R-85-777 - 10/18/1985WHEREAS, Regional Sewer has been a goal of the City of
Round Rock for the past several years; and
WHEREAS, a proposed contract among the interested
parties has been submitted for approval; and
WHEREAS, the City Council of the City of Round Rock
wishes to enter into said wastewater disposal contract; NOW,
THEREFORE
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND
ROCK, TEXAS
That the Mayor of the City of Round Rock, Texas is
hereby authorized and directed to execute on behalf of the
City a contract for wastewater disposal with Brushy Creek
Water Control and Improvement District #1 of Williamson and
Milam Counties, the City of Austin, Williamson County
Municipal Utility District #2 and Williamson County
Municipal Utility District #3, a copy of said contract being
attached hereto and incorporated herein for all purposes.
RESOLVED this the 18th day of October, 1985.
ATTEST:
RESOLUTION NO. 7777g
/ g
J. NNE LAND, City Secretary,
MIKE ROBINSON, Mayor
City of Round Rock, Texas
AGREEMENT REGARDING CONSTRUCTION, OWNERSHIP,
PURCHASE, AND USE -OF SPECIFIC WASTEWATER °
TRANSPORTATION FACILITIES
THE STATE OF TEXAS :
COUNTY OF WILLIAMSON
This agreement ( "Agreement ") regarding the construction,
ownership, purchase, and use of certain wastewater transportation
improvements. is made and entered into as of the - day of
October, 1986, by and between the following:
BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF
WILLIAMSON AND MILAM . COUNTIES ( "District "), a political
subdivision of „the State of Texas organized as a conservation and
reclamation district under authority of Article 16, Section 59 of
the Texas Constitution,
CITY OF AUSTIN ( "Austin "), a municipal corporation organized
under authority ,of Article 11, -. Section, 5 of the Texas
Constitution, •
CITY OF ROUND'ROCK ( "Round Rock"), 'a municipal corporation
organized under authority of Article 11, Section 5 of the Texas
Constitution,
WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 ( "MUD
2 "), a political subdivision of the State of Texas, organized
under authority.'of Article 16,' 'Section. 59 of the Texas
Constitution, -
WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 ( "MUD
3 "), a political subdivision the •State of Texas, organized
under authority" of Article ,16, Section 59 of the Texas
Constitution, • '
FERN BLUFF MUNICIPAL UTILITY DISTRICT ( "Fern Bluff "), a
political subdivision of the State of organized' under
authority ' of Article 16, ' Section 59 of t}ie,.Texas Constitution,
and
BILL MILBURN, INC. ( "Milburn "), a Texas corporation.
RECITALS
1. The District previously signed an agreement with
Austin, Round Rock MUD 2 and MUD 3, which agreement is captioned
.uy+ue
"Wastewater Disposal Contract" and dated December 16, 1985. In
this Agreement, Austin, Round Rock, MUD 2 and MUD 3 are
collectively referred to as the ' "Customers." - The Wastewater
Disposal Contract provides for construction and operation by
the District of :a `regionalized wastewater transportation and
treatment system owned by the Customers which system would serve
the western portion of'the Brushy Creek watershed in Williamson
County, Texas. In this Agreement, the wastewater transportation
and treatment system is referred to as the "District's System."
2. The District's, System is described in the Wastewater
Disposal Contract •,by reference' to 'an engineering report, which
report may be modified from time to time. •Integral parts of
Phases 1A and '1B of the •District's System are the Onion Creek
Pumpover and Onion Creek Interceptor, Phase 1 and 2, all projects
being subsequently described in Section 1.01 of this Agreement.
The District proposes to use the Onion Creek Pumpover and the
Onion Creek Interceptor to transport wastewater from the Brushy
Creek watershed west of Round Rock to Round Rock's wastewater
collection system in the Onion Creek watershed on an _interim
basis until the• District can complete construction of the
District's treatment facilities and the facilities which are
proposed to transport the wastewater from the Brushy Creek
watershed through Round Rock's corporate limits to the District's
treatment facilities.
3. Milburn proposes to immediately construct the initial
phase of the District's proposes Onion Creek'Pumpover, Phase 1 of
the District's Onion Creek Interceptor, and a 12 -inch force main,
in an effort to 'receive •wastewater transportation and treatment
service for Milburn's property located within the boundaries of
Fern Bluff by December 15, 1986.• Milburn also proposes to convey
the initial phases of the Onion Creek Pumpover and District's
Onion Creek Interceptor•, Phase 1 constructed' by Milburn to the
•
District, if and when the District•pays' Milburn a portion of the
costs paid by Milburn for constructing the portions of the Onion
Creek Pumpover and District's Onion Creek Interceptor, Phase 1.
3- 886.17 - 2 (10 -8 -86)
•8 r. kk ... ...
4. Fern Bluff is located within Austin's extraterritorial
jurisdiction, so Fern Bluff is eligible to receive wastewater
collection, treatment,. and disposal service, through Austin's
participation in the District's System.
5. The general location of the Onion Creek Pumpover,
District's Onion Creek Interceptor, 12 -inch force main, and point
of connection to Round Rock's existing Onion Creek interceptor is
shown on the vicinity map attached to this Agreement as Exhibit
attached hereto and incorporated herein for all purposes.
AGREEMENT
For and in considerationof.the mutual promises, covenants,
obligations,,, and, benefits of this Agreement, the District,
Customers, Fern Bluff, and'Milburn contract and agree as follows:
ARTICLE I.
CONSTRUCTION OF FACILITIES
Section 1.01. DESCRIPTION OF FACILITIES. As used in this
Agreement, the terms and phrases beginning with capitalized
letters listed below shall be defined as follows, unless the
context clearly indicates to the contrary: ■
(a) FACILITIES. The•term "Facilities" shall mean both the
"District Facilities" and "Milburn Force Main."
(b) MILBURIV FORCE MAIN. The phrase "Milburn Force Main"
shall mean the 12 -inch force main approximately 5808 feet in
length which begins at the Onion Creek Force Main, parallels Farm
to Market' Road , • 3406,',. 'and . terminates at the Onion • Creek
" A, "
Interceptor, Phase 1. .
(c) DISTRICT FACILITIES. The phrase "District Facilities"
shall mean the ' "Onion Creek Lift Station," "Onion Creek Force
Main," and "Onion Creek Interceptor, Phase 1." .
(d). ONION CREEK •'PUMPOVER. The phrase "Onion Creek
Pumpover" shall mean the "Onion Creek Lift Station," "Onion Creek
Force Main" and "Onion Creek Interceptor, Phase 1."
(e) ONION. CREEK LIFT STATION: The phrase "Onion Creek Lift
Station" shall mean the project consisting of •a lift station and
related appurtenances described'in the.drawings and plans and
specifications for. District 'Contract No. 4, which drawings and
3- 886.17 - 3 (10 -8 -86)
•
•
plans and specifications are incorporated into this Agreement by
reference as if attached to this Agreement as an exhibit,
together with fee simple title to the site; an all- weather road
located within an access easement'from 'a paved road dedicated to
the public as of , the effective date of this'Agreement to the
site; permits,' licenses, easements,• rights -of -way, and land
required for.the construction, operation, maintenance, repair,
replacement and expansion,of the lift station; and all other
related appurtenances. The Onion Creek Lift Station shall
consist, by way of example and not by limitation, of the
following:' a wet -well with a ,capacity of 5000 - Living Unit
Equivalents (as '!LUEs" are defined in the • Wastewater Disposal
Contract) and an initial pumping capacity of1650'LUEs.
(f) ONION CREEK FORCE MAIN. The phrase "Onion. Creek Force
Main" shall mean the project consisting of a 16 -inch force main
approximately 3055 feet in length, as more specifically described
in the drawings and ,plans and specifications for District
Contract No'. 5,' which drawings and plans and specifications are
incorporated into this Agreement° °by reference as,.if attached to
. r ,
this Agreement as an, exhibit; together with all permits,
licenses, easements; rights -of -way, and land required for the
construction,..operation, maintenance, repair .and replacement of
the force main; and all'bther related appurtenances. The Onion
Creek Force Main begins at the Onion Creek Lift Station,
generally parallels the,eastern boundary of the Tonkawa Springs
subdivision, and terminates at the Milburn Force Main. .
(g) ONION, CREEK INTERCEPTOR, .PHASE 1.F The. phrase "Onion
Creek Interceptor,. Phase 1" shall mean the project consisting of
a 24 -inch interceptor approximately 1179 'feet in length, as shown
on the drawing and plans and specifications for District Contract
No. 5, which drawings and plans and specifications are
incorporated into, this Agreement by reference as if attached to
this Agreement as an exhibit; together with all permits,
licenses, easements, rights -of -way, and land required for the
construction, operation, maintenance, repair and replacement of
the interceptor; and all other related appurtenances. The Onion
•
y3-886.17 - 4,(10 -8 -86)
•
Creek Interceptor Phase One shall begin at the Milburn Force Main
near Farm to Market Rcad, 3406 and terminate at Round, Rock's
existing wastewater interceptor for.the Onion -Creek watershed.
(h) ONION CREEK INTERCEPTOR, PHASE 2. The phrase "Onion
Creek Interceptor, Phase'2 ",shall mean the project consisting of
a 24 -inch interceptor approximately 7920.feet length, as more
specifically described•, on the drawings' and plans and
specifications for District Contract No. 5. The Onion Creek
Interceptor, Phase 2 begins at the Onion Creek Force Main and
terminates at the beginning of the Onion Creek Interceptor, Phase
1.
Section 1.02: ,•AUTHORIZATION TO CONSTRUCT FACILITIES. By
execution of this - Agreement, District, Customers, and Fern Bluff
ti
authorize Milburn to construct •the Facilities. The District,
Customers and Fern Bluff . may terminate their respective
authorizations to, construct the Facilities in the event Milburn
defaults in the performance of this Agreement and after notice of
default and opportunity for cure „as provided by Section 5.04 of
this Agreement, if Milburn• does not .cure .the, default, during the
time allowed :for cure of default under Section 5.04 of this
Agreement, or if. Milburn does not commence construction (as
determined by' the issuance of notice to the contractor to proceed
with construction) of „ the, District Facilities within one hundred
twenty (120) days'after the date all parties have executed this
Agreement. ,Milburn agrees to proceed with due diligence to
construct the District Facilities. ' -'
•
Section 1.03. CONSTRUCTION' COSTS:. All equipment,
3- 886:17•- 5
•
materials, and - .supplies required in connection with the
construction of the Facilities shall• be acquired in the name of
Milburn. Milburn shall require the construction contractor or
contractors to construct the Facilities in a good and workmanlike
manner and to meet the requirements of all federal,• state and
local regulatory authorities and.to represent that the materials
used in construction, of the Facilities shall be free from defects
and fit for their'intended purpose. • Milburn shall promptly pay
•
when due all costs of constructing or installing the Facilities,
including the following by way of example and not by limitation:
all engineering, .surveying, materials, labor, construction,
fiscal, legal, administrative, advertising, auditing of project
costs, conveyance of Facilities to°District; and material testing
and construction_ inspection arising in connection, with the
construction of the Facilities; all costs incurred in connection
with obtaining governmental, approvals, certificates, or permits,
required as a part of.the Facilities; all insurance premiums
required of Owner in construction contracts, ad valorem taxes,
and any miscellaneous costs by Milburn attributable to the
construction of.the Facilities; and all out -of- pocket expenses
incurred by Milburn in' connection with the construction of the
Facilities. District, Customers, and Fern Bluff shall not be
liable to any contractor, engineer, attorney, materialman, or
other party employed or contracted with by Milburn in connection
with the construction of the Facilities. .
Section 1.04., ,SUPERVISION BY DISTRICT. Milburn shall
comply with the following conditions:
(a) STATUS REPORTS. Milburn,. shall° make. monthly written
status,. reports to "District regarding the construction of the
Facilities and the costs incurred' by Milburn relating .to the
construction of the Facilities.,"
(b) ENGINEER. Milburn shall employ W.C. Engineers, Inc.
who shall (1) perform or supervise construction administration by
supervising, and controlling the day -to -day activities of the
construction of the Facilities, and pursue the timely completion
of the Facilities subject to the weather, the availability of
adequate labor,.machinery and materials, and other factors beyond
the control of Milburn;.and (2) perform or supervise,construction
staking and ,resident project representation during construction
of the Facilities. Milburn shall have the right at any time to
terminate, the services of the engineer and to engage the services
of other engineers provided,- however, prior to employment of the
other engineers, Milburn shill submit the•name of the engineer
and the contract °:for engineering: services, relating to the
•
3- 886.17 - 6 (10 -8 -86) °
Facilities to the District for the District's review and
approval.
(c) PLANS AND SPECIFICATIONS AND CONTRACT DOCUMENTS.
Milburn shall obtain the District's and Bluff's approval of
the plans and specifications _and contract documents for the
Facilities. Milburn shall construct the. District Facilities in
substantial conformance with .the drawings, ' plans and
specifications, and contract documents'approved by the District.
District makes no express. warranties and disclaims'all implied
warranties, if any,. with respect to the ,drawings, plans and
.specifications, _and contract documents. In the event the
District does not, purchase the,Di,strict Facilities from Milburn
as provided by Article.Ill of this,Agreement,.Milburn shall not
be required to pay- District the. District's actual cost of
preparing the drawings, plans and specifications, and contract
documents for the District Facilities.
(d) ADVERTISEMENT OF CONSTRUCTION CONTRACT. Milburn
represents to District, Customers, and Fern Bluff that Milburn
has advertised, or shall advertise, the for bids for the
construction of the Facilities..`. Milburn further represents to
the District, `Customers, and Fern Bluff that Milburn has
advertised or .will. advertise the request for bids for the
construction ofrthe Facilities in the manner,required by law to
be followed for advertising the'request for bids on'construction
contracts by municipal utility districts and by water control and
improvement districts and as required by the rules of the Texas
Water Commission. ,
(e) AWARD OF CONSTRUCTION, CONTRACT. Milburn shall review
and approve'. or reject ,bids for the construction "of the
Facilities, provided Milburn shall approve or reject, bids in the
manner required by law to be followed by. municipal utility
districts and by water control and improvement districts and as
required by the rules of the Texas Water Commission. Milburn
represents-td District Customers, and Fern Bluff that Milburn
has submitted.or will submit to•=the Di and ,Fern Bluff all
bids received by .Milburn for.the contracts for construction of
., 3- 886..17' -• 7 (10- 8 -86)
the Facilities; • shall advise the District and Fern Bluff
regarding the 'amount of the . bids and the experience and
competency of the bidders; and shall make recommendations to the
District and Fern Bluff concerning the award of the contracts for
construction of the Facilities. Milburn shall obtain the
•
District and Fern Bluff's approval, of the award of all the
contracts for construction of the Facilities and shall file with
the Texas Water Commission' all construction drawings, plans and
specifications, - contract =documents,-. and supporting engineering
data for the construction- and installation of the. Facilities,
together with evidence that the materials had been filed with and
approved by both the District and Fern Bluff.
(f) CHANGE ORDERS: Milburn shall .review and approve or
reject all changes to the plans and specifications and change
• •
orders to the contracts for construction- of the Facilities.
Prior to Milburn's approval. of a •change to the plans or
specifications or a change. order, Milburn= shall submit the
changed plans' and specifications and change order, as approved by
Milburn's engineer, together with an explanation of the need for
the change in plans and - specifications or change order, to the
District's general manager for review and conditional approval.
Milburn shall also submit the requested changes to Fern Bluff for
approval. Consideration, of approval of the change order or
change to the plans and, specifications, by the Board of Directors
shall be considered,at the next board meetings of the District
and Fern Bluff so long as •such request for consideration is filed
with the appropriate Board not less than ten (10) days prior to
such Board - meeting. Within sixty (60) days after approval of a
change order by both District and Fern. Bluff, Milburn shall file
with the Texas Water Commission •a copy of the change, order,
together with supporting engineering data and evidence that the
change order.was filed with and approved`by the•District and Fern
Bluff. Either District or Fern Bluff may request a change in the
plans and specifications . and change order, :but Milburn shall not
be obligated••to, approve any change- in the plans and
specifications or change order requested by =either Fern Bluff or
3-886.17 8 (10- 8 -86)'
District if either: (1) except'for'unforeseen'changes that are
reasonably necessary to complete and use the Facilities as
intended by this Agreement. .the change in the plans and
specifications or change order increases the cost of construction
of the Facilities and the request for change order is not
accompanied by a- •financial guarantee acceptable to Milburn in the
amount of the cost increase; (2) the change in the plans
specifications or- change order'•increase the time schedule
completion of the Facility; or' (3) the change' in the plans
specifications or change order reduces the capacity allocated to
Milburn or Fern Bluff. •
(g) PROGRESS AND FINAL PAYMENTS. Milburn shall review and
approve or reject all requests for progress and final payments to
the contractor or contractors. Within ,seven (7) days after
receipt of an engineer's approval of a request for payment to the
contractor, Milburn shall submit to District and Fern Bluff for
review and approval such requests for progress and final
payments. Within.sixty (60) days of completion of the projects,
Milburn shall file -copies of all requests for progress and final
payments with the Texas Water Commission.
(h) ADDITIONAL CONSTRUCTION INSPECTION. If Milburn elects
to construct the .Facilities,` Milburn authorizes District,
Customers, and Fern Bluff additionally to inspect and test the
materials and to observe the test procedures .used in the
and
for
and
construction of. the Facilities; provided, however, that such
additional inspection, testing, and observation shall be
performed at the expense the party who chooses to inspect,
test, or observe materials or construction. The choice by
District, Customers, or'.Fern not to inspect, observe, or
test materials and - .procedures .used during construction of the
•
Facilities shall not be • construed to be a. waiver by District,
Customers, or Fern Bluff of any defective material or
construction.'
TESTING. 'Milburn shall notify District and Round Rock
at least twenty -four (24) hours in advance of any testing of
materials or.•construction. If District- does not observe a
' 3- 886,17 •- 9 (10-8-86)
(i)
testing because Milburn did not give District 24 -hour advance
notice of the testing, then if District requests, Milburn shall
repeat the testing or cause the testing to be repeated in the
presence of District. The cost of the repeated testing shall not
be included in the purchase price under Section 3.02 of this
Agreement.
(j) NON - COMPLIANCE. 'In the .event District, Customers or
Fern Bluff observes materials,erid procedures that do not comply
with the drawings, plans and 'specifications, and general and
special conditions approved by the District, bistrict shall
report its observations, or the observations by Customers or Fern
Bluff, to , Milburn within 24 hours of observing the alleged
deficiency and Milburn shall correct or cause to be corrected the
deficiency, if any.
(k) FINAL . PLANS. "Within sixty (60) days after Milburn's
engineer signs the certificate of.- substaritial'completion of
construction.of completed phase of the Facilities and after the
District's purchase of the Facilities, Milburn shall furnish
District the following: (lj complete "as- built" plans, together
with a certificate, „signed and sealed by a registered
professional engineer acceptable to the District, that the
Facilities shown on the plans, were constructed as shown on the
drawings and in accordance with the plans and specifications and
change orders, .if any, for the.Facilities approved by District
and also by`Fern Bluff for Milburn "Facilities; (2)`any operations
and maintenance manuals,for the Onion Creek Lift Station provided
by the , manufactuiier; and (3) a surety's performance bond which
shall secure against non- performance or defects for a period
starting with the completion of each project of the Facilities to
at least "six (6) months'after the Contractor's one year warranty
expires.
•
Section 1.05. RECORDS AND REPORTS. Milburn shall maintain
books of records and accounts in which full, true and proper
entries are made pertaining, to the construction, operation,
maintenance and repair of the Facilities or Round Rock
Facilities. The 'books and accounts will be available for
, :37886.17 - 10 (10 -8 -86)
inspection and copying by the District, Customers, and Fern Bluff
during normal business hours and under reasonable circumstances.
Upon transfer'of• the District Facilities to the District, Milburn
shall transfer such records and accounts to the District and
Milburn shall have no,further duty to maintain such records and
accounts.
