted by law, interest shall accrue thereon at the rate of ten per cent
(10%) per annum until paid in full. Notwithstanding the foregoing, Bond Payments shall be paid
in accordance with Section 4.5 of this Contract. The BCRUA may, however, from time to time
by sixty (60)days' written notice change the date by which it shall render bills, and all bills shall
thereafter be due and payable fifteen (15) days after such dates as herein provided. Each City
shall make all payments in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts and shall make
payment to the BCRUA as its office in Williamson County, Texas, or at such other place as the
BCRUA may from time to time designate by sixty(60)days written notice.
Section 4.7 Delinquency in Payment. If any City fails to pay in full any bills when due
and payable, the BCRUA shall give written notice of such delinquency to the City and if all bills
due and unpaid, including interest thereon, are not paid in full within forty-five (45) days after
delivery of such notice, then the City agrees that the BCRUA shall be authorized, at its sole
option, to institute suit for collection thereof and to collect any amounts due and unpaid, together
with interest thereon and reasonable attorneys' fees, and the City further agrees that the BCRUA
shall, at its sole option, discontinue providing treated water to the City until all amounts due and
unpaid are paid in full with interest as herein specified. Any such discontinuation of service shall
not, however, relieve the City of its unconditional obligations to make the payments required by
this Contract. It is also hereby expressly acknowledged and agreed that any nondefaulting City
shall have no obligation to make any payments for the benefit of the defaulting City.
Section 4.8 BCRUA's Rights Assigned to Trustee. The Cities are advised and
recognize that as security for the payment of a series of Bonds, the BCRUA may, subsequent to
the issuance of the initial series of Bonds, assign to the Trustee, pursuant to one or more trust
indentures (or paying agent/registrar agreements) to be authorized by a Bond Resolution, the
BCRUA's rights under this Contract, including the right to receive the Annual Payments
hereunder (but not the right to receive payments, if any, under Section 12.13 hereof). Each City
assents to such assignment and will make the Annual Payments directly to the Trustee without
defense or set-off by reason of any dispute between one or both of the Cities and the BCRUA or
the Trustee. All rights against a City arising under this Contract or each Bond Resolution and
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assigned to the Trustee may be enforced by the Trustee, or the owners of the Bonds, to the extent
provided in each Bond Resolution, and the Trustee, or the owners of the Bonds, shall be entitled
to bring any suit, action, or proceeding against a City, to the extent provided in the Bond
Resolution, for the enforcement of this Contract, and it shall not be necessary in any such suit,
action, or proceeding to make the BCRUA or any other City a party thereto.
Section 4.9 Tax-Exempt Bonds. The Parties hereto understand and agree that the
BCRUA will use reasonable efforts to provide for, but will not be liable for a failure to produce,
the lowest overall debt service cost for any series of Bonds to be issued for the BCRUA Project.
In connection therewith, each City understands that the BCRUA intends to issue Bonds the
interest on which is excludable from the gross income of the owners thereof for federal income
tax purposes. The Parties hereto acknowledge their understanding that the federal income tax
laws impose certain restrictions on the use and investment of proceeds of such tax-exempt bonds
and on the use of the property financed therewith and the output produced therefrom.
Accordingly, each City agrees and covenants that if any series of Bonds are offered to investors
with the understanding that the interest will be exempt from federal income taxation, then the
Parties, their assigns and agents, will take such action to assure, and refrain from such action
which will adversely affect the treatment of such Bonds as obligations described in section 103
of the Code. Should any party fail to comply with such covenant, the effect of which being that
the Bonds no longer qualify as obligations described in the Code, such defaulting party shall be
liable for all costs resulting from the loss of the tax-exempt status of the Bonds. The Parties
hereby agree and covenant to comply with all of the representations and covenants relating to
such exemption which are set out in any Bond Resolution. Each City and the BCRUA further
agree and covenant that in the event any series of Bonds issued are to be tax-exempt, they will
modify such agreements, make such filings, restrict the yield on investments, and take such other
action necessary to fulfill the applicable provisions of the Code. For these purposes, the Parties
may rely on the respective opinion of any firm of nationally-recognized bond attorneys selected
by them. In the event that a conflict anises in the opinions of the respective firms of each of the
Parties, the Parties will identify a different firm that is mutually acceptable to all Parties, in order
to resolve the conflict of opinion.
Section 4.10 Payment to Rebate Fund. In the event that tax-exempt Bonds are issued as
provided in Section 4.9, the BCRUA hereby covenants and agrees to make the determinations
and to pay any deficiency into a rebate fund, at the times and as described in each Bond
Resolution to comply with the provisions of section 148(f)(2) of the Code. In any event, if the
amount of cash held in each rebate fund shall be insufficient to permit the BCRUA or the Trustee
to make payment to the United States of America of any amount due on any date under section
148(0(2) of the Code, each City forthwith shall pay the amount of such insufficiency for the
series of Bonds issued for that City on such date to the Trustee in immediately available funds
for such purpose. The obligations of each City under this Section 4.10 are direct obligations of
the City, acting under the authorization of, and on behalf of, the BCRUA and the BCRUA shall
have no further obligation or duty with respect to the rebate fund.
Section 4.11 City's Obligations. In the event the BCRUA Project is not completed for
any of the reasons contemplated herein or otherwise, or any proceeds from issuance of a series of
Bonds are not used for completion of the BCRUA Project for any reason, any Bond proceeds and
earnings thereon for such series not used for completion of the BCRUA Project shall be utilized
to satisfy amounts due and owing on such Bonds as described in the related Bond Resolution,
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and herein, so as to reduce the Bond Payments which would otherwise be due hereunder, or be
applied for the benefit of each City as provided in the related Bond Resolution. Each City has
covenanted absolutely and unconditionally, in accordance with all other terms of this Contract, to
make the Annual Payments, as provided herein, in consideration for such application of the
money as well as the other covenants and obligations of the BCRUA and others set forth or
contemplated herein.
Section 4.12 Interest on Money. All legally available money respecting a series of
Bonds shall be invested in the manner set forth in each Bond Resolution. Any interest earnings
on the Bond proceeds may be used to pay principal of and interest on the related Bonds or for the
payment of any BCRUA Project Costs or other costs related to the BCRUA Project approved by
the Cities, subject to Section 4.9.
Section 4.13 Sale and Offering Documents. At the request of the BCRUA, each City for
which a series of Bonds is being issued shall provide to the BCRUA current and historical
information concerning such City's System, the financial conditions results, and prospects of the
City, and such other information concerning such City as the BCRUA shall deem advisable for
inclusion in the Sale and Offering Documents, if any, for the Bonds to be issued for such City,
and shall certify to the BCRUA and the underwriters of any offering of Bonds to be made by
means of such Sale and Offering Documents when and if the City deems such Sale and Offering
Documents to be complete and final for purposes of the Rule. Each City represents and-warrants
that all statements concerning it (including, without limitation, its financial condition, results,
and prospects, and any demographic and economic information concerning the area served by
the BCRUA Project) that are contained in any Sale and Offering Document approved by the City
pursuant to Section 4.1 hereof shall be true in all material respects and shall not omit to state any
material fact necessary to make the statements made in such Sale and Offering Document, in the
light of the circumstances in which they are made, not misleading.
Section 4.14 Right to Prepay. Each City shall have the right at any time to prepay all or
any portion of its Annual Payments. Subject to the provisions of Section 4.9, such prepaid
Annual Payments, including any interest accruing, shall be used and invested by the BCRUA as
directed by the City which made such prepayment
(a) as a credit against future Annual Payment obligations of such City,
(b) to redeem Bonds issued for such City pursuant to the provisions of Section 4.4, or
(c) to provide for the defeasance of the Bonds pursuant to the provisions of the applicable
Bond Resolution.
Any such prepayment will not cause a termination of this Contract until all other amounts owed
or to be incurred by the BCRUA or any other person under the provisions of the applicable Bond
Resolution have been paid in full or waived by such person.
ARTICLE V
OPERATION, FINANCE AND MAINTENANCE OF BCRUA PROTECT
Section 5.1 Q3eration. The BCRUA shall operate the BCRUA Project in accordance with
accepted good business and engineering practices and in accordance with requirements of federal
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and state law, including without limitation the Texas Water Code, as amended, and as said laws
may be amended in the future, and any rules and regulations issued and to be issued by
appropriate agencies in the administration of said laws. The Operations Committee, as set forth
below, shall assist the BCRUA by providing advice and recommendations on the operations of
the BCRUA Project, as provided below.
Section 5.2 Payments for Operations and Maintenance Expenses. Each City shall pay to the
BCRUA its Annual Payments, including Operations and Maintenance Expenses related to the
operation of the BCRUA Project. However, controlling the costs paid by the Cities to the
BCRUA for Operation and Maintenance Expenses shall be of primary importance to the
BCRUA. The BCRUA shall use diligent efforts so that Operation and Maintenance Expenses
incurred by the BCRUA and ultimately paid by the Cities are reasonable and justified. The
BCRUA and the Cities agree that fixed Operation and Maintenance Expenses shall be allocated
among the Cities based upon each City's reserved capacity in the BCRUA Project components,
and that variable Operation and Maintenance Expenses shall be allocated among the Cities based
upon the volume of treated water delivered to each City in relation to the volume of treated water
delivered to all Cities.
Section 5.3 Composition of Operations Committee. The Cities and the BCRUA hereby create
an Operations Committee to be composed of the following:
(a) Two representatives appointed by Cedar Park;
(b) Two representatives appointed by Round Rock; and
(c) Two representatives appointed by Leander.
The City Manager 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 at the will of the City Manager who appointed such representative.
Upon the death, resignation or revocation of the power of a City's representative (or alternate
representative), the City Manager of such City shall promptly appoint a new representative (or
alternate representative)to the Operations Committee.
Section 5.4 Responsibility of Operations Committee. The Operations Committee shall
represent the individual and collective interests of the Cities and shall consult with and advise the
BCRUA Board of Directors and its respective General Manager or other designated
representative with regard to the following matters pertaining to the BCRUA Project:
(a) The operation and maintenance of the BCRUA Project;
(b) The addition of new customers to the BCRUA Project and the terms and
conditions of the agreements with such new customers consistent with the provisions of this
Contract;
(c) Review of the budgets, prior to submission to the Board of Directors of BCRUA;
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(d) Review of the annual reports of the BCRUA Project;
(e) Improvements to and expansions of the BCRUA Project;
(f) Review and make suggestions regarding proposals submitted to BCRUA for
engineering services related to the BCRUA Project;
(g) Review bids or proposals received for construction of BCRUA Project
components, and make recommendations for contract award;
(h) Review invoices received for the construction of BCRUA Project components,
and make recommendations for the allocation and payment of such invoices;
(i) Make recommendations for professional services consultants, including, but not
limited to, engineering and financial services;
0) Changes to the Engineering Reports;
(k) Review cash flow projections and provide input as to the assumptions contained
therein; and
(1) Any other pertinent matters relating to the management of the BCRUA Project.
The Board of Directors of the BCRUA shall not take any action with respect to any of the
foregoing matters without a recommendation from the Operations Committee. The Operations
Committee shall meet at regular intervals to review the progress of construction of the BCRUA
Project and the ongoing operation of the BCRUA Project. The Operations Committee shall have
access to and may inspect at any reasonable time all physical elements of the BCRUA Project
and all records and accounts of BCRUA pertaining to the BCRUA Project. The Operations
Committee shall be diligent, prompt, and timely in reviewing and commenting on matters
submitted to it. The Cities recognize that the activities of the Operations Committee are an
important function of the operation of the BCRUA Project and authorize payment of all
reasonable expenses and charges associated therewith.
Section 5.5 BCRUA's Overhead Expenses. To the extent not paid out of the proceeds of a
series of Bonds, or otherwise, each City shall pay and reimburse the BCRUA for its share of the
Overhead Expenses incurred by or attributable to it throughout the term of this Contract within
thirty (30) days of receipt of documentation therefor from the BCRUA. Each City also agrees,
with the consent of the BCRUA, to enter into an interlocal agreement to provide for, among
other matters, an annual adjustment of the Overhead Expenses paid by each City based upon
certain formulas and taking into account each City's reserved capacity in the BCRUA Project
and/or the quantity of treated water actually delivered to each City.
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ARTICLE VI
RESERVED CAPACITIES
Section 6.1 Reserved Capacities in BCRUA Project Components. Each City, respectively,
shall have the exclusive right to its reserved capacity in each BCRUA Project component as
described in Exhibit D. No reserved capacity may be allocated to or used by anyone 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.
Section 6.2 Reserved Capacities for Treated Water in the BCRUA Project. Each City,
respectively, shall have the exclusive right to take, and the BCRUA shall have the obligation to
deliver, treated water at the Delivery Points in the amounts shown in Exhibit D.
Section 6.3 Transfer of Reserved Capacity. Any City may transfer any portion of its
reserved capacity in one or more BCRUA Project 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 the BCRUA and the other City, signed by the Cities making the
transfer, specifying the amount of transferred reserved capacity and the affected BCRUA Project
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. A transfer of reserved capacity shall not change any Bond Payment, other payment, or
other obligations of the Cities pursuant to this Contract.
Section 6.4 Documentation of Transferred Reserved Capacity. In the event that reserved
capacity is transferred, the BCRUA and the Cities shall cause a written amendment to be made to
Exhibit D describing such transfer and setting forth the revised reserved capacity of each City in
the BCRUA Project or component(s) thereof.
ARTICLE VII
DELIVERY POINT(S)
Section 7.1 Delivery Point(s). Each City shall receive its treated water at a Delivery Point
designated for each City in the Engineering Reports, or as mutually agreed upon by all Cities.
Section 7.2 Rate and Quantity at Delivery Point(s). The rate and quantity of treated water
delivered to each City at its Delivery Point shall be metered. Each City shall cooperate in good
faith to design the Delivery Point(s) to be at appropriate sizes and in appropriate locations to
deliver the City's reserved capacity. Each Delivery Point shall be designed to deliver treated
water at a maximum rate to be agreed upon by the Cities as design of the BCRUA Project
progresses and stated in an amendment to the Engineering Reports, and no City shall take
delivery of treated water from the BCRUA Project at such Delivery Point at a rate exceeding
such agreed design rate.
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ARTICLE VIII
METERING AND MEASUREMENT
Section 8.1 Unit of Measurement. The unit of measurement for water delivered hereunder
shall be 1,000 gallons of water, U. S. Standard Liquid Measure.
Section 8.2 Measuring Equipment at the Intake Point. In compliance with the regulations and
requirements of the LCRA, the BCRUA shall furnish, install, operate and maintain for the intake
point on Lake Travis the necessary meters, including electronic or other equipment and devices
of standard type for measuring properly the quantity of water taken from Lake Travis. Each City
also agrees, with the consent of the BCRUA, to enter into an interlocal agreement to provide for,
among other matters, the appropriate amount of water taken from Lake Travis to be allocated to
each City based upon certain formulas and taking into account the quantity of treated water
actually delivered to each City.