Section 1.06. INDEMNITY BY MILBURN. Milburn shall
indemnify the District, Customers, and..Fern Bluff and hold the
•
District, Customers, and,'Fern Bluff-free and harmless from and
against any,and all liens, claims, debts, charges,,damages, loss,
penalties, and expenses, liquidated or,unliquidated, executed or
executory, . ,or written,, express or implied, actual or
contingent, not expressly listed or described, but which may be
asserted against the District, Customers, and Fern Bluff
resulting from occurrences or omissions occurring prior to the
time of closing_specified in Section 3.03 of this Agreement and
arising out of: ,1) any .default• under ore in violation of any
federal, state, or local statute, regulation, or order relating
to the construction of, the, Facilities; (,2) death or injury in
connection with construction of the Facilities, or'.any portion of
the Facilities; (3) any damage to property arising out of the
construction of, the Facilities; or (4) any default by Milburn
under any agreement; contract or understanding pertaining to the
construction of the Facilities,'• however caused, .except for such
'
injury, death, or property damagecaused by the negligence of the
District, Customers;' or Fern- Bluff. In „case any action or
proceeding may •be brought against the District, Customers, or
Fern Bluff for any matter for which the District, Customers or
Fern Bluff are indemnified under this Section of this Agreement,
Milburn shall assume in.full, and direct the defense of the action
or proceeding at Milburn's expense, and subsequently, Milburn
shall not be liable to District;Customers, Fern Bluff for any
legal or other. expenses, other than reasonable costs subsequently
incurred by the'District;•Customers, or Fern Bluff in connection
with the defense•of the action'or proceeding at the of
Milburn. The District, and Fern Bluff shall have the
• 3- 886.17 - 11 110 -8 -86) •
right to employ separate counsel in any action and participate in
the defense of the action or proceeding, but the fees and
expenses of the District's, Customers', or Fern ,Bluff's counsel
. K
shall be at•the expense of the District, Customers, or Fern Bluff
unless: (1) the employment, of separate counsel has been'approved
by Milburn;'orr (2) the District, Customers; or Fern Bluff has
been advised by courisel•that there may be one or more defenses
available to the District, Customers, or-Fern Bluff which are
different from or -additional .to. the defenses available to
Milburn. Milburn shall not be' liable, for any settlement by
District, Customers or Fern° Bluff of any claim, action or
proceeding effected without Milburn's consent. Milburn, prior to
construction of the Facilities shall provide proof of insurance
•
for its activities-in .the construction of the Facilities, which
insurance shall include'an umbrella policy with a Limitation of
Liability of no less than $2,000,000.00.. .
Section 1.07: RISK OF. LOSS. As between Milburn and the
District, Milburn-shall-beer•a1T risk °of loss of or damage to the
District Facilities, ,occurring prior to •the•• time of. closing
specified in Section 3.3 of this Agreement.,
. ARTICLE II.
•
. LEASE OF FACILITIES
Section 2.01. LEASE. Subject to District's right to
purchase the District Facilities•as provided by Section 3.01, and
Milburn's right to capacity within the Facilities as provided by
•
Sections 3.06.and of.this Agreement, Milburn may lease the
Facilities to'Fern Bluff. Provided, however, such lease shall in
no manner- release Milburn from.•any duties or obligations
hereunder to. the District or Customers. Upon purchase of the
Facilities by the District, such lease shall terminate.
Section 2.02. ALTERATIONS. During the term of the,lease as
provided by Section 2.01 .of, this Agreement, Milburn and Fern
Bluff shall make no alterations; improvements,' or additions to
the District Facilities, without the prior consent of•District
and Customers,••however, ',the prior consent,. of District and
Customers shall•not be required when the alteration, improvement,
3- 886.17 -'12 (10 -8 -86)
or addition is necessary "to maintain service to the public or to
avoid or mitigate damage-to the District Facilities' or other
property.' Such alterations, improvements or additions to the
District Facilities shall not be reimbursed to Milburn pursuant
to Sections 3.01 and 3.02 without the approval of the District.
Section 2.03.' ° INDEMNITY BY FERN BLUFF. Fern Bluff shall
indemnify the `District' and Customers and hold the District and
Customers free and harmless from and against any and all liens,
claims, debts, charges, 'damages, loss, penalties, and expenses,
liquidated or. unliquidated, executed or executory, oral or
written, 'express or implied, actual or contingent, not expressly
listed or described, but which••may' be asserted "against the
District and Customers resulting :from occurrences or omissions
'occurring prior to. the time of closing specified in Section 3.03
of this Agreement. and arising out'of: (1) any default under or
in violation of any federal, state or local statute, regulation,
or order relating to the operation and maintenance of the
Facilities; (2) death 'dr injury in connection with operation,
maintenance, repair, replacement or condition of the Facilities;
(3) any damage to property arising out of the operation,
maintenance, repair, replacement, or existence of the Facilities,
however caused,' except• for such injury, death, or property damage
caused by the negligence of the District or Customers; or (4) any
default by Fern' Bluff under any agreement, contract, or
understanding pertaining to the operation, maintenance, repair,
or replacement of—the •Facili;ties. •In case any action or
proceeding may be brought against'theDistrict or Customers for
any matter for which the District.or Customers are indemnified
under this Section '2.03 of this .Agreement,' Fern Bluff shall
assume in full and direct the defense of the action or proceeding
at Fern Bluff's expense; and subsequently, Fern Bluff shall not
be liable to the District or Customers for any legal or other
•
expenses, other, than reasonable costs subsequently incurred by
the District or Customers in connection with the defense of the
action or proceeding at the request, of Fern Bluff. The•District
and Customers shall` have the right' to employ separate counsel in
3- 886'.17 - 13 (10 -8 -86)
any action and participate in the defense of the action or
proceeding, but the -fees and expenses of the District's or
Customers' counsel shall be at the expense of the District or
Customers unless:- (1) .the employment of separate counsel has
been approved by.Fe'rn Bluff; or (2) the District or Customers
have been advised by counsel that there may be one or more
defenses available, to the District or Customers, which are
different from or additional to the defenses available to Fern
Bluff. Fern Bluff shall not be liable for any settlement by the
District or Customers of any claim, action, or proceeding
effected without Fern Bluff's consent. It is specifically
understood and agreed by all parties that no action shall lie
against any individual Fern Bluff director by any party to this
Agreement. • • •
Section 2..04. INSURANCE°,' Prior" to ,operation of the
Facilities by Fern Bluff, .Fern Bluff shall provide to District
1
proof of comprehensive general liability insurance in an amount
not less than $300,000.00 per year in the aggregate.
ARTICLE ILI.
• . PURCHASE OF ^FACILITIES ,d .
Section'3.01. PURCHASE OF DISTRICT FACILITIES. Subject to
the conditions specified in this Section 3.01, Milburn shall sell
the District Facilities to District and the District shall
purchase the District Facilities from Milburn upon the occurrence
of the following conditions:
(a) REQUIRED APPROVALS. Milburn obtains the District's
approval of the plans and specifications and contract documents,
award of construction .contracts, :change - orders, requests for
partial and final__payments to contractors,' and completion of
construction ,,of, the District, Facilities, which approvals shall
not be unreasonably withheld by District.
(b)- DISTRICT FUNDING.. The District. proceeds to implement
funding of Phase IA and IB of the Regional System and all funds
therefor have been received by 'the District pursuant to the terms
and conditions of Section 6:01b of the Contract. '
3- 886.17•- 14 (10 -8 -86)
•
(c) CONDITION OF FACILITIES. The District Facilities are
in as good a condition as when Milburn completed construction of
the District F the Facilities are
constructed according to plans and specifications and change
orders approved ° by the District, excepting only such normal wear
and deterioration as shall reasonably be expected from Fern
Bluff's prudent operation of the'District Facilities:
(d) CONDEMNATION AWARDS:' In the event that Milburn and /or
Fern Bluff have''found ittnecessary to acquire any land or
easement rights by condemnation and such condemnation procedure
has not been legally concluded and finally determined, Milburn
shall at closing, provide a letter of agreement, the form of
which shall be approved by, the District's General Counsel,
stating that in'the a final and nonappealable judgment for
the condemnee is made in an amount in excess of the amount placed
with the Court registry; `Milburn shall pay thirty percent (30 %)
,
of such additional amount immediately on behalf of the District.
Provided; however,' District may, at its sole discretion,
waive or excuse any of the conditions to the purchase and sale as
provided by this Agreement. °
If at such time the'Customers decide not to proceed with the
District's ' System,^ the Facilities 'preconstructed or under
construction Sy Milburn shall remain the property' of Milburn,
this Agreement shall terminate pursuant to Section 7.02 below.
Milburn understands and acknowledges that its expenditures on the
Facilities are at its own risk and that in the event the
District's System were 'not'to become operational or the above
conditions are not met,• reimbursements from the District or from
the Customers would not be made to Milburn.
Section 3:02,. PURCHASE PRICE OF DISTRICT FACILITIES. The
purchase price of the-District Facilities shall equal. seventy
percent (70 %) of costs approved District for constructing
and installing the District Facilities, as follows:
(a) ENGINEER. The expenses paid by Milburn for the
engineering services. performed in accordance with 'a contract for
engineering services. approved by the . District for contract
3- 886.17 - 15 (10 -8 -86) '
documents approved by the District and for construction
administration, construction staking, and resident project
representation. The expenses paid by Milburn for preparation of
additional drawings, plans and specifications.
(b) CONSTRUCTION COSTS. The total amount of the
construction contracts for District Facilities, as increased or
reduced by any change 'orders approved`by the District.
(c) EASEMENTS. The cost of acquiring permits,
licenses, easements, 'rights -of -way, and land required for the
construction, operation, 'maintenance, • repair, replacement and
removal of the District •Facilities; provided the cost of the
easements, rights -of -way or land shall not exceed the fair market
value of the easements, rights -of -way or land, plus damages, if
any, to the remaining portion of.the person's property that is
not acquired. The.fair market value and amount of damages shall
be equal to the lesser of either (1) the amount paid by Milburn
or (2) the amount determined by RMS Diversified, doing business
as Trans -Texas Land.Services,'or other appraiser approved by the
District,. or by the .District. The cost of acquiring the
easement, right -of -way or land, whether by negotiated donation or
purchase or, by-.eminent domain, 'the costs of obtaining title
research, title.insurance or legal opinion as to title, and the
costs of preparing >and recording the documents of title, shall
not exceed the cost per parcel that District is obligated to pay
Trans- Texas• Services; as provided by'Article XIII of the
contract between District and RMS Diversified unless the District
approves the amount of the expense prior to the time Milburn
incurs the expense-- > . . ,
..(d) OTHER CONSTRUCTION. pOSTS.. The costs of
advertising for bids. for construction, • contracts, materials
testing, construction inspection, cost of approvals,- permits and
certificates from governmental entities, surveying and any other
costs agreed to by•the District.
The 'purchase price:'shall 'specifically not include the
following:
=3- 886.17 16 (10 -8 -86)
1.' NEGOTIATIONS. The 'costs of negotiating and
preparing this Agreement. , It' is specifically, understood and
agreed by the "parties to' this °Agreement that all costs, including
legal fees, of negotiating and preparing this Agreement shall be
borne solely by the party incurring such costs.
2. INTEREST. •Interest.expense incurred or paid by
Milburn on the construction cbsts'paid by.Milburn or loss of
interest or investment earnings" on the construction costs paid by
Milburn.
3: MANAGEMENT:" Administrative, management, or
clerical expense paid or. incurred by Milburn relating to the
construction of the District Facilities.
4. AUDIT. The ,cost to have the purchase price
verified, calculated and certified by a certified public account
acceptable to 'the District' which verification, calculation and
certification shall be required as a condition under Section 3.03
below. -
5. ' REVIEW OF CONVEYANCE DOCUMENTS: Milburn shall pay
the District's expense''of preparing, reviewing, and recording
documents of title,' which expense shall be deducted from the
purchase price at closing. •, -
Section 3.03. CLOSING DATE.' The date for closing of
purchase and .sale` shall. be . 'es' determined' by District in
•
accordance with. the' conditions of Section 3.01, but the date of
closing shall not be more than five days after the occurrence of:
(1) the District's receipt of construction funding pursuant to
Section 3.01(b) above from the Customers, whether one or more,
for the purchase. of the District Facilities; (2) the District's
Board of Directors award the' contract for construction of the
Onion Creek Interceptor, Phase 2 (Contract No. 5); and (3) the
completion of audit of the purchase price. '
Section 3.04 :' CONVEYANCE. Upon payment of the purchase
price by District, Milburn shall convey the District Facilities
to District, together with' all rights to any existing insurance,
construction bonds,' guarantees and other matters. The conveyance
shall be evidenced bys a warranty deed' or an assignment of
3- 886:17 - J10=8-86), .
easements and a'bill'of sale, whichever is legally appropriate.
The conveyance shall be free' and clear of all 'liens and
encumbrances. In the event District, and Milburn are unable to
agree upon the 'amount of the purchase price of the District
Facilities, the District may deposit the amount equal to the
difference between the disputed amounts claimed to be correct by
each party into an,interest bearing escrow account and upon the
deposit, District and Milburn may close the transaction, provided
Milburn and District reserve their respective rights to recover
the disputed amount.'
Section 3.05.• ASSUMPTION OF CONTRACTS. In the event
Milburn has 'failed to complete the construction within the
construction periods set forth in the construction contracts with
all allowed time delays included, the District may purchase
District prior to completion- of construction, by
assuming Milburn•'s rights and obligations under the contracts for
construction of 'the District's Facilitiest and contract for
engineering services, and payment to Milburn of the costs paid by
Milburn for constructing the District Facilities as provided by
Section 3.02 of this Agreement. The date of closing shall be not
more than ten or less than five days after the District elects to
assume the contracts for construction of the District Facilities.
Section 3.06. USE OF DISTRICT FACILITIES BY CUSTOMERS
WITHOUT REGIONAL SYSTEM. In the event the District elects not to
proceed to construct or acquire Phase lA and 1B of the District's
.
System, as provided by Section 6.01(b) of the Wastewater Disposal
Contract, any Customer 'may elect within thirty (30) days of
written notice from the =District to the Customers that the
District will not Proceed to construct Phase lA and 1B of the
District's System to purchase a share of the District Facilities
from Milburn. °Should some or all of the Customers elect to
purchase a share, °each Customer 'so electing shall required and
hereby agrees to pay - 'their pro -rata share for the 'District
Facilities as follows: • - •
(a). ..Should MUD ' 2, MUD 3' or , Round Rock elect to
purchase,,that party so electing' shall pay its pro -rata share of
3- 886.17 - 18 (10-8-86)
•
•
all costs of the District Facilities, including accrued interest,
from the date the initial' expense was incurred:
(b) Should Austin, which shall be providing service to
Fern Bluff and Milburn',s property,. elect to purchase, it shall
pay its pro -rata share• of the Purchase Price, as defined in
Section 3.02, of the District Facilities.
Such payment by the purchasing party shall be in cash within
ten (10) business days after such Customer elects to purchase a
share of the District Facilities. Their pro -rata share shall be
equal to their percentage of use ^of.the available capacity of the
District Facilities. ' Provided,. however, it is specifically
understood and agreed by the Customers that Milburn and Fern
Bluff shall at all times have a guaranteed minimum capacity of
•
1500 LUEs in the District Facilities. It is further understood
and agreed that all capacity within the Milburn Force Main
financed by Milburn shall be- reserved for the sole use of Milburn
and Fern Bluff.except.as set forth in this paragraph. Milburn
and Fern Bluff specifically agree that. Austin shall have a
reservation of 150'.LUEs of capacity in the Milburn Force Main and
Round Rock shall• have _a reservation of 150 LUEs of capacity in
the Milburn Force Main, Neither Milburn nor Fern Bluff shall
have any obligation to •secure or otherwise provide wastewater
treatment capacity or any additional improvements necessary for
such Customer to utilize the District Facilities.
Section 3.07 • USE OF FACILITIES PRIOR TO PURCHASE. It is
specifically understood and :agreed•by the parties that:•.
(a):' No parties other than Milburn and Fern Bluff
except Austin and Round Rock as set 3.06 above
shall have the right 'to use the Facilities prior to the
conveyance of the Facilities to the District which right to use
shall be contingent upon 'execution of an agreement for interim
, • .
wastewater. ^treatment between the District, Round Rock, and the
other Customers. - •' -,
(b) Any wastewater,which'may be discharged from the
Facilities shall pass -into the ownership and control of Austin
and Round Rock.., at the point where the Onion Creek Interceptor,
3- 886.17 - 19 (10 -8 -86)
Phase I enters Round Rock's existing Onion Creek Interceptor, at
which point such wastewater. shall pass immediately thereafter
into the ownership and control of the District for discharge into
Round Rock's system in •accordance with the Interim Wastewater
Disposal Contract between the District, .the Customers and Round
Rock.
ARTICLE IV.
ALLOCATION OF CAPACITY.
Section 4.01., •Guaranteed reservations, of capacity in the
Facilities by the Customers• shall be set forth in the Interim
Waste Treatment Agreement between the District, Round Rock and
the other Customers -and shall be subject to the execution of such
agreement between Round Rock, • the District and the other
Customers for sufficient wastewater treatment capacity and shall
not be effective until such time as that agreement is in effect.
• ARTICLE V.
DEFAULT, NOTICE, AND REMEDIES
Section 5.01". ; FORCE MAJEURE. • In case. by reason of "Force
Majeure" either party shall „be rendered unable' wholly or in part
to carry out its obligations under'this..Agreement, then•if the
party shall give notice and full. particulars of the "Force
Majeure” in writing to the other parties within a reasonable time
after occurrence of the event or cause relied on, the obligation
of the party giving such notice, so far as it is affected by such
Force Majeure, if appropriate, shall be suspended during the
continuance •of the inability' then•, claimed, but for no longer •
period, and they 'shall incur ,,no ,liibil -ity, by reason of the
party's failure to perform in•whole•or in part, and the party
shall endeavor to remove or overcome such inability with all
reasonable dispatch. The term . "Force Majeure" as . employed
herein, shall mean acts : of God, strikes, lockouts, or other
industrial disturbances, acts.of public enemy, orders of any kind
of the United States. or the State of Texas, or any civil or
military authority, insurrections ,.riots,'epidemics; landslides,
lightning, earthquakes, fires, hurricanes; • storms, floods,
washouts, droughts, ..arrests, restrain . of government and people,
3- 886'.17 - 20 (10 -8 -86) •
civil disturbances, 'explosion's, breakage or accidents to
machinery, pipelines or -canals, or of any other causes not
reasonably within the control of the party claiming such
inability. It is understood and agreed that the settlement of
strikes and-lockouts shall beentire,ly within•the discretion of
the party having the,-difficulty and that the above requirement
that any Force Majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes and lockouts
by acceding to the de ands of the opposing 'party or parties when
such settlement is unfavorable in the judgment of the party
having the difficulty.
Section 5.02., ,REMEDIES UPON DEFAULT. The parties to this
Agreement do not intend to specify, and this•Agreement shall not
be constructed as. specifying, an exclusive remedy for any
default, but all. such other remedies; other than termination,
existing at law or in equity may be availed of by any party to
this Agreement and shall be cumulative.
Section 5.03. NOTICES. Unless otherwise provided in this
Agreement, any notice, communication, request, reply, or advice
(severally and .collectively = called !'Notice". required or
permitted to,be.given.as provided by this Agreement shall be in
writing and will be deemed to be delivered and received either:
(1) when deposited in the United States Mail, postage prepaid,
certified or registered,., with return receipt requested, properly
addressed to the party to be notified; or (2) when delivered to a
courier service for delivery, delivery charges prepaid, properly
addressed to the party to be notified.. 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 to, this be .as. shown above the signatures
of each party to.this Agreement, until changed as subsequently
provided. The parties to this,Agreement 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 notice to the
other parties to this Agreement:
•
3- 886'.17 - 21 (10 -8 -86)
Section 5.04.' NOTICE''OF DEFAULT." If 'any party to this
Agreement believes • that • another party has defaulted in
performance under this Agreement, then within ten days after the
discovery of the alleged default, the complaining party shall
give written notice to the alleged defaulting party and the other
parties, which notice shall specify in detail the nature of the
alleged default and the, action proposed by the complaining party
to remedy the alleged violation. If the alleged defaulting party
does not cure the default or otherwise resolve the alleged
default within thirty days after receipt of'the default notice,
then the complaining party shall have recourse to the available
remedies, as
applicable law.
this Agreement,
specified in this .Agreement or as provided by
Except as expressly,provided by Section 5.5 of
the failure by`a party to immediately discover a
default and give notice to the defaulting party of an alleged
default shall constitute a waiver,by a party of the alleged
default should the alleged default be proven from its inception.
Section 5.05. WAIVER. Any right or remedy or any default
under this Agreement 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 the
default or alleged default. Notice of 'default and opportunity
for cure of the. default as provided by Section 5.4 of this
Agreement shall be a prerequisite to any proceeding at law or in
equity, unless the default is discovered'less than twenty (20)
months after the default occurred or unless the default harms or
threatens to damage the property or,facilities belonging to the
party alleging the default or the default harms to
harm the health,osafety, and . ` welfare of 'the general public and
the harm or threatened harm will 'occur. before notice of the
default and opportunity 'to cure the default can be given. No
waiver or waivers of any' breach or default ('or any breaches or
defaults) by any party to this Agreement of any term, covenant,
condition, or liability under this Agreement or of the
performance by the other party to this Agreement of any duty or
obligation under this Agreement, sha11be deemed or construed to
3- 886217 - 22.(1078-86),
be a waiver in the future of subsequent breaches or defaults of
any kind, character, or description, under any circumstances.
Section 5.06. VENUE. All amounts due under this Agreement,
including, but not limited to, payments due under this Agreement
or damages for the breach of this. Agreement,, shall be paid and be
due in Williamson County, Texas, which is,:the county in which
Round Rock is located.', The parties' to this..Agreement expressly
agree that Williamson County, Texas,, is'the place of performance
of this Agreement and in the event that any legal proceeding is
brought to enforce this Agreement or any provision of the
Agreement, the legal proceeding shall be brought in Williamson
County, Texas. - ,
. Section 5.07. - APPLICABLE .LAW. This Agreement shall be
r ,
construed under the laws of the State of Texas.