Section 8.3 Measuring Equipment at Delivery Points. The BCRUA shall furnish, install,
operate and maintain at its own expense for each Delivery Point the necessary meters, including
electronic or other equipment and devices of standard type for measuring properly the quantity of
treated water delivered under this Contract. Such meter or meters and other equipment so
installed shall remain the property of the BCRUA. Each City shall have access to such metering
equipment at all reasonable times, but the reading, calibration, and adjustment thereof shall be
done only by the employees or agents of the BCRUA. For the purpose of this Contract the
original record or reading of the meter or meters shall be the journal or other record book of
BCRUA in its office in which the records of the employees or agents of the BCRUA who take
readings are or may be transcribed. Upon written request of a City, the BCRUA will give the
City a copy of such journal or record book, or permit the City to have access to the same in the
office of the BCRUA during reasonable business hours.
The BCRUA shall calibrate its meters periodically, but not less often than every three (3) years,
in the presence of a representative of each City. The BCRUA and the Cities shall jointly observe
any necessary adjustments which are made to the meters. If any check meter(s) hereinafter
provided for have been installed, the same shall also be calibrated by each City in the presence of
a representative of the BCRUA and a representative of the other Cities, who shall jointly observe
any necessary adjustment. The BCRUA shall give the Cities reasonable notice of the time when
any such calibration is to be made. In the event that a representative of a City is not present at the
time set, the BCRUA may proceed with calibration and adjustment in the absence of any such
representative.
If any party at any time observes a variation between the delivery meter or meters and the check
meter or meters, if any such check meter or meters shall be installed, such party will promptly
notify the other Parties, and the Parties hereto shall then cooperate to procure an immediate
calibration test and joint observation of any adjustment, and said meter or meters shall then be
adjusted to accuracy. Each party shall give the other Parties not less than forty-eight (48) hours
notice of the time of all tests of meters so that the other Parties may have a representative
present.
If upon any test, the percentage of inaccuracy of any metering equipment is found to be in excess
of two percent (2%), registration thereof shall be corrected for a period extending back to the
time when such inaccuracy began, if such time is ascertainable, and if such time is not
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ascertainable, then for a period extending back one-half('/z) of the time elapsed since the last
date of calibration, but in no event further back than a period of six (6) months. If for any reason
any meters are out of service or out of repair so that the amount of treated water delivered cannot
be ascertained or computed from the reading thereof, the treated water delivered during the
period such meters are out of service or out of repair shall be estimated and agreed upon by the
Parties hereto upon the basis of the best data available. For such purpose, the best data available
shall be deemed to be the registration of any check meter or meters if the same have been
installed and are accurately registering. Otherwise the amount of treated water delivered during
such period may be estimated (i) by correcting the error if the percentage of the error is
ascertainable by calibration tests or mathematical calculation, or (ii) by estimating the quantity of
delivery by deliveries during the preceding periods under similar conditions when the meter or
meters were registering accurately.
Each City may, at its sole option and its own expense, install and operate a check meter to verify
the operation of each meter installed by the BCRUA, but the measurement of treated water for
the purpose of this Contract shall be determined solely by the BCRUA's meters, except in the
cases hereinabove specifically provided to the contrary. All such check meters shall be of
standard make and shall be subject at all reasonable times to inspection and examination by any
employee or agent of the BCRUA, but the reading, calibration and adjustment thereof shall be
made only by the City that installed the check meter, except during any period when a check
meter may be used under the provisions hereof for measuring the amount of treated water
delivered, in which case the reading, calibration and adjustment thereof shall be made by
BCRUA with like effect as if such check meter or meters had been furnished or installed by
BCRUA.
ARTICLE IX
ANNUAL PAYMENTS, CITY COVENANTS
Section 9.1 Annual Estimate of Annual Payments. Not less than ninety (90) days prior to
each Fiscal Year, the BCRUA shall furnish to the Cities an estimate and schedule of the Annual
Payments required to be paid by each City in such Fiscal Year.
Section 9.2 Annual Payments by the Cities.
(a) Each City hereby agrees that it will make payment of its Bond Payment to the
extent BCRUA issues a series of Bonds for such City and its proportionate share of the
Operation and Maintenance Expenses and Overhead Expenses to the BCRUA, or to the Trustee
on behalf of the BCRUA, as provided in each Bond Resolution in accordance with the
procedures established in Section 4.6 hereof. If a City at any time disputes the amount to be paid
by it to the BCRUA, such City shall nevertheless promptly make such payment or payments, but
if it is subsequently determined by agreement or court decision that such disputed payments
made by the such City should have been less, or more, the BCRUA shall promptly revise the
charges for such City in such manner that a City will recover its overpayment or the BCRUA
will recover the amount due it. The BCRUA shall pursue all legal remedies, including 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 it, against any City to enforce
and protect the rights of the BCRUA and the owners of the Bonds, and the City shall not be
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relieved of the liability to the BCRUA for the payment of all amounts which are due by them
hereunder. However, no City shall have any liability or responsibility for any Annual Payment
attributable to another City.
(b) Except to the extent otherwise provided by a Bond Resolution, all amounts due
under this Contract shall be paid and are due in Williamson County, Texas, which is the County
in which the principal administrative offices of the BCRUA are located.
(c) The BCRUA shall redetermine the estimate and schedule of Annual Payments
due in any Fiscal Year at any time during such Fiscal Year, as and to the extent deemed
necessary or advisable by the BCRUA to accurately forecast the amount and date of Annual
Payments to be made by each City, if(i) the BCRUA issues Bonds to complete the BCRUA
Project or to refund any Bonds or enters into, amends, or terminates a Credit Agreement, (ii)
actual interest rates on any variable interest rate Bonds differ from those projected by the
BCRUA, or (iii) any other event occurs which results in an increase or decrease in the Annual
Payments required to be made by any City in such Fiscal Year.
(d) If, during any Fiscal Year, the Annual Payment is redetermined in any manner as
provided or required in this Section, the BCRUA will promptly furnish the Cities with an
updated schedule of payments reflecting such redetermination.
(e) Notwithstanding anything herein to the contrary, no failure of the BCRUA to
estimate, and no mistake by the BCRUA in any estimate of, the amount of or schedule for
Annual Payments due from the Cities in any Fiscal Year shall relieve any City from(or defer) its
absolute and unconditional obligation to make all Annual Payments in full when due.
Section 9.3 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 Chapter
1502, as amended, Texas Government Code, of its City System, but only to the extent of the
Annual Payment, 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 services to be provided by the BCRUA Project
are absolutely necessary and essential to provide the treated water to such City.
(b) Each City agrees throughout the term of this Contract 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 Annual Payments under
this Contract and (ii) all other amounts as required by law and the provisions of the ordinances or
resolutions authorizing its Utility Bonds or other obligations now or hereafter outstanding
payable, in whole or in part, from the net revenues of the its City System, including the amounts
required to pay all principal of and interest on such City's Utility Bonds and other obligations.
(c) No ad valorem tax revenues of any City shall be pledged to the payment of any
amounts to be paid by the City to the BCRUA under this Contract, nor shall the BCRUA 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 and 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.
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Section 9.4 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 9.5 Revenue Sources Pledged. Each City hereby pledges the gross revenues of its
City System to the payment of its obligations under this Contract and recognizes that the
BCRUA will, and authorizes the BCRUA to, pledge the Bond Payments owing to it by each City
under this Contract to the payment of the applicable series of Bonds and Credit Agreements
issued for that particular City. The BCRUA agrees to make the payments for such series of
Bonds and Credit Agreements when and as required by each Bond Resolution, each Credit
Agreement, and this Contract, from and to the extent of proceeds of a series of Bonds not
expended for the BCRUA Project and Bond Payments made by each City.
Section 9.6 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. It will faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in each ordinance or resolution authorizing
the issuance of the series of Bonds issued for it by the BCRUA; 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 said ordinances, but only from and to the extent of the sources of
funds described in such ordinances.