ARTICLE VI.
INTERPRETATION AND CONSTRUCTION
Section 6.01. INTERPRETATION. Unless the context requires
otherwise, words.of the masculine gender shall be construed to
include correlative' words of feminine and neuter genders and
vice -versa and words of the singular number shall be construed to
include correlative =words of the plural number and versa.
Reference to any party to this'Agreement means °that party and the
successors and, a of. that party. The parties agree that
this Agreement or any provision of this Agreement shall not be
construed in favor of or.against any Party on the basis that the
Party did or did not author this Agreement or provision. This
Agreement and all the.terms, and provisions shall be liberally
construed to .effectuate the - purposes set forth,herein.and to
sustain the validity of 'this Agreement. Nothing in this
Agreement shall be construed to permit a violation of any federal
or state statutory provision or,`any provision of the federal or
state constitutions, and'all•acts•done pursuant to this Agreement
shall be performed in such manner as to conform thereto, whether
expressly provided or not. Where any procedure hereunder may be
held by a �f competent.jurisdiction , to be violative of any
federal or state" statutory or' constitutional provision,•the
-. 3- 886.17 - 23 (10-8-86)
•
parties to this Agreement shall have'the power by resolution to
adopt and promulgate rea and necessary alternative
procedures which will conform thereto and the Parties agree that
they would have entered into this Agreement notwithstanding the
invalidity of any provision or provisions hereof.
Section 6.02. REGULATORY AUTHORITY. This Agreement shall
be subject to all valid'rules, - regulation, • laws, permits,
orders, and ordinances applicable hereto passed or promulgated by
the United States of America, the State' of Texas or any
governmental body or agency having lawful jurisdiction or any
authorized representative 'or agency of any of them.
Section 6.03.' CURRENT . REGULATIONS.. In each instance in
this Agreement where reference is made. to a federal, state, or
.1
local lac./ or regulation, the parties to this Agreement intend
that, at any given 'time, the then - current edition of any such
federal, state or local law or regulation shall apply..
- Section 6.04. " MODIFICATION. , This Agreement shall be
subject to change or modification only with the mutual consent of
the parties to this Agreement.
Section 6.05. ASSIGNMENT. This Agreement shall not be
assignable in whole or' 'in part by any party •without the prior
written consent- of the other party'or `parties to this Agreement.
Section 6.06. SEVERABILITY.' The provisions of this
Agreement are severable; and if any provision or part of this
Agreement or • the application thereof to any person or
circumstance shall- ever' be held by any court of competent
jurisdiction to be invalid or unconstitutional for any reason,
the remainder of this Agreement and the application of such
provision' or part .of this Agreement "to other. persons or
circumstances shall not be affected thereby: •r
Section 6.07 MERGER.' Except as otherwise provided by this
Agreement, this : Ag constitutes, the entire agreement
between the parties relative'to the' construction and use of the
Facilities. There have been and are not agreements, covenants,
representations or warranties between the parties other than
those expressly stated herein or expressly provided for herein.
3- 886.17 - X 24 ('10 -9 -86) ' "
Section 6.08. APPROVAL'OR•CONSENT. Whenever this Agreement
requires,or permits approval or consent to be hereafter given by
any party, the parties agree that such approval or consent shall
not be unreasonably withheld. Such approval or consent may be
evidenced by an order or resolution adopted by the governing body
of the respective parties or by an appropriate certificate
executed by a person, firm or entity authorized to determine and
give approval or 'consent on behalf of the: respective parties
pursuant to an order °or resolution.adopted by'the governing body
or board of directors thereof. Such approval or consent shall be
effective without regard to whether given before or after the
time required herein and no approval or consent of the parties
shall be required as a condition of any action except as
expressly required in this Agreement:
Section 6.09. PARTIES IN •INTEREST. Except as expressly
provided otherwise by this Agreement, this Agreement shall be for
the sole and exclusive 'benefit of • the parties hereto and shall
not be construed to confer any rights upon any third party.
Nothing herein shall be construed to confer standing to sue upon
any third party who did not otherwise have such standing.
Section 6.10: CAPTIONS. The captions appearing at the
first of each numbered section or:paragraph°in this Agreement are
inserted and included solely for convenience and shall never be
considered on given any effect in construing this Agreement,'or
any provisions hereof, or in connection • with the duties,
obligations, or liabilities of the respective parties hereto or
in ascertaining intent, if any questions of intent should arise.
Section 6.11. TIME OF THE ESSENCE. Time shall be of the
essence of this Agreement.
,
Section 6.12. NO PARTNERSHIP The 'parties to this
Agreement do not intend that this Agreement establishes, nor
shall this Agreement be construed to as in any way establishing a
partnership or joint venture, express' or implied agency, or
employer - employee 'relationship between' the parties to this
Agreement.
3- 886.17 - 25•(10 -8 -86)
Section 6.13` COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each'. of which shall be deemed an
original and all of which shall together constitute one and the
same instrument. The terms of this Agreement shall become
binding upon each party from and after the time it has been
executed by all parties and an interim wastewater disposal
agreement with Round Rock'has been entered into and executed by
the District and the Customers•.
' ARTICLE VII.
EFFECTIVE DATE AND TERM OF. AGREEMENT
Section 7.01.' EFFECTIVE DATE. This Agreement shall become
effective as of date shown above.
Section 7.02. TERM. This Agreement shall continue in force
and effect from the effective date of this Agreement for a period
of five (5) years, unless terminated earlier by (1) the mutual
written agreement of the parties to this Agreement; (2) pursuant
to Section 1.02 above; (3) the ,District's purchase of the
District Facilities from Milburn; or (4). the ;elapse of forty -one
(41) days after the District gives written notice to the
Customers that the. District. does not. intend' to proceed to
construct the Phase lA and Phase 1B of the District's System.
IN WITNESS WHEREOF, the parties to this Agreement acting
under the authority of their respective governing bodies have
caused this'Agreement to be duly executed.
Roscoe Conoley Da Mize '
Secretary President.
3- 886.17 - 26 (10 -8 -86)
BRUSHY CREEK WATER CONTROL AND
IMPROVEMENT DISTRICT NO. 1 OF
WILLIAMSON AND MILAN COUNTIES
P.O. Box 882
Taylor, Texas 76574
Executed /1 -' " ' , 1986
•
•
ATTEST:
ames E. Aldridge
City Clerk
ATT ST:
11/
Jo •= ne Land
City Secretary
ATTEST:
Al Parici
Secretary
ATTEST:
Danny Malo e
Secretary
CITY OF AUSTIN '
P.O. Box 1088
Austin, Texas.78767
rge Carrasco
City Manager
Executed
3- 886.17 - 27 (10-8-86)
CITY OF ROUND ROCK
214 E. Main
Round Rock, Texas 78664
, 1986
Mike Robinson
Mayor •
Executed
WILLIAMSON COUNTY MUNICIPAL
UTILITY DISTRICT NO. 2
3737 Hairy Man Road
Round Rock, Texas 78681
Wayne Woyld
President
Executed •
WILLIAMSON COUNTY MUNICIPAL
UTILITY DISTRICT NO. 3
408 Ridgewood Road
Cedar Park, Texas 78613
Executed
BILL MILBURN, INC.,
a Texas corporation
P.O. Box 802-682
Au 8766
, 1986
, 1986
, 1986
ill Milburn
President
Executed
, 1986
FERN BLUFF MUNICIPAL
UTILITY DISTRICT
2600 One American Center
Austin, Texas 78701
ATTEST:
e M. Jacob
Dene M. Jac n Thomas J. ndridge
Secretary Presiden
3- 886.17
Executed
3- 886.17 - 28 (10 -8 -86)
, 1986
EXHIBIT "A"
OF
AGREEMENT REGARDING CONSTRUCTION, OWNERSHIP, PURCHASE,
AND USE OF SPECIFIC WASTEWATER TRANSPORTATION FACILITIES
%•
11 -4 -85
WASTEWATER DISPOSAL CONTRACT
Between
Brushy Creek Water Control and
Improvement District No. 1
of Williamson and Milam Counties
The City of Austin
The City of Round Rock
Williamson County Municipal
Utility District No. 2
and
Williamson County Municipal
District No. 3
TABLE OF CONTENTS
Recitals 1
ARTICLE I DEFINITIONS
1.01. Definition of Terms 2
1.02. Interpretation 8
ARTICLE II RESERVED CAPACITY; CUSTOMER CATEGORY
2.01. Reserved Capacity 9
2.02. Category of Customer 9
ARTICLE III DESIGN, ACQUISITION AND CONSTRUCTION
OF SYSTEM BY DISTRICT
3.01. Construction 9
3.02. Acquisition and Construction 9
3.03. Conditions Precedent 9
ARTICLE IV DISCHARGE OF WASTEWATER AND METERING
4.01. Rights of Customers
4.02. Discharge
4.03. Point of Entry
4.04. Coveyance to Point of Entry
4.05. Quantity at Point of Entry
4.06. Liability for Damages and
Responsibility for Treatment and
Disposal of Wastewater
4.07. Metering
4.08. Unit of Measurement
10
10
10
10
10
10
11
11
ARTICLE V QUALITY AND TESTING
5.01. General 12
5.02. Admissible Discharges 12
5.03. District Regulations 12
5.04. Industrial Wastes 13
ARTICLE VI FISCAL PROVISIONS
6.01. Cost of Phases IA and IB of System 13
6.02. Construction of Phase IC of the
System 19
6.03. Deposits on Funding Date 21
6.04. Service Charge 21
6.05. Payments by Customers and
Additional Customers for
Future System Capacity 21
6.06. Capital Recovery Fee 22
6.07. Default 24
6.08. Surcharge 26
6.09. Management Fee 26
6.10. Payments by Customers 27
ARTICLE VII REQUIRED IMPROVEMENTS
7.01. District to Determine Required
Improvements 27
7.02. District's Duty to Make
Required Improvements 28
7.03. Customer's Obligation In Event
of Required Improvement 28
ARTICLE VIII GENERAL PROVISIONS
8.01. Obligations of Customers 29
8.02. Payments to Constitute
Operating Expenses of
Customer 29
8.U3. Customer to Establish
Adequate Rates 29
8.04. Mandamus and Other Remedies
Against Category B Customers 30
8.05. Other Remedies 30
8.06. Use of Public Property 30
8.07. Use of Revenues of System 30
8.08. Force Majeure 30
8.09. Insurance 31
8.10. Regulatory Bodies 31
8.11. District Contracts with Others 31
8.12. Additional Capacity and
Facilities 32
8.13. Contracts with Others 32
8.14. Annual Report and Audit of System 32
8.15. Governmental Regulations 32
8.16. Operation of the System 32
8.17. Regional Designation 32
8.18. No Additional Waiver Implied 33
8.19. Addresses and Notice 33
8.20. Modification 34
8.21. Assignability 34
8.22. Severability 34
8.23. Merger 34
ARTICLE IX DISTRICT SYSTEM BUDGET
9.01. Filing With Customers 34
ARTICLE X OTHER MATTERS
10.01. Agreement Concerning Permits
for Existing Utility Systems 35
10.02. Interim Capacity in Round Rock
Wastewater Transportation
and Treatment System 35
10.03 Ownership of System 35
10.04. Provisions Applicable to Austin 36
10.05. Provisions Applicable to
Round Rock 37
10.06. Provisions Applicable to MUD 2 37
10.07. Provisions Applicable to MUD 3 38
ARTICLE XI TECHNICAL COMMITTEE
11.01. Composition of Technical Committee 40
11.02. Organization of the Technical
Committee 40
11.03. Action of Technical Committee 40
11.04. Responsibility of
Technical Committee 41
ARTICLE XII EFFECTIVE DATE AND TERM OF AGREEMENT
12.01. Effective Date 41
12.02. Term of Agreement 41
Signatures 42
WASTEWATER DISPOSAL CONTRACT
This contract (the "Agreement ") is entered into between
Brushy Creek Water Control and Improvement District No. 1 of
Williamson and Milam Counties (the "District "), the City of
Austin ( "Austin "), the City of Round Rocx ( "Round Rock "),
Williamson County Municipal Utility District No. 2 ( "MUD 2 ")
and Williamson County Municipal Utility District No. 3
( "MUD 3 "), all of such parties other than the District being
collectively referred to as the "Customers."
RECITALS
WHEREAS, the District was created by order of the State
of Texas Board of Water Engineers (presently the Texas Water
Commission) by order dated November 1, 1956, which creation
was confirmed by an election held within the District on
January 8, 1957, and was validated by Acts, 1957, 55th
Legislature, Regular Session, Chapter 341, Page 807, as
amended by Acts, 1957, 55th Legislature, Second Called
Session, Chapter 10, Page 166;
WHEREAS, the District's boundaries include all of the
Brushy Creek watershed, an area in Williamson and Milam
Counties, Texas;
WHEREAS, the District is authorized to provide Waste-
water collection and treatment services to lands within the
District and in the vicinity of the District;
WHEREAS, there is a need to establish in the upper
Brushy Creek Watershed, generally in the area outlined in
the Engineering Report (as hereinafter defined), a regional
Wastewater collection, treatment and disposal system for the
purpose of providing facilities to adequately receive,
transport, treat and dispose of Wastewater in such area;
WHEREAS, the Texas Water Development Board has, pursu-
ant to Chapter 26, Texas Water Code, declared the area in
the upper Brushy Creek watershed to be in need of a regional
Wastewater collection, treatment and disposal system and has
ordered that the District be the provider of regional
Wastewater services in said area [31 T.A.C. § 351.111 -
351.113, adopted 10 TEX REG 3217 (8 -23- 1985)1;
WHEREAS, the Customers each presently own, operate and
maintain their respective Wastewater systems to collect,
treat and dispose of Wastewater from the areas served by
the Customers;
WHEREAS, the Customers desire to discharge Wastewater
from their Wastewater collection systems into the regional
Wastewater collection, treatment and disposal system (the
"System ") proposed to be constructed by the District and as
described in the Engineering Report, in order to achieve
efficiencies of cost• and operation and to protect and
preserve the environment of the upper and lower Brushy Creek
watersheds;
WHEREAS, the District is willing to acquire, construct
and expand the System to receive Wastewater from the Custom-
ers' Wastewater collection systems and to treat and dispose
of such Wastewater;
WHEREAS, the District and the Customers are authorized
to make this Agreement under the provisions of Chapter 30,
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Texas Water Code, and other applicable provisions of state
law; and
WHEREAS, the parties hereto recognize:
(a) That the District will use the payments to be
received under this Agreement for the payment of the
expenses of acquiring, constructing, financing and
operating the System;
(b) That contracts similar to this Agreement may,
in the future, be executed between the District and
Additional Customers to expand the System;
(c) That the District plans to secure cash
contributions and /or to issue and sell its Bonds to
raise funds to finance the acquisition and construction
of the System;
(d) That the District is preparing to issue and
sell its Bonds to provide a portion of the funds to
enable it to acquire and construct the System;
(e) That the District will issue Bonds from time
to time in the future or receive additional cash
contributions from Customers and /or Additional Cus-
tomers to further expand, extend, enlarge, repair and
improve the System; and
(f) That the Customers and the District are
subject to all valid rules, regulations and require-
ments of the Texas Water Commission, the Environmental
Protection Agency and such State, federal and local
laws, rules and regulations as now exist or may be
enacted during the term of this Agreement;
NOW, THEREFORE, the Customers and the District do
hereby contract and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITION OF TERMS. Terms and expres-
sions as used in this Agreement, unless the context clearly
shows otherwise, shall have the following meanings:
(a) "Additional Customer" means any party with
whom the District makes a contract for receiving,
transporting, treating and disposing of Wastewater
through the System in an Expansion. Additional Custom-
ers shall be designated as either Category A Additional
Customers or Category B Additional Customers under the
same criteria as used for determining Category A
Customers and Category B Customers.
(b) "Agreement" means this agreement.
(c) "Annual Debt Service Requirement" means the
principal of and redemption premium, if any, and the
interest on Bonds, if any, issued by the District on
behalf of a Category B Customer or Additional Category
B Customer as such principal, redemption premium, if
any, and interest become due during any Fiscal Year,
less interest to be paid out of Bond proceeds as
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permitted by the Bond Resolution and less any other
funds which are dedicated by the District for payment
of principal, redemption premium and interest on the
Bonds during such Fiscal Year; plus the amounts, if
any, required to be deposited to restore any deficiency
in the Debt Service Reserve Fund in accordance with the
provisions of the Bond Resolution; and plus any amounts
required to pay charges, fees or expenses of any
trustee, paying agent or registrar for the Bonds.
(d) "Annual Operation and Maintenance Expense
Requirement" means the amount paid or payable for all
Operation and Maintenance Expenses during any Fiscal
Year together with any amount required or necessary to
replenish and maintain the Repair and Replacement
Reserve Fund and the Operation and Maintenance Reserve
Fund for the System.
(e) "Austin" means the City of Austin.
(f) "Bond" means any bond, note or other evidence
of indebtedness (including, without limitation, any
Improvement Bonds) to be issued by the District pursu-
ant to this Agreement to provide temporary, interim or
permanent financing for the acquisition, construction,
expansion, extension, enlargement, improvement or
repair of the System, •whether one or more issues, or
any bond issued to refund the same, or issued for any
purpose necessary to acquire, construct, expand,
extend, enlarge, improve or repair the System, but does
not include any other bonds of the District issued
heretofore or hereafter for any other District purpose.
(g) "Bond Issuance Costs" means all costs associ-
ated with the authorization, issuance, sale and deliv-
ery of the Bonds, including all legal, financial
advisory and engineering fees related thereto, expenses
of printing the Bonds, expenses to retain a trustee,
paying agent or registrar for the Bonds, advertising
expenses and all other out -of- pocket expenses directly
related to the authorization, issuance, sale and
delivery of the Bonds. In addition, "Bond Issuance
Costs" shall include an amount equal to eighteen months
interest on the Bonds, which amount shall be deposited
into the Interest Account of the Debt Service Reserve
Fund and be used to pay interest on the Bonds.
(h) "Bond Resolution" means any resolution of the
Board of Directors of the District (including, without
limitation, any Improvement Bond Resolution) authoriz-
ing the issuance of Bonds and providing for their
security and payment, as such resolution may be amended
from time to time as therein permitted; without limita-
tion, "Bond Resolution" shall include any trust inden-
ture pursuant to which the Bonds are issued.
(i) "Capacity Charge" means a lump sum payment
made in accordance with the terms of any contract
between the District and a Category A Customer, which
payment shall equal such Category A Customer's propor-
tionate share of the Project Costs of the System.
(j) "Capital Recovery Fee" means the fee estab-
lished by the District pursuant to Section 6.06(a) -(c)
of this Agreement.
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(k) "Common Facilities" means the facilities
described in Section 6.06 of this Agreement, which
while constituting a part of Phase I of the System,
also either benefit the Additional Customers or consti-
tute a necessary expense of accomplishing Phase I of
the System as a regional system.
(1) "Construction Fund" means the fund estab-
lished by the District to receive that portion of the
Capacity Charges from Category A Customers and that
portion of the proceeds of Bonds issued by the District
on behalf of Category B Customers which are allocable
to the cost of acquiring or constructing Phase I of the
System.
(m) "Customers" means Austin, Round Rock, MUD 2
and MUD 3. There shall be two classes of Customers,
and every Customer shall be designated as either a
"Category A Customer" or a "Category B Customer," as
defined herein, as appropriate.
Category A Customer: Shall be any Customer who
pays for its proportionate share of the Project
Costs of Phase I of the System by payment of a
Capacity Charge.
Category B Customer: Shall be any Customer who
pays for its proportionate share of the Project
Costs of Phase I of the System by monthly payment
of a Facility Charge.
(n) • "Debt Service Fund" means the fund estab-
lished in the Bond Resolution for the purpose of
receiving deposits of Facility Charge payments and
paying debt service on the Bonds, which fund shall be
comprised of a Principal Account and an Interest
Account.
(o) "Debt Service Reserve Fund" means the fund
established in the Bond Resolution authorizing the
issuance of Bonds on behalf of a Category B Customer or
Additional Category B Customer which will be used as a
reserve to secure payment of debt service on such
Bonds.
(p) "District" means the Brushy Creek Water
Control and Improvement District No. 1 of Williamson
and Milam Counties.
(q) "Eligible Securities" means obligations of
the United States or obligations unconditionally
guaranteed by the United States or an agency of the
United States, and certificates of deposits of banks
and savings and 'loan associations authorized to do
business in the State of Texas provided such deposits
are secured in the manner provided by law for the
deposit of county funds.
(r) "Engineering Report" means a report of Haynie
& Kallman, Inc., and Espey, Huston & Associates, Inc.,
Consulting Engineers, entitled A Feasibility Study of a
Potential Regional Wastewater Treatment Facility for
the Upper Brushy Creek Watershed of Southwest William-
son County, Texas, dated July 1984, as such report may
be amended, modified and changed and superseded by the
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District at its direction at any time prior to the
execution of construction contracts for improvements,
additions and enlargements to Phase I of the System or
as modified and changed by change orders issued after
execution of such construction contracts; provided,
however, that no such change orders shall affect the
Reserved Capacity, rate of discharge or Point of Entry
for any Customer without such Customer's consent.
(s) "Expansion" means any facilities or equipment
which constitute an expansion, extension or enlargement
beyond Phase I of the System other than Required
Improvements.
(t) "Facility Charge" means the annual charge
which each Category B Customer or Additional Category B
Customer agrees unconditionally to pay to the District
calculated in accordance with this Agreement.
(u) "Fiscal Year" means the twelve (12) month
period beginning January 1 of each year or such other
twelve (12) month period as may be established in the
future to constitute the District's Fiscal Year.
(v) "Funding" means the receipt by the District
of the funds necessary to pay the Project Costs from
Capacity Charge payments made by a Category A Customer
or from the Net Bond Proceeds of Bonds issued by the
District on behalf of a Category B Customer.
(w) "Funding Date" means the date or dates on
which a Funding occurs.
(x) "Improvement Bond" means any bond, note or
other evidence of indebtedness to be issued by the
District pursuant to Article VII of this Agreement to
provide temporary, interim or permanent financing for
the improvement or repair of the System as deemed
necessary by the Board of Directors of the District to
cause the System to be in compliance with State or
federal law or with the requirements of any regulatory
body, other than the District, whether one or more
issues, or any Bond issued to refund same, but does not
include any other bonds of the District issued hereto-
fore or hereafter for any other District purpose.
(y) "Improvement Bond Resolution" means any
resolution of the Board of Directors of the District
authorizing the issuance of Improvement Bonds and
providing for their security and payment, as such
resolution may be amended from time to time as therein
permitted; without limitation, "Improvement Bond
Resolution" shall include any trust indenture pursuant
to which the Improvement Bonds are issued.
(z) "Initial Funding" means the Funding scheduled
to occur forty -five (45) days after the execution of
this Agreement by the Customers and the District.
(aa) "Initial Funding Date" means the date of the
Initial Funding.
(bb) "LUE" means the amount of sewage collection
and treatment capacity needed by one living unit
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equivalent which amount shall be 350 gallons per day
based on a 30 -day average.
(cc) "Month" means a calendar month.
(dd) "MUD 2" means Williamson County Municipal
Utility District No. 2.
(ee) "MUD 3" means Williamson County Municipal
Utility District No. 3.
(ff) "Net Bond Proceeds" means the proceeds
received by the District upon the sale of its Bonds
less all Bond Issuance Costs.
(gg) "Operation and Maintenance Expense" means all
costs of operation and maintenance of the System
including, but not limited to, repairs and replacements
to the extent not paid from the Repair and Replacement
Reserve Fund or the Operation and Maintenance Reserve
Fund, costs of maintaining any permits or licenses
necessary to operate and maintain the System, and cost
of utilities, supervision, engineering, accounting,
auditing, legal services, liability insurance for the
District and the District directors and employees,
expenses of the Technical Committee in fulfilling its
responsibilities, and. any other supplies, services,
administrative costs and equipment necessary for proper
operation and maintenance of the System, and payments
made by the District in satisfaction of judgments
resulting from claims not covered by the District's
insurance or not paid by one particular Customer or
Additional Customer arising in connection with the
operation and maintenance of the System including any
and all expenses incurred by the District in connection
with any litigation of any nature whatsoever concerning
the System or the District's responsibilities hereunder
to any person, entity or party hereto. Depreciation
shall not be considered an item of Operation and
Maintenance Expense.
(hh) "Operation and Maintenance Reserve Fund"
means the fund to be established by the District to
provide moneys to operate and maintain the System in
the event current revenues of the System are insuffi-
cient to meet the Operation and Maintenance Expenses of
the System.
(ii) "Phase I of the System" means an interceptor
line and related facilities and a 15.1 MGD Wastewater
treatment plant or such other size plant as will
adequately provide the Reserved Capacity needs of the
Customers in the System, all as generally described in
the Engineering Report, including interim components
which may be abandoned as future expansions are added
and Project Costs associated with acquisition or con-
struction of downsized components which may be smaller
than ultimately necessary to receive the Reserved
Capacity of all Customers.
(jj) "Point of Entry" means a point at which
Wastewater enters the System.
(kk) "Project Contracts" means any contract or
agreement, any amendments thereto, and any termination
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thereof, whether in writing or not, entered into by the
District in connection with or in furtherance of the
management, planning, design, financing, construction,
acquisition, expansion, implementation, operation or
maintenance of the System.
(11) "Project Costs" includes all acquisition and
construction costs and reconstruction costs as those
terms are generally understood in standard accounting
practice as applied to projects of the nature of the
System, and without limiting the generality of the
foregoing, the term shall include the costs of obtain-
ing all licenses and permits; purchase of equipment,
property, rights in property, costs of land, easements
and rights -of -way, including damages to land and
property; engineering, administrative, auditing, legal
expenses and liability insurance for the District and
the District directors and employees incurred in con-
nection with the planning, development, acquisition and
construction of the System; any and all tools and
equipment required for the operation and maintenance of
the System; costs of the same nature for any expansion,
extension, enlargement, improvement or replacement of
the System; the costs of establishing the Operation and
Maintenance Reserve Fund and the Repair and Replacement
Reserve Fund; legal and other expenses incurred by the
District in accomplishing the acquisition or con-
struction of the System including any and all expenses
incurred by the District in connection with any litiga-
tion of any nature whatsoever concerning the System or
the District's responsibilities hereunder to any
person, entity or party hereto; and a reasonable amount
for contingencies, not to exceed ten (10) percent of
the construction contract amount. The Project Costs
shall be composed of two components: (1) "Line Project
Costs" which shall be all Project Costs related to
constructing interceptor lines, collection lines and
related facilities to collect and transport Wastewater
to the System's proposed wastewater treatment plant and
(2) "Treatment Project Costs" which shall be all
Project Costs related to constructing the System's
wastewater treatment plant (such Treatment Project
Costs consisting of [a] "Treatment Project Common
Facilities Costs" being those Treatment Project Costs
for Common Facilities and [b] "Treatment Project Phase
Costs" being those Treatment Project Costs for a
particular phase of the Project which are not related
to the cost of Common Facilities).
(mm) "Repair and Replacement Reserve Fund" means
the fund to be established by the District, the moneys
from which will be used to repair the System or to
replace worn or obsolete parts of the System.
(nn) "Required Improvement" means any facilities
or equipment which constitute an improvement to or
modification of the System, the construction, acquisi-
tion and ownership of which is undertaken pursuant to
Article VII this Agreement as the result of the re-
quirement of a regulatory body other than the District
or repairs and replacements which cost more than the
amount of money on hand in the Repair and Replacement
Reserve Fund.
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(oo) "Reserved Capacity" means, with respect to any
given period of time, the total quantity of Wastewater
that a particular Customer or Additional Customer is
entitled to deliver into the System pursuant to this
Agreement and similar contracts with Additional Custom-
ers.
(pp) "Round Rock" means the City of Round Rock.
(qq) "Service Charge" means a monthly charge which
will be paid by every Customer and Additional Customer
of each Category (Categories A and B), to enable the
District to meet the Annual Operation and Maintenance
Expense Requirement.
(rr) "System" means all of the facilities for
receiving, transporting, treating and disposing of
Wastewater generally in the upper Brushy Creek Water-
shed, together with any expansions, extensions, en-
largements or improvements to said facilities and any
replacements of said facilities constructed or other-
wise incorporated into said facilities in the future,
including any Required Improvements, which facilities
are to be owned by the District and the Customers as
provided in Article X hereof and to be managed and
operated by the District as provided in Article X.
Said term shall include only those facilities which are
used, constructed or acquired, or the use of which is
arranged for, by the District to afford service to the
Customers and Additional Customers.
(ss) "System Year" means an annual period begin-
ning October 1 of a year and ending September 30 of the
next year.
(tt) "Technical Committee" means the committee
created by Article XI of this Agreement.
(uu) "Total Reserved Capacity" means, with respect
to any given period of time, the total quantity of
Wastewater that all Customers and /or Additional Cus-
tomers are entitled to deliver into the System pursuant
to this Agreement and similar agreements with Addi-
tional Customers.
(vv) "Wastewater" means liquid and water carried
waste discharged from sanitary conveniences of dwell-
ings, business buildings, institutions and the like
including garbage which has been shredded to such
degree that all particles will be carried freely under
flow conditions normally prevailing in public sewers,
with no particle greater than one -half (1/2) inch in
any dimension and the liquid wastes from industrial
processes, and includes any infiltration water that has
migrated from the ground into the System.
Section 1.02. INTERPRETATION. Terms used in this
Agreement with initial letters capitalized and not otherwise
defined in this Agreement have the meanings assigned to them
in Section 1.01. Except where the context otherwise re-
quires, words imparting the singular number shall include
the plural number and vice versa. Reference to any document
means that document as amended or supplemented from time to
time. Reference to any party means that party and its
successors and assigns.
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ARTICLE II
RESERVED CAPACITY; CUSTOMER CATEGORY
Section 2.01. RESERVED CAPACITY. The Customers are
entitled to Reserved Capacity in the System (and its various
phases and components) as described in Exhibit "A ", attached
hereto and hereby incorporated herein by reference for all
intents and purposes.
Section 2.02. CATEGORY OF CUSTOMER. Upon execution of
this Agreement, each Customer shall notify the District as
to which Category of Customer it desires to be for purposes
of the payments made to the District on the Initial Funding
Date. Thereafter, each of the Customers agrees to notify
the District at least sixty (60) days in advance of each
subsequent Funding Date as to whether the Customer desires
to be a Category A or Category B Customer for purposes of
the payments made at each subsequent Funding Date.
ARTICLE III
DESIGN, ACQUISITION AND
CONSTRUCTION OF SYSTEM BY DISTRICT
Section 3.01. CONSTRUCTION. In order to provide
services for receiving, transporting, treating and disposing
of Wastewater for the Customers and Additional Customers,
the District will design and acquire or construct the System
as described in the Engineering Report, will acquire all
necessary lands, easements and rights -of -way, and will own,
operate, maintain and from time to time expand, extend,
enlarge, improve and repair the System. The District shall
exercise due diligence and use its best efforts to complete
construction of Phases IA and IB of the System within 20
months after the Initial Funding Date. Phase IC shall be
constructed and completed as necessary and as otherwise
provided herein.
Section 3.02. ACQUISITION AND CONSTRUCTION. The
District agrees to proceed promptly with the acquisition and
construction of Phase I of the System as described in
Article VI and as necessary to the performance of its
obligations hereunder subject to the provisions of Section
3.03 of this Agreement. The District shall not be liable to
the Customers for any damages occasioned by delay in the
commencement of such service to the Customers. After the
District has notified the Customers of its readiness to
accept such Wastewater at the Point or Points of Entry, the
District shall, subject to other terms and conditions of
this Agreement, continually hold itself ready, willing and
able to supply such service to the Customers. Liability of
the District under this covenant shall be subject to the
provisions of Sections 6.07 and 8.08 of this Agreement.
Section 3.03. CONDITIONS PRECEDENT. It is expressly
understood and agreed that any obligation on the part of the
District to acquire, construct and operate the System or
Phase I thereof, as appropriate, shall be conditioned upon
the following:
(1) the District's obtaining sufficient
funds to pay the Project Costs of the System, or
Phase I thereof, as appropriate, including the
payment of all Capacity Charges and the sale and
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delivery upon terms satisfactory to the District
of the Bonds for the System, or Phase I thereof,
as appropriate;
(2) the District's ability to reasonably
obtain all sites, rights -of -way, easements, labor,
equipment and materials required for acquisition
or construction of the System, or Phase I thereof,
as appropriate; and
(3) the District's obtaining all permits,
approvals and licenses required to acquire,
construct or operate the System, or Phase I
thereof, as appropriate, including waste discharge
permits issued by the Texas Water Commission or
its successors.
ARTICLE IV
DISCHARGE OF WASTEWATER AND METERING
Section 4.01. RIGHTS OF CUSTOMERS. The Customers
shall have the right to discharge Wastewater into the System
under this Agreement upon the completion of Phase IA of the
System described in the Engineering Report.
Section 4.02. DISCHARGE. The Customers shall have the
right to discharge Wastewater into the System meeting the
requirements for quantity set forth in this Agreement and
the requirements of quality as set forth in District regu-
lations to be adopted from time to time as described in
Article V.
Section 4.03. POINT OF ENTRY. Each Customer shall
discharge its Wastewater at a Point or Points of Entry
designated for each Customer in the Engineering Report, or
at such additional Points of Entry as may be mutually agreed
upon by the District and any Customer utilizing such Point
of Entry.
Section 4.04. CONVEYANCE TO POINT OF ENTRY. It shall
be the sole responsibility of each Customer to convey its
Wastewater to the Point or Points of Entry.
Section 4.05. QUANTITY AT POINT OF ENTRY.
(a) The quantity of Wastewater conveyed to the Point
or Points of Entry by each Customer shall be metered and the
total annual contributing flow of Wastewater received during
any Fiscal Year from each Customer shall be used to deter-
mine each Customer's payment of the Variable Charges of the
Service Charge as set forth in Article VI.
(b) Each Customer's maximum discharge rate for each
Point of Entry is, or will be, designated in the Engineering
Report and will be mutually agreed to by such Customer and
the District.
Section 4.06. LIABILITY FOR DAMAGES AND RESPONSIBILITY
FOR TREATMENT AND DISPOSAL OF WASTEWATER. Liability for
damages arising from the reception, transportation, delivery
and disposal of all Wastewater discharged hereunder shall
remain in each Customer to the Points of Entry, and immedi-
ately prior to passing through meters installed at the
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Points of Entry liability for such damages shall pass to the
District. As between the parties, each party hereto agrees
to save and hold the other parties harmless from all claims,
demands and causes of action which may be asserted by anyone
on account of the reception, transportation, delivery and
disposal of Wastewater while the Wastewater is in the
control of such party. This covenant is not made for the
benefit of any third party. The District takes the respon-
sibility as between the parties hereto for the proper
reception,, transportation, treatment and disposal of all
such Wastewater received by it at Points of Entry.
Section 4.07. METERING. The District will furnish,
install, operate and maintain at its expense at each Point
of Entry the necessary equipment and devices of standard
type for measuring properly all Wastewater to be discharged
under this Agreement as such devices are specified in the
Engineering Report. Such meters and other equipment shall
remain the property of the District. The Customers shall
have access to such metering equipment at all reasonable
times for inspection and examination, and the reading,
calibration and adjustment thereof shall be done by employ-
ees or agents of the District in the presence of a repre-
sentative of any Customer if requested by the Customer. All
readings of meters will be entered upon proper books of
record maintained by the District and a copy of said read-
ings supplied to the Customers. Upon written request any
Customer may have access to said record books during reason-
able business hours.
Not more than three times in each year of operation,
the District shall calibrate the meters, if requested in
writing by the affected Customer to do so, in the presence
of a representative of such Customer, and such parties shall
jointly observe any adjustments which are made to the meters
in case any adjustment is found to be necessary. If, for
any reason, any meters are out of service or out of repair,
or if, upon any test, the percentage of inaccuracy of any
meter is found to be in excess of five percent (5 %), regis-
tration thereof shall be corrected for a period of time
extending back to the time when such inaccuracy began, if
such time is ascertainable, and if not ascertainable, then
for a period extending back one -half (Z) of the time elapsed
since the date of the last calibration, but in no event
further back than a period of six (6) months. Any Customer
may, at its option and its own expense, install and operate
a check meter to check each meter installed by the District,
but the measurement for the purpose of this Agreement shall
be solely by the District's meters, except as in this
section 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 District, but the reading, calibra-
tion and adjustment thereof shall be made only by the
Customer installing same, except during any period when a
check meter may be used under specific written consent by
the District for measuring the amount of Wastewater de-
livered into the System in which case the reading, cali-
bration and adjustment thereof shall be made by the District
with like effect as if such check meter or meters had been
furnished or installed by the District.
Section 4.08. UNIT OF MEASUREMENT. The unit of
measurement for Wastewater delivered hereunder shall be one
thousand (1,000) gallons, U.S. Standard Liquid Measure.
ARTICLE V
QUALITY AND TESTING
Section 5.01. GENERAL. The Customers agree to limit
their discharge into the System to wastes defined by the
District as admissible discharges, and to prohibit entry
into the System of any wastes that have the characteristics
of prohibited discharges, also as defined by the District.
5.02. ADMISSIBLE DISCHARGES. Wastes discharged into
the System shall consist only of wastes which the System is
capable of handling, so that:
(a) effluent from the System meets the current and
future legal standards of the Texas Water Commission or
of any governmental body having legal authority to set
standards for such effluents; and
(b) the System is not damaged to the extent to cause
unnecessary repairs or replacements resulting in
increased Operation and Maintenance Expense.
5.03. DISTRICT REGULATIONS. The District may, from
time to time, after giving sixty (60) days notice to all
Customers and Additional Customers, establish by regulation
the quality of Wastewater which will qualify as admissible
discharges and be accepted into the System from Customers
and Additional Customers at the Points of Entry and to
establish the quality of Wastewater which will qualify as
prohibited discharges and not be accepted into the System.
The District may establish standards which are stricter than
those required from time to time by applicable law, rule or
regulation by a 4 /5ths majority vote of the Board of Direc-
tors of the District; provided, however, the District may
not establish any standards to require pretreatment of
normal domestic wastewater unless such treatment is required
by applicable federal or State law or regulation. The
District shall immediately notify all Customers and Addi-
tional Customers of such regulations after they are adopted
by the District. Each Customer and Additional Customer
shall have one hundred and eighty (180) days after the date
of adoption of any such regulations to bring the quality of
its Wastewater into compliance with such regulation unless a
shorter period is required by applicable State or federal
law or regulation. The District may also provide in such
regulations for the testing of Wastewater delivered into the
System. Such regulations may provide that the District may
terminate service to any Customer or Additional Customer
which continues to violate said regulations after being
notified by the District in writing and given a reasonable
period of time (not to exceed thirty (30) days) to. correct
such violation. The regulations shall establish reasonable
procedures for terminating such service and shall make
reasonable provisions for due process rights of the Custom-
ers and Additional Customers. The District may also estab-
lish, charge and collect a surcharge from any such Customer
or Additional Customer for discharge of admissible dis-
charges which, because of the excessive concentration of
biochemical oxygen demand, suspended solids or other charac-
teristic, are exceedingly difficult or expensive to treat,
which surcharge shall be in addition to the Customer's or
Additional Customer's Service Charge as described in Section
6.08.
- 12 -
Section 5.04. INDUSTRIAL WASTES. The effects of
certain types of industrial waste upon Wastewater and
Wastewater treatment processes are such as to require that
careful consideration be made of each industrial connection.
This is a matter of concern both to the District and the
Customers. Accordingly, the District, upon request by any
Customer, will work jointly in processing applications for
discharge of industrial waste into any sewers ultimately
discharging into the System. Each Customer covenants that
it will have in effect and will enforce an industrial waste
ordinance acceptable to federal and State agencies or
departments having lawful jurisdiction to set standards for
waste discharges.
Each Customer will allow the District access to the
Customer's records to gather information and data that will
be useful to the District as statistical data for planning
the operation, improvement and expansion of the System.
ARTICLE VI
FISCAL PROVISIONS
Section 6.01. COST OF PHASES IA AND IB OF SYSTEM.
(a) The District intends to construct Phase I of the
System in three stages to be known as Phases IA, IB and IC,
as described in the Engineering Report. The parties recog-
nize that Phases IA, IB and IC of the System will be de-
signed and advertised for bid by the District at separate
times as described later in this section. The parties
further recognize that although each Customer will not
become fully liable for its pro rata share of the con-
struction costs of the various phases until such time as
construction bids are obtained by the District, that never-
theless the District will incur Project Costs for design of
the System, preparation of plans and specifications for
construction of the System, and certain engineering, legal,
administrative and other expenses included in the Project
Costs of the System prior to the time that construction bids
are accepted. The District has no source of funds to pay
the Project Costs of Phases IA and IB of the System other
than those provided by the Customers. Therefore, the
parties agree that forty -five (45) days after the execution
of this Agreement by all Customers (the "Initial Funding
Date "), each Customer shall pay to the District the sum of
the amount per LUE of the Customer's Reserved Capacity in
Phase I of the System for Line Project Costs of Phases IA
and IB estimated to be incurred prior to acceptance of
construction bids, and the amount per LUE of the Customer's
Reserved Capacity in the Wastewater treatment plant con-
structed in Phase I for Treatment Project Costs of Phases IA
and IB estimated to be incurred prior to acceptance of
construction bids, as described in Exhibit "B ", attached
hereto and hereby incorporated herein by reference for all
intents and purposes. These amounts represent each Custom-
er's pro rata share of the estimated Project Costs to be
incurred by the District prior to the other Funding Dates
for Phases IA and IB of the System, consisting of the
following:
(1) each Customer's share of such Line Project
Costs to be paid prior to the other Funding Dates being
determined by dividing the estimated Line Project Costs
of Phases IA and IB of the System to be incurred prior
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to the other Funding Dates by the number of LUEs of
Total Reserved Capacity in Phase I of the System and
multiplying the result times the Customer's number of
LUEs of Reserved Capacity in Phase I of the System,
(2) each Customer's share of Treatment Project
Phase Costs of Phases IA and IB of the System to be
paid prior to the other Funding Dates being determined
by dividing the estimated Treatment Project Phase Costs
of Phases IA and IB of the System to be incurred prior
to the other Funding Dates by the number of LUEs of
Total Reserved Capacity in Phases IA and IB of the
System and multiplying the result times the Customer's
number of LUEs of Reserved Capacity in Phases IA and IB
of the System and
(3) each Customer's share of Treatment Project
Common Facilities Costs being determined by dividing
the Treatment Project Common Facilities Costs of Phases
IA and IB of the System by the total number of LUEs of
Total Reserved Capacity of all Customers in Phase I of
the System and multiplying the result times the Custom-
er's number of LUEs of Reserved Capacity in Phase I of
the System.