(b) Legal Authority. It is a duly created and existing home rule city of the State and
is duly authorized under the laws of the State to enter into this Contract. By execution hereof, it
represents that all actions on its part for the execution and delivery of this Contract have been
duly and 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. (i) It shall use its best
efforts in accordance with Prudent Utility Practice to acquire and construct, or cause to be
acquired and constructed, any capital improvements to its City System, which shall mean and
include any capital extensions, improvements, and betterments, in accordance with the plans and
specifications therefor, as modified from time to time with due diligence and in a sound and
economical manner; and (ii) it 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
and every part and parcel thereof, 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 so that at all times the operation of its City System may be properly
and advantageously conducted.
(d) Title. It has or will obtain lawful title, whether such title is in fee or lesser
interest, to the lands, buildings, structures, and facilities constituting its City System; it will
defend the title to all the aforesaid lands, buildings, structures, and facilities, and every part
thereof, for the benefit of the BCRUA and the owners of each series of Bonds, against the claims
and demands of all persons whomsoever; and it is lawfully qualified to pledge the gross revenues
26
of its City System to the payment of the payments required by this Contract in the manner
prescribed herein, and has lawfully exercised such rights.
(e) Liens. It will from time to time and before the same become delinquent pay and
discharge all taxes, assessments, and governmental charges, if any, which shall be lawfully
imposed upon its City System; it will pay all lawful claims for rents, royalties, labor, materials,
and supplies which if unpaid might by law become a lien or charge thereon, the lien of which
would be prior to or interfere with the liens hereof, so that the priority of the lien granted
hereunder shall be fully preserved in the manner provided herein; and it will not create or suffer
to be created any mechanic's, laborer's, materialman's, or other lien or charge which might or
could be prior to the liens hereof, or do or suffer any matter or thing whereby the lien hereof
might or could be impaired; provided however, that no such tax, assessment, or charge, and that
no such claims which might be used as the basis of a mechanic's, laborer's, materialman's, or
other lien or charge, shall be required to be paid so long as the validity of the same shall be
contested in good faith by the Cities-
(f) Books, Records, and Accounts. It 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 each series of Bonds, and it shall
cause said books and accounts to be audited annually as of the close of each-Fiscal Year. At the
request of the BCRUA, the Cities shall allow the BCRUA to audit such books, records, and
accounts at any reasonable time and from time to time.
(g) Insurance.
(i) Except as otherwise permitted in clause (ii) below, it shall
cause to be insured such parts of its City System as would usually
be insured by governmental entities operating like properties, with
a responsible insurance company or companies, against risks,
accidents, or casualties against which and to the extent insurance is
usually carried by governmental entities operating like properties,
including, to the extent reasonably obtainable, fire and extended
coverage insurance, insurance against damage by floods, and use
and occupancy insurance. Public liability and property damage
insurance shall also be carried unless the City Attorney gives a
written opinion to the effect that the City is not liable for claims
which would be protected by such insurance. At any time while
any contractor engaged in construction work shall be fully
responsible therefor, the Cities shall not be required to carry
insurance on the work being constructed if the contractor is
required to carry appropriate insurance. All such policies shall be
open to the inspection of the BCRUA at all reasonable times.
(ii) In lieu of obtaining policies for insurance as provided
above, the Cities may self-insure against risks, accidents, claims,
or casualties described in clause(i) above.
(iii) The annual audit hereinafter required shall contain a section
commenting on whether or not the City has complied with the
requirements of this Section with respect to the maintenance of
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insurance, and listing the areas of insurance for which the City is
self-insuring, all policies carried, and whether or not all insurance
premiums upon the insurance policies to which reference is
hereinbefore made have been paid.
(h) Audits. After the close of each Fiscal Year while this Contract is in effect, an
audit will be made by each City of the books and accounts relating to its City System and the
revenues of the its City System. As soon as practicable after the close of each such Fiscal Year,
and when said audit has been completed and made available to the Cities, a copy of such audit
for the preceding Fiscal Year shall be mailed to the BCRUA. Such annual audit reports shall be
open to the inspection of the BCRUA, its agents and representatives, the Trustee, and the owners
of the Bonds at all reasonable times at the BCRUA's office.
(i) Governmental Agencies. It will comply with all of the terms and conditions of
any and all franchises, permits, and authorizations applicable to or necessary with respect to a
respective City System, and which have been obtained from any governmental entity, and the
Cities have or will obtain and keep in full force and 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.
0) No Competition. To the extent it legally may, each City hereby covenants solely
with the owners of its series of Bonds issued by the BCRUA, if any, that such City will not grant
any franchise or permit for the acquisition, construction, or operation of any competing facilities
which might be used as a substitute for a City System, to the extent such competing facility
would impair the City System's ability to pay under this Contract, and, to the extent that it
legally may, each City will prohibit any such competing facilities.
(k) Rights of Inspection. The BCRUA, the Trustee, and the owners of 10% or more
in principal amount of the Bonds of any series shall have the right at all reasonable times to
inspect each City System and all records, accounts, and data of the respective City relating
thereto, and upon request, each City shall furnish to the BCRUA, the Trustee, and such owners
of Bonds such financial statements, reports, and other information relating to a respective City
and a respective City System as any such person may from time to time reasonably request.
(1) Sale, Lease, or Disposal of Property by the Cities. No part of a City System shall
be sold, leased, mortgaged, demolished, removed, or otherwise disposed of, except as follows:
(i) To the extent permitted by law, a City may sell or exchange
at any time and from time to time any property or facilities
constituting a part of its City System only if(a) it shall determine
such property or facilities are not useful in the operation of its City
System, (b) the proceeds of such sale are $250,000 or less, or it
shall have received a certificate executed by the City Manager
stating, in his/her opinion, that the fair market value of the property
or facilities exchanged is $250,000 or less, (c) if such proceeds or
fair market value exceeds $250,000 it shall have received a
certificate executed by the City Manager stating his/her opinion
that the sale or exchange of such property or facilities will not
impair the ability of the Cities to comply during the current or any
future year with the provisions of Section 9.3(b) of this Contract,
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or (d) the sale or exchange will not adversely affect the
excludability of interest on the Bonds from the gross income of the
owners thereof. The proceeds of any such sale or exchange not
used to acquire other property necessary or desirable for the safe or
efficient operation of its City System shall forthwith, at the option
of the City be used as provided in the ordinances of the City
authorizing its Utility Bonds.
(ii) To the extent permitted by law, a City may lease or make
contracts or grant licenses for the operation of, or make
arrangements for the use of, or grant easements or other rights with
respect to, any part of its City System, provided that any such
lease, contract, license, arrangement, easement or right(a) does not
impede the operation by such City of its City System and (b) does
not in any manner impair or adversely affect the rights or security
of the BCRUA under this Contract; and provided, further, that if
the depreciated cost of the property to be covered by any such
lease, contract, license, arrangement, easement, or other right is in
excess of $500,000, the affected City shall have received a
certificate executed by the City Manager that the action of the such
City with respect thereto does not result in a breach of the
conditions under this subsection (ii). Any payments received by the
affected City under or in connection with any such lease, contract,
license, arrangement, easement or right in respect of one or more
City System or any part thereof shall constitute gross revenues of
the respective City System or Systems.
ARTICLE X
CONTINUING DISCLOSURE
Section 10.1 Annual Reports. Following the issuance of Bonds of any series by the BCRUA
for the benefit of the appropriate City, the offer or sale of which is not exempt from the Rule and,
until the City is no longer obligated, contingently or otherwise, to make Bond Payments in
respect of the Bonds of such series issued for such City, each City undertakes to and shall
provide annually to each NR-MSIR and any SID, within six months after the end of each Fiscal
Year, (i) financial information and operating data of the general type included in the Sale and
Offering Documents for the Bonds of such series, as specified in its approval of such Sale and
Offering Documents pursuant to Section 4.1 hereof and (ii) audited general purpose financial
statements of the City, if then available. Any financial statements so to be provided shall be (i)
prepared in accordance with generally accepted accounting principles for governmental agencies
or such other accounting principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (ii) audited, if the City commissions an audit of such
statements and the audit is completed within the period during which it must be provided. If the
audit of such financial statements is not complete within such period, then the City shall provide
unaudited financial statements within the required period, and shall provide audited financial
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statements for the applicable Fiscal Year to each NRMSIR and any SID, when and if the audit
report on such statements become available.