The total estimated Project Costs of Phases IA and IB of the
System to be incurred prior to the other Funding Dates, is
presently estimated to be two million nine hundred and
eleven thousand, nine hundred and two dollars ($2,911,902)
for Line Project Costs and one million two hundred and ten
thousand, two hundred and twenty -five dollars ($1,210,225)
for Treatment Project Costs as described in Exhibit "B"
attached hereto and hereby incorporated by reference for all
intents and purposes. For Category B Customers, the Dis-
trict agrees to use its best efforts to issue Bonds on
behalf of such Customers in the same manner as that de-
scribed in Section 6.01(e) to allow a deposit of the Custom-
er's pro rata share of the Project Costs to be paid prior to
the other Funding Dates for Phases IA and IB of the System.
All such amounts paid by the Customers shall be used solely
for the purpose of paying the Project Costs of Phases IA and
IB of the System which are incurred by the District prior to
the other Funding Dates, and, in the event that Phases IA
and IB of the System are constructed, any such amount paid
by any Customer shall be credited against that Customer's
pro rata share of the Project Costs for Phases IA and IB of
the System. In the event Phases IA and IB of the System are
not constructed, any excess proceeds paid by any Customer to
the District which are not used to pay Project Costs for
Phases IA and IB of the System incurred prior to the other
Funding Dates shall be returned to such Customer on the same
pro rata basis as previously described in allocating the
amount of such payments to the Customers.
(b) On the Initial Funding Date, the District shall
notify the District's engineers to proceed with the prepara-
tion of plans and specifications for Phases IA and IB of the
System. The District shall also proceed to take all other
action necessary to acquire or construct Phases IA and IB of
the System, including obtaining appropriate easements,
making appropriate surveys, obtaining appropriate permits
and governmental approvals and taking all other necessary
and proper actions. The District anticipates that within
three (3) months after the Initial Funding Date that plans
and specifications for Phases IA of the System will be
- 14 -
completed. The District will prepare plans and specifica-
tions for Phase IB as soon as possible. The plans and
specifications shall be submitted to the Customers for their
comments which must be received within thirty (30) days
after receipt of same. The District shall make any aajust-
ments to the plans and specifications which it deems appro-
priate thereafter. The District anticipates that after
final plans and specifications have been prepared a period
of thirty (30) days will be necessary in order to obtain
approval by all appropriate regulatory bodies of the plans
and specifications. After all such approvals have been
obtained, the District shall proceed, as appropriate, to
advertise for bids for construction of Phases IA and IB of
the System or any part or parts thereof as determined to be
appropriate by the Technical Committee. Upon receipt of
such bids, the District shall tabulate the bids and notify
the Customers and the Technical Committee of the bids which
have been received and shall recommend approval of the
lowest and best bid for the construction of Phases IA and IB
of the System or parts thereof. The District shall also
notify the Customers and the Technical Committee, based on
such lowest and best bid, of the estimated Project Costs of
Phases IA and IB of the System. If the recommended bids do
not exceed the estimated cost of construction of the facil-
ities for which bids were received by more than ten (10)
percent, then the District shall establish a Funding Date
for Phases IA and IB of the System, which date shall be
prior to the time that such construction bids for Phases IA
and IB of the System expire, but shall not be less than
forty -five (45) days after the date the District notifies
the Customers and the Technical Committee of the recommended
low bid. If the recommended bid exceeds the estimated cost
of the construction contract by more than ten (10) percent,
then within thirty (30) days after receiving such notice
from the District, each Customer shall notify the District
as to whether or not it desires the District to proceed with
the construction of Phases IA and IB of the System. If any
Customer elects not to authorize the District to proceed to
acquire or construct Phases IA and IB, then the District
shall not be obligated to so proceed and the District and
the Customers shall be relieved from any further obligations
one to the other under this Agreement and the District shall
return any excess moneys in the Construction Fund which are
not needed to pay Project Costs to each Customer as appro-
priate; provided, however, the District and the other
Customers agree to use their best efforts to continue to
proceed to construct the System without the declining
Customer. If all Customers shall notify the District that
they desire the District to proceed with the construction of
Phases IA and IB of the System, the District shall there-
after establish a Funding Date for Phases IA and IB of the
System, which date shall be prior to the time that such con-
struction bids expire for Phases IA and IB of the System,
but shall be not less. than forty -five (45) days after the
receipt of notice from all Customers to proceed with the
construction of Phases IA and IB of the System.
(c) In order to obtain the Project Cost per LUE for
Phases IA and IB of the System, which shall be used in
determining the amount of the Capacity Charge to be paid by
a Category A Customer for Phases IA and IB of the System and
which shall be used in determining the amount of Bonds which
must be issued for a Category B Customer for Phases IA and
IB of the System, Project Costs of each Phase IA and IB of
the System shall be divided into Line Project Costs,
- 15 -
Treatment Project Phase Costs and Treatment Project Common
Facilities Costs. Each Customer's share of Line Project
Costs of each Phase IA and IB of the System shall be deter-
mined by dividing the Line Project Costs of Phases IA and IB
of the System by the number of LUEs of Total Reserved
Capacity in Phase I of the System, and multiplying the
result times such Customer's number of LUEs of Reserved
Capacity in Phase I of the System. Each Customer's share of
the Treatment Project Phase Costs for Phases IA and IB of
the System shall be determined by dividing the estimated
Treatment Project Phase Costs in Phases IA and IB of the
System by the Total Reserved Capacity of all Customers in
Phases IA and IB of the System and multiplying the result
times the number of LUEs of Reserved Capacity of such
Customers in Phases IA and IB of the System. Each Cus-
tomer's share of Treatment Project Common Facilities Costs
of Phases IA and IB of the System shall be determined by
dividing the Treatment Project Common Facilities Costs in
Phases IA and IB of the System by the number of LUEs of
Total Reserved Capacity in Phase I of the System and multi-
plying the result times such Customer's number of LUEs of
Reserved Capacity in Phase I of the System. After the
Funding Date, if the District, on the advice of the Dis-
trict's engineer, determines that its estimate of the cost
of acquisition and construction of Phases IA and IB of the
System should be increased, it shall calculate the addi-
tional cost per LUE in the•manner described above and shall
promptly notify each Customer in writing of the additional
amount that said Customer must pay to the District for
deposit into the Construction Fund, the Operation and
Maintenance Reserve Fund and the Repair and Replacement
Reserve Fund, as appropriate. Each Customer shall within
ninety (90) days of receipt of such notice pay to the
District the additional amount; provided that at the request
of any Category B Customer which must pay an additional
amount in excess of ten thousand (10,000) dollars which
request must be in writing and received by the District at
least sixty (60) days prior to the date such additional
amounts are payable to the District, the District agrees
that it will use its best efforts to issue Bonds on behalf
of such Category B Customer to allow for the payment of such
amounts; and provided further, that the failure or inability
of the District to issue, sell and deliver such Bonds shall
not relieve the Category B Customer from its obligation to
pay the additional amount. Upon completion of acquisition
or construction of Phases IA and IB of the System and
payment of all costs of acquisition and construction then
due and owing, any remaining moneys in the Construction Fund
shall be credited to the Customer's pro rata share of the
costs of Phase IC of the System if then under construction,
or returned to each Customer if Phase IC is not under
construction or the Customer has no capacity in Phase IC.
(d) If a Customer elects to be treated as a Category A
Customer, it shall pay to the District a Capacity Charge
equal to (1) such Customer's share of Line Project Costs
determined by dividing the Line Project Costs of Phases IA
and IB of the System by the number of LUEs of Total Reserved
Capacity in Phase I of the System, and multiplying the
result times such Customer's number of LUEs .of Reserved
Capacity in Phase I of the System plus (2) such Customer's
share of the Treatment Project Phase Costs for Phases IA and
IB of the System determined by dividing the Treatment
Project Phase Costs in Phases IA and IB of the System by the
number of LUEs of Total Reserved Capacity of all Customers
- 16 -
in Phases IA and IB of the System and multiplying the result
times the number of LUEs of Reserved Capacity of such
Customer in Phases IA and IB of the System plus (3) such
Customer's share of Treatment Project Common Facilities
Costs determined by dividing the Treatment Project Common
Facilities Costs for Phases IA and IB of the System by the
number of LUEs of Total Reserved Capacity in Phase I of the
System and multiplying the result times the number of LUEs
of the Reserved Capacity of such Customer in Phase I of the
System. Tile Capacity Charge shall be paid on the Funding
Date and shall be deposited by the District into the Con-
struction Fund, the Operation and Maintenance Reserve Fund
and the Repair and Replacement Reserve Fund, as appropriate.
The Capacity Charge may be paid by delivery of an irrevo-
cable, unconditional letter of credit for a term of one year
payable to the District on demand in the amount of the
Capacity Charge and in a form and from a bank acceptable to
the District. The form of the letter of credit shall be
substantially the same as provided in Exhibit "C ", attached
hereto and hereby incorporated by reference herein for all
intents and purposes. The District shall have the right to
approve the financial institution which issues the letter of
credit, which approval shall not be unreasonably withheld or
delayed. The District may draw on said letter of credit, as
necessary, to pay the Customer's share of the Project Costs
as such costs are incurred, or, in the event the letter of
credit is not renewed within thirty (30) days prior to its
expiration, as costs are thereafter estimated to be in-
curred. However, before any draw is made on the letter of
credit, the District shall give the Customer written notice
delivered to the Customer at the address specified herein of
the amount to be drawn and, if the Customer pays such amount
to the District within ten (10) days after receipt of such
notice, then the District will not draw on the letter of
credit for such amount and the letter of credit shall be
reduced by the amount so paid.
(e) If a Customer elects to be treated as a Category B
Customer, the District shall use its best efforts to issue
Bonds on behalf of such Customer in the amount necessary to
allow for a deposit of the Net Bond Proceeds in an amount
equal to the sum of (1) such Customer's share of Line
Project Costs determined by dividing the Line Project Costs
of Phases IA and IB of the System by the number of LUEs of
Total Reserved Capacity in Phase I of the System, and
multiplying the result times such Customer's number of LUEs
of Reserved Capacity in Phase I of the System plus (2) such
Customer's share of the Treatment Project Phase Costs for
Phases IA and IB of the System determined by dividing the
Treatment Project Phase Costs in Phases IA and IB of the
System by the number of LUEs of Total Reserved Capacity of
Customers in Phases IA and IB of the System and multiplying
the result times the number of LUEs of Reserved Capacity of
such Customer in Phases IA and IB of the System plus
(3) such Customer's share of Treatment Project Common
Facilities Costs of Phases IA and IB of the System deter-
mined by dividing the Treatment Project Common Facilities
Costs for Phases IA and IB of the System by the number of
LUEs of Total Reserved Capacity in Phase I of the System and
multiplying the result times the number of LUEs of Reserved
Capacity of such Customer in Phase I of the System into the
Construction Fund, the Operation and Maintenance Reserve
Fund and the Repair and Replacement Reserve Fund, as appro-
priate, and to allow for a deposit into the Debt Service
Reserve Fund of the amount required to be deposited therein
- 17 -
pursuant to the Bond Resolution. Such Category B Customer
shall pay a Facility Charge to the District to meet the
Annual Debt Service Requirement on the Bonds issued on
behalf of such Customer. All Facility Charge payments shall
be deposited by the District in the Debt Service Fund
created by the Bond Resolution. Except as provided below,
(i) the Facility Charge will be payable to the District in
monthly installments, which shall be due and payable, in
immediately available funds, on the last business day of
each calendar month and (ii) the monthly Facility Charge
shall equal the sum of (w) an amount equal to one - twelfth of
the principal of and any redemption premium on Bonds which
mature (or are to be redeemed) during the twelve months
following such monthly payment date, plus (x) an amount
equal to the amount of interest which will be due and
payable on the Bonds on the next interest payment date
divided by the number of months (or 30 -day periods) between
the last succeeding interest payment date and the next
preceding interest payment date, plus (y) any fees or
expenses of the trustee, paying agent or registrar for the
Bonds and plus (z) the amount required to restore any defi-
ciency in the Debt Service Reserve Fund; provided that such
Category B Customer shall pay as a special Facility Charge
payment on the fifth business day prior to any date on which
the District is required to pay principal, premium or
interest on the Bonds, the amount, if any, necessary to
cause the amount on deposit•in the Debt Service Fund created
under the Bond Resolution to equal the amount required to be
paid to the owners of the Bonds by the District on the next
succeeding payment date; and provided further that the
obligation of such Category B Customer to pay the amounts
described in clauses (w) and (x) above shall be offset by
the respective amounts in the Principal Account and the
Interest Account of the Debt Service Fund of such Customer.
(f) A Customer, to the extent it is a Category B
Customer, agrees that its obligation to pay the Facility
Charge shall be absolute and unconditional, irrespective of
any rights of set -off, diminution, abatement, recoupment or
counterclaim the Customer might otherwise have against the
District or any other person, and the Customer covenants not
to seek and hereby waives, to the extent permitted by
applicable law, the benefits of any rights which it may have
at any time to any stay or extension of time for performance
or to terminate, cancel or limit its liability to pay the
Facility Charge. Each Category B Customer hereby agrees
that the holders from time to time of the District's Bonds
shall be entitled to rely upon the agreement of the Customer
to pay the Facility Charge regardless of the validity of the
remainder of this Agreement or any other agreement.
(g) The preceding paragraph shall not be construed to
release the District from the performance of any of its
agreements contained in this Agreement or, except to the
extent provided in this section, prevent or restrict any
Category B Customer from asserting any rights which it may
have against the District or any other person under this
Agreement or under any provision of law or prevent or
restrict such Customer, at its own cost and expense, from
prosecuting or defending any action or proceeding against or
by third parties or taking any other action to secure or
protect its rights under this Agreement.
(h) To the extent it elects to become a Category B
Customer, a Customer recognizes that the Bonds issued by the
- 18 -
District on its behalf will be supported by the pledge of
the payment of the Facility Charge by the Customer under the
terms of its agreement with the District. In order to
enable the District to issue the Bonds, such Category B
Customer agrees, if requested to do so by the District, to
execute a separate agreement with the District, the owners
of the Bonds or a trustee acting on behalf of the owners of
the Bonds evidencing its unconditional obligation to pay the
Facility Charge to enable the District to pay debt service
on the Bonds issued by the District on behalf of the Cus-
tomer. Such additional agreements shall in all respects be
consistent with the requirements of this Agreement regarding
the payment of the Facility Charge by the Customer.
(i) The District shall maintain separate accounts in
the Construction Fund for each Customer to account for the
Customer's pro rata share of the costs of Phases IA and IB
of the System. The District shall, with the advice of the
Customer, invest the moneys in the Construction Fund in
Eligible Securities. All income shall accrue to the benefit
of such Customer and shall be paid to the Customer within
ten (10) days after receipt by the District unless otherwise
agreed by the District and such Customer.
(j) Notwithstanding anything herein to the contrary,
it is understood that Funding of Phases IA and IB of the
System may occur in stages as the District obtains bids for
construction or otherwise acquires the System or parts
thereof. The District, with the advice of the Technical
Committee and the District's engineer, will establish, and
from time to time revise, a budget showing the estimated
expenditures of and need for funds to construct or otherwise
acquire Phases IA and IB of the System in order to provide
the Customers with as much notice as reasonably possible as
to when Fundings will occur and how much money will be
needed from each Customer. It is understood that each
Funding will be designed to provide the District with
sufficient funds to enter into all Project Contracts, and
pay all Project Costs (including engineering and contin-
gencies) related thereto, to continue prompt construction
and acquisition of the System.
Section 6.02. CONSTRUCTION OF PHASE IC OF THE SYSTEM.
The District at its sole discretion, shall determine when to
notify the District's engineers to proceed with the develop-
ment of plans and specifications and construction of
Phase IC of the System. The District shall give the Custom-
ers and the Technical Committee forty -five (45) days prior
written notice of its intent to so advise the District's
engineers. Any Customer or Customers may request in writing
that the District proceed with design, construction, and
acquisition of Phase IC of the System. Upon receiving such
request, the District shall immediately notify all other
Customers of such request and ask whether such other Custom-
ers desire the District to proceed with development of Phase
IC. Within thirty (30) days after receiving such request,
the District shall determine whether or not it will proceed
with development of Phase IC and shall so notify the Custom-
ers and the Technical Committee. If requested by the
Customer or Customers after the completion of Phase IA of
the System, the District shall apply in its name for all
necessary governmental approvals to acquire or construct
Phase IC of the System or any part thereof.
- 19 -
If the District elects not to proceed with development
of Phase IC, then the Customer or Customers desiring to
proceed with such development may proceed to design, acquire
or construct at their sole expense their share of the
capacity in Phase IC as provided herein. Subject only to
the other provisions of this section, the District and the
Customers agree to support the Customer or Customers design-
ing and constructing such facilities in regard to obtaining
necessary governmental approvals and in regard to all other
matters related to design, construction and acquisition of
said facilities by the Customer and the operation thereof by
the District. Specifically, the parties agree that the
Customer or Customers proceeding to implement all or a
portion of Phase IC may apply for all necessary governmental
approvals in the name of said Customer or Customers for
their own benefit or as agent or agents of the District.
Prior to commencement of such construction by a Customer,
the District, with the advice of the Technical Committee,
shall have the right to review and approve the plans and
specifications for any such construction to ensure that such
construction is compatible with the design standards and
physical structure of the System, which approval shall not
be unreasonably withheld or delayed. After approval of such
plans and specifications, such construction shall conform
thereto unless the District thereafter approves a change to
the plans and specifications. The District shall have the
right to inspect the construction during the progress
thereof to ensure compliance with the approved plans and
specifications. Upon completion of construction and ap-
proval thereof by the District, such facilities shall become
a part of the System and the Customer or Customers shall be
entitled to use said facilities.
If the District proceeds to design, acquire, or con-
struct Phase IC of the System, then the provisions of Sec-
tion 6.01 of this Agreement shall apply to the duties and
responsibilities of the parties in regard to the design,
acquisition and construction of Phase IC of the System in
the same manner as applicable to Phases IA and IB of the
System, except that the phrase "Phases IA and IB" in such
Section 6.01 shall instead be "Phase IC." Also, the esti-
mated Project Costs of Phase IC of the System to be incurred
prior to the other Funding Dates and to be paid in the
Initial Funding for Phase IC of the System is estimated by
the District to be zero (0) dollars for Line Project Costs
and six hundred and thirteen thousand three hundred and
seventy -three dollars ($613,373) for Treatment Project Costs
as described in Exhibit "B" attached hereto. Each Custom-
er's pro rata share of such amounts shall be payable to the
District in the same manner as provided for Project Costs to
be paid prior to the other Funding Dates for Phases IA and
IB of the System as described in Section 6.01(a). Not-
withstanding anything herein or in Sections 6.01 or 11.03 to
the contrary, however,. it is specifically provided that if
the recommended low bid for construction of Phase IC of the
System exceeds the estimated construction cost by more than
ten (10) percent, then the Customers receiving Reserved
Capacity in Phase IC of the System shall review the Dis-
trict's recommendation. Either of such Customers may decide
to require the District to reject the bid and redesign or
readvertise the contract. In any event, the District shall
be obligated to rebid the construction contract only one
time. Thereafter, the District's recommendation shall be
final and conclusive.
- 20 -
Section 6.03. DEPOSITS ON FUNDING DATE. After the
District obtains all funds on the Funding Date for any Phase
of the System from the payment of Capacity Charges and from
Net Bond Proceeds, the District shall deposit all of said
funds into the Construction Fund, the Operation and Mainte-
nance Reserve Fund and the Repair and Replacement Reserve
Fund, as appropriate.
Section 6.04. SERVICE CHARGE. Every Customer and
Additional,Customer of each Category (Categories A and B),
shall be required to pay a monthly charge (the "Service
Charge ") to meet the Annual Operation and Maintenance
Expense Requirement. The rate used in determining the
amount of the Service Charge shall be established by the
Board of Directors of the District and shall be adjusted by
said Board from time to time, and in any event at least
annually, for all Customers and Additional Customers in
order to recover the Operation and Maintenance Expenses of
the System during any applicable period. The Service Charge
shall be composed of two components, one representing those
Operation and Maintenance Expenses which are incurred by the
District regardless of the amount of actual use by any
Customer or Additional Customer (the "Fixed Charges ") and
the other representing those Operation and Maintenance
Expenses which are directly related to the amount of service
actually provided by the District (the "Variable Charges ")
which shall be all Operation and Maintenance Expenses other
than the Fixed Charges. The rate for Fixed Charges shall be
calculated by multiplying a Fixed Charge rate times the
Reserved Capacity of each Customer and Additional Customer
in the System and Variable Charges shall be calculated by
multiplying a Variable Charge rate times the actual amount
of Wastewater delivered to the System, expressed in U.S.
gallons and determined in accordance with Article IV of this
Agreement.
Section 6.05. PAYMENTS' BY CUSTOMERS AND ADDITIONAL
CUSTOMERS FOR FUTURE SYSTEM CAPACITY.
(a) All Customers shall be required to share in
Project Costs of Expansions of the System if, and only to
the extent that, those Customers request additional Reserved
Capacity. A Customer which requests additional Reserved
Capacity shall be treated as an Additional Customer for such
purposes. However, if a Customer does not request addi-
tional Reserved Capacity in the Expansion its obligation to
pay the Capacity Charge or Facility Charge will not be in-
creased to reflect the additional Project Costs of the
Expansion.
(b) At such time as the District desires to acquire or
construct an Expansion of the System for Additional Custom-
ers, it may enter into additional agreements with such
Additional Customers, .similar to this Agreement, whereby
such Additional Customers may acquire Reserved Capacity in
the System by payment of either a Capacity Charge or a
Facility Charge, as appropriate, and by payment of the
Service Charge all in a manner consistent with that previ-
ously described herein for Phase I of the System. The
parties recognize that the Bonds issued by the District for
any Expansion of the System for Additional Category B
Customers shall be supported by and be payable from solely
the Facility Charges of the Additional Category B Customers
under separate contracts to be signed between the Additional
Category B Customers and the District and the Customers
- 21 -
shall in no way be responsible for payment of Facility
Charges or debt service of Bonds issued to construct an
Expansion of the System for the Additional Category B
Customers.
(c) After the Expansion of the System by the District
to serve Additional Customers, each Customer and Additional
Customer shall be required to pay a Service Charge calculat-
ed in accordance with Section 6.04 above.
(d) Any Customer or Additional Customer which requires
an Expansion of the System shall request such Expansion in
writing to the District and shall specify in such request
the amount of capacity required in the Expansion. Upon
receiving a request for Expansion of the System, the Dis-
trict shall, within five (5) days, contact all Customers and
Additional Customers to determine whether or not such
Customers and Additional Customers desire additional capa-
city in the Expansion. Any such other requests from the
Customers and Additional Customers shall be provided in
writing to the District within thirty (30) days after such
Customer or Additional Customer receives such notice from
the District. If the total of the requests' is at least
1 MGD, then the District shall proceed as indicated below.
If the total of the requests is less than 1 MGD, the Dis-
trict may deny the request or proceed as indicated below, at
its discretion. After receipt of all such requests for
Expansion of the System, the District shall determine what
capacity in the System is presently being utilized by all
Customers and Additional Customers. If less than eighty
(80) percent of the then Total Reserved Capacity of the
System is being utilized, the District need not commence the
Expansion for the Customers and Additional Customers as
requested by them immediately, but may defer the acquisition
or construction of the requested Expansion to a later date
to be determined by the District, but to be no later than
the date at which time eighty (80) percent or more of the
existing Total Reserved Capacity in the System is being
utilized by the Customers and Additional Customers; provided
that the District is able to find a Customer which is
willing to lease its excess capacity in the System to such
Additional Customer(s) under terms and at prices to be
approved by the District. However, no Customer shall be
required to lease its Reserved Capacity in the System.
If no Customer is willing to lease such excess capacity
or, in any event, once the District determines that eighty
(80) percent or more of the existing Total Reserved Capacity
in the System is being utilized, the District must commence
the requested Expansion if the total requests are at least 1
MGD. If the District fails or is not obligated to commence
the required Expansion as indicated herein, any Customer or
Additional Customer requesting such Expansion may commence
the Expansion at the sole cost of the Customer or Additional
Customer and, upon completion of the Expansion, convey the
Expansion to the District to own and operate on behalf of
the Customer or Additional Customer making the Expansion.
The District shall have the right to review and approve any
construction of an Expansion by a Customer or Additional
Customer.
Section 6.06. CAPITAL RECOVERY FEE.
(a) The parties recognize that certain of the faci-
lities (as described in the Engineering Report) being
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acquired or constructed in Phase I of the System (1) are
designed and built to serve the needs not only of the
Customers of Phase I of the System, but are designed and
will be constructed to benefit all Customers and Additional
Customers of the System, or (2) are facilities which the
District is required to construct or acquire in order to
accomplish Phase I of the System as a regional system. It
is recognized and agreed between the parties that these
facilities, referred to as the Common Facilities, include
the following:
(1) Phase I Interceptor Line;
(2) Phase I Plant Site;
(3) Davis Spring Interim Lift Station and Pump -
over Facility;
(4) North Austin MUD No. 1 Interim Lift Station
and Pumpover;
(5) Onion Creek Pumpover Facility;
(6) Amounts paid to MUD 2 to reimburse it for its
agreement to discontinue using existing
facilities owned by it;
(7) Amounts paid to MUD 3 to reimburse it for its
agreement to discontinue using existing
facilities owned by it;
(
Costs of obtaining any wastewater discharge
permits necessary to acquire, construct,
improve or operate Phase I of the System;
provided, however, that in regards to obtain-
ing wastewater discharge permits for Phase IC
of the System, if more than two permits are
obtained for Phase IC of the System, then all
costs for permits for Phase IC over and above
said two permits shall be Treatment Plant
Common Facilities Costs only for purposes of
computing the Capital Recovery Fee, and shall
be considered as Treatment Plant Phase Costs
for purposes of distributing said costs among
the Customers; and
(9) Such other items as determined by the Dis-
trict.
(b) The parties recognize that the Customers, by
paying the Project Costs of Phase I of the System, will be
funding the cost of the Common Facilities. The parties
therefore agree that the District, prior to the time that it
enters into agreements with Additional Customers, will
establish a Capital Recovery Fee for Additional Customers of
the System designed to recover from such Additional Custo-
mers a pro rata share of the cost of the Common Facilities.
(c) The Capital Recovery Fee shall be calculated as
follows: the District will determine the cost of each
Common Facility, inclu'ing an appropriate amount for Project
Costs incurred by the District in the acquisition or con-
struction of Phase I of the System which should be allocated
to all Customers and all Additional Customers because such
costs are related to implementing the System for the entire
- 23 -
Brushy Creek Watershed as opposed to only benefiting speci-
fic Customers. In order to determine the Capital Recovery
Fee per LUE for each Expansion, the District will divide the
cost of the Common Facilities (increased by ten (10) percent
each year, or part thereof, for inflation and carrying
costs) by the number of LUEs in Phase I and the Expansion of
the System. The resulting cost per LUE for all of the
Common Facilities shall be used in determining the Capital
Recovery Fee to be charged by the District per LUE of
Reserved Capacity for any Additional Customer. The District
shall, prior to agreeing to expand the System for Additional
Customers, determine the Capital Recovery Fee in accordance
with this formula and shall establish such a Capital Recov-
ery Fee by appropriate action of the District's Board of
Directors.
If the total actual demand of the Reserved Capacity for
all of the Additional Customers who participate in a given
Expansion is less than the total Reserved Capacity provided
in the Expansion, such Additional Customers shall pay on a
pro rata basis, in proportion to the actual demand of the
Reserved Capacity each of them acquires in the Expansion,
the Capital Recovery Fees for the LUEs provided in the
Expansion in excess of their actual demand of the Reserved
Capacity in the Expansion. Additional Customers having
rights to LUEs in the Reserved Capacity of the Expansion in
excess of their actual demand in the Expansion may sell,
transfer or assign their excess LUEs to other parties at
their cost, plus interest at 10% per annum for inflation and
carrying costs, subject to prior verification by the Dis-
trict that the price being charged per LUE does not exceed
the amount authorized under the foregoing formula and
subject to prior approval by the District of the party to
whom the LUEs are being assigned, which approval shall not
be unreasonably withheld or delayed.
(d) In addition to all other charges previously de-
scribed herein, at the time the District executes an agree-
ment with any Additional Customers for Reserved Capacity in
any Expansion of the System, the District shall require
payment by the Additional Customer of the Capital Recovery
Fee. The Capital Recovery Fee shall be paid to the District
prior to the commencement of acquisition and construction of
any Expansion of the System. Within thirty (30) days after
receipt of the Capital Recovery Fee by the District, the
District shall pay the moneys thus received to the Customers
in the proportion that each Customer's Reserved Capacity in
Phase I of the System bears to the Total Reserved Capacity
of all Customers in Phase I of the System.
(e) After such an Expansion, future Capital Recovery
Fees shall be calculated and implemented in the same manner
as previously described in this section except that Addi-
tional Customers that have previously paid a Capital Recov-
ery Fee shall be entitled to reimbursement from future
Capital Recovery Fees on the same basis as the Customers.
Section 6.07. DEFAULT.
(a) In the event any Customer or Additional Customer
defaults in the payment of the Facility Charge or Service
Charge required hereunder, the District shall immediately
give notice of such de£aillt to such Customer or Additional
Customer and other Customers or Additional Customers;
provided, however, that nothing in this section shrill
- 24 -
prevent any Customer from paying under protest any amount
alleged as owed by the District or prevent the District from
accepting any payment even if less than the amount alleged
by the District as owed by the Customer. Payment or receipt
of any such disputed amount shall not be construed as a
waiver of any right of the party making or receiving such
disputed amount to contest such matter and to demand payment
or receipt of a different amount. Thereafter, the default-
ing Customer or Additional Customer shall take all appropri-
ate steps to correct such default and shall correct such
default within ten (10) days after receipt of such notice.
Any past due amount shall be paid, together with interest at
ten (10) percent per annum thereon, or the maximum legal
rate of interest then in effect, whichever is lesser. In
the event such default remains unremedied for a period of
thirty (30) days from the date of receipt of notification of
default, then the District may terminate service to such
defaulting Customer or Additional Customer after providing
ten days' written notice to such defaulting Customer or
Additional Customer of its intention to so terminate service
hereunder. If such default remains unremedied for a contin-
uous period of ninety (90) days from the date of receipt of
notification of default, then the District shall notify all
Customers and Additional Customers of such fact and the
District shall, after giving the defaulting Customer or
Additional Customer ten (10) days' written notice, terminate
the contract between the District and such defaulting
Customer or Additional Customer by delivery of a written
notice to such Customer or Additional Customer. The Custom-
ers agree that the District shall have the right to so
terminate this Agreement as to any defaulting Customer in
the event such defaulting Customer is in default of any of
its obligations hereunder as described in this section and
the defaulting Customer, in the event of termination of its
rights under this Agreement by the District as provided
herein, waives any and all of its rights to seek any damages
or other remedy against the District or any of the Customers
or Additional Customers of the District or to claim any
amounts as due and owing to it from the District or other
Customers or Additional Customers either from amounts then
on hand or to be paid in the future to the District or such
other Customers and Additional Customers.
(b) It is specifically provided that regardless of any
other provisions in this Agreement or in similar contracts
executed between the District and Additional Customers, in
the event a Category B Customer or Additional Category B
Customer defaults in the payment of its Facility Charge,
then the following shall occur:
(1) The District shall immediately give written notice
to such defaulting Category B Customer or Addi-
tional Category B Customer and to all other
Customers and Additional Customers of such de-
fault. If such default is not fully remedied
within ten (10) days after receipt of such notice
by the defaulting party, then the District shall
immediately take all actions necessary and appro-
priate to cause such defaulting party to correct
such default including pursuing all legal remedies
such as mandamus of the officials of such default-
ing party.
(2) If such default remains unremedied for a continu-
ous period . of ninety (90) days from the date of
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receipt of notification of default, then the
District shall notify all Customers and Additional
Customers of such fact and shall take all actions
necessary to terminate service to such defaulting
party. If the District terminates service to such
defaulting Category B Customer or Additional
Category B Customer and terminates the contract
entered into between the District and such de-
faulting party, then the Reserved Capacity in the
System of such defaulting party shall be owned by
the District. The District may execute additional
contracts with Customers, Additional Customers or
other persons similar to this Agreement, which
contracts would provide the District with the
necessary revenues to pay the Annual Debt Service
Requirement related to Bonds issued on behalf of
such defaulting Category B Customer or Additional
Category B Customer for the System and the Dis-
trict may reserve for any such party that enters
into any such contract with it that portion of the
Reserved Capacity in the System that was previ-
ously reserved for the defaulting Category B
Customer or Additional Category B Customer. All
Customers agree to cooperate with the District in
enabling the District to enter into any such con-
tracts in order to prevent a default in the
payment of the debt service on Bonds issued by the
District to acquire or construct the System.
(c) Termination of the rights of a defaulting Customer
shall not relieve the Customer from the performance of any
of its obligations hereunder.
Section 6.08. SURCHARGE. The Annual Operation and
Maintenance Expense Requirement allocable to a Customer or
Additional Customer may be increased by a surcharge as
described in Section 5.03. In the event a Customer is
assessed a surcharge, the District will bill such Customer
for such surcharge monthly as determined by the District
following the determination of the surcharge and such
Customer shall pay such surcharge within ten (10) days of
the receipt of any such bill. Any such surcharge collected
by the District shall be applied by the District against the
total cost of Operation and Maintenance Expense of the
System.
Section 6.09. MANAGEMENT FEE.
It is agreed between the parties that, in addition to
all other compensation or reimbursement authorized and
required to be made to the District by the Customers as
otherwise provided in this Agreement, the District shall
receive annually on each February 1 a fee in the total
aggregate amount from all Customers of twenty thousand
(20,000) dollars per year to compensate the District for the
increased administrative responsibility borne by the Dis-
trict in fulfilling its management obligations under this
Agreement; provided, however, that such annual fee for
calendar year 1985 shall be paid to the District at the time
of Initial Funding and shall be prorated for such year for
the period from the date of execution of this Agreement by
all Customers with the District. The parties agree that
such fee shall be a Project Cost of Phases IA and IB of the
System until completion of Phases lA and IB of the System
and, in connection therewith, shall be considered a Line
- 26 -
Project Cost. After completion of construction of Phases lA
and IB of the System, such fee shall be considered an
Operation and Maintenance Expense of the System and shall be
part of the Fixed Charges of the System. Money received by
the District from such fee may be used for any lawful
purpose.
Section 6.10. PAYMENTS BY CUSTOMERS.
(a) .ecognizing that the District will use payments
received from each Customer to the extent such Customer is a
Category B Customer to pay, secure and finance the issuance
of the Bonds, it is hereby agreed that upon the effective
date of this Agreement, each Customer, to the extent it is a
Category B Customer, shall be unconditionally obligated to
pay the Facility Charge regardless of whether or not such
Customer actually discharges Wastewater hereunder, whether
due to Force Majeure or otherwise.
(b) On or before March 15 of each year the District
will furnish each Customer with an estimated schedule of
monthly payments to be made by the Customer for the ensuing
System Year. On or before June 1 of each year, the District
shall furnish each Customer with a finalized schedule of the
monthly payments to be made by such Customer to the District
for the ensuing System Year. Each Customer hereby agrees
that it will make such payments to the District on or before
the last day of each month of such System Year. If a
Customer at any time disputes the amount to be paid by it to
the District, such Customer shall nevertheless promptly make
the payment or payments determined by District, and, if it
is subsequently determined by agreement, arbitration,
administrative agency or court decision that such disputed
payments made by the Customer should have been less, the
District shall promptly revise and reallocate the charges
among all Customers and Additional Customers then being
served by the District in such manner that such Customer
will recover its overpayment together with interest thereon
at reasonable rate to be determined by the District.
(c) If a Customer's Facility Charge or Service Charge
is redetermined as herein provided, the District will
promptly furnish the Customer with an updated schedule of
monthly payments reflecting such redetermination.
(d) All interest income earned by the investment of
any funds created in the Bond Resolution or any other funds
related to the System shall be taken into account in deter-
mining the Facility Charge and the Service Charge.
ARTICLE VII
REQUIRED IMPROVEMENTS
Section 7.01. DISTRICT TO DETERMINE REQUIRED IMPROVE-
MENTS. In the event that Required Improvements of the
System are necessary in order to treat and dispose of waste
adequately in accordance with the orders, rules, regulations
or requirements of any regulatory body, other than the
District, the District will determine the Required Improve-
ment which is necessary. The District's determination that
Required Improvements are necessary to enable the System to
meet the waste treatment and disposal requirements of the
Customers and Additional Customers shall be supported by a
certificate from the District's consulting engineer which
- 27 -
certificate shall be submitted to the Customers and the
Technical Committee.
Section 7.02. DISTRICT'S DUTY TO MAKE REQUIRED IM-
PROVEMENTS. The District shall design, acquire, construct,
own, operate, maintain and repair all Required Improvements.
The District's obligation to acquire or construct any
Required Improvement shall be contingent upon and subject
to:
(1) the District's obtaining sufficient
funds to pay the Project Costs of the Required
Improvement of the System including the payment of
any Capacity Charges and the sale and delivery
upon terms satisfactory to the District of the
Improvement Bonds for any Required Improvement of
the System;
(2) the District's ability to obtain all
sites, rights -of -way, easements, labor, equipment
and materials required for acquisition or con-
struction of any Required Improvement of the
System; and
(3) the District's obtaining all permits,
approvals and licenses required to acquire or
construct the Required. Improvement and to operate
the System thereafter, including waste discharge
permits issued by the Texas Water Commission or
its successors and approval of the project and
Improvement Bonds issued therefor by the Texas
Water Commission or its successors.
Section 7.03. CUSTOMER'S OBLIGATIONS IN EVENT OF
REQUIRED IMPROVEMENT.
(a) In the event the District determines that a
Required Improvement is necessary, it shall notify all
Customers, Additional Customers and the Technical Committee
in writing of such fact. Such notice shall specify a date
by which such Customer or Additional Customer shall be
liable for contribution of its share of all funds necessary
for acquisition or construction of the Required Improvement,
either by way of a Capacity Charge therefor or by the
District's issuance of Bonds therefor on behalf of such
Customer or Additional Customer. The date so specified
shall be not less than forty -five (45) days after such
notice is mailed. Such notice shall include the estimated
total Project Costs of the Required Improvement, the esti-
mated Project Cost of the Required Improvement per LUE, and
the number of LUEs for which each Customer and Additional
Customer is responsible. At least thirty (30) days prior to
such date, each Customer shall notify the District as to
whether it desires to be treated as a Category A Customer or
(Additional Category A Customer) or Category B Customer (or
Additional Category B Customer) for the purposes of such
Required Improvement.
(b) In the event the Customer elects to be treated as
a Category A Customer (or Additional Category A Customer)
for purposes of such Required Improvement, it shall pay a
Capacity Charge to the District by the date specified in the
notice, which Capacity Charge shall be determined in the
manner described in Article VI.
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(c) In the event the Customer elects to be treated as
a Category B Customer (or Additional Category B Customer)
for purposes of the Required Improvement, the District shall
use its best efforts to issue Improvement Bonds on behalf of
the Customer in an amount sufficient to provide from the Net
Bond Proceeds the amount sufficient to pay the Customer's
share of the Project Costs of the Required Improvement in
the manner described in Article VI.
(d) If, thereafter, the estimated costs of the
Required Improvement increase, the District shall notify the
Customers and the Technical Committee of such fact in the
same manner as provided in Section 6.01 hereof in connection
with the acquisition or construction of Phases IA and IB of
the System and the Customer shall be required to provide
additional Capacity Charge payments or be responsible for
additional Improvement Bonds, as appropriate, in the same
manner as provided in Section 6.01 hereof in connection with
the acquisition or construction of Phases IA and IB of the
System.
(e) The Category B Customers shall thereafter be
responsible for payment of any Facility Charge, if appropri-
ate, and any Service Charge related to the Required Improve-
ment in the same manner as provided in Article VI hereof.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. OBLIGATIONS OF CUSTOMERS. Unless
otherwise specifically provided in writing by subsequent
agreement between the District and any Customer, the Dis-
trict shall never have the right to demand payment by a
Customer of any obligation assumed or imposed on it under
and by virtue of this Agreement from funds raised or to be
raised by taxation, it being expressly understood by the
parties hereto that all payments due by the Customers
hereunder are to be made from the revenues and income
received by each Customer from its waterworks and sanitary
sewer systems.