If a City changes its Fiscal Year, the City will notify the Trustee, each NRMSIR, and any SID in
writing of the change(and of the date of the new Fiscal Year end) prior to the next date by which
the City otherwise would be required to provide financial information and operating data
pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may be set
forth in full in one or more documents or may be incorporated by specific reference to any
document or specific part thereby(including an official statement or other offering document, if
it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID
or filed with the SEC. Copies of such information and operating data shall be furnished to the
BCRUA at the same time the information and data are furnished to any NRMSIR or SID.
Section 10.2 Material Event Notices.
(a) The following are the events with respect to any series of Bonds which the
BCRUA must agree to disclose in a timely manner pursuant to the Rule, if"material" under
applicable federal securities laws and regulations promulgated thereunder.
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
(vii) Modifications to rights of holders of the Bonds;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the Bonds;
and
(xi) Rating changes.
(b) Each City shall,.promptly after obtaining actual knowledge of the occurrence of
any of the events enumerated in (a) above, notify the BCRUA of such event and provide all
information in the format required to satisfy the requirements of the Rule. Further, each City
shall provide, in a timely manner, notice of any failure to provide audited financial statements,
financial information, and operating data in accordance with Section 10.1 hereof to each
NRMSIR and each SID.
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Section 10.3 Limitations Disclaimers, and Amendments.
(a) Each City shall be obligated to observe and perform the covenants specified in
this Article in respect of its Bonds of any series for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Bonds of such series within the meaning of the
Rule, except that the City in any event will give notice of any deposit made in accordance with
the Bond Resolution that causes Bonds of such series no longer to be outstanding.
(b) The provisions of this Article are for the sole benefit of(and may be enforced by)
the owners and beneficial owners of the Bonds of such City, and nothing in this Article, express
or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to
any other person. Each City undertakes to provide only the financial information, operating data,
financial statements, and notices which they have expressly agreed to provide pursuant to this
Article and does not hereby undertake to provide any other information that may be relevant or
material to a complete presentation of the its financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Article or otherwise,
except as expressly provided herein. Each City makes no representation or warranty concerning
such information or its usefulness to a decision to invest in or sell Bonds at any future date.
(c) UNDER NO CIRCUMSTANCES SHALL A CITY BE LIABLE TO THE
OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY A CITY WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
(d) No default by a City in observing or performing its obligations under this Article
shall comprise a breach of or default under this Contract for purposes of any other provision of
this Contract.
(e) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise
limit the duties of the BCRUA or each City under federal and state securities laws.
(f) The provisions of this Article may be amended by the BCRUA and the Cities
from time to time to adapt to changed circumstances that arise from a change in legal
requirements, a change in law, or a change in the identity, nature, status, or type of operations of
the BCRUA or the appropriate Cities, but only if
(i) the provisions of this Article, as so amended, would have permitted an
underwriter to purchase or sell Bonds of the applicable series in the primary
offering of the Bonds of such series in compliance with the Rule, taking into
account any amendments or interpretations of the Rule since such offering as well
as such changed circumstances, and
(ii) either
(1) the owners of a majority in aggregate principal amount (or any greater
amount required by any other provision of this Contract that authorizes
such an amendment)of the outstanding Bonds of each such series affected
consent to such amendment or
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(2) an entity that is unaffiliated with the BCRUA or the appropriate Cities
(such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the owners and
beneficial owners of the Bonds of such series and is permitted by the
terms of the Article.
If the BCRUA and the Cities so amend the provisions of this Article in connection with the
financial or operating data which the Cities are required to disclose under Section 10.1 hereof,
the appropriate Cities shall provide a notice of such amendment to be filed in accordance with
Section 10.2(b) hereof, together with an explanation, in narrative form, of the reason for the
amendment and the impact of any change in the type of financial information or operating data
to be so provided. The BCRUA and the appropriate Cities may also amend or repeal the
provisions of this Article if the SEC amends or repeals the applicable provision of the Rule or a
court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only
if and to the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering of each series of Bonds.
ARTICLE XI
COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS
Section 11.1 Compliance with Federal, State and Local Laws. In addition to the provisions of
Section 9.6 hereof, 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
government authority having or asserting jurisdiction. The Contract is specifically subject to the
rules of the TCEQ, and the BCRUA shall have the right to terminate this Contract upon a City's
non-compliance with the rules promulgated by the TCEQ, but such termination shall only affect
the non-complying City; provided however, such termination shall not affect the non-complying
City's obligation to pay Bond Payments in accordance with this Contract.
Section 11.2 _Recordkegping and Reporting. The BCRUA shall maintain records on site in
accordance with applicable State laws.
(a) Records to be maintained by the BCRUA include:
(i) copies of notifications made to the TCEQ concerning water
systems;
(ii) as applicable, copies of contracts made with each water
user;
(iii) records of volume of treated water delivered to each water
user per delivery; and
(iv) water quality analyses.
(b) The BCRUA shall report to the TCEQ as required by law. All costs of compliance
with the rules of the TCEQ shall be paid by the BCRUA, but such costs shall be considered an
Operation and Maintenance Expense_
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ARTICLE XII
GENERAL PROVISIONS
Section 12.1 Participation by the Parties. The BCRUA and each City represents to the others
that it is empowered by law to participate in the acquisition, construction, and financing of the
BCRUA Project, 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 BCRUA Project
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. The BCRUA and each City agree 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 12.2 Insurance.
(a) The BCRUA agrees to cant'public liability insurance on the BCRUA Project for
purposes and in amounts which ordinarily would be carried by a privately owned utility company
owning and operating such facilities, except that the BCRUA shall not be required to carry
liability insurance except to insure itself against risk of loss due to claims for which it can, in the
opinion of the BCRUA's legal counsel,-be potentially liable considering relevant governmental
immunities of the Cities and the BCRUA. The BCRUA shall also carry property casualty
insurance in the amount of the replacement value of all improvements and personal property
connected with the BCRUA Project(less a deductible comparable to the deductible on the Cities'
property insurance for Cities property generally).
All premiums for such insurance shall constitute an expense of the BCRUA Project but may be
paid out of the proceeds of the Bonds to the extent that such proceeds are available. In the event
the BCRUA is required to pay a deductible with respect to a claim under any such policy, the
amount of such deductible shall constitute an expense and shall be paid by the Cities.
(b) The BCRUA shall require the contractor or contractors employed for construction
of the BCRUA Project to carry insurance coverage throughout the construction period in at least
the following amounts:
(i) Workers'_Compensation: State law limits;
(ii) General Liability (including contractual liability) and Automobile
Liability: One million dollars ($1,000,000.00) per person and per occurrence for
bodily injury and One million dollars ($I,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 famished with a certified copy of such effective policy of insurance prior to
commencement of construction. Such insurance policies shall name the BCRUA and the Cities
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as additional insureds, and the BCRUA 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 BCRUA has been given thirty(30) days prior written notice of such event.
(c) The insurance required by this section may be modified by written agreement of
the Cities and the BCRUA, in accordance with good business practice. Any questions about the
scope of coverage required hereunder shall be resolved by written agreement between the Cities
and the BCRUA. The Parties can agree to substitute an owner controlled insurance program for
any of the above specified insurance requirements.