Section 8.02. PAYMENTS TO CONSTITUTE OPERATING EX-
PENSES OF CUSTOMER. Each Customer represents and covenants
that the services to be obtained pursuant to this Agreement
are essential and necessary to the operation of the Customer
and its own Wastewater facilities, and that all payments to
be made hereunder by it will constitute reasonable and
necessary "operating expenses" of the Customer's waterworks
and sanitary sewer systems, within the meaning of Arti-
cle 1113, Vernon's Texas Civil Statutes, if appropriate, and
the provisions of all ordinances authorizing the issuance of
all bonds of the Customer which are payable from revenues
of the Customer's waterworks and sewer systems.
Section 8.03. CUSTOMER TO ESTABLISH ADEQUATE RATES.
Each Customer agrees to establish and collect such rates and
charges for its waterworks and Wastewater services to be
supplied by its system as will make possible the prompt
payment of all expenses of operating and maintaining its
system including the payments contracted hereunder, and the
prompt payment of the principal of and interest on its
obligations, if any, payable from the revenues of its
waterworks and Wastewater systems.
- 29 -
Section 8.04. MANDAMUS AND OTHER REMEDIES AGAINST
CATEGORY B CUSTOMERS. To the extent the Customer is a
Category B Customer, the parties recognize that the District
will be issuing its bonds on behalf of such Customer and
will pledge the revenues from the Facility Charge to secure
payment of principal of, premium, if any, and interest on
the Bonds. Therefore, the parties agree that, in addition
to all other remedies provided herein or at law or in
equity, each Category B Customer agrees that the District or
any other Customer shall be entitled to a writ of mandamus
issued by a court of competent jurisdiction compelling and
requiring the Category B Customer to take all actions cove-
nanted herein and to make prompt payment of the Facility
Charge and other payments contracted to be made herein and
to observe and perform the covenants, obligations and
conditions imposed in this Agreement.
Section 8.05. OTHER REMEDIES. The District also
agrees that each Customer shall be entitled to a writ of
mandamus or injunctive relief from a court of competent
jurisdiction compelling and requiring the District to
perform the covenants, obligations and conditions imposed
upon the District in this Agreement.
Section 8.06. USE OF PUBLIC PROPERTY. By these
presents, each Customer, to the extent capable under exist-
ing law, authorizes use by the District of streets and
general utility or sewer easements of the Customer for
construction, operation and maintenance of the System, so
long as such use by the District is in compliance with the
terms of any easement utilized by the District and does not
interfere with any lawful use by the Customer and subject to
all of the Customer's ordinances, rules and regulations
respecting the manner of such use and restoration of lands,
pavement or improvements resulting from exercise of the
rights provided in this section, including the cost of
relocation of any facilities located within any such ease-
ment as an expense of the System. The District will cooper-
ate with each Customer in the timing, planning and installa-
tion of the System to be constructed and installed by the
District.
Section 8.07. USE OF REVENUES OF SYSTEM. All revenues
received from any source whatsoever by the District by
reason of its ownership of this System shall, to the extent
permitted by law, be credited to the funds of the System as
established herein and in the Bond Resolutions and, to the
extent required or permitted, be credited to the appropriate
Customer. To the extent permitted by law, if the District
receives income from the use of treated Wastewater, prior to
its discharge into a public stream of the State of Texas,
the District will apply said income against the Operation
and Maintenance Expense of the System. No funds derived
from the Customers and Additional Customers shall ever be
used for the benefit of any project the revenues of which
have been excluded from the pledge for payment of the Bonds
hereunder or which may be so excluded in the future.
Section 8.08. FORCE MAJEURE. In case by reason of
"Force Majeure" any party hereto shall be rendered unable
wholly or in part to carry out its obligations under this
Agreement, then if such party shall give notice and full
particulars of such "Force Majeure" in writing to the other
parties within a reasonable time after occurrence of the
event or cause relied on, the obligation of the party giving
- 30 -
such notice, so far as it is affected by such Force Majeure,
with the exception of the obligation of a Category B Cus-
tomer to pay Facility Charges, if appropriate, 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 means acts of God, strikes, lockouts or other
industrial disturbances, acts of public enemy, orders of any
kind of the United States or the State of Texas or any civil
or military authority, insurrections, riots, epidemics,
landslides, lightning, earthquakes, fires, hurricanes,
storms, floods, washouts, droughts, arrests, restraint of
government and people, civil disturbances, explosions,
breakage or accidents to machinery, pipelines or canals,
partial or entire failure of water supply and inability on
the part of such Customer to provide water necessary for
operation of its water and Wastewater system hereunder or of
the District to receive Wastewater on account of any other
causes not reasonably within the control of the party
claiming such inability. It is understood and agreed that
the settlement of strikes and lockouts shall be entirely
within the discretion of the party having the difficulty and
that the above requirement that any Force Majeure shall be
remedied with all reasonable dispatch shall not require the
settlement of strikes and lockouts by acceding to the
demands of the opposing party or parties when such settle-
ment is unfavorable in the judgment of the party having the
difficulty.
Section 8.09. INSURANCE. The District will, and the
Bond Resolution will contain appropriate provisions
requiring the District to, carry insurance for purposes
including, without limitation, those purposes contemplated
in Sections 1.01(gg) and (11) and in amounts which would
ordinarily be carried by a privately owned utility company
under contract to perform services similar to those under-
taken by the District in this Agreement. Such provisions
will be so designed as to afford protection not only for the
owners of the Bonds but to assure and facilitate, to the
extent feasible and practicable, the restoration of damaged
or destroyed properties and to minimize the interruption of
service to the Customers and others.
Section 8.10. REGULATORY BODIES. This Agreement shall
be subject to all valid rules, regulations and laws applica-
ble hereto passed or promulgated by the United States of
America, the State of. Texas or any governmental body or
agency having lawful jurisdiction or any authorized rep-
resentative or agency of any of them.
Section 8.11. DISTRICT CONTRACTS WITH OTHERS. The
District reserves the right to contract with other persons,
natural or corporate,'private or public, to perform services
similar to those to be performed under this Agreement or
other services; provided, however, that no contract will be
made for service within a Customer's limits or within the
extraterritorial jurisdiction of any Customer, if appropri-
ate, as defined, in Article 970a, Vernon's Annotated Civil
Statutes, on the date of such contract, without the District
first allowing such Customer a reasonable opportunity (not
to be less than three months) to agree to provide Wastewater
service to any such person.
- 31 -
Section 8.12. ADDITIONAL CAPACITY AND FACILITIES. As
the responsible agency for the establishment, adminis-
tration, operation and maintenance of the System, the
District will, from time to time, as provided previously
herein, determine when it is necessary to provide additional
facilities to receive, transport, treat and dispose of
additional Wastewater of the Customers and any Additional
Customers. In making the determinations called for herein,
District covenants that such determinations will be made
only after requests from Customers or Additional Customers
and after detailed studies of statistical data available as
to the need and feasibility have been made and after con-
sulting with consulting engineers and financial advisors.
Each Customer will be kept advised at all times of planning
and proposed development of the System.
Section 8.13. CONTRACTS WITH OTHERS. Each Customer
shall have the right to enter into contracts with other
persons natural or corporate, private or public, to receive
Wastewater from such persons. Each Customer covenants that
it will advise the District of all such written contracts
and will, if requested by the District, furnish the District
with a list of all customers other than retail, residential
customers.
Section 8.14. ANNUAL REPORT AND AUDIT OF SYSTEM. The
District shall, at the close of each Fiscal Year, cause to
be prepared an annual report and audit of the System. Such
report shall contain such matters and information as may be
considered necessary and useful by the District and as
customarily supplied in an audit performed by and certified
by a nationally recognized independent public accounting
firm. A copy of the annual report and audit and accompany-
ing management letter shall be promptly provided to each
Customer and the Technical Committee. Such report shall be
prepared in conformity with applicable law.
Section 8.15. GOVERNMENTAL REGULATIONS. In each
instance herein where reference is made to a federal or
State regulation, it is the intention of the parties that at
any given time the then current edition of any such federal
or State regulation shall apply. New standards shall be
adopted by the District which are in compliance with appli-
cable State and federal laws and any valid rules and regu-
lations issued pursuant thereto.
Section 8.16. OPERATION OF THE SYSTEM. The District
covenants that it will operate the System in accordance with
accepted good business and engineering practices and in
accordance with requirements of the Clean Water Act and 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 adminis-
tration of said laws. The Customers and the District agree
that their obligations hereunder shall include compliance
with the requirements made under said laws, and any rules
and regulations issued pursuant thereto.
Section 8.17. REGIONAL DESIGNATION. The parties
recognize that the District has been designated as the
entity to provide regional Wastewater system services to the
upper Brushy Creek watershed by the Texas Water Development
Board pursuant to the powers previously vested in the Board
by Chapter 26, Texas Water Code. The District covenants
that it will faithfully and diligently perform its duties as
- 32 -
the regional provider of Wastewater services in the upper
Brushy Creek watershed as provided in Chapter 26, Texas
Water Code.
Section 8.18. NO ADDITIONAL WAIVER IMPLIED. No waiver
or waivers of any breach or default (or any breaches or
defaults) by any party hereto of any term, covenant, condi-
tion, or liability hereunder, or of performance by the other
parties of any duty or obligation hereunder, shall be deemed
or construed to be a waiver of subsequent breaches or
defaults of any kind, under any circumstances.
Section 8.19. ADDRESSES AND NOTICE. Unless otherwise
provided in this Agreement, any notice, communication,
request, reply, or advice (herein severally and collective-
ly, for convenience, called "Notice ") herein provided or
permitted to be given, made or accepted by any party to the
others 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 tele-
gram, when appropriate, addressed to the party to be no-
tified. Notice deposited in the mail in the manner herein-
above described shall be conclusively deemed to be effec-
tive, unless otherwise stated in this Agreement, from and
after the expiration of four (4) days after it is so depos-
ited. Notice given in any other manner shall be effective
only if and when received by the party to be notified. For
the purpose of notice, the addresses of the parties shall,
until changed as hereinafter provided, be as follows:
If to the District, to:
Brushy Creek Water Control and Improvement District
No. 1 of Williamson and Milam Counties
P.O. Box 882
Taylor, TX 76574
Attn.: President, Board of Directors
If to Austin, to:
City of Austin
P.O. Box 1088
Austin, TX 78767 -8828
Attn.: City Manager
If to Round Rock, to:
City of Round Rock
214 E. Main Street
Round Rock, TX 78664
Attn.: City Manager
If to MUD 2, to:
Williamson County Municipal Utility District No. 2
3737 Hairy Man Road
Round Rock, TX 78681
Attn.: President, Board of Directors
- 33 -
If to MUD 3, to:
Williamson County Municipal Utility District No. 3
P.O. Box 986
Cedar Park, TX 78613
Attn.: General Manager
The parties 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 8.20. MODIFICATION. This Agreement shall be
subject to change or modification only with the mutual
consent of the governing bodies of each of the parties
hereto, but the parties recognize that the Bond Resolution
may contain covenants by the District not to consent to
certain changes or modifications of this Agreement.
Section 8.21. ASSIGNABILITY. This Agreement shall not
be assignable by any party without the prior written consent
of the other parties, which consent shall not be unreason-
ably withheld or delayed.
Section 8.22. SEVERABILITY. The provisions of this
Agreement are severable, and if any provision or part of
this Agreement or the application thereof to any person or
circumstance shall ever be held by any court of competent
jurisdiction to be invalid or unconstitutional for any
reason, the remainder of this Agreement and the application
of such provision or part of this Agreement to other persons
or circumstances shall not be affected thereby.
Section 8.23. MERGER. This Agreement constitutes the
entire agreement between the parties relative to the subject
matter thereof. There have been and are no agreements,
covenants, representations or warranties between the parties
other than those expressly stated herein or expressly
provided for herein.
ARTICLE IX
DISTRICT SYSTEM BUDGET
Section 9.01. FILING WITH CUSTOMERS. Not less than
forty (40) days before commencement of the second Fiscal
Year and not less than forty (40) days before the commence-
ment of each Fiscal Year thereafter while this Agreement is
in effect, District shall cause to be prepared and filed
with the Technical Committee and each Customer and Addi-
tional Customer its tentative budget for the operation of
the System for the next ensuing Fiscal Year. If no protest
or request for a hearing on such tentative budget is pre-
sented to District within thirty (30) days after such filing
of the tentative budget by one or more Customers or Addi-
tional Customers, the tentative budget for the System, when
adopted by District's Board of Directors, shall be con-
sidered for all purposes as the "System Budget" for the next
ensuing Fiscal Year. But if a protest or request for a
hearing is duly filed, it shall be the duty of the District
to fix a date and time for a hearing on the tentative budget
before the Board of Directors of the District and the
District shall to advise the Technical Committee, all
- 34 -
Customers and all Additional Customers in writing. After
said hearing, the Board of Directors of District may adopt
the budget or make such amendments thereof as to it may seem
proper. The budget thus approved by the Board of Directors
of the District shall be the System Budget for the next
ensuing Fiscal Year.
ARTICLE X
OTHER MATTERS
Section 10.01. AGREEMENT CONCERNING PERMITS FOR
EXISTING UTILITY SYSTEMS. By the execution of this Agree-
ment, the Customers and the District agree that they will
not protest or take any action to prevent or delay any
permit amendment, renewal, extension, temporary order or
other authorization sought by a Customer to enable the
Customer to continue operation of its existing Wastewater
treatment plants.
Section 10.02. INTERIM CAPACITY IN ROUND ROCK WASTEWA-
TER TRANSPORTATION AND TREATMENT SYSTEM. The District
agrees to use its best efforts to negotiate and execute an
agreement with Round Rock to obtain interim Wastewater
transportation and treatment capacity and services in the
Round Rock Wastewater transportation and treatment system,
to provide interim Wastewater treatment and disposal ser-
vices to Austin, MUD 2 and MUD 3 pending the completion of
the District's proposed 10 MGD Wastewater treatment plant
proposed to be constructed in Phase IA and to provide
interim Wastewater transportation capacity pending the
completion of Phase IB of the System. Any such capacity
agreed to be reserved for and used by the District shall be
shared by Austin, MUD 2 and MUD 3 on a pro rata basis based
on their respective shares of capacity in the System as
otherwise provided herein. The costs of constructing or
obtaining any such capacity shall be considered a Project
Cost of Phases IA and IB of the System and shall be dis-
tributed among the Customers as otherwise provided herein.
The monthly costs charged by Round Rock to the District for
providing any such transportation or treatment services
shall be an Operation and Maintenance Expense and shall be
paid by the Customers utilizing such capacity in the manner
provided herein.
10.03. OWNERSHIP OF SYSTEM.
(a) Notwithstanding anything to the contrary herein -
before provided, to the extent a Customer agrees to pay
Capacity Charges as a Category A Customer, then such Cus-
tomer shall own an undivided interest in the Phase of the
System being acquired or constructed in the ratio that such
Customer's Reserved Capacity purchased by such payments in
that Phase of the System bears to the Total Reserved Capa-
city of that Phase. Such undivided interest shall be
represented by the right of the Customer to deliver Waste-
water to the District for collection and treatment as
provided in this Agreement. In such event, the Customer
designates the District as the sole and exclusive manager
and operator of the System under the provisions of this
Agreement for the longer of the term of this Agreement or so
long as any Bonds or Additional Bonds issued by the District
remain outstanding. As manager and operator, the District
is authorized to enter into all contracts necessary or
convenient to perform its responsibilities, including
- 35 -
contracting with other persons to perform such functions on
behalf of the District. Further, in such event, wherever
this Agreement refers to the District as the owner or
operator of the System, such rights shall be construed to
mean the right of the District to be the sole and exclusive
manager and operator of such Customer's undivided interest
in the System.
(b) Notwithstanding anything to the contrary herein -
before provided, to the extent a Customer agrees to pay
Facility Charges as a Category B Customer, then so long as
any Bonds or Additional Bonds issued by the District on
behalf of such Customer remain outstanding, the District
shall own an undivided interest in the Phase of the System
being acquired or constructed in the ratio that such Custom-
er's share of the Reserved Capacity purchased by such
payments in that Phase of the System bears to the Total
Reserved Capacity of that Phase. Such undivided interest
shall be utilized solely to provide Wastewater collection
and treatment services to such Customer as provided herein.
Upon payment of all principal, interest and other charges
related to such Bonds and Additional Bonds by such Customer
(it being understood that such payments constitute install-
ment sales of the District's undivided interest in the
System), the District shall convey such undivided interest
to the Customer. In such event, if other Bonds or Addi-
tional Bonds issued by the District on behalf of other
Customers or Additional Customers remain outstanding, the
Customer designates the District as the sole and exclusive
manager and operator of the System under the provisions of
this Agreement for the longer of the term of this Agreement
or so long as any Bonds or Additional Bonds issued by the
District remain outstanding. As manager and operator, the
District is authorized to enter into all contracts necessary
or convenient to perform its functions, including contract-
ing with other persons to perform such functions on behalf
of the District. Further, in such event, whenever this
Agreement refers to the rights of the District as the owner
or operator of the System, such rights shall be construed to
mean the right of the District to be the sole and exclusive
manager and operator of the Customer's undivided interest in
the System.
Section 10.04. PROVISIONS APPLICABLE TO AUSTIN.
(a) It is expressly understood and agreed that Austin
may acquire or construct at its sole expense and option that
portion of the Lake Creek Interceptor Line from its upper-
most point to the Davis Spring lift station and temporary
interceptor as described in the Engineering Report, includ-
ing all necessary land, easements, and right -of -way there-
for, and, after completion of said facilities, shall, if
allowed by applicable law, convey said facilities along with
the land, easements, or right -of -way upon which the facili-
ties are located to the District which shall thereafter own
and operate said facilities as part of the System. Austin's
option to construct said facilities must be communicated to
the District within six (6) months from the date of execu-
tion of this Agreement.
(b) If Austin constructs the Lake Creek Interceptor
Line as provided in Section 10.04(a), then upon completion
of said line and conveyance thereof to the District, the
District agrees to reimburse Austin for the costs thereof
plus interest on said costs at a rate of interest equal to
- 36 -
the net effective interest rate on bonds issued by or on
behalf of Austin to pay for such costs with interest accru-
ing from the date or dates of each payment of such costs by
Austin to the date of payment therefor by the District.
(c) Notwithstanding anything to the contrary herein -
before provided, it is specifically agreed that Austin may,
in the event that use of the existing 1.3 MGD wastewater
treatment plant owned by Williamson County Municipal Utility
District Flo. 1 located at Anderson Mill subdivision is
permanently discontinued, acquire 1.3 MGD of additional
capacity in an Expansion of the System without being
required to pay any Capital Recovery Fee as otherwise
provided in Section 6.06.
Section 10.05. PROVISIONS APPLICABLE TO ROUND ROCK.
(a) It is expressly understood and agreed that Round
Rock has acquired the plant site for the District's Waste-
water treatment plant at great expense and Round Rock hereby
agrees, if allowed by applicable law, to convey to the
District ownership of such plant site free and clear of all
liens and encumbrances except as otherwise agreed to by the
District. The purchase price shall be twenty thousand
(20,000) dollars per acre for approximately thirty (30)
acres as described on Exhibit "D" attached hereto. Such
sale shall be consummated not later than three (3) months
from the Funding Date for construction of Phases IA and IB
of the System.
(b) The District agrees also to reimburse Round Rock
for any and all out -of- pocket expenses incurred by Round
Rock for design, acquisition or construction of land or
facilities for Phases IA and IB of the System (except for
costs of acquiring any governmental permits), such reim-
bursement to occur upon conveyance of such land and facil-
ities. Such reimbursement shall include interest on such
costs calculated at a rate of interest equal to the net
effective interest rate on bonds issued by Round Rock to pay
such costs with interest accruing from the date or dates of
each payment of such costs by Round Rock to the date of
payment therefor by the District.
(c) Notwithstanding anything to the contrary herein -
before provided, it is specifically agreed that Round Rock
may, in the event it permanently discontinues use of its
existing 3 MGD wastewater treatment plant located at its
existing site on Austin Avenue in Round Rock, acquire 3 MGD
of additional capacity in an Expansion of the System without
being required to pay any Capital Recovery Fee as otherwise
provided in Section 6.06.
Section 10.06. PROVISIONS APPLICABLE TO MUD 2.
(a) It is expressly understood and agreed that MUD 2
has constructed, owns and operates its own Wastewater
treatment and collection system, including the Brushy Creek
North and Brushy Creek South Wastewater treatment plants
which system has been built and maintained at great expense
to MUD 2 and remains a valuable asset of MUD 2 and that
possession and control of said Wastewater treatment plants,
along with the land upon which the facilities are located,
all collection lines and any other property of MUD 2, will
be retained by MUD 2 or may be sold, leased, transferred or
- 37 -
otherwise conveyed by MUD 2 according to its sole discre-
tion.
(b) It is expressly understood and agreed that, due to
the need to continue Wastewater treatment services to
MUD 2's retail customers, should Phases IA and IB of the
System not be completed and operational and able to receive
and treat flows from MUD 2 by the time that the waste
discharge permits for MUD 2's Brushy Creek North and Brushy
Creek South Wastewater treatment plants would expire, or
should additional treatment capacity be needed at those
plants prior to the time that Phases IA and IB of the System
are completed and operational and able to receive and treat
flows from MUD 2, MUD 2 may seek any permit amendment,
renewal, extension, temporary order or other authorization
necessary to continue operation of said plants and to
temporarily (until completion of construction of Phases IA
and IB of the System) meet the interim needs of MUD 2. Any
such temporary measures shall be at no cost to the District
or the other Customers. The District and the other Custom-
ers agree that they will not protest any permit amendment,
renewal, extension, temporary order or other authorization
sought by MUD 2, nor will they take any action to prevent or
delay MUD 2 in obtaining any such authorization to enable
MUD 2 to continue operation of its existing Wastewater
treatment plants described in Section 10.06(a) above pending
completion of construction and operation of Phases IA and IB
of the System.
(c) MUD 2 agrees to cease all discharge of Wastewater
from its existing Wastewater treatment plants within thirty
(30) days of the date that Phases IA and IB of the System
are completed and operational and able to receive and treat
flows from MUD 2. Further, as Phases IA and IB of the
System are completed and operational, MUD 2 agrees to
maximize its use of the System based upon MUD 2's Reserved
Capacity therein and minimize use of its own Wastewater
treatment plants. The determination of when the System or
parts thereof are completed, operational and able to receive
and treat flows from MUD 2 shall be made by the District's
engineer who shall apply reasonable and standard engineering
practices in making such determination.
(d) The District agrees to pay to MUD 2 the sum of one
million two hundred and eighty -one thousand dollars
($1,281,000) to compensate MUD 2 for its agreeing to remove
its existing Wastewater treatment facilities from operation
upon completion of Phases IA and IB of the System. Such
payments shall be made periodically during construction of
Phases IA and IB in proportional amounts equal to the
product of multiplying $1,281,000 times the percentage of
completion of, and at the time construction contract pay-
ments are made for, the Line Project Costs for Phases IA and
IB of the System as determined by the District's engineers.
Such payment shall be adjusted on the last payment to equal
a total payment to MUD 2 of one thousand, two hundred and
twenty (1,220) LUEs times the actual cost per LUE of
Phases IA and IB of the System.
Section 10.07. PROVISIONS APPLICABLE TO MUD 3.
(a) It is expressly understood and agreed that MUD 3
has constructed, owns and operates its own Wastewater
treatment and collection system, including a two hundred and
fifty thousand (250,000) GPD Wastewater treatment plant and
- 38 -
a one hundred and fifty thousand (150,000) GPD expansion of
said plant, presently under construction, which system has
been built and maintained at great expense to MUD 3 and
remains a valuable asset of MUD 3, and that possession and
control of said Wastewater treatment plant, along with the
land upon which the facilities are located, all collection
lines and any other property of MUD 3, will be retained by
MUD 3 or may be sold, leased, transferred or otherwise
conveyed by MUD 3 according to its sole discretion.
(b) It is expressly understood and agreed that, due to
the need to continue Wastewater treatment services to
MUD 3's retail customers, should Phases IA and IB of the
System not be completed and operational and able to receive
and treat flows from MUD 3 by the time that the waste
discharge permits for MUD 3's Wastewater treatment plant
would expire, or should additional treatment capacity be
needed at those plants prior to the time that Phases IA and
IB of the System are completed and operational and able to
receive and treat flows from MUD 3, MUD 3 may seek any
permit amendment, renewal, extension, temporary order or
other authorization necessary to continue operation of said
plants and to temporarily (until completion of construction
of Phases IA and IB of the System) meet the interim needs of
MUD 3. Any such temporary measures shall be at no cost to
the District or the other Customers. The District and the
other Customers agree that they will not protest any permit
amendment, renewal, extension, temporary order or other
authorization sought by MUD 3, nor will they take any action
to prevent or delay MUD 3 in obtaining any such authoriza-
tion to enable MUD 3 to continue operation of its existing
Wastewater treatment plants described in Section 10.07(a)
above pending completion of construction and operation of
Phases IA and IB of the System.
(c) MUD 3 agrees to cease all discharge of Wastewater
from its existing Wastewater treatment plants within thirty
(30) days of the date that Phases IA and IB of the System
are completed and operational and able to receive and treat
flows from MUD 3. Further, as Phases IA and IB of the
System are completed and operational, MUD 3 agrees to
maximize its use of the System based upon MUD 3's Reserved
Capacity therein and minimize use of its own Wastewater
treatment plants. The determination of when the System or
parts thereof are completed, operational and able to receive
and treat flows from MUD 3 shall be made by the District's
engineer who shall apply reasonable and standard engineering
practices in making such determination.
(d) The District agrees to pay MUD 3 the sum of one
million four hundred and forty -eight thousand two hundred
and fifty -six dollars ($1,448,256) to compensate MUD 3 for
its agreeing to remove its existing Wastewater treatment
facilities from operation upon completion of Phases IA and
IB of the System. As soon as possible, MUD 3 shall provide
evidence to the District to verify that such number repre-
sents MUD 3's cost of acquiring its wastewater treatment
plant as described in Section 10.06(a). The parties agree
to make any necessary adjustments in said number upon such
verification such that the amount paid to MUD 3 under this
section will reimburse MUD 3 for such costs. Such payments
shall be made periodically during construction of Phases IA
and IB of the System in proportional amounts equal to the
product of multiplying $1,448,256 times the percentage of
completion of, and at the time construction contract
- 39 -
payments are made for, the Line Project Costs for Phases IA
and IB of the System as determined by the District's engi-
neers.
ARTICLE XI
TECHNICAL COMMITTEE
Section 11.01. COMPOSITION OF TECHNICAL COMMITTEE.
There is hereby created a Technical Committee to be composed
of the following:
(a) Two representatives appointed by Austin;
(b) Two representatives appointed by Round Rock;
(c) One representative appointed by MUD 2;
(d) One representative appointed by MUD 3; and
(e) One representative appointed by the District.
The governing bodies of the Customers shall each
appoint their representatives (and alternate representatives
to serve in the absence of the Customers' representatives)
to the Technical Committee within ten (10) days after
execution of this Agreement, and shall immediately notify
the District of such appointment. The District shall,
within ten (10) days thereafter, appoint its representative
(and alternate representative to serve in the absence of the
District's representative) to the Technical Committee and
shall promptly notify all Customers of the representatives
(and their alternates, it being understood that there may be
more than one alternate for each representative) initially
comprising the Technical Committee. Each representative (or
alternate representative), of a Customer or the District
shall serve at the will of the governing body which the
person represents. Upon the death, resignation or revoca-
tion of the power of such representative (or alternate
representative), the governing body of the appropriate
entity shall immediately appoint a new representative (or
alternate representative) to the Technical Committee.
Section 11.02. ORGANIZATION OF THE TECHNICAL COMMIT-
TEE. The Technical Committee shall, within ten (10) days
after the appointment of all representatives thereto, meet
at a time and place established by the District's represen-
tative to the Technical Committee. At such meeting, the
Technical Committee shall elect one of its members as
chairman to preside over the meetings and shall elect
another member as secretary to keep records of the business
and actions of the Technical Committee. The Technical
Committee may establish such other offices as it may deem
proper. The Technical Committee may take any other actions
necessary for the establishment of rules and procedures for
the efficient and economical operation of the Technical
Committee, including, but not limited to, rules governing
future election and terms of office of officers, meeting
dates, and other matters pertinent to the functioning of the
Technical Committee.
Section 11.03. ACTION OF TECHNICAL COMMITTEE. No
action of the Technical Committee is valid unless such
action is approved at a meeting of the Technical Committee
by the affirmative vote of a majority of the members of the
Technical Committee.
- 40 -
Section 11.04. RESPONSIBILITY OF TECHNICAL COMMITTEE.
The Technical Committee shall be responsible for:
(a) Reviewing plans and specifications for, and work
performed under, Project Contracts;
(b) Submitting recommendations to the District as to
the award of or changes in Project Contracts;
(c) *ubmitting recommendations to the District as to
operating budgets for the System and rates for
service by the System;
(d) Reviewing changes to the Engineering Report; and
(e) Reporting to the District on any other matters
which may be referred to the Technical Committee
by the District or any Customer.
ARTICLE XII
EFFECTIVE DATE AND TERM OF AGREEMENT
Section 12.01. EFFECTIVE DATE. This Agreement shall
become effective upon execution by the District and all
Customers and such fact shall be communicated in writing to
the Customers by the District. This Agreement shall consti-
tute the sole and only contract between the Customers and
the District regarding Wastewater disposal services and the
Customers hereby recognize and affirm their responsibility
to make the payments required hereunder.
Section 12.02. TERM OF AGREEMENT. This Agreement
shall continue in force and effect from the effective date
hereof for a period of forty (40) years, and thereafter
shall continue in effect until any Bonds, or Bonds issued to
refund same, if any, have been paid in full. The Customers
shall have the right to the continued performance of ser-
vices provided hereunder for the useful life of the System
after amortization of the District's investment in the
System, upon payment of charges by the Customers, reduced to
take into consideration such amortization.
- 41 -
IN
IN WITNESS WHEREOF, the parties hereto acting under
authority of their respective governing bodies have caused
this Agreement to be duly executed in several counterparts,
each of which shall constitute an original, all as of the
/6"t day of P4ac b , 1985.
ATTEST:
(SEAL)
ATTEST:
(SEAL)
to cc:- az,-a-----(23
games E. Aldridge
City Clerk
111 00!JYJY:
Joi ne Land
Cil'ySecretary
(SEAL)
BRUSHY CREEK WATER CONTROL &
IMPROVEMENT DISTRICT NO. 1 OF
WILLIAMSON AND MILAM COUNTIES
B
Tom Bul
President
CITY OF AUSTIN
BY &IAA,MC
BY:
- 42 -
a Carrasco
City Manager
CITY OF ROUND ROCK
Mike Robinson
Mayor
ATTEST:
ATTEST:
(SEAL)
. Clark, Jr., cretary
(SEAL)
Danny Ma1o.e, Secretary
BY:
J
- 43 ..
WILLIAMSON COUNTY MUNICIPAL
UTILITY DISTRICT NO. 2
11, President
WILLIAMSON COUNTY MUNICIPAL
UTILITY DISTRICT NO. 3
BY:
, r1 hurst, President
CUSTOMS
RESERVED
1A 1 1
IC
LIES
MSC I
COST LIE
PHASE I
3111TIAL TWIN.
COST
IA 1 It
1
IC
-
1A 1 11 FUIOING
(1)1(4 - (S1
IA 1 IR
1
TOTALS
IC FLM01116 $
IC
TOTAL HR101116
IS)
$
1017LS
1. AI6311
A. LEA. Project
5, Tr..1a.At Project
Phase
C. 1r..la.F Project
Fa
27,500
17,1120
27,500
--
9.510
--
27.5013
1 441
1 314
3 21
4140.100
755,051
--
405,509
--
14,501,900
5.912,919
23,250.315
3,171.151
11.310.000
10.215.000
.7151 500
21.452.510
.7
2. YILLIMSO COMITY
MIN 10. 2
A. 1.1u Project
0. P t Project
PL..e
L. Treauteet Project
CUM F
1.100
',500
1.100
--
—
--
1.400
1.500
14500
1 141
1 314
5 29
514,940
340,040
--
--
--
--
5.103.010
2.111.140
. 22 4 1
1,141.500
5.111,000
3,119.000
. 2 Como 00
9,113.500
3. NAM 11CO
A. Lies Project
0, Walloon Pro
PR...
L. 411sui f wt II1tlK1
dRnR «flfa
1,100
—
1.910
—
4,900
—
iia
: : :
5 411
1 314
$ Z♦
331.431
--
201.541
'-
2.945.141
--
� �
, T1a1.XNa
3,00,541
1.125.034
3,213.200
1,p2,400
.
1
1.241.100
2. YILLIMS01 MITE
MIN NO. 3
A. line Pr1J «t
0. Treat/tot Project
Plow
C. b.. r « Project
Como Hon r
2.150
2.150
2.150
—
--
--
2.150
2.150
2.550
1 141
1 314
1 »
, 145,421
91.014
--
--
--
- - g
1,210.114
113,024
2,044.150
1,434.200
104.10➢
,
2.302.450
101AL1
51.011/
IIE
4,122,121
413,313
34,541,103
1
4.102.147
1 fe
7
EXHIBIT A
PHASE IA ANO 11 FLOWING (OPTION 4F - 9/10/85)
CUSTOMER
RESERVED LUES
INITIAL
FUNDING /LUE
INITIAL FUNDING S
IA & 18
IC
• +
TOTAL
PHASE I
IA A 18
IC
, .
IA & 18
IC
. . , + )
TOTAL
PHASE I
1. AUSTIN
Lines
Treatment Plant
2. WILLIANSON COUNTY
NUO I. 2
Lines
Treatment Plant
3. ROUND ROCK
Lines
Treatment Plant
4. WILLIAMS0t1 COUNTY
MUD N0. 3
Lines
Treatment Plant
27,500
17,920
8,500
8,500
4,900
--
2,150
2,150
--
9,580
--
--
--
4,900
--
--
27,500
27,500
8,500
8,500
4,900
4,900
2,150
2,150
67.64
42.36
67.64
42.36
67.64
42.36
67.64
42.36
--
42.36
--
42.36
--
42.36
--
42.36
51,860,100
759 091
S --
405 809
$1,860,100
1 16900
19
52,, 6,1 91
$ 574,940
3 T 5,
5405, 809
S --
33,0 Odd
S 574,940
3
S 331,436
--
, -
$ --
207,564
3707:511 4
$ --
;_
5 331,436
5 331,436
5 145.426
1& 0
�22.0�7_5,644
5 539, uw
S 145,426
5 74
91 0
54,122,127
5613.373
$4,735,500
EXHIBIT 8
INITIAL FUNDING (OPTION 4F - 9/10/85)
IRREVOCABLE LETTER OF CREDIT NO.
Board of Directors
Brushy Creek Water Control
and Improvement District
No. 1 of Williamson and
Milani Counties
c/o Mr. Tom Bullion
P.O. Box 1068
Taylor, Texas 76574
Gentlemen:
EXHIBIT "C"
Austin, Texas
BANK
1985
We hereby establish our Irrevocable Letter of Credit
No. in your favor at the request and for the
account of (the 'Developer "),
for a sum not exceeding in all
U.S. Dollars ($ ) pursuant to that certain
Agreement, dated , 1985,
between Williamson County Municipal Utility District No.
(the "MUD ") and the Developer. Such amount will be avail-
able to you by one or more drafts at sight drawn on
Bank accompanied by a written statement
from the President of Brushy Creek Water Control and
Improvement District No. 1 of Williamson and Milani Counties
(the "District ") or other person designated by resolution of
the Board of Directors of the District, stating that the
amount of the accompanying draft represents the MUD's share
of payments due pursuant to the terms of that certain
agreement entitled "Wastewater Disposal Contract Between
Brushy Creek Water Control and Improvement District No. 1 of
Williamson and Milani Counties and Williamson County Munici-
pal Utility District No. ". No other supporting documen-
tation will be required.
Reference to the agreements described above are for
identification purposes only. They are neither incorporated
in nor made part of this Letter of Credit.
Drafts drawn must be marked "Drawn under
Bank Irrevocable Letter of Credit No. dated
, 1985, and must be made payable Brushy
Creek Water Control and Improvement District No. 1 of
Williamson and Milani Counties - Construction Account for
Williamson County Municipal Utility District No.
(Account No. ) at
, Austin, Texas 78701.
The original of this Letter of Credit must accompany
all drafts.
This Letter of. Credit expires at our counters on
, 1986 (one year from date of issue).
We engage with you that all drafts drawn under and in
compliance with the terms of this credit will be duly
honored by us.
Authorized Signature
BANK
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EXHIBIT "D"
PLANT SITE
Approximately 30 acres out of
the following tract:
DESCRIPTION FOR THE ESTATE OF A.G. ROSSOW
CITY OF ROUND ROCK
BEING 31.372 acres of the Joseph Marshall Survey, Abstract No. 409, in
Williamson County, Texas, the same tract called 31.00 acres in a deed to
A.G. Rossow of record in Vol. 550, Page 404, Deed Records of Williamson
County, Texas. Surveyed on the ground in July of 1979, under the
tirection of W.P. Forest, Registered.Public Surveyor No. 101.
BEGINNING at an iron pin set in the South R.O.W. of the I. & C.N. Railroad
at the Northeast corr of the said 31.00 acre tract and at the Northeast
corner of a tract owned by Mrs. V.A. Southern.
THENCE S 00'25' E 700.0 feet with the general course of a crooked fence in
the creek bottom and S 02'03' W 677.0 feet to the center of Brushy Creek
and to the Southeast corner of the 31.00 acre tract.
THENCE upstream with the center of the Creek as follows: S 56'21' W 287.4
feet, S 64'10' W 246 feet, S 41'05' W 117 feet and 5 02'05' E 181 feet to
the 1ewi 48 1L corner of a 3.593 acre tract surveyed in June of 1977, an
iron pin found.
THENCE N 85'1S' W 377.2 feet to an iron pin found at an ell corner in the
East boundary of the 3.593 acres tract (on the East line of a 22 foot :ride
strip used as an accessway).
THENCE N 00'05' E 1443.80 feet with the boundary of the 3.593 acre tract
to a point on the crumbling East edge of a bridge.
THENCE N 31'51'45" E 59.9 feet to an iron pin found.
THENCE N 67'30'55" E 729.09 feet to an iron pin found.
THENCE N 19'30'30" W 22.09 feet to an iron pin found in the South line
of the I. b G.N. Railroad and at the upper Northeast corner of the
3.593 acre tract.
THENCE N 69'03'10" E 241.96 feat with the South line of the railroad
to the POINT OP BEGINNING.
STATE OF TEXAS
COUNTY OF WIILIANSON
X NOW ALL MEN BY THESE PRESENTS:
I, W.P. FOREST, do hereby certify that the above described tract was surveyed
on the ground under my supervision and•tbat the above description is true ant
correct to the best of my knowledge and belief.
TO CERTIFY WHICH, WITNESS my hand end seal at Georgetown, Texas, this
the 8th day of August, 1979•, A.D.
<- ,V-1.. / W.P. FOREST
REGISTERED PUBLIC SURVEYOR NO. 101
3300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002 -6760
TELEPHONE 713 551 -2222
CABLE VINELKINS -TELEX 762 HB
0642:2952
Enclosure
cc: Jim Miles
VINSON & ELKINS
ATTORNEYS AT LAW
FIRST CITY CENTRE
816 CONGRESS AVENUE
AUSTIN, TEXAS 78701 -2496
TELEPHONE 512 4955400
47 CHARLES BT, BERKELEY SQUARE
L0NDONWIX 7PB, ENGLAND
TELEPHONE OI 441 4E1,7236
CASLE VINELKINS LONDON WI 421E1 24140
December 23, 1985
Mr. Don Wolf
City of Round Rock
214 E. Main
Round Rock, Texas '78664
Re: Brushy Creek Regional Wastewater Contract
Dear M :
Very truly yours,
Ronald J. Freeman
SUITE 900
1101 CONNECTICUT AVE. N W
WASHINGTON. D C.20036 -4303
TELEPHONE 202 B62.6500
CABLE VINELKINS -TELEX 89680
Enclosed please find a completely executed original of
the Brushy Creek Regional Wastewater Disposal Contract.
Somewhere along in the process the contract got dated
December 16, 1985, which seems as good a date as any to me.
That would make the initial funding date to be no later than
January 30, 1986.
I know that everyone has been in the process of select-
ing their representatives and alternates to the Technical
Committee. Would you please send me the names, addresses
and phone numbers of the representative or representatives
and alternatives which your client has selected. Jim Miles,
the District's representative to the Technical Committee,
has told me that he would like to have a meeting of the
Technical Committee for sometime on January 3rd. We will be
in touch later as to the specific time and place.
Thanks for your help throughout the process. I look
forward to continue working with you during the construction
process.
�. � •.
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December 2, 1986
Jack Harzke, City Manager
214 E. Main St.
Round Rock, Texas 78664
The Bill Milburn Company_
Building New Homes the Old Way
RE: Agreement Regarding Construction, Ownership, Purchase, and Use of
Specific Wastewater Transportation Facilities by and among Brushy Creek
WCID NO. 1, the City of Austin, the City of Round Rock, Williamson County
Municipal Utility Districts Nos. 2 and 3, Fern Bluff Municipal Utility
District and Bill Milburn, Inc. -
Interim Wastewater Disposal Contract by and among Brushy Creek WCID No.
1, the City of Austin, the City of Round Rock, Williamson County
Municipal Utility Districts Nos. 2 and No. 3.
Dear Mr. Harzke,
I am forwarding seven (7) originals of the above - referenced Agreement and
five (5) originals of the above referenced Contract that will need to be
signed by Mike Robinson, Mayor.
Upon execution of these instruments please contact me at 835 -4663 and I
will arrange to have them picked up.
Thank you for your consideration in this matter.
Sincere
Borne • Reynolds
Vice President Construction
Bill Milburn Company •
11911 Burnet Road /P.O. Box 9802 '682/Austin, Texas 78766/(512) 835 -HOME
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