Section 12.3 Force Majeure. If by reason of Force Majeure any party hereto shall be rendered
unable wholly or in part to carry out its obligations under this Contract, other than the obligation
of each City to make the payments required under Sections 4.5 and 9.2 of this Contract, which
payments will continue irrespective of a Force Majeure event, then if such party shall give notice
and full particulars of such Force Majeure in writing to the other party within a reasonable time
after the occurrence of the event or cause relied on, the obligation of the party giving such notice,
so far as it is affected by such Force Majeure, 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, war, strikes, fires, explosions or other causes that are beyond the
reasonable control of the party claiming such inability and that by exercise of due foresight such
party could not reasonably have been expected to avoid and which by exercise of all reasonable
due diligence such party is unable to overcome_
Section 12.4 Unconditional Obligation to Make Payment. Recognizing the fact that the Cities
urgently require the facilities and services of the BCRUA Project, and that such facilities and
services are essential and necessary for actual use and for standby purposes, and recognizing the
fact that the Bond Payments to be received from each City will be the primary source of funds
available to_the BCRUA and the Trustee to pay the Bonds and other BCRUA Project Costs, and
recognizing the fact that purchasers of Bonds will rely on the obligation of the Cities to make
Annual Payments with respect to their series of Bonds in accordance with the provisions of this
Contract, each City hereby waives all rights of set-off, recoupment, counterclaim, suspension,
deferment, reduction, and amendment, with respect to making its Annual Payments against the
BCRUA, the Trustee, and any other direct or indirect recipients of Annual Payments, and each
City agrees that it shall make its appropriate Annual Payment even if no Bonds are issued for its
benefit by the BCRUA and if any Bonds are issued, each City shall be unconditionally obligated
to pay its Annual Payments as provided and determined by this Contract, regardless of whether
or not the BCRUA actually acquires, constructs, or completes the BCRUA Project, or the
portions thereof designated for its use, or breaches any obligation on its part hereunder, and
whether or not each City actually uses the BCRUA Project, or the portions thereof designated for
its use, whether due to Force Majeure or any other reason whatsoever, regardless of any other
provisions of this Contract, any other contract or agreement between any of the Parties hereto.
This covenant by each City shall be for the benefit of and enforceable by the owners of the
Bonds and/or by the BCRUA.
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.
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Section 12.5 Tenn of Contract. This Contract shall be effective from and after its date, and this
Contract shall continue in force and effect until the principal of and interest on all Bonds shall
have been paid or provision for the payment of all of the Bonds has been made in accordance
with the terms of each Bond Resolution and thereafter continue in force and effect during the
entire useful life of the BCRUA Project. When the principal of and interest on all Bonds shall
have been paid or provision for the payment of all of the Bonds has been made in accordance
with the terms of the Bond Resolution and all amounts owed to the BCRUA, the Trustee, or any
other person hereunder have been paid, all money held by the Trustee or the BCRUA pursuant to
the terns of the Bond Resolution shall be paid to the BCRUA. Upon the termination of this
Contract, the BCRUA will charge each City a per gallonage charge (or other published rate) for
treated water delivered to the Cities in accordance with the BCRUA's then existing rate
schedule.
Section 12.6 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
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.
Section 12.7 Addresses and Notice. Unless otherwise provided herein, any notice,
communication, request, reply, or advice (herein severally and collectively, for convenience,
called "Notice") herein provided or permitted to be given, made, or accepted by any party to the
other parties must be in writing and may be given or be served by depositing the same in the
United States mail postpaid and registered or certified and addressed to the party to be notified,
with return receipt requested, or by delivering the same to an officer of such party, or by prepaid
telegram when appropriate, addressed to the party to be notified. Notice deposited in the mail in
the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise
stated herein, from and after the expiration of three days after it is so deposited. Notice given in
any other manner shall be effective only if and when received by the party to be notified. For the
purposes of notice, the addresses of the Parties shall, until changed as hereinafter provided, be as
follows:
If to the BCRUA:
President, Board of Directors
Brushy Creek Regional Utility Authority, Inc.
221 E. Main St.
Round Rock, Texas 78664
If to Cedar Park:
City Manager
600 North Bell Blvd.
Cedar Park,Texas 78613
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If to Leander:
City Manager
P.O. Box 319
Leander,Texas 78646-0319
If to Round Rock:
City Manager
221 E. Main St.
Round Rock,Texas 78664
The BCRUA and the Cities hereto shall have the right from time to time and at any time to
change their respective addresses and each shall have the right to specify as its address any other
address by at least fifteen(15)days ' written notice to the other Parties.
Section 12.8 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 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
and the BCRUA 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 either party to carry out their
respective obligations under or contemplated by this Contract.
Section 12.9 Severability. The Parties hereto specifically agree that in case any one or more of
the sections, subsections, provisions, clauses, or words of this Contract or the application of such
sections, subsections, provisions, clauses, or words to any situation or circumstance should be,or
should be held to be, for any reason, invalid or unconstitutional, under the laws or constitutions
of the State or the United States of America, or in contravention of any such laws or
constitutions, such invalidity, unconstitutionality, or contravention shall not affect any other
sections, subsections, provisions, clauses, or words of this Contract or the application of such
actions, subsections, provisions, clauses, or words 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 12.10 Remedies Upon Default. It is not intended hereby to specify (and this Contract
shall not be considered as specifying) an exclusive remedy for any default, but all such other
remedies (other than termination) existing at law or in equity may be availed of by either party
hereto and shall be cumulative. Recognizing that failure in the performance of the Cities'
obligations hereunder could not be adequately compensated in money damages alone, each City
agrees in the event of any default on its part that the BCRUA and the owners of the Bonds as
third-party beneficiaries 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. As long as an Insurer is not in default on the related Insurance
Policy for a series of Bonds, the Insurer of a series of Bonds shall be deemed to be the Owner of
36
such Bonds insured by it for purposes of enforcing the provisions of this Contract, so long as no
event of default exists. Notwithstanding anything to the contrary contained in this Contract, any
right or remedy or any default hereunder, except the right of the BCRUA to receive the Annual
Payments and the provision of Section 4.9 hereof, which shall never be determined to be waived,
shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in
equity within two (2) years plus one (1) day after the occurrence of such default. No waiver or
waivers of any breach or default (or any breaches or defaults) by any party hereto or of the
performance by any other party of any duty or obligation hereunder shall be deemed a waiver
thereof in the future, nor shall any such waiver or waivers be deemed or construed to be a waiver
of subsequent breaches or defaults of any kind, character or description, under any
circumstances.
Section 12.11 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 administrative
offices of the BCRUA are located. It is specifically agreed among the Parties to this Contract 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 12.12 Statutory Authority. In entering into this Contract and performing all duties and
obligations hereunder, the Cities and the BCRUA exercise their authority under and in
accordance with the State Constitution and laws including, but not limited to, the Act, Chapter
402, as amended, Texas Local Government Code; 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 12.13 Indemnification. FOR SO LONG AS THE BONDS ARE OUTSTANDING AND
UNPAID,AND ALSO WITH RESPECT TO ANY CLAIM THAT MAY ARISE OUT OF THE
OFFER AND SALE OF THE BONDS OF ANY SERIES OR THE ALLEGED
MISSTATEMENT OR OMISSION OF A MATERIAL FACT IN OR FROM ANY SALE AND
OFFERING DOCUMENT RELATING TO ANY OF THE CITIES USED IN CONNECTION
THEREWITH, TO THE EXTENT PERMITTED BY LAW, EACH CITY AGREES TO
INDEMNIFY, TO THE EXTENT PERMITTED BY LAW, AND SAVE AND HOLD
HARMLESS THE BCRUA, AND THE OTHER CITIES, AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, FINANCIAL ADVISORS, ATTORNEYS, AND
EMPLOYEES, AND THE UNDERWRITERS OF ANY SUCH OFFERING AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS, AND ALL
PERSONS WHO CONTROL THE SAME WITHIN THE MEANING OF THE FEDERAL
SECURITIES LAWS, FROM AND AGAINST ALL CLAIMS THAT MAY ARISE AS A
RESULT OF ANY UNDERTAKING, ACT, OR OMISSION, WHETHER NEGLIGENT OR
NOT, WHICH IS DONE OR OMITTED TO BE DONE BY THE CITIES OR ANY OF THEIR
OFFICERS, COUNCILMEN, AGENTS, ATTORNEYS, AND EMPLOYEES, RELATING TO
THE BCRUA PROJECT OR PROVIDING INFORMATION FOR INCLUSION IN THE SALE
AND OFFERING DOCUMENTS. IF ANY SUCH CLAIM IS BROUGHT AGAINST ANY
SUCH INDEMNIFIED PERSON, THE CITIES SHALL PAY ALL COSTS INCURRED BY
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SUCH PERSON IN DEFENDING AND (SUBJECT TO APPLICABLE RULES OF
ATTORNEY CONDUCT) MAY CONTROL THE DEFENSE OF SUCH CLAIM.
Section 12.14 Contract for Benefit of the Cities. This Contract is made for the exclusive benefit
of the Cities (except with respect to Section 9.66) which is solely for the benefit of the owners of
the Bonds issued by the BCRUA for a particular City), the BCRUA, the Trustee, the owners of
the Bonds, the parties to any Credit Agreements, the underwriters of any offering of and
remarketing agent and tender agent, if any, for any Bonds, and their respective successors and
assigns herein permitted, and not for any third party or parties other than the BCRUA (including
its officers, directors, employees, agents, and attorneys), the Trustee, the owners of the Bonds,
the Cities, and the parties to any Credit Agreements, the underwriters of any offering of and
remarketing agent and tender agent, if any, for any Bonds, the other persons indemnified by
Section 12.13 hereof, and their respective successors and assigns herein permitted, any rights or
remedies under or by reason of this Contract.
Section 12.15 Succession and Assignment. This Contract is binding on and inures to the benefit
of the Parties 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 contained in the Bond Resolution and (ii) prior
written notice to and approval by the other Parties, which consent may be withheld without
cause. The provisions of this Section do not affect the assignment of the BCRUA's rights under
this Contract to a Trustee pursuant to Section 4.8.
Section 12.16 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 BCRUA and the
Cities.
Section 12.17 Indeyendent Contractor. As among the Parties, the BCRUA shall be solely
responsible for the operation of the BCRUA Project to produce and treat raw water and to deliver
treated water to the Cities pursuant to this Contract (except to the extent the BCRUA and the
Cities enter into agreements for the Cities to operate parts of the BCRUA Project); and the
BCRUA shall be an independent contractor in the operation of the BCRUA Project.
Section 12.18 Financing Statement. Each City agrees at the request of the BCRUA to execute a
financing statement in a form satisfactory to the BCRUA and meeting the requirements of the
Texas Business and Commerce Code to perfect any security interest created hereby. The Cities
further agree to execute such continuation statements or other documents as may be necessary to
maintain any such security interest.
Section 12.19 Entire Agreement. This Contract constitutes the entire agreement among the
Parties with respect to the matters described herein.
Section 12.20 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 12.21 _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.
38
IN WITNESS WHEREOF, the Parties 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.
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
By:
Scott Rhode, President
Attest:
By:
John Cowman,Secretary
a= CITY OF CEDAR PARK, TEXAS
t=, By:
-_ Bob Lemon, Mayor
Attest:
By: �
LeAnn Quinn, City Secretary
39
CITY OF LEANDER,TEXAS
By:
John Cowman, Mayor
Attest:
By:
Debbie Haile, City Secretary
40
CITY OF ROUND ROCK,TEXAS
By:
Alan McGraw, Mayor
Attest:
By:
Sara White, City Secretary
41
EXHIBIT A
Contract between City of Round Rock and LCRA
for Lake Travis Water
42
EXHIBIT B
Contract between City of Cedar Park and LCRA
for Lake Travis Water
43
EXHIBIT C
Contract between City of Leander and LCRA
for Lake Travis Water
44
EXHIBIT D
Cities' Reserved Capacity and Cost Allocation in BCRUA Project Components
45
EXHIBIT C
TWDB Financing Agreement
BCRUAWP108_ResApprovgBylsws C—t
EEXHIBIT
11011
1
Draft 8/21108
FINANCING AGREEMENT
THIS FINANCING AGREEMENT (Agreement) is entered into between the TEXAS
WATER DEVELOPMENT BOARD (Board), an agency of the State of Texas, and the
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC., local government corporation
created, and acting on behalf of, the cities of Cedar Park, Leander and Round Rock, Texas
pursuant to Subchapter D of Chapter 431 of the Texas Government Code as amended #
(Borrower).
RECITALS
WHEREAS, the Board adopted Resolution No. 08-03 on January 28, 2008, making a
commitment to the Borrower for financial assistance in the amount of $309,755,000 from the
Financial Assistance Account of the Development Fund II (DFund II) administered by the Board.
WHEREAS, the Borrower intends to sell the Board the Borrower's Contract Revenue
Bonds, proposed as three separate series as follows $24,970,000* Brushy Creek Regional Utility
Authority, Inc. City of Cedar Park Contract Revenue Bonds (Brushy Creek Regional Water
Treatment and Distribution Project), Series 2009A; $91.180,000* Brushy Creek Regional Utility
Authority Inc. City of Leander Contract Revenue Bonds (Brushy Creek Regional Water
Treatment and Distribution Project) Series 2009B and $65,870,000* Brushy Creek Regional
Utility Authority, the City of Round Rock Contract Revenue Bonds (Brushy Creek Regional
Water Treatment and Distribution Project), Series 2009C (collectively, Borrower Bonds),
described on Attachment A attached hereto, to fund the first phase of the Borrower's regional
water supply project described in Board Resolution No. 08-03; and
WHEREAS, DFund II is funded, in part, with proceeds of the Board's Water Financial
Assistance Bonds, which is used to provide financial assistance, under Texas Water Code
§17.959 and Texas Constitution Article III, Section 49-d-8; and
WHEREAS, DFund lI is funded, in part, with money received as repayment of financial
assistance provided from DFund 11, which is used to pay the principal and interest on the Board's
Water Financial Assistance Bonds, under Texas Constitution, Article II1, Section 49-d-8(e); and
WHEREAS, Condition No. 13 of Board Resolution 08-03 provides that the commitment
is contingent on a future sale of bonds or on the availability of funds on hand; and
WHEREAS, the Board intends to issue Water Financial Assistance Bonds in order to
enable it to provide financial assistance from DFund 11 to the Borrower; and
WHEREAS, the Board has a reasonable expectation that the proceeds from the Water
Financial Assistance Bonds will be loaned only to the Borrower, and will not be loaned as part of
a pooled fund; and
*Not to exceed principal amount
WHEREAS, the Board and the Borrower desire to enter into this Agreement to set forth
the obligations of the parties with respect to the Board's intent to issue Water Financial
Assistance Bonds to provide financial assistance from DFund II solely to the Borrower, and the
Borrower's intent to issue its Borrower Bonds to the Board;
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants
herein contained, the Board and the Borrower hereby agree as follows:
AGREEMENT
Section 1. Loan Commitment; Schedule. The Board hereby commits to lend
$182,020,000* as evidenced by Attachment A to the Borrower from DFund II, which loan will
be evidenced by the Board's purchase of the Borrower Bonds for deposit in the Financial
Assistance Account of DFund II. The Borrower hereby commits to borrow $182,020,000* from
DFund II, which loan will be evidenced by the Borrower's sale of the Borrower Bonds identified
in Attachment A for deposit in the Financial Assistance Account of DFund II. Each party agrees
to use its best efforts to take actions as may be required by such party in order to effectuate the
purchase and sale of the Borrower Bonds by January 8, 2009.
Section 2. Interest Rates. The loan to be made from Water Financial Assistance Bonds
specifically issued for the Borrower will be made at a yield similar to the rate the Board received
in the open market the day the Board sold the Water Financial Assistance Bonds, but which also
recovers the Board's costs of issuance associated with the issuance of such bonds. By 12:00 p.m.
(Central Standard Time) on the business day preceding the date on which the Board intends to
execute a bond purchase agreement relating to the Board's Water Financial Assistance Bonds
described herein (Bond Purchase Agreement), the Development Fund Manager shall notify the
Borrower of the rates (Initial Rates) to be bome by the Borrower Bonds, which rates shall be
subject to approval by the Borrower. Unless such rates are approved in writing by the Borrower
by 2:00 p.m. (Central Standard Time) on the business day preceding the date on which the Board
intends to execute the Bond Purchase Agreement, neither the Board nor the Borrower shall have
any continuing obligation hereunder.
Section 3. Closing. The Borrower agrees, subject to receipt of the Texas Attorney
General approval, to close on the Borrower Bonds described in Attachment A within 30 days
after the Water Financial Assistance Bond proceeds are delivered to the Board by the
Underwriters. If the Borrower fails to close on the sale of its Borrower Bonds within 30 days
after the Water Financial Assistance Bond proceeds are delivered to the Board by the
Underwriters, the Borrower agrees to pay the Board the amount of principal and interest the
Board pays on its Water Financial Assistance Bonds. Such payments shall be made to the Board
on or before the payment dates on the Board's debt service schedule for its Water Financial
Assistance Bonds, and continuing until such time as the Borrower closes its Borrower Bonds or
the Board is no longer required to pay principal and interest on its Water Financial Assistance
*Not to exceed principal amount
Bonds. Beginning 30 days after the Water Financial Assistance Bond proceeds are delivered to
the Board by the Underwriters, the Board may use the Water Financial Assistance Bond
proceeds to provide financial assistance to other entities or to defease the Water Financial
Assistance Bonds and the amount of principal and interest the Borrower must pay the Board
under this Section may be reduced by the amount of return funds the Board receives from the
other entities.
Section 4. Termination.
A. The parties hereto agree that the Board's obligation to lend money to the
Borrower from DFund II is contingent upon the purchase of the Board's Water Financial
Assistance Bonds by the underwriters thereof (Underwriters) pursuant to the Bond Purchase
Agreement. Accordingly, if the Underwriters fail to purchase the Board's Water Financial
Assistance Bonds pursuant to the Bond Purchase Agreement, the Board, upon delivery of written
notice thereof to the Borrower, may extend or terminate this Agreement together with all of its
obligations and duties hereunder without incurring any cost, fee or penalty therefor.
B. The Borrower may terminate this Agreement by delivery of written_notice to the
Board at any time prior to any purchase of-the Board's Water Financial Assistance Bonds by the
Underwriters, provided that the Borrower agrees to compensate the Board for its costs related to
the preparations for bond issuance within 30 days of the Board's written notification to the
Borrower of such costs.
Section 5. Redemption of Outstanding Debt. If proceeds of the Borrower Bonds are to
be used, in whole or in part, to redeem outstanding bonds, commercial paper, or other interim
financing issued by the Borrower, the Borrower agrees that it will not take or fail to take any
action that will cause the Board's Water Financial Assistance Bonds to be considered to be
advance refunding bonds under Section 148 of the Internal Revenue Service Code of 1986, as
amended. Specifically, the Borrower agrees to redeem any such outstanding bonds, commercial
paper, or other interim financing within ninety (90) days of the date of delivery of the Board's
Water Financial Assistance Bonds and to take such other action as shall be required to comply
with this Section.
Section 6. Notices. All notices, agreements or other communications required hereunder
shall be given, and shall be deemed given, when delivered in writing to the address or telecopier
number of the identified party or parties set forth below:
Texas Water Development Board Brushy Creek Regional Utility Authority, Inc.
Nancy Banks Marstiller, Development Fund Chris Lippe
Manager 221 E. Main Street
P.O. Box 13231 Round Rock,Texas
Austin, Texas 78711-3231 78664
Telephone (512) 475-2091 Telephone(512)
Facsimile(512) 475-2053 Facsimile
*Not to exceed principal amount
Section 7. Severability. In the event any provision of this Agreement shall be held
illegal, invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate, render unenforceable or otherwise affect any other provisions hereof.
Section 8. Amendments, Supplements and Modifications. This Agreement shall not be
amended, supplemented or modified except by a written instrument executed by the Board and
the Borrower.
Section 9. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
Section 10. State Audit. By executing this Agreement, the Borrower accepts the
authority of the State Auditor's Office, under direction of the legislative audit committee, to
conduct audits and investigations in connection with any and all state fluids received pursuant to
this Agreement. The Borrower shall comply with and cooperate in any such investigation or
audit. The Borrower agrees to provide the State Auditor with access to any information the State
Auditor considers relevant to the investigation or audit. The Borrower also agrees to include a
provision in any subcontract related to this Agreement that requires the subcontractor to submit
to audits and investigation by the State Auditor's Office in connection with any. and all state
funds received pursuant to the subcontract.
Section 11. Force Majeure. Either party may be excused from performance under this
contract for any period when performance is prevented as the result of an act of God, strike, war,
civil disturbance, epidemic, or court order, provided that the party experiencing the event of
Force Majeure has prudently and promptly acted to take any and all steps that are within the
party's control to ensure performance and to shorten the duration of the event of Force Majeure.
The party suffering an event of Force Majeure shall provide notice of the event to the other
parties as soon as practicable but not later than 36 hours after the termination of the event.
Subject to this provision, such nonperformance shall not be deemed a default or a ground for
termination.
Section 12_ Effective Date. This Agreement shall be effective as of the date of the last
signature below.
Section 13. Binding Agreement. The respective commitments of the Board and the
Borrower set forth above shall be binding upon the Board and the Borrower upon both parties'
execution of this Agreement.
BRUSHY CREEK REGIONAL UTILITY AUTHORITY, INC.
*Not to exceed principal amount
By:
Name:
Title:
Date:
Accepted:
TEXAS WATER DEVELOPMENT BOARD
By:
Name: Nancy Banks Mar-stiller
Title: _ Development Fund Manager
Date:
ATTACHMENT A
DESCRIPTION OF BORROWER BONDS
Title of Borrower Bonds Brushy Creek Regional Utility Authority, Inc. Contract Revenue
Bonds, Series 2009 A, B, and C as set forth below
Project Name First Phase, Regional Water Supply Project as further described in
Master Contract
Project Number
Aggregate Principal Amount of Borrower Bonds
Consisting of:
Brushy Creek Regional Utility Authority, Inc. City of Cedar Park Contract Revenue Bonds
*Not to exceed principal amount
(Brushy Creek Regional Water Treatment and Distribution Project), Series 2009A,
$24,9700,000*
Brushy Creek Regional Utility Authority, Inc. City of Leander Contract Revenue Bonds (Brushy
Creek Regional Water Treatment and Distribution Project), Series 20098, $91,180,000*
Brushy Creek Regional Utility Authority, Inc. City of Round Rock Texas Contract Revenue
Bonds (Brushy Creek Regional Water Treatment and Distribution Project), Series 2009C,
$65,870,000*
Anticipated Closing Date January 8, 2009
Dated Date: January 1, 2009
Maturity Schedule: [To Come]
Maturity Principal Amount
*Not to exceed principal amount